On March 2, 2010, the Ninth Circuit Court of Appeals in Rutti v. Lojack Corp. (9th Cir., No. 07-56599, 3/2/10), reconsidered one of its earlier decisions and somewhat modified its prior ruling. The case provided more judicial insight on what constitutes non-compensable preliminary and postliminary time under the Fair Labor Standards Act. The case also provided validation to this writer’s observation that the concept of “postliminary” is peculiar to the FLSA. As noted by the Court in footnote 2: “Although not in the dictionary, this word is used in the critical statute, 29 USC § 254(a)(2).” But I digress.
The Facts and Procedural History
The case involved Lojack technicians. These technicians routinely install or repair vehicle tracking devices at client locations. Each day before leaving home, each technician receives his or her assignments for the day by logging into a company provided hand-held computer device, maps the routes to the assignments, and may complete some minimal paperwork. At the end of the technician’s last work assignment, the technician drives home. Each technician drives a company vehicle and is required to go directly to the first appointment, and to return home from the last appointment, directly and without passengers. Each technician is also required to keep his or her cell phone on while driving. At sometime between 7:00 p.m. and 7:00 a.m., while at home, the technician transmits, via a special company-provided modem, company data regarding the work performed during the prior workday as stored on a portable data terminal used by the technician. These transmissions usually entail about 10 minutes, but more than one attempt to transmit the data is often necessary. For each workday, though, the technician is only paid from the time the technician arrives at the first client location, through the time the technician leaves the last client location.
The technicians sued seeking compensation for their drives to the first client and their return home under the “continuous workday doctrine”, as well as for the time taken to perform their pre- and post-shift duties at home. Their claims were based on the FLSA and California law, but the California issues are beyond the scope of this article. As to the federal claims, the trial court dismissed the commuting claims due to the terms of the Employee Commuting and Flexibility Act, 29 USC § 254(a)(2), and the court also dismissed the pre- and post-shift work claims. The appellate panel initially affirmed the trial court as to the commuting issue under the ECFA, as well as the pre-shift work claims, holding that they were both not integral and indispensable to their jobs and de minimis. In a 2-1 decision on the post-shift transmitting data issues, however, the panel reversed the trial court.
During reconsideration, the outcome on the state claim altered, but that on the federal claim remained. The issues were: 1) whether the commute in the company car was compensable; 2) whether the off-the-clock activities were either not part of the employee’s principal work activities or were de minimis; and 3) whether under the continuous workday doctrine, the workday included the first and last trips.
Commuting Time is Not Compensable
As to the first issue, the Court held that, notwithstanding the rules limiting the use of the car, the commutes were nonetheless not compensable. The Court rejected the argument that the employer imposed limitations on the commute compelled a different result because such requirements were tantamount to a condition of employment. Noting that, prior to the 1996 passage of the ECFA, the DOL proscribed such conditions of employment with respect to non-compensable disputes, the ECFA changed that rule and specifically allows such conditions. This allowance is clear under the provision stating that commuting in a company vehicle is not compensable “if the use . . . is subject to an agreement on the part of the employer and the employee . . . .” 29 USC § 254(a). Such agreements, the Court held, could be conditions of employment. The restrictions on use of the car did not alter this outcome. The Court noted that restrictions of this type were envisioned by Congress when it passed the ECFA. Further, the Court held that the restrictions were not related to the principal work activities of the employees, and that they were also de minimis. The Court also held that other circuits reviewing this issue with facts entailing more burdensome limits have similarly concluded the commutes were non-compensable.
Pre- and Post-Shift Activities
As to the off-the-clock work, the Court concluded that the pre-shift activities were preliminary to the employees’ principal activities, and thereby non-compensable. The post-shift data transmission activity, however, the court still believed could be found to compensable.
In reaching these conclusions, the Court reviewed case law as to what constitutes a principal activity and de minimis. With respect to the principal activity, the Court summarized the rule as being that the term is to be liberally construed no matter when the work is performed, and that particular attention is to be given as to whether the activities are performed as a part of the regular work of the employees in the ordinary course of the business, as well as the employees’ freedom to engage in other activities. With respect to what is de minimis, the Court recognized matters of a few seconds or minutes may be disregarded, and as much as 10 minutes may be de minimis. The Court also recognized that time must be paid unless it is so small that recording it is administratively impracticable, but that the amount at issue may be aggregated. The regularity of the extra work and the ability to engage in other activities are also to be considered, the Court held.
Applying the “principal activity” rule to the pre-shift activities, the Court held that the employees checking where to go and how to get there is not integral and indispensable to the technician’s installation or repair work, but rather to the commute. Under the law, commutes are presumptively non-compensable. As to the minimal paperwork alleged, the Court held that there is no evidence to suggest that the work had to be performed at home and could not be performed at the jobsite. The Court also concluded that to the extent that these activities were distinct from the commute and related the principal activities, they were still de minimis. The filling-in of firms took only a minute or two.
The post-shift data transmissions, however, are different. These activities are integral and indispensable to the principal activities of the technicians’ job. These transmissions are required by Lojak and provide the company with information about the technicians’ jobs. They were “part of the regular work of the employees in the ordinary course of business,” and are “necessary to the business and are . . . primarily for the benefit of the employer . . . .” Thus, at least for purpose of summary judgment, “the district court could not determine that this activity was not integral to [Plaintiff’s] activities.”
The Court specifically noted, though, that summary judgment for Lojack may later be possible, depending on the facts that develop. For instance, the small amount of time involved may become compelling. At this time, though, the Court did not know how often the employees have to check on each transmission’s success and how often the transmissions have to be repeated. Thus, the record does not show that the daily transmissions take less than ten minutes. The Court stated that while less than ten minutes may be de minimis, there still is no bright line rule in this regard.
The Continuous Workday Doctrine Does Not Apply
On the last issue, the continuous workday issue, the Court again upheld the district court. Since the pre-shift activities were already held to be only preliminary or de minimis, they could not trigger the beginning of a continuous workday. Further, while the post-shift activity may be integrally related to the employees’ principal activities and could have supported the application of the continuous workday doctrine for the commute home, the doctrine still does not apply in this case due to another rule. That rule provides: “Periods during which an employee is completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes are not hours worked.” 29 CFR § 785.16. Since the employees must perform the transmission between 7:00 p.m. and 7:00 a.m., and since the employee “has hours, not minutes, in which to complete this task, the intervening time is ‘long enough to enable him to use the time effectively for his own purpose.’” Thus, the employee is completely relieved of duties upon leaving the last client location. Accordingly, the Court concluded, the commute is not compensable.
This case is yet another which shows that the determination of what time is compensable and what is not is often complex and not subject to a rigid formula. As more and more employees perform activities at home which are arguably somehow related to the job, more of these cases will arise. The Rutti Court has provided significant insight in how such claims may be effectively and comprehensively analyzed.