On Tuesday, December 9, 2014, the U.S. Supreme Court issued a unanimous decision providing clear guidance as to what constitutes compensable work under the Fair Labor Standards Act, as amended by the Portal-to-Portal Act.
The case, Integrity Solutions, Inc. v. Busk, involved a contractor to Amazon.com whose employees retrieved products from the shelves in Amazon’s warehouses and packaged them for delivery to Amazon’s customers. At the end of each shift the employees were required to undergo a security screening before leaving the warehouses. The employees claimed that the time spent waiting for and undergoing the screenings entailed about 25 minutes per day, and through the lawsuit, they were seeking overtime compensation for that time. They also claimed that the time could have been significantly shortened to a de minimis period if the shifts were staggered or more screening stations were available. Consequently, they claimed, the time devoted to the screening was for the benefit of the employer or its customer Amazon.com, and therefore should have counted as part of their compensable workweeks.
The Supreme Court disagreed. Reversing the holding of the Ninth Circuit Court of Appeals, the Supreme Court held that the time spent for the screening was not compensable time. Applying precedent, the Court noted that the compensable period during a workday stops once the last activity that is “integral and indispensable” to the job’s “principal activity” is performed. In this case, the principal activity for which the employees were employed were retrieving and packaging goods in the warehouse.
In the opinion written by Justice Thomas, the Court concluded that the screenings at issue did not relate to that principal activity, rather they were only incidental to the job. Under the Act, such activities – i.e., preliminary or postliminary activities – are not compensable. Thus, the Court held that the court of appeals applied the wrong test, i.e., whether the screenings were required by and for the benefit of the employer to prevent theft, and instead it should have inquired as to whether the activity was tied to the productive work that the employees were employed to perform.
Consequently, the Court rejected any notion that all time spent for the employer’s benefit is compensable, and specifically held that such a construct is overly broad and improper. The Court also rejected the argument that the time spent in the screenings could have been lessened and thereby a source of liability since that fact did not alter the finding that the time was unrelated to the principal activity at issue.
Explaining that the time spent on security screenings in this context was postliminary and therefore not compensable, the Court noted that “Integrity Staffing did not employ its workers to undergo security screenings, but to retrieve products from warehouse shelves and package those products for shipment to Amazon customers.” The screenings were not “integral and indispensable” to that work, the Court continued, because they were not “an intrinsic element of those [principal] activities and one with which the employee cannot dispense if he is to perform those activities.” In this regard, the Court noted, the employer “could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.”
With this elaboration on the definition of what is a compensable activity, one can only hope that courts will be able to evaluate pre- and post-shift activity cases with more confidence and avoid the recent trend of conflicting holdings on this issue. Such clear guidance is also of value to employers as they try to make sure that all time that is legally compensable is paid. Importantly, though, and as expressed by Justices Kagan in her concurring opinion joined by Justice Sotomayer, some pre- and post-shift activities remain compensable since they are integral and indispensable to the job, such donning and doffing certain protective gear for the performance of an employee’s job.
Dykema Gossett PLLC