Supreme Court Rules in Favor of Employer as to What is Compensable Time

In March, we reported that the United States Supreme Court had granted cert in a case involving the question of whether time spent by employees working for Amazon.com in security checks at the end of their shifts was compensable under the Fair Labor Standards Act (“FLSA”). On December 9, the Supreme Court issued its ruling in this case and decided that the time that the workers spent waiting to undergo and then undergoing the security screenings was not compensable under the FLSA. See Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. ___ (December 9, 2014).

The background of this case is that two warehouse workers for a company providing warehouse staffing and space to Amazon.com asserted that their employer had violated the FLSA by failing to properly compensate them for time spent waiting to pass through a security check at the end of their shifts. The workers alleged that they had to wait up to 25 minutes to be searched and had to remove their wallets, keys and belts and then pass through metal detectors. According to the workers, these security checks were to protect the company from employee theft. When the case got to the Ninth Circuit Court of Appeals, it explained that although time spent by employees in preliminary or postliminary activities is generally not compensable, these activities are compensable under the Portal-to-Portal Act of 1947 if they are “integral and indispensable” to an employee’s principal activities. In the case of these warehouse workers, because the security screenings were required by the employer and were intended to prevent employee theft, these security checks were necessary to the employees’ primary work as warehouse employees and done for the benefit of the employer, and thus the plaintiffs had adequately stated a claim for relief under the FLSA. See Integrity Staffing Solutions, Inc. v. Busk, et al., No. 11-16892 (9th Cir.).

The Supreme Court disagreed with the Ninth Circuit. As the Supreme Court explained, “[a]n activity is . . . integral and indispensable to the principal activities that an employee is employed to perform if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.” Integrity Staffing, 574 U.S. ___, p. 6. The Supreme Court then gave examples of activities that satisfy this test, like time spent by battery plant employees showering and changing clothes because of the toxic nature of the chemicals in the plant and time spent by employees at a meatpacking plant sharpening their knives.

In contrast, here, the Supreme Court found, “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.” Id., p. 7. Thus, these screenings were not “an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment” and, in fact, these screenings could have been eliminated “without impairing the employees’ ability to complete their work.” Id. The Court pointed out that this holding was consistent with an 1951 Opinion Letter issued by the Department of Labor finding that neither a pre-shift security search of employees in a rocket powder plan for matches and cigarette lighters for safety purposes or a post-shift security search in the interest of theft prevention was compensable. Id., p. 8.

The Supreme Court stated that the Ninth Circuit had erred in “focusing on whether an employer required a particular activity” instead of whether it was tied to work that the employee is employed to perform. Id. “If the test could be satisfied merely by the fact that an employer required an activity, it would sweep into ‘principal activities’ the very activities that the Portal-to-Portal Act was designed to address.” Id.

In conclusion, the Supreme Court found that an activity satisfies the integral and indispensable test and is thus compensable “if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.” Id., p. 9.