The Seventh Circuit in Sandifer v. U.S Steel has provided union employers a useful tool to avoid potential Fair Labor Standards Act ("FLSA"or "Act") liability.
Sandifer arose out of a "collective action" brought under the FLSA by 800 former and current unionized hourly workers at U.S. Steel's steel works in Gary, Ind. The plaintiffs argued that U.S. Steel violated the FLSA when it failed to compensate them for time spent donning and doffing work clothes in a locker room at the plant. The work clothes at issue consisted of flame-retardant pants and jackets, work gloves, metatarsal boots, hard hats, safety glasses, ear plugs, and "snoods" (a hood that covers the top of the head, the chin, and the neck).
Plaintiffs further alleged they were entitled to compensation for time spent walking between the locker room and their workstations. The district court ruled that the FLSA did not require that changing time be compensated, but that the Act may require compensation for time spent walking to and from the locker room and therefore refused to dismiss the suit. Both parties subsequently appealed.
The Seventh Circuit first addressed whether plaintiffs' time spent donning and doffing work clothes was compensable under the FLSA. The Act ordinarily requires that workers be paid at least the federal minimum wage for all hours worked, and time and a half for hours worked over 40 hours in a week. However, 29 U.S.C. § 203(o) provides that any time spent changing "clothes" at the beginning or end of each workday may be excluded from working time by the express terms of, or custom or practice under, a bona fide collective bargaining agreement. The collective bargaining agreement between U.S. Steel and the steelworkers union did not require compensation for changing time. In fact, none of the previous collective bargaining agreements between U.S. Steel and the union since 1947 required it either.
On appeal, plaintiffs argued this exclusion was inapplicable because their work attire did not constitute "clothes" under Section 203(o), but rather "safety equipment." The Seventh Circuit disagreed, noting the outfit employees were required to wear was merely clothing with a "protective function." According to the Court, it would be "absurd to exclude all work clothes that have a protective function from section 203(o), and thus limit the exclusion largely to actors' costumes and waiters' and doormen's uniforms." Accordingly, U.S. Steel was not obligated to compensate its workers for time spent donning and doffing work clothes.
The Court went on to address whether plaintiffs' time spent walking between the locker room and worksite was compensable. An employer ordinarily is obligated to compensate an employee for time spent traveling from one "principal activity" to another. Thus, for example, a millwright whose "principal activity" involves repairing mechanical equipment in different parts of a steel mill must be compensated for time spent walking from one machine to another. The Portal to Portal Act, however, provides an exemption. Employers need not compensate employees for time spent traveling to and from a location where the "principal activity" is performed. For example, time spent traveling to and from home during a regular workday is considered a normal incident of employment and is not considered compensable time.
Interestingly, and as noted above, the district court concluded that donning and doffing work clothes may constitute a "principal activity," despite the fact the activity itself was non-compensable due to the exclusion prescribed by section 203(o). The Seventh Circuit disagreed: "If clothes-changing time is lawfully not compensated, we can't see how it could be thought a principal employment activity..." Thus, plaintiffs' time spent traveling between the locker room and their work stations was a normal incident of employment and not compensable. Accordingly, the Seventh Circuit directed the district court to dismiss the suit in its entirety.
Significantly, the Seventh Circuit's holding on this travel time issue stands in stark contrast to the 2010 holding of the Sixth Circuit Court of Appeals in Franklin v. Kellogg Co. In Franklin, the Sixth Circuit concluded that such travel time was compensable, because the clothes-changing time required by the employer was still a "principal activity" even though it was subject to the exclusion established by section 203(o). Although the Seventh Circuit did note that its decision in Sandifer created an inter-circuit conflict, it opined that the Sixth Circuit's decision in Franklin "seems clearly wrong." Whether the U.S. Supreme Court will be asked to weigh in on this issue remains to be seen.
Section 203(o) can be a useful tool for unionized employers, although workers will have the opportunity to negotiate a higher wage rate in exchange for agreeing to exclude some of their time from the base. Union-free employers, however, must be extraordinarily careful when evaluating whether donning and doffing time must be compensated as section 203(o) ordinarily will not apply in the absence of a bona fide collective bargaining agreement. As a result, a non-unionized employer that requires its employees to don and doff attire in the workplace should evaluate whether such time could be compensable under the FLSA. That evaluation may turn on a number of factors, including, for example, the nature of the clothing or equipment being donned and doffed, and the amount of time spent in such activities.
With respect to travel time between the locker room and the worksite, a unionized employer's risk analysis may currently hinge on geographic considerations, given the current split between the Seventh Circuit's decision in Sandifer and the Sixth Circuit's decision in Franklin. For non-unionized worksites, where section 203(o) is not in play, the assessment of whether such travel time must be treated as compensable time "on the clock" requires even greater care.
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