United States: U.S. Supreme Court Rules That Security Screening Time Is Non-Compensable Under Federal Law And The Portal-To-Portal Act

In a decision issued on Tuesday, December 9, 2014, the United States Supreme Court ruled that employees are not entitled to compensation under the federal Fair Labor Standards Act ("FLSA") for the time they spend waiting to undergo, and actually do undergo, security screenings. The Court's unanimous decision in Integrity Staffing Solutions, Inc. v. Busk, et al., reverses a judgment of the United States Court of Appeal for the Ninth Circuit which found that Integrity Staffing employees could state an unpaid wages claim under the FLSA for undergoing a daily security screening because the screenings were required by, and for the benefit of, their employer.

The plaintiffs in Integrity Staffing were hourly employees who had been placed on assignment at Amazon.com warehouses in Nevada. These employees were tasked with retrieving inventory and packaging it for delivery to Amazon customers. Prior to leaving the warehouse each day, the plaintiffs were required to undergo a security screening – aimed to prevent employee theft – during which employees passed through metal detectors. Plaintiffs filed a putative class action on behalf of similarly-situated Nevada warehouse employees, claiming that they should have been compensated for the security screening time, which they alleged amounted to approximately 25 minutes per day.

In reaching its decision, the Court first turned to the historical backdrop against which the Portal-to-Portal Act of 1947 was signed into law. The Portal-to-Portal Act, which, as relevant here, exempts employers from compensating employees for activities which are either "preliminary" or "postliminary" to employees' "principal activities," was enacted in response to the more than 1,500 lawsuits (seeking nearly $6 billion in damages) that were filed under the FLSA shortly after the Court determined that the time spent by employees (1) traveling between mine entrances and underground work areas, and (2) walking from timeclocks to workbenches, was compensable.

Rejecting the Ninth Circuit's theory that the test of whether a pre-shift or post-shift activity should be compensable turns on whether the employer requires the activity, the Court explained that this test would result in employers being compelled to compensate employees for the very activities that the Portal-to-Portal Act was designed to address and exclude. For example, the Portal-to-Portal Act was intended to repudiate the Court's earlier holding that employees' walking time was compensable where the employees were required "to walk from a timeclock near the factory gate to a workstation" in order to "begin their work."

Rather, the Court explained that employees need only be compensated for preliminary and postliminary activities that are an "integral" and "indispensable" part of the employees' "principal activities." Defining the terms "integral" and "indispensable" in their ordinary, dictionary sense, the Court clarified that an activity is only integral and indispensable to an employee's principal activities "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." For example, as the Court has previously held, meatpacking employees must be compensated for the time they spend sharpening their knives because the use of dull knives would burden production and negatively affect the quality of the meat.

However, in the instant matter, "Integrity Staffing did not employ its workers to undergo security screenings, but to retrieve products from warehouse shelves and package those products to Amazon customers." Simply stated, "[t]he screenings were not an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment. And Integrity Staffing could have eliminated the screenings altogether without impairing the employees' ability to complete their work." As a result, the Court held that the employees were not entitled to be paid for the time spent dealing with the screening procedures.

Conclusion

The Supreme Court's ruling in Integrity Staffing is a steadying response to the flurry of class action lawsuits seeking back pay for time spent in pre-shift and post-shift security screenings that sprung up in the wake of the Ninth Circuit's now overturned decision. However, we caution that Integrity Staffing was decided under the FLSA and may not have a significant impact on claims brought pursuant to state wage-and-hour laws, which, in some cases, may not incorporate the "integral" and "indispensable" standards set forth under the Portal-to-Portal Act. In fact, that central analysis of this decision may have little impact in California, where the current law establishes a different "subject to the control of the employer" test to determine whether an employee is to be compensated for certain activities. Thus, employers in California still should be wary of using any such screening procedures with regard to their employees when the employees are not being paid for that time.

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