The United States Supreme Court recently held in Integrity Staffing Solutions, Inc. v. Busk et al. that time spent waiting for and undergoing post-shift security checks is not compensable under the Fair Labor Standards Act ("FLSA"), as amended by the Portal-to-Portal Act.
Amazon.com subcontractor Integrity employed warehouse workers to retrieve products from warehouse shelves and package them for delivery to Amazon customers. In two Nevada warehouses, employees were required to undergo security checks at the end of their shifts before leaving the premises. During the checks, employees removed items such as wallets and keys and walked through metal detectors. Waiting in line for and undergoing the checks took about twenty-five minutes.
Former warehouse workers filed a putative class action in Nevada District Court on behalf of themselves and other Nevada warehouse workers seeking compensation for the time spent waiting for and undergoing the security checks. They argued that (1) the checks were conducted to prevent theft and thus were solely for the benefit of the employer and its customers and (2) the employer could reduce the time spent waiting for and undergoing the checks to a de minimis amount by adding more security screeners or staggering shifts. The District Court dismissed the case, holding that the time was not compensable because the checks occurred after the shift and were not "an integral and indispensable part of the principal activities" the workers were hired to perform.
The Ninth Circuit reversed, holding that although normally the checks would be noncompensable postliminary activities, they were compensable as integral and indispensable to the workers' principal activities if they were necessary to the principal work performed and done for the benefit of the employer. The focus of the court's analysis was that the checks were required by the employer and for its benefit.
Agreeing with the District Court, the Supreme Court reversed the Ninth Circuit decision and held that the checks were not compensable. Looking at the historical backdrop of and rationale for the Portal-to-Portal Act, the Court noted that Congress created the Act in reaction to Supreme Court rulings in the 1940s that threatened to bankrupt employers by holding that a broad swath of activities were considered compensable time. Thus, it created the Act, in part, to explicitly exempt employers from liability under the FLSA for activities which are preliminary or postliminary to the performance of the principal activities that the employee is hired to perform.
It noted that the security checks were not integral and indispensable to the warehouse workers' duties – i.e., retrieving products from the warehouse shelves or packaging them for shipment. In fact, it stated that Integrity could have eliminated the checks without impairing the workers' ability to carry out their duties. It pointed out that the Ninth Circuit erred in holding that the appropriate test of compensable time is whether the activity (e.g., security checks) was required by or for the benefit of the employer and that such a test would "sweep into 'principal activities' the very activities that the Portal-to-Portal Act was designed to address."
Also, the Court dismissed the argument that Integrity could have reduced the time it took to wait for and undergo the checks, noting that this did not change either "the nature of the activity or its relationship to the principal activities that an employee is employed to perform." Thus, the Court held that an activity such as undergoing a security check is compensable if integral and indispensable to the principal activities that the worker is hired to perform – i.e., "an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities."
This decision is highly instructive for employers whose employees undergo non-trivial pre and/or postliminary activities. However, the decision interprets federal, not California, law. It does not foreclose a court or agency in California or other states, construing state law, from holding that such security checks constitute compensable time.
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