United States: California Supreme Court Issues Narrow Holding In De Minimis Case, Leaving Many Issues Unresolved

On July 26, 2018, the California Supreme Court issued its long awaited decision in Troester v. Starbucks Corporation (S234969) on whether California wage and hour law recognizes the de minimis doctrine established by the United States Supreme Court in Anderson v. Mt. Clemens Pottery Co. 328 U.S. 680 (1946) for wage claims arising under federal law.  Under the federal de minimis rule, small amounts of otherwise compensable work time are not actionable when tracking and paying for it is impractical.  Anderson held: "When the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded.  Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act.  It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved."  Id. at 692.  In deciding whether compensable work time is de minimis, federal courts consider "(1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work." See e.g. Lindow v. U.S. 738 F.2d 1057, 1063 (9th Cir. 1984); Kellar v. Summit Seating Inc., 664 F.3d 169, 176 (7th Cir. 2011); Kosakow v. New Rochelle Radiology Assocs., P.C. 274 F.3d 706, 719 (2d Cir. 2001).  Ten minutes or less is generally considered de minimis under federal law.  See Lindow, 738 F.2d at 1062.  The issue before the California Supreme Court in Troester (certified from the Ninth Circuit) was whether California wage and hour law recognizes the same or a similar rule.  Even though de minimis worktime is (by definition) small and insignificant, whether or not a de minimus exception to the requirement to pay for all time worked applies has major implications because relatively small amounts of unpaid wages have the potential to trigger substantial penalties and liability for plaintiffs' attorneys' fees in California.

The California Supreme Court ultimately issued a narrow ruling that California law would not treat the uncompensated work at issue under the facts of this specific case as de minimis, but left open the possibility that California may recognize some form of de minimis rule in other circumstances.  The California Supreme Court decided that the federal de minimis doctrine is not incorporated into California wage and hour law, but acknowledged that de minimis non curat lex (the law cares not for trifles) is an established part of California law generally.  However, the Court expressly declined to decide whether de minimis principles apply in the wage and hour context, because even if they did they would not apply to Starbucks' challenged pay practices.  In this case, Starbucks employees were regularly and routinely expected to perform 4-10 minutes of unrecorded and uncompensated time at the end of their shifts transmitting data to corporate headquarters, activating the alarm and locking the doors, exiting the store, and walking customers to their cars.  The California Supreme Court held that this uncompensated time was too significant and regular to be excused as de minimis.  The Court also held that its prior decision in  Augustus v. ABM Security Services, Inc., 2 Cal. 5th 257 (2016) implicitly decides that there are no de minimis exceptions to the requirement to provide exactly 10 minutes or more of interrupted off-duty break time to employee for every 4 hours, or major fraction thereof, of work.

The Court summarized its holding as follows: "We hold that the relevant California statutes and wage order have not incorporated the de minimis doctrine found in the FLSA.  We further conclude that although California has a de minimis rule that is a background principle of state law, the rule is not applicable here.  The relevant statutes and wage order do not allow employers to require employees to routinely work for minutes off-the-clock without compensation.  We leave open whether there are wage claims involving employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them."

The Troester opinion was written by Justice Liu and unanimously joined by the other members of the Court.  Two justices wrote separate concurrences.

A concurrence by Justice Cuellar proposes a "rule of reason" for when small amounts of work time may go uncompensated.  In Justice Cuellar's view, the answer depends on available technology and administrative feasibility.  His conception of what is practical is very broad however, and his understanding of what work time may fall under his proposed rule is extremely narrow.  The two examples Justice Cuellar gives of work time that employer's be excused from paying for are the 0.0167 seconds it takes for a computer screen to refresh or the 0.25 seconds reaction time to visual stimuli for most people.  Justice Cuellar states that "regular minutes worked by employees off the clock do not come close to being treatable essentially as rounding errors under a sensible application of a rule of reason" but "California law stops well short of requiring employer analysis of every fractional second as part of an unsparing effort to discern what time is compensable."

A concurrence by Justice Kruger (joined by Justice Grimes sitting by designation from the California Court of Appeal) states that she would decide the question of whether California accepts some of the de minimis rule in the wage and hour context in the affirmative.  Justice Kruger agrees with the main opinion that Starbucks must pay for the work time at issue because it is "nontrivial" and "regularly occurring," but would hold that "the law also recognizes that there may be some periods of time that are so brief, irregular of occurrence, or difficult to accurately measure or estimate, that it would neither be reasonable to require the employer to account for them nor sensible to devote judicial resources to litigating over them."  Justice Kruger gives a couple of examples of time an employer may not need to pay for that are substantially broader than the "fractional second[s]" Justice Cuellar seemed to have in mind.  Justice Kruger's examples are:

  • An employer requires workers to turn on their computers and log in to an application in order to start their shifts.  Ordinarily this process takes employees no more than a minute (and often far less, depending on the employee's typing speed), but on rare and unpredictable occasions a software glitch delays workers' log-ins for as long as two to three minutes.
  • An employer ordinarily distributes work schedules and schedule changes during working hours at the place of employment.  But occasionally employees are notified of schedule changes by e-mail or text message during their off hours and are expected to read and acknowledge the messages.
  • After their shifts have ended, employees in a retail store sometimes remain in the store for several minutes waiting for transportation.  On occasion, a customer will ask a waiting employee a question, not realizing the employee is off duty.  The employee — with the employer's knowledge [] — spends a minute or two helping the customer.

Justice Kruger's concurrence concludes: "In situations like these, a requirement that the employer accurately account for every second spent on work tasks may well be impractical and unreasonable; if so, a claim for wages and penalties based on the employer's failure to do so would be inconsistent with California labor law... California law does, in short, make some allowances based on considerations of practicality and reasonableness.  It does not, however, permit an employer to require an employee to regularly work for nontrivial periods of time without providing compensation."

Unfortunately, the Troester decision fails to provide much guidance to California employers on what sort of unpaid compensable work time may be excused as de minimis.  The only things that are certain are that 4-10 minutes of regularly occurring off-the-clock work must be paid for and that there are no de minimis exceptions to the obligation to provide 10 minute rest breaks.  California employers should probably expect that regularly occurring worktime of at least one minute must be paid for, but lesser amounts of time may be de minimis, particularly if isolated and infrequent.  The Troester decision also does not cast doubt on the principle that a neutral time rounding policy that does not systematically underpay employees is lawful, even if there are small deviations in pay from actual time worked in any given workweek.  Defining the precise contours of any California wage and hour de minimis rule will have to await further judicial development.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Events from this Firm
21 Oct 2018, Other, New York, United States

Partner Samantha Hardy will present on a panel titled, "Now You See It, Now You Don't - Keeping Up with California's Ever-Changing Wage and Hour Laws" on Monday, October 22 from 8:30 - 9:30 a.m.

24 Oct 2018, Seminar, Orange, United States

Please join us for Sheppard Mullin's Labor & Employment Law Update & Happy Hour Seminar Series. 2018 presents significant developments in California labor and employment laws that will affect the way you run your day-to-day business operations.

30 Oct 2018, Seminar, Los Angeles, United States

Please join us for Sheppard Mullin's Labor & Employment Law Update & Happy Hour Seminar Series. 2018 presents significant developments in California labor and employment laws that will affect the way you run your day-to-day business operations.

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