On August 16, 2023, in Tyger v. Precision Drilling Corp., No. 22-1613, 2023 WL 5257688 (3d Cir. Aug. 16, 2023), the U.S. Court of Appeals for the Third Circuit reversed a grant of summary judgment to an oil drilling company that dismissed workers' claims for gear-changing compensation. In doing so, the court sought to clarify the differences between activities that are "integral and indispensable to productive work" and therefore compensable under the Fair Labor Standards Act (FLSA), and those that are "preliminary or postliminary" to productive work and therefore not compensable.
The decision provides a framework for future courts in—and potentially outside of—the Third Circuit for how to evaluate whether time spent in gear-changing activities requires compensation under the FLSA. It also offers insights for how courts may evaluate other types of pre- and post-shift activities. Employers should take steps to evaluate whether their workers' pre- and post-shift activities require compensation under Tyger. In addition, employers must carefully evaluate whether governing state law requires compensation for pre- and post-shift activities even where the FLSA does not.
Background
Oil-and-gas drilling rig employees brought a collective action against their employer, Precision Drilling, seeking compensation under the FLSA for time spent changing into and out of personal protective equipment at the beginning and end of their shifts and walking from the rig's change house to safety meeting locations. Precision Drilling required these employees to wear flame-retardant coveralls, steel-toe boots, hard hats, safety glasses, gloves and earplugs to shield them from various job risks, including "fire, crushed toes, flying debris, electric shock, and chemical exposure."
The FLSA requires compensation for "the productive work that the employee is employed to perform" (i.e., principal activities) and all activities that are both "integral and indispensable" to those principal activities. The FLSA does not require employers to pay workers for travel to and from the place where they perform their principal activities or for activities that are "preliminary to or postliminary to" those principal activities.
Precision Drilling argued that changing gear is a preliminary and postliminary activity that is not compensable under the FLSA. The plaintiffs asserted the opposite: "changing gear is both integral and indispensable to what the parties agree is their principal activity: drilling for oil and gas."
Precision Drilling moved for summary judgment on the compensability of the gear-changing activity. To analyze the issue, the district court borrowed a test the U.S. Court of Appeals for the Second Circuit used to determine the compensability of gear-changing time: "whether the gear guards against workplace dangers that accompany the employee's principal activities and transcend ordinary risks."
Applying this test, the district court concluded that the plaintiffs faced only "ordinary, hypothetical, or isolated" risks and that the gear offered "incomplete" protection from those risks. Thus, according to the district court, changing into and out of the gear at issue was neither integral nor indispensable to oil drilling, so it granted summary judgment for Precision Drilling. The plaintiffs appealed.
The Third Circuit's Decision
The Third Circuit acknowledged that it had not yet addressed when pre- or post-shift activities are "integral and indispensable" and therefore require compensation under the FLSA. It therefore sought to provide a framework to analyze whether a given activity is "integral" and whether it is "indispensable."
When Changing Gear Is Integral
The court rejected the Second Circuit's "extraordinary risk" test as too narrow and instead identified three key factors: (1) location, (2) regulations and (3) type of clothing or gear.
First, the court explained that "where workers change" matters because "whether the changing takes place before or after workers cross the workplace threshold is likely to be relevant." Changing on the employer's premises is "integral" and therefore compensable when it "is required by law, by rules of the employer, or by the nature of the work." Moreover, according to the court," It is enough that the vast majority [of employees] do so regularly out of practical necessity or in line with industry custom," and "[c]hanging can be intrinsic even if not every worker changes onsite." The question "at bottom" is whether workers have a "meaningful option to change at home." If they do not, the changing time is more likely compensable.
Second, state or federal rules requiring certain protective measures or gear or otherwise acknowledging the risks of particular work will more likely render pre- or post-shift changing activities related to those rules compensable.
Third, the court explained that, "courts should consider what kind of gear is required—by regulation, employers, or the work's nature." Changing gear that is specialized or selected by the employer to address specific workplace hazards (such as pursuant to the employer's obligations to provide safety gear under the Occupational Safety and Health Act) is more likely compensable. The court rejected Precision Drilling's argument that "intrinsic" or "integral" gear means "unique" or "unusual" gear, holding that "even generic gear can be intrinsic."
When Changing Gear Is Indispensable
The court explained that an activity is indispensable "only when an employee could not dispense with it without impairing his ability to perform the principal activity safely and effectively." When that is true, the activity is "reasonably" necessary and therefore "indispensable" (even if not "strictly" necessary). Thus, according to the court, even though "butchers could cut meat with dull knives," their "doing so would slow down production, affect the appearance of the meat, cause waste, and make for accidents," so cutting the meat with a sharp knife is "reasonably" necessary. By contrast, according to the court, "security screenings for Amazon warehouse employees are not reasonably necessary for them to do their principal activities" of retrieving and packaging products for shipment, and therefore are not compensable under the FLSA.
The Third Circuit rejected Precision Drilling's concern that its newly articulated test creates a requirement to compensate employees for time spent changing into and out of any safety gear. According to the court, the FLSA's de minimis doctrine "stems the tide" because "when an activity 'concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded.'"
Applying the above analysis, the Third Circuit remanded the case for trial due to remaining factual disputes, including:
- How many employees changed at work and why;
- Whether changing on the oil/gas rig was required by law, Precision Drilling's rules or the nature of the work;
- Whether changing on the rig was merely a convenience for the employee;
- Whether it is industry custom for rig hands to change on site; and
- Whether the amount of time involved was more than de minimis.
State Law Differences
Tyger provides a framework in the Third Circuit for analyzing whether certain pre- and post-shift changing activities are compensable under the FLSA, but employers should not end their analysis there. Applicable state law may render pre- and post-shift activities compensable even where the FLSA under Tyger would not.
For instance, in Tyger, the Third Circuit gave security-screening time as an example of a pre- or post-shift activity that does not qualify as "indispensable" under the FLSA. But New Jersey and Pennsylvania courts have previously held that security-screening time is compensable under the New Jersey Wage and Hour Law and the Pennsylvania Minimum Wage Act.1
In addition, unlike the FLSA, some state wage and hour laws, such as Pennsylvania's, do not recognize the de minimis doctrine.
What This Means for Employers
Tyger provides a framework for courts in the Third Circuit to evaluate whether certain pre- or post-shift activities require compensation under the FLSA. The framework requires a case-by-case analysis of the applicable pre- and post-shift requirements and workers' circumstances. Employers should also keep in mind that state laws may contain broader or different definitions of "hours worked" and therefore require compensation for activities that are not compensable under the FLSA. Moreover, the analytical framework for evaluating the compensability of pre- and post-shift activities under the FLSA may vary outside the Third Circuit (or even within the Third Circuit for other types of pre- or post-shift activities).
Employers should evaluate any pre- or post-shift activities of their nonexempt employees, particularly gear- and clothes-changing activities, and ensure that their compensation policies and practices comply with both the FLSA (as interpreted in the relevant jurisdiction) and any applicable state law.
For More Information
If you have any questions about this Alert, please contact Christopher D. Durham, Natalie F. (Hrubos) Bare, Brian W. Sullivan, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.
Footnote
1. See, e.g., Vaccaro v. Amazon.com dedc, LLC, No. 18-11852, 2020 WL 3496973 (D.N.J. June 29, 2020) (holding that time spent in mandatory, post-shift security screenings was compensable under the New Jersey Wage and Hour Law because a regulation therein requires employers to pay for "[a]ll the time the employee is required to be at his or her place of work or on duty"); In re: Amazon.com, Inc., 225 A.3d 191 (Pa. 2021) (holding that time spent in mandatory, post-shift security screenings was compensable because a Pennsylvania Minimum Wage Act regulation defined "hours worked" as "time during which an employee is required by the employer to be on the premises of the employer").
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