Time Spent in Employer-Mandated Security Checks Held Non-Compensable

HIGHLIGHTS:

• Unless employees' activity is "integral and indispensable" to the principal activities of the employees' work, it will not be deemed compensable work.
• The decision of whether employees' activities are integral and indispensable to the principal activity of the employees is based on a fact-driven analysis.
• Even if the activity is required by the employer, benefits the employer and represents a significant amount of time, it may still be deemed non-compensable time.

In a recent U.S. Supreme Court decision, a unanimous court held that time spent by employees in mandatory security checks after work is not compensable, unless the screenings are "integral and indispensable" to the principal activities of the employees' work.

In Integrity Staffing Solutions, Inc. v. Busk, the employer – Integrity Staffing Solutions, Inc. - required all of its warehouse employees to be screened at security checkpoints in its warehouse. Integrity Staffing provides warehouse staffing to Amazon.com throughout the United States. Its employees retrieve products from the shelves and package those products for delivery to Amazon customers. The employees alleged that they were entitled to pay for waiting in line and undergoing the employer's mandatory security checks. The Supreme Court considered whether the employees' time spent waiting for and undergoing those security screenings was compensable under the Fair Labor Standards Act of 1938 (FLSA) and the Portal-to-Portal Act of 1947. Reversing a decision by the U.S. Court of Appeals for the Ninth Circuit, the Supreme Court held that time spent by employees waiting for and undergoing security screenings before leaving the workplace was not compensable under the FLSA.

During the mandatory screenings, Integrity Staffing required its employees to remove items such as wallets, keys, and belts from their persons, and then pass through metal detectors. The reason for the security checks was simple: to prevent theft of Amazon products. Two Integrity Staffing employees filed a class action lawsuit on behalf of other employees in a similar situation and alleged that they were entitled to compensation under FLSA for time spent on the security screenings. Notably, the employees alleged that 25 minutes spent in security screenings each day could have been reduced to a de minimis amount by adding more security screeners or by staggering the termination of shifts so that employees could flow through the checkpoint more quickly. More importantly, the employees alleged that, because the screenings were conducted "to prevent employee theft," they were performed "solely for the benefit of the employers and their customers."

Courts Disagree Over Compensability of Postliminary Activities

The Nevada District Court dismissed the employees' complaint for failure to state a claim, holding that the time spent waiting for and undergoing the security screenings was not compensable under the FLSA. Because the screenings occurred after the regular work shift, the district court explained that the employees could only state a claim for compensation if the screenings were an integral and indispensable part of the principal activities they were employed to perform. The district court held that these screenings were not integral and indispensable but instead fell into a non-compensable category of postliminary activities.

The U.S. Court of Appeals for the Ninth Circuit reversed and found that, although post-shift activities would ordinarily be noncompensable, the activities present were integral and indispensable to an employee's principal activities and therefore compensable, since they are necessary to the principal work performed and done for the benefit of the employer. The Ninth Circuit accepted as true the employees' allegation that the screenings were necessary to the employees' primary work as warehouse employees and done for Integrity Staffing's benefit.

The Supreme Court noted that, according to the Portal–to–Portal Act, employers are exempted from liability for work-related activities such as:

• walking, riding, or traveling to and from the actual place of performance of the principal activity or activities that the employee is to perform
• activities which are preliminary or postliminary to the principal activity or activities

The Supreme Court noted it has consistently interpreted "the term 'principal activity or activities' to mean all activities that are an integral and indispensable part of the principal activities." As examples, the court noted that compensable time was previously found where battery plant employees showered and changed clothes because the chemicals in the plant were "toxic to human beings," and the employer acknowledged that changing clothes and showering were indispensable to employees' performance of productive work. Similarly, the court found that employees' time spent sharpening knives was compensable because dull knives would "slow down production" on the assembly line and lead to accidents. Conversely, the court has previously held that time spent by poultry plant employees waiting to don protective gear was non-compensable because the waiting was "two steps removed from the productive activity on the assembly line."

Given this framework, the Supreme Court held that the security screenings at issue were non-compensable postliminary activities because the screenings were not the "principal activity or activities" that the employees were hired to perform. On the contrary, the Supreme Court found that the employees were hired by Integrity Staffing to retrieve products from warehouse shelves and package those products for shipment to Amazon customers. Given these facts, the court held that the security screenings also were not "integral and indispensable" to the employees' duties as warehouse workers. Drawing from a U.S. Department of Labor opinion letter, the Supreme Court noted that a pre-shift security search of employees in a rocket-powder plant for matches and other inflammatory materials for safety reasons and a post-shift security search of the employees to prevent theft were found not to be compensable.

The Supreme Court rejected employee arguments that the test could turn on whether the activity is for the benefit of the employer, that the employer's required security check made it a principal activity of the employer, and that the employees' argument that the employer could have reduced the time spent by employees in security screenings to a de minimis amount. The Supreme Court found that any claims regarding the reduction of time spent in security checks by employees were arguments to be presented not to a court of law but to the employer at the bargaining table in an FLSA claim.

Employers Need to Review Their Policies for Employees' Compensable Time

Employers dealing with issues of whether time spent by employees before or after work is compensable should closely review the Integrity Staffing Solutions, Inc. v. Busk decision. Deciding whether employees' activities are integral and indispensable to the principal activity of the employees is always a fact driven analysis. Employers should remember that the amount of time spent in preliminary or postliminary activities is not a deciding or even relevant factor. Similarly, requiring preliminary or postliminary activities of employees, even those that benefit the employer, will not make that employees' time compensable unless the employees' activity is integral and indispensable to their principal duties at work. While issues like theft and safety are critically important to any employer, wise employers should also understand that employee recruitment, morale and retention could be undermined and otherwise negatively influenced by forcing employees to be subjected to large amounts of noncompensable, but required, preliminary and postliminary time.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.