16 December 2014
In a unanimous decision authored by Justice Clarence Thomas, the US Supreme Court has ruled that Fair Labor Standards Act (FLSA) does not require that employees be compensated for time spent going through (and waiting to go through) security screenings before leaving the workplace.
In Integrity Staffing Solutions, Inc. v. Busk,hourly employees of a staffing agency filed a putative collective and class action lawsuit against their employer staffing agency, alleging failure to pay all wages due. The employees worked in Amazon.com’s warehouses, and they were required to undergo security screenings before leaving the warehouse each day to prevent theft. The plaintiffs alleged in their complaint that employees spent up to 25 minutes of uncompensated time each day waiting for, and going through, these screenings.
The district court had dismissed plaintiffs’ complaint for failure to state a claim based on the FLSA provision that exempts employers from compensating employees for “preliminary” and “postliminary” activities that are not “integral and indispensable” to the employees’ “principal activity or activities.” On appeal, the Ninth Circuit reversed, holding that the time was compensable because the screenings were necessary to the employees’ jobs and were done for the employer’s benefit.
The Supreme Court reversed, holding that the screening process was not “integral and indispensible” to the employees’ principal activity:
“an activity is integral and indispensable to the principal activities that an employee is employed to perform—and thus compensable under the FLSA—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.”
The Supreme Court further observed that the staffing agency “did not employ its workers to undergo security screenings, but to retrieve products from warehouse shelves and package those products for shipment to Amazon customers.” Indeed, the staffing agency “could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.” As a result, the security screenings were not “integral and indispensable” to the employees’ duties as warehouse workers.
The Court also expressly rejected the Ninth Circuit’s focus on whether the employer required a particular activity, holding that the “integral and indispensable” test looks at whether the activity is tied to the performance of productive work, rather than whether an employer required an activity. The Court further ruled that the assertion that an employer could or should address the time problem by reducing the time spent by employees on any preliminary or postliminary activity was not a relevant inquiry.
Impact: The Supreme Court’s decision is obviously important for employers that conduct security screenings of their employees on the way into or out of work, and may dispose of a series of nationwide class actions filed after the Ninth Circuit’s decision that seek back pay for time spent undergoing such screenings. The decision will also have broader implications for all employers—and especially those that have check-in or check-out procedures for their hourly employees—because it clarifies that the FLSA requires compensation only for activities that are indispensible to the productive work that an employee was hired to perform. For many businesses, the question going forward is likely to be whether collective-bargaining agreements provide for pay where federal law does not require it.