Security screening has become more common over the past decade, both to promote security for some employers and to deter employee theft for others. A growing issue in wage and hour law, at least until this morning, was whether the time spent in that screening was compensable under the Fair Labor Standards Act. In Integrity Staffing Solutions, Inc. v. Busk, Case No. 13-433 (U.S. S. Ct. December 9, 2014), a unanimous United States Supreme Court held that it was not.
We’ve blogged about some of the prior litigation in this arena, including lawsuits against clothing retailer Urban Outfitters and Apple, which you can read about here. These suits were fueled, at least in part, by the Ninth Circuit’s 2013 decision in Busk v. Integrity Staffing Solutions, Inc., Case No. 11-16882 (9th Cir. 2013), in which the court addressed claims by a putative class of workers employed at a warehouse used to ship products for Amazon.com. The crux of their claim was that they had to undergo a security screening as they left work as part of an effort to prevent employee theft. According to the plaintiffs, those security screenings could take upward of 25 minutes, as employees had to wait to remove their keys, belts, and wallets and then go through metal detectors before leaving the facility. They also asserted that the employer could have reduced the time spent waiting, even to de minimus levels, by adding more screeners or staggering quitting times. Interestingly, the district court dismissed the case without discovery under Rule 12(b)(6), finding that the complaint failed to state a claim upon which relief could be granted. It also held that, in any case, the plaintiffs could not simultaneously proceed with a Rule 23 class action under Nevada law and an FLSA section 16(b) (29 U.S.C. § 216(b)) collective action.
The Ninth Circuit reversed on both scores. We blogged about that decision here if you are interested in that opinion and, more particularly, in the class-action aspects of it.
The Ninth Circuit first held that Rule 23 class actions and FLSA section 16(b) collective actions could be pursued simultaneously. NOTE: This part of the ruling was not before the Supreme Court and is likely undisturbed.
The second part of the Ninth Circuit’s ruling was that the time spent in the security checks could be compensable as a postliminary activity under the Portal-to-Portal Act, 29 U.S.C. § 254(a). That finding was premised largely on the view that the security checks were being done primarily for the employer’s benefit and due to the nature of the work being performed (the handling of merchandise). It distinguished cases involving safety security, such as screening at airports and nuclear power plants.
A unanimous Supreme Court has now reversed. Like the Ninth Circuit, it found that the compensability of the waiting time was governed by the Portal-to-Portal Act. It found that historically the purpose of the Act had been to reduce employer liability for activities that are preliminary or postliminary to the employees’ principal duties. Based on the Court’s prior holdings, the question was whether the challenged activities were “integral and indispensable” to those duties. Put another way, the challenged activity must be one “with which the employee cannot dispense if he is to perform his principal activities.”
The Court had little difficulty in finding that the security screenings were not integral and indispensable to the work of warehouse staff. Simply stated, the employees were hired to “retrieve products from warehouse shelves and package those products for shipment,” not undergo security checks. It distinguished situations like so-called donning and doffing cases involving safety clothing and equipment in toxic waste facilities. It similarly distinguished activities needed to improve the quality of work, such as sharpening knives at a meatpacking plant. The Court drew further support from the Department of Labor’s regulations defining “principal activities” at 29 C.F.R. § 790.8, a 1951 Opinion letter and the agreement of the Solicitor General that the activities were not compensable. It rejected the argument that the employer could have reduced the amount of time spent waiting by running its operations differently, finding that that was a topic better left to the bargaining table.
The Busk decision is significant because it will likely stem a flood of litigation on security check issues. Implicit in the Court’s opinion is that the time spent by employees in security checks entering a facility (e.g., airports, courts, government facilities, and many private offices and plants with security concerns) are not compensable. The Busk case will also serve to refine what activities will be deemed preliminary and postliminary in the future.
The bottom line: A unanimous Supreme Court has found that time spent in post-work security checks is not compensable, and the decision will likely have further implications for security screenings generally.