Thursday, October 9, 2014

Are post-work security checks compensable? #SCOTUS and Integrity Staffing Solutions v. Busk

Yesterday, the Supreme Court heard oral argument in its first employment law case of this term, Integrity Staffing Solutions v. Busk.

To wage-and-hour geeks (like me), this case presents an interesting issue under the Fair Labor Standards Act: whether the FLSA entitles hourly employees to be paid for post-shift time spent undergoing mandatory security screenings. The case was brought by two employees of a warehousing company that was having employee theft problems. To combat the issue, the company implemented mandatory (and unpaid) post-shift security checks, which included passing through metal detectors, which kept employees at the plant for up to 30 extra minutes.

FLSA, as amended by the Portal-to-Portal Act, generally precludes compensation for “preliminary” (pre-shift) and “postliminary” (post-shift) activities, unless the activities are “integral and indispensable” to an employee’s principal activities. To be “integral and indispensable,” an activity must be (1) “necessary to the principal work performed” and (2) “done for the benefit of the employer.”

In this case, the 9th Circuit held that the security screenings were “integral and indispensible” because the company required them “to prevent employee theft, a concern that stems from the nature of the employees’ work.” In so ruling, the court distinguished cases involving non-compensable pre- and post-shift screenings at airports and nuclear power plants, which did not benefit the employer because they were otherwise mandate by federal law.

In its brief, the employer argued that the screenings take place away from the work area after the workday, and did not affect their work activity of pulling product off shelves. The employer also argued that the unpaid screenings are no different than unpaid time walking from their cars, through the parking lot, and into the warehouse. Contrarily, the employees argued that the employer’s required security screenings, for which the employees had no choice, triggered a legal duty to pay.

During oral argument (transcript) the conservative wing of the Court seemed to advocate for a narrow interpretation of “principal.”

Chief Justice Roberts: But no one’s principal activity is going through security screening.  The employer doesn’t hire somebody, I need somebody to go through employee screening.  He hires them to do something else…. You’re saying everything that is related somehow to the job is principal. I would have thought principal has to do with things that are more significantly related.

Justice Alito: You wouldn’t pay anybody just to come in and go through security.

Meanwhile, the more employee-friendly Justices attempted to argue that because “inventory control” is “important” to the business, it is integral and indispensable:

I mean, what makes it Amazon? It’s a system of inventory control that betters everybody else in the business. And what’s really important to Amazon is that it knows where every toothbrush in the warehouse is. And that’s just as integral to what Amazon does and to what it requires its employees to do….

In handicapping this case, you have to keep in mind that earlier this year, this same Court, in Sandifer v. U.S. Steel, decided that the time spent putting on and taking off certain protective gear is not compensable. While Sandifer is a different case, decided under a collective bargaining agreement, I would be surprised, especially given the tenor of oral argument, if the employees walk away from Busk with a win. This case will hinge on whether the security screenings are key to the nature of the employment. I, along with what I perceive as a majority of the Court, believe that the employer has the better of this agreement. We’ll find out for sure early next year when the Court issues its opinion.