Wage & Hour - Development & Highlights : New Jersey Labor and Employment Lawyer & Attorney : Fox Rothschild LLP Law Firm : Serving Essex County, Sussex County, Roseland, New Jersey

The electronic giant, Best Buy, has requested that a judge approve a $900,000 settlement in a New York State wage-hour class action in which the plaintiffs sought payment for time worked “off-the-clock.”  That working time was the minutes spent going through security clearings at the end of the work day, assumedly to ensure that employees did not steal anything during their shifts.  The case is entitled Turner v. Best Buy Company, Inc.

Although the case was filed in state court, the employer had removed the case to federal court under the Class Action Fairness Act of 2005.  After going through a great deal of discovery, the parties decided to settle the action, although they maintained their respective positions.  The company maintained that it properly paid all employees for all time worked, while plaintiffs took the view that going through the security check was an employer instigated “activity” that required compensation.

Interestingly, and significantly, the employer has agreed to modify its operating procedures to allow all employees to remain on the clock until their manager allows them to leave the store.  Thus, although the employer denied any culpability, the remedial action it took suggests that it knew that there was an issue here.

The key to determining whether preliminary or postliminary activities are compensable is the element of employer compulsion or the lack thereof.  I equate this activity to the employer ordering a retail cashier to report ten minutes early to balance out the cash drawer or to stay ten minutes after the shift ends to do the same.  It is a safe bet that where employer ordering, or direction or compulsion of an activity related to the main job is involved, the activity is working time and compensable.  The other benchmark is how integrally related to the main job is the side activity.

I have often commented on these preliminary and postliminary issues.  They are a real danger to the employer because oftentimes, the employer may not even appreciate that this “little” activity or routine or inconvenience to employees is actually “work,” which can then lead to a single employee filing an action (as was done here) and everybody else coming on board.  The proactive approach is to analyze every non-exempt job and ascertain if there are preliminary or postliminary activities involved or related to it and then apply the above-referenced analysis and make the call on whether it is or is not working time.
 

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I have posted a few times about Fair Labor Standards Act donning and doffing cases. The general rule is that donning and doffing is compensable if these preliminary and postliminary activities are integral to the performance of the employee’s primary job.

For a rule, there is always an exception. In a case entitled Johnson v. Koch Foods Inc., filed in the Eastern District of Tennessee, a federal judge has ruled that because the parties’ labor contract applicable to covering chicken processors working at a cut and kill plant explicitly excluded compensation for time spent donning and doffing certain sanitary and safety gear, the workers were not entitled to compensation for the time it took to put and remove the gear.

The judge analogized the putting on/taking off of the gear to “changing clothes,” which is not compensable under Section 203(o) of the Fair Labor Standards Act. The court did warn, however, that of a jury determined that such activities were integral and indispensable, they then could be compensable under the “continuous workday rule.”

This result seems anomalous because the workers were required to put on the protective gear prior to reporting to the production line, to begin their primary work, but they were only compensated for the time actually on the line.

There is a divergence in the federal Circuits as to what constitutes “clothes.” The Ninth Circuit has held that the “changing clothes” safe harbor applies only when the items at issue are clearly and unmistakably clothing, as is commonly understood. However, the Eleventh Circuit has held that the term applies to hairnets, gloves and hearing protection equipment. The US Department of Labor has issued an Opinion Letter concluding that the Section 203(o) definition of clothes “includes items worn on the body for covering, protection, or sanitation.”

This issue may ultimately have to be decided by the US Supreme Court. In the meantime, employers need to make assessments of the indispensability of the preliminary activity to the main job and start the analysis of compensability from that vantage point.
 

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Under the Fair Labor Standards Act, there is no law requiring employees receive a lunch period or break times. However, when the employer gives time for lunch, the employees must receive at least thirty minutes and the time must be uninterrupted. Put differently, the employees must be completely relieved from duty. When employees are not so relieved, they must then be compensated for that time, i.e. the half-hour, which all becomes “converted” into working time.

This is what the DOL found happened in this investigation, which ultimately included 4000 nurses. Some of the nurses answered phones while on lunch and others performed “some” duties. The result, however, is the same---all of the time is converted.

The hospitals also had an automatic deduction policy, by which one-half hour was automatically deducted from the nurses’ time for that day, on the assumption that the lunch was taken. Although the hospitals had a policy about not working during lunch (i.e. not carrying the hospital-provided phones during meal breaks) and also had a policy that allowed nurses to cancel the automatic deduction if they performed actual, productive work. The hospitals claimed that the nurses did not follow the policy. The result was a supervised settlement providing for 1.7 million dollars to be paid to the affected employees.

I have clients who have these automatic deduction systems for lunch time. As this makes clear, the automatic is not so automatic. There must still be supervisory oversight and intervention in issues where employees may have worked through lunch, to ensure that proper payment is made. The employer must have a system where employees can report that they worked through lunch and the employees, in my view, must be given training on the system, so all productive time is paid for and the DOL does not come knocking on the door.

In sum, a policy, a piece of paper, will not provide a defense to claims of uncompensated working time. More is required of the employer.
 

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In a case entitled Clifton Sandifer et al. v. U.S. Steel Corp. a federal judge has cut out some claims from a work time class action suit, but has allowed one major allegation to remain in the case. That cause of action involves whether the employees should be paid for the time spent in walking from their locker room to their work stations.

The case is in federal court in Indiana; the plaintiffs filed suit in December 2007. Unlike many class actions I have commented upon, this was not a misclassification lawsuit, but rather a work time case. The plaintiffs sought compensation for time spent donning, doffing, walking, showering and laundering personal clothing in excess of the 40-hour workweek. The employees allege that these “work” activities consumed 9-10 hours per week.

The judge threw out the portions of the case pertaining to the donning and doffing of protective clothing, agreeing with US Steel that the compensability of these activities was addressed in the parties’ collective bargaining agreement. The court also found that showering was not required by the company and therefore was a postliminary (i.e. after work) activity for which no compensation was required.

Similarly, even though instructions were provided on how to launder clothing worn under work gear, transporting and laundering clothing was not required by the Company and thus it was not compensable. The judge kept the walking to work station claim, rejecting the company argument that these were non-compensable preliminary and postliminary work. The judge also rejected the de minimis doctrine argument, finding that walking times varied widely throughout the plant.

Judge Miller also did not accept the argument that these claims were preempted under the National Labor Relations Act as they ostensibly involved interpretations of the collective bargaining agreement, rather than statutory violations of the Fair Labor Standards Act.
 

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