There have been a host of federal cases recently focusing on whether time spent waiting in security lines is compensable. Some have gone for the plaintiffs and others for the employer, as these cases are nuanced and fact-sensitive. A recent example of this genre is a Nike case where the Company will pay $8.25 million in settlement of such a case. The case is entitled Rodriguez v. Nike Retail Services Inc. et al., and was filed in federal court in the Northern District of California.
The settlement involves more than 16,000 workers who were employed from 2010-2019. There is established a fund of more than $5,000,000 and the workers will automatically receive a share. Without needing to fill out claim forms. There is also more than $3,000,000 for attorney fees. Interestingly, the Company amended its policy in November 2019 to deem the waiting time compensable.
The Company had taken the position for years that the time spent waiting for these checks was “de minimis.” In 2017, the Judge agreed with this position. The concept of “de minimis” revolves around the premise that the time being urged as working time was so fleeting or brief that it is not capable of being counted. The Ninth Circuit disagreed finding, significantly, that the de minimis rule, a creature of the FLSA and its regulations, did not apply to claims made under California wage-hour law.
The parties then went to mediation, as looming before them was perhaps many more years of expensive, protracted litigation. Interestingly, the mediation did not result in a settlement but the parties engaged in further discussions following the single day session and those talks produced this agreement.
I believe the de minimis rule is an overused and risky strategy for employers. An old case concluded that even five minutes per day, almost a half-hour per week, was not de minimis. If the employer puts all of its eggs in the de minimis basket and that defense loses, then the entire case is lost. This is the type of activity that behooves employers to get out in front of and allow perhaps 5-10 minutes per day compensable time for these checks, to evidence the employer’s awareness that the activity might be working time and to lessen its potential exposure (i.e. class action).
Spend a nickel to save a dollar…