Many employers believe that if an employee (or many employees) perform a tiny amount of work, or work-like activity, before their shifts, that brief off-the-clock, activity cannot be “working time” under the FLSA. This is the essence of the de minimis defense. Well, they are wrong, as a recent case illustrates. The case also is a cautionary tale for employers to be proactive in forestalling the prospect of major liability (and legal fees). The case is entitled Peterson v. Nelnef Diversified Solutions, LLC and issued from the Tenth Circuit Court of Appeals.
In this case, the employees spent approximately three minutes per day starting their computers and logging in to various programs. This was done pre-shift so the employees could be ready to answer customer questions when their shift commenced. The employees commenced a class action under the FLSA, with more than three hundred (300) workers in the class. The lower court concluded that the activities were work related, as they were integral to the primary function of the representatives. However, the trial court would not award damages as it held that the de minimis rule applied and thus the activities were too fleeting or ephemeral to warrant compensation.
The federal appellate court affirmed the legal conclusion rendered below that the activities were integral and therefore were compensable. Tellingly, the Tenth Circuit rejected the trial court’s reliance on the de minimis defense. The Court looked at how often the employees performed the activity, how hard (or not) it was for the employer to track/capture the time, as well as the number of employees involved and the total amount of possible damages.
The Court rejected the Company defense that it could not track or gauge the amount of working time involved. It also ruled, importantly, that the aggregated amount of the possible wages owed was not insignificant, although for each individual employee, the time worked might not be all that much. The Court noted the activity was a consistent routinized component of the employees’ activities and that the activity had to be performed on a regular, rather than, an isolated basis.
It seems odd, or counterintuitive, that a few skimpy minutes per day could add up to big trouble for the employer, but yet it is true. It is the regularity of the activity that is key here, as well as the implicit, in this case, element of employer compulsion. Plus, it was not just a single employee who had to boot up, but hundreds. That spells liability for the employer. The same principles would also apply to people who work at home and have to boot up before their shift officially begins. The answer here is simple—if the activity is required and integral to the primary job, the employees should clock in first and then boot up.
Pay the few minutes now, rather than thousands later…