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Wednesday, December 10, 2014

Waiting is Not Working says High Court

By: Tommy Eden



Jesse Busk worked for Integrity Staffing Solutions, Inc., a temporary staffing employer requiring its hourly warehouse workers, who retrieve products from warehouse shelves and packaged them for delivery to Amazon.com customers, to undergo a security screening before leaving the warehouse each day. Amazon mandated the security check to reduce shrinkage from employee theft of merchandise. Sometimes Busk had to wait in line for 25 minutes after he clocked out before the screening was completed.

Busk and several former employees of the company sued alleging that they were entitled to compensation under the Fair Labor Standards Act (FLSA) for the roughly 25 minutes each day that they spent waiting to undergo and undergoing those security screenings.They also alleged that the company could have reduced that time to a de minimis amount by adding screeners or staggering shift terminations. Because the screenings were conducted to prevent employee theft they claimed such were for the sole benefit of the employers and their customers and they should be paid to wait.

The United States District Court in Nevada dismissed the complaint, holding that the screenings were not integral and indispensable to the employees’ principal activities but were instead postliminary and non-compensable. The U. S. Court of Appeals for the Ninth Circuit reversed asserting that post-shift activities that would ordinarily be classified as non-compensable postliminary activities are compensable as integral and indispensable to an employee’s principal activities if the post-shift activities are necessary to the principal work and performed for the employer’s benefit. This decision alarmed similar large warehouse operations nationwide.

This week the United States Supreme Court held unanimously that the time spent waiting to undergo and undergoing security screenings is not compensable post-liminary activities under the FLSA. The Court reasoned that the security screenings at issue are not the principal activities the employees were employed to perform—i.e., the workers were employed not to undergo security screenings but to retrieve products from warehouse shelves and package them for shipment. Nor were the screening “integral and indispensable” to those activities. The Portal-To-Portal Act, which amended the FLSA in 1947, exempts employers from liability for activities that are “preliminary or postliminary” to a worker’s principle tasks.

Common Sense Counsel: FLSA violations are the most common and costly employment lawsuit being brought and employers are paying out millions in settlements and attorney fees. With the FLSA self help to determine if you are in compliance is simply not a legal option and an ounce of prevention with a wage and hour audit is the only risk reduction strategy. The top three most costly violations are: 1) Misclassification of Exempt Employees. 2) Not Counting Every Hour Worked; and 3) Not Calculating Overtime Pay the FLSA Way.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter tommyeden3