Explaining Compensable Activities Under FLSA
The Portal-to-Portal Act generally exempts employers from liability for pre-shift and post-shift activities unless they are “integral and indispensable” to the employee’s principal job activity. However, courts have struggled to find a concrete definition of “integral and indispensable”—leading to considerable uncertainty in employment policies and costly litigation.
The U.S. Supreme Court has provided important guidance for employers in the December 2014 Integrity Staffing Solutions v. Busk decision.
In its unanimous decision, the court held: 1. post-shift security screenings of warehouse workers is not a compensable activity under the FLSA; 2. for an activity to be “integral and indispensable,” it must be an “intrinsic element” of the employee’s hired purpose; and 3. whether an activity is required by the employer is not determinative of whether it is compensable. This result provides employers with more clarity, as they create policies regarding these activities.
The defendant, Integrity Staffing Solutions, provided staffing to warehouses owned by Amazon.com. Plaintiffs were warehouse employees whose job was to retrieve products from shelves and then package those products for shipping to Amazon customers. At the end of each shift, plaintiffs were required by Integrity Staffing to undergo a “security screening” before leaving—for anti-theft purposes. Plaintiffs alleged that the screenings accounted for 25 minutes of unpaid time each day, and were compensable under the FLSA. Plaintiffs further alleged that the screenings were for the benefit of their employer, as the screenings were conducted to prevent theft.
The district court dismissed the complaint, holding that the screenings were “not integral and indispensable” to the “principal activities” of the plaintiffs’ employment. Therefore, according to the district court, the screenings were not compensable postliminary activities. The U.S. Court of Appeals for the Ninth Circuit reversed. The Ninth Circuit accepted as true the allegation that the screenings were required, and held that “postshift activities [that] are necessary to the principal work performed and done for the benefit of the employer” are compensable.
Integral and Indispensable
The Busk court held that in order to be compensable, an activity must be an “intrinsic element” of the employee’s principal job activity. Citing to the dictionary definition of “intrinsic” and “indispensable,” the court explained that the activity must be one “with which the employee cannot dispense if he is to perform his principal activities.”
For example, the court explained that time spent showering and changing clothes by battery-plant employees was compensable because the chemicals in the plant were toxic (citing Steiner v. Mitchell,1956). Time employees spent sharpening knives at a meatpacking plant was compensable because dull knives would hurt production, cause accidents and affect the product. (citing Mitchell v. King Packing, 1956). In contrast, the court explained that time spent by poultry-plant employees “waiting to don protective gear” was noncompensable because it was “two steps removed from the productive activity on the assembly line.” (quoting IBP v. Alvarez, 2005).
In holding that the security screenings were not compensable under the FLSA, the court focused on the job duties of the plaintiffs. The plaintiffs were hired to “retrieve products from warehouse shelves and package those products for shipment to Amazon customers.” Therefore, as the court held, the security screenings were not an intrinsic element of their principal activity of retrieving products from shelves and packaging the products for shipping. Viewed in this context, the screenings could have been “eliminated altogether without impairing the employees’ ability to complete their work.”
The court rejected the Ninth Circuit’s approach, which focused on the fact that the security screenings were required by the employer. If this factor were determinative, as the court explained, the test would defeat the purpose of the Portal-to-Portal Act. Further, a “test that turns on whether the activity is for the benefit of the employer is . . . overbroad.” Additionally, the court stated that “[t]he fact that an employer could conceivably reduce the time spent by employees on any preliminary or postliminary activity” is not a factor in determining if such an activity is compensable under the FLSA.
Guidance for Employers
These preliminary and postliminary activities play important roles in the workplace—such as loss prevention or employee safety. Though employers are faced with a hazy standard, the Busk decision narrows the test for what constitutes compensable activities. After Busk, preliminary and postliminary activities will be compensable only if they are directly related to the employee’s principal job duties. Employers now have a good rule of thumb: Whether the activity could be eliminated without impairing the ability of the employees to complete their work.
Reprinted with permission from the April 6, 2015 edition of Texas Lawyer. © 2015 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited.