Overtime Law Blog

Home » Posts tagged 'Predominant Benefit Test'

Tag Archives: Predominant Benefit Test

U.S.S.C.: Time Spent By Employees Waiting For and Undergoing Security Screenings Before Leaving Workplace Was Not Compensable Under FLSA

Integrity Staffing Solutions, Inc. v. Busk

The Supreme Court handed yet another victory to America’s corporations early last month, when it ruled that employers do not have to pay their employees for time spent waiting for and undergoing security screening before leaving the workplace, despite the fact that such screenings are solely for the benefit of the employers. Of note, while the decision reversed a contrary decision from the Ninth Circuit, other Circuits and the DOL itself (which filed an amicus brief in support of employers) have long held that such screenings do not constitute compensable work time.

The Court summarized its decision in its Syllabus, preceding the actual opinion as follows:

Petitioner Integrity Staffing Solutions, Inc., required its hourly warehouse workers, who retrieved products from warehouse shelves and packaged them for delivery to Amazon.com customers, to undergo a security screening before leaving the warehouse each day. Respondents, former employees, sued the company alleging, as relevant here, that they were entitled to compensation under the Fair Labor Standards Act of 1938 (FLSA) for the roughly 25 minutes each day that they spent waiting to undergo and undergoing those screenings. They also alleged that the company could have reduced that time to a de minimis amount by adding screeners or staggering shift terminations and that the screenings were conducted to prevent employee theft and, thus, for the sole benefit of the employers and their customers.

The District Court dismissed the complaint for failure to state a claim, holding that the screenings were not integral and indispensable to the employees’ principal activities but were instead postliminary and noncompensable. The U.S. Court of Appeals for the Ninth Circuit reversed in relevant part, asserting that postshift activities that would ordinarily be classified as noncompensable postliminary activities are compensable as integral and indispensable to an employee’s principal activities if the postshift activities are necessary to the principal work and performed for the employer’s benefit.

Held : The time that respondents spent waiting to undergo and undergoing security screenings is not compensable under the FLSA. Pp. –––– – ––––.

(a) Congress passed the Portal–to–Portal Act to respond to an economic emergency created by the broad judicial interpretation given to the FLSA’s undefined terms “work” and “workweek.” See 29 U.S.C. § 251(a); Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 598, 64 S.Ct. 698, 88 L.Ed. 949. The Portal–to–Portal Act exempted employers from FLSA liability for claims based on “activities which are preliminary to or postliminary to” the performance of the principal activities that an employee is employed to perform. § 254(a)(2). Under this Court’s precedents, the term “principal activities” includes all activities which are an “integral and indispensable part of the principal activities.” Steiner v. Mitchell, 350 U.S. 247, 252–253, 76 S.Ct. 330, 100 L.Ed. 267. An activity is “integral and indispensable” if it is an intrinsic element of the employee’s principal activities and one with which the employee cannot dispense if he is to perform his principal activities. This Court has identified several activities that satisfy this test—see, e.g., id., at 249, 251, 76 S.Ct. 330; Mitchell v. King Packing Co., 350 U.S. 260, 262, 76 S.Ct. 337, 100 L.Ed. 282—and Department of Labor regulations are consistent with this approach, see 29 CFR §§ 790.8(c), 790.7(g). Pp. –––– – ––––.

(b) The security screenings at issue are noncompensable postliminary activities. To begin with, the screenings were 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 they “integral and indispensable” to those activities. This view is consistent with a 1951 Department of Labor opinion letter, which found noncompensable under the Portal–to–Portal Act both a preshift screening conducted for employee safety and a postshift search conducted to prevent employee theft. The Ninth Circuit’s test, which focused on whether the particular activity was required by the employer rather than whether it was tied to the productive work that the employee was employed to perform, would sweep into “principal activities” the very activities that the Portal–to–Portal Act was designed to exclude from compensation. See, e.g., IBP, supra, at 41, 126 S.Ct. 514. Finally, respondents’ claim that the screenings are compensable because Integrity Staffing could have reduced the time to a de minimis amount is properly presented at the bargaining table, not to a court in an FLSA claim. Pp. –––– – ––––.

While the decision was lauded by corporations throughout the country, it does not present a significant change to the existing law. However, depending on how the dicta in the decision is read in the future the case could have wide unanticipated consequences going forward. For this reason, and because it is from the United States’ highest court, wage and hour practitioners would be wise to read the entire decision.

Click Integrity Staffing Solutions, Inc. v. Busk to read the entire decision.

2nd Cir.: Reiterates Carrying 20 LB. Bag Does Not Transform Otherwise Non-Compensable Commute Time Into Compensable Time; Applyies “Predominate Benefit Test”

Clarke v. City of New York

Revisiting an issue it has previously ruled on, the 2nd Circuit held that an employee’s required carrying of 20 pounds of materials each day to and from work, during his or her daily commute does not transform otherwise non-compensable travel time into compensable work hours.

“This case falls squarely under the previously decided Singh v. City of New York, 524 F.3d 361 (2d Cir.2008). In Singh, a group of inspectors with the Fire Alarm Inspection Unit of the New York Fire Department brought a claim under the Fair Labor Standards Act (“FLSA”), as amended by the Portal-to-Portal Act, demanding compensation for their commuting time because they were required by their employer to transport and protect inspection documents. Id. The collective weight of their materials was between 15 and 20 pounds. Id. at 365.

We analyzed the claim in two parts, looking first to whether plaintiffs were entitled to compensation for the entire commute and, if not, whether they were entitled to compensation for the additional commuting time that resulted from their transport of these materials. Id. at 366-67. For the first part of the analysis, we applied a “predominant benefit test,” asking whether the employer’s restrictions hindered the employees’ ability to use their commuting time as they otherwise would have. Id. at 369. We determined that the inspectors’ commute was not materially altered by their document transport responsibilities, and thus they were not entitled to compensation for the entire commute. Id. at 370. We then looked to the second part of the test to determine if the additional commuting time that resulted from the transport of the documents was compensable. Id. While noting that the additional time was time spent “necessarily and primarily for the benefit of the City” and thus was compensable, we looked to a three-part test to determine if such compensable time qualified as de minimis. Id. The three factors were: “(1) the practical administrative difficulty of recording additional time; (2) the size of the claim in the aggregate; and (3) whether the claimants performed the work on a regular basis.” Id. at 371. Under this test, we determined that the additional commuting time was de minimis as a matter of law. Id. Thus, none of the plaintiffs’ commuting time was compensable under the FLSA. Id. at 372.

The facts of the case before us are materially indistinguishable from Singh. Plaintiffs in this case, like Singh, are responsible for the transport of a 20-pound bag of equipment.  This 20-pound bag, however, does not burden the plaintiffs to such a degree as to make the City the predominant beneficiary of their commute. Their responsibility is limited to transporting the bag; there are no other active work-related duties required during the commute. Transporting a bag in a car trunk, or at plaintiffs’ feet on a train or bus, allows them to use their commuting time as they wish. To the extent that the bag adds time to their commute, we find, just as in Singh, that such time is de minimis and non-compensable.”