Wage and Hour Claims Growing in

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Wage and Hour Claims Growing in Number and Diversity Donning and Doffing „ Social media and “smart” phones „ Compensable time in call centers „ Break and meal periods „ De Minimis time „ Travel time „ Payment Calculations „

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Donning and Doffing „

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In general, activity that is “integral and indispensable” to a “principal activity” is itself a “principal activity” under § 4(a) of the Portal-toPortal Act, and is compensable. See IBP, Inc. v. Alvarez, 546 U.S. 21, 37 (2005). The seminal case, but with much left to be decided. “Case law in this area is itself a mush, albeit one that redeemably recognizes the need to compensate workers fairly for work performed without driving companies crazy with microscopic litigation.” See Perez v. Mountaire Farms, Inc., 09-1917, 2011 WL 2207110 (4th Cir. 2011). 3

Donning and Doffing Trends „

Does the 29 U.S.C.A. § 203(o) definition of “clothes” create an exemption, which would be construed narrowly and against the employer?

• The Fifth, Sixth, and Eleventh Circuits have said no, § 203(o) is not an exemption. Allen v. McWane, Inc., 593 F.3d 449, 458 (5th Cir. 2010); Franklin v. Kellog, 619 F.3d 604, 612 (6th Cir. 2010); Adams v. United States, 471 F.3d 1321, 1325–26 (Fed. Cir. 2006). • The Ninth Circuit decided without analysis, that §203(o) is an exemption and must be read narrowly. Alvarez, 339 F.3d at 905. 4

Donning and Doffing Trends „

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Is “mid-shift” donning and doffing compensable? The Fourth Circuit says no. See Perez v. Mountaire Farms, Inc., 09-1917, 2011 WL 2207110 (4th Cir. 2011). Recent settlements:

• Pilgrim’s Pride agrees to an award of $1M+ in a donning and doffing case. • Toyota recently offered $4.5M in back pay to compensate employees for their prior time donning and doffing 5

Off-the-clock use of Social Media and Smart Phones/PDAs „

The case to watch: Allen v. City of Chicago, No. 10-CV-03183. Officers allege that they were required to respond to work related emails and text messages on department issued PDAs while off duty and without compensation. 6

Compensable time in call center environments „

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“An example of the first principal activity of the day for agents/specialists/representatives working in call centers includes starting the computer to download work instructions, computer applications, and work-related emails.” U.S. DOL Fact Sheet #64 revised July 2008. Nobles v. State Farm Mut. Auto. Ins. Co., 2:10CV-04175-NKL (W.D. Mo. 2011); Bishop v. AT & T Corp., 256 F.R.D. 503, 504 (W.D. Pa. 2009).

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Break and meal periods „

Automatic meal period deductions Lindberg v. UHS of Lakeside, LLC, 761 F. Supp. 2d 752, 754 (W.D. Tenn. 2011). „ Brabazon v. Aurora Health Care, Inc., 10CV-714, 2011 WL 1131097 (E.D. Wis. Mar. 28, 2011). „ Hamelin v. Faxton-St. Luke's Healthcare, 274 F.R.D. 385 (N.D.N.Y. 2011) (granting Plaintiff’s motion for certification for class relating to meal break deduction). „

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Break and meal periods (California) „

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Employers must provide meal and rest breaks. See Cal. Code § 11050(11)(A)-(12)(B). • Meal break periods shall be considered “on duty” (compensable) unless employees are relieved of all duties. • Rest time shall be counted as hours worked and therefore compensable.

Brinker Rest. Corp. v. S.C., 196 P.3d 216 (Cal. 2008)(pet for review granted) • See also Hernandez v. Chipotle Mexican Grill, Inc., 246 P.3d 612 (Cal. 2011) (further action deferred pending disposition of Brinker) 9

DE MINIMIS TIME: WHAT IS IT

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Anderson v. Mt. Clemens (1) Was the time spent walking from the main plant gate to an employee’s work station compensable?

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Anderson v. Mt. Clemens (2) Was the time spent in preliminary activities such as such as putting on aprons and overalls, removing shirts, taping or greasing arms, putting on finger cots, preparing the equipment for productive work, turning on switches for lights and machinery, opening windows and assembling and sharpening tools compensable? 12

Anderson v. Mt. Clemens Supreme Court: Subject to a de minimis exception, certain preliminary activities such as walking between the clock-in station and an employee’s work station and donning and doffing work clothes are compensable under the FLSA.

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Anderson v. Mt. Clemens The workweek contemplated by § 7(a) must be computed in light of the realities of the industrial world. When the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded.

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Anderson v. Mt. Clemens Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act. It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved.

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Anderson v. Mt. Clemens Walking Time--The de minimis rule can doubtless be applied to much of the walking time involved in this case, but the precise scope of that application can be determined only after the trier of facts makes more definite findings as to the amount of walking time in issue.

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Anderson v. Mt. Clemens The Preliminary Activities involve exertion of a physical nature, controlled or required by the employer and pursued necessarily and primarily for the employer's benefit. They are performed solely on the employer's premises and are a necessary prerequisite to productive work. Here again, however, it is appropriate to apply a de minimis doctrine so that insubstantial and insignificant periods of time spent in preliminary activities need not be included in the statutory workweek. 17

Anderson v. Mt. Clemens Thus we remand the case for the determination of • •

the amount of walking time involved and the amount of preliminary activities performed

giving due consideration to the de minimis doctrine and calculating the resulting damages under the Act. 18

Lindow v. United Sates -9th Cir (1)the amount of daily time spent on the additional work; (2)the practical administrative difficulty of recording the actual time; (3)the aggregate amount of time; (4)whether the work was performed on a regular basis 19

Lindow v. United Sates -9th Cir The district court held that the 7 to 8 minutes spent by employees reading the log book and exchanging information, even if not preliminary, was de minimis and therefore not compensable. Insofar as plaintiffs engaged in pre-shift work, we agree with the district court that the time was de minimis. 20

Lindow v. United Sates -9th Cir “although plaintiffs’ aggregate claim may be substantial…their claim is de minimis because of the administrative difficulty of recording the time and the irregularity of the additional pre-shift work.”

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Courts finding time NOT de minimis • Perez v. Mountaire Farms, 4th Cir • Burton v. Hillsborough County, 11th Cir • Kosakow v. New Rochelle Radiology Associates, 2d Cir. • De Asencio v. Tyson Foods, 3d Cir. • Reich v. Monfort, 10th Cir. • Brock v. City of Cincinnati, 6th cir. • Mireles v. Frio Foods, Inc., 5th Cir. 22

Courts finding time de minimis • Rutti v. Lojack, 9th Cir IBP v. Alvarez, 9th Cir • Tum v. Barber Foods, 1st Cir. • Reich v. New York City Transit Auth, 2d Cir. Singh v. City of New York, 2d Cir.

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TRAVEL TIME

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Travel Time „

Federal Law • Ordinary Commute Time • Continuous Workday • Company-Owned Vehicles

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California Law • Control Test

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Federal Law „

Portal-to-Portal Act (PPA) • Enacted in 1947, the PPA amended the FLSA and provides that compensable work does not include: „

“[T]raveling to and from the actual place of performance of the principal activity or activities . . .” and

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“[A]ctivities which are preliminary to or postliminary to said principal activity or activities,”

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“[W]hich occur prior to the time . . . at which such employee commences, or subsequent to the time . . . at which he ceases, such principal activity or activities.”

29 U.S.C. 254(a). 26

Federal Law „

Employee Commuting Flexibility Act (ECFA) • Congress amended the PPA in 1996 by adding language related to compensation for use of employers’ vehicles. The ECFA generally provides that the use of an employer’s vehicle for travel does not cause travel time to be compensable if it is within the “normal commuting area” for the employer’s business and the arrangement is subject to an agreement (need not be written) between the employer and the employee. • The agreement need not be knowingly and voluntarily made. See Rutti v. LoJack Corp., Inc., 596 F.3d 1046, 1052 (9th Cir. 2010) (requiring use of employer’s car as condition of employment is an “agreement” for purposes 27 of ECFA).

Commute Time Is Generally Not Compensable Under the FLSA „

Is this travel time compensable under the FLSA? • Facts: Employees are bus drivers seeking compensation for time spent returning from the destination points of their final routes to their home terminals or other relief points. • They are not required to return to their starting points once they complete their final bus routes. • Even so, many employees, particularly those who drove, walked, or bicycled in to pick up their buses, return to their starting points each day.

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Commute Time Is Generally Not Compensable Under the FLSA „

Answer: Maybe. • Start-end travel was compelled by the scheduling arrangements made by the employer for its benefit. Unlike employees in optional shuttle-to-work site cases, these employees were required to pick up their buses in order to work and did not voluntarily choose to end their runs at different location sites. • This was not normal commute time since absent fortuitous circumstances employees had to spend time going to their starting points before they could head home. Gilmer v. AlamedaContra Costa Transit District, No. C 08-05186, 2010 U.S. Dist. LEXIS 3405, at *21-22 (N.D. 29 Cal. Jan. 15, 2010).

Commute Time Is Generally Not Compensable Under the FLSA „

Answer: Maybe. (Cont’d) • “While it may be more awkward or inconvenient to arrange for transportation to and from work where the employees, like the drivers here, may begin or end their work day at diverse locations, such awkwardness or inconvenience does not change an otherwise non-compensable commute into compensable work time.” United Transp. Union Local 1745 v. City of Albuquerque, 178 F.3d 1109, 1121 (10th Cir. 1999). • The Gilmer Court distinguished City of Albuquerque noting that the Court relied on authority addressing the circumstance where employees travel to different job sites – not cases where employees started and ended their work in different locations. 30

Continuous Workday – Affect of PreCommute Activities on Travel Pay „

DOL regulations provide that a workday for purposes of the PPA includes “the period between the commencement and completion on the same workday of an employee’s principal activity or activities.” 29 C.F.R. § 790.6(b).

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Continuous Workday – Affect of PreCommute Activities on Travel Pay „

Does the continuous workday rule apply in this case? • Facts: Employee is responsible for merchandising and marketing products at 6 different retail stores. • Commute time from employee’s home or from last work site can take anywhere from 20 minutes to 3 hours in either direction.

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Continuous Workday – Affect of PreCommute Activities on Travel Pay „

Does the continuous workday rule apply in this case? (Cont’d) • At home, employee must perform certain administrative tasks including: „ „ „ „ „ „

Syncing his personal digital assistant; Attending to emails/voicemails; Printing/reviewing sales reports; Preparing marketing materials; Participating in online training; and Loading/unloading his car.

• Employee spends 15-30 minutes both before he leaves for the day and right after he returns from his last stop performing these tasks. 33

Continuous Workday – Affect of PreCommute Activities on Travel Pay „

Answer: No. • Even if the administrative work was integral and indispensable to plaintiff’s principal activity, he had flexibility as to WHEN the work was performed. That he chose to perform those tasks immediately before or after his commute does not transform his ordinary commute time into compensable work by way of the continuous workday doctrine. Kuebel v. Black & Decker Inc., No. 10-2273-cv, 2011 U.S. App. LEXIS 9448, at *18-20 (2d Cir. 2011). 34

Continuous Workday – Affect of PreCommute Activities on Travel Pay „

Developing Rule: • Preliminary/postliminary activities that are arguably integral and indispensable to principal activities will probably not trigger the continuous workday rule making subsequent travel time compensable where employees have flexibility in when and how those tasks are completed. „

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Rutti v. Lojack Corp., 596 F.3d 1046, 1049-50, 1060-61 (9th Cir. 2010). Ahle v. Veracity Research Co., 738 F. Supp. 2d 896, 917 (D. Minn. 2010). 35

ECFA – Conditions When Using Employer Provided Vehicles „

The line between “incidental” and “integral.” • ECFA – “[T]he use of an employer’s vehicle for travel by an employee and activities performed by an employee which are incidental to the use of such vehicle for commuting shall not be considered part of the employee’s principal activities if the use of such vehicle for travel is within the normal commuting area for the employer’s business or establishment and the use of the employer’s vehicle is subject to an agreement on the part of the employer and the employee or representation of such employee.” 29 U.S.C. § 254(a).

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ECFA – Conditions When Using Employer Provided Vehicles „

Restrictions that limit the use of the employer’s car during a commute are generally considered “incidental.” • Espinoza v. County of Fresno, No. 1:07-cv-01145-OWW-SMS, 2011 U.S. Dist. LEXIS 85401 at *13 (E.D. Cal. Aug. 2, 2011). „

Sheriff’s requirement to keep cell phone on to receive calls and monitor radio – incidental.

• Bobo v. United States, 136 F.3d 1465, 1466-67 (Fed. Cir. 1998). „

Border patrol agents required to commute in government owned vehicles to transport dogs that aided them in principal activities. The agents were prohibited from using their work vehicles for personal use, required to make relief and exercise stops for their dogs, and responsible for certain duties during their commute including monitoring radios, tracking mileage and watching for “suspicious activity” – incidental.

• Rutti (revisited). „

Restrictions against using company owned vehicle for personal pursuits and transporting passengers and requirements that employee drive directly from 37 home to work and back and have his cell phone on – incidental.

ECFA – Conditions When Using Employer Provided Vehicles „

Bottom line: Commuting in an employer’s vehicle should not be compensable unless employees perform additional legally cognizable work while driving to the workplace. • Rutti (revisited) – Requirement that employee have his cell phone -- not enough to be “additional legally cognizable work.” • Bobo (revisited) – Requirement that agents transport dogs, stop to allow dogs to exercise and relieve themselves, monitor radios, report mileage and look out for suspicious behavior -- not enough to be “additional legally cognizable work.”

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California Courts – Relevant Law Wage Orders

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Under California’s IWC wage orders, “hours worked” is generally defined as “the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.” Case Law

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The California Supreme Court has held that the level of the employer's control over its employees, rather than the mere fact that the employer requires the employees’ activity is the determinative factor in deciding compensability of travel pay. „

Morillion v. Royal Packing Co., 22 Cal. 4th 575, 586-87 (2000); Overton v. Walt Disney Co., 136 Cal. App. 4th 263, 271-73 (2006).

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The Control Test – Affect on Ordinary Commuting Rule? The Rutti majority reversed summary judgment in the employer’s favor for the employee’s state travel time claim, because it had “total control.”

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Employee was required to drive a company vehicle, no personal errands or passengers allowed;

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He could only drive directly from home to work and back;

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He could not use his cell phone while driving, but had to keep it on to answer calls from the dispatcher; and

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A computerized scheduling system set out the order of his job route including the first assignment of the day.

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PAYMENT CALCULATIONS

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“Gang Time” Payment For Estimated Length Of Activities „

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Acosto v. Tyson Foods, Inc., 2010 U.S. Dist. LEXIS 142430 (D. Neb. 2010) (adopted by 2010 U.S. Dist. LEXIS 142430 (D. Neb. 2011)) Class certified under FLSA and state law regarding pay for pre- and postproduction line activities

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Payment For Estimated Length Of Activities Acosta (cont’d)

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Employees at meat packing plant were paid from time first carcass passed their workstation until time last carcass passed An additional, standardized amount of time was added to compensate for a host of pre- and post-shift activities 43

Payment For Estimated Length Of Activities Acosta (cont’d)

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Defendant presented evidence of numerous individualized issues pertaining to nature and length of specific uncompensated tasks The court granted class certification, reasoning that the compensable nature of the duties was a common legal issue, and whether the estimated length was sufficient could be determined by common proof 44

Payment Based On Scheduled Shift Length „

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Alexander v. Caraustar Industries, Inc., 2011 U.S. Dist. LEXIS 68865 (N.D. Ill. 2011) Conditional certification granted under FLSA and state law based on allegation employer paid according to scheduled, not actual, shift length

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Payment Based On Scheduled Shift Length Alexander (cont’d)

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Manufacturer of paperboard products was alleged to have paid its employees based on scheduled shift length. Plaintiffs claimed this practice resulted in unpaid time attending mandatory meetings, donning and doffing safety equipment, walking to work stations, and discussing work issues with incoming shift.

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Payment Based On Scheduled Shift Length „

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Lugo v. Farmer’s Pride, Inc., 737 F. Supp. 2d 291 (E.D. Penn. 2010) Chicken processing plant paid employees based on scheduled shift length, plus additional time designed to compensate for donning, doffing, and travel to work station FLSA class ordered decertified 47

Payment Based On Scheduled Shift Length Lugo (cont’d)

Significant factors: a) Amount of additional time allotted was based on time and motion studies conducted by employer following DOL audit b) Amount of additional time was not clearly inadequate, meaning differences would affect liability as well as damages c) Employer introduced evidence that pay was adjusted if employee worked beyond standard shift 48

Rounding Time: Risks „

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Smith v. Safety-Kleen Systems, Inc., 2011 U.S. Dist. LEXIS 40670 (N.D. Ill. 2011) Safety-Kleen operated chemical recycling and production facilities Plaintiff sought conditional FLSA certification for unpaid time spent donning, doffing, and traveling to work stations 49

Rounding Time: Risks Smith (cont’d)

The employer admitted that it: 1) Rounded employees’ time to the nearest quarter hour, and 2) Did not permit employees to clock in more than seven minutes before a scheduled shift. Plaintiff contended that, in combination, the rounding policy necessarily worked to the detriment of the employee.

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Best Practices: Rounding „

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Dominguez v. Quigley's Ir. Pub, Inc., 2011 U.S. Dist. LEXIS 55399 (N.D. Ill. 2011) Two waitresses filed suit against employer alleging unpaid overtime under FLSA Management adjusted actual clock-in and clock-out times to match plaintiffs’ scheduled shifts Management claimed this was only practical way to determine payroll since it could not monitor every millisecond an employee starts and stops working 51

Best Practices: Rounding Dominguez (cont’d) „

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The court granted plaintiffs’ motion for summary judgment. The court’s advice for controlling self-willed employees: Fire them or adopt a valid rounding policy instead of choosing to pay employees by the minute.

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Best Practices: Rounding „

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Rutti v. Lojack Corp., 596 F.3d 1046 (9th Cir. 2010) Technician who installed alarms in customers’ cars sought class certification of FLSA and California state law claims. Plaintiff alleged that he performed various pre- and post-shift duties that were uncompensated. Post-shift duties included transmitting electronic data to employer, and then checking to ensure transmission was successful.

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Best Practices: Rounding Rutti (cont’d) „

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Court affirmed summary judgment on FLSA claims, but held that plaintiff had established a disputed issue as to whether his post-shift duties might be compensable under California law Court noted that tracking the post-shift time may be difficult and de minimus. However, the court suggested that “it may be possible to reasonably determine or estimate the average time.” 54