On Tuesday December 9, 2014, businesses everywhere were provided with a valuable tool in defending themselves from FLSA litigation. The Supreme Court ruled unanimously that a staffing agency was not required to pay workers at Amazon Warehouses for the time they spent waiting to go through a security checkpoint at the end of their shifts.[1] The Plaintiffs alleged this process could take up to twenty five minutes. However, Kelly Cheeseman, the spokesperson for Amazon stated these allegations were entirely untrue, and Amazon has a global process to ensure the screenings do not take longer than ninety seconds.[2] The workers were hired by a third party agency, Independent Employment, to retrieve and package inventory for shipment at Amazon warehouses. In order to combat employee theft, workerswere required to undergo a security screening at the end of the workday. These kinds of checks are common among retailers, as the industry loses an estimated $16 billion annually from theft.[3]
Plaintiff Employees filed a putative class action against Integrity Staffing, alleging they were owed compensation, pursuant to the Fair Labor Standards Act, for the time they spent waiting to undergo and actually undergoing the security screenings. The Court held that the employees’ time spent going through the screenings was not compensable under the Fair Labor Standards Act of 1938 (FLSA) 29 U.S.C. §201 et seq., as amended by the Portal-to-Portal Act of 1947 §251 et seq.
The FLSA was enacted to establish minimum wage and overtime compensation for every hour per week worked over forty. However, the legislation failed to give an explicit and clear definition of “work” and “work week”. In order to clarify this, Congress passed the Portal-to-Portal Act in 1948. The Portal-to-Portal Act exempted employers from liability for FLSA compensation claims for activities “which are preliminary or postlimininary to said principal activity or activities, which occur either prior to the time….or subsequent to the time on any particular workday at which he ceases such principal activity.” [4]
The Court stated that the security screenings were a part of the process by which the employees left from work, which is an activity Congress clearly intended to designate as noncompensable under the Portal-to-Portal Act. Moreover, the screenings were not a part of the principal activities of employment. The Court has interpreted principal activities “to embrace all activity which are an integral and indispensable part of the principle activities.”[5]The security screenings were not integral and indispensable to the employee’s duties as warehouse workers. If an activity was intrinsic and indispensable, an employee would be unable to perform other crucial duties of his or her job. As stated by Justice Sonia Sotomayor “employees could skip the screenings altogether without the safety or effectiveness of their principle activities being substantially impaired.” The screenings were not intrinsic elements of retrieving inventory from the warehouse and packing products for shipment. The screenings were not integral and indispensable to the principal activities employees were hired to perform. The time spent waiting for and undergoing the security screenings is not compensable under the FLSA.
This decision overturned the Court of Appeals ruling that security checks were integral and indispensable activities under the Portal-to-Portal Act because they were required by the employer. The Court of Appeals erred by focusing on whether an employer required an activity. The integral and indispensable test is tied to work that the employee was hired to perform. If the test could be satisfied by merely the fact an employer required a certain activity, it would encompass the very activities, such as traveling to and from work that the Portal-to-Portal Act is meant to exclude from the work week for the purpose of the FLSA.
Most importantly, this decision provides a powerful and decisive victory for employers facing similar legal battles. There are pending lawsuits of this nature, against Amazon, CVS Health Corp., Apple Inc. and other staffing companies affecting up to 400,000 employees, involving hundreds of millions of dollars. [6] The precedent of this case enables these suits to be efficiently and equitably resolved. Recently, employers have endured a rising number of FLSA suits, seeking to assemble large groups of employees who claim damages and back pay for activities which they allege to be intrinsic to the job. [7] The Supreme Court ruling represents a judicial effort to reign in overly expansive FLSA litigation. The significance of Integrity Staffing Solutions Inc., v. Busk should also be interpreted in light of a recent similar ruling of Sandifer v. U.S. Steel Corp., 134 S. Ct. 870 (2014).[8] In Sandifer, a class of employees filed suit asking for compensation under the FLSA for the time it took to “don and doff” their required clothes, goggles and earplugs. The Court held that under the Portal-to-Portal Act, these activities were akin to getting dressed for work, took minimal time, and were not integral and indispensable to employment. [9] Both cases narrow and define what tasks are integral and indispensable to an employee’s duties, specifically what constitutes a workday under the FLSA and Portal-to Portal Act. These two decisions, handed down in the same year, provide employers with helpful tools to fight back against wrongful FLSA litigation.
[1] Integrity Staffing Solutions Inc., v. Busk, 574 U. S. ____ (2014)
[2] Barnes, Robert. “Supreme Court Rules Amazon Doesn’t Have to Pay for After-hours Time in Security Lines.” Washington Post. The Washington Post. Web. 10 Dec. 2014. <http://www.washingtonpost.com/politics/courts_law/supreme-court-rules-amazon-doesnt-have-to-pay-for-after-hours-time-in-security-lines/2014/12/09/05c67c0c-7fb9-11e4-81fd-8c4814dfa9d7_story.html>.
[3] Hurley, Lawrence. “U.S. Top Court Rejects Worker Pay for Security-screening Time.”Reuters. Thomson Reuters, 9 Dec. 2014. Web. 10 Dec. 2014. <http://www.reuters.com/article/2014/12/09/us-usa-court-workers-idUSKBN0JN1P820141209>.
[4] 29 U.S.C. §254(a).
[5] IBP, Inc. v. Alvarez 546 U.S. 21, 29-30 (2005).
[6] Hurley, Lawrence. “U.S. Top Court Rejects Worker Pay for Security-screening Time.”Reuters. Thomson Reuters, 9 Dec. 2014. Web. 10 Dec. 2014. <http://www.reuters.com/article/2014/12/09/us-usa-court-workers-idUSKBN0JN1P820141209>.
[7] Fisher, Daniel “Amazon Workers Lose At Supreme Court On Security-Screening Time.”Forbes. Forbes Magazine. Web. 10 Dec. 2014. <http://www.forbes.com/sites/danielfisher/2014/12/09/amazon-workers-lose-at-supreme-court-on-security-screen-time/>.
[8] Id.
[9] Sandifer v. U.S. Steel Corp., 134 S. Ct. 870, 881(2014)