The United States Supreme Court, in an unanimous nine-page opinion authored by Justice Thomas, recently held that the time warehouse employees spent waiting to undergo and actually undergoing post-shift security screenings is not compensable under the Fair Labor Standards Act (FLSA).[1] The case, Integrity Staffing v. Busk,[2] turned on the meaning of the Portal-to-Portal Act,]3] a 1947 law that states that employers need not pay for “activities which are preliminary to or post-liminary … to principal activities [i.e., activities which the employee is hired to perform].”

In this case, the employer, Integrity Staffing Solutions Inc., provided staffing to Amazon fulfillment warehouses throughout the United States.[4] The plaintiff employees worked at Amazon warehouses in Nevada. Their primary duty was to retrieve products from the warehouse shelves and package those products for delivery to Amazon customers.

At the end of each work day, Integrity Staffing required its employees to undergo a post-liminary security screening in which they would be required to remove items such as wallets, keys and belts from their persons before they passed through metal detectors. The purpose of the screening was to prevent employee theft. The plaintiffs stated that the time spent waiting for and actually undergoing the security screening amounted to approximately 25 minutes per day.

In 2010, the plaintiff employees in Nevada filed a putative class action against Integrity Staffing on behalf of similarly situated employees in the Nevada warehouses for alleged violations of the FLSA and Nevada Labor Laws. The employees argued that they should be compensated for the security screening time for two reasons: (1) Integrity Staffing could have, although it did not, reduced the wait time and the actual screening time to a de minimis amount by restructuring its screening process and (2) the screenings were conducted to prevent employee theft, and thus occurred solely for the benefit of the employers and their customers.

The District Court dismissed the employees’ lawsuit for failure to state a claim, finding that the screenings were not “integral and indispensable” to a principal activity, and thus fell into the post-liminary exception of the Portal-to-Portal Act. On appeal, the Ninth Circuit broke ranks with its sister circuits that had considered similar issues, and held that the screening time was compensable as integral and indispensable to the employees’ principal activities because those post-shift activities were necessary to the work performed and done for the benefit of the employer.[5]

In order to clarify the “integral and indispensable” test and resolve the circuit split, the Supreme Court granted certiorari.[6] The court espoused the following test to determine whether an activity was integral and indispensable: “An activity is therefore integral and indispensable to the principal activities that an employee is employed to perform if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”[7]

The court then recounted its previous decisions that best illustrated this test. For example, in Steiner v. Mitchell, the time battery plant employees spent showering and changing clothes was considered compensable because the chemicals in the plant were toxic to human beings and the employer conceded that the clothes changing and showering activities of the employees were indispensable to the performance of their productive work and integrally related thereto.[8] Additionally, in Mitchell v. King Packing Company, the court held that the time meat packer employees spent sharpening their knives was compensable because dull knives would slow down production on the assembly line, affect the appearance of the meat as well as the quality of the hides, cause waste and lead to accidents.[9] In contrast, in IBP Inc. v. Alvarez, the time poultry plant employees spent waiting to don protective gear was considered non-compensable because such waiting time was “two steps removed from the productive activity on the assembly line.”[10]

The court also noted that its approach is consistent with certain Department of Labor regulations.[11] Additionally, its analysis aligns with a 1951 Department of Labor opinion letter concerning similar facts. Specifically, in that case, the department found non-compensable a pre-shift security search for employees in a rocket powder plant “for matches, spark-producing devices such as cigarette lighters, and other items which have a direct bearing on the safety of the employees,” as well as a post-shift security search of the employee done “for the purpose of preventing theft.”[12] In analyzing this opinion letter, the court found it important that the Department of Labor drew no distinction between searches for safety and searches for theft prevention.

Based on the integral and indispensable test and relevant precedent, the court reversed the Ninth Circuit and held that the security screenings at issue were non-compensable under the FLSA. First, the court held that the screenings were clearly not the “principal activity” for which the employees were hired to perform. The employees were hired to retrieve products from warehouse shelves and package those products for shipment to Amazon customers, not undergo security screenings.[13] Furthermore, the court held that the security screenings were not “integral and indispensable” to the employee’s principal activities (i.e., the job duties for which they were hired). In reaching such a conclusion, the court reasoned that “Integrity Staffing could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.”[14]

The court went on to explain why the Ninth Circuit’s reasoning was flawed. The Ninth Circuit erred in focusing on what was required of employees and not the job duties for which they were hired. The Supreme Court noted that the Ninth Circuit’s reasoning directly conflicts with the language and purpose of the Portal-to-Portal Act: “If the test could be satisfied merely by the fact that an employer required an activity, it would sweep into principal activities, the very activities that the Portal-to-Portal Act was designed to address.”[15]

Lastly, the Supreme Court quickly dispensed with the employees’ argument that the time should be held compensable because Integrity Staffing could have restructured the screening so that it would only take a de minimus amount of time. The fact that it could have been restructured, stated the court, “does not change the nature of the activity or its relationship to the principal activities that employee is employed to perform.”[16] Such an argument, the court reminded the employees, should be presented at the bargaining table, not through FLSA litigation.

This decision is the latest in a series of employer-friendly decisions from the United States Supreme Court. Here, the court made clear that simply because a pre- or post-shift activity is required by the employer, it is not automatically compensable under the FLSA. This decision clarified the “integral and indispensable” test, which should enable employers to better predict other types of activities that would be non-compensable under federal law.

Notes

1. Justice Sotomayor authored a concurring opinion, in which Justice Kagan joined.
2. No. 13-433, 574 U.S. __ (2014).
3. 29 U.S.C. § 254(a).
4. Although not pertinent to the court’s decision, Tennessee is home to five Amazon fulfillment facilities, like the ones at issue here, located in Charleston/Cleveland, Chattanooga, Lebanon, Murfreesboro and Nashville. Amazon Fulfillment Locations (www.amazonfulfillmentcareers.com/amazon-fulfillment/locations). It is also worth noting that Integrity Staffing provides warehouse personnel to the Amazon sites in Charleston/Cleveland and Chattanooga. Integrity Staffing Job Search (http://jobs.integritystaffing.com/search/?q=tennessee&startrow=1&utm_source=CSSearchWidget&search.x=55&search.y=9&search=Search+jobs).
5. 713 F.3d 525, 530 (2013).
6. Interestingly, the Obama administration sided with Integrity Staffing on the issue via an amicus brief filed on June 4, 2014 (http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/BriefsV4/13-433_resp_amcu_aflcio.authcheckdam.pdf). This may seem a bit odd given the administration’s usually strong position in favor of labor interests, but a closer look at the government’s amicus brief reveals that the federal government requires federal workers to undergo security checks similar to those instituted by Integrity Staffing, so the government had a vested financial interest in seeing Integrity Staffing’s position prevail.
7. Slip Op. at 6.
8. 350 U.S. 247, 249-250 (1956).
9. 350 U.S. 260, 262 (1956).
10. 456 U.S. 21, 42 (2005).
11. See 29 C.F.R. § 790.8.
12. Opinion Letter from Department of Labor, Wage & Hour Division, to the Department of Army, Office of Chief Ordinance, (April 18, 1951).
13. Slip Op. at 7.
14. Id.
15. Id. at 8.
16. Id. at 9.

EDWARD G. PHILLIPS is a lawyer with Kramer Rayson LLP in Knoxville, where his primary areas of practice are labor and employment law. He graduated with honors from East Tennessee State University and received his law degree from the University of Tennessee College of Law in 1978 with honors, and as a member of The Order of the Coif. He is a former chair of the Tennessee Bar Association’s Labor and Employment Law Section.

BRANDON L. MORROW is an associate with Kramer Rayson LLP in Knoxville where his primary areas of practice are labor and employment, and litigation. He earned a bachelor’s degree from the University of Tennessee and a law degree from UT College of Law in 2012.