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December 12, 2014Client Alert

The U.S. Supreme Court Delivers Employers a Holiday Package of Wage and Hour Rulings

On December 9, 2014, the United States Supreme Court issued its highly anticipated decision in Integrity Staffing Solutions, Inc. v. Busk. In Busk, the Supreme Court unanimously held that the  Fair Labor Standards Act (“FLSA”) did not require a staffing company to pay its employees for the time spent waiting for and  then undergoing security screenings after the completion of their work shifts. 

The Busk Opinion’s impact on FLSA lawsuits and employers’ compensation practices will likely be far reaching. Its holdings and analysis establish favorable new standards for employers struggling to determine whether their employees’ “off-the clock” activities should be considered compensable “hours worked.”

In Busk, hourly employees who retrieved and packaged items for shipping in an Amazon warehouse filed a putative collective action lawsuit under the FLSA seeking unpaid wages from their employer, Integrity Staffing Solutions (“Integrity” or “the Company”). 

Plaintiffs alleged the Company violated the FLSA by failing to pay them for the approximately 25 minutes per day they spent waiting in line for and then undergoing security screenings after the completion of their work shifts. The metal detector security screenings were much like what airline passengers endure, only with long lines of employees instead of travelers.

The Busk Court rejected plaintiffs’ FLSA claims. In common sense fashion the Busk Court noted that Integrity “did not employ its workers to undergo security screenings, but to retrieve products from ware¬house shelves and package those products for shipment [to the customer].” It further observed that the Company “could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.”  

Consequently, the Busk Court held that the function of undergoing security screenings was not “integral and indispensable” to the employees’ “principal” work activities, because the screenings were not an “intrinsic element” of “retrieving products from warehouse shelves or packaging them for shipment.” Given the activities in question were not “integral and indispensable” to the employees’ principal activities, Busk found they were not compensable hours worked under the FLSA.

In so doing, the Busk Court articulated several important holdings:

  1. An employee’s activities are not compensable merely because the employer “required” their performance (even if on-site). 
  1. An employee’s activities are not compensable even though their performance primarily benefited the employer.
  1. An employee’s “off- the-clock” activities will be considered “integral and indispensable” to the employee’s “principal” activities, and therefore compensable, only if they are “an intrinsic element of those [principal] activities and one with which the employee cannot dispense if he is to perform those [principal] activities.”  

The Busk Court’s holdings are not confined to the security screening context – they were deliberately broad pronouncements. Thus, one can foresee their potential application to a wide range of other employer required “off-the-clock activities,” such as donning and doffing uniforms and PPE, and booting up and/or logging off company computers. And given the standards set by the rulings, there is a much greater likelihood that such activities will be found non-compensable.

In short, the Supreme Court delivered a neatly wrapped package of rulings that all employers should take some “comfort and joy” from during the Holidays and after.

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