Insights: Supreme Court Win for Employers
By Patrick Bannon, Rebecca DeGroff, Noah Finkel, Richard Alfred (Seyfarth Shaw LLP)
The Supreme Court has unanimously that the Fair Labor Standards Act does not require employers to pay employees for time spent passing through post-shift security screening.
The decision, Integrity Staffing Solutions, Inc. v. Busk, is not only a major win for employers who use security screening. The logic of the ruling is important for all employers because it clarifies the “integral and indispensable” test used to determine the compensability of employee activities that are not, themselves, principal activities.
It is now clear that the fact that an employer requires a particular activity does not make that activity integral and indispensable and, thus, compensable. More is required. For an activity to be integral and indispensable to a principal activity, it must be “an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”
The case involved employees who packaged products at Amazon warehouses. At the end of each shift they were required to line up and pass through anti-theft metal detectors, a process that allegedly took 25 minutes per day. According to the employees, the employer could have dramatically reduced the time required by hiring more screeners.
The plaintiff had argued that time spent on screenings was compensable because the employer required it for the employer’s benefit. The Supreme Court rejected that theory as inconsistent with Congress’ amendment of the FLSA in the Portal-to-Portal Act to limit the scope of compensable work.
The real test, the Court wrote, is whether a pre-or post-shift activity is “integral and indispensable to the principal activities that an employee is employed to perform.” Merely being required to perform an activity does not meet that test. Rather, the test can only be met if an activity is an “intrinsic element” of the job.
The Supreme Court concluded that passing through security was not a “principal activity” of the employees because they were employed to package products, not to go through security screenings. Nor, the Court stated, were the security screenings “integral or indispensable” to the employees principal activities. On the contrary, the employer “could have eliminated the screenings altogether without impairing the employees ability to complete their work.” Justices Sotomayor and Kagan wrote a concurrence that endorsed the basic reasoning of the Court’s opinion, but did not include the “intrinsic element” language in the opinion of the Court.
The Court also rejected as irrelevant whether the employer could have shortened the time required for the screenings. Such arguments, the Court wrote, “are properly presented to the employer at the bargaining table . . . not to a court in an FLSA claim.”
The Court’s definitive ruling — a 9-0 ruling issued about 60 days after oral argument — likely will not be limited to security screenings. The “intrinsic element” test should be applied by lower courts to many other contexts, including donning and doffing claims and claims for compensation for computer “boot up” time in call center environments.
Busk marks a moment of solidarity between employers and the Department of Labor, which, consistent with a 1951 Opinion Letter, argued in favor of Integrity Staffing. The Supreme Court noted that the Department of Labor’s regulations were “consistent with” the Court’s conclusion, but made no reference to giving the regulations any deference.
This opinion marks the third Supreme Court decision in as many years in which the Court sided with employers in a wage-hour dispute. Two years ago, it held that pharmaceutical representatives are exempt outside sales employees and thus are not entitled to overtime compensation.
Earlier this year, and as part of last year’s Supreme Court term, the Court ruled that time spent donning and doffing certain clothes by employees covered by a collective bargaining agreement is excluded from compensable time due to Section 203(o). And now it has ruled that employees’ preliminary or postliminary activities are compensable only if they are an “intrinsic element” of an employee’s principal activity.
Interestingly, the Court stressed at the beginning of its opinion that the Portal-to-Portal Act of 1947 was enacted by Congress to stop a flood of litigation alleging that employees should be paid for activities that are not their principal job activities. The Court itself is now stopping the wave of FLSA litigation asserting similar claims that has flooded employers in the last decade.
Patrick Bannon is a partner in the Labor & Employment department in Seyfarth Shaw LLP's Boston office. He can be reached at [email protected].
Rebecca DeGroff is a partner in the Labor and Employment department in Seyfarth Shaw LLP's Chicago office. She can be reached at [email protected].
Noah Finkel is a partner in the Labor & Employment department and the Wage & Hour Litigation practice group in Seyfarth Shaw LLP’s Chicago office. He can be reached at [email protected].
Richard Alfred is the chair of Seyfarth Shaw LLP’s National Wage & Hour Litigation practice group in the firm’s Boston office. He can be reached at [email protected].