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March 3 --Granting a petition filed by an employee staffing firm, the U.S. Supreme Court March 3 agreed to review whether workers in a Nevada warehouse may be entitled to compensation under the Fair Labor Standards Act for time spent going through security screenings after their shifts (Integrity Staffing Solutions v. Busk, U.S., No. 13-433, cert. granted 3/3/14).
Petitioner Integrity Staffing Solutions, which provides workers for warehouses that fulfill Amazon.com orders, said the U.S. Court of Appeals for the Ninth Circuit erred by ruling the FLSA, as amended by the Portal-to-Portal Act, may require Integrity to pay warehouse employees for time spent emptying their pockets and passing through metal detectors before exiting the warehouse after their work shifts are over.
Last April, the Ninth Circuit reversed a district court's dismissal of an FLSA collective action filed by two former Integrity employees who had been assigned to the Nevada warehouse handling Amazon.com orders. The appeals court ruled that since the post-shift security screenings are solely for the employer's benefits, the employees may be entitled to pay for the up to 25 minutes the plaintiffs testified that workers sometimes must wait to get through the security checkpoint ( 713 F.3d 525, 20 WH Cases2d 937, 2013 BL 99089 (9th Cir. 2013); 71 DLR AA-1, 4/12/13).
In seeking review, Integrity said the Ninth Circuit “disregarded the plain text” of the Portal-to-Portal Act, a 1947 amendment to the FLSA, and violated Supreme Court precedent by departing from “an unbroken line of authority” that employees are not entitled to compensation under the FLSA for time spent in security screenings.
The Ninth Circuit decision, which conflicts with two other federal circuit court rulings, already has caused “a spate of new nationwide class-action suits” filed against major employers seeking back pay under the FLSA and state laws for time spent in security screenings, Integrity said.
“If allowed to stand, the [Ninth Circuit] decision will result in massive retroactive liability for employers, and will fundamentally upend the careful balance struck by Congress in the FLSA and Portal-to-Portal Act,” Integrity said.
In a brief opposing review, former Integrity employees Jesse Busk and Laurie Castro said no circuit conflict exists, as the other federal appeals courts haven't said employee time spent in security screenings is never compensable under the FLSA.
The Ninth Circuit ruled in the particular circumstances of this case, employee participation in the anti-theft screening process may be “integral and indispensable” to the workers' “principal activities” and therefore compensable under the FLSA, Busk and Castro said.
Integrity's “claim of error in the fact-bound application of that standard to the particular claim in this case does not present any circuit conflict or otherwise warrant review by this Court,” the former employees said.
But Integrity in its petition for review said the Ninth Circuit's decision “cannot be squared” with the Portal-to-Portal Act's plain language, which establishes that a worker's “preliminary” and “postlimininary” activities are not covered by the FLSA.
In Steiner v. Mitchell, 350 U.S. 247, 12 WH Cases 750 (1956), and subsequent decisions, the Supreme Court construed the Portal-to-Portal Act as requiring employee compensation “only for tasks that are an 'integral and indispensable part of the principal activities for which covered workman are employed,' ” Integrity said.
The Ninth Circuit decision can't be reconciled with those Supreme Court rulings, as security screenings are “a paradigmatic example” of an activity that is “preliminary” or “postliminary” to a worker's primary job duties, Integrity said.
The security screenings that the warehouse workers undergo are “indistinguishable” from many other tasks that courts have ruled non-compensable under the FLSA, such as waiting to punch in or out of work, walking from a parking lot to the workplace or waiting to pick up protective gear prior to donning it for a work shift, Integrity said.
“All of these activities are 'required' in a broad, but-for sense, but they are not compensable under the FLSA because such tasks are fundamentally distinct from employees' actual job duties,” Integrity said, citing the Supreme Court decision in IBP v. Alvarez, 546 U.S. 21, 10 WH Cases2d 1825 (2005) (216 DLR AA-1, 11/9/05).
The Ninth Circuit ruling also conflicts with the Second Circuit decision in Gorman v. Consolidated Edison Corp., 488 F.3d 586, 12 WH Cases2d 1104 (2d Cir. 2007) (112 DLR A-1, 6/12/07), and the Eleventh Circuit decision in Bonilla v. Baker Concrete Construction, 487 F.3d 1340, 12 WH Cases2d 1100 (11th Cir. 2007) (105 DLR A-1, 6/1/07), Integrity said.
The Supreme Court should grant review to resolve the circuit split, clarify that time spent in security screenings is not covered by the FLSA and prevent the scenario in which retailers with large warehouse operations such as Amazon.com, Apple and CVS Pharmacy, for example, are targeted for wage and hour class actions, Integrity said.
“Because of the ease with which nationwide FLSA class actions can be brought, the Ninth Circuit's decision threatens to become the de facto national standard,” Integrity said.
“Moreover, because the Ninth Circuit's decision was a dramatic change in what had been a settled area of the law, employers across the country face the prospect of massive retroactive liability,” the petitioner said. “Under these circumstances, certiorari is plainly warranted so that this Court can establish a uniform rule on this important issue.”
Paul D. Clement of Barcroft PLLC in Washington is counsel of record for Integrity Staffing Solutions.
But in their brief opposing review, former employees Busk and Castro said “the central premise--and flaw--of [Integrity's] petition” is that all “security screenings” are the same and that such activities can never be compensable under the FLSA and Portal-to-Portal Act.
Instead, the former employees said the nature of security screenings varies considerably depending on the workplace, and the Ninth Circuit “manifestly did not hold that a 'security screening' is always compensable.”
“[T]o the contrary, the [Ninth Circuit] limited its holding of compensability to the particular activities alleged in this case, and did not question the correctness of decisions holding that screenings were not compensable in certain other circumstances,” Busk and Castro said. “Conversely, neither the Second nor the Eleventh Circuit ha adopted a per se rule that 'security screenings' are never compensable.”
Instead, all the federal appeals courts at issue applied the Supreme Court test first announced in Steiner but reached different results based on different factual situations, the former employees said.
The Ninth Circuit has remanded the case to the district court in Nevada for a decision on whether the warehouse employees' time spent going through security is actually “integral and indispensable” to their primary work activities and therefore compensable, the former employees said. The Supreme Court should not intervene simply because the parties disagree about one application of a settled legal test, they said.
Mark R. Thierman of the Thierman Law Firm PC in Reno, Nev., is counsel of record for the former Integrity employees.
The Supreme Court has filled its oral argument calendar for the current term, so it will take up this case during the new term beginning in October.
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