QUESTIONS THAT REMAIN OPEN AFTER IBP V. AI; VAREZ. Ellen C. Kearns. The most significant issue not addressed by the Supreme Court decision in DIP v.

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1 QUESTIONS THAT REMAIN OPEN AFTER IBP V. AI; VAREZ BY Ellen C. Kearns 1. The De Minimis Issue The most significant issue not addressed by the Supreme Court decision in DIP v. AZvarez2 concerns the concept of de minimis time. a. Background The Supreme Court, in Anderson v. Mt. CZemens Pottery Co., 328 U.S. 680 (1946), described the de minimis principle as follows: - Id. at 692. We do not, of course, preclude the application of a de minimis rule where the minimum walking time is such as to be negligible. The workweek contemplated by 4 7(a) [FLSA overtime provision] must be computed in light of the realities of the industrial world. When the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act. It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved. Ellen C. Kearns 15 a member of the Boston Office of Foley & Lardner, Li i. She is the Editor -in-chief of the BNA treatise, The Fair Labor Standards Act, a member of thc Board of Editors for its Annual Supplcment, and a Chapter Editor (Massachusetts) of the BN,I Treatise, Wage and Hour Laws, A St<ite-by-State Survey. She writes and lectures frequently on wage and hour matters S. Ct. 514 (201 15). BOST I 323

2 Following the Supreme Court decision in Mt. Clemens, the DOL addressed the issue of de minimis time in 29 C. 1;.R., Section That Section now provides: In recording working time under the Act, insubstantial or insignificant periods of time beyond the scheduled working hours, which cannot as a practical administrative matter be precisely recorded for payroll purposes, may be disregarded. The courts have held that such trifles are de minimis. (Anderson v. Mt. Clemems Pottery Co., 328 U.S. 680 (1946)) This rule applies only where there are uncertain arid indefinite periods of time involved of a few seconds or minutes duration, and where the failure to count such time is due to considerations justified by industrial realities. An employer may not arbitrarily fail to count as hours worked any part, however small, of the employer s fixed or regular working time or practically ascertainable period of time he is regularly required to spend on duties assigned to him. See Glenn L. Martin Nebraska Co. v. Caulkin, 197 F. 2d 891,987 (C.A. 8, 1952), cert denied, 344 US. 866 (1952), rehearing denied, 344 U.S. 888 (1952), holding that working time amounting to $1 of additional compensation a week is not a trivial matter to a workingman and was not de minimis; Addison v. Huron Stevecluring Curp., 204 F. 2d 88,95 (C.A. 2, 1953), cert denied 346 US. 877, holding that To disregard workweeks for which less than a dollar is due will produce capricious and unfair results. Hawkins v. E.I. du Pont de Nemours & Co., 12 W. H. Cases 448, 27 Labor Cases, para. 69,094 (E. D. Va. 1955), holding that ten minutes a day is not de minimis. Despite the fact that the DOL regulations approved of the holding in Hawkins v. E.I. du Pont de Nemours & Co., supra, a US Claims Court concluded that ten minutes a day was de minimis. In a case under the Contract Work Hours Safety Standards Act (CW HSSA), International Business Investments Inc. v. United States. 11 C1. Ct. 588 ( 1987) the court concluded that the case law seems to establish that a period of 10 minutes or less per day devoted by an employee to necessary pre-and post-shift work is de minimis. The de mirzimis rule under the CWHASSA is the same as the rule under the FLSA In Lindow v. United States, 7-38 F.2d 1057 (9th Cir. 1984) the Ninth Circuit stated that [aln important factvr in determining whether a claim is de minimis is the amount of daily time WT I 2

3 spent on the additional work. There is no precise amount of time that may be denied compensation as de minimis. No rigid rule can be applied with mathematical certainty." Lat Lindow noted that "[m]ost courts have found daily periods of approximately 10 minutes de minimis even though otherwise compensable.'' &(citing cases). Lindow then concluded that the approximately 7 to 8 minutes spent each day before the employees' shift reading the log book and exchanging information was de minimis because it was irregular and difficult to monitor. Significantly, however, the Ninth Circuit stated that a reviewing court must also look at the "the size of the aggregate claim" as a factor in determining de minimis. 738 F.2d at The Ninth Circuit in Lindow did not state definitively what it meant by aggregating time. It did state that "[aln important factor in determining whether a claim is de minimis is the amount of daily time spent on additional work." 738 F.2d at The Ninth Circuit, however, also cited to other cases where time has been aggregated beyond a daily basis (ranging up to three years). Id. at 1063 ("Courts have granted relief for claims that might have been minimal on a daily basis but, when aggregated, amounted to a substantial claim."). The court also pointed to cases where time was aggregated "in relation to the total sum or claim involved in the litigation." Id. See also Monfort. 144 F.3d at 1334 (post- Lindow case where court stated that "[ilt is also appropriate to consider an aggregate based on the total number of workers"). Ten years after the Lindow decision, the Tenth Circuit addressed the de minimis issue in Reich v. IBP, Inc., 38 F.3d 1123, 1126 (10th Cir. 1994). It found that "as little as ten minutes of working time goes beyond the level of de minimis and triggers the FLSA." Id at It held Supplementary Brief for the Secretary of Labor as Amicus Curiae Supporting the Petition For Panel Rehearing and Petition For Rehearing En Banc, First Circuit Court of Appeals, Abdela Tum, et al. v. Barber Foods, BOST I 3 325

4 that the time spent by knife-using employees at a meat packing company donning, doffing, and cleaning of unique protective gear constituted an integral part of employees principal activities, and had to be compensated while time spent donning, removing, and gathering standard safety equipment and outer garments was not compensable. The Tenth Circuit had the opportunity to expound on its ruling in Reich v. Monfort, 144 F.3d 1329, 1333 (10th Cir. 1998). In Monfort, the Tenth Circuit explicitly stated that it was proper to apply the de minimis rule in relation to the aggregate amount of time worked by all employees involved in the litigation. On this basis, the court held that preliminary and postliminary activities amounting to 10 minutes per day for each meat processing company employee, including putting on and taking off safety gear was not de minimis. The facts of that case were From the period May, 1989, to May, 1993, between 1,537 and 1,717 employees worked in the slaughter and fabrication departments and performed these activities on a daily basis at the Greeley, Colorado plant. From May, 1993, to the present time, the number of employees in each department has not significantly changed. Both the trail court and the appellate court conceded that the time would be administratively difficult to record. However, the appellate court held that the total amount of time involved, both on a per employee basis (10 minutes per day over a 3 year period) and on an aggregate basis for all the employees as a group (in excess of 1500 employees) would properly be considered substantial. The appellate court also decided that the regularity of the activities invcllved weighed against a de minimis finding. It thus affirmed the district court s decision that the time was compensable. The Tenth Circuit said that it was a close call,. but that it was 4

5 proper to apply the de minimis rule in relation to the aggregate amount of time worked by all employees involved in the litigation. The back pay award was over $1.5 million plus interest b. Circuit Court Decisions in Alvarez and Turn. In Alvarez v. IBP, Inc., 339 F. 3d 894 (9th Cir. 2003) the Ninth Circuit distinguished between what it called unique protective gear [chain link metal aprons, vests, plexiglass armguards, and special gloves] and non-unique protective gear [hard hats, ear plugs, safety glasses. boots and hairnets.]. It held that donning and doffing unique protective gear was compensable but that the time employees spent donning and doffing non-unique protective gear, while integral and indispensable to the employees principal activities, was not compensable because the time was de minimis as a matter of law. Id. at In Turn v. Barber Foods, 331 F. 3d I (lst Cir. 2003) a jury found that the time employees spent donning and doffing protective clothing and equipment was de minimis. As a result, the jury did not require the employer to compensate employees for the time spent donning and doffing. On appeal, the First Circuit Court of Appeals asked the Solicitor s Office to submit an amicus brief, in part to address the issues raised by the Ninth Circuit s Alvarez decision.. In its Supplementary Brief for the Secretary of Labor as Amicus Curiae Supporting the Petition For Panel Rehearing and Petition For Rehearing En Banc, the Secretary wrote: Lindow does not support the court s conclusion in AZvarez on this point. Rather, Lindow specifically sets out criteria for determining u,hether aggregate time during the workday is de minimis, which necessarily calls for a factual inquiry. The court in AEvnrez thus misapprehended its own precedent, and thereby misapplied the concept of de minimis to discrete activities as a matter of law. This, BOST

6 in turn, allowed the Ninth Circuit to treat as noncompensable the de minimis time associated with the donning and doffing of nonunique protective gear. Alvarez, 339 F.3d at 904. The court was in error on this point. c. IBP v. Alvarez, 126 S. Ct. 514 (2005) In IBP v. Alvarez, 126 S. Ct. 514 (2005), the Supreme Court held that since donning and doffing were principal activities, employers were required to pay employees for walking from and to the clothes changing area to the place of work. The Supreme Court did not address or resolve the question as to whether the plaintiffs would now be permitted to aggregate the clothes changing time with the walking time making the total time compensable, if the total time spent was not de minimis. Many thought that the First Circuit would address this de minimis question following the Supreme Court s remand of Tum v. Barber Foods to the First Circuit. However, to date, the First Circuit has issued no ruling on this matter. However, on May 3 1,2006, the DOL issued a Wage and Hour Advisory Memorandum (WHAM) on IBP v Alvare~..~ The Memorandum was directed to Regional Administrators and District Directors of the Department of Labor (DOL). The Memorandum advises staff of the state of the law after the Supreme Court s decision in IBP v. Alvarez, 125 S. Ct. 514 (2005) (together with Barber Foods v. Wage and Hour Advisory Memorandum No Id. MT

7 The first issue addressed by the WHAM was the Ninth Circuit s decision in IBP v. Alvarez with respect to the donning and doffing of nonunique gear such as hairnets, goggles, hardhats and smocks: As the government s Supreme Court amicus brief in Alvarez states, the Ninth Circuit erred in its application of the de minimis rule. The de minimis rules apples to the aggregate amount of time for which an employee seeks compensation, not separately to each discrete activity, and particularly not to certain activities as a mater of law. The Supreme Court s continuous workday rationale renders the Ninth Circuit s de minimis as a matter of law discussion untenable. The DOL WAM did point out, however, that donning and doffing of required gear is within the continuous workday only when the employer or the nature of the job mandates that it take place on the employer s premise^."^ If employees have the option to change into required gear at home, changing into that gear is not a principal activity. Next the WHAM turned to the concept of de minimis. It acknowledged that the Supreme Court in IBP v. Alvarez did not rule on the scope or meaning of de minimis activities nor on the effect of de minimis activities on the compensability of donning, doffing, walking and waiting time. It did point out, however, that the Supreme Court in reversing the First Circuit s decision in Turn and remanding that case for further proceedings, concluded: during a continuous workday, any walking time that occurs afler the beginning of the employee s first principal activity and before the end of the employee s last principal activity is compensable. Thus, the W AM concluded that the Supreme Court s decision in IBP v. Alvarez clearly stood for the proposition that where the aggregate time spent donning, walking, waiting and doffing exceeds the de minimis standard, it is compensable. Any other conclusion would be 6 Id at 3. BOST I 7 329

8 inconsistent with the continuous workday rule. It would also appear to render the Supreme Court s holding in Turn an advisory opinion, and leave the Court s remand of the case to the First Circuit devoid of any apparent p~rpose. ~ 2. Commuting Time Another issue that was not directly addressed by the Supreme Court concerns the application of the continuous work day rule to commuting activities. For example, if an employee is required to log-on to the Company s system from his or her home, and while logged on, performs some preliminary matters before commuting to work, does the commuting time become compensable? In its brief to the Supreme Court, the Department of Labor took the position that the performance of integral and indispensable activities at home would not render the subsequent commute compensable because the activities would not be subject to employer control and thus would not qualify as work. But, could it be argued that the employer does have control over communications because the computer can determine the amount of time on the computer and what the communication was about? In Dooley v. Liberty Mutual Life Insurance Company, 307 F. Supp. 2d 234 (D. Mass. 2004) a federal district court in Massachusetts held that auto damage appraisers who performed work at home before traveling to their first appointment should be Compensated for their travel time because their travel time was all part of a day s work. As telecommuting becomes more prevalent, this issue will bubble up for further resolution. 7 Id at 4. mt i 8

9 3. The Section 3(0) Issue Section 3(0) of the FLSA provides: In determining for the purposes of sections 6 [minimum wage] and 7 [overtime requirements] the hours for which an employer is employed, there shall be excluded any time spent in changing clothes or washing at the beginning or end of each workday which was excluded from measured working time during the week involved by the express terms of or by custom or practice under a bona fide collective bargaining agreement applicable to the particular employee. In June 2002, the Wage-Hour Administrator issued an Opinion Letter in which, contrary to a 1997 opinion letter, the Administrator concluded that the time spent by meatpacking employees donning and doffing protective equipment represents the sort of clothes changing that Section 3(0) of the FLSA was meant to address. The 2002 opinion letter appears to say that meatpacking employers and unions are free to agree to exclude some or all clothes changing time, but not the time spent by employees washing their protective equipment, from the employees compensable time under the FLSA. The Supreme Court in the Alvarez decision did not address either Section 3(0) or the Wage-Hour Administrator s 2002 opinion letter. Therefore, whether in fact Section 3(0) permits employers to exclude donning and doffing time from the compensable work day under collective bargaining agreements, as the 2002 opinion letter appears to permit, remains undecided The Supreme Court s refusal to grant review of the Section 3(0) issue in Alvarez does not mean that the Supreme Court approves of the Ninth Circuit s rejection of the 2002 opinion letter. BOST_~ I

10 Rather, it simply means that the Ninth Circuit s ruling remains standing, at least for the time being, in that Circuit. However, the viability of the 2002 opinion letter as an interpretation of Section 3(0) is an open question outside the Ninth Circuit. 10