Integrity Staffing Solutions v. Busk: When Is Time at Work Not Work?

Last month, the Supreme Court heard oral argument in Integrity Staffing Solutions v. Busk.  At issue in the case is whether, and under what circumstances, an hourly employee is entitled to compensation under the Fair Labor Standards Act for time spent participating in an employer-mandated anti-theft search at the end of the workday.  This post aims to provide an overview of the case and its legal framework.

The Legal Framework

Passed in 1938, the Fair Labor Standards Act (FLSA) establishes a federal minimum wage and requires that employees receive overtime compensation when they work more than 40 hours per week.  But what activities count as work?  Early cases took an expansive view, holding that FLSA required compensation for all time spent at the employer’s premises.  In 1947, however, Congress passed the Portal-to-Portal Act, which amended FLSA by limiting the scope of compensable time.

The Portal-to-Portal Act carved out two exceptions to FLSA’s coverage.  First, it established that employees are not entitled to compensation for “walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform.”   Second, it precluded compensation for “activities which are preliminary to or postliminary to said principal activity or activities, which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities.”  The key question for claims arising under the FLSA, therefore, is whether the acts for which compensation is claimed are “principal activities.”

In 1956, the Supreme Court in Steiner v. Mitchell explained that activities that are “an integral and indispensable part of the principal activities for which covered workmen are employed” are themselves compensable under the Act.  More recently, in IBP, Inc. v. Alvarez the Court clarified that “any activity that is ‘integral and indispensable’ to a ‘principal activity’ is itself a ‘principal activity.’”

The Case

Integrity Staffing Solutions, Inc., is a subcontractor providing warehouse staffing to various corporate clients.  The plaintiffs, Jesse Busk and Laurie Castro, were employed by Integrity as hourly employees at a warehouse owned by Amazon.com.  Integrity employs a policy that requires employees to pass through a security clearance at the end of each shift, a process which can take up to 25 minutes.  Employees are not compensated for time spent going through this security screening.

In 2010, Busk and Castro filed a putative class-action claim against Integrity alleging that the company violated FLSA by failing to compensate workers for time spent in post-shift security screenings.  The district court dismissed the complaint for failure to state a claim, holding that this time was noncompensable under the Portal-to-Portal Act.

The Ninth Circuit reversed.  Writing for a unanimous panel, Judge Thomas rejected out-of-circuit precedents holding that time spent passing through security clearances was per se noncompensable.  The court held that, since, as loss-prevention measures, the security procedures at issue here were “necessary to employees’ primary work as warehouse employees and done for Integrity’s benefit,” the plaintiffs had stated a valid claim that the procedures were “integral and indispensable” to their work, and thus covered by FLSA.

After the Supreme Court granted certiorari, the Solicitor General and the Department of Labor filed an amicus brief in support of the employer.  Though the Labor Department has often supported plaintiffs in FLSA cases, its brief in this case pointed to the Department’s existing regulations on preliminary and postliminary activities, as well as the interest of the United States as an employer that often requires security screenings, to explain its support for the employer.

The Oral Argument

At oral argument before the Supreme Court, advocates on both sides struggled to explain to the Court how exactly to draw the line between compensable and noncompensable activities.  Appearing on behalf of Integrity, Paul Clement argued that going through security is a “classic postliminary activity that is noncompensable under the Portal-to-Portal Act,” because it is “materially similar” to waiting in line to check out at the end of the day, something that both sides agree would not be covered by FLSA.  Justice Kagan pressed on this claim with a hypothetical: suppose an employee who worked at a cash register was required, for the purpose of loss prevention, to go through a twenty minute process to close out the register.  Assuming that time would be compensable, how would it differ from the procedures at issue here?  Clement, with an assist from Justice Scalia, argued that in that case the closeout procedures would be part of the job, rather than part of the “egress process.”

As the federal government is supporting Integrity in the case, Curtis Gannon, an assistant to the U.S. Solicitor General, argued next.  He reiterated the argument that the security screening was a quintessentially postliminary activity that was neither integral nor indispensable to the work of the warehouse employees.  He acknowledged that there might be some security searches that would be so burdensome that they would require compensation, but they would have to be “dramatically different, more intrusive, more time consuming” than merely waiting in line: he offered drug testing as an example.  Like Clement, Gannon distinguished Justice Kagan’s hypothetical by saying that cash register closeout procedures were simply “part of the job,” but Justice Kagan countered that this was not so: they were simply “an antitheft mechanism.”

Mark Thierman, the attorney for the plaintiffs, attempted to reframe the analysis, arguing that the Justices need not reach the “integral and indispensable” question.  Because the security screening was an activity required by the employer and for the employer’s benefit, it could not be considered a postliminary activity at all.  But, as a number of Justices pointed out, the same could be said of simply checking in and out of a shift.  Thierman argued in response that a crucial distinction in this case was that the employees, before proceeding to the security check, had already checked out, “and you don’t check out twice.”  Moreover, he claimed, whereas checkout procedures are normally brief and unintrusive, the security checks here were more akin to drug testing, something separate from the simple process of egress.

Moving Forward

Based simply on the oral arguments, it appears difficult to predict the outcome of the case. Both sides faced highly skeptical questioning, and both sides had difficulty articulating a clear test under which they would win.  The case may ultimately turn on whether the Justices agree with Clement that the security procedures are simply a “logical part of the egress process.”  The pivotal vote may belong to Justice Breyer, who at times appeared skeptical of the employer’s position, but also seemed inclined to defer to the position of the Department of Labor, which favored the employer.

Stay tuned for further coverage once the decision comes down.

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