The U.S. Supreme Court has agreed to resolve a split among the federal circuits regarding whether time spent in security screenings is compensable under the Fair Labor Standards Act (FLSA), as amended in 1947 by the Portal-to-Portal Act. The outcome of the case, Integrity Staffing Solutions v. Busk, could have a significant economic impact on employers who require employees to submit to security searches before or after they begin their workday if employers are required to pay for the time employees spend doing so.
The case arises from claims filed by two former employees of Integrity Staffing Solutions, which provides warehouse space and staffing to clients. At the end of each shift, after clocking out, the employees were required to pass through a security clearance (including removal of wallets, keys and belts and passing through a metal detector) designed to prevent employee theft of goods, for which they waited upwards of 25 minutes without pay.
The issue is whether such security screenings are “integral and indispensable” to the employee’s principal work activities. The Portal-to-Portal amendments to the FLSA preclude compensation for activities that are “preliminary” or “postliminary” to the “principal activity or activities,” unless those activities are “integral and indispensable” to those principal activities. The applicable test is whether the activity is “necessary” to the principal work and done for the employer’s benefit. Under this standard, for example, time spent donning and doffing protective gear in a meat packing plant has been found “integral and indispensable,” while time spent at work dressing in required uniforms that could be donned at home instead has been found not to be “integral and indispensable.”
The district court dismissed the complaint based on decisions of the Second and Eleventh Circuits in 2007 that held that preliminary security screenings at the beginning of the workday were not compensable. The Ninth Circuit reversed, finding that the complaint on its face, by alleging that “the security screenings are necessary to employees’ primary work as warehouse employees and done for Integrity’s benefit,” stated a “plausible claim for relief” under the FLSA sufficient to withstand a motion to dismiss. The Ninth Circuit also found relevant the distinction between the preliminary screenings required in the Second and Eleventh Circuit cases, which in the former case applied to everyone who entered a nuclear power plant, and in the latter were mandated by Federal Aviation Administration rules, and the postliminary screening at issue in this case. We see a compelling argument, however, that a security check at the end of the workday for employees with access to millions of dollars of merchandise is neither “necessary” to the work they perform (certainly not in the same sense as wearing protective gear when working with sharp knives all day) nor solely for the employer’s benefit, as prevention of theft is a public concern that benefits everyone in numerous ways.
Because of relative ease in which an individual claim under the FLSA can be elevated to a collective action involving hundreds or even thousands of employees provided they are “similarly situated” to the lead plaintiff, the stakes are high for employers. As stated in the brief on behalf of several amici in favor of Integrity, including the U.S. Chamber of Commerce, “the Ninth Circuit’s decision has created nationwide legal uncertainty and enormous potential financial liability for thousands of employers.” (Petition at 11). The case will not be decided until the next Supreme Court term that begins in October 2014.