Down to the Minute: Starbucks Wage-and-Hour Decision
California Supreme Court Rejects Employer-Friendly Defense in Class Action
California employers cannot require employees to routinely work — even for just minutes — off-the-clock without compensation, according to the California Supreme Court’s recent opinion in Troester v. Starbucks. The decision is a warning to all California employers to carefully review their timekeeping procedures to ensure that all time worked by employees is recorded and compensated. This is especially true in this day-and-age where mobile devices make it easy for employees to work outside of normal working hours.
The plaintiff, Douglas Troester, filed a class action lawsuit on behalf of himself and all non-managerial California Starbucks employees who performed store-closing tasks during a certain time period. He established that Starbucks' computer software required him to clock out before initiating a separate “store closing procedure” on a different computer. After clocking out and initiating the store closing procedure, Troester activated the alarm, locked the front door and walked other employees to their cars as required by Starbucks’ policy. He also occasionally reopened the store to allow employees to retrieve items they left behind, waited with employees for their rides to arrive or moved patio furniture inside the store. These tasks required Troester to work 4 to 10 additional minutes of compensable time each day after he clocked out. Over 17 months, this added up to $102.67 in unpaid wages.
Starbucks argued that under the de minimis doctrine, Troester’s unpaid time each day was so minimal that it was not required to compensate him. The de minimis doctrine —which is based on the maxim that “the law does not concern itself with trifles” — is codified in the federal Fair Labor Standards Act. Under the FLSA, federal courts have applied the de minimis doctrine to excuse employers from paying wages for insubstantial or insignificant periods of time beyond the scheduled working hours, which could not, as a practical administrative matter, be precisely recorded. Federal courts have looked at the administrative difficulty in recording the time, the aggregate amount of compensable time, and the regularity of the additional work.
In a two-part holding, the Supreme Court determined that California’s employee-protective wage and hour statutes and regulations have not adopted the federal de minimis doctrine and the de minimis doctrine under California law did not excuse Starbucks from paying its employees under the facts of the case, which involved routinely required work off-the-clock. The Court left open the possibility that the de minimis doctrine would apply to employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time.
The Court’s holding clearly places the burden on employers to track even small amounts of regularly occurring work by employees, even in cases where such time is administratively difficult to capture. The Court reasoned that employers are better-situated than employees to devise methods to keep track of employee time. For example, employers may make use of smartphones, tablets, time-tracking tools and other recent technological advances to ensure they capture this time.
This case serves as a warning to employers that any appreciable amount of time worked by employees is likely required to be compensated, and reliance on the de minimis doctrine is risky. Moreover, the Supreme Court’s observations about modern technology, and the availability of tools and programs to accurately track employee time, suggest that employers need to carefully evaluate all options before attempting to claim that time is administratively difficult to record.
Although the Court did not decide whether there are circumstances where compensable time worked is so minute or irregular that it is unreasonable to expect the time to be recorded, the Court’s reasoning and analysis cast doubt on the viability of a de minimis defense to wage and hour claims brought under California law.
California employers should therefore carefully review their timekeeping procedures to ensure that all time worked by employees is recorded and compensated. Employees who clock out before completing their daily tasks, and employees who work at home or during their commute to or from work, are just two scenarios under which an employer may not be paying its employees for all compensable time worked. In today’s modern workplace, with employees’ use of cell phones and mobile devices to work outside of normal working hours, every employer should be paying particularly close attention to off-the-clock work.
For more information about this decision and how it may impact your organization, contact the authors of this Legal Alert listed at right in the firm’s Business and Labor & Employment practice groups, or your BB&K attorney.
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