Kitchin Legal has represented thousands of retail employees in several statewide class action cases. This includes employees from Polo Ralph Lauren, Gap and Banana Republic, and Chico’s in California-wide class action cases. We filed each of the cases under California labor law. Our lawsuit against Polo Ralph Lauren challenged Polo’s failure to pay sales associations for time they spent waiting for and undergoing loss prevention inspections or “bag checks” at the end of their shifts. Plaintiffs sometimes were required to wait for up to a half an hour before they were permitted to leave the store. They were not paid for that work time. We argued that they were entitled to wages for the time they spent undergoing these inspections.
The Retail Industry Relies Heavily on Bag Checks
Many nationwide companies in operation in California require everyone to undergo bag check inspections before they can leave for breaks and at the end of their shifts. Reasonable inspections are permitted in California. They are often mandatory for clothing retail workers. But when employees are required to wait for their managers to perform bag checks after they have clocked out they should be paid for the time
The Level of Employer Control is Central
With certain exceptions, California hourly employees must be paid for all the time they are “subject to the control of an employer.” This includes,”the time the employee is suffered or permitted to work, whether or not required to do so.” Industrial Welfare Commission Order 7-2001. In our Polo case, plaintiffs alleged they were routinely locked inside their stores after they had clocked out. Physical confinement plainly satisfied the “control” requirement under California law.
The De Minimus Doctrine or Rule
Polo relied on a federal legal doctrine called the de minimis rule. A de minimis defense comes from the Portal-to-Portal Act of the federal Fair Labor Standards Act (FSLA) The statute excludes time as non-compensable it it happens before (preliminary) or after (postliminary) the worker’s principle work activities
Under the FLSA principle activities include work of consequence performed by an employee for the employer, no matter when the work is performed. In other words, when the activity is necessary to the business, it is generally subject to wages, unless it is determined to be de minimis. It is de minimis when the unpaid time is short, occurs infrequently and is difficult for the employer to track. Lindow v. United States, 738 F. 2d 1057 (9th Cir. 1984)
As the United States Supreme Court explained more than 60 years ago,
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.
Federal Courts, including the Ninth Circuit, have developed a three-part test to evaluate when unpaid work time can be described as de minimis. In Lindow v. United States, (9th Cir. 1984), for example the Ninth Circuit explained that to excuse an employer from its wage obligations under the de minimis defense, the courts must evaluate three things:
“(1) the practical administrative difficulty of recording the additional time;
(2) the aggregate amount of compensable time; and
(3) the regularity of the additional work.”
In other words, if the work time is short, occurs only on rare occasion and is hard to track, the employer can ignore the time for payroll accounting purposes.
But, Does the De Minimis Defense Apply Under California Law?
Whether the federal de minimis exception applied to wage and hour claims under California law was at issue in the Polo case. We argued that the defense would undermine California’s “subject to the control” test. It doesn’t matter whether the time is preliminary, postliminary or de minimis, because workers in California are entitled to be paid wages for all time they are under the employer’s control,. If control is present, then the employee is entitled to be paid for the time.
Just days before the trial court in the Polo case was scheduled to decide whether to apply the federal de minimis defense to our clients’ California claims, the case settled for four million dollars. So, our judge was not required to rule on whether the rule applied to our case.
In Jul 2018, the California Supreme Court issued a decision that supported our position years before in the Polo case. In Troester v. Starbucks Corporation, the Supreme Court of California held that the de minimis rule cannot be used to steal wages from employees, which is what happens when work time is not paid.
In August 2018, the Court modified its initial ruling as follows:
We hold that the relevant California statutes and wage order have not incorporated the de minimis doctrine found in the FLSA. We further conclude that although California has a de minimis rule that is a background principle of state law, the rule is not applicable to the regularly reoccurring activities that are principally at issue here. The relevant statutes and wage order do not allow employers to require employees to routinely work for minutes off the clock without compensation. We leave open whether there are wage claims involving employee activities that are so irregular or brief in duration that employers may not be reasonably required to compensate employees for the time spent on them.
This decision is in line with our thinking about work time and we have been able to use it to our clients’ advantage in other cases.
If you have questions about off-the-clock time at your place of work, please contact Patrick Kitchin at firstname.lastname@example.org.