In Cadena v. Customer Connexx LLC, decided on July 10, 2024, the United States Court of Appeals for the Ninth Circuit (which includes California) recently affirmed the applicability of the “de minimis” doctrine, which provides that under the Fair Labor Standards Act (FLSA) employers are not required to pay wages for work performed before or after scheduled work hours when the amount of time is “de mininis.” The court however, held that a triable issue of fact existed whether the employees’ alleged pre/post shift work actually was de minimis, and reversed the district court’s granting of summary judgment to the employer.
Background
Defendant Customer Connexx LLC operates a customer service call center in Las Vegas for an appliance recycling business. Plaintiffs are customer service representatives of Connexx who spoke to customers on the phone, or supervised call center agents. Connexx required these employees to clock in/out for each shift with a computer timekeeping software program. To do so, employees had to turn on/awaken the computer, log in, and then open the timekeeping software to clock in. Employees did not have their own workstation. Employees testified some computers were “old and slow” and that sometimes they had to try several work stations before they found a working computer.
Under Connexx’s policies, employees had to be clocked in and ready to accept calls before their shift started, so employees had to arrive and login before their shift began. Connexx policy prohibited employees from clocking in 7 or more minutes before their shift began.
Plaintiffs Cariene Cadena and Andrew Gonzales, two Connexx call center workers, filed a collective action complaint (which allows similarly situated employees to opt into the action), seeking unpaid overtime under the FLSA for the time they spent booting up and down their computers before and after clocking into the timekeeping software each shift. The district court initially granted summary judgment to Connexx, and on appeal the Ninth Circuit reversed and remanded to the District Court to determine whether this time was compensable or de minimis under the FLSA. On remand the District Court again granted summary judgment to Connexx concluding the time was de minimis. Plaintiffs appealed.
Is the de minimis rule still valid?
First, the Court evaluated whether the de minimis doctrine is still good law in light of the United States Supreme Court’s 2014 decision in Sandifer v. U.S. Steel Corp., 571 U.S. 220 (2014). Sandifer held the de minimis doctrine was inapplicable to 29 U.S.C. §203(o) which allows parties to a collective bargaining agreement to exclude as compensable time spent changing clothes at the start or end of the workday (“donning and doffing”). The Ninth Circuit rejected Plaintiffs’ argument that Sandifer foreclosed the applicability of the de minimis rule. The Court reviewed its prior decisions applying the de minimis rule, noting they did not concern donning/doffing or exclusions from collective bargaining agreements, but rather addressed when pre/post shift work activities were compensable or de minimis. Thus, the Ninth Circuit concluded that Sandifer did not overrule the de minimis rule.
Was Plaintiffs’ time waiting for computers to boot up non-compensable de minimis time?
The Ninth Circuit considers three factors in determining whether work time is de minimis:
This is the employer’s burden. The Court addressed each of the factors in turn.
First, as to the regularity of the work, employees performed uncompensated work before every shift since they need to boot up a computer to clock in, and likely had to wait for their computers to shut down at the end of this shift, and Connexx was aware of this. While the amounts of time employees had to wait for their computers to boot up varied, that did not impact the regularity of this time. This regularity favored compensability.
Second, the Ninth Circuit found a disputed factual issue at to the aggregate amount of time spent on booting up/down. Employees testified as to estimated ranges varying from a “few seconds up to thirty minutes per shift” booting up and shutting down their computers. The Ninth Circuit found that spending eleven to thirty minutes “cannot be characterized as de minimis” and this uncompensated time “could be substantial over time.”
Finally, the Ninth Circuit rejected Connexx’s arguments that it was administratively difficult and impracticable to record this time. The Court suggested a number of alternatives, such as having employees swipe in/out when they arrive and leave, or using a non-computer based time tracker, such as a separate time clock on the wall, or a punch clock at their workstations.
Based on these three factors, the Ninth Circuit concluded the plaintiffs raised triable issues whether their boot up/down time was de minimis, and this precluded summary judgment. The Ninth Circuit remanded to the District Court for further proceedings.
Application to California Employers
While the Ninth Circuit’s decision in Cadena v. Connexx is helpful to employers in affirming the application of the de minimis rule, the Court’s decision emphasizes the burden on employers to prove the work time really is de minimis and should not be compensated. The Court’s decision further highlights that regular uncompensated time, even in small or varying amounts, could aggregate to significant amounts that warrant compensation and are not de minimis. Finally, employers should anticipate that, in their making de minimis arguments that time is too administratively and practically challenging to calculate, courts could well view the arguments with skepticism and close examination. When California employers are aware employees are engaging in pre/post shift work activities that are not being compensated, they should take appropriate action to make sure there is compliance with the FLSA. This includes among other things evaluating if this work time is regular and if there are easy ways to capture and compensate employees for this time.