On December 9, 2014, in a 9-0 decision, the United States Supreme Court held that employees’ time spent waiting to undergo and undergoing security screenings is not compensable time under the Fair Labor Standards Act (“FLSA”). Integrity Staffing Solutions, Inc. v. Busk, No. 13-433, 2014 WL 6885951 (2014).

The lawsuit was originally brought by two hourly employees of Integrity Staffing Solutions (“Integrity Staffing”) who worked in Amazon.com warehouses gathering products and packaging them for delivery. Prior to departing the Amazon.com warehouse each day, Integrity Staffing employees were required to go through a security screening in which they removed items like wallets, keys, and belts and walked through metal detectors. Two of Integrity Staffing’s employees filed a putative class action alleging that the “off-the-clock” time they spent waiting to be screened and actually being screened was approximately 25 minutes each day and that Integrity Staffing’s failure to compensate them for this time violated the FLSA and Nevada labor laws. The employees argued that Integrity Staffing could have reduced the screening time by furnishing more security screeners or altering shift times. They also argued that the screening time was compensable because the screenings were designed “to prevent employee theft” and were thus “solely for the benefit of the employers and their customers.”

The district court in Nevada dismissed the claim because it reasoned that the FLSA only required compensation for activities that are “an integral and indispensable part of the principal activities for which [he is] employed,” that “[w]aiting time generally does not qualify as integral and indispensable, and that the waiting time at issue here was similar to other non-compensable waiting time like checking in at work.

The U.S. Court of Appeals for the Ninth Circuit reversed the district court, distinguishing other security clearance time cases noting that the other cases involved time for security checks upon entering work or security clearances mandated by law. The Court of Appeals held that the district court erred by enforcing a “blanket rule that security clearances are noncompensable instead of assessing the plaintiffs’ claims under the ‘integral and indispensable’ test” and concluded that the Integrity Staffing employees had stated a valid claim for relief under the FLSA.

The Supreme Court reversed the Ninth Circuit in a 9-0 opinion. The Court looked to the Portal-to-Portal Act which exempts employers from liability for future claims based on two categories of work related activities: 1) “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,” and 2) “activities which are preliminary to postliminary to said principal activity or activities [...]” In this case, the employees’ allegations implicated the second exemption for preliminary or postliminary activities.

The Court explained that it had “consistently interpreted the term ‘principal activity or activities’ [to] embrac[e] all activities which are an ‘integral and indispensable part of the principal activities.’” Furthermore, “[a]n activity is therefore integral and indispensable to the principal activities that an employee is employed to perform if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”

The Court concluded that the security screenings at issue in Integrity Staffing were “noncompensable postliminary activities.” The Court noted that the screenings were not the “principal activity or activities” which the employees were employed to perform as Integrity Staffing did not employ workers to undergo security screenings, but rather to retrieve and package products for shipment to Amazon.com customers. Additionally, the Court found that the security screenings were not “integral and indispensable” to the warehouse workers’ duties. The screenings were not an “intrinsic element” of gathering and packaging items for shipment and “Integrity Staffing could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.”

The Court stated that the Ninth Circuit “erred by focusing on whether an employerrequired a particular activity” because the “integral and indispensable test is tied to the productive work that the employee is employed to perform.” The Court also rejected the employees’ argument that the security screening time was compensable under the FLSA because Integrity Staffing could have reduced the time to a de minimisamount. The Court held that “[t]he fact that an employer could conceivably reduce the time spent by employees on any preliminary or postliminary activity does not change the nature of the activity or its relationship to the principal activities that an employee is employed to perform. These arguments are properly presented to the employer at the bargaining table […], not to a court in a FLSA claim.”

In sum, “an activity is integral and indispensable to the principal activities that an employee is employed to perform—and thus compensable under the FLSA—if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”

Given the proliferation of FLSA cases claiming overtime for preliminary and postliminary activities, this decision is a critical one for employers with facilities where employees must pass through gates, security checks, or other steps before entering or leaving the workplace, and should be evaluated carefully for its discussion of the compensability of such time.