In order to prevent employee theft, some employers — particularly in the retail arena — require their employees to undergo security screenings before leaving the employer’s facilities. The United States Supreme Court recently ruled that Integrity Staffing Solutions, Inc. (Integrity), a staffing company used by Amazon.com, did not need to pay employees for such time spent going through post-work security screenings. Intergrity Staffing Solutions Inc., v. Busk, et al. No. 13–433 (Dec. 9, 2014).

Facts

Integrity employed individuals to work at Amazon.com packaging facilities throughout the United States. As part of their employment, Integrity required that its employees undergo security screening before leaving the warehouse at the end of each day. During this screening, employees removed items such as wallets, keys, and belts from their possession and passed through metal detectors. Integrity did not pay the employees for time spent going through this security protocol.

The Case Below

Several former employees filed a putative class action lawsuit in the United States District Court for the District of Nevada, contending that they were entitled to be paid for the time spent undergoing security screenings before leaving the warehouse, which they estimated took 25 minutes per day. The District Court dismissed the lawsuit, holding that the time spent in screenings was postliminary, noncompensable time, as it was not integral and indispensable to the employees’ principal activities of retrieving items and packing boxes. Busk v. Integrity Staffing Solutions, Inc., No. 2:10-CV-01854-RLH, 2011 WL 2971265 (D. Nev. July 19, 2011). The Ninth Circuit reversed that decision, concluding that activities that might normally be considered postliminary and noncompensable become compensable if they are required by the employer and performed for the employer’s benefit. Busk v. Integrity Staffing Solutions, Inc., 713 F.3d 525 (9th Cir. 2013).

The Supreme Court’s Analysis

The Supreme Court granted certiorari on the issue of whether the time spent going through security is compensable. A unanimous Court concluded that it was not, reversing the Ninth Circuit’s decision. The Court first explained that Congress passed the Portal-to-Portal Act, which amended the Fair Labor Standards Act (FLSA) in order to respond to an “economic emergency” created by the broad judicial interpretation given to the FLSA’s undefined terms “work” and “workweek.” The Portal-to-Portal Act exempts employers from FLSA liability for claims based on “activities which are preliminary to or postliminary” to the performance of the principal activities that an employee is employed to perform. In order to be covered by the Portal-to-Portal Act, the activities in question must be “integral and indispensible” to the principal activity.

The Court observed that the principal activity in this case was retrieving items in the warehouse and packing boxes. The Court held that the security screenings at issue were not integral and indispensable to the performance of the principal activity, primarily because Integrity Staffing could have completely eliminated the security screenings altogether without impairing the safety or effectiveness of the employees’ principal activities. This is why the security screenings were differentiated from other work-related activities that have been found to be covered by the FLSA, such as requiring pre-shift donning and doffing of protective gear.

Importantly, the Court expressly rejected the Ninth Circuit’s test, which focused on whether an employer required an employee to engage in a particular activity. The Court explained that, by failing to tie activities to the employee’s performance of work, the Ninth Circuit had improperly broadened the definition of “principal activities” beyond the particular activities that the Portal-to-Portal Act was designed to address and exclude from compensable working time. The Court also dismissed the employees’ argument that Integrity Staffing violated the FLSA because it could have acted to reduce the time spent in the security screenings to a de minimis amount. The Court found that this decision had no bearing on the FLSA analysis and was an issue “properly presented to the employer at the bargaining table, not to a court in an FLSA claim.”

The Integrity Staffing decision provides an important and clear answer for employers on post-shift security screenings under similar circumstances, which have become more common in the workplace and, in particular, for retailers concerned about employee theft. The decision may also likely effectively dispense with the numerous class and collective action lawsuits filed by employees seeking backpay for time spent undergoing pre- or post-shift security checks that were filed in the wake of the Ninth Circuit’s decision. More broadly, even though Integrity Staffing focused only on security checks, the decision could further limit the scope of what constitutes “integral and indispensable” activities in the workplace, which could prove to be advantageous for employers.