United States: Ninth Circuit Undermines Use Of Time Studies In Disposing Of Wage And Hour Claims In California

Two years ago, we blogged a pair of cases with similar fact patterns and outcomes involving the successful use of time studies (See our October 13, 2017 and October 16, 2017 blog posts). In both cases, shoe retailers required employees to undergo brief security checks before leaving the store. The employees in both cases brought Rule 23 class claims under California law to recover wages and the usual list of California damages arising from the time spent in those checks. In both cases, the district court relied on time studies that the time spent was minimal, and thus granted summary judgment for the employer under the de minimis doctrine.

One of those two cases, Rodriguez v. Nike Retail Services, Inc., Case No. 17-16866 (9th Cir., June 28, 2019), has now been reversed. Relying on the intervening California Supreme Court authority in Troester v. Starbucks Corp., 421 P.3d 1114 (Cal. 2018), the court found that the district court had improperly applied the federal de minimis doctrine to the plaintiffs' claims. Although the state Supreme Court in Troester had rejected the federal 10-minute standard, it had left open the door to the question of whether California would apply the doctrine to a shorter span of time. The Ninth Circuit concluded, however, that the application of a shorter period was unlikely, and found that there probably was no de minimis defense available under California law.

So does that mean time studies are worthless? Nope. First, the Rodriguez case was decided under California law. Nothing in the opinion suggests that a time study could not be used effectively under existing FLSA case law. Such a study can still be used to demonstrate that the time spent in uncompensated activities was, indeed, de minimis and would not give rise to a claim under federal law. Hence, proper time studies can still be dispositive under the FLSA and the laws of most states.

Second, the studies did show that the time spent in the security checks was minimal, and thus would have lessened the amount of time (and pay) the plaintiffs were claiming. Such a reduction would also be valuable in a claim under the FLSA and its state law counterparts in several respects. It would, of course, reduce the available recovery. In many cases, it might also reduce the claim to zero, particularly in "gap time" situations in which the employees continue to earn above the minimum wage but have not worked in excess of 40 hours per week.

The bottom line: Despite recent unfavorable Ninth Circuit authority under California law, time studies can be a useful tool to limit or dispose of wage and hour claims.

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