Seyfarth Synopsis: While reversing a grant of summary judgment in favor of an employer based on the de minimis doctrine, the Ninth Circuit held that the doctrine still can apply under the FLSA.
As readers of this blog, and particularly fans of The Princess Bride, know well, the de minimis doctrine is considered by many to be " mostly dead" in wage-hour litigation.
Indeed, the doctrine was feared to be close to its demise last week when it was considered by the Ninth Circuit Court of Appeals in Cadena v. Customer Connexx, LLC, a long-running case in which call center employees claim that they are owed additional overtime pay for time spent booting up and shutting down their computers.
Nearly two years ago, the Ninth Circuit reversed a district court grant of summary judgment to the employer, holding that time these call center workers spent booting up their computers is an integral and indispensable part of their duties. But on remand last summer, the district court granted summary judgment to the employer yet again, this time on the grounds that time spent booting up and shutting down a computer is de minimis.
The call center workers appealed, this time urging the Ninth Circuit to hold that the de minimis doctrine should no longer be recognized under the FLSA, particularly in light of Justice Scalia's passage in Sandifer v. U.S. Steel Corp. (U.S. 2014) that the "de minimis doctrine does not fit comfortably within the [FLSA], which, it can fairly be said is all about trifles." The workers' contention stood a good chance of gaining acceptance, as the Ninth Circuit often is regarded as more protective of workers than several other circuits. Indeed, an intermediate appellate court in California and the Supreme Court of Pennsylvania both recently invalidated thede minimisdoctrine under their state wage-hour laws.
The Ninth Circuit, however, did not take the bait, holding that the de minimis doctrine remains a potentially viable defense to a claim for overtime wages. In doing so, the court cabined Justice Scalia's Sandifer language to the FLSA Section 203(o) concerning clothes changing time and relied on its prior precedents on the de minimis doctrine. At least in the Ninth Circuit, the de minimis doctrine remains, in the words of Miracle Max, "slightly alive," taking into account in each case the practical administrative challenges of recording the time spent on the activity at issue, the aggregate amount of payable time, and the regularity of the activity in question.
The Ninth Circuit's ruling also makes clear that the de minimis doctrine remains in a precarious position, as it reversed the district court's grant of summary judgment to the employer. First, it reiterated that, within the Ninth Circuit, it is the employer's burden to show that the time spent on the activity at issue is de minimis. Second, it stressed that employers may have to compensate employees for even small amounts of daily time, especially if it occurs regularly, unless that time cannot, as an administrative matter, be recorded for payroll purposes.
Third, in applying those principles to this case, the court concluded that disputed questions of material fact necessitate reversal of the district court's decision because there exists evidence that all workers engaged in booting up, and shutting down, their computers each and every shift; that while some workers spent only seconds on such activities, others testified that the process could take even more than ten minutes each day; and that there are methods the employer potentially could have used to estimate time spent booting up computers or that it could have recorded time on that activity through a separate time clock.
Employers must bear in mind that several of these factors could apply in many call center environments and in several other contexts and make it difficult to sustain a de minimis defense.
The district court, perhaps through a jury, is now tasked with reconsidering the difficulty for the employer in tracking its workers' boot up and shut down time and how much time booting up and shutting down a computer really takes (everyday experience suggests that jurors may believe that, while there are occasions after outages or system updates that booting up can take a bit of time, it usually takes only seconds to type CTRL+ALT+DELETE, a username, and a password).
This decision's impact on employers underscores the importance of accurately recording and compensating all time employees spend on job functions, including preparatory activities such as booting up a computer. Although the de minimis doctrine still has a place in litigation under the right circumstances, the trends of recognizing such preparatory activities as compensable time, as well as questioning time rounding practices, suggests that employers only rarely should rely on the doctrine as a defense.
Instead, they should review timekeeping practices to ensure compliance with the FLSA to avoid potential litigation; ensure they mandate compensation for all hours worked, including delays encountered by slow computer boot-ups due to software updates, bugs, or other issues; include a method for employees to report any delays that may impact their duties; train employees and their supervisors about their timekeeping policies and practices; and evaluate the startup process for essential applications to understand the actual time required for employees to be ready to work.
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