On Dec. 9, 2014, the Supreme Court decided the case of Integrity Staffing Solutions, Inc. v. Busk. It involved hourly-paid Amazon.com warehouse workers who retrieve products from shelves and package them for delivery to customers. These employees are required to undergo a security screening before leaving the warehouse each day. Former employees sued, alleging that they were entitled to compensation for “working time” under the Fair Labor Standards Act (FLSA) for roughly 25 minutes each day that they spent waiting to undergo and processing through these screenings.
The first federal court to consider these claims, the U. S. District Court in Nevada, found against the employees. The U. S. Court of Appeals in San Francisco reversed that decision, finding that these post-shift activities are compensable, because they are “integral and indispensable” to an employee’s principle activities and performed for the employer’s benefit.
The Supreme Court reversed the U. S. Court of Appeals and has ruled that such security screenings are not compensable under the FLSA. The reasoning is important, with respect to both federal and Maryland law.
In the federal context, Congress passed a law in 1947, called the “Portal-to-Portal Act,” directly in response to an economic near-emergency created by broad judicial interpretation given to the terms “work” and “workweek” under the FLSA.
The FLSA, enacted in 1938, did not define “work” or “workweek.” Initially, courts, including the Supreme Court, interpreted those terms broadly as including “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business” –Tennessee Coal, Iron and R. Co. v. Muscoda Local Number 123, 321 U.S. 590, 598 (1944). Similarly, in Anderson v. Mt. Clemens Pottery Co., 328 U. S. 680, 690-91 (1946), “workweek” was defined to include “all time during which an employee is necessarily required to be on the employer’s premises, on duty, or at a prescribed work place.”
As the Supreme Court noted in this month’s ISS decision, these expansive definitions resulted in, for example, time being found compensable in traveling between underground work areas in coal mines, as well as time spent walking from time clocks to work benches in the two cases mentioned above.
In response, in 1947 Congress enacted the Portal-to-Portal Act. It is concerned primarily with defining the beginning and end of the workday. It distinguishes between activities that are essentially part of the workers’ ingress and egress process, as opposed to activities that constitute actual “work of consequence performed for an employer.” 29 C.F.R. § 790.8(a).
The Tennesse Coal and Anderson decisions provoked a “flood of litigation,” as observed by the Supreme Court in ISS. For example, in the six months following the Anderson decision, unions and employees filed more than 1,500 lawsuits under the FLSA. The Court observed that “Congress responded swiftly, finding that the FLSA had disregarded long-established customs, practices and contracts, created unexpected large liabilities. Declaring the situation to be an “emergency,”, Congress found that continuing such interpretations and liabilities “would bring about financial ruin of many employers” and “employees would receive windfall payments … for activities performed by them without any expectation of reward beyond that included in their agreed rates of pay.” .29 U.S.C.§§ 251(a)-(b). (“Congressional Findings and Declaration of Policy”).
These federal law circumstances and history leave open an interesting issue in Maryland. Maryland Regulations interpreting and enforcing the state’s minimum wage and overtime laws highlight this issue and the potential risk to employers. COMAR § 09.12.41.10 (“Hours of Work”) provides:
A. “Hours of work” means the time during the workweek that an individual employed by an employer is required by the employer to be on the employer’s premises, on duty, or at a prescribed workplace. (Emphasis supplied.)
But, unlike Congress in 1947, Maryland has never enacted a statute comparable to the federal Portal-to-Portal Act. Therefore, because such screenings probably will occur after the conclusion of a work shift, and the time most likely will not be paid by the employer, the risk to employers in Maryland is that such time spent in security screenings could be ruled to be compensable.
It remains to be seen how Maryland courts might resolve issues like those presented by the Amazon.com warehouse workers in the ISS case. Recent history demonstrates that employee class action lawsuits over unpaid wages and overtime pay have increased substantially. The public consciousness of issues like this probably has heightened in recent years, as evidenced by the flurry of activity in media such as print, TV, radio, and fueled by attorney advertisements. It is probably only a matter of time before the applicability of the ISS decision in Maryland is presented for adjudication.
Patrick M. Pilachowski, of Shawe & Rosenthal, LLP, has represented employers for over 30 years in all aspects of labor relations matters.