In 2010, two of Integrity’s employees filed a putative class action against Integrity for alleged violations of the FLSA. The FLSA requires employers who are engaged in the production of goods for commerce to pay their employees at least the federal minimum wage, and to pay overtime pay for hours worked in excess of 40 in each workweek. 29 U.S.C. § 206, 207, respectively. The Ninth Circuit Court of Appeals reversed the District Court’s dismissal of the complaint for failure to state a claim, finding that the post-shift screening activities were necessary to the principal work performed and done for the benefit of the employer. The Ninth Circuit accepted as true the allegation that Integrity required the screenings to prevent employee theft.
The Supreme Court reversed the Ninth Circuit. In Integrity, the Supreme Court began its analysis by discussing the litany of lawsuits that followed the passage of the FLSA in 1938, in which employees sought nearly $6 billion in backpay and liquidated damages for various pre- and post-shift activities. “Congress responded swiftly,” the Court wrote. “Declaring the situation to be an ‘emergency,’ Congress found that, if such interpretations ‘were permitted to stand,…the payment of such liabilities would bring about financial ruin of many employers.” The Portal-to-Portal Act was enacted in 1947 to quell the tide of these litigious actions. The Portal-to-Portal Act exempts employers from liability under the FLSA for claims related to 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 or postliminary to said principal activity or activities.” 29 U.S.C. § 254(a).
In reaching this conclusion, the Court erred in a number of significant ways. First, the Court attempted to create a third category of activities: those that are integral and indispensable to a principal activity, but which are not themselves principal activities. The Court found the screening activities were not the principal activity or activities for which Integrity hired the warehouse workers. Slip Op. at 7. Then the Court found that the security screenings were not integral and indispensable to the employees’ duties as warehouse workers. Id. By bifurcating the integral and indispensable duties from the principal activities, the Court in essence attempted to create a third category of activities—those that are integral and indispensable to the employer, and thus compensable, but which are not designated principal duties of the employees. In IBP v. Alvarez, 126 S. Ct. 514 (2005), the Court rejected this very analysis by respondent employer IBP. In IBP, the Court explained that in “Steiner [v. Mitchell, 350 U.S. 247 (1956)], we made it clear that § 4 of the Portal-to-Portal Act does not remove activities which are ‘integral and indispensable’ to ‘principal activities’ from FLSA coverage precisely because such activities are themselves ‘principal activities.’” IBP, 126 S. Ct. at 523 (quoting Steiner, 350 U.S. at 253).
Third, the Court erred in its analysis of whether the security screenings were integral and indispensable to the principal activities performed by the warehouse workers. The Court wrote that, “[t]he screenings were not an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment. And Integrity Staffing could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.” Integrity, Slip Op. at 7. The Court cited three cases to support its conclusion. The Court first discussed Steiner, in which the Court had held compensable “the time battery-plant employees spent showering and changing clothes because the chemicals in the plant were ‘toxic to human beings.” Integrity, Slip Op. at 6 (quoting Steiner, 350 U.S. at 249, 251). Next, the Court explained that in Mitchell, 350 U.S. 260, it had held as “compensable the time meatpacker employees spent sharpening their knives because dull knives would ‘slow down production’ on the assembly line, ‘affect the appearance of the meat as well as the quality of the hides,’ ‘cause waste,’ and lead to ‘accidents.’” Id. (quoting Mitchell, 350 U.S. at 262). In contrast, in IBP, the Court explained it had held as noncompensable the “time poultry-plant employees spent waiting to don protective gear because such waiting was ‘two steps removed from the productive activity on the assembly line.’” Id. (quoting IBP, 126 S. Ct. at 528).
Fourth, citing to the Department of Labor’s regulations at 29 C.F.R. § 790.8(c), the Court erred in finding that the security screenings were not closely related activities which were indispensable to the performance of the warehouse workers’ principal activities. “[T]he regulations explain that the time spent by an employee in a chemical plant changing clothes would be compensable if he ‘c[ould not] perform his principal activities without putting on certain clothes’ but would not be compensable if ‘changing clothes [were] merely a convenience to the employee and not directly related to his principal activities.” Integrity, Slip Op. at 6-7 (brackets in original) (quoting 29 C.F.R. § 790.8(c)). In the regulations, the Department of Labor added a footnote to this provision cited by the Court, stating, “[s]uch a situation may exist where the changing of clothes on the employer’s premises is required by law, by rules of the employer, or by the nature of the work.” 29 C.F.R. § 790.8(c) n. 65. The Court failed to appreciate that the warehouse workers did not empty their pockets, wallets, etc., and pass through a metal detector as a convenience to themselves. Rather, the security screenings were required by Integrity’s rules. Under the Department of Labor’s regulations, the security screenings were closely related activities which were indispensable to the performance of the warehouse workers’ principal activities of retrieving products from warehouse shelves and packaging those products for delivery to Amazon customers. For if employee theft (which the security screenings were intended to prevent) resulted in little or no products remaining on the shelves for delivery to Amazon’s customers, the warehouse workers would not be able to perform these principal activities.
The Supreme Court has left hourly employees with a Hobson’s Choice: spend time on duties which they were not specifically hired to perform or which is not actual productive work—and not get paid for that work—or refuse to do that work and risk getting fired. In this time of a shrinking middle class, it seems that the Supreme Court’s decision in Integrity will all but ensure a continuation of that downward spiral.