Nonessential Work Does Not Require Compensation

According to the Supreme Court of the United States (SCOTUS), nonessential work activities can go uncompensated.  Maybe I should worry.  Does this mean I don’t have to be paid when I answer the telephone or make coffee or chat about the games over the weekend during work?  What about going to the bathroom?  Is that not essential?  It seems to be an interesting legal decision, but most everything out of SCOTUS is interesting, in one way or another.

The December 9 decision centered on departing warehouse workers required by management to undergo security screening to control shrinkage.  Employees claimed they should have been paid for the time they spent going through the company’s security screening and had sued the company for back wages and overtime pay. 

The high court reversed an April 2013 ruling by the 9th U.S. Circuit Court of Appeals, which had found that the screenings were an integral part of the warehousing job done for the benefit of the employer and should be compensated.

The Supreme Court Justices ruled to the contrary, that the screening process is not a "principal activity" of the workers' jobs under the Fair Labor Standards Act and therefore is not subject to compensation.

Justice Thomas wrote the unanimous opinion:

For workers to be paid, the activity in question must be “an intrinsic element” of the job and “one with which the employee cannot dispense if he is to perform his principal activities…”

A business group called the Retail Litigation Center submitted a brief supporting the warehousing company, saying the industry in general loses $16 billion annually in thefts.  The ruling will probably help other companies facing similar lawsuits like Amazon, CVS Health Corp and Apple Inc, according to the warehousing company's lawyers.  Amazon, the world's largest online retailer, was not directly involved in this case. 

Others have complained that this is a typical legal decision that makes no common sense.  But it seems that all the powers are united against the security-screened workers.

Justice Sonia Sotomayor, joined by Justice Elena Kagan, wrote a brief concurring opinion to stress that the high court's opinion was consistent with Labor Department regulations.

President Barack Obama's administration had backed the warehousing company's position. Both the company and the government said the security checks are not central to warehouse work and instead are more like waiting in line to punch a time clock, an activity some courts have found does not require compensation.

I must admit that I find such agreement somewhat stunning.  Sure, it’s great for retailers, because shrinkage truly is a terrible problem for most of them.  The ability of some like Costco to reduce pilfering and shoplifting to almose zero by requiring every departing customer go through a security check where their invoice is checked against their purchases gives them almost twice the profit margin of similar retailers.  But I worry about what this precedent means, when every HR professional knows there are rapacious employers out there who will immediately jump on this excuse to argue that any number of normal workplace activities no longer require compensation.  Some brutal bosses will begin dreaming up tasks that would benefit them but could be ordered to be done without pay. 

What might the future hold for us?  I call upon our readers to draw upon their extensive knowledge of job analysis to suggest other elements of normal work that might similarly go uncompensated tomorrow.  What other tasks or behaviors might fall under this new and shocking exception, to be transformed into unpaid volunteer activities without extrinsic value (without pay, in other words)?  

E. James (Jim) Brennan was Senior Associate of ERI Economic Research Institute, the premier publisher of interactive pay and living-cost surveys. After over 40 years in HR corporate and consulting roles throughout the U.S. and Canada, he’s pretty much been there done that (articles, books, speeches, seminars, radio/TV, advisory posts, in-trial expert witness stuff, etc.), serves on the Advisory Board of the Compensation and Benefits Review and will express his opinion on almost anything.

Creative Commons image "money hand" by neubie

Comments

[Jacque Vilet]

I see this as one more example of "business creep" --- meaning that more and more decisions coming out of SCOTUS are pro-business.

My question is --- how long does this security check take --- 30 minutes? One hour? More? I can see where if there are hundreds of warehouse workers and only 10 security guards or whoever does the checks --- waiting time could be significant.
Do you have details on this?

And yes I agree that companies will likely jump on this decision and begin to pick apart the non-essential parts of jobs that they won't have to pay for.

[E. James (Jim) Brennan]

Jacque: I found this http://www.scotusblog.com/2014/12/no-overtime-pay-for-after-work-security-check/ today, showing the length of the security check was "up to 25 minutes".

With the new liberal wing Justices appointed by the current Dem President, 1/3 of the SCOTUS is considered liberal, 1/3 conservative and 1/3 swing voters. Unanimous decisions among Justices with such widely varied leanings are rare and a matter of great interest. The LAST thing I would expect from such a polarized but increasingly liberal-oriented court is an expanded "pro-business" attitude.

The separate additional concurring opinion from the newest and arguably most liberal appointees is especially troubling. They are probably not suddenly turning conservatively pro-business! Might they perhaps be signaling Congress or POTUS to change the FLSA to expand rather than maintain its status quo limited coverage of work requiring pay? What else could this mean?

[Mark]

So employees can be detained against their will with no compensation.......... Hmmmmm.

[E. James (Jim) Brennan]

Good observation, Mark. Isn't that a police power that used to be reserved to law enforcement only?

[Jim Johnson]

I'm also surprised by this decsion, but I think it is the right decision and should be applauded. I can only hope that this signals a move away from the "entitlement mentality" that has been so pervasive in American (and European) industry for too many generations.

[E. James (Jim) Brennan]

JJ: Maybe. But being a professional skeptic, I worry that even the Supremes aren't immune to exercising sarcastic "malicious compliance" when they see a technically legal situation some would want changed. Meanwhile, what OTHER "nonessential" activities might workers be demanded to perform without pay?

[Tony Bergmann-Porter]

I'm quite surprised it wasn't considered analogous to donning and doffing.

[E. James (Jim) Brennan]

Excellent observation, Tony. Past SCOTUS rulings on "donning and doffing" have also been unanimous, it seems. It depends on the facts of the case.

When it was deemed integral to the principal work responsibility (like legally required safety/sanitation gear), it was compensable. "But the Portal-to-Portal Act creates an exception to the FLSA for activities that are preliminary or postliminary to the principal activity of an employee, unless the activity is an integral or indispensable part of the principal activity."

That raises a question to me: If your job requires being fully dressed, why isn't dressing time counted towards hourly pay and overtime?