77 OBJ 845 (Mar. 11, 2006)

Introduction

On Nov. 8, 2005, the U.S. Supreme Court issued a unanimous decision interpreting the Fair Labor Standards Act of 1938 (“FLSA”) related to the scope of the compensable workday for employees required to wear protective gear in the performance of their jobs. This landmark decision not only dramatically affects the workplace where protective gear is required but potentially affects the payment of wages for all employees.

Case Synopsis

In IBP Inc. v. Alvarez,1 the Supreme Court consolidated two class-action lawsuits raising questions concerning the language of the FLSA,2 as amended by the Portal-to-Portal Act of 1947,3 regarding the compensability of activities of employees who must put on (“don”) and take off (“doff”) protective gear on the employer’s premises prior and subsequent to engaging in the productive labor for which they are hired.4 In settling a divergence of opinion between the 9th Circuit Court of Appeals5 and the 1st Circuit Court of Appeals,6 the Supreme Court held that the time employees spend donning and doffing protective clothing and equipment is compensable under the FLSA if such activities are an “integral and indispensable part of the principal activities” for which the employees are employed.7 Also compensable under the FLSA is the time employees spend walking between changing and production areas.8 Finally, although employees’ time spent waiting to doff protective equipment is potentially compensable under the FLSA, their time spent waiting to don such equipment is not compensable because such time is specifically excluded under Section 4(a)(2) of the Portal-to-Portal Act.9

Brief History of Compensable Time under the FLSA and the Portal-to-Portal Act

Fair Labor Standards Act

Enacted in 1938, the FLSA requires employers engaged in the production of goods for commerce to pay their employees a minimum wage and requires employers to pay overtime compensation to covered employees who work in excess of 40 hours per workweek.10 However, neither “work” nor “workweek” is defined in the statute, leaving the courts with the task of determining the same.11 Initially, the Supreme Court defined those terms broadly.12 In Anderson v. Mt. Clemons Pottery Co., the Court held that the time necessarily spent by employees walking from time clocks near the factory entrance gate to their workstations must be treated as part of the workweek.13

The Portal-to-Portal Act

In response to the Supreme Court’s expansive interpretation of the terms “work” and “workweek,” Congress passed the Portal-to-Portal Act to supplement and amend certain provisions of the FLSA.14 Particularly, the Portal-to-Portal Act implemented two statutory remedies relating to “existing claims” and “future claims,” distinguishing between working time that is compensable pursuant to contract or custom and practice, and time that was found compensable under the Supreme Court’s expansive reading of the FLSA.15

With respect to existing claims, the Portal-to-Portal Act provided that employers will not be liable under the FLSA for failing to pay an employee minimum wage or overtime compensation unless an activity was compensable by either: a) an express provision of a written or non-written contract between an employee and employer, or b) an established custom or practice between an employee and employer (“Section 2”).16 With respect to future claims, the Portal-to-Portal Act specifically excepted two activities from the FLSA’s minimum wage and overtime compensation requirements: a) walking or traveling to and from the actual place of performance of the principal activities for which the employee is employed, and b) activities which are preliminary and postliminary to the principal activities (“Section 4”).17

Eight years after the enactment of the Portal-to-Portal Act, in Steiner v. Mitchell, the Supreme Court addressed the question of whether employees in a battery plant had a statutory right to compensation for time spent changing clothes at the beginning of a shift and showering at the end, where such action was required due to the dangerously poisonous and toxic materials the employees repetitively used.18 Upon distinguishing “changing clothes and showering under normal conditions” and stressing the important health and safety risks surrounding the production of batteries, the Supreme Court upheld the conclusion that such activities were compensable under the FLSA.19 In reaching this result, the Supreme Court agreed with the circuit court that the phrase “principal activity or activities” described in the Portal-to-Portal Act includes not only the principal activities themselves but also all activities which are an “integral and indispensable part of the principal activities.”20 As a result, the Steiner court found that the dressing and showering activities were “integral and indispensable,” and were thus compensable.21

The Supreme Court Cases

In IBP Inc. v. Alvarez, the Supreme Court revisited employee compensation requirements under the FLSA, the Portal-to-Portal Act and Steiner.22 The court determined that the primary question presented by the two consolidated cases before it – both involving required protective gear integral and indispensable to the employees’ work – is “whether postdonning and predoffing walking time” is specifically excluded from compensation under the FLSA by Section 4(a)(1).23 The court determined it is not.24

In answering the above question, the Supreme Court analyzed the two cases before it separately. First, the court addressed the issues raised in IBP Inc. v. Alvarez.25 Second, the court addressed the issues raised in Tum v. Barber Foods Inc.26 Following is a summary of the court’s analysis with respect to both cases.

IBP Inc. v. Alvarez

IBP Inc. (“IBP”) is a large meat producer.27 At its production plant, it employs approximately 178 workers in the slaughter division and 800 workers in the processing division.28 All production workers in both divisions were required to wear protective gear such as hardhats, hairnets, earplugs, gloves, sleeves, aprons, leggings and boots.29 Some workers were required to wear more extensive gear such as chain link metal aprons, vests and Plexiglas armguards.30 IBP required its employees to store their protective gear and tools in company locker rooms.31

IBP based its production workers’ pay primarily on their time spent cutting and bagging meat.32 In 1999, IBP employees filed a class-action lawsuit to recover compensation for preproduction and postproduction work, including time spent donning and doffing protective gear and walking between the locker rooms and the production floor before and after their assigned shifts.33 After a lengthy bench trial, a Washington District Court concluded that “donning and doffing of protective gear that was unique to the jobs at issue were compensable under the FLSA because they were integral and indispensable to the work of the employees who wore such equipment.”34 Further, the district court found that for those employees required to don and doff unique protective gear, the time employees spent walking between the locker room and the production floor was also compensable because such walking occurred during the workday.35 The district court, however, held that “ordinary clothes changing and washing” and the “donning and doffing” of ordinary equipment such as hard hats, earplugs, safety glasses, boots and hairnets were not compensable under the FLSA.36

On appeal, the 9th Circuit Court of Appeals generally agreed with the trial court’s decision but did so, in part, for different reasons.37 Specifically, while the 9th Circuit affirmed the distinction between the donning and doffing of elaborate protective gear and the time spent donning and doffing ordinary gear, it found that the donning and doffing activities in this case were de minimis as a matter of law.38

On appeal to the U.S. Supreme Court, IBP challenged whether the 9th Circuit “correctly rejected IBP’s contention that the walking between locker rooms and the production areas is excluded from FLSA coverage by [Section] 4(a)(1) of the Portal-to-Portal Act.”39 Rejecting IBP’s contention that the actual donning and doffing of protective equipment is not itself a “principal activity” that commences the beginning of the workday, and therefore the walking that occurs immediately after donning and immediately before doffing is not compensable, the Supreme Court relied on Steiner reiterating that 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.”40 Further, the court noted that IBP failed to offer any support for the proposition that Congress “intended to create an intermediate category of activities that would be sufficiently ‘principal’ to be compensable, but not sufficiently principal to commence the workday.”41

Ultimately, the Supreme Court agreed with the 9th Circuit and concluded that under the facts, the time employees spent walking between the locker rooms and the production areas is compensable under the FLSA.42 Specifically, the court found the locker rooms where the employees don and doff the unique safety gear are the relevant places of performance of the principal activity that the employees were employed to perform pursuant to Section 4(a)(1).43 Consequently, time spent walking to the locker rooms before commencing work is statutorily excluded from FLSA coverage, but time spent walking from the locker rooms to another area within the plant immediately after the workday has commenced is not excluded from FLSA coverage, and is therefore compensable.44

IBP also contended that the Supreme Court’s decision in Anderson, holding the FLSA-mandated compensation for the time employees spent walking from time clocks located near the plant entrance to their respective places of work prior to the start of their productive labor may have been the proximate cause of the enactment of the Portal-to-Portal Act which specifically excluded such activity from FLSA coverage.45 IBP’s position was that Congress’ obvious repudiation of the Anderson holding reflected a purpose to exclude what IBP regarded as the “quite similar walking time spent by [employees] before and after their work slaughtering cattle and processing meat.”46

In Anderson, the walking occurred prior to the beginning of the workday ( i.e., prior to the employees’ principal activities).47 However, in IBP, the relevant walking occurred after the workday began and prior to its end.48 The Alvarez court refused to accept IBP’s argument that an “activity can be sufficiently ‘principal’ to be compensable, but not sufficiently so to start the workday.”49 The court also noted that the walking time IBP disputed consumes “less time than the donning and doffing activities that precede or follow it” and is more comparable to “time spent walking between two different positions on an assembly line than to the prework walking in Anderson.”50

In conclusion, the Alvarez court held that “any activity that is ‘integral and indispensable’ to a ‘principal activity’ is itself a ‘principal activity’ under [Section] 4(a) of the Portal-to-Portal Act.”51 Moreover, during a continuous workday, the court opined, any walking time that occurs after the beginning of the employee’s first principal activity and before the end of the employee’s last principal activity is excluded from the scope of that provision, and as a result is covered by the FLSA.52

Tum v. Barber

Barber Foods Inc. (“Barber”) operates a poultry processing plant that employs approximately 300 production workers.53 The workers perform a variety of tasks on the production lines requiring different combinations of protective clothing.54 The workers are compensated by the hour beginning from the time they “punch in to computerized time clocks located at the entrances to the production floor.”55 Like in the Alvarez case, several Barber employees and former employees filed a class action lawsuit against Barber to recover compensation under the FLSA for a) time spent donning and doffing required protective gear and b) the attendant walking and waiting time.56

On summary judgment, the district court held as follows: 1) time spent donning and doffing clothing and equipment required by the employer or by government regulation (as opposed to clothing and equipment employees choose to wear) is an integral part of the employees’ work and is not excluded from compensation under the Portal-to-Portal Act as preliminary or postliminary activities, and 2) time employees spent prior to obtaining their clothing and equipment is not compensable because it is not an integral part of the employees’ work activities.57 Therefore, Barber was “entitled to summary judgment on any claims based on time spent walking from the plant entrances to an employee’s workstation, locker, time clock or site where clothing and equipment required to be worn on the job is to be obtained and any claims based on time spent waiting to punch in or out for such clothing or equipment.”58 The case proceeded to a jury trial, however, on the sole issue of whether Barber was required to compensate its employees for the time they spent actually donning and doffing required protective gear.59 The jury found for Barber on all counts, determining the time employees spent donning and doffing protective equipment de minimis and therefore not compensable.60

On appeal, the employees argued that the district court improperly excluded as noncompensable the time employees spent walking to the production floor after donning their safety equipment, and from the production floor to the place where the employees doffed their safety equipment.61 The 1st Circuit Court of Appeals rejected the employees’ argument, categorizing such walking time as a “species of preliminary and postliminary activity excluded from FLSA coverage” by the Portal-to-Portal Act.62 The employees further argued that the waiting time attendant to the donning and doffing of equipment was compensable under the FLSA.63 The 1st Circuit once again disagreed finding the waiting time also qualified as a “preliminary or postliminary activity” excluded from FLSA coverage.64

As previously explained in the discussion of IBP Inc. v. Alvarez, the Supreme Court disagreed with the 1st Circuit’s categorical conclusion that postdonning and predoffing walking time are preliminary and postliminary activities excluded from FLSA coverage.65 As to the compensability of waiting time, the Supreme Court ultimately agreed with the 1st Circuit as to pre-donning waiting time but disagreed as to pre-doffing waiting time.66

The Supreme Court found, “[b]ecause doffing gear that is ‘integral and indispensable’ to employees’ work is a ‘principal activity’ under the statute, the continuous workday rule mandates that time spent waiting to doff is not affected by the Portal-to-Portal Act and is instead covered by the FLSA.”67 However, the time spent waiting to don is “time that elapses before the principal activity of donning integral and indispensable gear” and is therefore not compensable under the FLSA.68 The court explained, “the fact that certain preshift activities are necessary for employees to engage in their principal activities does not mean that those preshift activities are ‘integral and indispensable’ to a ‘principal activity’ under Steiner.69 For example, walking from a time clock near the factory gate to a workstation is certainly necessary for employees to begin their work, but it is indisputable that the Portal-to-Portal Act evinces Congress’ intent to repudiate Anderson’s holding that such walking time was compensable under the FLSA.”70

The Supreme Court noted its analysis would be different if Barber required its employees to arrive at a particular time in order to begin waiting to don their equipment.71 A regulation promulgated by the secretary of labor provides that when an employee “is required by his employer to report at a particular hour at his workbench or other place where he performs his principal activity, if the employee is there at that hour ready and willing to work but for some reason beyond his control there is no work for him to perform until some time has elapsed, waiting for work would be an integral part of the employee’s principal activities.”72

The court concluded, “we are not persuaded that such waiting – which in this case is two steps removed from the productive activity on the assembly line – is ‘integral and indispensable’ to a ‘principal activity’ that identifies the time when the continuous workday begins.”73 Accordingly, the court held the Portal-to-Portal Act excludes from the scope of the FLSA “time employees spend waiting to don the first piece of gear that marks the beginning of the continuous workday.”74

The Impact of Alvarez and Barber on Employers

The U.S. Supreme Court’s decision in Alvarez requires all employers, meat producers or otherwise, to re-evaluate their criteria for determining the compensable workday including all activities that are “integral and indispensable” to the employees’ principal activities. In this regard, the Supreme Court’s decision is not limited to the activity of donning and doffing protective gear but extends to any preliminary activity required of employees to perform the primary activities of their jobs. Examples of potentially compensable preliminary activities include tasks such as “scrubbing up,” changing into a required uniform, inspecting a rig or vehicle prior to transporting goods or people, loading or unloading cargo for delivery or receipt, or even booting up a computer.

Employers should also remember that generally time employees spend prior to the commencement of the workday, walking, waiting or engaging in some other activity is specifically excluded from coverage under the FLSA, and is therefore not compensable, unless the employer requires its employees to arrive at a specific time, in which case this time is likely compensable under the FLSA.75 Unless and until Congress decides once again to scale back the judiciary’s broad interpretation of compensable activities under the FLSA, counsel should assist employers in modifying their policies and practices to conform to the Supreme Court’s recent ruling in IBP Inc. v. Alvarez or face potential costly litigation.

Finally, counsel should advise employers to audit and/or implement payroll and timekeeping policies and practices to ensure compliance with the FLSA, including determining specifically what activities are “on” and what activities are “off” the clock.

1.126 S. Ct. 514 (2005).
2. 29 U.S.C. § 201 et seq.
3. 29 U.S.C. §§ 251-262.
4. Alvarez, 126 S. Ct. at ¶¶ 6-7.
5. Alvarez v. IBP Inc., 339 F.3d 894 (9th Cir. 2003).
6. Tum v. Barber Foods Inc., 360 F.3d 274 (1st Cir. 2004).
7. Alvarez, 126 S. Ct. at ¶¶ 15-16.
8. Id. at ¶ 28.
9. Id. at ¶ 36.
10. 29 U.S.C. §§ 206-207.
11. Alvarez, 126 S. Ct. at ¶ 8.
12. See, e.g., Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590 (1944) (holding time spent traveling from iron ore mine portals to underground working areas was compensable); Armour & Co. v. Wantock, 323 U.S. 126 (1944) (clarifying “exertion” was not necessary for an activity to constitute “work” under the FLSA); Anderson v. Mt. Clemons Pottery Co., 328 U.S. 680 (1946) (defining “the statutory workweek” to include all time during which an employee is necessarily required to be on the employer’s premises, on duty or at a prescribed workplace).
13. 328 U.S. 680, 691-92 (1946).
14. Alvarez, 126 S. Ct. at ¶¶ 9-10.
15. 29 U.S.C. §§ 252(a) and 254(a); Alvarez, 126 S. Ct. at ¶ 10.
16. 29 U.S.C. § 252(a).
17. 29 U.S.C. §254(a).
18. Steiner v. Mitchell, 350 U.S. 247, 248 (1956).
19. Id. at 249.
20. Id. at 252-53.
21. Id.
22. IBP Inc. v. Alvarez,126 S. Ct. 514 (2005).
23. Id. at ¶ 16.
24. Id.
25. See supra note 5.
26. See supra note 6.
27. Alvarez, 126 S. Ct. at ¶ 16.
28. Id. at ¶¶ 16-17.
29. Id. at ¶ 17.
30. Id.
31. Id.
32. Id.
33. Id.
34. Id. at ¶ 18.
35. Id.
36. Id.
37. Id. at ¶ 19.
38. Id. at ¶¶ 19-20.
39. Id.; IBP did not challenge that in light of Steiner, the donning and doffing of unique protective gear are “principal activities” under the Portal-to-Portal Act. Id. at ¶ 20.
40. Id. at ¶¶ 20-22.
41. Id. at ¶ 23.
42. Id.
43. Id.
44. Id.
45. Id. at ¶¶ 23-24.
46. Id. at ¶ 24.
47. Id.
48. Id.
49. Id.
50. Id. at ¶¶24-25; See also 29 C.F.R. § 790.7(c)(2005) (establishing that the Portal-to-Portal Act does not affect the compensability of time spent traveling from the place of performance of one principal activity to that of another); 29 C.F.R. § 785.38 (explaining that “where an employee is required to report at a meeting place to receive instructions or to perform other work there, or to pick up and carry tools, the travel from the designated place to the work place is part of the day’s work, and must be counted as hours worked . . .”).
51. Alvarez, 126 S. Ct. at ¶ 28.
52. Id.
53. Id.
54. Id.
55. Id.
56. Id. at ¶¶ 28-29.
57. Id. at ¶¶ 29-30.
58. Id. at ¶ 30.
59. Id.
60. Id. at ¶ 31.
61. Id. at ¶¶ 31-32.
62. Id.
63. Id.
64. Id.
65. Id. at ¶ 32.
66. Id.
67. Id.
68. Id. at ¶¶32-33.
69. Id. at ¶¶ 33-34.
70. Id. at ¶34.
71. Id. at ¶33.
72. 29 C.F.R. § 790.7(h) (2005).
73. Alvarez, 126 S. Ct. at ¶ 36.
74. Id.
75. See Id. at ¶¶ 33-36.