Troester v. Starbucks: The CA Supreme Court Holds Routine Tasks that Take Minutes to Perform are not too Minute to Evade Compensation

Standard

In a July 27, 2018 decision, the California Supreme Court in Troester v. Starbucks Corp., 5 Cal.5th 829 (2018), clarified that, where an employer requires an employee to perform several minutes of compensable work after the employee has clocked out for the day, California law requires the employer to pay the employee for the work, even if the additional time may be administratively difficult to capture.  California case law does not support the application of the “de minimis” rule, which is applicable under the federal Fair Labor Standards Act, to avoid payment.

In light of the Troester decision, employers should adopt or revise their practices and policies to capture all time employees spend on work routinely done:

  1. If employees have been performing such tasks before they clock in or after they clock out, the employer should make sure to capture that time and compensate the employees. Employers should arrange that such tasks be performed after clocking in or before clocking out.  No such tasks should be performed once an employee has clocked out.
  2. If the tasks required of an employee make it difficult for the employee to clock out after performing them, because, for example, the manner of clocking out is by a clock or a computer distant from the task and the exit, the employer should explore new technologies, perhaps using smart phones, for clocking in or out.
  3. Employers should adopt a strong policy prohibiting work before clocking in or after clocking out and provide periodic reminders to employees of that policy.
  4. Supervisors should be trained to remind employees of that policy and to check with employees to make sure they are not performing tasks off the clock for which they are uncompensated. Employers should consider making work off the clock reportable to HR as a disciplinary matter, while still making sure to compensate the employee for the work.

In Troester, the Court, upon request by the U.S. Court of Appeals for the Ninth Circuit, examined whether the “federal Fair Labor Standards Act’s de minimis doctrine . . . [applies] to claims for unpaid wages under California Labor Code sections 510, 1194 and 1197.  Section 510 states, among other things, that a workday consists of eight hours, and any hours worked in excess of eight hours in a day or 40 hours in a workweek must be compensated at an overtime rate of time-and-a-half.  Section 1194 authorizes an employee to file suit for any amount of wages that is paid at a rate of less than minimum wage and any unpaid overtime pay.  And section 1197 provides for the setting of the minimum wage and makes it unlawful for an employer to pay at a rate less than the minimum wage.

The Court concluded that California’s wage laws and regulations have not adopted the FLSA’s de minimis principle.  The Court also concluded that California’s own de minimis principle, which operates in other contexts, cannot be applied to wage and hour statutes in the context of an employer that requires “the employee to work ‘off the clock’ several minutes per shift.”  The Court left to another day the question of whether the de minimis principle could be applied in “circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.”

While California wage orders have not directly addressed the de minimis rule used in federal cases, they define “hours worked” broadly to include “preliminary” and “postliminary” tasks that may be excluded under federal law.  And they place” more importance on the policy of ensuring that employees are fully compensated for all time spent in the employer’s control.”

In light of that emphasis under the Labor Code and Wage Orders, the de minimis principle was inapplicable in the circumstances presented in Troester.  The duties that the employee had to perform after clocking out related to closing the store (activating the burglar alarm, exiting the store quickly thereafter, locking the door to the store, walking coworkers to their cars and, from time to time, arranging for coworkers to re-enter the store or bringing in patio furniture that had been left outside).  The Court noted that these are compensable tasks; that they take only a few minutes per day to accomplish does not absolve an employer from its obligation to pay the wages attributable to them.

California law does not make time non-compensable simply because of the difficulty of keeping track of that time.  The Court was unwilling to impose on the employee the burden arising from the difficulty in keeping track of time worked.  In addition, the Court noted that the availability of class action lawsuits has made it possible and worthwhile to fashion a remedy for such lost wages.  And technological advances have made it feasible to track and record work time that was previously unmanageable to capture.

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