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Minutes Count: California Supreme Court Rejects De Minimis Doctrine for Wage Claim

On July 26, 2018, the California Supreme Court ruled in Troester v. Starbucks Corporation that the federal de minimisdoctrine does not apply to a California employee’s class action wage claims.  This ruling will have widespread impact, particularly on those employers with large numbers of non-exempt employees such as retailers and food service providers, as employers are now required to pay employees for even the small amounts of time spent on incidental work that occurs prior to clocking in or after clocking out.

The employee in Troester, a non-exempt Starbucks supervisor, argued that Starbucks should pay him for the roughly 4 to 10 minutes each day he spent on tasks related to closing the store after clocking out.  These tasks included activating the alarm, exiting the store, locking the front door, walking coworkers to their cars pursuant to Starbucks’ safety policy, and other occasional tasks such as letting an employee back into the store to retrieve a forgotten item.  The Court noted that over the 17 month period of employment, Troester’s time spent performing these unpaid tasks totaled approximately 12 hours and 50 minutes or about $102.67 in lost wages.

Starbucks argued that the federal Fair Labor Standards Act’s de minimis doctrine applied to this case and excused Starbucks’ nonpayment of wages for these small amounts of otherwise compensable time.  The Court first rejected Starbucks’ argument, finding that the Labor Code and the Industrial Welfare Commission’s (IWC) wage orders had not adopted the federal de minimis doctrine.  In support of its findings, the Court pointed to the language contained in these statutes and regulations which emphasize that hours worked includes “all the time the employee is suffered or permitted to work.”  By emphasizing that it includes “all” time, the Court found that California law is more protective than federal law when it comes to payment of wages.

Second, the Court rejected Starbucks’ argument that the Court should recognize the de minimis rule in light of the fact that it is part of the “established background of legal principles” upon which the Labor Code and IWC wage orders have been enacted.  In its ruling, the Court found that the Labor Code and the IWC wage orders are clearly concerned with small amounts of time given that employees receive 10 minute rest breaks.  Along with this observation, the Court noted that it implicitly rejected a de minimum intrusion of such time in Augustus v. ABM Security Services, Inc.  The Court also found support for its holding because the IWC wage orders amended its language demonstrating an intent to depart from the federal standard for waiting time and other forms of travel time.  The federal Portal-to-Portal Act relieves employers from paying minimum wages or overtime for certain activities such as walking to the actual place of performing the principal activity for the employer and other preliminary or postliminary activities.  In response, the IWC amended its wage orders such that hours worked included these activities.  In doing so, the Court found that the IWC intended for employers to pay employees for these small amounts of time.  Finally, the Court noted that the modern availability of class action lawsuits and technology advances in employer timekeeping methods both undermine the de minimis doctrine.

This case will spark a new wave of California class action lawsuits focusing on those previously uncounted minutes and perhaps even seconds of time worked by an employee.  With this risk of increased exposure, employers should review their timekeeping policies and procedures.  Employers should also analyze each non-exempt employees’ duties and responsibilities and minimize the risk of any off-the-clock work.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Kinal Patel, Regulatory, HealthCare Attorney, Squire Patton Boggs Law Firm
Associate

Kinal Patel focuses his practice on regulatory and contractual matters in the healthcare industry.

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Karen E. Wentzel sexual harassment, sex, race, age disability legal specialist
Of Counsel

Karen Wentzel has more than 20 years of experience representing clients in a wide variety of business disputes, with special expertise in the laws governing sexual harassment, sex, race, age and disability discrimination, wrongful discharge, employee raiding and misappropriation of trade secrets, and stock options. She regularly appears in both state and federal courts, and in private arbitrations.

Karen regularly advises clients on the avoidance of litigation on wage and hour matters, reductions-in-force, unfair competition, reasonable accommodation, protecting proprietary information, employee raiding and non-solicitation issues and personnel matters. Her clients particularly value her practical approach to complex employment issues in the context of their unique business needs.

Her practice also includes extensive experience working with companies and executives in negotiating employment contracts, and transition and severance agreements for high level executives.

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Michael Kelly, Squire Patton Boggs Law Firm, Employment Attorney
Partner

Michael Kelly has experience in employment litigation, counseling, collective bargaining and arbitration. His practice includes state and federal employment litigation regarding wage and hour issues, age and disability discrimination, sexual harassment and retaliation.

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