Douglas Troester’s suit against coffee giant Starbucks might have only been to recoup a small amount of money that he felt was due, but the implications of the suit’s ruling regarding minimal tasks performed by employees may have a significant impact on employers across California.
Douglas Troester’s claim was that Starbucks failed to compensate him for the time he spent closing the coffee store. During his 17-month employment, Starbucks allegedly failed to compensate him for the time he spent locking the doors after his shift, turning on the alarm, and when necessary, reopening the door when customers left their belongings behind. A class- action lawsuit was filed under the California Labor Code that totaled unpaid wages in the amount of $102.67.
Starbucks responded by filing a motion for summary judgment to dismiss the case due to the federal de minimis rule. Although the trial court ruled in Starbucks’ favor, the case was appealed in the California Supreme Court. Their subsequent decision is likely to have an impact on wage tracking requirements, the structuring of work hours for employees, and how businesses estimate the time it takes to perform tasks.
What is the de minimis rule?
The appellate court dismissed the case due to the federal de minimis doctrine. The de minimis doctrine is a defense to state and federal laws requiring that hourly workers track and be paid for all time worked. Under the Fair Labor Standards Act (FLSA), employers are able to defend themselves against claims for unpaid wages for small amounts of time that may be too impractical to track.
Federal courts had previously analyzed a variety of factors in determining whether an employer was warranted in disregarding the time as “de minimis.” Similarly, prior to the Troester case, certain federal courts in California had held that employers did not need to pay wages for minutes spent outside shifts that were not practical to track.
What the Supreme Court ruled
The Troester decision, however, rejected the de minimis federal application (and some prior California decisions), thereby requiring employers to compensate employees for small tasks performed when employees are technically “off the clock.” The new rule will likely create tracking difficulties for employers, especially now they are required to compensate employees for this time.
For example, the time that it takes an employee to walk to and from their car might come into question. If a person works in an event industry and they are required to park far away and walk to the venue, they might be able to demand compensation for their time walking.
And if these employees are required to be compensated, how much time are they required to be paid? Many factors can come into play to affect the amount of time that one employee takes over from another and how to fairly compensate them for that time. In the Troester case, the plaintiff was asked to “estimate” the amount of time it took him for minimal tasks performed. This does not provide employers with very clear guidelines, and could lead to a massive influx of class-action claims.
Why the California Supreme Court rejected the de minimis doctrine
The California Supreme Court contended that employers are in a better position to implement technology-based systems that can prevent failure to compensate employees for this additional time. However, they admitted that for specific industries, it can create an extremely challenging administrative burden.
The court did not say that the de minimis rule can never apply, but it strictly limited an employer’s ability to rely on it alone. Therefore, it appears the Supreme Court of California has left businesses to fend off class action suits on their own.
What are the implications for employers in California regarding minimal tasks performed?
What the rule means for employers in California is that they must compensate employees for all time, even after their shift, regardless of whether the task seems menial and relatively insignificant. Minimal tasks performed might no longer be minimal at all.
If you are an employer in the state of California, it is vital that you know how the new ruling will affect how you record, estimate, and pay for “off-hour” tasks, and if there is indeed such a thing as “off-hour” tasks at all. To ensure that the implications of this ruling won’t leave your company vulnerable to a class-action suit, contact Trestle Law today.