In Starbucks Case, Calif. Supremes Chew on Value of Slivers of Off-the-Clock Time
The California high court on Tuesday considered whether the "de minimis doctrine"—a defense for employers facing federal wage claims for brief off-the-clock tasks—applies under the state's more protective labor laws.
May 01, 2018 at 05:17 PM
4 minute read
SAN FRANCISCO — Justices on California's high court on Tuesday grappled with how the state's worker-friendly wage-and-hour laws apply to employees required to do brief off-the-clock tasks before or after their work shifts.
The arguments in Troester v. Starbucks focused on whether employers can assert a common defense under the California Labor Code used to excuse not paying for tasks that take less than 10 minutes under the Fair Labor Standards Act.
Right out of the gate at Tuesday morning's argument, plaintiffs lawyer Stanley D. Saltzman of Marlin & Saltzman in Agoura Hills took aim at the so-called “de minimis doctrine” arguing that it applies under federal law. Saltzman said under federal law, all time worked must be paid “as a general rule,” but that there's no such caveat under California law.
Saltzman's client, Douglas Troester, a former Starbucks shift supervisor, sued in state court in 2012 claiming the company violated the California Labor Code because it failed to pay him for time spent off the clock closing the store where he worked. Troester claimed he was required to upload store sales data, turn off computers and lights, lock up, activate the store alarm, and escort employees to their cars or accompany them as they waited for rides, all after he clocked out. The case was removed to federal court where Troester lost on summary judgment.
The U.S. Court of Appeals for the Ninth Circuit referred the case to the California Supreme Court to determine whether the de minimis defense, which Starbucks won on at the district court, applies under California law.
Under questioning from Justice Goodwin Liu about who should bear the burden for adapting technology to accurately record employee time, Saltzman said it was up to Starbucks to adopt accurate technology or to get a reasonable estimate of the amount of time it would take an employee to complete the required tasks. Although Starbucks allowed employees in Troester's position to put in for additional time beyond what was recorded on their time cards, Saltzman argued “that time should be recorded upfront and immediately.”
Justice Beth Grimes of the Second District Court of Appeal, sitting pro tempore on the case, asked Saltzman how the court should determine what exactly was “compensable time.”
He responded that the key thing to keep in mind was “the last act for which you could be fired.”
“If your employer can discipline you or terminate you after three actions of the same, that has to be compensable time,” he said. “You are under their control.”
But Starbucks' counsel, Rex Heinke of Akin Gump Strauss Hauer & Feld, cautioned the justices that if they were to find the de minimis doctrine didn't apply under California law, cases involving disputes over “one second or half-a-second” of time would become the norm since California law carries stiff statutory penalties for misstating a worker's time worked or failing to pay wages.
Liu said that he couldn't understand why a “big corporation” like Starbucks that focuses on being “super efficient” couldn't just do a time study to see what happens at a typical store.
“You're talking about an average,” Heinke responded. “Average is not a defense.”
Chief Justice Tani Cantil-Sakauye pointed out that since the initial 1946 U.S. Supreme Court decision, which established the de minimis doctrine, federal regulations have codified it. She said that if the court were to adopt the rule itself for California, that move could deprive employers and organizations representing workers of the opportunity to weigh in on the “nitty gritty” of questions like whether four seconds can be captured and should be considered “all hours worked.”
Heinke, however, didn't back off his cautionary tone. He said that if the court didn't adopt the doctrine, companies in Starbucks' position would face “millions of dollars in penalties” because of small slivers of unpaid time. Employees, he pointed out, are entitled to a statutory penalty of $4,000 per violation under the applicable California law and a “waiting penalty” that could amount to 30-days' pay per employee.
“This case is not about the small amount of wages that they are contesting. It is about all these other things,” Heinke said. “That is what drives this litigation.”
In a brief rebuttal, Saltzman pointed out that penalties don't kick in under California law unless employers act willfully.
“The penalties are not automatic,” he said. “I've been doing this for many years. They are actually very hard to get.”
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