San Diego Employers: Ninth Circuit Holds Employees Must be Paid for All Time Worked

Last year, the California Supreme Court decided the case of Troester v. Starbucks Corporation, 5 Cal. 5th 829 (2018). In Troester, the court broadly held that the California Labor Code required that workers must be paid for all time worked, even for required tasks that only take a minute or two each day. See our discussion here. In that case, the employer — Starbucks — required its managers to clock off and out of the system and then lock-up the store location. However, the tasks required for locking up generally took one to four minutes. In Troester, our Supreme Court held that those extra “off-the-clock” minutes were compensable.

In line with Troester, the federal Ninth Circuit recently held that there is no “de minimis” exception to what Troester requires. See Rodriguez v. Nike Retails Services, Case No. 17-16866 (9th Cir. June 28, 2019). Interestingly, the oral argument was heard on June 14, 2019, and the opinion was issued only two weeks later which is an unusually quick turnaround.

The Rodriquez case involved Nike’s policy of inspecting employee bags as they finished their shifts and left the stores. The employees were required to clock out and, then, before leaving the store, any bags or packages or boxes had to be inspected before they left. Obviously, this was an anti-theft policy. However, the search took anywhere from 30 seconds to a couple of minutes.

The Rodriquez case was filed prior to Troester being decided. At the trial court level, the case was dismissed under the “de minimis time” legal doctrine. The federal courts — not the California state courts — have evolved what is known at the “de minimis time” legal doctrine under federal labor laws. Under federal labor laws, employers do not need to pay workers for short, trifling, and trivial increments of time — de minimis increments of time. The trial court in Rodriquez applied the federal de minimis doctrine to California labor laws and dismissed the claims.

However, as noted, the Ninth Circuit reversed. Since California labor laws were at issue, there is no application of the de minimis time doctrine. The court held further that they did not feel that the California Supreme Court would create a de minimis time exception to Troester. The rule under California law is that all time required by an employer must be compensated including the time required to inspect bags before exiting.

The Ninth Circuit did leave open the possibility that some truly de minimis increment of time would not be compensable even under California law. But there was certainly no bright line rule that, say, 30 seconds, would always be considered de minimis.

Legal lesson for San Diego Employers

Litigation over wages and alleged unpaid benefits is expensive. First, you should retain an experienced San Diego corporate attorney for advice and counsel. Second, to reduce the risk of litigation, establish procedures that capture all the time that your employees work and compensate them for all of their time. This is just a matter of record keeping. There are many software solutions to this record keeping problem. Alternatively, one solution is to automatically add a set amount of time — five minutes, for example — to the time clocked for workers who have post-clocking-out duties. Set the automatically added time high enough to always cover the actual time worked. But caution is needed since the post-clocking-out time might slowly expand to be six minutes and then the specter of litigation arises again.

Contact San Diego Corporate Law

For more information, call Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard focuses his practice on business law, transactional, and corporate matters, and he proudly provides legal services to business owners in San Diego and the surrounding communities. Mr. Leonard can be reached at (858) 483-9200 or via email. Like us on Facebook.

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