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Tic-Tock: Every "Split-Second" of Work is Compensated Says Cal. Supreme Court

UPSHOT: No task is too small or too short to be compensated according to the Cal. Supreme Court.

Disregarding the guidanceskagway national forest ride-may-2018.jpg provided in the State's own Fair Labor Standards, the Cal. Supreme Court says each overtime situation must be studied on its own peculiar circumstances.

This is the language trial lawyers love- a veritable cornucopia of pleading possibilities for the disgruntled employee's attorney.

For park owners, closing up at the end of the shift needs to be defined as the completion of all duties before e.g., 5:00 p.m. Example: New offices hours end at 4:45 p.m., allowing 15 minutes to turn out the lights.

HOLDING: "We [being the California Supreme Court] hold that the relevant wage order and statutes do not permit application of the de minimis rule. . . , where the employer required the employee to work "off the clock" several minutes per shift. We do not decide whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded."

All moments in and around the store after clocking out are compensable even though an inevitable and incidental part of closing up any store at the end of business hours.

WHAT DID THE STARBUCKS EMPLOYEES DO TO EARN MORE COMPENSATION?

"The undisputed facts show that, on average, Plaintiff:

★ Activated the alarm approximately one minute after he clocked out.

★ Moreover, he did so within two minutes on 90 percent of the shifts and within five minutes on every shift.

★ Once he set the alarm, Plaintiff needed to exit the store within one minute to avoid triggering the alarm.

★ It took 30 seconds to walk out of the store.

★ He then locked the door, which took 15 seconds to 'a couple minutes,'

★ Walked his coworkers to their cars, which took 35 to 45 seconds.

★ On rare occasions-once every couple of months-Plaintiff spent a few minutes letting coworkers back inside the store or bringing in patio furniture that he forgot to retrieve before clocking out.

LAWYERS HIRED TO FILE A CLASS ACTION FOR ALL EMPLOYEES

The original lawsuit was filed in Los Angeles for a class of all California employees who performed store closing tasks from 2009 to 2010. Starbucks moved the case to federal court and moved for judgment because the uncompensated time was so de minimis that Starbucks was not required to pay for the trifling amounts.

FEDERAL COURT ASKS THE STATE FOR ITS POSITION ON 4-10 MINUTES OF ADDITIONAL WORK

The federal trial court's decision assumed post clock actions were compensable. The closing tasks generally took 4-10 minutes. In the aggregate over this seventeen month period in his employment, his unpaid closing shift time totaled approximately 12 hours and 50 minutes, or about $102.67 at the then-applicable minimum wage of $8.00 per hour, exclusive of any penalties or other remedies.

The trial court also assumed that the closing tasks would be administratively difficult to capture. Still, the court concluded that the de minimis doctrine applied and granted summary judgment (on the claims for unpaid wages, failure to provide accurate written wage statements, to pay all final wages in a timely manner, and unfair competition).

Then employees appeal and the 9th Circuit asks the State highest court for clarification of State law on this issue. California law does not recognize the de minimis exception. Everything must be compensated. This is a stark contrast to federal laws which do not preempt state law in this instance.

Under the federal Fair Labor Standards Act (FLSA), employers are relieved from liability for unpaid wages where otherwise compensable time was de minimis.

WHAT IS DE MINIMIS TIME?

The rule had been that when the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. The realities of the workplace and the difficulty of recording trivial amounts of time are common sense considerations. "[S]plit-second absurdities" are not justified by real working conditions or the law. It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved:

(1) the practical administrative difficulty of recording the additional time;

(2) the aggregate amount of compensable time; and

(3) the regularity of the additional work.

The Cal. Supreme Court says "de minimis" rules do not apply in California. The court rejected the administrative expertise and guidance of California specialized administrators who devote all their time to the administration of labor laws. The de minimis doctrine appears in the Enforcement Policies and Interpretations Manual published by the Division of Labor Standards Enforcement (DLSE Manual). Sections 47.2.1 and 47.2.1.1 of the manual adopt virtually verbatim the federal regulation on this issue. (DLSE Manual (2002 11 update) p. 47-1; see 29 C.F.R. § 785.47 (2018).)

Rather, the Supreme Court relies on an 1891 precedent. "We have said that application of a de minimis rule is inappropriate when 'the law under which this action is prosecuted does care for small things.'" Francais v. Somps (1891) 92 Cal. 503, 506."

The U.S. Chamber filed an amicus brief urging the Cal. Supreme Court to hold that the de minimis defense applies to claims for unpaid wages. The Chamber's brief argues that the de minimis rule is a practical necessity and has been applied to wage-and-hour claims under the California Labor Code for many years. The Chamber says that employees will now be emboldened to bring claims seeking compensation for trifling absurdities.

Concurring opinions look encourage a "rule of reason," while seemingly discounting any fleeting moment as being trivial. Some say that in a world with smartphones and sensors, what employers can routinely record are precisely the "split-second absurdities" previously deemed impossible to track.

WHAT DOES THE PARK OWNER DO?

In the continuing devolution of business-compatible state regulations, what does the park owner do?

Written Employment Agreements.

The responsible person should be under written employment contract. That will describe job duties. If you may have such issues in the future, at least let's keep them out of court for sake of all sides to a dispute. Use a written employment agreement, which contains an arbitration clause. If Starbucks had used arbitration clauses, perhaps the California Supreme Court would not be involved at all.

Describe your closing procedure

Any tasks to be accomplished at the end of the work day can be explained in the employment agreement. The agreement can also describe the work schedule, when to initiate the closing procedures, and the margin of time expected to remain, with the obligation to report if not enough close-up time is allotted. It should be well enough in advance of the "end of shift" so there is no hangover time.

Lose that Unnecessary Responsible Person.

Resident on site management is required for every mobilehome park with greater than 50 spaces. First, consider if parks with less than 50 spaces need on site management. Bear in mind that a "resident manager" is never required. It is a "responsible person" capable of turning-off utilities in the event of an emergency. Health and Safety Code sec. 18603. Eligible parks may consider eliminating the position altogether and buying more insurance instead.

Shorten Office Hours to Provide Time for Closing Tasks.

In parks with greater than 50 spaces, the answer to the mindless complexity of payroll and record management is obvious and clear. You change procedure to eliminate the risk. Shorten clubhouse hours by 10-15 minutes, to allow time for all closing tasks to be completed before clocking out. If office hours end at 5:00, consider a change to close at 4:45. This allows the manager a period of 15 minutes to accomplish closing tasks and turn out the lights. Beware however of possible claims for service reduction in a rent control jurisdiction with especially needy residents; but easy enough to maintain the ability to pay or communicate (sole purpose of office hours) with a phone number clearly made known to make contact in lieu of office visits in the closing minutes.

Find a Closer?

Relieve the manager of the closing duties and use a separate part-time employee to perform closing tasks, including locking the clubhouse. Many owners already have a closer. Expand their part time duties to cover the usual closing tasks.

Consider Modifying Closing Procedure - Automate.

Are there changes one may envision in the closing procedure to simplify and thus abbreviate the time needed to be spent on closing up? Automatically locking doors alleviates the time for keys and locking up. Auto shut off lights in rest rooms and common areas is less time spent on closing down facilities.

What You Cannot Do.

Starbucks follows Dynamex Operations v. Sup. Court (2018) which nixes re-labeling of your manager to an "independent contractor" status unless, among other things, the work performed by the independent contractor is a line of business totally different than that of the employer. In other words, there is no room to call a park manager an independent contractor. NOT an available option. Some commentators are stating the obvious: the landscape for California employers remains enormously challenging due to the state's unique requirements.

The future judicial attitude will strengthen the attention to trivial pursuit. Some justices expressed surprise that with ever-present smartphones, technology isn't used to record time, no matter how short. Justice Goodwin H. Liu questioned whether an "app" exists to record employees' after clock work. Justice Ming W. Chin asked whether any amount of time performed by an hourly worker is not indeed compensable.

Some experts have estimated that the case could cost Starbucks alone seven figures, and that all California employers with hourly workers could find themselves in legal and financial jeopardy if they aren't paying their workers for all the time they've worked.IMG_0337.jpg

So, Consider: Written Employment Agreements. Clear and Very Clear. Arbitration Clauses. Prayer.

Don't Hire Baristas: Finally, maybe you avoid hiring self-entitled baristas that hecter you with nonsense like 4-10 minutes of extra work. That is not employee rights. That is a bad employee.


Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 692 (1946); Lindow v. United States, 738 F.2d 1057, 1063 (9th Cir. 1984)

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