Employment Law

California Employer Defense Attorney Insights: Supreme Court Rulings on Compensable Hours and Employer Control

In the recent California Supreme Court ruling in the matter of Huerta v. CSI Electrical Contractors, the Ninth Circuit asked whether time an employee spends on his employer’s premises waiting in his personal vehicle to scan an identification badge and have a security guard peer into his vehicle before exiting a Security Gate is compensable as “hours worked.” The California Supreme Court’s answer was “That it is.”

While the California Supreme Court stated that the issue of an employee spending time on the employer’s premises awaiting and undergoing an exit security procedure that is mandated by the employer for its own benefit, the employee, even when in his personal vehicle, is subject to the employer’s control, and the time is compensable as “hours worked,” was a matter of first impression, the court relied upon its prior rulings in industries other than construction as a basis for this determination. 

In the matter of Frlekin v. Apple Inc., the Ninth Circuit asked the California Supreme Court to resolve a similar question: whether the time that Apple employees spent on Apple’s premises “waiting for, and undergoing, required exit searches of packages, bags, or personal technology devices voluntarily brought to work purely for personal convenience by employees” is compensable as “ hours worked.” In answering yes, the court conducted a “strictly textual analysis” of the control clause, which led us to conclude that “Apple employees are clearly under Apple’s control while awaiting, and during, the exit searches.” Apple’s control of its employees during the time they spent “awaiting, and during, the exit searches” was evidenced by Apple’s requirement that “its employees … comply with the bag-search policy under threat of discipline, up to and including termination”; its confinement of employees to the premises while they waited to undergo an exit search; and its requirement that employees “perform specific and supervised tasks while awaiting and during the search,” including “locating a manager or security guard and waiting for that person to become available, unzipping and opening all bags and packages, moving around items within a bag or package, removing any personal Apple technology devices for inspection, and providing a personal technology card for device verification.” The court ruled that the level of the employer’s control over its employees, rather than the mere fact that the employer requires the employees’ activity, is determinative concerning whether an activity is compensable. 

The Huerta matter, like Frlekin, involves time spent on the employer’s premises by employees awaiting an exit security procedure that included a search. The fact that an employee awaits and undergoes the exit process while in his personal vehicle does not necessarily transform that time into commuting time, nor does it foreclose an employer’s ability to exert control over its employee. An employee in his personal vehicle may be subject to his employer’s control within the meaning of the wage order if sufficient indicia of control are present. The court found that, like the employees in Frlekin, Huerta was required to wait for and undergo the exit security procedure before leaving the Site. Whereas the bag search in Frelkin was practically mandatory because employees could only avoid it by not bringing personal technology items to work, compliance with CSI’s exit procedure was strictly required for every employee, and Huerta remained confined to the employer’s premises until he completed the exit procedure; the procedure was thus an “onsite employer-controlled activit[y].” Further, Huerta was required to perform “specific and supervised tasks” as part of the exit procedure, and CSI’s requirement that Huerta undergo the exit procedure was primarily in service of its own interests. 

To be sure, the CSI exit protocol is not as intrusive as the search of the Apple employees, however the fact that the procedure itself could take up to a minute or more per vehicle suggests that CSI’s inspections extended beyond the time necessary to simply scan a badge, and prolonged the time required for workers to exit the jobsite beyond what would result from ordinary traffic congestion at the end of the workday. 

The court in Huerta also reiterated its prior ruling that California’s wage and hour statutes generally do not incorporate the federal de minimis doctrine and do not “excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record.” 

In Troester v. Starbuck Corp., Troester had various duties related to closing the store after he clocked out, and the parties agreed, for purposes of resolving the issue before us, that the time spent on these duties is compensable, including daily closing tasks generally took Troester about 4-10 minutes. This time was in addition to the time Troester alleges he spent, once every couple of months, letting coworkers back inside the store or bringing in patio furniture that he forgot to retrieve before clocking out, time that Starbucks contended was not compensable.

In deciding whether the application of the de minimis rule, in this case, would be consistent with the governing wage order and Labor Code statutes, the court observed that the regulatory scheme of which the relevant statutes and wage order provisions are a part is indeed concerned with small things. An employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine. As the facts in Troester demonstrate, a few extra minutes of work each day can add up, and what an employer may call “de minimis” is not de minimis at all to many ordinary people who work for hourly wages.

The takeaway from these cases is that relevant California statutes and wage orders do not allow employers to require employees to routinely work for minutes off the clock without compensation. 

Therefore, simply because an employee’s scheduled shift has been completed or your business location has closed its doors to customers does not mean that an employee’s right to compensation for “hours worked” has been terminated. 

For further assistance on navigating these complex wage and hour laws, a seasoned California employer defense attorney can provide invaluable guidance and representation.