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On October 24, 2022, a unanimous panel of judges from the U.S. Court of Appeals for the Ninth Circuit held that call center workers may be entitled to compensation for the time they spent booting up their computers at the beginning of their shifts. In a published opinion, the Ninth Circuit reversed a 2021 decision by the U.S. District Court for the District of Nevada, which had thrown out the payment case against the employer, Customer Connexx LLC.
The employees in this case worked for Customer Connexx at a call center, providing customer support and scheduling services using a “soft phone,” operated only through their employer-provided computers. Because they kept track of their time electronically on the Company’s computer system, they had to log into the computer to start tracking their work hours. They alleged that Customer Connexx should have paid them for the few moments of time they spent each week booting up their computers at the beginning of their shifts, as well as for time spent shutting down their computers at the shift’s end.
Under the federal Fair Labor Standards Act (FLSA), tasks like these are referred to as "preliminary or postliminary activities" under a 1947 revision to the FLSA called the Portal-to-Portal Act. The Portal to Portal Act amended the federal overtime legislation specifically to deal with whether these brief pre-shift and post-shift activities are compensable.
When does something that an employee does before their scheduled shift become compensable? The U.S. Supreme Court first articulated a standard in 1956 and it remains the standard to this day under federal law: preliminary or postliminary activities are compensable only "if those activities are an integral and indispensable part of the principal activities for which [the employees] are employed.” Steiner v. Mitchell, 350 U.S. 247, 256 (1956).
In a 2014 case involving employees who sought compensation for time spent waiting for mandatory pre-shift security checks at an Amazon facility, the Supreme Court ruled in the employer's favor, clarifying that the “integral and indispensable test is tied to the productive work that the employee is employed to perform” and does not include all activities an employer requires an employee to perform. Integrity Staffing Sols., Inc. v. Busk, 574 U.S. 27, 36 (2014).
In Customer Connexx, the Ninth Circuit's decision turned on the panel's conclusion that the employees could not perform their duties "without turning on and booting up their work computers" because "having a functioning computer is necessary before employees can receive calls and schedule appointments." The Ninth Circuit's Customer Connexx decision was limited in a couple of ways.
First, the decision clearly stated that it was "limited to whether booting up the computers is compensable" and left the question of whether time spent shutting down the computers to be decided by the lower court on remand, noting that because such time is "not integral and indispensable to the employees’ ability to conduct calls, it is not compensable under [the postliminary activities] theory."
Second, the panel expressly stated that it offered "no opinion" as to "whether the same time would be compensable under the FLSA if [the employees] worked remotely or used their personal computers to perform these duties."
Finally, the decision left open the possibility – at least for employers outside California – to argue that any time spent booting up computers need not be compensated under the "de minimus" rule. That rule allows employers to avoid compensation for "insubstantial or insignificant" periods of time that "cannot as a practical administrative matter be precisely recorded for payroll purposes." 29 C.F.R. § 785.47.
Unfortunately for employers in California, our courts do not recognize a "de minimus" rule for violations of the pay rules outlined in the California Labor Code. Thus, California employers must compensate employees for any compensable time (such as computer boot up time), no matter how brief or insignificant that period of time is.
This decision highlights just one more area where employers in California can find themselves on the hook for compensation in areas they wouldn't have expected. Others include employee bag checks, commonly performed for loss-prevention reasons in retail and distribution center workplaces. Attorneys here have been actively filing lawsuits challenging those practices after a California Supreme Court ruling involving Starbucks held that even small amounts of time at the beginning or end of the work day must be compensated. Timekeeping practices such as time "rounding" have also recently been in the crosshairs of employment litigation.
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