Nike retail employees required to undergo post-clockout, pre-exit bag and coat checks are not entitled to compensation under California’s wage and hour laws for the time spent on such inspections, a federal district court has ruled. Rodriguez v. Nike Retail Services, Inc., 2017 U.S. Dist. LEXIS 147762 (N.D. Cal. Sept. 12, 2017). Assuming such inspections are considered compensable time worked, they nevertheless must require enough of the employees’ time such that the time is not considered de minimis, that is, too short or insubstantial to require employers to track and pay for it. The de minimis concept arose in the context of the FLSA, where more than seventy years ago the U.S. Supreme Court noted that “[w]hen the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. Split-second absurdities are not justified by the actualities of working conditions or by the policy of the [FLSA].” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 692 (1946).
In this case, the employer’s expert time and motion study demonstrated that about 60% of the employee exits involved zero waiting time, while 83% of the remaining exits involved a waiting time of one minute or less. In total, the average waiting time for all employee exits was only 14.2 seconds. As to the inspections themselves, the expert analysis demonstrated that the average visual inspection (where no bag was present) took only about three seconds, while inspections involving bags averaged only 7.5 seconds. Thus, the overall combined waiting and inspection time per employee was between 17 and 20 seconds. While the plaintiffs presented testimony from a couple of store managers who opined that inspections sometimes took longer, even they did not clearly refute the extensive expert study. Under these circumstances, the time spent by these Nike retail employees was indeed de minimis and, therefore, not compensable.
In light of the strong facts Nike was able to establish in this case, California employers lacking similar facts should be cautious in relying on its holding. Moreover, whether the district court’s decision will stand likely depends on two separate but related issues currently certified to the California Supreme Court for determination. First, the district court assumed that the de minimis standard, while clearly applicable to claims under the FLSA, likewise is applicable to claims under California’s Labor Code. However, that issue remains undecided. Last year, California’s highest court agreed to decide the issue on a certified question from the Ninth Circuit Court of Appeals. Troester v. Starbucks Corp., 680 Fed. Appx. 511 (9th Cir. 2016), request granted, 2016 Cal. LEXIS 6801 (Cal. Aug. 17, 2016). Similarly, and with the potential for even greater impact, just last week the California Supreme Court also agreed to decide whether the time spent on waiting for and undergoing inspections of bags or packages “voluntarily brought to work purely for personal convenience by employees” constitutes compensable “hours worked” at all under state law, regardless of the amount of time spent doing so. Frlekin v. Apple, Inc., 2017 U.S. App. LEXIS 15372 (9th Cir. Aug. 16, 2017), request granted (Cal. Sep. 20, 2017). Both of these rulings could have a significant impact on employers with operations in the Golden State.
If you have any questions regarding the compensability of pre-exit inspections in your business, or any other wage & hour questions, please contact the Jackson Lewis attorney(s) with whom you work.