California Supreme Court Takes De Minimus to the Maximus

in Employment Law, In The News, Home

In its long-awaited decision in Troester v. Starbucks Corporation, the California Supreme Court refused to apply the federal Fair Labor Standard Act’s (“FLSA”) de minimis rule in a lawsuit seeking recovery of unpaid wages pursuant to California state law.

Under the de minimis doctrine, employers in some circumstances are excused from paying wages for small amounts of otherwise compensable work, where the time is shown to be difficult to track and record.

 In August 2012, lead plaintiff Douglas Troester brought suit against Starbucks alleging that the company violated the California Labor Code by failing to pay him and other employees for small tasks performed after employees had clocked out for the day. Such tasks included running the store’s closing report, activating the security alarm and locking the door. Troester also testified that on occasion, he was required to walk his coworkers to their cars, reopen the store to allow employee to retrieve items they left behind, and bring in patio furniture that had mistakenly been left outside. Relying on federal precedent, Starbucks argued that the four to 10 minutes these tasks took each day were de minimis and need not be compensated.

Applying the FLSA’s de minimis doctrine, the district court ruled in favor of Starbucks and dismissed Troester’s state law claims. On appeal, the Ninth Circuit sought guidance from the California Supreme Court on the question of whether the de minimis doctrine applies to claims brought under California’s wage and hour laws.

Concluding that the de minimis doctrine did not excuse payment, the California Supreme Court held that “[a]n employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of a job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine.” Central to the Court’s holding appears to be the distinction between the facts presented in Troester, in which employees were required to perform several minutes of off the clock work each shift, and cases where employees are occasionally required to work a few seconds or minutes and “the failure to count such time is due to considerations justified by industrial realities.” Although the Court acknowledged that its holding creates a burden for employers, it reasoned that employers are in a better position than employees to “devise alternatives that would permit the tracking of small amount of regularly occurring work time.”

Precisely what this means for employers will be determined in the coming years as employees inevitably seek to test the boundaries of the Troester decision through class action litigation. In the meantime, employers are advised to reassess their timekeeping and compensation policies to ensure that employees are compensated for all time worked.

***Presented for informational purposes only.  This does not create an attorney-client relationship or substitute for legal advice.  You should consult with your legal counsel for legal advice. ***

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