Last week, in Troester v. Starbucks Corporation (Case No. S234969), the California Supreme Court weighed in for the first time on the viability of a de minimis defense to California wage and hour claims.
Many commentators have since rushed to declare that “de minimis” is dead. Not so.
While the Court ruled that California’s wage and hour laws have not adopted the de minimis doctrine from the federal Fair Labor Standards Act (FLSA), the Court expressly left “open whether there are wage claims involving employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.” Indeed, the Court recognized that California has a de minimis rule that is a background principle of state law. On the facts of this case, however, the Court held 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.”
In 2012, a shift supervisor filed an action on behalf of himself and a putative class of all nonmanagerial California employees who performed store closing tasks from mid-2009 to October 2010. The plaintiff submitted evidence that during the alleged class period, the employer’s computer software required him to clock out on every closing shift before initiating the store closing procedures (which included transmitting sales data, setting an alarm, sometimes bringing in patio furniture or walking coworkers to their cars). The undisputed evidence was that these closing tasks required the plaintiff to work four to 10 additional minutes each day.
The district court, applying the FLSA’s de minimis doctrine to the California wage and hour claims, granted summary judgment for the employer. While acknowledging that the plaintiff’s store closing activities were regularly occurring, the district court concluded that the uncompensated time was de minimis. The Ninth Circuit recognized that although the de minimis doctrine has long been a part of the FLSA, the California Supreme Court had never addressed whether the doctrine applies to wage claims brought under California law and it certified the question to the Court. Notably, the California Division of Labor Standards Enforcement had previously adopted the federal de minimis standard in its Enforcement Policies and Interpretations Manual and in its opinion letters.
The California Supreme Court’s Opinion
The California Supreme Court approached the certified question in two parts:
- Have California’s wage and hour statutes or regulations adopted the de minimis doctrine found in the FLSA?
- No, they have not.
- The Court held there was “no indication in the text or history of the relevant statutes and Industrial Welfare Commission (IWC) wage orders of such adoption.”
- Does the de minimis principle, which has operated in California in various contexts, apply to wage and hour claims?
- Possibly, depending on the circumstances.
- The Court recognized California has a de minimis rule that is a background principle of state law. Quoting a law review article, the Court observed “[t]he maxim signifies ‘that mere trifles and technicalities must yield to practical common sense and substantial justice’ so as to ‘prevent expensive and mischievous litigation, which can result in no real benefit to complainant, but which may occasion delay and injury to other suitors.’”
- The Court noted there were a wide range of scenarios where the de minimis issue may arise, such as activity that was irregular or rarely occurring, paperwork involving a minute or less of an employee’s time, or an employee reading an e-mail notification of a shift change during off-work hours. The Court declined to address how the de minimis doctrine may be applied in these hypothetical scenarios.
- The Court instead limited its decision to the undisputed facts in this case, “where the employer required the employee to work ‘off the clock’ several minutes per shift [e.g., four to 10 additional minutes each day].” Under these facts, the 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 the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine.” The Court’s opinion noted that the plaintiff’s unpaid time totaled about 12 hours and 50 minutes over 17 months. At $8 per hour, that time amounted to about $102.67, exclusive of any potential penalties or other remedies.
- The de minimis doctrine remains a viable defense to California wage and hour claims, particularly where the allegedly compensable time is irregular or brief in duration.
- To reduce the risk of potential liability, employers should evaluate their timekeeping procedures and practices to ensure employees are compensated for even small amounts of regularly occurring work time. To capture regular off-the-clock time, consider:
- Restructuring work assignments so that employees do not have to work before clocking in or after clocking out;
- Utilizing available time tracking tools or evaluating new time tracking tools;
- Reasonably estimating work time and compensating employees for that time; or
- Adopting a fair and neutral rounding practice, as previously endorsed by the Court of Appeal in See’s Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889, 892 (2012).
- Continue to follow this area closely. We expect to see new decisions as California courts apply the de minimis principle to various factual scenarios involving alleged off-the-clock time.
For more information, please reach out to your Baker McKenzie employment lawyer.