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Justices at Supreme Court now consider arguments on paying employees for security screenings.

Summary: Much is at stake in the Integrity Staffing Solutions Inc. v. Busk case now before the Supreme Court. It involves workers in Amazon warehouses, but ...

Much is at stake in the Integrity Staffing Solutions Inc. v. Busk case now before the Supreme Court. It involves workers in Amazon warehouses, but could impact many more workers and could cost businesses millions -- possibly billions -- of dollars.

Basically, workers want to be paid by a contracting firm, used by Amazon.com, for time after shifts they wait to go through security checks. A case was recently presented for oral arguments before the Supreme Court.

When reaching a decision, many labor and employment attorneys hope the justices will clarify which activities are not compensable and which require compensation. The decision may also further explain how to define "work."

"Work has changed since the 1930s," Richard Alfred, chair of Seyfarth Shaw's National Wage & Hour Litigation practice group, told InsideCounsel. "The Amazon.com warehouse and that type of workplace didn't exist years ago."

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FURTHER READING:

Oral arguments take place at Supreme Court about paying employees for time spent waiting for security checks

Amazon's security check wage and hour dispute moves up to the Supreme Court

Amazon security screening case goes up for arguments this week

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The Fair Labor Standards Act (FSLA) was enacted in the 1930s, and it makes employers pay workers for time on the job. The Portal-to-Portal Act, approved in the 1940s, exempts some activities, according to CBS News. Putting on and taking off safety clothing is exempt, news reports said.

But many activities such as security screenings after leaving the work floor have generated controversy.

"These activities are often the subject of dispute," Alfred said. "This [decision] will hopefully help to define the parameters of activities."

And depending on how clear the ruling is, it could lead to other litigation in the labor and employment sector. One example may be if an employee uses an electrical device before arriving at work; that could be compensable.

"It's possible the court's ruling could have an impact on those types of issues," Alfred said.

Businesses argue those activities that require compensation typically are "integral and indispensable" to the business.

Yet, it is possible if a security screening is a "principal activity" and provides value to the employer, employees may need to get compensated, news reports add.

During oral arguments, Justice Anthony Kennedy asked, "Let's assume that it takes 25 minutes to check out and that it would be very easy for the employer to hire a few more checkers and make it five minutes. Just assume that that's the fact. Why isn't the long line ... caused by very few checkers for the benefit of the employer? It's for the benefit of the employer to hire fewer checkers."

The total cost of employee theft has been estimated at $16 billion, so the prevention of employee theft is important.

On the other hand, Catherine Ruckelshaus, general counsel and program director at the National Employment Law Project, called a 25-minute wait "excessive."

"It should be compensated," she added in an interview with InsideCounsel. "It's so much time."

But Edward Brill, a partner in the Proskauer's Labor & Employment Department, who attended the oral arguments, said, "The justices pressed attorneys on both sides with hypotheticals in trying to define when post-shift activities are compensable."

He noted how Justice Elena Kagan was "particularly active in questioning, including how the security checks at issue compared to a law clerk who is required to cut grapefruit for a judge's breakfast and to a cashier who has to spend time accounting for the money in her register at the end of the day."

On the other hand, Chief Justice John Roberts and Justice Antonin Scalia were "openly skeptical of the argument by plaintiffs' counsel that the security checks were a 'principal activity' for which the employees had to be paid, commenting that companies don't hire employees to go through security screening."

"Justice (Stephen) Breyer said that he would ordinarily expect to follow the view of the Department of Labor in defining when preliminary or postliminary activities are compensable in accordance with its regulations under the Portal to Portal Act. He pointedly asked counsel for (the) plaintiff, why he should not accept the position of the Department, as argued by Curtis Gannon, an assistant to the U.S. Solicitor General, that the security screening was not compensable as it was not integral and indispensable to the warehouse employees' principal activities," Brill said. "Paul Clement, arguing for Integrity Staffing, analogized the post-shift security screening to checking in and out of work, which is not compensable under the Department of Labor regulations. Mark Thierman, arguing for the employees, instead sought to compare the security screening to drug testing, which would be compensable."

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Publication:Inside Counsel
Date:Oct 17, 2014
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