Supreme Court Rules Security Screenings Are Not "Integral and Indispensable" to Principal Activities and Thus Not Compensable

On Tuesday, December 9, 2014, the Supreme Court of the United States ruled that the time workers spend waiting to undergo and undergoing security screenings is not compensable under the Fair Labor Standards Act (FLSA). According to Justice Thomas, writing for a unanimous Court, the security screenings at issue were not the principal activities the employees were employed to perform and were not “integral and indispensable” to those activities. Thus, the screenings were “noncompensable postliminary activities.” In arriving at this conclusion, the Court provided some much-needed clarification on the “integral and indispensable” test, holding “that an activity is integral and indispensable to the principal activities that an employee is employed to perform—and thus compensable under the FLSA—if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.” Integrity Staffing Solutions, Inc. v. Busk, Supreme Court of the United States, No. 13–433 (December 9, 2014).

Factual Background

Integrity Staffing Solutions, Inc., which provides staff and warehouse space to companies, required its workers to undergo an anti-theft search at the end of each shift. As part of the search, which required employees to wait up to 25 minutes, employees were asked to remove their wallets, keys, and belts and pass through metal detectors.

Two warehouse employees of Integrity Staffing filed suit against the company on behalf of a putative class of workers claiming federal and state law wage and hour violations. The workers claimed that their employer violated the FLSA and state labor laws by failing to pay them for the time they spent in security screenings that the company used to prevent theft. The district court granted Integrity Staffing’s motion to dismiss the workers’ complaint, holding that the time they spent passing through the security clearance was not compensable.

The case was appealed to the Ninth Circuit Court of Appeals. The appellate court noted that the FLSA, as amended by the Portal-to-Portal Act of 1947, does not require employers to compensate employees for activities that are “preliminary” or “postliminary” to employees’ “principal activity or activities.” But, preliminary and postliminary activities are compensable if they are “integral and indispensable” to an employee’s principal activities. According to prior case law, to be “integral and indispensable,” an activity must be “necessary to the principal work performed” and “done for the benefit of the employer.”

The Ninth Circuit found that the security clearances were necessary to the employees’ primary work, which involved access to merchandise, and were done for the benefit of the employer, as the security screenings were intended to prevent theft by employees. Thus, the court ruled that the warehouse workers had stated a valid claim for relief under the FLSA.

Circuit Court Decisions

In arriving at its pro-worker conclusion, the Ninth Circuit distinguished cases from other circuit courts (namely, the Second Circuit and the Eleventh Circuit) holding that time spent clearing security is not compensable under the Portal-to-Portal Act. The security screenings at issue in Integrity Staffing, the court found, were implemented due to the nature of the employees’ work and because of employees’ access to merchandise. In other decisions, the security screenings had been unrelated to employees’ primary work and had not been implemented for the employer’s benefit. Noting that there was no blanket rule that time spent going through a security screening is noncompensable, the appellate court stated that the “integral and indispensable” test should have been applied to analyze the warehouse workers’ claims.

The Supreme Court’s Decision

The Supreme Court agreed to hear the case to decide whether time spent in security screenings is compensable under the FLSA, as amended by the Portal-to-Portal Act. The Court reversed the Ninth Circuit’s decision and found that the time spent passing through the security clearance is not compensable.

The Court started its analysis with the Portal-to-Portal Act’s exemption for “activities which are

preliminary to or postliminary to said principal activity or activities” and noted that the Court has interpreted the exemption to include “all activities which are an ‘integral and indispensable part of the principal activities.’”

The Court defined the phrase “integral and indispensable” as follows: “An activity is therefore integral and indispensable to the principal activities that an employee is employed to perform if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”

Finding that Integrity Staffing did not employ its workers to undergo security screenings but to retrieve and package warehouse products, the Court ruled that the security screenings were noncompensable postliminary activities. In addition, the Court found that the screenings also were not “integral and indispensable” to the employees’ duties as warehouse workers in that they were not “an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment.” The Court also noted that the employer “could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.”

Providing further clarification on the “integral and indispensable” test, the Court found that the “test is tied to the productive work that the employee is employed to perform” and not whether the employer required the particular activity. The Court also rejected the workers’ claim that they should have been compensated for the time they spent waiting to undergo the screenings because the employer could have reduced that time to a de minimis amount. The fact that the employer could have reduced the time, the Court found, “does not change the nature of the activity or its relationship to the principal activities that an employee is employed to perform.”

Practical Impact

According to Alfred B. Robinson, Jr., a shareholder in the Washington, D.C. office of Ogletree Deakins who co-chairs the firm’s Wage and Hour Practice Group and who previously served as the acting Administrator of the Wage and Hour Division (WHD) of the U.S. Department of Labor, “Employers should be encouraged by this unanimous decision of the Supreme Court involving the FLSA and Portal-to-Portal Act. In finding that the security screening time was noncompensable, the Court validates practices by companies to safeguard their inventory and minimize theft. Second, and perhaps more importantly, the clarification by the Court of which activities are integral and indispensable to an employee’s principal activities is helpful guidance for employers when evaluating which activities are an intrinsic part of the work activities that employees cannot avoid or neglect when performing their principal activities and for which employees must be paid under the FLSA in order to avoid future litigation.”

According to Eric C. Stuart, a shareholder in the Morristown office of Ogletree Deakins and a member of the firm’s Traditional Labor Practice Group Steering Committee, “Although time spent clearing security is not compensable under the Portal-to-Portal Act, employers with a unionized workforce may be faced with new contract demands by unions seeking to negotiate additional compensation for employees who are required to undergo such screenings. Justice Thomas specifically stated that these claims ‘are properly presented to the employer at the bargaining table, see 29 U.S.C. §254(b)(1), not to a court in an FLSA claim.’ Union demands of this nature are likely mandatory subjects of bargaining under the National Labor Relations Act.”