Hunton Employment & Labor Perspectives

The California Supreme Court has ruled that California employers cannot rely on the federal de minimis doctrine to avoid claims for unpaid wages on small amounts of time.   Under the de minimis doctrine, employers may be excused from paying workers for small amounts of otherwise compensable time if the work is irregular and administratively difficult to record.  Federal Courts have frequently found that daily periods of approximately 10 minutes are de minimis even though otherwise compensable.

In Troester v. Starbucks Corporation, the California Supreme Court held that California wage and hour laws have not adopted the FLSA’s de minimis doctrine.  As a result, Starbucks was not permitted to avoid paying an employee who regularly spent several minutes per shift working off-the-clock.  The Supreme Court acknowledged, however, that there may be circumstances 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.”

Troester, a former Starbucks shift supervisor, claimed he was not paid for all hours worked when working a closing shift.  He alleged that Starbuck’s timekeeping system required him to clock out before performing tasks related to closing the store.  The closing procedures totaled four to 10 minutes per day and consisted of transmitting daily sales, profit and loss, and store inventory data, activating the store alarm system, exiting the store, locking the front door, and escorting coworkers to their cars.  The district court granted Starbuck’s motion for summary judgment, finding the de minimis doctrine applied since the amount of time was trivial and administratively difficult to capture.  On appeal, the Ninth Circuit sought guidance from the California Supreme Court to determine the application of the de minimis rule under California law.

First, the California Supreme Court examined California Labor Code statutes, wage orders, and legislative history and determined that neither the California Legislature nor the Industrial Wage Commission had explicitly or implicitly adopted the 70 year old federal de minimis rule.  Next, the Court examined whether a general de minimis principle, which has operated in California in various other contexts applied to wage and hour claims.  The Court held that on the facts of this case the general de minimis rule did not apply, and the relevant laws did not allow employers to require employees to routinely work for minutes off-the-clock without compensation.  The Court left open “whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.”  Troester’s lawsuit will now go back to the Ninth Circuit, which is likely to overturn Starbuck’s summary judgment victory.

In light of this decision, California employers may need to revisit the job duties of non-exempt employees to assess whether those employees are expected to perform tasks off the clock that may be compensable.  Employers are likely to see a rash of lawsuits filed over these small amounts of time and may also experience new challenges to rounding policies in light of the California Supreme Court’s decision.