How Much Is Closing a Door Worth? The California Supreme Court Addresses the De Minimis Doctrine - Labor & Employment Newsletter

by Bradley Arant Boult Cummings LLP
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On August 6, 2012, Douglas Troester, a former shift supervisor at a Starbucks location, filed a lawsuit against Starbucks in state court in Los Angeles, California. Mr. Troester filed his lawsuit on behalf of himself and a proposed class of all non-managerial Starbucks employees in California who performed store closing tasks from mid-2009 to October 2010. Starbucks removed his case to federal court.

Mr. Troester alleged that Starbucks violated the California Labor Code by failing to pay him and other non-managerial Starbucks employees in California for performing certain tasks associated with closing stores. More specifically, Mr. Troester alleged that Starbucks’ computer software required him to clock out before initiating the software’s “close store procedure” on a separate computer terminal. The store close procedure transmitted daily sales, profit and loss, and inventory data to Starbucks’ corporate headquarters. According to Mr. Troester, after he initiated the software’s close store procedure, he activated the alarm, exited the store, locked the front door, and walked his coworkers to their cars in compliance with Starbucks’ policy. Further, Mr. Troester alleged, he occasionally reopened the store to allow employees to retrieve items they left behind, waited with employees for their rides to arrive, or brought in store patio furniture mistakenly left outside.

Some readers familiar with wage and hour laws may be asking this question: What about the de minimis doctrine? As applied to wage and hour claims, the de minimis doctrine, which arises from the legal maxim de minimis non curat lex (“the law does not concern itself with trifles”), provides that employers may be excused from paying wages for small amounts of otherwise compensable time upon a showing that the time is administratively difficult to record precisely.

The federal district court judge hearing evidence in this case asked this question, and his answer led him to grant Starbucks’ motion for summary judgment and dismiss Mr. Troester’s claims. According to the district court’s opinion, the undisputed evidence showed that Mr. Troester’s store closing tasks required no more than 10 minutes each day, and often less than four minutes. He activated the alarm approximately one minute after he clocked out; he had to leave the store within one minute of activating the alarm or the alarm would sound; he spent 15 seconds to two minutes locking the door; and he spent 35 to 45 seconds walking his coworkers to their cars. Once every couple of months, he spent a few minutes letting coworkers back inside the store to retrieve forgotten items or bringing in patio furniture.

Over Mr. Troester’s 17 months of employment with Starbucks, the district court calculated that his unpaid time for store closing tasks totaled less than 13 hours, or just over $100 in unpaid compensation at the applicable minimum wage. The district court concluded that the de minimis doctrine applied and dismissed Mr. Troester’s claims for unpaid wages.

The district court summed up its decision thusly: “The brief moments that Plaintiff spent in and around the store after clocking out are an inevitable and incidental part of closing up any store at the end of business hours. There will always be some unaccounted-for seconds spent on setting an alarm, physically leaving the store, locking the door, and walking out at the end of a closing shift. But not every second can be or need be recorded and compensated.”

Unfortunately for employers, Mr. Troester’s story does not end here. Mr. Troester appealed his case to the United States Court of Appeals for the Ninth Circuit. The appellate court, in a nod to California’s employment laws favoring employees, noted that the California Supreme Court has “long-standing precedent declining to import federal limitations into more employee-protective California Labor Code provisions.” Because the California Supreme Court had never directly addressed whether the de minimis doctrine applies to wage and hour claims brought exclusively under California law, the appellate court asked the California Supreme Court to opine on this issue.

On July 26, 2018, the California Supreme Court issued an opinion that, while appearing to leave the door open for the de minimis defense in California wage and hour claims, may have the effect of rendering the defense practically obsolete in such claims. First, the court noted that no California wage and hour statute, regulation, or wage order has incorporated the de minimis doctrine found in the federal Fair Labor Standards Act. Second, and equally troubling for employers, the court stated that although California has a general de minimis rule that is a “background principle of state law,” the rule is not applicable to the facts presented by Mr. Troester because California law does “not allow employers to require employees to routinely work for minutes off-the-clock without compensation.”

The court stated its intent to leave open the issue of whether there can be wage claims involving employment activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for time spent on them. However, if one minute setting an alarm, one minute leaving the store, 15 seconds locking a door, and 35 seconds walking a coworker to his or her car is not sufficiently brief in duration to qualify as de minimis, one wonders what is. An employer may have more success arguing that brief activities are de minimis if they occur infrequently than if they occur regularly.

To be clear, the California Supreme Court’s decision applies only to wage and hour claims brought under California state law. It does not apply to claims brought under the Fair Labor Standards Act, nor does it apply to claims brought under the laws of other states. However, other states whose wage and hour laws do not expressly incorporate the de minimis doctrine may be influenced by this decision. Moreover, with the increasing reliance on computer log-on and log- off times for timekeeping purposes, many plaintiffs’ attorneys specializing in wage and hour claims have filed lawsuits alleging that employees are not compensated for work performed before they log in to their computers and after they log off. The California Supreme Court’s opinion that regularly spending as little as four minutes “working” after logging off a computer does not qualify as de minimis is likely to increase the prevalence of such lawsuits.

Employers that use computer log-on and log-off times for timekeeping purposes would be well served to examine what activities, if any, are performed by employees outside of the time they are logged into their computers.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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