Starbucks to Face Suit Over De Minimis Time

Manatt, Phelps & Phillips, LLP

Manatt, Phelps & Phillips, LLP

Starbucks to Face Suit Over De Minimis Time

Why it matters

A putative class action against Starbucks will move forward after the U.S. Court of Appeals, Ninth Circuit applied the reasoning of the California Supreme Court’s August decision involving application of the Fair Labor Standards Act (FLSA) de minimis doctrine to state law. The dispute involves Douglas Troester’s claims that Starbucks employees spent additional, compensable time working after they clocked out of the store’s computer terminal—bringing in patio furniture, for example, or reopening the store to allow workers to retrieve items left behind. A federal court found the time to be de minimis and granted summary judgment in favor of the employer. On appeal, the Ninth Circuit punted the case to the state’s highest court. Earlier this year, the California Supreme Court ruled that the FLSA’s de minimis doctrine does not apply to the state’s wage and hour rules and regulations and instead mandates that employees be paid for “all hours worked.” In light of this ruling, the federal appellate panel reversed summary judgment in favor of Starbucks and remanded the case to the district court.

Detailed discussion

A former shift supervisor at a California Starbucks, Douglas Troester, filed suit in August 2012. He claimed that during his year of employment with the company, Starbucks’ computer software required him to clock out of every closing shift before initiating the software’s “close store procedure” on a separate computer terminal in the back office.

In addition, Troester was required by company policy to walk coworkers to their cars and, on occasion, wait with employees for their rides to arrive, bring in store patio furniture that had been left outside or reopen the store to allow employees to retrieve items they left behind. These tasks generally took between four and ten minutes, which in aggregate over Troester’s employment would have netted him $102.67 had he been paid for the time.

Ruling on Starbucks’ motion for summary judgment, a federal district court judge found the time to be de minimis. While acknowledging that the closing activities occurred on a regular basis, the court said the FLSA’s de minimis doctrine foreclosed recovery in the suit.

Troester appealed, and the U.S. Court of Appeals, Ninth Circuit turned to the California Supreme Court for assistance, certifying the question: “Does the federal [FLSA’s] de minimis doctrine … apply to claims for unpaid wages under the California Labor Code?”

The state’s highest court answered in the negative, holding that “the relevant California statutes and wage order have not incorporated the de minimis doctrine found in the FLSA … [and] do not allow employers to require employees to routinely work for minutes off-the-clock without compensation.”

Further, “although California has a de minimis rule that is a background principle of state law, the rule is not applicable to the regularly reoccurring activities that are principally at issue here,” the California Supreme Court said.

Applying the holding, the Ninth Circuit returned the case to the district court to move forward on the merits. “In light of the answer to the certified question, we reverse and remand for further proceedings consistent with the California Supreme Court,” the panel wrote.

To read the memorandum in Troester v. Starbucks Corporation, click here.

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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Manatt, Phelps & Phillips, LLP

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