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California Supreme Court Holds That An Employee's Small Time Worked Off the Clock Must Be Compensated


Troester v. Starbucks, Corp. - California Supreme Court


Facts:  Douglas Troester ("Troester") worked as a supervisor at Starbucks.  His duties included working a closing shift in which he clocked out before initiating Starbucks's computer software for "close store procedure" which transmitted daily sales, profit and loss, and store inventory data to Starbucks's corporate headquarters.  After finishing this task, Troester activated an alarm, exited the store, locked the door, and walked his coworkers to their cars in accordance with Starbucks's policy.  These various  off the clock tasks took between four and ten minutes per shift.  Over the course of his seventeen months of employment, Troester alleged that Starbucks owed him $102.67 in unpaid time, not including any penalties or other remedies.

Troester proceeded to file suit on behalf of himself and a putative class of all non-managerial California employees at Starbucks that performed closing duties in 2009 and 2010.  After the case was removed to federal court, summary judgment was granted in favor of Starbucks on the grounds that the de minimis doctrine applied and the short period of time that Troester performed work tasks off the clock was not compensable.  The Ninth Circuit Court of Appeals took up the case and noted that while the de minimis doctrine has been a part of the Fair Labor Standards Act ("FLSA"), it had never been decided whether it also applied to wage claims brought under California law (as this case had been).  The Ninth Court subsequently certified a question to the California Supreme Court to decide whether de minimis time worked off the clock was compensable time under California law.

Holding:  The California Supreme Court began its analysis of the certified question with a recognition that "in determining whether otherwise compensable time is de minimis [under the FLSA], we will consider (1) the practical administrative difficulty of recording additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work."  In regard to application of the de minimis doctrine in California wage litigation cases, the Court noted that when construing the Labor Code and wage orders, the Court adopts the interpretation that best protects employees.

Under the California Labor Code, employees are to be paid for all work performed.  In its effort to parse the language of the Labor Code and several relevant work orders, the Court noted that the federal rule allowing employers to require employees to work some de minimis time without compensation was less protective than the California rule that employees must be paid for "all hours worked".  Consequently, the Court held that there was nothing in the language of the Labor Code or wage orders that indicated an intent to incorporate the federal de minimis rule into California law.

It is important to note that in this case, the Court was careful to note that it declined to decide whether the de minimis principle could ever apply to a wage and hour claim, given the wide range of scenarios that could arise.  Instead, the Court made clear that it was only applying its decision to the facts as set forth by the Ninth Circuit.

Judgment:  In dealing with the Ninth Circuit Court of Appeals' certified question, the California Supreme Court held that the off the clock time worked by a Starbucks employee was compensable time under California law, as the de minimis doctrine found in the FLSA did not apply to this California wage claim.

The Takeaway:  I caution readers here to not take the California Supreme Court's decision here as the "be all end all" in this case.  Several news reports have been published which have suggested that every California employer will now be on the hook for all off the clock work by an employee.  Reading the Supreme Court's opinion here, that is simply not the case.  While the Court's opinion is significant, in so much that it clarifies that the de minimis doctrine found in the FLSA does not apply to this California wage claim, this is not the end of the case.  The matter will go back to the Ninth Circuit Court of Appeals to decide whether the granting of summary judgment was proper for Starbucks at the district court level.  

As well, I will note that the Court was careful to clarify that its holding that the de minimis doctrine found in the FLSA did not apply in this particular case, it is possible it could apply to other California wage claims.  I think that is an important distinction to draw from this case, as the de minimis matter was decided for this particular fact set, but the Court left open the question for other California wage claims.

Majority Opinion Judge:  Judge Liu

Date:  July 26, 2018

Opinion:  http://www.courts.ca.gov/opinions/documents/S234969.PDF
 

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