FLSA Lawsuit: Must Workers Be Paid to Boot Up Computers?

Question: Do employees have to be paid for the time spent booting up and shutting down computers?

Though the question sounds quite simple, it’s at the center of a long-running FLSA dispute that the Ninth Circuit recently heard for a second time. Here’s what happened — and where the case currently stands.

Company uses computer-based software system

A call center in Las Vegas provides customer service and scheduling for an appliance recycling business. Call center agents are hourly, nonexempt employees. Their primary work responsibilities include providing customer service and scheduling appointments for customers over the phone.

The company uses a computer-based timekeeping system. Its policy prohibits off-the-clock work and requires hourly employees to record their actual time worked.

To reach the timekeeping program, employees turn on or boot up computers, log in with their usernames and passwords, and open the timekeeping software. At that point, they clock in on the computer.

The company provides “punch claim forms” for employees to correct inaccuracies on their time cards due to technical issues.

Time clock causes FLSA dispute

The plaintiffs in this class action said employees were not assigned to a specific computer. Instead, it was a first-come, first-served arrangement. As such, the length of time spent before employees could clock in varied, depending on the age of the computer model and whether it had been shut down or was in sleep mode.

Once clocked in, employees used a software program that ran calls through employees’ computers rather than a physical telephone. At the end of each shift, employees wrapped up the call they were on, closed out the program, clocked out, and then logged off or shut down their computers. Employees gave varying accounts of how long it took to log off. On average, it took an estimated 4.75 to 7.75 minutes to log off and shut down computers.

A group of employees filed a class-action lawsuit, alleging they should’ve been paid for the time spent:

• booting up their computers before clocking in on the computer-based timekeeping system, and
• shutting down their computers after clocking out of the timekeeping system.

They said the unpaid hours also resulted in overtime violations under the FLSA.

The company filed a motion for summary judgment.

Company wins first round in court

The district court sided with the company, finding the employees’ principal job duties did not include booting up and shutting down company computers because the company hired them “to answer customer phone calls and perform scheduling tasks.”

It opined that the company “could dispense with the electronic timekeeping method and the employees could still perform their work.” Because of this fact, the time was not compensable under the FLSA, the court determined.

The employees appealed to the Ninth Circuit.

A brief history of the FLSA: What you need to know

Enacted in 1938, the FLSA requires companies to pay nonexempt employees one-and-a-half times their regular pay for any time worked over 40 hours in a single workweek.

A few years later, in Anderson v. Mt. Clemens Pottery Co., the U.S. Supreme Court held that “the statutory workweek includes all time during which an employee is necessarily required to be on the employer’s premises, on duty or at a prescribed workplace.” The Court provided specific examples, such as activities like “walking to work on the employer’s premises,” “putting on aprons and overalls,” and “turning on switches for lights and machinery.”

But the Court recognized the administrative difficulty of recording small amounts of time for payroll purposes. Thus, the Anderson ruling also established the de minimis doctrine: Time that lasts “only a few seconds or minutes of work beyond the scheduled working hours” are “trifles [that] may be disregarded.”

Was ruling too broad? Congress steps in

The following year, Congress passed the Portal-to-Portal Act, an amendment to the FLSA, to “correct the ‘unexpected liabilities’” created by the Court’s broad ruling. In a nutshell, the amendment clarified that companies are not required to pay workers for the time spent on activities performed before or after their principal job duties, often referred to as “preliminary” and “postliminary” activities. Examples of such non-compensable time include traveling to and from work and engaging in incidental activities before or after work.

A 1956 ruling highlights the Court’s revised understanding of the FLSA in light of the Portal-to-Portal Act.

In Steiner v. Mitchell, the Court held that “activities performed either before or after the regular work shift … are compensable … if those activities are an integral and indispensable part of the principal activities for which covered workmen are employed.”

In Steiner, workers at a battery factory changed clothes prior to shifts and showered afterward because they were exposed to toxic dust while working. The court held that because the workers’ pre- and post-shift tasks of changing and showering were “indispensable,” the time was compensable under the FLSA.

But not all pre- and post-shift tasks are “integral and indispensable” – even if they are required by companies.

For example, in Integrity Staffing Solutions, Inc. v. Busk, the Court heard a case filed by warehouse workers at Amazon who were required to undergo security screening before leaving the warehouse at the end of their shifts. Ultimately, the Court determined that time was not compensable under the FLSA because “the screening was not ‘an intrinsic element’ of the job the employees were employed to perform – retrieving products from shelves and packaging them for shipment.”

Is booting up computers an ‘integral and indispensable’ task?

Applying the “integral and indispensable” test established in Steiner to the current case, the Ninth Circuit looked at the job the workers were hired to do – answering customer phone calls and scheduling their requests. Importantly, the workers used computer software for answering calls and scheduling tasks, the court noted.

Because the workers had to turn on and boot up computers to access the software to phone customers and schedule their requests, the act of “turning on the computer itself is a principal activity … and the time spent waiting for the boot-up process is a part of the continuous workday,” the Ninth Circuit held.

Thus, the Ninth Circuit reversed the lower court’s ruling for the company, concluding that “the time spent turning on the computer and logging in to the timekeeping program is compensable as integral and indispensable parts of the employees’ principal job duties.”

Shutting down computers: Ninth Circuit punts

But the Ninth Circuit wasn’t convinced about shutting down the computers. It held that “shutting down computers is not integral and indispensable to the employees’ ability to conduct calls, [so] it is not compensable under this theory.”

However, it recognized that the parties disputed whether the workers were instructed to shut down the computers at the end of their shift. The court also said time spent shutting down computers might be compensable, depending on whether it was “determined to be a principal activity in and of itself.” More info was needed, so the Ninth Circuit remanded on the issue of shutting down computers.

It also remanded the case for further proceedings with instructions for the lower court to determine whether the time spent booting up and shutting down computers was not compensable:

• Under the de minimis doctrine, or
• Because the employer did not know of the alleged overtime violations.

On remand, the company again filed for summary judgment, arguing the FLSA claim failed because the time spent booting up and shutting down computers was de minimis.

According to the U.S. Department of Labor’s guidance for recording work time under the FLSA, “infrequent and insignificant periods of time beyond the scheduled working hours, which cannot as a practical matter be precisely recorded for payroll purposes, may be disregarded. The courts have held that such periods of time are de minimis (insignificant).”

Was time de minimis?

It’s crucial to understand that the Anderson decision did not establish a hard-and-fast rule on what amount of time qualifies as de minimis. Generally speaking though, courts have held less than 10 minutes of working time is de minimis, according to the law firm Epstein Becker Green.

To determine whether time is de minimis, courts look at:

• The practical administrative difficulty of recording the additional time
• The aggregate amount of compensable time, and
• The regularity of the additional work.

As to the first two elements, most employees testified that “it took mere seconds or a couple of minutes to turn the computer on and off.” The court said this testimony was “consistent with common sense that pushing or clicking a button or opening a computer program typically takes little time,” and recording such small fragments of time for payroll purposes could present logistical problems.

Turning to the third element, the court said the irregularity of alleged unpaid work also favored a finding for the company. Employees had to turn on and boot up computers every day. But “the occasions when the logins or logouts took longer were irregular in both frequency and duration.”

Moreover, the employees’ testimony about their experiences logging in and out were so varied that the differences “suggest that proceeding collectively under the FLSA is not warranted,” the court added. For example, employees reported being impacted by multiple factors, such as what shift they worked; whether the computer was already on; whether the computer was in sleep mode; and how old the computer model was.

Finally, when the time spent logging in or out took longer, and thus would not be de minimis, employees could submit the “punch claim forms” to correct their time, the court pointed out.

The court granted the company’s motion for judgment, finding the employees failed to show the time spent booting up and shutting down computers during their pre- and post-shift rituals was more than de minimis, or that when it was, the company failed to adjust their time as requested.

The employees appealed to the Ninth Circuit for a second time.

Appeals court chastises lower court

On appeal, the Ninth Circuit first noted that “the district court appears to have disregarded” its ruling that summary judgment was not appropriate and its instructions on remand.

Then it turned to the matter at hand: Did the lower court correctly determine that the time was de minimis?

Here’s how the Ninth Circuit assessed the three elements listed above.

1. Regularity of additional work

As to the regularity of the additional work, the employees alleged they “performed uncompensated work before each and every shift: they had to engage the computer and log in before they were able to clock in using the timekeeping software program.” (Emphasis in original.)

With respect to shutting down the computers, the parties disputed whether employees “were required to ensure that the computers were shut down at the end of every shift.”

The company said workers were not required to wait for the computers to shut down, but several employees testified they were instructed to confirm computers were properly shut down before leaving.

In light of the differing testimony, the Ninth Circuit said a jury needed to determine whether employees were required to ensure their computers were shut down and whether employees were required to perform off-the-clock work at the end of every shift. 

The lower court found the work was irregular because “the occasions when logins or logouts took longer were irregular both in frequency and duration.”

But the Ninth Circuit said that wasn’t the whole story. These employees said working without pay wasn’t “irregular in frequency because it happened every shift.”

2. Aggregate amount of compensable time

As to the aggregate amount of time at issue, the Ninth Circuit said a triable issue of fact existed. During testimony, workers’ estimates on the time spent booting up and shutting down their computers varied, depending on which terminal they used on a given day. Workers estimated from a minute or two each day up to 30 minutes per shift on these tasks.

Relevant here, courts have awarded relief for claims that “when aggregated, amounted to a substantial claim,” even if the amounts might be “minimal on a daily basis,” the Ninth Circuit explained.

As such, a reasonable jury could conclude that, in the aggregate, the total uncompensated time could be substantial over time, the court held.

3. Practical administrative difficulties of recording time

Regarding the final issue – the practical administrative difficulty of recording the additional time – the company argued that the lower court was right to find that it would be “too administratively difficult” to calculate the time workers spent booting up and shutting down computers.

The Ninth Circuit was not swayed, pointing out that the company could use a traditional time clock installed near the computer workstations that would allow workers to punch the clock before and after logging in and out, which would track all the time that employees worked, ensuring FLSA compliance.

Appeals court backs employees again

In the Ninth Circuit’s view, the evidence favors a finding for the employees, as a reasonable jury could find the allegations to be true and that the time spent booting up and shutting down computers should’ve been compensated.

Ultimately, it is the company’s responsibility to establish that the time was de minimis, but it has not yet done so, the appeals court explained.

The Ninth Circuit reversed the lower court’s ruling and remanded the case for a second time with stern instructions that “a trial will be necessary to resolve the disputed fact issues.”

The case continues. We’ll keep you posted.

Cadena v. Customer Connexx LLC, No. 23-15820, 2024 U.S. App. Lexis 16836 (9th Cir. 7/10/24).