California Supreme Court Tightens Wage and Hour Rules

Troester v. Starbucks Corporation (SC S234969)

California continues its trend as an employee-friendly state. On July 26, 2018, the California Supreme Court held that the Federal “de minimis” doctrine is not supported by California wage and hour statutes and regulations. The Court also found that, as applied to the facts at issue with the employer, where the employer required their non-exempt employees to work “off the clock” 4 to 10 minutes per shift, the relevant wage order and statutes also do not permit application of the de minimis rule.

De Minimis Doctrine

The de minimis doctrine is an application of the maxim de minimis non curat lex, which means the law does not concern itself with trifles. Since 1946, employers have used this maxim and its interpretation under Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, 692 and later Lindow v. U.S. (9th Cir. 1984) 738 F.2d 1057, 1063, as a defense against claims of unpaid wages for minimal amounts of time worked if the employer could prove: (1) the practical administrative difficulty for the employer to record the time; (2) the aggregate amount of compensable time is minimal; and (3) the additional work is irregular. Federal courts widely used this test and as a result found daily periods of 10 minutes de minimis. Id. at p. 1062.

Troester’s De Minimis Work At Starbucks

In Troester v. Starbucks, Douglas Troester worked as a non-exempt, non-managerial shift supervisor. Starbucks required Troester to clock out prior to performing his very last store closing tasks. Specifically, Starbucks required Troester to use a “close store procedure” on a terminal in the back office. After clocking out, he activated the alarm, exited the store, and locked the front door. He walked his coworkers to their cars in compliance with Starbucks’ policy. About once every two months, he re-opened the store to let coworkers back inside to retrieve items left behind or brought in store patio furniture that was left outside. On average, he worked 4 to 10 minutes off the clock, totaling 12 hours and 50 minutes during his 17-month period of employment. Based on his minimum wage of $8 per hour, he was not paid $102.67, exclusive of penalties and other remedies he alleged. He filed a class action lawsuit under the California Labor Code for unpaid pages as well as derivative claims for failure to provide accurate written wage statements, failure to timely pay all final wages, and unfair competition.

Starbucks Could Not Use the De Minimis Doctrine

The California Supreme Court stated that Starbucks may not evade the obligation to compensate the 4 to 10 minutes of time by invoking the de minimis doctrine. It reasoned that the off-the-clock work was part of the employee’s duties and was performed regularly. Due to technological advances such as smart phones or tablets, it was not impractical or difficult to properly record the time. Finally, it reasoned that in these particular circumstances, an unpaid $102.67 was not de minimis, noting that such amount is “enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares.” In short, the Court declined to adopt a rule that would require the employee to bear the entire burden of any difficulty in recording regularly occurring work time.

Practical Tips for Employers:

  • Regularly occurring work required by the employer must be compensated.
  • If using a rounding policy, the rounding policy must be consistent with a core statutory and regulatory purpose that employees are to be paid for all time worked.
  • Ensure that employee handbooks and written policies are up-to-date and implemented.
  • Use technological advances to accurately record all time worked.
  • Structure the work so that hourly, non-exempt employees need not start or continue work (even four minutes of work) before or after clocking in or out.
  • Train supervisors and managers against requesting or permitting non-exempt employees’ off-the-clock work.
  • If not technologically feasible to capture the time for off-the-clock duties, estimate the time it takes the employee to perform the off-the-clock work and compensate for that time.

Call Bicvan Brown at Tressler about off-the-clock work or California employment laws.