The Cost of Security

As recently stated in the Fourth Annual Workplace Class Action Litigation Report, the number of decisions issued in wage and hour class actions in 2007 outstripped decisions in employment discrimination or benefits class actions, demonstrating the increasing popularity of wage and hour class action claims. Aside from the standard misclassification cases and more traditional off-the-clock claims, a recent trend has been claims for unpaid wages and overtime for time spent submitting to and/or waiting for a security check. For example, in January 2007, a group of Wackenhut Services, Inc. security guards filed suit for unpaid wages and overtime for time spent going through security screening required by the electric generating station at which they worked. Last August, a California federal court certified a class action for unpaid wages and overtime against Best Buy for all non-exempt employees who were subject to security checks. In October 2007 and January 2008, two additional class action lawsuits were filed against Best Buy in Pennsylvania and New York state courts, asserting that the employees are owed compensation for, among other things, time spent submitting to security checks.

With the ever-increasing focus on security, these claims create potential liability for a variety of employers, from airport vendors to power plants to retailers. Fortunately for these employers and others, the recent, yet limited, case law has held that such time is not compensable. Moreover, general wage and hour principles support this conclusion.

The Portal-to-Portal Act: Two Cases

The Portal-to-Portal Act ('Portal Act') specifically excludes from the definition of compensable time 'walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform,' and 'activities which are preliminary to or postliminary to said principal activity or activities.' 29 U.S.C ' 254(a). The time spent submitting to a security check may be found non-compensable under either exclusion. Even if a court rejects application of one of these exclusions, the time spent may be de minimis, so that an employer may ignore it for purposes of compensation.

Two recent cases demonstrate the appropriate analysis. In Gorman v. Consolidated Edison Corp., 488 F.3d 586 (2d Cir. 2007), the employees claimed they were owed compensation for the time they expended waiting in traffic outside the plant entrance; submitting to a badge inspection, visual check of the car, and occasional random vehicle inspection; walking to and waiting in line at the command post to pass through a radiation detector, x-ray machine, and explosive material detector; and waiting in line to swipe an identification badge and to palm a sensor. The court held that the time spent by nuclear power station employees in entering and exiting through security was not compensable time because these activities were not both indispensable and integral to the employee's principal work activities, as required by the standard set forth in Steiner v. Mitchell, 350 U.S. 247, 252-53 (1956), and reiterated in IBP, Inc. v. Alvarez, 546 U.S. 21, 29-30 (2005). See Gorman, 488 F.3d at 592-93. Although the security procedures were necessary (or indispensable) because they were required by the company and essential to the security of the nuclear facility, they were not integral to the employee's work. See Id. at 593. The employees were not employed for the purpose of submitting to such security procedures. Instead, these activities were more accurately categorized as part of the normal travel necessary to get to work at this type of facility. See Id.

In Bonilla v. Baker Concrete Construction, Inc., 487 F.3d 1340 (11th Cir. 2007), construction workers for an airport terminal project claimed that the time spent going through airport security should be compensated. The Eleventh Circuit held that the time spent submitting to the security screen was not compensable time because it was not integral and indispensable to the employees' principal activities. See Bonilla, 487 F.3d at 1344. The Eleventh Circuit considered the following factors in determining whether the time should be compensable: 1) whether the activity is required by the employer; 2) whether the activity is necessary to perform the employee's duties; and 3) whether the activity primarily benefits the employer. See Id. In particular, whether an activity is integral and indispensable is not simply a 'but-for test of causal necessity.' Id. Otherwise, all commuting time for any employee would be compensable; but that clearly has been excluded under the Portal Act. In this case, although passing through security was necessary for the employees to get to their work locations, the security checks were required by the Federal Aviation Administration and were not for the benefit of the employer, so the time was not compensable. See Id. at 1344.

General Legal Principles Under the Act

In addition to Gorman and Bonilla, general legal principles under the Portal Act support the conclusion that the time spent submitting to a security screen is not compensable. Section 254(a) excludes all travel between the employee's home and 'the actual place where he does what he is employed to do.' 29 C.F.R. ' 790.7(c). This includes the 'employee's travel on the employer's premises until he reaches his workbench or other place where he commences the performance of the principal activity or activities, and the return travel from that place at the end of the workday.' 29 C.F.R. ' 790.7(e), (f). It does not matter whether the travel occurs before or after the employee has checked in or out for work. See 29 C.F.R. ' 790.7(e).

As the Gorman court held, the time an employee spends submitting to a security check is properly categorized as part of the employee's travel time to and/or from work. Submitting to a security process is just one step in the employee's commute. For example, in Lindow v. U.S., 738 F.2d 1057, 1064 (9th Cir. 1984), certain employees were required to open or close the security gates to the project areas where they worked. The Ninth Circuit held that the time spent opening or closing the security gates in order to reach the employee's actual place of performance of work was properly excluded from compensation under the Portal Act's exception for travel time.

Alternatively, the security check is simply preliminary and/or postliminary to the employee's principal activities. Principal activities are those duties that the employee is employed to perform and all activities that are integral to the principal activity. See 29 C.F.R. ' 790.8(a), (b). For the general employees working at a retailer, the airport, or a nuclear facility, the security procedures they have to submit to are clearly not their principal activity ' they were not hired to test or monitor the security procedures. Instead, the security checks are just part of the process for an employee checking in and out for work and, therefore, may be categorized as non-compensable preliminary and postliminary activities. See 29 C.F.R. ' 790.7(g) (preliminary and postliminary activities include 'checking in and out and waiting in line to do so').

Indispensable and Integral?

The more complicated question is whether such activity is indispensable and integral to a principal activity. An activity is integral to a principal activity if it is closely related to the principal activity and indispensable to its performance. See 29 C.F.R. ' 790.8(c). Although the Bonilla court found that the security checks were indispensable to the employees' jobs, because the security screen was necessary in order to begin performing work, it decided that the security check was not integral to the employees' principal activities. Just as a security check is not the employee's principal activity, it is not closely related or integral to any principal activity. See, e.g., 29 C.F.R. ' 790.8(c) ('activities such as checking in and out and waiting in line to do so would not ordinarily be regarded as integral parts of the principal activity').

However, the language used by the Bonilla court and others can be misconstrued to argue that certain security checks are integral to the employee's work. In determining whether an activity is integral and indispensable to a principal activity, the Bonilla court considered the following factors: 1) Is the activity required by the employer? 2) Is the activity necessary to perform the employee's duties? and 3) Does the activity primarily benefit the employer? See Bonilla, 487 F.3d at 1344; see also Dunlop v. City Electric, Inc., 527 F.2d 394, 398 (5th Cir. 1976) (To be preliminary or postliminary, the 'activities must be undertaken 'for [the employee's] own convenience, not being required by the employer and not being necessary for the performance of their duties for the employer.”). The security check in Bonilla was required by the FAA, not the employer, and it primarily benefited the airport rather than the employer. Similarly, based on the Bonilla court's factors, employees who work at an airport, power plant, or other similar facility that is regulated by the government and subject to certain safety and security measures, would not be compensated for security time, since the security requirements are imposed by the regulating government agency and the beneficiary of the security measures is the general public.

What about the retail employees? In this case, a plaintiff's lawyer could argue that the security check meets each element of the Bonilla court's standard: It is required by the employer, it is necessary in order for the employee to start work, and it primarily benefits the employer by reducing inventory loss. A proper determination that this time is not compensable requires a careful analysis of the second element: whether the security check is necessary for the employee's work. As the Bonilla court noted, an activity is not necessary for purposes of determining compensability just because there is a but-for causal connection. So, even though passing through security is necessary for the employees to reach their work locations, that is not due to the nature of the employees' actual work, but is simply a part of the employer's efforts to reduce inventory loss through employee theft. If the employee performed retail work by processing Internet orders and did not actually have access to the inventory, a security check would not be necessary. The security checks cannot be integral to the job of a retail employee who works in a physical store when such security checks are not a necessary part of the job in the virtual world.

Further Support

The exclusion of security checks from compensable time is further supported by a review of the types of activities that courts have held are integral to an employee's principal activities and, therefore, compensable: specifically, cleaning or preparing tools, vehicles, or machinery in order to perform work and changing into safety clothing and other gear, when required by the dangers
or necessities of the job. See 29 C.F.R. ' 790.8(b), (c) (preparing machine, changing clothes for safety reasons); see, e.g., IBP, Inc. v. Alvarez, 546 U.S. 21 (2005) (donning and doffing safety gear); Steiner v. Mitchell, 350 U.S. 247 (1956) (changing clothes for safety reasons); Mitchell v. King Packing Co., 350 U.S. 260 (1956) (sharpening knives for meat cutting). Unlike a security check, these activities are integral to the job by virtue of the job itself rather than being merely a part of the employee's travel from home to his or her actual place of work performance.

Even if a court determines that the time is not excluded under the Portal Act, such time may be de minimis so that an employer is not liable for such time. Citing to Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), the Department of Labor's regulation states that insubstantial or insignificant time outside the scheduled working hours that are administratively difficult to record may be disregarded by employer as de minimis. See 29 C.F.R. ' 785.47. Although there is no precise time period identified, the courts consider the following factors to determine whether time is de minimis: 1) the administrative difficulty of recording the additional time; 2) the aggregate amount of compensable time; and 3) the regularity of the additional work. See Lindow v. U.S., 738 F.2d 1057, 1063 (9th Cir. 1984); see also De Asencio v. Tyson Foods, Inc., 500 F.3d 361, 374 (3rd Cir. 2007); Reich v. Monfort, Inc., 144 F.3d 1329, 1333-34 (10th Cir. 1998). In some cases, 10 minutes a day has been held to be de minimis. See Lindow, 738 F.2d at 1062.

This determination will depend heavily on the specific factual circumstances. Almost universally, the administrative difficulty of tracking the time spent submitting to a security check will weigh in favor of the employer. Security checks are usually performed at the employer's entrance before or after the employee has checked in or out, making it unfeasible to track this time, and the amount of time a security check takes will often vary. The aggregate amount of time at issue will depend on how thorough the security process is and how long the employee has been working. Although the aggregate for each employee is important, the courts will also consider the aggregate total for the entire class, so the number of employees impacted will influence that factor as well. See Monfort, 144 F.3d at 1334; Lindow, 738 F.2d at 1063. Last, the regularity of the 'work' will likely weigh in favor of the employee, since most security checks are required every day. However, time spent for random or intermittent security checks is more likely to be considered de minimis.

Conclusion

While employers can take comfort based on existing wage and hour case law, especially Gorman and Bonilla, that the time spent submitting to a security screen is likely not compensable time, it is clear that plaintiff's counsel will continue to pursue these class action claims with the hope that courts will recognize a new area of compensable time. Even if such claims are unsuccessful in court, the expense of defending against class action litigation or, in some cases, settling such claims has become a new cost of security.

Joan Tucker Fife is a partner and Gina Del Negro is an associate at Winston & Strawn LLP's San Francisco office. They are members of the firm's Labor and Employment Relations Practice.

As recently stated in the Fourth Annual Workplace Class Action Litigation Report, the number of decisions issued in wage and hour class actions in 2007 outstripped decisions in employment discrimination or benefits class actions, demonstrating the increasing popularity of wage and hour class action claims. Aside from the standard misclassification cases and more traditional off-the-clock claims, a recent trend has been claims for unpaid wages and overtime for time spent submitting to and/or waiting for a security check. For example, in January 2007, a group of Wackenhut Services, Inc. security guards filed suit for unpaid wages and overtime for time spent going through security screening required by the electric generating station at which they worked. Last August, a California federal court certified a class action for unpaid wages and overtime against Best Buy for all non-exempt employees who were subject to security checks. In October 2007 and January 2008, two additional class action lawsuits were filed against Best Buy in Pennsylvania and New York state courts, asserting that the employees are owed compensation for, among other things, time spent submitting to security checks.

With the ever-increasing focus on security, these claims create potential liability for a variety of employers, from airport vendors to power plants to retailers. Fortunately for these employers and others, the recent, yet limited, case law has held that such time is not compensable. Moreover, general wage and hour principles support this conclusion.

The Portal-to-Portal Act: Two Cases

The Portal-to-Portal Act ('Portal Act') specifically excludes from the definition of compensable time 'walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform,' and 'activities which are preliminary to or postliminary to said principal activity or activities.' 29 U.S.C ' 254(a). The time spent submitting to a security check may be found non-compensable under either exclusion. Even if a court rejects application of one of these exclusions, the time spent may be de minimis, so that an employer may ignore it for purposes of compensation.

Two recent cases demonstrate the appropriate analysis. In Gorman v. Consolidated Edison Corp. , 488 F.3d 586 (2d Cir. 2007), the employees claimed they were owed compensation for the time they expended waiting in traffic outside the plant entrance; submitting to a badge inspection, visual check of the car, and occasional random vehicle inspection; walking to and waiting in line at the command post to pass through a radiation detector, x-ray machine, and explosive material detector; and waiting in line to swipe an identification badge and to palm a sensor. The court held that the time spent by nuclear power station employees in entering and exiting through security was not compensable time because these activities were not both indispensable and integral to the employee's principal work activities, as required by the standard set forth in Steiner v. Mitchell , 350 U.S. 247, 252-53 (1956), and reiterated in IBP, Inc. v. Alvarez , 546 U.S. 21, 29-30 (2005). See Gorman, 488 F.3d at 592-93. Although the security procedures were necessary (or indispensable) because they were required by the company and essential to the security of the nuclear facility, they were not integral to the employee's work. See Id. at 593. The employees were not employed for the purpose of submitting to such security procedures. Instead, these activities were more accurately categorized as part of the normal travel necessary to get to work at this type of facility. See Id.

In Bonilla v. Baker Concrete Construction, Inc. , 487 F.3d 1340 (11th Cir. 2007), construction workers for an airport terminal project claimed that the time spent going through airport security should be compensated. The Eleventh Circuit held that the time spent submitting to the security screen was not compensable time because it was not integral and indispensable to the employees' principal activities. See Bonilla, 487 F.3d at 1344. The Eleventh Circuit considered the following factors in determining whether the time should be compensable: 1) whether the activity is required by the employer; 2) whether the activity is necessary to perform the employee's duties; and 3) whether the activity primarily benefits the employer. See Id. In particular, whether an activity is integral and indispensable is not simply a 'but-for test of causal necessity.' Id. Otherwise, all commuting time for any employee would be compensable; but that clearly has been excluded under the Portal Act. In this case, although passing through security was necessary for the employees to get to their work locations, the security checks were required by the Federal Aviation Administration and were not for the benefit of the employer, so the time was not compensable. See Id. at 1344.

General Legal Principles Under the Act

In addition to Gorman and Bonilla, general legal principles under the Portal Act support the conclusion that the time spent submitting to a security screen is not compensable. Section 254(a) excludes all travel between the employee's home and 'the actual place where he does what he is employed to do.' 29 C.F.R. ' 790.7(c). This includes the 'employee's travel on the employer's premises until he reaches his workbench or other place where he commences the performance of the principal activity or activities, and the return travel from that place at the end of the workday.' 29 C.F.R. ' 790.7(e), (f). It does not matter whether the travel occurs before or after the employee has checked in or out for work. See 29 C.F.R. ' 790.7(e).

As the Gorman court held, the time an employee spends submitting to a security check is properly categorized as part of the employee's travel time to and/or from work. Submitting to a security process is just one step in the employee's commute. For example, in Lindow v. U.S. , 738 F.2d 1057, 1064 (9th Cir. 1984), certain employees were required to open or close the security gates to the project areas where they worked. The Ninth Circuit held that the time spent opening or closing the security gates in order to reach the employee's actual place of performance of work was properly excluded from compensation under the Portal Act's exception for travel time.

Alternatively, the security check is simply preliminary and/or postliminary to the employee's principal activities. Principal activities are those duties that the employee is employed to perform and all activities that are integral to the principal activity. See 29 C.F.R. ' 790.8(a), (b). For the general employees working at a retailer, the airport, or a nuclear facility, the security procedures they have to submit to are clearly not their principal activity ' they were not hired to test or monitor the security procedures. Instead, the security checks are just part of the process for an employee checking in and out for work and, therefore, may be categorized as non-compensable preliminary and postliminary activities. See 29 C.F.R. ' 790.7(g) (preliminary and postliminary activities include 'checking in and out and waiting in line to do so').

Indispensable and Integral?

The more complicated question is whether such activity is indispensable and integral to a principal activity. An activity is integral to a principal activity if it is closely related to the principal activity and indispensable to its performance. See 29 C.F.R. ' 790.8(c). Although the Bonilla court found that the security checks were indispensable to the employees' jobs, because the security screen was necessary in order to begin performing work, it decided that the security check was not integral to the employees' principal activities. Just as a security check is not the employee's principal activity, it is not closely related or integral to any principal activity. See, e.g., 29 C.F.R. ' 790.8(c) ('activities such as checking in and out and waiting in line to do so would not ordinarily be regarded as integral parts of the principal activity').

However, the language used by the Bonilla court and others can be misconstrued to argue that certain security checks are integral to the employee's work. In determining whether an activity is integral and indispensable to a principal activity, the Bonilla court considered the following factors: 1) Is the activity required by the employer? 2) Is the activity necessary to perform the employee's duties? and 3) Does the activity primarily benefit the employer? See Bonilla , 487 F.3d at 1344; see also Dunlop v. City Electric, Inc. , 527 F.2d 394, 398 (5th Cir. 1976) (To be preliminary or postliminary, the 'activities must be undertaken 'for [the employee's] own convenience, not being required by the employer and not being necessary for the performance of their duties for the employer.”). The security check in Bonilla was required by the FAA, not the employer, and it primarily benefited the airport rather than the employer. Similarly, based on the Bonilla court's factors, employees who work at an airport, power plant, or other similar facility that is regulated by the government and subject to certain safety and security measures, would not be compensated for security time, since the security requirements are imposed by the regulating government agency and the beneficiary of the security measures is the general public.

What about the retail employees? In this case, a plaintiff's lawyer could argue that the security check meets each element of the Bonilla court's standard: It is required by the employer, it is necessary in order for the employee to start work, and it primarily benefits the employer by reducing inventory loss. A proper determination that this time is not compensable requires a careful analysis of the second element: whether the security check is necessary for the employee's work. As the Bonilla court noted, an activity is not necessary for purposes of determining compensability just because there is a but-for causal connection. So, even though passing through security is necessary for the employees to reach their work locations, that is not due to the nature of the employees' actual work, but is simply a part of the employer's efforts to reduce inventory loss through employee theft. If the employee performed retail work by processing Internet orders and did not actually have access to the inventory, a security check would not be necessary. The security checks cannot be integral to the job of a retail employee who works in a physical store when such security checks are not a necessary part of the job in the virtual world.

Further Support

The exclusion of security checks from compensable time is further supported by a review of the types of activities that courts have held are integral to an employee's principal activities and, therefore, compensable: specifically, cleaning or preparing tools, vehicles, or machinery in order to perform work and changing into safety clothing and other gear, when required by the dangers
or necessities of the job. See 29 C.F.R. ' 790.8(b), (c) (preparing machine, changing clothes for safety reasons); see, e.g., IBP, Inc. v. Alvarez , 546 U.S. 21 (2005) (donning and doffing safety gear); Steiner v. Mitchell , 350 U.S. 247 (1956) (changing clothes for safety reasons); Mitchell v. King Packing Co. , 350 U.S. 260 (1956) (sharpening knives for meat cutting). Unlike a security check, these activities are integral to the job by virtue of the job itself rather than being merely a part of the employee's travel from home to his or her actual place of work performance.

Even if a court determines that the time is not excluded under the Portal Act, such time may be de minimis so that an employer is not liable for such time. Citing to Anderson v. Mt. Clemens Pottery Co. , 328 U.S. 680 (1946), the Department of Labor's regulation states that insubstantial or insignificant time outside the scheduled working hours that are administratively difficult to record may be disregarded by employer as de minimis . See 29 C.F.R. ' 785.47. Although there is no precise time period identified, the courts consider the following factors to determine whether time is de minimis: 1) the administrative difficulty of recording the additional time; 2) the aggregate amount of compensable time; and 3) the regularity of the additional work. See Lindow v. U.S. , 738 F.2d 1057, 1063 (9th Cir. 1984); see also De Asencio v. Tyson Foods, Inc. , 500 F.3d 361, 374 (3rd Cir. 2007); Reich v. Monfort, Inc. , 144 F.3d 1329, 1333-34 (10th Cir. 1998). In some cases, 10 minutes a day has been held to be de minimis. See Lindow, 738 F.2d at 1062.

This determination will depend heavily on the specific factual circumstances. Almost universally, the administrative difficulty of tracking the time spent submitting to a security check will weigh in favor of the employer. Security checks are usually performed at the employer's entrance before or after the employee has checked in or out, making it unfeasible to track this time, and the amount of time a security check takes will often vary. The aggregate amount of time at issue will depend on how thorough the security process is and how long the employee has been working. Although the aggregate for each employee is important, the courts will also consider the aggregate total for the entire class, so the number of employees impacted will influence that factor as well. See Monfort, 144 F.3d at 1334; Lindow, 738 F.2d at 1063. Last, the regularity of the 'work' will likely weigh in favor of the employee, since most security checks are required every day. However, time spent for random or intermittent security checks is more likely to be considered de minimis.

Conclusion

While employers can take comfort based on existing wage and hour case law, especially Gorman and Bonilla, that the time spent submitting to a security screen is likely not compensable time, it is clear that plaintiff's counsel will continue to pursue these class action claims with the hope that courts will recognize a new area of compensable time. Even if such claims are unsuccessful in court, the expense of defending against class action litigation or, in some cases, settling such claims has become a new cost of security.

Joan Tucker Fife is a partner and Gina Del Negro is an associate at Winston & Strawn LLP's San Francisco office. They are members of the firm's Labor and Employment Relations Practice.