US Employment Litigation Round-Up For July 2018

Two California Courts Clarify Limits to Employer Timekeeping Policies

Decisions: The California Supreme Court recently concluded that employers must compensate employees for small amounts of work time that are regularly performed, even if they are administratively difficult to measure. In Troester v. Starbucks, the plaintiff employee alleged that he was routinely required to "clock out" from work before performing various job duties, including closing the store and helping fellow employees to their vehicles. The plaintiff alleged that he lost $102 in wages over the course of his 17-month employment as a result of this policy. The defendant moved to dismiss, citing the federal Fair Labor Standards Act's ("FLSA") "de minimis" doctrine, which "excuse[s] the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record." The California Supreme Court rejected this argument, holding that California's wage and hour statutes and regulations had not adopted the FLSA's de minimis doctrine and pointing to technological advances and alternative timekeeping arrangements that could ensure that employees are fully compensated. The court left open the possibility that the de minimis doctrine might apply under a different fact pattern—e.g., "where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded."

In another recent decision, a California Court of Appeal clarified that the practice of rounding employees' time to the nearest quarter-hour is permissible under California law so long as it is facially neutral and results in a net benefit to all employees. In AHMC Healthcare, Inc. v. Superior Court, the defendant hospital group had a practice of rounding its employees' time clock swipes up or down to the nearest quarter-hour. At one hospital facility, this practice resulted in 52 percent of employees losing compensable time. However, on the whole, the rounding resulted in a net increase to employees' compensable time. The court held that the defendant's policy was lawful. Drawing on federal cases upholding similar time-rounding policies, the court held that an employer's rounding policy does not systematically undercompensate employees where it "[is] neutral on its face" and "results in a net surplus of compensated hours and a net economic benefit to employees viewed as a whole." Although the bare majority of employees at one of the...