The Developing Law On Compensability Of Time Spent Undergoing Security Screening

In February 2012, we reported on an increase in litigation concerning whether employees' time spent undergoing bag checks and other security screenings must be paid under the Fair Labor Standards Act (FLSA) or parallel state laws. We noted that retailers' loss-prevention measures were at the center of the debate. Since then, the debate has continued, with an increasing number of retailers facing class action lawsuits. In this edition of Morgan Lewis Retail Did You Know?, we provide an update on the developing law, including the U.S. Supreme Court's recent grant of certiorari in Busk v. Integrity Staffing Solutions, in which the U.S. Court of Appeals for the Ninth Circuit held that workers stated a claim under the FLSA in seeking pay for time spent undergoing security screenings meant to prevent employee theft. We also provide an update on the recent wave of security screening litigation. Finally, we provide practical advice for avoiding litigation and preparing for litigation should it be filed.

The Developing Law

As the Supreme Court recently discussed in Sandifer v. U.S. Steel Corporation,1 the Portal-to-Portal Act2 amended the FLSA to limit the scope of employers' liability in various ways. One way was by excluding from mandatorily compensable time activities that are "preliminary to" or "postliminary to" the principal activity that an employee is employed to perform and that occur before (or after) the time—on any particular workday—at which the employee commences (or ceases) the principal activity. The Supreme Court further reminded us in Sandifer of its statement in IBP, Inc. v. Alvarez3 (based on much older precedent in Steiner v. Mitchell4) that any activity that is "integral and indispensable" to a "principal activity" is itself a "principal activity" under the FLSA. Appellate courts have applied the Supreme Court's pronouncements regarding which activities are compensable and which are not to security screening activities with varying results.

Two U.S. Courts of Appeals have held that the time employees spend in preliminary and postliminary security screenings generally is not time spent in a "principal activity" and thus does not constitute time worked under the FLSA. These courts have observed that, although security checks may be necessary for security purposes, they are not "integral and indispensable" to an employee's job. In Gorman v. Consolidated Edison Corp., the U.S. Court of Appeals for the Second Circuit held that time...