Courts define 'off-the-clock' work

By G. Phillip Shuler

Overtime and misclassification collective action claims under the Fair Labor Standards Act (FLSA) are the fastest growing areas of employment litigation. As reported by Martindale-Hubble's Pulse, "Class action lawsuits against employers charging FLSA violations have exploded in the last two years, according to data compiled by LexisNexis CourtLink. In 2001, 397 FLSA class actions were filed in district courts.

In 2004, that number nearly tripled to 1,076. At the same time, the number of other types of class action employment litigation, including Title VII and Employee Retirement Income Security Act (ERISA) cases, has remained relatively steady.

In many recent cases, plaintiffs allege that their employer violated the FLSA by requiring them to work before or after their scheduled shift (off the clock) without paying them for that time.

To date, employees in the construction industry have raised relatively few of these claims. However, because employees in the construction industry may perform a variety of activities before and after their scheduled shift, the issue of uncompensated "off-the-clock" time is prevalent in the construction industry.

Common examples of the types of activities employees in the construction industry may perform before or after their scheduled shifts include:

1. Checking in and checking out tools the employees use during the day

2. Transporting tools and other equipment from a central location to the jobsite and returning the tools to the central location

3. Receiving instructions for the day's work

4. Searching for lost tools

5. Rolling out and rolling up tools and equipment

6. Stocking and assembling materials

7. Repairing and maintaining equipment and tools

8. Receiving safety instructions and performing various safety activities

9. Donning and doffing clothing such as utility belts, earplugs, hardhats etc.

10. Traveling from outside the jobsite to restricted areas on the jobsite

11. Traveling to the actual jobsite from the employer's office or a central warehouse

12. Cleaning the work area

FLSA and Portal-to-Portal Act. The FLSA requires that employers pay employees for all hours worked. More specifically, the act requires that each covered employee be paid at least a specified minimum wage for every hour worked.

The act also requires that all non-exempt employees receive at least one and a half times their regular rate of pay for each hour worked over 40 in a given work week. But until it is determined how many hours an employee has worked, it is impossible to determine how much compensation the employee is owed.

Supreme Court decisions and the Portal-to-Portal Act. While the FLSA requires employers to pay employees for all hours worked, the FLSA does not provide a definition of "work." Therefore, courts have been left with the responsibility to do so.

In a case decided shortly after the passing of the FLSA, the Supreme Court defined work as "physical or mental exertion, whether burdensome or not, controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business." Tenn. Coal, Iron & Railroad Co. v. Muscoda Local No. 123, et al, 321 U.S. 590, 598 (1944).

In Tennessee Coal, the Supreme Court concluded that the time spent on iron ore miners in traveling underground in mines to and from their place of work constituted "work" or "employment" for which compensation was required to be paid under the FLSA. According to the court, the miners were entitled to portal-to-portal pay, where the travel occurred under the employer's strict control and involved continuous physical and mental exertion as well as hazards to life and limb.

Moreover, in traveling the miners were engaged in a process or occupation necessary to actual production. Two years later, the Supreme Court modified its ruling >> and expanded the definition of "work" in Anderson, et al v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946). In Mt. Clemens, the court held that "there need not be exertion at all . . . when the employee is required to give up a substantial measure of his or her time and effort, the time is hours worked."

Because Mt. Clemens dramatically expanded the definition of "work" at a time when there was no federal statute of limitations on FLSA claims, potential liability for "off-the-clock" claims reached the billions. As a result, Congress enacted the Portal-to-Portal Act, which limits the scope of compensable activities under the FLSA.

Under the Portal-to-Portal Act, "walking, riding, or traveling to and from the actual place of performance of the principal activity or activities" and "activities which are preliminary to or postliminary to the principal activities" are not compensable, unless such activities were made compensable in an express provision of a contract or if it was the custom or practice of the employee to compensate the employees for such activities."

While the statute was clear in its intent (to eliminate liability for before workday and after workday activities), the statute is far from clear as applied by the courts.

Conclusion. While the FLSA requires employers to pay employees for all hours worked, the statute recognizes that there are certain activities that are "preliminary and/or postliminary" to the primary activities that the employee is employed to perform.

The FLSA does not require that employers pay for the performance of such preliminary and postliminary activities. If such activities are, however, "an integral part of and indispensable to" the employees' principal activities, compensation is required.

Whether an employee performs compensable work (as opposed to noncompensable preliminary or postliminary activities) prior to and after their scheduled shift, is a fact-sensitive inquiry and will be decided on a case-by-case basis.

In the construction industry, in light of recent litigation trends and the realities of the industry, employers are encouraged to proactively take the necessary steps to protect their companies from liability by employees who may claim that they perform tasks "off-the-clock."

Editor's Note: G. Phillip Shuler is a partner in the New Orleans office of Chaffe, McCall, Phillips, Toler & Sarpy.