Supreme Court clears up compensation issue

By G. Phillip Shuler

In the July issue of Louisiana Contractor, we discussed the very timely issue of whether employees in the construction industry must be compensated for work performed before or after their actual work day begins or ends. We discussed whether such activities constituted compensable time under the Fair Labor Standards Act (FLSA).

For example, 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; and 12) cleaning the work area.

This issue was timely because class and/or collective action suits under the FLSA over such issues have been proliferating and the Supreme Court had agreed to hear two cases involving these issues in the meat packing industry.

We now have a unanimous Supreme Court decision in a consolidated class action lawsuit that could have far reaching effects on compensation practices generally and particularly in the construction industry for the practices discussed in the July 2005 Louisiana Contractor article. IBP Inc. v. Alvarez, No. 03-1238 (U.S. Nov. 8, 2005); Tum v. Barber Foods Inc., No. 04-66 (U.S. Nov. 8, 2005).

In IBP and Barber Foods, the issue raised was whether under the FLSA employers must pay workers who are required to wear protective gear for time spent walking to and from the changing areas and time spent waiting to receive and remove protective gear. The court unanimously ruled payment was required for all time except the time spent waiting to receive protective gear.

Background. The FLSA requires employers to pay minimum wage for all "work" and to pay overtime compensation for "work" in excess of 40 hours.

However, the FLSA fails to define "work." The Portal-to-Portal Act provides some guidance by excluding two activities from what constitutes "work" covered by the FLSA: 1) walking on the employer's premises to and from the actual place of performance of the principal activity of the employee; and 2) activities that are "preliminary or postliminary" to that principal activity.

The consolidated case decided required the Supreme Court to address whether the walking and waiting time was compensable under the FLSA or excluded by virtue of the Portal-to-Portal Act.

The class actions were brought against two food-processing employers, IBP and Barber Foods. At IBP, employees worked in the slaughter and processing division of a large producer of fresh beef, pork and related products.

Employees were required to wear protective gear including hardhats, hairnets, earplugs, gloves, boots and other specialty gear if knives were used. At Barber Foods, employees worked in a chicken-processing plant and were also required to wear a variety of protective clothing.

The employees claimed under the FLSA they were entitled to compensation for:

• Time spent waiting to receive protective gear from the employer
  
• Time spent putting on (donning) protective gear
  
• Time spent walking from the changing area to the worksite and back to the changing area after work was completed
  
• Time spent waiting to remove protective gear
  
• Time spent taking off (doffing) protective gear

Legal ruling. Following its previous holdings, the court reiterated that time spent donning and doffing safety equipment is covered under the FLSA and thus, is compensable time. The court stated that donning and doffing is an activity that is "integral and indispensable" to a "principal activity" and therefore is itself a "principal activity" under the Portal-to-Portal Act.

As a "principal activity," putting on and taking off protective gear both begins and ends the workday. The court also found that during a continuous workday, any walking time that occurs after the beginning of the employee's first principal activity (i.e. donning) and before the end of the employee's last principal activity (i.e. doffing) is compensable time under the FLSA.

As for time spent waiting, the court made a distinction between waiting to receive protective gear and waiting to remove protective gear. Donning starts the workday because it constitutes a "principal activity," as detailed above.

Time spent waiting to don protective gear is not compensable because the workday has not yet begun. Waiting to doff protective gear is compensable; the workday continues until employees remove protective gear. Indeed, the court's pro-employee ruling mandates that employers pay workers who are required to wear protective gear for time spent walking to and from changing areas and time spent waiting to remove, but not receive, protective gear.

Practical implications. For the meat packing and poultry industries, this case ends the debate over whether waiting and walking to and from worksites following donning protective gear is compensable time. But, the case may spawn new debate regarding whether all industries that require employees to wear protective gear are covered under the case.

Employers in the construction industry who require workers to wear safety clothing and equipment should take special note of this case and review their compensation practices accordingly.

More broadly, employers in the construction industry should review their compensation practices as they relate to all the preliminary and postliminary activities mentioned in the first paragraph of this article.

Construction employers should also review their activities and policies with their labor counsel in light of the courts' broad, pro-worker decision.

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