The California Supreme Court recently struck a blow to Starbucks Corporation that will affect many employers state-wide. In the case Troester v. Starbucks Corporation, the plaintiff employee had filed a class action in employee-friendly state court, alleging that he and other employees were required to perform store-closing tasks after clocking out, without compensation. Starbucks removed the case to federal court and moved for summary judgment, in which it successfully argued that the employees’ post-shift work was not compensable under the federal de minimis rule, which provides that “insubstantial or insignificant periods of time…which cannot as a practical administrative matter be precisely recorded for payroll purposes, may be disregarded.”
The employee appealed the case to the Ninth Circuit. The Ninth Circuit recognized that California law is more protective of employee wage claims and that California courts had not yet addressed whether the federal de minimis doctrine applies to California law, so it certified this question for the California Supreme Court to decide.
The Supreme Court concluded that California’s wage and hour statutes have not adopted the de minimis doctrine from the federal Fair Labor Standards Act. The Court also considered whether the de minimis doctrine could apply to wage and hour claims brought under California law, notwithstanding that California had not adopted the doctrine. The Court found that it could not, holding that the relevant statutes and the California Industrial Welfare Commission wage orders (which require employers to compensate for “all hours worked”) did not permit its application based on the facts presented in this case. One of these facts, which was undisputed by Starbucks, was that plaintiff’s uncompensated closing tasks took anywhere from 4-10 minutes per day. The employee’s unpaid time totaled approximately 12 hours and 50 minutes over 17 months. The Court noted that the resulting $102.67 in wages owed was “enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares,” concluding that “[w]hat Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.”
Though the Court found the total amount of unpaid time significant, what was equally significant was that the plaintiff regularly worked after clocking out. The Court “decline[d] to decide whether a de minimis principle may ever apply to wage and hour claims given the wide range of scenarios in which this issue arises,” and it left open “whether there are wage claims involving employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.”
The Court’s decision leaves room for employers to argue that the de minimis principle may still apply to their practices, such as where employees are required to perform off-the-clock work less frequently than every shift and if the work is of a short duration (e.g., if an employer sends employees weekly emails during non-work hours to provide them with the upcoming week’s schedule). That said, employers should exercise caution when communicating with employees during non-work hours or when requiring employees to perform tasks that must be performed before clocking in or after clocking out, however brief. As evolving case law continues to show, any existing ambiguities in California law are unlikely to be resolved in favor of the employer.