Last week, the California Supreme Court issued its opinion in Troester v. Starbucks, refusing to hold that the well-established de minimis doctrine applies under California law. The de minimis doctrine is a principle of law that has long been endorsed and applied by both federal and California state courts (as well as California’s Division of Labor Standards Enforcement), holding that employers need not compensate employees for insignificant amounts of time spent performing work-related tasks off the clock where such time is administratively difficult to track.
The high court made it clear that although the doctrine is widely accepted under the federal FLSA, California wage orders are more protective of employees and require payment for “all hours worked.” The Court held that the de minimis doctrine cannot be used to allow an employer to avoid paying for tasks that take, on average, 4-10 minutes at the end of an employee’s shift. However, the Court stated that is was not prepared to hold that the doctrine could never be applied under California law on potentially different facts involving smaller amounts of time spent off the clock and/or only sporadically.
Troester was a shift supervisor for Starbucks who filed a class action lawsuit in California state court alleging that the coffee giant failed to compensate him and other employees for closing tasks (e.g. locking the door, setting the alarm) they performed after clocking out at the end of their shifts. Starbucks removed the case to federal court and then moved for summary judgment, arguing that Troester’s claims had no merit because an employer is not required by law to pay employees for de minimis time associated with tasks that as a matter of practicality are performed after the employee has clocked out (such as locking the door or shutting down a computer).
The federal district court agreed with Starbucks and granted its motion for judgment. Troester appealed to the Ninth Circuit, which, in turn, certified the issue to the California Supreme Court to provide guidance on whether the de minimis doctrine applies for purposes of claims for unpaid wages brought under California law (as opposed to wage claims brought under federal law, the FLSA).
The Supreme Court’s Decision
So, last week, the California Supreme Court issued the requested guidance, rejecting application of the de minimis doctrine on the facts of the Starbucks case. The Court held that nothing in the text or legislative history of the wage orders or Labor Code suggested any legislative intent to allow employers to avoid paying for de minimis amounts of time spent on work tasks. The Court explained that on the facts of the case before it, it was undisputed that Troester spent an average of 4-10 minutes on closing tasks after he had clocked out. The Court also noted that over his entire period of employment, this was the equivalent of about $100 in unpaid wages. The off the clock tasks were regularly recurring tasks that were part of the employee’s closing responsibilities. On these facts, the Court held that the time had to be compensated.
However, the Court stopped short of providing a bright-line holding that the de minimis doctrine may never be applied under California law. Frustratingly for employers, the Court provided no guidance for employers on the parameters for when the doctrine would apply. Additionally, the Court’s opinion contains a lot of language explaining that there are many technologies available to employers and employees today (e.g. timekeeping apps on smart phones) that make tracking of time administratively easier, implying that it will be a difficult burden for an employer to successfully prevail on a de minimis theory in most any case.
Even more frustrating, the Court acknowledges in its opinion that California’s DLSE and courts have held that the de minimis doctrine indeed applies under California law. Nonetheless, the Court basically distinguished the cases and rejected the DLSE interpretive guidance. This is patently unfair to employers that have justifiably relied on this precedent and DLSE interpretive guidance in adopting timekeeping and pay practices. Now they face potential retroactive (4 years back) liability for unpaid wages due to the Supreme Court’s effective changing of the law to the detriment of employers.
Today’s decision is another employee-sided opinion that hurts California employers. Although the state high Court stopped short of holding that the de minimis doctrine never may be used to defend against California wage claims, the Court rejected it on the facts of the Starbucks case, and made it difficult for employers to safely rely on the doctrine going forward in most any factual setting. California employers should ensure that all time spent by employees performing work tasks (and/or time when employees are under the control of the employer) is tracked and compensated — no matter how minimal the time.