Wage-Hour Lessons Learned from Starbucks
By John Mavros Attorney at Law, Partner, Fisher & Phillips, LLP | July 21, 2019
This article was co-authored by Lauren Stockunas, Associate, Fisher Phillips LLP
The de minimis doctrine is an established defense under the federal Fair Labor Standards Act (FLSA) for the administrative difficulty in recording small amounts of time for payroll purposes that an employee spends performing tasks off-the-clock. Federal courts hold that employers may disregard time as de minimis depending on three factors: (1) the practical difficulty the employer would encounter in recording the additional time, (2) the total amount of compensable time and (3) the regularity of the additional work.
But unfortunately, the de minimus standard is already a relatively high standard to meet and California, being the bellwether state that it is, has upped the ante. In Troester v. Starbucks, a recent California Supreme Court decision, the court decided that the de minimus standard does not apply to the California Labor Code or Wage Orders and employees must be paid for all regularly occurring work that lasts several minutes per day.
While this strict standard does not apply across the country, the fact that a court would apply such a strict standard makes this case a good lesson for all hotel employers regarding best practices for timekeeping.
The California Supreme Court's Shocking Decision in Troester v. Starbucks
The Plaintiff, Douglas Troester, worked for Starbucks as an hourly shift supervisor and alleged that he was required to engage in off-the-clock work while engaging in store-closing tasks. He alleged that after clocking out on the store's computer system located in a back office, he was required to activate the alarm, lock the store's front door, and occasionally reopen the door for a co-worker to retrieve forgotten personal items. He also argued that per Starbucks policy, he was required to walk co-workers to their cars and sometimes waited with co-workers for transportation to arrive. The post-shift tasks added up to an average of 4 - 10 minutes per day and 12 hours and 50 minutes during his 17 months of employment. The unpaid time added up to just $102.67.
The federal district court held in Starbucks' favor, applying the de minimis doctrine, which, as discussed above, relieves an employer of its obligation to compensate employees for working time that is trivially small. Troester appealed to the Ninth Circuit Court of Appeals, which requested that the Supreme Court of California resolve the issue. The California Supreme Court held that the federal de minimis defense did not apply and that employers must compensate employees for time worked off the clock when such work occurs on a regular basis. In coming to this conclusion, the court reasoned that the $102.67 of unpaid wages was significant because $102.67 is "enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares."