September 16, 2009

An automotive employee was not entitled to compensation under the Fair Labor Standards Act or California law for commuting time and time spent on preliminary activities, the federal appeals court in San Francisco held in a class action case. However, the question of the compensability of employees’ post-shift activity of transmitting required daily data is remanded to the district court for trial.  Rutti v. Lojack Corp., No. 07-56599 (9th Cir. Aug. 21, 2009).

Mike Rutti, an automotive technician, worked for Lojack Corp. installing and repairing vehicle recovery systems.  Because technicians perform most of their duties at the clients’ locations, Lojack required them to use a company-owned vehicle to travel to clients’ sites.  Technicians also were required to keep their cell phones on while driving the vehicles.  They were prohibited from carrying passengers in company vehicles and from using the vehicles for personal business.   

Rutti was paid on an hourly basis beginning when he arrived at his first job and ending when he completed his final job, but not for any commuting time.  Rutti also performed various preliminary and post-shift activities.  For example, before he left for his first job of the day, he spent time receiving assignments, mapping routes, prioritizing jobs, and completing paperwork.  In the evening, he had to upload data regarding his installations from a portable data terminal (“PDT”) provided by the employer.  He would connect the PDT to a modem provided by the employer, transmit the data and ensure that the transmission was successful.  Rutti claimed it often took more than one attempt to complete a transmission. 

Rutti, on behalf of himself and all technicians employed by the employer, sued the employer under the FLSA and California law to recover compensation for commuting time and time spent in alleged preliminary and post-shift activities.  The district court granted the employer’s motion for summary judgment, holding that the commuting time was not compensable.  It also held the alleged preliminary and post-shift activities were not compensable because either they were not integral to Rutti’s principal activities or they consumed only a de minimis amount of time.  Rutti appealed.

The plaintiff first argued that he was entitled to compensation for commuting time because his use of the employer’s vehicle was a condition of employment.  The appellate court observed that under the federal Employee Commuting Flexibility Act (“ECFA”), the use of an employer’s vehicle to commute is not compensable, even if it is a condition of employment.  The ECFA provides that, where the use of the vehicle “is subject to an agreement on the part of the employer and the employee,” it is not part of the employee’s principal activities and thus not compensable.  The Court determined that the “agreement” required by the ECFA may be a condition of employment, since “there was no suggestion that the agreement could not be a condition of employment.  Further, the most logical place to record an agreement between an employee and an employer concerning the use of an employer’s vehicle is in the employee’s employment contract.”  Accordingly, the Court concluded that Rutti was not entitled to compensation for his commuting time.

Rutti then argued that, because the employer placed restrictions on his use of the vehicle, the commuting time was compensable.  The Court found this unsupported by the ECFA.  Further, other courts addressing this issue have held that commuting is not compensable unless the employees show that they perform “additional legally cognizable work” while driving, the Court noted.  Because Rutti could not demonstrate this, his claim failed. 

Rutti also contended that, even if the commuting time was not compensable under federal law, it was compensable under California law, because he was under the employer’s control while commuting.  The Court rejected this argument, finding the various restrictions imposed on the use of the vehicle did not amount to putting Rutti under the employer’s control during his commute.

The Court then examined whether Rutti’s preliminary and post-shift activities were compensable.  In general, such activities are compensable if they are an “integral and indispensable part of the principal activities for which covered workmen are employed,” the Court explained.  When making this determination, courts will examine whether the activities are “principal activities,” performed as part of employees’ regular work in the ordinary course of the employer’s business.  However, even if certain activities are “principal activities,” the obligation to pay is moderated by the “de minimis rule.” The rule recognizes “the practical administrative difficulty of recording small amounts of time for payroll purposes.”  Further, in determining whether otherwise compensable time is de minimis, courts may consider the aggregate amount of the time spent and the regularity of the work.

Applying this standard, the Court determined that some of Rutti’s preliminary activities were related to his commute and, thus, not compensable, and the rest were de minimis.  However, the Court found the time spent in the evening making PDT transmissions could be compensable.  The evidence indicated that the PDT transmissions were an important part of Rutti’s job and that the time spent in making the transmissions, including the time needed to confirm transmissions and, if necessary, to resend, was not de minimis.  Evidence suggests that transmissions took approximately 15 minutes each day.  This was over an hour each week, the Court noted, and “for many employees, this is a significant amount of time and money.”  Thus, the Court reversed the grant of summary judgment on this issue and remanded the matter for trial.

This case confirms that commuting time generally is not compensable, even if employees commute in company-owned vehicles and the employer imposes restrictions on the use of those vehicles.  Employers are reminded, however, they may be liable for compensation when employees must perform work-related tasks outside of the normal work days.  Even if employers consider the work de minimis (and not compensable), such tasks, in the aggregate, may require a significant amount of time that turns out to be compensable.  Jackson Lewis attorneys are available to answer your questions about this case and wage and hour compliance in California.

© 2007 Jackson Lewis LLP. Reprinted with permission. Originally published at www.jacksonlewis.com. Jackson Lewis LLP is a national workplace law firm with offices nationwide.