Folks who attended Miller Nash’s Annual Employment Law Seminar last fall may remember a discussion about a case brought by Nevada call center workers seeking compensation for their time booting up and shutting down their computers. We shared that the Ninth Circuit reversed a motion for summary judgment in favor of the employer and sent the case back to the District Court. In a similar script, last week, the Ninth Circuit again reversed a second motion for summary judgment for the employer and remanded the case again (Cadena v. Customer Connexx LLC, 23-15820, 2024 WL 3352712 (9th Cir July 10, 2024)). With its remand, though, the Ninth Circuit has made clear that the “de minimis doctrine” still applies to cases related to claims for overtime wages.

As a quick refresh, Customer Connexx operates a call center in Las Vegas where hourly-paid customer service representatives work in-person scheduling functions for appliance recycling customers. Connexx requires its employees to clock in and clock out of their workdays through an online timekeeping program. Employees must boot up their computers and first clock in before they can access the programs required to do the tasks of their job. Evidence suggested the start-up time ranges from 1-20 minutes, with an average of 6-12 minutes; this start-up time is not compensated.

At this go-around, the Ninth Circuit rejected the employees’ argument (adopted by the District Court) that the de minimis standard (i.e., small amounts of time are not compensable) no longer applies. While the U.S. Supreme Court has found that the de minimis standard does not apply to a particular provision of the Fair Labor Standards Act related to time spent changing clothes and washing when there is a collective bargaining agreement at play, it still applies to the circumstances with Connexx.

That said, the Ninth Circuit found that, in this case, summary judgment in favor of the employer was not appropriate and a trier of fact must determine whether the amount of time was de minimis. The Ninth Circuit directed the District Court to make this determination. While there is no “bright line rule,” to determine whether compensable time is de minimis, the court should look at:

1. the regularity of the additional work;
2. the aggregate amount of compensable time; and
3. the practical administrative difficulty of recording the additional time.

Under these factors, the Ninth Circuit found there were still open questions about whether the start-up and shut-down time was de minimus and therefore not compensable.

While this case does not make new law in the Ninth Circuit, it provides a reminder to employers that when employees conduct certain tasks off the clock, this time may be compensable work time. Some key takeaways and considerations as employers consider compliance:

• If the time for a particular task (even if short) is every day, these small amounts may be “regular.”
• An employer should look at the uncompensated time over a period. While six minutes a day seems small in isolation, over a two-week pay period that is an hour of wages, and an hour’s wages for some employees may not be de minimis. Class actions for hours of wages each pay period may add up quickly, often to millions of dollars not including penalties and interest.
• Employers have different ways to track employees (e.g., card swipes accessing buildings) that could be used in conjunction with an online login system to estimate additional time. The Ninth Circuit even suggested that a standard (non-computer-based) time clock could be used in addition to the online login system to track time before employees log in online.
• Employers relying on their employees’ logging into computers to then track their work time may need to take significant steps to ensure the logging-in process does not take excessive amounts of time and have a process in place for employees to report if their computers are taking more than two or three minutes to start up.
• Even if an employer has a procedure in place that allows an employee to report additional time and an employer may potentially adjust time, a court may examine the specifics of how that process is designed and how it is carried out in practice. The Ninth Circuit reminded employers that if they know an employee is performing tasks, they should be compensated, even if they do not ask to be.

Of course, the case has still not been decided on its merits and now returns to the District Court for a trial. We will keep track of it and keep you posted if there are further developments.