Articles from October 2018

California’s highest court recently issued a unanimous decision in the closely-watched Troester v. Starbucks, holding that the coffee behemoth must compensate employees for “all hours worked,” including brief periods of off-the-clock work. No. S234969 (July 26, 2018) (slip op. available here). This decision comes after the California Supreme Court agreed to answer the Ninth Circuit’s request to clarify whether the Fair Labor Standards Act’s (FLSA) de minimis doctrine applies to claims for unpaid wages under California Labor Code sections 510, 1194, and 1197.

In Troester, Starbucks argued that the 4 to 10 minutes spent on closing procedures each night that the plaintiffs assert was uncompensated off-the-clock work is so inconsequential that employers need not record nor provide compensation. Starbucks relied on the de minimis doctrine, an ancient adage defined in the California Civil Code as “the law disregards trifles.” The FLSA specifically adopts this doctrine, and courts have found that up to ten minutes of off-the-clock work can be considered de minimis and therefore non-compensable. Slip op. at 7.

The California Supreme Court, however, rejected the de minimis doctrine as a defense to off-the-clock claims under California law. The court first reasoned that California employers must follow IWC wage orders dictating conditions of employment in various industries, which is often more protective of workers than is federal law. Slip op. at 4. For instance, Wage Order 5, governing the “public housekeeping industry” (which includes food and beverage establishments like Starbucks), requires that employees be paid for “all hours worked,” with no explicit nor implicit exception for de minimis time. Id. at 9-11. Because the wage order required full compensation, and Starbucks provided no statutory or regulatory history supporting their contrary position, the court held that the de minimis doctrine had not been incorporated into California labor law or wage orders. Id. at 10. The court also pointed out that timekeeping technology has advanced to the point where employers can no longer claim that recording all time worked is inconvenient or cumbersome, which was one of the key rationales for the de minimis doctrine. Slip op. at 18.

While statutory interpretation is largely an academic exercise, the California Supreme Court emphasized the policy of protecting workers. It observed that “a few extra minutes of work each day can add up” for hourly workers and “[w]hat Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.” Slip op. at 20. The court also underscored the need for class actions in such circumstances, since “[t]he very premise of such suits is that small individual recoveries worthy of neither the plaintiff’s nor the court’s time can be aggregated to vindicate an important public policy.” Id. at 17. In other words, absent the class action mechanism, large companies such as Starbucks would be free to exploit their employees, a few minutes at a time.

Starbucks recently petitioned for reconsideration of the decision. On August 29, 2018, the California Supreme Court rejected a request by Starbucks to reconsider its ruling; the Troester ruling will stand. Within a few weeks after the decision, a California federal judge cited Troester when certifying a class of nearly 11,000 H&M employees suing for off-the-clock time spent waiting to go through security searches at the end of their shifts. Lao v. H&M Hennes & Mauritz, No. 5:16-cv-00333 (N.D. Cal. Aug. 8, 2018).

Authored by:
Robin Hall, Associate
CAPSTONE LAW APC