Security Checks Aren't Part of Workday, Court Rules 9-0

Two freshly delivered Amazon boxes are seen on a counter in Golden, Colorado August 27, 2014.   REUTERS/Rick Wilking
Rick Wilking/Reuters
By Lawrence Hurley

WASHINGTON -- The U.S. Supreme Court on Tuesday handed a victory to employers over worker compensation, ruling that companies do not have to pay employees for the time they spend undergoing security checks at the end of their shifts in a case involving an (AMZN) warehousing contractor.

On a 9-0 vote, the court decided that employees of Integrity Staffing Solutions facilities in Nevada, where merchandise is processed and shipped, cannot claim compensation for the time they spend going through security screening -- up to half an hour a day -- aimed at protecting against theft.

Justice Clarence Thomas wrote on behalf of the court in the important employment law case that the screening process is not a "principal activity" of the workers' jobs under a law called the Fair Labor Standards Act and therefore is not subject to compensation.

For workers to be paid, the activity in question must be "an intrinsic element" of the job and "one with which the employee cannot dispense if he is to perform his principal activities," Thomas wrote.

Amazon spokeswoman Kelly Cheeseman said the allegations in the Integrity case of a lengthy security screening process were "simply not true." She added that Amazon's screening process is designed to take 90 seconds per employee at its facilities.

Earlier Ruling Reversed

The high court reversed an April 2013 ruling by the 9th U.S. Circuit Court of Appeals, which had found that the screenings were an integral part of the warehousing job done for the benefit of the employer and should be compensated.

Employees had sued Integrity Staffing Solutions for back wages and overtime pay, saying they should have been paid for the time spent going through security screenings.

Amazon, the world's largest online retailer, is not directly involved in the case. But a business group called the Retail Litigation Center, in a brief supporting the warehousing company, said the industry in general loses $16 billion annually in thefts.

Impact of the Ruling

The ruling is likely to benefit other companies facing similar lawsuits, including CVS (CVS) and Apple (AAPL), according to Integrity's lawyers. Mark Theirman, an attorney for the plaintiffs, said the ruling leaves thousands of workers "short-changed a half hour per day." Many workers will still be able to pursue similar claims under state law, he added.

Justice Sonia Sotomayor, joined by Justice Elena Kagan, wrote a brief concurring opinion to stress that the high court's opinion was consistent with Labor Department regulations.

President Barack Obama's administration had backed the warehousing company's position. Both the company and the government said the security checks are not central to warehouse work and instead are more like waiting in line to punch a time clock, an activity some courts have found does not require compensation.

The case is Integrity Staffing Solutions, Inc v. Jesse Busk and Laurie Castro, U.S. Supreme Court, No. 13-433.

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