A recent Oregon Supreme Court decision found that Oregon wage and hour laws mirror the federal Fair Labor Standards Act (FLSA) and do not provide employees with a greater right to compensation for time spent performing pre- or post-shift activities. As a result, the Court concluded that time spent on an employer’s premises waiting for and undergoing mandatory security screenings (before or after a shift) is compensable if the screenings are an “integral and indispensable” part of the employee’s principal activities or compensable as a matter of contract, custom, or practice.
Facts of the Case
Lindsey Buero worked for Amazon in a warehouse located in Troutdale, Oregon. She brought a class action wage and hour lawsuit under Oregon law against Amazon to recover wages for time she and other employees spent going through Amazon’s mandatory security screening procedures.
To prevent theft, Amazon kept merchandise in a secure area within its warehouse. When employees left the secured area at the end of their shift, they were required to clock out before proceeding with a security screening. There were nine screening lanes in the warehouse. Employees without metal or bags could use one of five express lanes that allowed the employee to walk through a metal detector. However, any employee who brought a bag into the secured area was required to use one of two lanes and had to walk through a metal detector and put their bag on a conveyor belt for x-ray screening. If the employee set off a metal detector in any of the lanes, a security guard with a handheld metal detector would check the employee’s person for merchandise. After completing the security screening, an employee could voluntarily remain in the warehouse or could leave the premises. Because the screening procedures occurred after the employee clocked out for the day, employees did not receive pay for time spent waiting for and undergoing the security screenings.
Amazon argued that time spent in security screenings is not compensable under Oregon law and that Oregon’s wage and hour laws track federal law. The District Court agreed and dismissed Buero’s Complaint. On appeal, the Ninth Circuit certified the following question to the Oregon Supreme Court: Under Oregon law, is time that employees spend on the employer’s premises waiting for and undergoing mandatory security screenings compensable?
Because the case required the Court to determine whether Oregon law mirrors federal law, the Court analyzed the evolution of state and federal wage and hour laws. Under federal law—the FLSA as amended by the Portal to Portal Act—time spent by employees engaged in activities before or after their work shift is not compensable, unless those acts are (1) integral and indispensable part of the employees’ principal activities or (2) compensable as a matter of contract, custom or practice. Applying this general rule, the United States Supreme Court previously held in a similar case that time spent waiting for and undergoing the security screenings at issue in that case was not compensable because the activities were not integral and indispensable to the employees’ principal activities.
The Oregon Supreme Court ultimately held that based on the text, context, and rulemaking history, the administrative regulations promulgated by the Bureau of Labor and Industries, specifically OAR 839-020-0043, tracks federal law and likewise provides that preparatory and concluding activities are considered hours worked only when an integral and indispensable part of a principal activity for which the employee is employed or when required by contract, custom, or practice. Further, the Oregon Supreme Court also held that this rule is not inconsistent with ORS 653.010 (11), which provides that “work time” includes both time worked and time of authorized attendance.
In summary, the Court concluded that Oregon statute defining “work time” and the administrative rule regarding the compensability of work time spent performing pre- and post-shift activities mirror federal law. Therefore, whether time spent waiting for and undergoing mandatory security screenings on an employer’s premises is compensable under Oregon law depends on whether the screenings are either (1) an integral and indispensable part of an employee’s principal activities or (2) compensable as a matter of contract, customer, or practice—just as under federal law.
In deciding whether an employee’s pre- or post-shift activities are compensable under state law, the Oregon Supreme Court declined to extend a broader state-specific test and instead cleared the way for Oregon Courts to rely on similar decisions under the FLSA.
Takeaway for Employers
While this case did not ultimately determine whether time spent during security screenings was, in fact, compensable, it serves as a reminder that these issues require careful attention by employers who want to avoid costly wage and hour claims. This also presents a good opportunity for Oregon employers to review their compensation policies to ensure that employees receive pay for all pre- or post-shift tasks that are necessary or integral to the employee job responsibilities. Finally, employers should promptly consult with qualified counsel to evaluate and implement any necessary adjustments in compensation policies and should ensure that managers are trained on any new requirements.
The legal issues impacting workplaces are ever changing (Employment Law in Motion!) and since publication, new or additional information not referenced in this blog post may be available. Employers should feel free to call on the Miller Nash team if you have questions or need assistance, and always consult with an attorney for legal guidance.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.