March 23, 2015

FMLA and FLSA Lawsuits Are Increasing

The U.S. federal courts saw a whopping 26.3 percent increase in the number of Family and Medical Leave Act (FMLA) lawsuits filed last year over the prior fiscal year, according to statistics recently released by the Administrative Office of the U.S. Courts. Wage and hour lawsuits alleging a violation of the Fair Labor Standards Act (FLSA) were up a significant 8.8 percent. These filings are the highest they’ve been in the past 20 years of annual statistics reported by the courts.

The increasing numbers of lawsuits brought under those two employment laws may reflect how difficult it is to understand and administer wage and hour and leave laws. The increase also may be due to the heightened awareness by workers of their rights and benefits under these laws. Regardless of the cause of the increase, the numbers suggest that it is worthwhile for employers to focus their compliance efforts in these two areas.

Self-Audit Your Pay and Leave Practices

Before you find yourself defending a lawsuit, take the time to review your payroll and FMLA policies and practices, including these often tricky issues:

Classifying workers as exempt versus non-exempt from minimum wage and overtime pay requirements
Calculating each non-exempt employee’s regular rate of pay and overtime rate
Rounding time at the beginning and end of shifts
Automatic deductions for meal periods
Treating workers as independent contractors rather than employees
Tracking time worked remotely or “off-the-clock”
Providing FMLA notices within required time period
Calculating FMLA leave for workers with irregular schedules
Administering intermittent FMLA leave
Not penalizing employees who have taken FMLA leave

If your self-audit reveals any irregularities, take steps to revise your policies and practices to bring them into compliance with the applicable laws. Don’t forget state and local laws that may impose additional requirements related to pay and leave administration. If in doubt, don’t hesitate to consult with your legal counsel so that you don’t become one of next year’s statistics.

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March 17, 2015

Utah Adds Sexual Orientation and Gender Identity to Anti-Discrimination Laws

By Cecilia Romero

On March 12, 2015, Utah signed into law a bill that protects individuals on the basis of sexual orientation and gender identity in employment and housing. The law contains certain exceptions for religious organizations and permits employers to maintain reasonable dress codes and sex-specific facilities. Here are the details on the employment protections.

Discrimination, Harassment and Retaliation Prohibited

The new law adds sexual orientation and gender identity to the list of protected characteristics under Utah’s employment discrimination law, making it unlawful for Utah employers to refuse to hire, promote, discharge, demote, terminate, retaliate against, harass or discriminate in compensation or any other terms of employment because of an individual’s sexual orientation or gender identity. The full list of protected groups under Utah law is now race, color, sex, pregnancy/childbirth, age, religion, national origin, disability, sexual orientation and gender identity.

Sexual Orientation and Gender Identity Defined

Sexual orientation is defined as an individual’s actual or perceived orientation as heterosexual, homosexual or bisexual. Gender identity is defined by reference to the Diagnostic and Statistical Manual (DSM-5) which refers to individuals who see and feel themselves to be a different gender than their assigned gender.

Reasonable Dress Codes and Sex-Specific Facilities Permitted

The new law specifically addresses two frequent concerns for employers. First, the new law allows employers to adopt reasonable dress and grooming standards and second, employers are allowed to adopt reasonable policies that designate sex-specific facilities, such as restrooms, shower rooms and dressing facilities.

Exemptions for Religious Organizations and Protecting Religious Expression

The new law protects religious organizations and the expression of religious beliefs. The list of excluded religious groups was expanded through this law to include not only religious organizations, associations and corporations, but also religious societies, educational institutions and leaders, and the Boy Scouts of America.

State Law Trumps Local Laws

This new state law supersedes and preempts any laws, ordinances or regulations related to the prohibition of employment discrimination passed by a city, county or other local or state governmental entity. This should help employers maintain uniform policies statewide without having to account for local anti-discrimination laws. Complaints will be handled by the state antidiscrimination division. Recovery under the law is limited to actual damages, not punitive damages.

Practice Points to Employers

These new employment protections will affect many of your employment communications so take time now to:

Review and understand the new law;
Revise harassment and retaliation policies to include sexual orientation and gender identity as prohibited bases for harassment and retaliation; remember such statements might be contained in your employee handbook, on your job applications, in recruiting and training materials and on your website; and
Train managers and supervisors on the new law.

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March 12, 2015

EEOC Strategic Enforcement Priorities: More Insight from Denver’s Director (Part Two)

By Jude Biggs

As we wrote last week, John Lowrie, the new director of the EEOC’s Denver Field Office, recently offered insight into the agency’s national Strategic Enforcement Plan (SEP) and how his office will approach those enforcement goals. Here is the second article in the series exploring the third and fourth priorities in the EEOC’s SEP.

Priority #3 – Developing Issues

Field Director Lowrie explained the EEOC and its individual field offices are working to advance a number of developing issues. These include:

Reasonable ADA accommodations – one example is telecommuting, where an employee’s physical presence at the company is not an essential job function. The EEOC has successfully pursued this in a case against the Ford Motor Company but the case is being reexamined by the full Sixth Circuit Court of Appeals so may not stand.
Pregnancy discrimination – Mr. Lowrie discussed the lengthy Pregnancy Discrimination Act (PDA) enforcement guidance issued last July. The guidance document contains many hypothetical situations that the agency deems would violate the PDA as well as a section on employer best practices.
Title VII accommodations – Mr. Lowrie pointed to the Abercrombie & Fitch religious accommodation case which is currently before the U.S. Supreme Court as an example of how the agency looks to ensure employers make reasonable accommodations for characteristics protected by Title VII. At issue in the Abercrombie case is whether a Muslim job applicant who wore a headscarf to her job interview and was denied employment was required to request a reasonable accommodation on religious grounds in light of the company’s “look policy” which would not have permitted wearing the headscarf at work.

Priority #4 – Equal Pay Act

The fourth priority in the EEOC’s SEP is enforcement of the Equal Pay Act (EPA). Mr. Lowrie noted that Jenny Yang, who was appointed as the EEOC’s new chairperson last September, had made a recent visit to the Denver field office during which she specifically mentioned EPA issues to the Denver investigators and staff. Because equal pay issues are high on the Chair’s agenda, charges involving allegations of unequal pay based on gender will receive additional attention by EEOC investigators and attorneys.

Mr. Lowrie also noted that Wyoming is the worst state in the nation for pay disparity issues. Because the Denver field office has jurisdiction over Wyoming (as well as Colorado), the Denver field office may look to change Wyoming’s poor ranking through vigilant enforcement of equal pay charges that come into its office.

Steps to Avoid Additional Scrutiny

Because the EEOC is giving priority status to these types of charges, you need to take time to review your compliance efforts related to these issues. First, take a look at your reasonable accommodation process. Have you trained your managers and supervisors to recognize when an accommodation is being requested? Do you engage in an interactive process with the applicants and employees who make accommodation requests? Be certain to document your interactive process and all accommodations decisions you make. Second, review your policies as they relate to pregnant employees. Make sure that you do not treat pregnancy less favorably than other medical conditions and consider possible ADA accommodations if circumstances so warrant. Third, audit your pay grades and compensation structure to make sure that you are paying workers doing the same work equally, regardless of gender.

Next Installment Will Focus on Final Two EEOC Priorities

In the next and final article in this series, we will offer insight into the last two of the EEOC’s strategic priorities. Both are areas in which the EEOC has vigorously sued employers whose policies and practices it deems are discriminatory, so stay tuned.

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March 9, 2015

DOL May Issue Interpretations of FLSA Exemptions Without Notice-and-Comment Process

By Mark Wiletsky

Today the Supreme Court sided with the U.S. Department of Labor (DOL), holding that a federal agency’s interpretive rules are exempt from notice-and-comment rulemaking procedures. Perez v. Mortgage Bankers Ass’n, 575 U.S. ___ (2015). The Court’s decision means that the DOL (and other federal agencies) may issue initial and amended interpretive rules without advance notice and without considering input from interested parties.

DOL “Flip-Flopped” on Interpretive FLSA Rule

In this case, the Mortgage Bankers Association (MBA) challenged the DOL’s most recent interpretation on whether loan officers fell within the Fair Labor Standards Act (FLSA) administrative exemption following a series of “flip-flops” in the DOL’s interpretation. In 1999 and 2001, the DOL issued opinion letters stating that mortgage-loan officers do not qualify for the administrative exemption to overtime pay requirements. After new regulations regarding the exemption were issued in 2004, the MBA requested a new interpretation under the revised regulations. In 2006, the DOL issued an opinion letter in which it changed its position, deciding that mortgage-loan officers do qualify for the administrative exemption. In 2010, however, the DOL changed its interpretation again when it withdrew the 2006 opinion letter and issued an Administrator’s Interpretation without notice or comment stating that loan officers once again do not fall within the administrative exemption.

The MBA sued the DOL, claiming that the DOL needed to use the notice-and-comment process established by the Administrative Procedure Act (APA) when it planned to issue a new interpretation of a regulation that differs significantly from its prior interpretation.

Distinction Between Legislative Rules and Interpretive Rules

In a unanimous decision, the U.S. Supreme Court ruled that the text of the APA specifically excludes interpretive rules from the notice-and-comment process, so the DOL was free to change its interpretation on loan officers qualifying for the administrative exemption without providing advance notice or seeking public comment first. The Court pointed to the difference between “legislative rules” that have the force and effect of law, which must go through the notice-and-comment period, and “interpretive rules” that do not have the force and effect of law and, therefore, are not subject to the notice-and-comment obligation.

Finding that the clear text of the APA exempted interpretive rules from the notice-and-comment process, the Court overruled prior precedent in a line of cases that has come to be known as the Paralyzed Veterans doctrine. Under that doctrine, if an agency had given its regulation a definitive interpretation, the agency needed to use the APA’s notice-and-comment process before issuing a significantly revised interpretation. The Court’s ruling today specifies that no notice or comment process is needed for interpretive rules, whether it is an initial interpretation or a subsequently revised one.

Implications of Court’s Decision

Today’s ruling means that the DOL’s interpretation excluding mortgage-loan officers from the administrative exemption stands. More broadly, it means that federal agencies, such as the DOL, are permitted to issue and amend interpretations of their regulations that will take effect immediately without any advance notice to the regulated parties. Accordingly, employers should stay on top of new developments so as not to miss any new regulatory interpretations that may impact their employment practices.

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March 2, 2015

EEOC Strategic Enforcement Priorities: Insight from Denver’s Director (Part One)

By Jude Biggs

Knowing the Equal Employment Opportunity Commission’s (EEOC’s) top priorities can help you direct your risk management efforts and avoid enhanced scrutiny. John Lowrie, the new director of the EEOC’s Denver Field Office, recently spoke to the Labor and Employment Section of the Colorado Bar Association about the agency’s national Strategic Enforcement Plan (SEP) and how his office will approach those enforcement goals. This article is the first in a series that will share Mr. Lowrie’s insight into how EEOC investigators and attorneys in the Denver Field Office work toward fulfilling the national enforcement priorities.

Certain EEOC Charges Get Immediate Attention

The Denver field office currently has 12.5 investigators, 7 attorneys, 3 mediators and 1 administrative law judge. With the volume of charges received by the Denver office remaining steady at between 1,800 to 2,000 charges each year, charges alleging certain types of claims get enhanced attention which can include immediate review by the legal staff, up to and including the director himself.

Which charges receive this immediate attention? Any charge that touches on one of the EEOC’s six national strategic enforcement priorities. Here we discuss the first two priorities in the national SEP, including Mr. Lowrie’s perspective from the Denver Field Office.

Priority #1 – Remove Barriers to Employment

According to Field Director Lowrie, there are two main components to the EEOC’s first enforcement priority of removing barriers to employment: (1) arrest and conviction records, and (2) medical screening questions and procedures. If a charge alleges discriminatory use of criminal background checks in hiring or the inappropriate timing or use of medical questions or exams, the EEOC will escalate that charge for immediate review.

The EEOC has brought several high-profile lawsuits in the past few years alleging that blanket “no hire” policies that prohibit hiring an applicant with a criminal record have a discriminatory impact on African Americans and other protected classes in violation of Title VII. In the Peoplemark case, however, the EEOC was ordered to pay the prevailing employer over $750,000 in attorneys’ and expert witness fees when the court ruled that no company-wide criminal background check policy existed, an allegation that was essential to the EEOC’s case. Similarly, in the Freeman case, a federal appeals court recently upheld the dismissal of the EEOC’s case, calling its expert’s analysis “utterly unreliable.” Despite its losses, the EEOC is pursuing claims based on criminal background checks, with lawsuits against BMW, Dollar General and other companies still ongoing.

Priority #2 – Vulnerable Workers

The second strategic enforcement priority is the protection of vulnerable workers. Field Director Lowrie explained that this includes agricultural workers, immigrant and migrant workers and mentally disabled workers.

When discussing immigrant and migrant workers, Mr. Lowrie noted the EEOC does not look at whether the workers are authorized to work in the U.S. or if they are in the country illegally, commenting that the EEOC is not ICE or Homeland Security. Instead, the EEOC looks to enforce the anti-discrimination laws under its jurisdiction so that employers do not escape enforcement just because they use unauthorized workers.

As for protecting mentally disabled workers, Mr. Lowrie specifically mentioned the EEOC’s win in a case against a turkey farm in the Midwest in which over thirty men with intellectual disabilities were housed in substandard facilities, denied medical care and harassed both verbally and physically for years.

Stay Tuned for Insight into Other Top EEOC Priorities

In the next few weeks, we will explore the EEOC’s remaining strategic priorities. In the meantime, review your background check policy to ensure you do not have a blanket “no hire” criminal record exclusion. Check that your employment application does not state that applicants will be automatically excluded if they have a criminal record. Make sure that you do not ask for medical information, such as family medical history, or send applicants for a medical exam until after a conditional job offer has been made. Be careful with wellness programs, ensuring they are voluntary. And if you employ vulnerable workers, make certain that your policies and practices do not single them out for disparate treatment in pay, job assignments or other conditions of employment.

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February 23, 2015

Exempt Employee Salary Deductions for a Reduced Schedule

By Brad Cave

Classifying an employee as exempt under the Fair Labor Standards Act (FLSA) comes with a trade-off. Most employers know that exempt employees are not entitled to overtime. But, in exchange for that benefit, the FLSA limits employers’ ability to reduce the exempt employee’s salary, even when they are not coming to work. However, exempt employees are not immune from needing time off of work to recover from a medical condition, to settle an aging parent into an assisting living arrangement or to handle a long-term behavioral issue with a child. If an employee seeks some time off each week to take care of such matters, you may agree to allow the employee to work a reduced work schedule for a period of time. But when payday rolls around, must you pay the employee his or her full weekly salary or can you deduct pay to reflect the reduced work schedule? Missing this answer can have significant ramifications for the employee’s exempt status.

FLSA Salary Basis

Under the Fair Labor Standards Act, exempt employees’ pay must meet the salary basis test, which means that the employee must receive a predetermined amount of salary for each workweek, without reductions because of variations in the quality or quantity of work during the week. Thus, deductions from salary for reduced working hours is generally not permitted under the salary basis test. Deducting pay for the missed time could result in the loss of the employee’s exempt status. However, two exceptions may apply to your employee.

FMLA Leave Can Result in Pay Deduction

If the employee’s reduced schedule constitutes unpaid leave under the Family and Medical Leave Act (FMLA), the FLSA regulations permit employers to “pay a proportionate part of the full salary for time actually worked” without risk to the exempt status. This means that if your employee is missing work for an FMLA-qualifying reason, you may deduct pay from their weekly salary to reflect the unpaid FMLA leave time.

PTO, Sick Leave or Other Paid Leaves

If the employee has accrued PTO, sick leave or another type of company-provided paid leave, you can require that the employee use such paid leave to cover the partial day absences, as long as the employee continues to receive the full amount of their weekly salary. And, once the employee uses up all of their accrued paid leave, you can make salary deductions for full-day, but not partial-day, absences.

Saved Wages Vs. Loss of Exempt Status

Deductions from an exempt employee’s salary should be made only after careful consideration of the potential consequences. After all, the salary you save now for missed time may seem trivial if you lose the exempt status of this and all similarly-situated employees and owe them overtime for the past two years.

February 16, 2015

Lessons From a $15M Discrimination Verdict

By Mark Wiletsky

A Colorado federal jury reportedly awarded $15 million last week to 11 workers who claimed they had been subject to workplace harassment, discrimination and retaliation because of their race and national origin. Ten of the 11 current and former workers who sued their employer, a trucking and mail-sorting company at Denver International Airport, were black men. Three had been born in the United States and the remaining seven were from Mali, Guinea and Brazil. Their allegations included that racist comments pervaded the workplace, that they were discriminated in work assignments, layoffs and pay and were segregated into certain unfavorable job categories and shifts, and that they faced retaliation after complaining about the harassment and discrimination.

Although we do not know exactly which facts or claims persuaded the jury to award this large sum, the fact that the jury awarded $13 million dollars for punitive damages suggests that it believed the company’s actions (or inactions) were particularly bad.

What can you learn from this significant discrimination verdict? Even if the verdict is later reversed or reduced, you can learn what not to do when managing a racially and ethnically diverse workforce.

Ignoring Complaints and Promoting the Harassers

The workers in this case alleged that they complained internally about racist comments and slurs made by supervisors, leads and co-workers and that nothing was done. Examples of some supposed comments directed toward the workers were “lazy, stupid Africans,” “go back to your f***ing country,” “they need to fire all the n***ers here” as well as regular use of the N-word. Instead of stopping the comments, management supposedly turned a deaf ear and even promoted some of those who made the slurs.

Don’t ignore inappropriate comments when you hear them. It is up to you to stop racial and ethnic slurs immediately and take action to ensure they are not pervasive in your workplace. If an employee complains about discriminatory name-calling and threats, you need to investigate the report and take appropriate action. Be sure to confirm—in writing—that you met with the accuser(s) to discuss the results of your investigation, and ensure there is no retaliation. Then follow-up again to ensure things have improved. Doing so will demonstrate your commitment to a workplace free from discrimination and harassment – so long as you are prepared to take action against those who violate your policies.

Failing to Enforce EEO and Harassment Policies

You likely have an Equal Employment Opportunity and a Harassment policy in your employee handbook, but they do no good if you fail to enforce them. Review your policies, train your supervisors on them and enforce them uniformly and consistently.

Retaliating Against Those Who Complain or Their Supporters

The eleventh worker who sued the trucking company in this case was a white man who offered support for the African workers and provided evidence supporting their allegations. After being terminated from his job, he alleged his firing was in retaliation for his support.

Retaliation is within company control and in many cases, is preventable. Train your supervisors not to treat an employee who has complained of discrimination or harassment, or who has participated in a charge or lawsuit, differently than other employees are treated. Carefully analyze any adverse decision that would affect such an employee and make sure your decision is based on legitimate business reasons and is well-documented, in case you have to defend a retaliation complaint.

Fifteen Million Reasons To Do It Right

You don’t want to end up in front of a jury defending your employment practices, but if you find yourself in that position, you want to be able to show a jury you did everything you could to prevent discrimination and harassment in your workplace. If you don’t take those actions, a jury may very well punish you for it.

December 23, 2014

National Labor Relations Board continues down a controversial path!

By Steven M. Gutierrez

In recent years, the National Labor Relations Board (“NLRB”) has issued some notable decisions that impact both union and non-union employers nationwide. In the past month, two important pronouncements have been made by the NLRB. Both are controversial; however, anyone that has been following the last several years’ NLRB activity, neither was unexpected.

The first pronouncement is found in a holding of the NLRB issued on December 11, 2014 in Purple Communications, Inc., 361 NLRB No. 126. In this matter, Purple Communication’s electronic communications policy, which prohibited employees of Purple Communications from using the company’s email and communication systems in activities on behalf of organizations that had no professional or business affiliation with the company, was found unlawful. In holding that the policy was unlawful, the NLRB overruled Register Guard. Under Register Guard, employers could prohibit employees from using the employer’s email system, provided that the ban was not applied discriminatorily. Under the new Purple Communications standard, there is now a presumption that employees who have been given access to the employer’s communication system are entitled to use that system to engage in concerted protected activity during their non-working time. Employers who can show special circumstances can justify a ban on this kind of communication, but the burden will be high and the ban must be supported by evidence that there is a specific business interest at issue.

The second pronouncement comes from the issuance of a final rule, on December 12, 2014, when the NLRB amended representation election procedures. The new rules become effective on April 14, 2015. Pursuant to the final rule, the time period between filing of a union election petition and the date of the election is reduced and expedited. What normally would have taken six to seven weeks, will now be accomplished in 10-21 days. Further, issues related to voter eligibility and bargaining unit inclusion are resolved after the election. Notably, an employer will now be required to submit a “Statement of Position” prior to the pre-election hearing, and will be found to waive arguments concerning the election that are not raised in the Statement of Position. This new rule will most certainly make it easier for unions to organize and reduce the time an employer previously had to communicate with its employees in advance of a union petition requesting a vote.

Based upon these two developments and others in the past year, you can be virtually certain that the NLRB will continue with its controversial ways in the coming year. It is clear to this author, the NLRB would like to make it easy for unions to assert greater influence and stem the tide of the continued decline in membership.

December 15, 2014

Are Your Employee Handbooks and Policies Up-to-Date?

By Mark Wiletsky

As 2014 comes to a close, employers should consider reviewing and, if necessary, updating handbooks, policies, and employment agreements. Organizations sometimes devote significant resources to developing policies or handbooks, but if they are not regularly updated or revised, the policies and handbooks may not be particularly useful. In fact, an outdated policy may end up causing confusion among employees and managers, or create issues for the organization if a dispute arises. To avoid these issues, consider (among other things):

Changing your handbook to eliminate old or outdated policies, and ensure the current policies accurately reflect current practices;
Reminding employees about key policies, such as anti-discrimination/harassment and nondisclosure policies; and
Revising or updating nondisclosure, noncompetition, and/or nonsolicitation agreements. In Colorado, continued employment is generally sufficient consideration for such agreements, but in other states or jurisdictions, that might not be the case, so tying an update to a year-end bonus, raise, or promotion may be a good way to ensure adequate consideration exists for new or revised agreements.

Rolling out new or updated policies in the first quarter of 2015 may be a good way to introduce new and existing employees to the changes or updates. In addition, if you do not already do so, consider highlighting key policies, such as anti-discrimination and anti-harassment, or conducting an annual training on critical policies. Doing so may limit potential claims, or at least put you in a better position to defend against a claim down the road.

December 12, 2014

Supreme Court Says No Pay For Security Screening Time

Supreme Court Says No Pay For Security Screening Time

By Brad Williams

Should employers pay employees for time spent in mandatory, post-shift security screenings designed to deter theft? Not according to a recent Supreme Court decision.

On December 9, 2014, the Supreme Court unanimously held in Integrity Staffing Solutions, Inc. v. Busk, No. 13-433 (2014), that post-shift, anti-theft security screenings are not compensable work time under the Fair Labor Standards Act (FLSA). The decision reversed a Ninth Circuit decision holding that workers in two Amazon.com warehouses were entitled to pay for periods spent waiting for, and being screened at, security checkpoints after their shifts had ended. The workers claimed that they spent roughly twenty-five minutes per day in such screenings, which included removal of their wallets, keys, and belts.

Splitting from other courts to have considered the issue, the Ninth Circuit held that such time was compensable because the workers’ post-shift screening activities were necessary to their principal work activities, and were performed for the benefit of their employer. However, the Ninth Circuit’s understanding of compensable work time under the FLSA echoed that in earlier judicial decisions that had been expressly overruled by Congress.

Specifically, in response to a flood of litigation caused by the earlier decisions, Congress had passed the Portal-To-Portal Act in 1947 to clarify that employers are not obligated to pay employees for activities which are “preliminary” or “postliminary” to the principal activities they are employed to perform. As such, time spent before or after a worker’s “principal activities” is not compensable unless it is spent on activities that are themselves “integral and indispensable” to the worker’s principal activities. Regulations interpreting the Portal-To-Portal Act had long held that activities like checking into and out of work, or waiting in line to receive paychecks, is not compensable work time.

In its December 9th ruling, the Supreme Court reaffirmed that just because an activity may be required by, or may benefit, an employer, does not mean that it is a compensable “principal activity,” or is “integral and indispensable” to a principal activity. The warehouse workers’ employer did not employ the workers to undergo security screenings; it employed them to retrieve products from warehouse shelves and to package the products for shipment to customers. The security screenings were also not “integral and indispensable” to the warehouse workers’ principal activities because their employer could have eliminated the screening requirement altogether without impairing the workers’ ability to perform their jobs.

In reaching its decision, the Supreme Court stated a new definition of “integral and indispensable” activities to guide lower courts. An activity is now “integral and indispensable” to an employee’s principal work activities if it is an “intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.” Examples include time spent by battery-plant employees showering and changing clothes because chemicals in the plant are toxic to humans. It also includes time spent by meatpacker employees sharpening knives because dull knives cause inefficiency and other problems on the production line.

The Supreme Court’s decision gives employers much-needed certainty regarding the compensability of certain “preliminary” or “postliminary ” activities. It clarifies that most employers may continue performing uncompensated pre- and post-shift security or anti-theft screenings without fear of successful FLSA collective actions. The decision is particularly relevant to employers in the retail industry, who regularly conduct anti-theft screenings, and to other employers who are increasingly performing security screenings in an era of heightened concerns over terrorism.

Because the FLSA sets minimum standards for wage and overtime payments, states may set higher standards for compensable work time, including with respect to “preliminary” or “postliminary” activities. Unions may also bargain with employers to make such activities compensable. But the Supreme Court’s recent decision helps push back on the tide of FLSA collective actions filed by employees claiming that certain activities are compensable because they are essential to their jobs. The decision also follows a similar Supreme Court decision in January 2014, Sandifer v. U.S. Steel Corp., No. 12-417 (2014), in which the Court held that time spent by union-employees donning and doffing personal protective equipment was not compensable. Taken together, these decisions suggest a concerted judicial effort to address the explosion of FLSA collective actions.