By: Rocco DiCicco

Troester v. Starbucks Corp., No. S234969, 2018 WL 3582702 (Cal. Jul. 26, 2018)

In 1961, the Code of Federal Regulations incorporated a prevailing federal common law doctrine known as the “de minimis” doctrine. The de minimis doctrine allows for insubstantial or insignificant periods of time beyond an employee’s scheduled working hours, which cannot as a practical administrative matter be precisely recorded for payroll purposes, to be disregarded.  In other words, an employer is not required to pay the employee for that time. The de minimis doctrine remains firmly established in federal courts, particularly in Fair Labor Standards Act (FLSA) jurisprudence.

Recently, the Ninth Circuit asked the California Supreme Court to provide an advisory opinion as to whether California wage and hour laws have adopted the de minimis doctrine. The Ninth Circuit requested the California Supreme Court’s opinion under the backdrop of a putative class of all nonmanagerial California employees of Starbucks Corporation (Starbucks) seeking unpaid wages for performing off-the-clock store closing tasks from mid-2009 to October 2010. Douglas Troester, the class representative, alleged that Starbucks’s computer software required him to clock out on every closing shift before initiating the software’s “close store procedure” on a separate computer terminal in the back office.  Troester submitted evidence that after he clocked out, he completed other various tasks such as activating the store alarm, walking his coworkers to their cars in compliance with company policy, waiting with employees for their rides to arrive, and occasionally bringing in store patio furniture mistakenly left outside—all of which took approximately 4 to 10 minutes to complete.

In granting summary judgment in favor of Starbucks, the District Court found that over the 17-month period of his employment, Troester’s unpaid time totaled approximately 12 hours and 50 minutes.  At the then-applicable minimum wage of $8 per hour, this unpaid time added up to $102.67, exclusive of any penalties or other remedies. The District Court concluded that the de minimis doctrine applied and granted summary judgment against Troester, holding that Starbucks was not required to pay for that time.

On appeal, the Ninth Circuit recognized that although the de minimis doctrine has long been a part of the FLSA, the question of whether the doctrine applies to wage claims brought under California law was unresolved.  The Ninth Circuit certified this question to the California Supreme Court, which approached its answer to the question in two parts: (1) have California’s wage and hour statutes or regulations adopted the de minimis doctrine?; and (2) if California has not adopted the federal de minimis doctrine, does some version of the doctrine nonetheless apply to the facts presented in this case as a matter of state law?

In answering the first question, the Court firmly held that California’s wage and hour statutes or regulations have not adopted the de minimis doctrine.  The Court, adhering to the general trend in California to provide additional protections for employees beyond those found in federal law, found that a doctrine permitting employees to work for some time each day without compensation is less protective than the language in the Labor Code and the applicable Industrial Welfare Commission Wage Order, which requires compensation for “all hours worked”. Further, neither the Labor Code statutes nor any Wage Order has been amended to recognize a de minimis exception.

In answering the second question, the Court considered that while California recognizes the well-established legal principle that “the law disregards trifles” in some contexts, it declined to decide whether a de minimis doctrine may ever apply to a wage and hour claim, given the wide range of scenarios in which this issue arises.  However, as applied to the facts of this case, the Court held that the de minimis doctrine does not apply.

The Court relied on both California’s traditional expansiveness for defining the time for which an employee must be compensated, and on practical considerations. The Court found it instructive that the Industrial Welfare Commission broadly defines “hours worked” to include preliminary and postliminary activities that are excluded by the FLSA. The Court construed the broad definition of “hours worked” to give little weight to the customary employment practices contemplated by the de minimis doctrine, and instead placed more importance on the policy of ensuring that employees are fully compensated for all time spent under the employer’s control.

On a more practical level, the Court determined that the modern availability of class action lawsuits undermines the rationale behind a de minimis rule with respect to wage and hour actions, since allowing small, individual recoveries can be aggregated to vindicate the public policy of compensating employees for all hours worked.  Further, the Court recognized that many of the problems in recording employee work time that existed when the de minimis doctrine was created may be ameliorated by technological advances that enable employees to track and register their work time via smartphones, tablets, or other devices.

From this case, we learn that while it is unclear whether the de minimis doctrine applies when compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded, California employers must be extremely cognizant of hourly employees regularly working off-the-clock and failing to record “all hours worked”. Businesses that require time-consuming opening and closing procedures must ensure that employees clock in for the day prior to completing any opening tasks, and clock out for the day after completing all closing tasks. Regular unrecorded time, even as little as 10 minutes of unrecorded time each day, is likely compensable, and opens employers up to liability if it is not paid.

Rocco DiCicco is an attorney with Wanger Jones Helsley PC and practices in Fresno and throughout the Central Valley.  Rocco’s practice focuses primarily on business litigation and business transactions, including both real property litigation and transactions, contract disputes, lien enforcement, and corporate governance.  This article is intended to notify our clients and friends of changes and updates to the law and provide general information.  It is not intended, nor should it be used, as legal advice, and it does not create an attorney-client relationship between the author and the reader.