BYBEE, Circuit Judge:
This case turns on $15.02 and one minute. $15.02 represents the total amount of
The district court disagreed and granted summary judgment to TWEAN. The court determined that because the company's rounding policy was neutral on its face and in practice, TWEAN's policy complied with the federal rounding regulation, see 29 C.F.R. § 785.48(b), and Corbin's $15.02 in lost wages did not present an issue of material fact. The court also held that the one minute of uncompensated time Corbin spent logging into an auxiliary computer program before logging into TWEAN's timekeeping software was de minimis as a matter of law.
We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
TWEAN operates a call center in San Diego, California where its employees field telephone calls from customers. Until May of 2010, non-exempt employees at the facility recorded their work hours by swiping their employment badges through a wall clock mounted at the entrance to the call center. After May 4, 2010, TWEAN transitioned to an online timekeeping platform, implementing a recording system known as Kronos Connect. Kronos Connect directly links an employee's time stamps to a program called Avaya, a "soft-phone system" that must be activated before employees can begin taking customer phone calls. When an employee logs into Avaya to begin work, he is automatically clocked into Kronos. Similarly, when an employee logs out of Avaya, he is automatically clocked out of Kronos. The "Avaya/Kronos" system was designed to help prevent off-the-clock work, blocking employees from answering customer calls unless they are properly clocked into TWEAN's timekeeping software.
TWEAN's compensation policies incorporate a "rounding" procedure that relies on the time stamps recorded by the Avaya/Kronos system. When an employee uses Avaya/Kronos to clock in for work, to clock in and out for lunch, and to clock out at the end of the day, the system rounds each time stamp recorded to the nearest quarter-hour. For example, an employee who clocks in at 8:07 a.m. to begin his workday would see his wage statement reflect a clock-in of 8:00 a.m., rounding his time to the nearest quarter-hour and crediting him with seven minutes of work time for which he was not actually on the clock. Similarly, an employee who clocks out at 5:05 p.m. to end her workday would see her wage statement reflect a clock-out of 5:00 p.m., again rounding her time to the nearest quarter-hour and deducting five minutes of work time for which she was actually on the clock. At the end of each pay period, TWEAN's non-exempt employees are paid in accordance with these rounded figures.
Corbin worked for TWEAN at the San Diego call center from July 20, 2007 to June 15, 2011. Hired to answer customer calls, Corbin was classified as a "technical support agent," a non-exempt position paid
Corbin filed this action in the Superior Court of California in 2011. TWEAN removed the case to federal court pursuant to the Class Action Fairness Act. See 28 U.S.C. § 1332(d).
In 2012, Corbin moved to file a second amended complaint, seeking to add several new claims, including the rounding claim at issue in this appeal. That motion was denied later that year, as was Corbin's motion to certify a class of California employees based on the claims alleged in his first amended complaint. Corbin filed a motion for reconsideration on the district court's class certification order in January of 2013. Two months later, the district court granted TWEAN's motion for summary judgment in its entirety and entered final judgment in favor of TWEAN.
We review the district court's grant of summary judgment de novo. Pavoni v. Chrysler Grp., LLC, 789 F.3d 1095, 1098 (9th Cir.2015). We "must determine, viewing the evidence in the light most favorable to the nonmoving party, whether the district court correctly applied the relevant substantive law and whether there are any genuine issues of material fact." Balint v. Carson City, 180 F.3d 1047, 1050 (9th Cir.1999) (en banc). A "genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1031 (9th Cir.2010) (quoting Caneva v. Sun Cmtys. Operating Ltd. P'ship (In re Caneva), 550 F.3d 755, 761 (9th Cir.2008) (as amended)).
We review a district court's decision to grant summary judgment prior to deciding a motion for class certification for abuse of discretion. Wright v. Schock, 742 F.2d 541, 543-44 (9th Cir.1984).
Corbin's core claims center on two of TWEAN's employment practices. First, Corbin argues that TWEAN's rounding policy deprived him of the full amount of his earned wages, specifically overtime compensation. We will refer to this as the "rounding claim." Second, Corbin alleges that TWEAN permitted employees to load auxiliary computer programs before clocking into the Kronos/Avaya system, a practice, he claims, that denied him full compensation for time spent actually working. We will refer to this as the "logging-in" claim. Corbin raises the rounding and logging-in claims as violations under the FLSA, and these violations also serve as the basis for Corbin's claims under California wage laws.
We address each contention in turn.
Corbin argues that TWEAN's rounding policy violates 29 C.F.R. § 785.48(b), the federal rounding regulation, because it is not facially neutral or neutral as applied to Corbin. We reject this argument. However, before addressing whether TWEAN's rounding policy meets the requirements of § 785.48(b), we address Corbin's threshold arguments that seek to undermine the validity of the rounding timekeeping method more broadly.
For more than fifty years, a federal regulation has endorsed the use of "`Rounding' practices." See Wage and Hour Division, Department of Labor, 26 Fed.Reg. 190, 195 (January 11, 1961). Codified at 29 C.F.R. § 785.48(b), the current regulation reads in full:
This regulation permits "employers to efficiently calculate hours worked without imposing any burden on employees," offering employers a "practical method for calculating work time" and a "neutral calculation tool for providing full payment to employees." See's Candy Shops, Inc. v. Superior Court, 210 Cal.App.4th 889, 903, 148 Cal.Rptr.3d 690 (2012). The federal rounding rules have long been applied to
We are not aware of any published decision by a court of appeals addressing the rounding regulation.
Here, Corbin alleges that if an employee loses any compensation due to the
First, Corbin's interpretation reads into the federal rounding regulation an "individual employee" requirement that does not exist. The regulation instead explicitly notes that it applies to "employees" and contemplates wages for the time "they" actually work. 29 C.F.R. § 785.48(b) (emphasis added). If the rounding policy was meant to be applied individually to each employee to ensure that no employee ever lost a single cent over a pay period, the regulation would have said as much.
Second, Corbin's reading of the regulation completely misunderstands the purpose of a rounding policy. Employers use rounding policies to calculate wages efficiently; sometimes, in any given pay period, employees come out ahead and sometimes they come out behind, but the policy is meant to average out in the long-term. If an employer's rounding practice does not permit both upward and downward rounding, then the system is not neutral and "will ... result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked." Id. Such an arrangement "[p]resumably" does not "average[ ] out." Id.; see also Gonzalez, 296 F.Supp.2d at 932-33 & n. 31 (Employees claimed they were systematically harmed by defendant's rounding system because they could not clock in more than seven minutes prior to a shift and because management manually edited the employees' time-punches; the claim presented a genuine issue of fact for trial).
Corbin's argument, if accepted, would undercut the purpose and would gut the effectiveness of a rounding policy. In fact, Corbin's preferred interpretation would require employers to engage in the very mathematical calculations that the federal rounding regulation serves to avoid. The California Court of Appeal has previously rejected this precise contention, explaining that by the terms of Corbin's argument, employers could only "lawfully use the rounding method ... if they engage[d] in a `mini actuarial process at the time of payroll' and reconcile[d] the rounding with actual time punches." See's Candy, 210 Cal.App.4th at 904, 148 Cal.Rptr.3d 690 (quoting plaintiff's argument). Put differently, the employers would have to "un-round" every employee's time stamps for every pay period to verify that the rounding policy had benefitted every employee. If that was the case, why would any employer ever implement a rounding policy at all? The proper interpretation of the federal rounding regulation cannot be one that renders it entirely useless.
We also note that Corbin's preferred interpretation of the federal rounding regulation unfairly rewards strategic pleading, permitting plaintiffs to selectively edit their relevant employment windows to include only pay periods in which they may have come out behind while chopping off pay periods in which they may have come out ahead. For example, consider a hypothetical employee who came out behind in January by ten minutes and fifteen dollars, but came out ahead in February by twelve minutes and eighteen dollars. Even though, "over [this full] period of time,"
Finally, Corbin argues that because overtime minutes are compensated at a higher rate than regular-time minutes, the district court improperly characterized the rounding statute as neutral. In California, employees are entitled to overtime compensation at a "rate of no less than one and one-half times the regular rate of pay for an employee" for time worked beyond eight hours in a single day or forty hours over a workweek. Cal. Lab.Code § 510(a). Because of this variance in compensation rates, Corbin argues, not all rounded time is created equally and the district court erred by finding otherwise.
We disagree for three reasons. First, Corbin offers no case support for the proposition that California's law is at odds with the federal rounding regulation and cites to no precedent that endorses his argument. Second, the only case to address Corbin's argument, See's Candy, explicitly rejected it. 210 Cal.App.4th at 905-06, 148 Cal.Rptr.3d 690. There, the California Court of Appeal explained that the federal rounding regulation had long successfully coexisted with FLSA's own rule mandating overtime pay after forty hours of work over the course of a week. Id. at 906, 148 Cal.Rptr.3d 690. "There is no analytical difference," the court pointed out, "between rounding in the context of daily overtime and rounding in the context of weekly overtime." Id. We agree. Over the long term, TWEAN's rounding system is neutral, favoring neither employer nor employee. Third, TWEAN's rounding policy allows employees to gain overtime compensation just as easily as it causes them to lose it. For example, an employee who clocks in for eight hours and eight minutes of work in a day, will see those eight minutes rounded up to fifteen minutes — all of which will be compensated at the overtime rate.
TWEAN's rounding policy passes muster. First, TWEAN's policy is facially neutral, as TWEAN rounds all employee time punches to the nearest quarter-hour without an eye towards whether the employer
Second, Corbin's own compensation records demonstrate that TWEAN's rounding policy is neutral in application. Sometimes Corbin gained minutes and compensation, and sometimes Corbin lost minutes and compensation. In total, from the time TWEAN implemented the Avaya/Kronos system to the time he resigned his employment with TWEAN, Corbin banked three minutes of unworked time and lost $15.02. Those numbers, however, fluctuated from pay period to pay period, and given that Corbin consistently gained time and compensation in the final pay periods analyzed, a few more pay periods of employment may have tilted the total time/compensation tally in the other direction (Corbin, for example, gained both time and compensation in eight of his last ten pay periods.). TWEAN's rounding policy operated exactly as the federal rounding regulation intended, and Corbin has not shown the existence of a material fact as to whether or not, "over a period of time," he was not properly compensated for his work. 29 C.F.R. § 785.48(b).
We join the consensus of district courts that have analyzed this issue, and find that TWEAN's rounding policy comports with the federal rounding regulation. See, e.g., Alonzo, 832 F.Supp.2d at 1126; East, 34 F.Supp.2d at 1184. Mandating that every employee must gain or break even over every pay period misreads the text of the federal rounding regulation and vitiates the purpose and effectiveness of using rounding as a timekeeping method. The district court properly interpreted and applied the regulation, and we affirm the district court's grant of summary judgment as to Corbin's rounding claim.
Corbin alleges that TWEAN did not properly compensate him for the one minute he spent logging into an auxiliary computer program before clocking into Avaya/Kronos. Corbin points to one example of an uncompensated "log-in minute" over the course of his employment at TWEAN: On March 19, 2011, Corbin logged into an auxiliary program called "AAD" at 8:28 a.m. and did not log into Avaya/Kronos until 8:29 a.m., a loss of one minute of compensable time.
TWEAN argues — and the district court determined — that this single minute amounted to non-recoverable de minimis time. Corbin challenges this holding on two grounds: First, Corbin argues that because TWEAN did not plead the de minimis doctrine as an affirmative defense, it cannot later be asserted by TWEAN to defeat Corbin's logging-in claim.
If a party seeks to assert an affirmative defense, the party "must affirmatively state" that defense in a responsive pleading. Fed.R.Civ.P. 8(c)(1). Rule 8 lists a
Nor can we find any precedent mandating affirmative pleading ourselves. Rather, the United States Supreme Court refers to the de minimis doctrine as a "rule" and does not suggest that it must be affirmatively pleaded by a defendant before being properly applied by a court. See Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 692, 694, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946) (detailing the "application of a de minimis rule" and remanding to the lower court to give "due consideration to the de minimis doctrine") (emphasis added). We have followed the Supreme Court's lead, similarly referring to the de minimis doctrine as a "rule" or "[d]octrine" and not as an affirmative defense. See Lindow v. United States, 738 F.2d 1057, 1062 (9th Cir.1984) (referring to the application of the "de minimis rule"). And the federal regulation codifying the de minimis doctrine follows suit. The de minimis "rule," as the regulation terms it, permits "insubstantial or insignificant periods of time beyond the scheduled working hours" to be "disregarded," but does not require the rule to be affirmatively pleaded in an initial responsive pleading. 29 C.F.R. § 785.47.
We think these guideposts offer the better characterization of the de minimis rule. Often evidence that a particular consequence or fact is de minimis will not be evident from the face of the complaint, but will only emerge with discovery. We do not think parties should be prevented from making arguments they could not have anticipated. Accordingly, we reject Corbin's argument and hold that the district court properly considered the de minimis doctrine even though TWEAN did not affirmatively plead it in its answer.
Turning to the application of the de minimis doctrine, the Supreme Court has long held that, "in light of the realities of the industrial world," a "few seconds or minutes of work beyond the scheduled working hours ... may be disregarded." Anderson, 328 U.S. at 692; see also 29 C.F.R. § 785.47 (citing to Anderson and explaining that "failure to count" a "few seconds or minutes" can be justified by "industrial realities"). "Split-second absurdities" in the recording of employees' work time are "not justified by the actualities
Applying Anderson, we have explained that as a "general rule, employees cannot recover for otherwise compensable time if it is de minimis," pointing out that the "de minimis rule is concerned with the practical administrative difficulty of recording small amounts of time for payroll purposes." Lindow, 738 F.2d at 1062.
To determine if otherwise compensable time is properly classified as de minimis, in Lindow we established a three-prong test, instructing courts to "consider (1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work." Id. at 1063. In Lindow, plaintiff employees alleged that they were required to arrive prior to "the start of their scheduled shifts" in order to review a shift log book "regarding previous shift activities and plant conditions," and to "exchange information and clarify log entries" with employees departing from an earlier shift. Id. at 1059. Despite spending, on average, "about 7 to 8 minutes per day" on these uncompensated tasks over a period of three years, id. at 1059-60, we nonetheless determined that this time was de minimis and non-compensable, id. at 1063-64. We held that because employees "did not always" read the log book or exchange information before a shift, "the administrative difficulty of recording the time" and "monitoring this pre-shift activity" was high. Id. at 1064 (emphasis added). Moreover, we explained, even though the plaintiffs' "aggregate claim may be [a] substantial" amount of minutes, the "irregularity" of the work counseled in favor of finding the time de minimis. Id.
Here, all three factors of the Lindow test support the district court's conclusion that Corbin's one minute of uncompensated time accumulated by logging into an auxiliary computer program before logging into the Avaya/Kronos timekeeping program was de minimis. First, the practical administrative burden on TWEAN to cross-reference every employee's log-in/out patterns is quite high. To do so, TWEAN would have to double-check four time stamps (clocking in/out for work; clocking in/out for lunch) for each employee on each day on the off-chance that an employee accidentally loaded an auxiliary program
Second, the amount of compensable time at issue here is only one minute. Though there is "no precise amount of time" that courts have labeled de minimis per se, "[m]ost courts have found daily periods of approximately 10 minutes de minimis even though otherwise compensable." Id. at 1062. The claim at issue here is far less than the claim classified as de minimis in Lindow (Corbin's total of one minute of uncompensated time over multiple years of employment is roughly an eighth of each employee's claim of uncompensated time for a single day in Lindow), and represents a minuscule amount of time when considered over Corbin's multi-year employment tenure. Accordingly, we find that this factor weighs heavily in TWEAN's favor.
Finally, the uncompensated time at issue here is not "regular" at all — it was the result of Corbin's violation of a company policy mandating that all work activities be on the clock. Indeed, the scarcity of examples to which Corbin can refer indicates that this practice does not occur with "regularity." Corbin explained in his deposition that he knew TWEAN prohibited off-the-clock work and that his standard practice was to log into Avaya/Kronos before booting up any auxiliary programs. And an analysis of Corbin's computer log-in records confirms that aside from the instance outlined above, Corbin faithfully complied with that standard practice over the course of his employment: The vast majority of time, Corbin followed TWEAN's employment policy and logged into Avaya/Kronos before logging into any other programs or beginning any other work.
Because the Lindow factors uniformly lean in favor of TWEAN, the district court properly classified the one minute of uncompensated time as de minimis and appropriately granted summary judgment to TWEAN on Corbin's "logging-in" claim.
Corbin alleges that the district court improperly truncated the relevant employment window by granting summary judgment on all claims pertaining to hours worked before May 4, 2010 — the date TWEAN transitioned from a wall-clock timekeeping system to the Avaya/Kronos online timekeeping system. This artificial reduction in the relevant employment period, he argues, allowed "hundreds of dollars in damages" to go unconsidered. Specifically, Corbin alleges that he was not given a full and fair opportunity to address the impact of the change of timekeeping methods on his rounding claim,
TWEAN has the better of the argument. First, Corbin's operative complaint
Moreover, Corbin had multiple opportunities to explain to the district court how and why his rounding claim should apply to the pre-May 4, 2010 timekeeping system, but never did so. As a "general rule, a district court may not sua sponte grant summary judgment on a claim without giving the losing party ... an opportunity to present new evidence," United States v. Grayson, 879 F.2d 620, 625 (9th Cir.1989), and a "full and fair opportunity to ventilate the issues involved in the motion," Cool Fuel, Inc. v. Connett, 685 F.2d 309, 312 (9th Cir.1982). Here, the district court did just that, explaining to the parties at a hearing on TWEAN's motion for summary judgment held more than a month before it issued its ruling that it was "prepared to grant summary judgment as to any claims to recover for allegations prior to May 4 of 2010, which is the time frame that the employer went from the Kronos card-swipe system to the Kronos/Avaya phone system for clocking in." Corbin, despite being afforded the opportunity to respond, did not object to the pre-May 4 cut-off in his supplemental briefing on the very rounding claim at issue here. In light of the district court's pointed statements and requests, Corbin should have been well aware that he had an opportunity to respond to the truncating of the claims period. He made no such response.
Additionally, there is no genuine issue of material fact as to the applicability of Corbin's rounding claim to TWEAN's pre-May 4, 2010 timekeeping system. Corbin explained in his deposition that after clocking in at the wall-clock, he had a "five-minute grace period ... to get to [his] desk and start up for the day." As Corbin's rounding claim turned on a very precise calculation of whether each individual employment minute was clocked in, rounded, and/or actually spent working, a nebulous daily five-minute period where Corbin perhaps went right to his desk to begin working or perhaps spent the time socializing would be impossible to analyze, especially after multiple years have passed. See Alonzo, 832 F.Supp.2d at 1128-29 (refusing to sustain a rounding claim when time records show only that plaintiffs "may have been present on Defendant's premises but not engaged in work activities"); see also See's Candy, 210 Cal.App.4th at 907-08, 148 Cal.Rptr.3d 690 (same).
The district court did not err in granting summary judgment as to Corbin's pre-May 4, 2010 rounding claims.
To the extent that Corbin properly raised challenges on appeal to the district court's grant of summary judgment to TWEAN on his state law claims, see supra n. 3, those challenges are denied.
California Labor Code § 510(a) explains that "[a]ny work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek ... shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee." Cal. Lab.Code § 510(a). This claim is derivative of the rounding claim analyzed above, and for the same reasons, we find no triable issue of material fact. See supra pp. 1078-79; see also See's Candy, 210 Cal.App.4th at 906, 148 Cal.Rptr.3d 690.
California Labor Code § 226 guarantees each employee an "accurate itemized statement in writing showing (1) gross wages earned, [and] (2) total hours worked by the employee." Cal. Lab.Code § 226(a). Corbin argues that because TWEAN rounded
Finally, Corbin requests that we remand his rounding claim to the district court for a class certification inquiry. Because we hold that the district court properly granted summary judgment to TWEAN as to Corbin's individual rounding claim, there is no need to remand this case to the district court for further proceedings.
The procedural history of this case is convoluted and warrants some discussion. On June 10, 2011, Corbin filed his first amended complaint in district court. This complaint did not explicitly plead a rounding claim. On May 18, 2012, Corbin moved to file a second amended complaint, seeking to add several new claims including the rounding claim at issue here. Three days later, on May 21, 2012, Corbin filed a motion seeking to certify a class of California-based employees as to both the rounding claim and the "logging-in" claim.
On January 2, 2013, Corbin filed a motion seeking reconsideration of the district court's order denying class certification. Corbin (somewhat confusingly) argued that a rounding claim was implied in his first amended complaint all along, and that his later effort to affirmatively plead the rounding claim via an amended complaint was nothing more than a "professional courtesy" to TWEAN.
In its order granting TWEAN's summary judgment motion, the district court explained that "[a]fter a careful review of the first amended complaint," Corbin had properly alleged that "Defendant failed to pay employees for overtime compensation based on Defendant's rounding policy." The district court considered the rounding claim on its merits, proceeded to grant summary judgment for TWEAN, and entered final judgment in favor of TWEAN.
Whatever the answer to Corbin's pleaded-or-not-pleaded argument, the district court's summary judgment ruling on the merits of Corbin's individual rounding claim fully moots the need for any further steps to be taken below. As explained above, see supra pp. 1078-79, the district court properly granted summary judgment
Corbin has failed to demonstrate the existence of a material fact as to his rounding claim, his logging-in claim, or his derivative state claims. Additionally, the district court did not err by limiting consideration of Corbin's rounding claim to the time period after the implementation of the Avaya/Kronos timekeeping system. Finally, because we affirm the district court's grant of summary judgment to TWEAN on Corbin's rounding claim, there is no need for the district court to consider whether that claim can form the basis of a viable class action proceeding.
The decision, because it is unpublished, is not binding on this panel. See Reynolds Metals Co. v. Ellis, 202 F.3d 1246, 1249 (9th Cir.2000). We often issue such dispositions in cases that we do not think sufficiently novel or important to warrant a published opinion. Significantly, our memorandum dispositions typically do not undertake a careful rendition of the facts. See generally Alex Kozinski Stephen Reinhardt, Please Don't Cite This! Why We Don't Allow Citation to Unpublished Dispositions, CAL. LAWYER, June 2000, at 43, 43 (explaining that a memorandum disposition "need not state the facts," and can "often be accomplished in a few sentences"). Thus, it is conceivable that there are facts supporting the conclusion we reached in Gillings that are not included in the disposition. To the extent that Gillings conflicts with this decision, we disagree with it.
Of course, Corbin's argument depends on his beginning work precisely at 9:00 a.m. and working a full eight hours of compensable time. If Corbin arrived at work at 9:03 a.m. (rounded back to 9:00 a.m.), he is, of course, not entitled to any overtime pay for clocking out at 5:03 p.m.
