ROBERT HOLMES BELL, District Judge.
This is a putative collective action brought by seven
Labor Ready is a temporary employment service that provides human labor, or "employees," to businesses in need, or "customers." Though employees perform work for and subject to the supervision of customers, they are employees of, and paid by, Labor Ready, not the customers. Labor Ready's revenue derives from the difference between the hourly rate at which it charges customers for use of employees' services, and the hourly rate at which it pays employees. This action stems from Labor Ready's practice of paying employees
As with most jobs, prospective Labor Ready employees must complete an employment application. Labor Ready verifies that the applicant is authorized to work in the United States and is otherwise qualified prior to extending the applicant an employment offer. Applicants that are given an employment offer are not automatically entitled to specific working hours or a regular paycheck; rather, they are merely added to Labor Ready's eligible workforce, and permitted to request jobs as customers make them available.
Labor Ready employs a so-called "best fit" policy in determining which employee to select to fill a customer's work order. Occasionally, Labor Ready will seek out a particular employee to fill a position. More commonly, Labor Ready selects an employee from a list of employees that "register" to work on the day that work is available.
To register, an employee must appear in person and sign in at a regional Labor Ready dispatch office. Though many do so early in the morning, employees can register at anytime throughout the day, and they are considered for any jobs that become available after they register.
Employees that are given an assignment are expected to arrive at the customer's location prior to the start of the job. The record, however, reveals significant variations from employee to employee and from day to day in the experiences of employees after they accept a work assignment and before they begin work at a customer's location. For each assignment, the customer is required to complete and return to Labor Ready a "work ticket" on behalf of the employee, which is Labor Ready's means of tracking hours worked and payment. If an assignment is expected to last more than one day, Labor Ready issues a "repeat work ticket" which collects information from each day of a multi-day assignment and excuses an employee from having to procure a work ticket on any day covered by the repeat work ticket. If an assignment is not expected to last more than one day, the daily issuance of a separate work ticket is required. Occasionally, Labor Ready will fax the work ticket to the customer, or have a Labor Ready representative drop it off. More commonly, however, Labor Ready will simply provide the work ticket to the employee that accepts the assignment, and have that employee deliver it directly to the customer at the start of the job.
Employees charged with transporting the work ticket either receive the work ticket from Labor Ready at the time they accept their assignment, or make a special trip to Labor Ready to retrieve the work ticket sometime after accepting the assignment
After an employee has been given a work ticket and otherwise cleared for departure, a process known as "dispatch," the employee is free to use the time between dispatch and the start of the job in any manner desired. Dispatched employees may stop for gas and/or a meal on their way to a job site, and employees that have been dispatched several hours to a full day prior to the start of their job can go home, eat, and sleep before traveling to the customer's location. Labor Ready requests only that the employee arrive at the customer's location at the time indicated on the work ticket.
Sometime after completing an assignment, employees are required to return to the appropriate Labor Ready dispatch office, sign out, file the completed work ticket, and collect payment. Employees have the option of returning to the dispatch office immediately following completion of an assignment, but they are not required to do so. Employees often wait several days before returning to the office to sign out and collect payment.
Plaintiffs claim that they should have been paid for time spent waiting in a Labor Ready dispatch office prior and subsequent to receiving an assignment, as well as time spent traveling to and from a customer's location prior and subsequent to completing an assignment. Plaintiffs claim that, by not compensating them for waiting and travel time, Labor Ready paid Plaintiffs an hourly fee below minimum wage, and that Labor Ready was able to avoid paying Plaintiffs for overtime in violation of the FLSA and MWL.
Labor Ready is entitled to summary judgment on Plaintiffs' claims if the pleadings and affidavits "show that there is no genuine issue as to any material fact and that [Labor Ready] is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c)(2). To withstand a motion for summary judgment, "there must be evidence on which the jury could reasonably find for the [non-moving party]." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Labor Ready moves for summary judgment on the ground that, as a matter of law, it is not required to compensate its employees for waiting and travel time. Whether an employer must compensate for waiting time involves a similar but different legal analysis than whether an employer must compensate for travel time.
Under both federal and state law,
Whether waiting time is for the benefit of the employer or the employee depends on all the circumstances of the case. Armour, 323 U.S. at 133, 65 S.Ct. 165; Skidmore v. Swift, 323 U.S. 134, 136-37, 65 S.Ct. 161, 89 L.Ed. 124 (1944); 29 C.F.R. § 785.14. Nevertheless, courts consider several non-controlling and non-exhaustive factors in determining whether waiting time is predominately for the benefit of the employer or employee. First, courts consider whether the agreements and understandings between the employer and employee indicate that waiting time will be compensated.
The agreements and understandings between the parties clearly indicate
The day-to-day decision to seek an assignment is always reserved solely to the discretion of the employee. The employment application makes clear that: "I understand that I am not required to work on any particular day and whether I report to a Labor Ready branch office is always my choice." (Dkt. No. 46, Def.'s Mot. Exs. A(1), A(2).) It also provides: "I understand that I am free to leave the dispatch office at any time." (Id.) The remaining evidence indicates that Labor Ready's practice was entirely consistent with this policy. Employees acknowledged that they were never under an obligation to make themselves available for an assignment. Some employees would go several years without reporting to Labor Ready after their employment applications were accepted, but they were always welcome back when they decided it was time to again begin seeking jobs.
In this sense, waiting in the Labor Ready office is never requested or required. It is an employee's own desire to work that drives his or her decision to register for work, not a requirement or request imposed by Labor Ready. If an employee does desire to seek work, Labor Ready encourages him or her to wait in the Labor Ready office by reserving the right to prefer employees that are physically present in the office, and thus demonstrably ready, willing, and able to work, to those that are not in delegating assignments. (Dkt. No. 46, Ex. A (employment application) ("I understand that ... I have a better opportunity for work if I am present when a job assignment is called.").) The use of economic incentives, such as the increased likelihood of being hired, to encourage waiting has been called "economic compulsion." Irwin v. Clark, 400 F.2d 882 (9th Cir.1968). Courts have held that economic compulsion should be considered in determining whether waiting is for the benefit of the employer. Id. at 884. However, in this case Labor Ready's policy of preferring present employees actually preserves Labor Ready's policy of permitting employees to seek work only when they desire. By encouraging employees seeking an assignment to appear in the office, Labor Ready is also able to identify those employees that are not seeking work, and to accordingly respect this decision. Even if Labor Ready's policy of encouraging employees to wait for assignments is somehow motivated by its own self-interest, economic compulsion, though a consideration, does not control whether waiting is for the benefit of the employer or employee, and other factors should be weighed against it. Id.
After an employee receives an assignment and is "dispatched," a process that generally occurs at least one-hour before the start of a job, the employee is not required, or even encouraged, to wait, or subject to any other control measures imposed by Labor Ready prior to the start of the job. If an employee is not given a work ticket at the same time he or she is
If an employee decides to wait for an assignment, it is undisputed that he or she is permitted to use that time any way he or she wants. While waiting, employees can watch television, socialize with other workers, read, use the restroom, drink coffee, and smoke cigarettes. In addition, the employment application permits employees "to leave the dispatch office at any time," and employees that take advantage of this right are permitted to return to the dispatch office at their leisure and resume their pursuit of employment. (Dkt. No. 46, Ex. A.) Labor Ready exerts no control over the employees during this time period.
An employee's free will is similarly unrestrained after the employee is given an assignment and dispatched. The employment application provides: "I understand that after receiving a job assignment I am free to leave the branch office and do as I wish until the job assignment starts." (Id.) The record indicates that Labor Ready's practice follows its policy. After dispatch, employees are permitted to stop for gas, stop for food, or otherwise use the time in any manner they wish, as long as they report to the customer's location at the required time.
Plaintiffs cite two alleged benefits to Labor Ready resulting from the physical presence of employees in the dispatch office. However, neither of these benefits are sufficient to convince the Court that the employees' wait time is predominantly for the benefit of Labor Ready as opposed to the employees.
First, Plaintiffs argue that employees' waiting ensures that Labor Ready has access at all times to a ready and willing supply of employees, which permits Labor Ready to promptly fill customer orders. Plaintiffs are correct that Labor Ready touts as one of its "primary competitive advantages" the "[a]bility to fulfill short-term customer orders with short notice." (Dkt. No. 49, Ex. B-1 at 6.) However, Plaintiffs' argument that in-office waiting gave Labor Ready the benefit of quick access to employees is undermined by two uncontroverted facts. First, employees are at all times free to reject assignments. (Dkt. No. 46, Ex. B at 75, Ex. C at 110, Ex. D at 35.) Thus, even a full lobby did not guarantee that Labor Ready would always be able to satisfy its customers' labor demands promptly because nothing obligates the employees to accept any given job. Second, Labor Ready has the option of satisfying its customers' labor demands promptly by delegating assignments to employees who are not physically present at the office. (Dkt. No. 46, Ex. B at 99, Ex. C at 103, Ex. D at 46.) For these two reasons, Labor Ready's ability to guarantee the prompt and continuous delivery of labor to its customers is not dependent on the physical presence of employees in the office.
Plaintiffs also argue that waiting benefits Labor Ready in that it permits Labor Ready to observe the employees prior to dispatch, ensure they are physically and mentally prepared to work, and ensure
Even assuming an employee's preparedness at dispatch can accurately forecast whether the employee will be prepared at the start of the job, the Court holds that the preparation rituals performed by Labor Ready prior to dispatch benefit the employees as much, if not more, than Labor Ready. Customers have a right to reject employees that are not fit to the task. If an employee is rejected, the employee generally is not paid.
Time Plaintiffs spent waiting in the Labor Ready dispatch office prior to the start of an assignment was predominately for the benefit of Plaintiffs, not Labor Ready. Labor Ready offered Plaintiffs the unique option of being able to work only when they wanted to work, and to accept only the types of jobs they wanted to accept. As an incident of this arrangement, however, Plaintiffs were occasionally required to appear at the Labor Ready office proclaiming their desire to work. Despite the fact that Labor Ready was able to use Plaintiffs' wait time to ensure employees were prepared to work, the Court is convinced that the wait time was overwhelmingly for the benefit of Plaintiffs. No reasonable fact finder could determine otherwise. See Anderson v. Liberty
Generally, the Portal-to-Portal Act, 29 U.S.C. § 254(a), requires employers to pay employees only when they are engaged in "principal activities of employment," and not those activities that are considered "preliminary or postliminary" to the principal activities. Travel time is generally not considered a principal activity of employment. 5 C.F.R. § 551.422(b) ("An employee who travels from home before the regular workday begins and returns home at the end of the workday is engaged in normal `home to work' travel; such travel is not hours of work."). There are, however, certain exceptions to this rule. First, travel time may be a principal activity of employment if it is "an indispensable part of performing one's job" rather than "ordinary home to work travel which is a normal incident of employment." Vega v. Gasper, 36 F.3d 417, 424 (5th Cir.1994) (quoting 29 C.F.R. § 785.35); see also 29 U.S.C. § 254; IBP, Inc. v. Alvarez, 546 U.S. 21, 37, 126 S.Ct. 514, 163 L.Ed.2d 288 (2005); Steiner v. Mitchell, 350 U.S. 247, 256, 76 S.Ct. 330, 100 L.Ed. 267 (1956). Second, even if the travel itself is not an indispensable part of performing one's job, travel time is compensable if it "occur[s] after the employee commences to perform the first principal activity on a particular workday and before he ceases the performance of the last principal activity on a particular workday." 29 C.F.R. § 790.6(a); see also Jordan v. IBP, Inc., 542 F.Supp.2d 790, 800 (M.D.Tenn.2008) ("Thus, preliminary and postliminary activities are compensable under the FLSA, in spite of the Portal-to-Portal Act, so long as they occur after the workday has begun and before it has ended."); 29 C.F.R. § 790.7(c) (noting that the limitation on the compensability of travel does not "include travel from the place of performance of one principal activity to the place of performance of another, nor does it include travel during an employee's regular working hours."); 29 C.F.R. § 785.38 ("Where an employee is required to report at a meeting place to receive instructions or to perform work there, or to pick up and to carry tools, the travel from the designated place to the work place is part of the day's work ...."). This is known as the "continuous workday" rule. IBP, Inc. v. Alvarez, 546 U.S. 21, 28, 126 S.Ct. 514, 163 L.Ed.2d 288 (2005). Plaintiffs claim that travel time to a customer's location at the start of the workday, as well as travel time from the customer's location at the end of the workday, fall within both exceptions to the general rule that travel time is not compensable.
The evidence indicates that sometimes employees travel to a job site from home, and sometimes employees travel to a job site from a Labor Ready dispatch office. It is first important to establish that, regardless of whether an employee departs from home or from a Labor Ready office, travel time to the customer's location is not compensable as part of the continuous workday rule. Plaintiffs' argument that travel time is compensable as part of the continuous workday rule hinges entirely on Plaintiffs' argument that pre-dispatch waiting time is the start of the workday, an argument that the Court rejected above.
Nor is travel time compensable as an indispensable part of the employee's principal activity of employment. Plaintiffs seem to argue that travel to the customer's worksite is an indispensable part of employment
The evidence indicates that after completion of an assignment employees sometimes travel from a job site to a Labor Ready dispatch office to immediately sign out and collect payment, and sometimes employees travel from a job site to home, and return to a Labor Ready office hours or even days later to sign out and collect payment. Regardless of whether an employee travels from a job site to a Labor Ready office or home, travel time from the customer's location as a matter of law is not an indispensable part of the employee's principal activity of employment. Plaintiffs find it significant that, as with an employee's commute to a customer's worksite, employees often bring paperwork along with them. However, as discussed above, the mere transport of paperwork, which can be transported by other means and is not necessary for the employee to perform the customer's job, is not sufficient to make travel from the customer's location an indispensable part of employment.
Plaintiffs also argue that travel from the customer's location should be compensated pursuant to the continuous workday rule. Since the travel itself is not a principal activity of employment, Plaintiffs need to identify a principal activity of
The four factors courts consider to determine whether waiting time is for the primary benefit of the employer and thus should be compensated—the agreements between the parties, whether waiting was requested or required, an employee's free will while waiting, and the actual benefit of waiting to the employer—clearly indicate that Plaintiffs' waiting in the Labor Ready dispatch office prior to the start of an assignment is not compensable. In addition, Plaintiffs' travel time to and from the customer's location is not compensable as either an extension of the continuous workday or a principal activity of employment. Labor Ready did not violate the FLSA or the MWL by failing to pay Plaintiffs for waiting and travel time, and Labor Ready is entitled to summary judgment on Plaintiffs' claims. An order and judgment consistent with this opinion shall be entered.
In accordance with the opinion entered this date,