IBP, Inc. v. Alvarez (03-1238); Tum v. Barber Foods, Inc. (04-66)


Appealed from: United States Court of Appeals, Ninth Circuit (IBP), United States Court of Appeals, First Circuit ) (Tum)

Oral argument: October 3, 2005

EMPLOYMENT LAW, WORKERS' RIGHTS, MEAT-PACKING INDUSTRY, FAIR LABOR STANDARDS ACT, PORTAL-TO-PORTAL ACT

Under the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. ("FLSA"), as amended by the Portal-to-Portal Act, 29 U.S.C. §§ 251-262 ("Portal Act"), an employee must be compensated for the time their employer requires them to spend donning and doffing protective gear. In the combined oral argument for Tum v. Barber Foods, Inc. and IBP, Inc. v. Alvarez, the Supreme Court will consider an important related question—whether an employee is also entitled to compensation for time spent waiting at stations where required safety and health equipment is distributed, donned, and doffed, and traveling to and from these stations to work sites at the beginning and end of each workday.

Under the FLSA, employers must compensate employees for activities performed during the workday. However, the Portal Act, which amended the FLSA, removed employers' obligation to compensate employees for two categories of activities performed outside the workday. These activities include: "(1) walking, riding, or traveling to and from the actual place of performance of the principal activity, and (2) activities which are preliminary or postliminary to said principal activity or activities." Tum and Alvarez ("Employees") contend that walking and waiting at safety stations are inextricably linked to the donning and doffing process, and are principal activities that demark the beginning and end of the workday. The Employees also argue that these activities occur within the workday, and thus, the above Portal Act exceptions are inapplicable. Public policy considerations, such as employee safety, financial welfare, and corporate profitability will figure prominently in the Supreme Court's resolution of these conflicting appellate court rulings. The outcome will also profoundly impact workers' salaries, manufacturing costs, and corporate outsourcing policy.

[Question(s) presented ] | [Issue(s) ] | [Facts ] | [Discussion ] | [Analysis ]

Questions Presented

IBP, Inc. v. Alvarez :
Whether walking that occurs between compensable clothes-changing time and the time employees arrive at or depart from their actual work stations constitutes non-compensable "walking . . . to and from the actual place of performance of the principal activity" within the meaning of Section 4(a) of the Portal-to-Portal Act.

Tum v. Barber Foods, Inc. :
1. Is the time employees must spend walking to and from stations where required safety equipment is distributed compensable under the Fair Labor Standards Act, as amended by the Portal-to-Portal Act, 29 U.S.C. § 216(b), 254(a).
2. Do employees have a right to compensation for time they must spend waiting at required safety equipment distribution stations?

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Issues

Should Employees' walking to and waiting at distribution stations where required safety equipment is distributed to the employees be included as part of either the principal activities for which an employer is employed or integral and indispensable to such principal activities, and therefore compensable under the Portal-to-Portal Act?

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Facts

Tum v. Barber Foods, Inc. , 360 F.3d 274 (1st Cir. 2004)

Tum, representing current and former employees at Barber Foods' poultry processing plant in Portland, Maine, sued to recover unpaid wages for time spent waiting at and walking to stations where required safety equipment is distributed. Federal health and safety regulations, as well as company policy, require employees at the plant to wear lab coats, hair nets, earplugs and safety glasses. Certain occupations within the plant require additional protective gear, including vinyl gloves, hard hats, back belts, steel-toed boots, and steel mesh gloves.

Barber Foods alone controls the distribution of this required equipment, and dispenses it at stations throughout its plant. Under Barber Foods' distribution process, employees begin by waiting in line at equipment cages, where they receive basic protective apparel. They then retrieve required lab coats from racks along a separate narrow hallway. At the end of this hallway, they collect additional equipment from tubs and then generally proceed to the locker room to retrieve hard hats and boots. After donning this protective gear, they then stand in line on a stairway leading to the entrance of the factory floor, where workers must then clock in.

At the end of their shifts, employees reverse the process, removing all of their required equipment and returning it to the cage and various designated lockers, laundry bins, and trash cans. On a typical day, employees spend twenty minutes donning and doffing gear and moving to and from these distribution stations. Specialized workers, such as meatroom employees, spend up to thirty-five minutes daily on these tasks.

In Tum v. Barber Foods, Inc. , the District Court issued, and the First Circuit Court of Appeals affirmed, summary judgment for Barber Foods, holding that the company was not required to compensate the 300 employees at its poultry processing plant for the time spent waiting and walking to stations where required health and safety gear is distributed. Both courts concluded that these tasks were, as a matter of law, "preliminary and postliminary" activities exempted from compensation. See 360 F.3d 274 (1st Cir. 2004)

Alvarez v. IBP, Inc. , 339 F.3d 894 (9th Cir. 2003)

Alvarez, representing employees at IBP's (also known as Tyson Foods ) meat-packing plant in Pasco, Washington, filed a similar suit on nearly identical facts as those described above several months prior to the complaint in Tum. In Alvarez, the Ninth Circuit unanimously reached a contrary conclusion, holding that IBP was required to compensate the 815 workers at its Washington plant for time spent waiting and walking to stations where mandatory protective equipment is distributed. Both the district court and the Ninth Circuit agreed that although the time spent waiting at and walking to these stations might be considered "preliminary and postliminary," such activities are still compensable because they are "integral and indispensable" to the employees' jobs. See Alvarez v. IBP, Inc. , 339 F.3d 894 (9th Cir. 2003).

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Discussion

Mark Twain once remarked, "The clothes make the man. Naked people have little or no influence in society." (The Columbia World of Quotations, 1996, Number 62062.) If the Employees in Tum and Alvarez prevail, however, the scantily-clad may finally find reason to rejoice.

A victory for Employers would remove their obligation to compensate employees for time spent waiting at and walking to stations where safety equipment is distributed. This result would have far-reaching consequences on corporate profitability, United States' competitiveness in the international marketplace, and the take-home salaries of potentially millions of workers.

Because most employees spend fewer than thirty minutes waiting in safety equipment distribution lines and traveling to and from these stations every day, corporate cost savings per individual worker would be slight in most cases. However, labor-intensive businesses which employ tens of thousands of workers could achieve significant aggregate savings. As United States corporations arguably flock to foreign countries in search of cheap, unregulated labor, such cost reductions may discourage business flight, thereby preserving domestic manufacturing jobs. The resulting labor savings resulting from a victory for the Employers would also aid businesses in controlling production costs, enabling them to price goods more competitively.

A victory for the Employers could also produce unexpected ancillary benefits. It may, for example, encourage corporate compliance with Federal and state safety regulations. An employer that does not have to compensate employees for time spent waiting at or traveling to safety equipment stations would have fewer incentives to circumvent these requirements. Finally, if the Employers prevail, companies might also be more willing to adopt stringent safety standards, including requiring additional protective gear, since they would not incur labor costs from the employees' time spent waiting or walking to distribution stations.

On the other hand, a victory for the Employers could also have profound negative impacts. Employees at facilities where extensive protective gear is required would find a significant amount of their time spent at the workplace non-compensable. Forcing workers to labor longer hours for the same pay, and leaving them less time to be with their families and friends, appears intuitively unjust. Further, even a small reduction in daily wages could significantly affect an employee's cumulative annual pay. For example, factory workers, who typically earn marginal incomes, would be especially vulnerable to even slight fluctuations in wages.

Furthermore, a victory for the Employers would remove the incentive for employers to streamline distribution procedures at safety stations. As long as companies do not have to compensate employees for time spent in line or traveling to and from safety equipment stations, they have little reason to improve efficiency.

The Supreme Court's ruling on this issue could potentially impact a sweeping range of occupations. Service employees who must wear specific articles of clothing, including police uniforms, nurse smocks, or carpenter toolbelts, could feel its effects. Indeed, expanding the definition of "principal activity" to include waiting and walking could also entitle employees to compensation for time spent retrieving these articles.

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Analysis

Employees' Argument

The Portal Act requires an employer to compensate an employee for his efforts during the workday, defined as the period between the first and last "principal activity." 29 U.S.C. § 254(a) ; see also Pet'r Tum's Br. at 4. Compensable efforts include not only productive labor, but also traveling between and waiting at work stations during the workday. 29 U.S.C. § 254(a) ; 29 CFR § 790.6 (2005) ; see also Pet'r Tum's Br. at 4. This policy reflects Congress's recognition that it would be "inadministerable" to start and stop the time clock each time an employee waited at or changed work stations. Pet'r. Tum's Br. at 11.

Significantly, the Portal Act removes employers' duty to pay employees when they engage in these kinds of activities outside the workday. 29 U.S.C. § 254(a). Indeed, this statute eliminates employers' obligation under federal law to compensate employees for the following categories of activities:

(1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and

(2) activities which are preliminary to or postliminary to said principal activities—,

which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities.

Id. (emphasis added). Thus, the Employees in this case stress that the Portal Act "does preclude compensation for petitioners' walk from the factory gate to the donning area, but it does not apply to walking during the workday." Pet'r Tum's Br. at 11. Because the Portal Act only removes an employer's obligation to compensate employees for tasks performed outside the workday—while preserving the employer's duty to pay employees for walking, waiting, and other activities occurring during the workday—the precise start and end of that workday is of utmost importance. Id . at 4.

As mentioned above, the Employees insist that the first and last principal activities performed mark the respective start and end of the workday. Pet'r Tum's Br. at 8. The Employees contend that waiting and walking to stations where safety equipment is distributed are, in and of themselves, principal activities that commence and conclude the workday. Id . As such, the walking to and waiting at the safety equipment distribution stations occur inside rather than outside the workday and hence are not covered by the Portal Act exceptions. Therefore, compensation is, according to the Employees, mandatory.

To support their theory of the case, the Employees offer three independent reasons to support their conclusion that waiting at and walking to distribution stations are either "principal activities" or so "integral and indispensable" to principal activities that they require compensation. First the Employees argue that Supreme Court precedent supports the proposition that waiting and walking are integral and indispensable to principal activities. Pet'r Tum's Br. at 10. In Steiner v. Mitchell , the Court held that the specific acts of putting on and taking off mandatory protective clothing were integral and indispensable to the employee's principal activities and hence compensable. 350 U.S. 247, 256 (1956). The Employees argue that walking and waiting are "part and parcel" of the donning and doffing process and, therefore, are similarly indispensable to their principal activities. Pet'r Tum's Br. at 12. The Employees insist that changing into and out of equipment, on the one hand, and walking and waiting at distribution stations, on the other hand, "cannot be sensibly distinguished" because employees "undertake the walking and waiting solely in order to complete the required donning and doffing." Id . at 12-13.

The Supreme Court's conclusion in Steiner that bathing, changing clothes, and dispensing of soiled laundry were integral to employees' principal activities aids the Employees' argument because the holding, they argue, suggests a broader construction of the donning and doffing process, which encompasses not only the specific act of putting on and removing clothes, but also closely related activities, including "walking and waiting as employees [are] given work clothes, chang[ing] into them in locker rooms, chang[ing] out of them at the end of the day, dropp[ing] them off for laundering by the employer, and proceed[ing] to take showers." Pet'r Tum's Br. at 12-13. The Employees, therefore, contend that the broader, more comprehensive understanding of donning and doffing elaborated in Steiner supports classifying waiting and walking as integral and indispensable to the employees' principal activities and should thus be compensable. Id .

Second, the Employees' state that walking and waiting at distribution stations are not only integral and indispensable to principal activities, but are themselves principal activities because they satisfy the FLSA's definition of work. See 29 U.S.C §§ 201 et seq. ; Pet'r Tum's Br. at 2-3. Under the FLSA, work includes efforts " controlled by [the] employer and pursued necessarily and primarily for the benefit of the employer and his business." Tennessee Coal v. Muscoda Local No. 123, 321 U.S. 590, 598 (1944) (emphasis added). In the case at bar, the Employers exclusively control not only the kinds of gear required, but also the time, location, and schedule for retrieving and donning it. Pet'r Tum's Br. at 15. Furthermore, all such safety stations are located on the Employers' premises. Id . In this light, it may be argued that the walking and waiting process was entirely under the Employers' control.

Additionally, clothing requirements may chiefly benefit the Employers. Certainly, the gloves, aprons, and other gear safeguards employees; however, this protective gear is also indispensable to the successful operation of the Employers' businesses. At the Barber Foods ' plant, lab coats and hair nets prevent the spread of germs from human hands, hair, and arms to meats, thus ensuring quality control and compliance with Federal health and safety laws. Vinyl gloves, steel-toed boots, and steel mesh gloves, which protect employees against deep punctures and lacerations while handling cutting instruments, are also necessary to create a safe workplace where employees can work comfortably and securely. The resulting employee confidence in the workplace is a prerequisite to retain and attract workers. Further, by curbing serious workplace injuries, protective gear helps employers avoid costly legal suits and to reduce insurance rates. In light of these conspicuous benefits that the Employers derive from clothing requirements, "there is no serious dispute that the activities at issue in this case constitute compensable —work'" under the FLSA. Pet'r Tum's Br. at 23.

Third, the Employees insist that public policy imperatives command classifying waiting at and walking to the safety equipment stations as compensable activities. Denying compensation for such waiting and walking to locations of donning and doffing could significantly impact employee salaries. Factory employees earning marginal incomes may be chiefly affected by the Supreme Court's decision because many of these employees are especially sensitive to even small fluctuations in wages.

The Employees reject the Employers' contention that employees could unilaterally expand the length of the workday by donning and doffing equipment at anytime. Pet'r Tum's Br. at 12. To the contrary, the Employers exclusively control the time, location, and procedures by which employees receive and put on safety equipment. Id . Thus, an employee could not don his gloves and apron at six o'clock in the morning in order to lengthen the workday. Additionally, the Employers' implicit contention that compensating waiting and walking would balloon labor costs is without merit. Efficiency improvements, including reducing the distance between equipment distribution and work stations, adding distribution stations, and staggering groups and pick-up times, would curb these costs. Id .

Ultimately, the Employees contend that they should prevail. Pet'r Tum's Br. at 10-11. The Employees initially observe that, under Steiner , donning and doffing are integral and indispensable to the principal activities and thus serve to commence and conclude the workday. Id . Significantly, the Portal Act only removes an employers' obligation to compensate employees for tasks performed outside the workday, while preserving employers' duty to pay employees for walking, waiting, and other activities occurring during the workday. Id . Thus, at the very least, any walking or waiting that occur between the time an employee dons his equipment in the morning and doffs his equipment in the evening should be compensable.

Employers' Argument

The Employers contend that the plain language of the Portal Act expressly eliminates employers' obligation to compensate workers for time spent waiting and walking to stations where required equipment is distributed. Resp't Barber Foods' Br. at 6-7. The Portal Act exempts "walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform." 29 U.S.C. § 254(a). The Employers insist that "the principal activity or activities which such employee is employed to perform" is neither donning and doffing equipment nor waiting and walking to distribution stations, but rather poultry processing. Resp't Barber Foods' Br. at 7. Further, the Employers contend that the place of performance of the principal activity is the production floor and that any walking, riding, or traveling to and from the production floor should be non-compensable. Id .

The Employers reject the Employees' contention that Steiner classified donning and doffing as principal activities demarking the beginning and end of the workday. See Steiner , 350 U.S. at 256; Resp't Barber Foods' Br. at 7. Further, the Employers argue that even if the walking and waiting are integral and indispensable to employees' principal activities under Steiner , superseding language in Section 4(a)(1) of the Portal Act specifically bars compensation for "walking, riding, or traveling to and from the actual place of performance." See Steiner , 350 U.S. at 256; Pet'r Alvarez's Br. at 21.

The Employers further contend that exempting from compensation the walking to and from and waiting at safety equipment distribution stations fulfills the legislative intent of the Portal Act. See Amicus Br. , The Chamber of Commerce of the United States, National Association of Manufacturers, Society For Human Resources Management, and Association of International Automobile Manufacturers at 4-6. Congress sought to provide a default rule of non-compensability for all preliminary and postliminary travel time. Section 4(b), 29 U.S.C. § 254(b) of the Portal Act allows employers and employees to contract around the non-compensability of waiting and walking time under the appropriate circumstances, thus implying that non-compensability is the default rule. See Id . at 9-13.

Prior to the Portal Act's enactment, the Court held in Anderson v. Mt. Clemens Pottery Co. and similar cases that walking and waiting time was compensable. Anderson v. Mt. Clemens Pottery Co. 328 U.S. 680, 691 (1946); Pet'r Alvarez's Br. at 21-22. The Employers argue that the Portal Act was a response to the ensuing tide of worker litigation—a tide that may rise again if preparatory activities are suddenly compensable. Pet'r Alvarez's Br. at 22-24.

Finally, the Employers insist that employees primarily control the sequence, schedule, and manner of obtaining required equipment at distribution stations, and therefore, waiting and walking do not qualify as compensable work under the FLSA. Asserting that a "great deal of flexibility and personal discretion [exists] among associates as to when and where they don and doff their clothing gear," the Employers argue that the "only specific requirement is that they be on the line and ready to go when the shift starts—" Resp't Barber Food's Br. at 7. The Employers explain that "[p]re-shift, some associates arrive early, pick up their clothes, and then go to the cafeteria to socialize; some don their clothes before going to the cafeteria, some after; some go to the lockers and don their clothes there, others do not use lockers; some don their clothes as soon as they retrieve them—" Id . at 3-4

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Conclusion

Although the FLSA mandates that employers compensate workers for all activities performed during the workday, the Portal Act amended the FLSA by removing employers' obligation to compensate employees for traveling to and from the actual place of performance of the principal activity. The Employees contend that walking and waiting at safety stations are integral and indispensable to their principal activities and hence escape the Portal Act exemptions.

No Supreme Court precedent addresses the applicability of Section 4(a)(1) of the Portal Act to walking and waiting. Public policy considerations, including worker income, manufacturing costs, and corporate outsourcing policy, are likely to loom large in the Supreme Court's decision. Wary of contravening congressional commands, the Court is likely to adhere closely to the text of the Portal Act, a move that can only benefit the Employers.

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Authors

Prepared by: Ari M. Selman, Dennis N. Chi

Additional Sources

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