In a recent “off-the-clock” case, the Seventh Circuit Court of Appeals affirmed an Indiana district court decision and held that the time an employee spends before his or her shift in preparation for the shift is not compensable – even if such time is in excess of 10 minutes and to the significant benefit of the employer – if the employer does not know or have reason to know that the employee is regularly working this off-the-clock time.

In the case, Plaintiff Susan Kellar alleged that she regularly arrived at Defendant Summit Seating Inc.’s (“Summit”) worksite between 15 and 45 minutes before the start of her shift. According to the plaintiff, she would then typically spend:

• 5 minutes unlocking doors, turning on lights, turning on equipment, and punching into the time clock;
• 5 minutes preparing coffee for herself and the rest of the employees;
• 5-10 minutes (or longer) gathering material and distributing it to her subordinates’ workstations; and
• 5 minutes taking a coffee / smoking break.

The plaintiff then allegedly spent the remaining amount of time performing other tasks in preparation for the beginning of her subordinates’ shifts. At her deposition, the plaintiff claimed that it would have been “a hassle” to show up at 5 am and still get her subordinates prepared in time for the beginning of their shifts which also began at 5 am. However, the plaintiff never told her supervisors, who would typically arrive 2-3 hours after her, that she was clocking in early or performing any pre-shift work. She also never requested overtime for this work, reported any errors on her paycheck relating to the same nor disclosed at any meetings with her supervisors that her schedule needed to be adjusted to accommodate this work.

The plaintiff later resigned, then sued Summit, claiming unpaid overtime wages under the Fair Labor Standards Act (FLSA). The district court, however, found that the plaintiff’s pre-shift activities were noncompensable, “preliminary” activities under the Portal-to-Portal Act of 1947. The Portal-to-Portal Act, which amended the FLSA, holds that employers cannot be held liable "on account of . . . activities which are preliminary to or postliminary to [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 [activities]."¹ Accordingly, the district court granted summary judgment in favor of the defendant, which the plaintiff appealed to the 7th Circuit.

On appeal, the 7th Circuit looked as if it would overturn the district court’s holding. First, the court found that the plaintiff’s pre-shift work was actually non-preliminary. The court based this finding, among other things, on the fact that the defendant apparently derived significant benefits from the plaintiff’s pre-shift preparations. Next, the court found that the “de minimis” doctrine did not apply to the plaintiff’s pre-shift work. Under this doctrine, the current consensus among the courts is that a few seconds or minutes of work beyond an employee’s scheduled working hours can be disregarded, when in dispute, even though such time would otherwise be considered compensable. The court noted, though, that the plaintiff had alleged pre-shift time of 15-45 minutes (excluding the 5-minute break), which goes beyond the well-known 10-minute rule-of-thumb. Because the defendant could not point to any caselaw that had found pre-shift time more than 10 minutes in length to be “de minimis,” the court rejected the doctrine’s applicability.

Despite these findings, however, the court ultimately held that the plaintiff’s pre-shift time was not compensable because she failed to show that her supervisors had actual or even constructive knowledge of her overtime work. First, the court noted how the plaintiff conceded that most employees who clocked in early did not perform work until their shift began. Next, the court noted that the plaintiff's behavior did not raise any red flags. For instance, the plaintiff did not record her pre-shift time – rather she consistently indicated on her time cards that she arrived at the beginning of her shift, not before it. Moreover, she attended weekly meetings with her supervisors in which schedules were discussed, but never disclosed that she had worked pre-shift time or complained about the same. In sum, the supervisors had no reason to know that she had worked unpaid overtime. Thus, the court affirmed the lower court’s dismissal of the plaintiff’s FLSA claim.²

Although this case does represent a win for the employer, it is important to note that the 7th Circuit did not side with employers on the “preliminary” argument or the de minimis doctrine. Instead, the employer prevailed only because it did not have actual or constructive knowledge of the employee’s off-the-clock work. Based on these considerations, employers should keep the following in mind:

• A timekeeping system should be comprehensive and accurate. All employees should be trained upon hire regarding how the timekeeping system works.
• If an employee complains to a supervisor about having to work a few minutes before and/or after his or her scheduled shift, it is likely that this will be considered notice such that the pre- or post-shift work time may be compensable under the FLSA.
• Work performed by an employee that is integral and indispensible to his or her principal work, or the principal work of others, such as distributing materials or readying a workstation, is likely not “preliminary” work and thus may be compensable under the FLSA.

¹ 29 U.S.C. § 254(a) (emphasis added).

² The court also affirmed dismissal of the plaintiff’s Indiana Wage Payment Statute claim for the same reasons.

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