Where Troester stops not even Troester knows

Less than a year ago, the California Supreme Court, in Troester v. Starbucks Corp., 5 Cal., 5th 829 (2018) as mod., reh. den. (Aug. 29, 2018), held that California employers cannot use the federal Fair Labor Standards Act's de minimis doctrine as a defense against claims for unpaid wages under the California Labor Code. Troester, a suit litigated in federal court, reached the California Supreme Court when the 9th U.S. Circuit Court of Appeals certified a question to that Court, asking for a definitive answer to the question of whether the federal de minimis doctrine applies to wage claims arising under California law.

Troester answered the 9th Circuit's question in two parts. First, the court explained that the de minimis doctrine applicable to the FLSA has never been adopted as part of California's wage and hour laws, either in the Labor Code or the implementing Wage Orders. Second, Troester affirmatively held that employees must be compensated for all hours worked, without exception. Well, almost. What the Troester court did not do is decide whether a California de minimis doctrine could ever apply to state wage and hour claims "given the wide range of scenarios in which this issue arises." Most notably, Troester left unanswered whether there are wage claims involving time worked that are so irregular or brief in duration that it would be impossible for employers to capture, accurately record, and compensate for that time.

While Troester readily sniffed out unpaid time of several minutes a day as compensable, the shockwaves of that decision are still reverberating. On June 28, the 9th Circuit provided one of the first indications of the true impact of Troester. In the consolidated appeals of Rodriguez v. Nike Retail Services, Inc. and Chavez v. Converse, Inc., 2019 DJDAR 6028, the 9th Circuit, with Troester front and center, reviewed grants of summary judgment in favor of the employers. The trial courts in those two cases held that the time spent going through "bag checks" before leaving the stores, but after clocking out, was de minimis and therefor lawfully uncompensated.

The Rodriguez and Chavez trial court orders were issued prior to Troester. It would have surprised no one, then, if the 9th Circuit had opted to remand both matters with a simple directive to reconsider in light of Troester. In fact, the employees asked the court to remand both cases for reconsideration under Troester without wading into the merits of the cases. In an interesting twist, the 9th Circuit did not heed this request. Instead, the 9th Circuit applied Troester to the record before it and decided the propriety of summary judgment de novo.

For their part, the employers asked the 9th Circuit to find that Troester was distinguishable from Rodriguez and Chavez, and hold that, since Troester spoke of "minutes" of uncompensated work per shift, the one-minute mark was the bright-line demarcation point for the application of a California de minimis doctrine applicable to state wage and hour claims. The 9th Circuit was not buying what the employers were selling. Distilling the core of Troester into a single paragraph, the 9th Circuit refused to interpret Troester as replacing the federal de minimis doctrine's 10-minute daily threshold with a state-law 60-second analogue. The court explained that such a construction would "read far too much" into Troester's passing mention of "minutes," and clash with Troester's reasoning, which emphasized the requirement under California law that employees must be paid for all hours worked. The 9th Circuit expressed serious doubt that Troester would have been decided differently if the closing tasks at issue in Troester had taken only 59 seconds per day. In Rodriguez (which sets forth the court's analysis of Troester for both of the consolidated appeals), expert testimony stated that 21% of the off-the-clock bag checks took no time at all and the average combined time of an exit inspection was between 18 seconds and two minutes. The 9th Circuit concluded that the inspection time was neither so short nor so irregular as a matter of law after Troester to support summary judgment for the employer.

The 9th Circuit recognized Troester as holding that all time worked must be paid unless it is so tiny or irregular that it is effectively impossible to capture. But, as Troester made clear, the burden to show that impossibility lies with the employer, not the employees. Given the 9th Circuit's stark observation that the result in Troester would not likely have been different if 59 seconds per day were at issue, the extent of Troester's impact, and its future potential, becomes a little clearer. Rodriguez and Chavez remove nonsense about the one-minute mark acting as some sort of safe harbor for employers that routinely require small amounts of uncompensated work.

Soon after Troester, we observed that employers should fear that the sky is falling. The 9th Circuit's assessment of Troester in Rodriguez strengthens that conclusion. Beyond swiftly dispatching the unsupported claim that Troester's analysis is limited to "minutes" of time, Rodriguez only increases the likelihood that the next domino to fall is a rejection of underpayments due to rounding in any situation where rounding is not necessary. After all, if failing to pay even 59 seconds of time would "clash" with Troester's conclusion that employees must be paid for all hours worked if there is any way to capture that time, how can an employer justify under California law the failure to pay an employee for all hours worked through adverse rounding? It defies logic to conclude that California law requires an employee to be compensated for every second of work that can be captured through any means but also conclude that it is permissible to take pay from that same employee whenever rounding the employee's actual time worked results in a reduction of compensated time.

Will California ultimately be known as the state where it's fine to rob Peter to pay Paul so long as you pay Peter for all hours worked before the robbery? Stranger things have happened, but that seems more implausible after the first major appellate decision to apply Troester. 