Amazon Didn't Have to Pay Oregon Workers for Security Screenings

​Amazon employees in Oregon were not entitled to compensation for required security screenings, the 9th U.S. Circuit Court of Appeals recently decided.

"I've seen cases going both ways" on whether security screenings are compensable, said Steven Suflas, an attorney with Holland & Hart in Salt Lake City. There are dozens of cases pending on security screenings, he said.

Phillip Ray, an attorney with Kluger Healey in Lincroft, N.J., said HR professionals in states with wage and hour laws that have a similar compensability test as the Fair Labor Standards Act (FLSA) don't need to compensate employees for security screenings.

Dan Altchek, an attorney with Saul Ewing in Baltimore, said many states do not follow the standards of the federal Portal-to-Portal Act—an FLSA amendment that excluded certain activities from compensable work time under the law—when interpreting their own wage and hour laws.

Case Originated in Oregon

In a class action, the plaintiff maintained that Amazon unlawfully failed to compensate employees for time waiting for and passing through mandatory screenings before and after work shifts and off-premises meal breaks. The plaintiff worked in a warehouse in Troutdale, Ore.

Here's how the screenings worked at the end of the employees' work shifts, according to an Oregon Supreme Court decision—included in the appendix of the 9th Circuit's decision—on the plaintiff's claims. When employees left the secured area of the warehouse where merchandise was located, they would clock out and undergo a security screening used to prevent theft.

There were nine screening lanes. If an employee had not brought any metal items or bags into the secured area at the start of their shift, the worker could leave using one of five express lanes in which the employee would simply walk through a metal detector.

If an employee had brought metal items but no bags into the secured area, the employee could use one of two disbursement lanes, in which they would walk through a metal detector and slide their metal items down sloped ramps next to the detector. If an employee had brought a bag into the secured area, the worker had to use one of two lanes, in which they would walk through a metal detector and put their bag on a conveyor belt for X-ray screening.

When an employee set off a metal detector in any of the lanes, a security guard with a handheld metal detector would check the employee for merchandise.

The company required employees to undergo security screening if they chose to leave the premises during meal periods and chose to take belongings with them, the 9th Circuit noted.

The Oregon Supreme Court ruled for the company after the 9th Circuit initially sent the case to the state supreme court.

Citing the Oregon Supreme Court holding, the 9th Circuit said that Oregon law matched federal law on whether security screenings are compensable. Time employees spend on the employer's premises waiting for and undergoing mandatory security screenings before or after their work shifts is compensable only if the screenings are either 1) an integral and indispensable part of the employees' principal activities or 2) compensable as a matter of contract, custom or practice, the 9th Circuit said, again relying on the Oregon Supreme Court's holding.

The plaintiff's complaint did not allege that either of the exceptions applied, the 9th Circuit noted.

"Although the Oregon Supreme Court's opinion did not address separately or directly [the] plaintiff's meal-period claim, the logic of that opinion yields the same result," the 9th Circuit stated in its per curiam decision.

U.S. Supreme Court Precedent

The Oregon Supreme Court noted that in a separate case, the U.S. Supreme Court ruled in 2014 that warehouse workers were not entitled to compensation under the FLSA for time spent going through security checks after their shifts ended.

By contrast, in another case, the U.S. Supreme Court ruled that changing clothes and showering were an integral and indispensable part of the principal activities of battery plant employees whose job duties required extensive use of dangerously caustic and toxic materials.

In yet another decision, the U.S. Supreme Court held that putting on (that is, donning) and taking off (that is, doffing) unique personal protective equipment constituted preliminary and postliminary activities that were integral to the employees' principal activities. As a result, the U.S. Supreme Court held that the compensable workday under the FLSA included the time that covered employees spent walking from changing areas where they donned their personal protective gear to the production area. The compensable workday also included the time workers spent walking back to the changing areas at the end of a shift before they doffed their personal protective gear.

"We recognize that [the] plaintiff's situation—not receiving compensation for the time she was required to be on her employer's premises for the employer's benefit—certainly raises a policy question whether all employees should be compensated for time spent in mandatory security screenings like those at issue in this case," the Oregon Supreme Court stated in the case involving Amazon. The state supreme court said the plaintiff may raise the issue before the state legislature, which might choose to depart from federal law and adopt its own standard for compensable time, consistent with any limits imposed by state and federal law.

Lessons for Employers

HR should be able to articulate a need for security screenings, Suflas noted. If shrinkage is large, the screenings clearly are for the employers' benefit.

Another consideration is the continuing labor shortage. "In today's environment in which employers are facing a daily war for talent, employers might also evaluate how not paying employees for these types of activities will impact their ability to recruit and retain employees," said Joe Beachboard, an attorney with Beachboard Consulting Group in Los Angeles.