IE 11 is not supported. For an optimal experience visit our site on another browser.

Billions could be at stake in Supreme Court case on overtime

Depending on how the court rules, it could unleash a flood of class action suits alleging unpaid overtime.
Employee Lamar Roby prepares shipping orders at Amazon's San Bernardino Fulfillment Center October 29, 2013 in San Bernardino, California.
Employee Lamar Roby prepares shipping orders at Amazon's San Bernardino Fulfillment Center October 29, 2013 in San Bernardino, California.

On Wednesday morning, oral arguments began in the first of several major labor law cases the Supreme Court will take up this session. At dispute in Integrity Staffing Solutions, Inc. v. Busk, is a relatively arcane question about U.S. overtime compensation laws: When retail or warehouse employees go through security checks at the end of the day, are they still on the clock? Should they be paid overtime for standing in line and waiting to be screened?

It may sound like a minor point, but the court's decision could send a shock wave through the American retail industry. If the nine justices rule that waiting for and receiving mandated security checks can be considered an integral part of a worker's job, it will open the door for major class action lawsuits against some of America's biggest retailers. Suits against Amazon, CVS and Apple are already on hold pending the Supreme Court's ruling.

"I think it's one of the most under-appreciated cases of the term, because it's so arcane and technical that people don't understand the dollars and cents that are involved," said Marquette University labor law professor Paul Secunda. "We're literally talking about billions of dollars here, because so many employers require their employees to go through some kind of security screening."

Integrity Staffing Solutions, Inc. v. Busk concerns just one of those companies: A Nevada-based contractor that handles warehouse storage and logistics for According to Jesse Busk and Laurie Castro, the two former Integrity Staffing employees named as plaintiffs in the original suit, workers at their warehouse were often required to stand in line for as much as 25 minutes after the official end of the work day, waiting for security to ensure they had not stolen anything. A brief filed by their attorneys says they were also required to empty out their pockets and pass through metal detectors in a process not unlike going through airport security.

A Nevada district court ruled that Busk and Castro were not entitled to overtime for the time they lost to the security check, but they won a reversal of that decision from the 9th Circuit. Then, last October, attorneys for Integrity Staffing petitioned the Supreme Court to give the case another look. Workers can't demand overtime for time spent in security screenings, the attorneys argue, because passing through those screenings does not qualify as a compensable activity.

Integrity Staffing's attorneys -- one of whom is Paul Clement, the United States Solicitor General under President George W. Bush -- argue that going through security screenings does not mean the standard test for whether a workplace activity is deserving of compensation: In the 1956 case Steiner v. Mitchell, the Supreme Court ruled that workers must only be paid for those activities which are an "integral and indispensable part of the principal activities for which covered workmen are employed." The time spent passing through security checks is equivalent to the time they spend eating lunch or commuting to work, they argued: A task the employees might need to perform in order to do their job, but not one that's actually central to the central to why the company employs them.

The 9th Circuit rejected this line of reasoning and sided with the plaintiffs because, it reasoned, the process of going through security checks is "integral and indispensable." The essential work of the warehouse employees is ensuring that products ordered on get properly stored and shipped to their owners without becoming damaged or going missing; hence the 9th Court ruled that "the security clearances are necessary to the employees' primary work as warehouse employees and done for Integrity's benefit."

"I think the issue is simple: When an employer tells you to do something, it's work, and you ought to get compensated for it," said Mark Thierman, an attorney representing Busk and Castro in both the Supreme Court case and their pending class action suit against Amazon. "Unless there's a specific carve-out. There are some carve-outs for traveling, commuter time, and some other carve-outs for quasi-voluntary activities."

Attorneys representing Integrity Staffing did not return a request for comment, but a spokesperson for Amazon reached out to msnbc to comment on the allegations that security checks tend to take nearly a half hour.

"We have a longstanding practice of not commenting on pending litigation, but data shows that employees walk through post shift security screening with little or no wait," wrote Amazon spokesperson Kelly Cheeseman in an emailed statement.

The case has mobilized other interested parties on both sides. The industry group National Retail Federation (NRF) and the United States federal government have both filed amicus briefs siding with Integrity Staffing; two months ago, the labor coalition AFL-CIO filed a brief of its own supporting Busk and Castro.