Wage & Hour Class Actions May Allege State and Federal Claims

April 15, 2013

By:  Christopher P. Wesierski and Ashley A. Reagan

Plaintiffs Jesse Busk and Laurie Castro are former employees of Defendant Integrity Staffing Solutions, Inc., which provides warehouse space and staffing to clients such as Amazon.com.  Plaintiffs worked as hourly employees in warehouses located in Las Vegas and Fernley, Nevada.  Plaintiffs sued Defendant on behalf of a putative class of workers in both warehouses alleging that Defendant violated federal and state labor laws by requiring them to pass through a security clearance at the end of each shift.  The clearance sometimes took up to 25 minutes and they were not compensated for this time.  Plaintiffs additionally sought compensation for their 30 minute unpaid meal period because 10 minutes of this break was spent walking to and from the cafeteria and going though security.   

The district court granted Defendant’s motion to dismiss for Plaintiffs’ failure to state a claim, finding that the time employees spent passing through security screening was not compensable.  Further, the district court held that Plaintiffs failed to state a claim related to their shortened meal period allegations.  The state claims were dismissed due to the conflicting class certification mechanisms for state and federal claims.

The court of appeal affirmed in part and reversed in part.  It was error to dismiss Plaintiffs’ state claims on the basis of a conflict because state and federal claims may peacefully coexist.  State law requires that a plaintiff affirmatively opt-in to a lawsuit.  In contrast, the federal rules require a plaintiff to opt-out to be excluded from the class.  These different opting mechanisms do not require dismissal of state claims.  If these claims were to proceed separately in federal and state court, the confusion would be even worse because employees would receive uncoordinated notices from multiple courts.  It is possible to create an adequate notice that allows employees to opt-in or opt-out.  The fact that Federal Rule of Civil Procedure 23 class actions use an opt-out mechanism while Fair Labor Standards Act (FLSA) collective actions use an opt-in mechanism does not create a conflict warranting dismissal of state law claims.

Plaintiffs’ claim related to security clearances was plausible on its face and should not have been dismissed.  Preliminary and postliminary activities are compensable if they are necessary to the principal work performed and done for the benefit of the employer.  The security clearances meet this criteria because the security screenings must be conduct at work and are intended to prevent employee theft, concern that stems from the nature of the employees’ work.  The court of appeal reversed the district court’s dismissal of the parallel state law claim. 

The court of appeal affirmed the dismissal of the claim for shortened meal periods.  Plaintiffs failed to state a claim because walking to the lunchroom is not a work duty for which one is owed compensation.

Facts and analysis based upon Jesse Busk, et al. v. Integrity Staffing Solutions, Inc., decided on April 12, 2013 by the United States Court of Appeals, Ninth Circuit.