Supreme Court Docket Report - March 3, 2014

Today, the Supreme Court granted certiorari in three cases of interest to the business community:

Fair Labor Standards Act—Security Screenings Federal Trade Commission Act—Exemption from Antitrust Laws Under "State Action" Doctrine Securities Act of 1933—Misstatements in SEC Registration Statements Fair Labor Standards Act—Security Screenings

Less than two months after resolving its last dispute about what constitutes compensable time under the Fair Labor Standards Act ("FLSA") (see Sandifer v. U.S. Steel Corp., No. 12-417), the Supreme Court has again granted certiorari to decide when an hourly employee's workday begins and ends. Earlier today, the Supreme Court granted certiorari in Integrity Staffing Solutions, Inc. v. Busk, No. 13-433, to determine whether time spent in security screenings is compensable under the FLSA, as amended by the Portal-to-Portal Act.

In Integrity Staffing Solutions,former warehouse employees claimed that they should have been compensated for time spent passing through a security clearance at the end of each of their shifts—a precaution implemented to prevent theft. Under the FLSA, employees must be compensated for activities that are "integral and indispensable" to the activities for which they were hired to perform. They need not be compensated, however, for activities that are "preliminary" or "postliminary" to their "principal activities" as employees. Taking a broad view of "integral and indispensable" activities, the Ninth Circuit held that time spent clearing security was compensable because it was necessary to the work performed by the employees and done for the benefit of the employer.

The Ninth Circuit's holding arguably conflicts with two cases from other circuits holding that time spent clearing security is not compensable under the Portal-to-Portal Act. In Gorman v. Consolidated Edison Corp., 488 F.3d 586 (2d Cir. 2007), the Second Circuit described the security procedures required to enter and exit a nuclear power station as "modern paradigms of the preliminary and postliminary activities described in the Portal-to-Portal Act." Id. at 593. In Bonilla v. Baker Concrete Construction, Inc., 487 F.3d 1340 (11th Cir. 2007), the Eleventh Circuit similarly found that time airport employees spent going through airport security was not compensable. There, however, the court noted that the screening was required by the Federal Aviation Administration; it was not implemented for the benefit of the employer...