Many employers require specific clothing at work, and some also require that employees change into and out of this clothing on the job. Employers who follow this practice need to ask themselves a couple of questions that have become hotly litigated topics: Do I have to pay employees for this time? And, if so, when does the clock start? If you are unsure of the answer, you are not alone. And, it may be of some solace that even Federal courts disagree. The Seventh Circuit (governing Indiana, Illinois and Wisconsin) recently answered this question differently than the Sixth Circuit (governing Ohio, Kentucky, Tennessee and Michigan). In other words, the answer to the question currently depends on where the employees are located. Although each of these decisions dealt with the peculiarities of the Fair Labor Standards Act (FLSA) as applied to unionized workplaces, the recent Seventh Circuit decision also provides meaningful guidance even in non-union settings.
By way of general background, we understand that the FLSA requires that workers be paid no less than the federal minimum wage for all hours worked, and time and a half for hours worked in excess of 40 hours during the workweek. However, the FLSA does not provide a definition of what constitutes “work” for purposes of calculating compensation owed. Even so, Section 203(o) of the Act does provide an exception for time spent changing clothes at the beginning and end of the workday if expressly excluded by the terms of, or custom or practice under, a collective bargaining agreement.
In 2010, the Sixth Circuit held in Franklin v. Kellogg Co. that, although the unionized employees were not entitled to compensation for time spent changing into and out of clothes due to the application of Section 203(o), they were entitled to compensation for time spent walking between the changing area and the worksite. On May 8, 2012, in Sandifer v. U.S. Steel Corp., the Seventh Circuit disagreed with the Sixth Circuit when it dismissed a class action lawsuit brought by 800 unionized workers to recover wages for time spent changing into and out of work clothes as well as time spent traveling between the locker room and the work site. The Seventh Circuit found that neither activity constituted compensable work that counted toward the calculation of overtime.
Sandifer argued, on behalf of the class, that U.S. Steel violated the FLSA by failing to compensate workers for time spent putting on and taking off work clothes in a locker room located at the plant. The work clothes in question consisted of flame-retardant pants and jacket, work gloves, metatarsal boots, a hard hat, safety glasses, earplugs and a “snood” (a hood that covers the top of the head, the chin and neck). Although the workers were subject to a collective bargaining agreement that did not require compensation for changing time, they argued that the Section 203(o) exclusion did not apply because the work clothes constitute “safety equipment,” rather than clothing.
Sandifer also argued that the workers were entitled to compensation for time spent walking to and from the locker room and their workstations. Employers are generally required to compensate workers for time spent traveling between principal activities. Principal activities are defined as those activities that are an “integral and indispensable” part of the work. Sandifer argued that changing clothes was integral and indispensable because the workers were required to wear a designated outfit while working.
The Court first rejected Sandifer’s argument regarding changing time, finding that the outfit was clothing with a “protective function” and subject to the Section 203(o) exception. Next, the Sandifer Court addressed whether the workers were entitled to compensation for time spent traveling between the changing area and the work site. The Court also rejected this argument and reasoned that: “If clothes-changing time is lawfully not compensated, we can’t see how it could be thought a principal employment activity…” Since changing clothes is not considered a principal activity, time spent traveling between the locker room and the work site is also not a principal activity. Thus, no compensation is required.
Conflict with Sixth Circuit
The portion of the Seventh Circuit’s decision in Sandifer related to travel time is in direct conflict with the Sixth Circuit’s decision in Franklin. Specifically, the Franklin Court found that changing clothes, even if not compensable by virtue of Section 203(o), is a principal activity. Thus, time spent traveling between the changing room and the work site is compensable.
The Sandifer decision has important implications for both union and non-union employers. Union employers should review the terms of their collective bargaining agreements. If changing time is expressly excluded from compensable time, additional consideration must also be given to the workers’ geographic location. For now, and until the U.S. Supreme Court provides a definitive answer, workers located within the Seventh Circuit do not need to be compensated for time traveling between the changing room and the work site if changing time is excluded under the collective bargaining agreement. If the workers are located within the Sixth Circuit, compensation may be owed for travel time regardless of the bargained terms related to changing time. In other areas of the country, employers should consult their counsel and conduct a risk analysis due to the lack of controlling authority at this time.
The Sandifer decision is also instructive to non-union employers. The decision recognizes that changing time is compensable (unless it requires de minimis effort) if not excluded under a collective bargaining agreement. If the time is compensable, changing time is a principal activity. Therefore, travel time to and from the changing area to the work site is also compensable. Employers who require that employees change into clothing at the worksite should consult counsel to determine whether the time spent changing is de minimus under the FLSA and, if not, ensure that employees are paid for that time and that the time is considered when calculating overtime.