Commuting in Employer-Provided Car and “Postliminary” Work May Be Compensable
The Ninth Circuit recently revisited its prior decision in Rutti v. Lojack Corp., regarding compensability of commute time and preliminary and postliminary work. The Ninth Circuit altered its prior decision in some respects. Our prior post on the Rutti case is here. On rehearing, the Ninth Circuit ruled that an employee may seek wages for time spent commuting to and from work in a company car he is required to use when he is "effectively subject to the control of the employer," as well as time spent on the "postliminary" activity of transmitting required daily portable data transmissions to his employer from home.
Specifically, the Ninth Circuit considered Rutti's claims for compensation for commuting in a car which use was mandated by his employer, and for certain "off-the-clock" work he performed both prior to and after his commuting time. Rutti brought a putative class action for unpaid wages on behalf of all technicians employed by Lojack to install and repair alarms in customers' cars. Most, if not all of the installations and repairs are done at the clients' locations. The technicians were required to travel to the job sites in a company-owned vehicle. Rutti was paid on an hourly basis for the time period beginning when he arrived at his first job location and ending when he completed his final job installation of the day. In addition to the time spent commuting to his first job assignment and from his last assignment to home, Rutti also sought compensation for "off-the-clock" activities he performed before he left the house and after he returned home. Rutti alleged he spent time in the morning receiving assignments for the day, mapping his routes to assignments, prioritizing jobs for the day, and minimal paperwork. Rutti further alleged that he spent time after he returned home in the evenings to upload data to his company from a portable data terminal ("PDT") from which his work activities were recorded during the day.
Although Rutti filed a motion for class certification at the same time Lojack filed a motion for partial summary judgment, the district court only ruled on the summary judgment motion in disposing of Rutti's federal claims and state law claim for commuting compensation, and later dismissed the remaining state law claims for lack of subject matter jurisdiction.
The Ninth Circuit affirmed the district court's ruling that Rutti's commute time was not compensable under federal law pursuant to the Employee Commuter Flexibility Act ("ECFA," 29 U.S.C. § 254(a)(2)). ECFA provides that the use of an employer's vehicle that is subject to an agreement between the employer and employee and is not part of the employee's principal activities is not compensable. This interpretation is consistent with federal authorities that the cost of commuting is not compensable unless employees "perform additional legally cognizable work while driving to their workplace." However, the Court ruled that Rutti is entitled to seek compensation for his commute time under California law as compulsory travel time. Rutti asserts that Lojack restricts him from using the vehicle for personal pursuits and transporting passengers, requires that he drive directly from home to work and from work to home, and requires that he keep his cell phone on during the commute. The Ninth Circuit, relying on the California Supreme Court's decision in Morillion v. Royal Packing Co., 22 Cal.4th 575, 578 (2000), held that Rutti was entitled to seek compensation because he was subject to his employer's control during his commute because he was foreclosed from engaging in personal pursuits that he would otherwise have been able to undertake if he was permitted to travel to the field using his own transportation.
The Court held that Rutti's preliminary activities (those that take place before he leaves home) of "receiving, mapping, and prioritizing jobs and routes for assignment" are related to his commute and not related to his principal activities. Moreover, even if they are related to his principal work activities, appear to be de minimis. As a result, they are not compensable. In contrast, Rutti's postliminary activities in performing the PDT transmissions were a regular part of his work duties and necessary to Lojack's business. The Court ruled that upon remand, Lojack might still be entitled to summary judgment if the time spent performing such tasks was de minimis. However, the factual record did not compel this conclusion because, although it may take only five to ten minutes to initiate the transmission, employees were required to come back to see if the transmission was successful and, if not, to send it again. There was evidence of frequent transmission failures. In so holding, the Court stated there was no bright-line rule that activities requiring less than ten minutes' time was per se de minimis. Rather, courts are to employ a three-prong test as established in Lindow v. U.S., 738 F.2d 1057, 1063 (9th Cir. 1984) and consider: (1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work. Because there was evidence that Lojack paid one technician 15 minutes a day to cover PDT transmission time, and Rutti testified that he spent about 15 minutes a day performing such tasks (which, over the course of one week was substantial enough to warrant compensation), the Court reversed the grant of summary judgment and remanded for reconsideration in light of these factors.
Employers who require employees to use company vehicles for commuting purposes should carefully review their policies to see whether they are exerting sufficient "control" over the time and manner in which employees are commuting to determine whether that time needs to be compensated. Employers should also determine whether employees' preliminary and postliminary activities are integral to the employees' principal job duties and, if so, whether that work required more than de minimis time to determine whether additional compensation should be paid.
The Ninth Circuit's new opinion in Rutti v. Lojack Corp. is here.