Salasky v. Amazon.Com, Inc. (In re Amazon.Com, Inc.)

• Decision Date: 21 July 2021
• Docket Number: No. 43 EAP 2019,43 EAP 2019
• Citation: 255 A.3d 191
• Parties: IN RE: AMAZON.COM, INC., Fulfillment Center Fair Labor Standards Act (FLSA) and Wage and Hour Litigation Neal Heimbach; Karen Salasky, Appellants v. Amazon.Com, Inc.; Amazon.Com.DEDC, LLC; Integrity Staffing Solutions, Inc., Appellees
• Court: Pennsylvania Supreme Court

255 A.3d 191

IN RE: AMAZON.COM, INC., Fulfillment Center Fair Labor Standards Act (FLSA) and Wage and Hour LitigationNeal Heimbach; Karen Salasky, Appellants

v.Amazon.Com, Inc.; Amazon.Com.DEDC, LLC; Integrity Staffing Solutions, Inc., Appellees

No. 43 EAP 2019

Supreme Court of Pennsylvania.

Argued: September 17, 2020

Decided: July 21, 2021

Peter David Winebrake, Esq., Winebrake & Santillo, LLC, Dresher, for Appellants.

Irwin William Aronson, Esq. Willig, Williams & Davidson, Harrisburg, Krysten Leigh Connon, Esq., Camille Rodriguez, Esq., Sarah Rebecca Schalman-Bergen, Esq., Philadelphia, Michaela L. Walin, Esq., Berger Montague PC, Catherine Ruckelshaus, Esq., M. Patricia Smith, Esq., National Employment Law Project, for Appellants Amici Curiae Pennsylvania AFL-CIO, Service Employees International Union, United Food and Commercial Workers International Union, Community Legal Services, National Employment Law Project, National Employment Lawyers Association, Western Pennsylvania Employment Lawyers Association, NELA-Eastern PA, Justice At Work, Towards Justice.

John Bartley DeLone, Esq., Harrisburg, Nancy Anne Walker, Esq., Pennsylvania Office of Attorney General, for Appellant Amicus Curiae Josh Shapiro, Attorney General of the Commonwealth of Pennsylvania.

Sarah Bryan Fask, Esq., Jay Andrew Inman, Esq., Martha Jane Keon, Esq., Littler Mendelson, Philadelphia, for Appellee Integrity Staffing Solutions, Inc.

Michael E. Kenneally, Esq., Richard G. Rosenblatt, Esq., David B. Salmons, Esq., Morgan, Lewis & Bockius, for Appellees Amazon.Com, Inc., Amazon.Com.DEDC, LLC.

Samantha D. Hardy, Esq., Karin D. Vogel, Esq., Sheppard, Mullin, Richter & Hampton LLP, for Appellee Amicus Curiae National Retail Federation and Pennsylvania Retailers Association.

BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION

JUSTICE TODD

We answer herein two certified questions from the United States Court of Appeals for the Sixth Circuit: (1) whether time spent on an employer's premises waiting to undergo, and undergoing, mandatory security screening is compensable as "hours worked" within the meaning of the Pennsylvania Minimum Wage Act¹ ("PMWA")?; and (2) whether the doctrine of de minimis non curat lex ,² as described in Anderson v. Mt. Clemens Pottery Co. , 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946), applies to bar claims brought under the PMWA? Our reply to these questions is that time spent on an employer's premises waiting to undergo, and undergoing, mandatory security screening constitutes "hours worked" under the PMWA; and there exists no de minimis exception to the PMWA.

I. Factual Background and Procedural History

This case arises out of a class action suit for unpaid wages brought by Appellants Neil Heimbach and Karen Salasky ("Employees") who worked for Appellees (collectively "Amazon") at Amazon's warehouse facility in Pennsylvania.³ As summarized by the Sixth Circuit Court of Appeals in its opinion in support of certification:

The relevant facts are not in dispute. [Employees] worked at Amazon's "logistics facility/fulfillment center" located in a large warehouse in Breinigsville, Pennsylvania. [Appellant] Heimbach worked for Amazon while [Appellant] Salasky worked for Integrity Staffing Solutions. Amazon and Integrity "separately employed hundreds of hourly workers at the Facility." The workers’ duties included "receiving deliveries of merchandise, transporting merchandise to its appropriate location within the Facility, ‘picking’ merchandise from storage locations, and processing merchandise for shipping."

Hourly employees clocked in and out on time clocks at the beginning and end of their shifts, respectively. After clocking out at the end of their shifts, employees were required to undergo antitheft security screening, which included metal detectors, searches of bags and other personal items, and "a secondary screening process if the metal detector's alarm sounded."^[4] While [Employees] and [Amazon] disagree as to the amount of time this screening took on average, no party disputes that [Amazon] did not compensate [their] employees for the time it took to wait in line for and undergo these security screenings.^{[5 ]}

In re Amazon.com, Inc. , 942 F.3d 297, 299 (6th Cir. 2019) (footnote omitted).

On October 30, 2013, Employees commenced their class action lawsuit against Amazon in the Philadelphia County Court of Common Pleas, asserting that they were entitled to compensation for their unpaid time spent in the security screening process under the PMWA. On November 1, 2013, Amazon successfully had the action removed to the United States District Court for the Eastern District of Pennsylvania. Thereafter, this suit was consolidated by the United States Judicial Panel on Multidistrict Litigation in the Western District of Kentucky with other similar class actions brought in other states, such as Kentucky, California, Arizona, and Nevada, under those states’ minimum wage laws, as well as combined with actions brought under the federal Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. §§ 201 et seq. , as amended by the federal Portal to Portal Act of 1947 ("PTPA"), id . §§ 251-262. The federal FLSA requires, subject to certain exceptions not relevant here, that an employer "pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce," a statutorily specified hourly wage. Id. § 206.

Once transferred to the District Court for the Western District of Kentucky, the case proceeded through the discovery phase, and, upon completion of this process, Amazon filed a motion for summary judgment. During the pendency of these proceedings, on December 9, 2014, the United States Supreme Court issued its decision in Integrity Staffing Solutions v. Busk , 574 U.S. 27, 135 S.Ct. 513, 190 L.Ed.2d 410 (2014).

In Busk , the high Court ruled that time spent by Amazon warehouse workers in Nevada going through the same security screenings the employees in the present case were subjected to was not compensable under the federal FLSA. In its opinion, the high Court noted that when the FLSA was first enacted in 1938 it contained no definition of the terms "work" or "workweek." The court observed that, in its prior decision of Anderson v. Mt. Clemens Pottery Company , 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946), when confronted with the question of whether employees of a sprawling pottery plant were entitled to compensation under the FLSA for the time they spent walking from the time clock where they punched in to their workbenches, and back again when they punched out, the Court ruled that they were entitled to compensation, because such activities met the FLSA's definition of "working time" – that is, they "involved ‘physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.’ " Busk , 574 U.S. at 31, 135 S.Ct. 513 (quoting Anderson , 328 U.S. at 691-92, 66 S.Ct. 1187 ).⁶

The high Court recounted that the Anderson decision met with swift and intense opposition due to an ensuing flood of claims by employees for this type of unpaid time, and, in response, Congress enacted the federal PTPA, Section 254 of which provides, in relevant part:

(a) Activities not compensable

Except as provided in subsection (b) [where compensation is mandated by contract or custom], no employer shall be subject to any liability or punishment under the Fair Labor Standards Act of 1938 ... on account of the failure of such employer to pay an employee minimum wages, or to pay an employee overtime compensation, for or on account of any of the following activities of such employee engaged in on or after May 14, 1947--

(1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and

(2) activities which are preliminary to or postliminary to said principal activity or activities,

which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities. ...

29 U.S.C. § 254(a).

Thus, in the aftermath of the enactment of the federal PTPA, "activities which are preliminary to or postliminary to" a worker's principal activity or activities were non-compensable under the FLSA. Id. § 254(2). The high Court noted that it previously interpreted the term "principal activities" as including "all activities which are an ‘integral and indispensable part of the principal activities’ " of the employee, those "that an employee is employed to perform." 574 U.S. at 33, 135 S.Ct. 513. Hence, in its view, an employee activity, even if required by the employer, does not fall within the purview of the federal FLSA, as amended by the federal PTPA, unless the activity is an "intrinsic element" of the employees’ principal duties, and "one with which the employee cannot dispense if he is to perform his principal activities." Id.

The high Court determined that the security screenings were not the principal activity which the warehouse workers were employed to perform – which was to remove products from warehouse shelves and to pack and ship them to customers – nor did it deem the screenings "integral and indispensable" to those principal activities. Consequently, the high Court ruled that the screenings were not compensable under the FLSA. Id. at 35, 135 S.Ct. 513.

Because of the Busk decision, the district court herein dismissed the cases before it which were founded on the federal FLSA. The court then considered whether Busk also required the dismissal of Employees’ case which was based solely on the PMWA, as well as those cases which were brought under other state minimum wage statutes. The...