Chicago Business Litigation Lawyer Blog

A California wage and hour ruling caught the attention of our Illinois employment rights attorneys because it caused substantial dissent and inspired a replacement decision more than six months after its original opinion was published. Rutti v. Lojack Corporation Inc., No. 07-56599 (9th. Cir. March 2, 2010) concerned whether commute time and time spent at home on work-related tasks should be compensated at work. In its most recent decision, a three-judge panel of the Ninth U.S. Circuit Court of Appeals agreed that commute time is not federally compensable, but split on whether the time is compensable under state law. Similarly, all three agreed that Mike Rutti’s minimal time spent checking assignments for the day from home was not compensable, but disagreed on whether longer evening periods spent transmitting data counted as work time.

Rutti was one of about 450 technicians nationwide for Lojack, Inc. to install alarms in customers’ cars. He spent most of the day on the road traveling between job sites in a company-owned vehicle, but began and ended the day at home, performing administrative tasks for Lojack. Lojack paid him an hourly wage starting when he arrived at the first work site and ending when he left the last one. He file a proposed class action lawsuit seeking compensation under federal and state wage and hour laws for his preliminary and postliminary activities, as well as commute time to and from work sites. The trial court granted Lojack summary judgment dismissing all of the federal claims but upheld a state-law claim seeking compensation for commuting, before dismissing the remaining state-law claims for lack of subject matter jurisdiction. Rutti appealed to the Ninth Circuit.

On appeal, the Ninth separated the case into three issues: whether the commute time was compensable; whether his off-the-clock activities were substantial enough to be compensable; and when Rutti’s work day started under the “continuous work day” doctrine adopted by the Department of Labor. On the commute time issue, the appeals court agreed with the trial court, but only as to Rutti’s Fair Labor Standards Act claims. A 1996 federal law called the Employee Commuter Flexibility Act says employees need not be compensated for travel time, preliminary activities or postliminary activities that take place outside of a normal work day. That’s true even when the vehicle used is the employer’s vehicle and is subject to restrictions on its use, as long as it’s subject to an agreement between the parties.

Rutti had more luck on the issue of off-the-clock activities performed at home before and after work. These are also subject to the ECFA, the Ninth wrote, but only if they are not “principal activities.” In addition, caselaw says they must not be minimal activities. The activity at the beginning of the day included receiving job orders, mapping them and planning his route for the day. This is related to his commute, the court found, and commuting is not compensable. They are also relatively minimal, taking no more than a few minutes. Thus, the Ninth upheld the trial court on the preliminary activities. However, it reversed the trial court as to Rutti’s postliminary activities, which it said were more time-consuming. This included connecting with Lojack’s servers to upload data about his work for the day. This was part of Rutti’s regular work and necessary to Lojack’s business, the court wrote, making it part of the company’s “principal business activities.” The court also found that it was not minimal, citing evidence that it could take more than 10 to 15 minutes because of frequent failures, and that it was a regular part of the work. Thus, it may very well have been compensable time under federal law and should not have been dismissed at the summary judgment stage.

Finally, the court ruled that Rutti may have a case under the “continuous work day” doctrine set forth in Dooley v. Liberty Mutual Ins. Co., 307 F. Supp. 2d 234 (D. Mass. 2004), which held that automobile damage appraisers who worked from home were entitled to compensation for commutes because activities they performed at home were “principal activities” that formed part of a continuous work day. Because the court had already determined that Rutti’s preliminary activities were not compensable, it wrote, the morning commute is not part of a continuous workday. The evening commute might be, the Ninth said, except that 29 C.F.R. § 785.16 says employers may not be compelled to compensate workers for periods when they are relieved from duty so long that they can use the time for their own purposes. This was the case with the postliminary upload time, the court said, because Lojack gave technicians 12 hours in which to upload.

Using all of that reasoning, the majority upheld most of the trial court’s rulings, but vacated rulings as to state-law claims for compensation and postliminary claims for the data upload. A separate concurring opinion by Judge Silverman and joined by Judge Hall agreed as to the California state-law claims for commuting. California requires employers to compensate their workers for all time “during which an employee is subject to the control of an employer, the judges wrote, citing Morillion v. Royal Packing Co., 22 Cal. 4th 575, 578 (2000). Because Rutti was subject to multiple rules governing his behavior with the company truck, he was clearly under Lojack’s control, they wrote. Another concurrence authored by Judge Hall alone said the panel should have upheld the trial court on the postliminary data upload as well, because they were minimal. Finally, Judge Callahan dissented from the majority’s opinion on the state-law claims, arguing that Morillion did not apply because Rutti was not required to commute by company bus, as in that case.

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