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April 02, 2010
Court Struggles with FLSA Issues
A California technician got a second chance to argue his case before appellate judges, but the panel of three was still split over one of his issues—whether time he and other technicians spend after their workday transmitting work reports to their employer deserves to be paid time.

What happened. “Ricci” works for Lojack Corporation, a company based in Massachusetts but employing technicians nationwide, who travel to customers’ locations to install and repair vehicle tracking and recovery systems. They are paid by the hour from when they first arrive at a client’s premises until they leave the last client for the day.

However, Ricci charged, they are required to use company cars for their commute from the homes to clients, cannot conduct any personal errands or pick up anyone else, and must remain accessible to the employer by cell phone while they’re traveling.

He sued under the Fair Labor Standards Act (FLSA) to be compensated for that time, saying it was controlled by the employer and entirely for its benefit. Further, technicians must, at the end of the day once they reach home, use a modem to transmit to the employer data recorded during the day on a portable data terminal about the work performed.

Frequently, Ricci testified, transmissions failed and had to be redone, sometimes several times before they were successful. For that time, too, he wanted himself and other technicians to be paid.

A federal district judge ruled against the plaintiffs, and they first appealed to the 9th Circuit, which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington, in August 2009. Judges were divided, but they rejected the technicians’ claims at that point. Ricci and the others asked judges to reconsider, and they did so.

What the court said. Again, judges agreed unanimously that the commute in company cars to and from clients’ locations was not compensable. Reviewing the Employee Commuting Flexibility Act, they wrote “that where the use of the vehicle ‘is subject to an agreement on the part of the employer and the employee,’ it is not part of the employee’s principal activities and thus not compensable.”

But they were not sure about the duties of transmitting data to the employer, noting that if repeated transmissions were often necessary, the time involved might be more than “de minimis”—5 or 10 minutes—and so compensable. So they sent that issue back to district court for further exploration. Rutti et al. v. Lojack Corporation, U.S. Court of Appeals for the 9th Circuit, No. 07-56599 (3/2/10).

Point to remember: The vast majority of commutes to and from work for nonexempt employees, whether or not in company-owned vehicles, are not compensable.

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