The U.S. Supreme Court on Tuesday handed a victory to employers over worker compensation, ruling that companies do not have to pay employees for the time they spend undergoing security checks at the end of their shifts in a case involving an Amazon.com Inc warehousing contractor.
The court decided by a 9-0 vote that employees of Integrity Staffing Solutions facilities in Nevada, where Amazon merchandise is processed and shipped, cannot claim compensation for time spent undergoing screening - up to half an hour a day, according to the workers - aimed at protecting against theft.
The ruling is likely to benefit other companies facing similar lawsuits including Amazon, CVS Health Corp and Apple Inc, according to Integrity's lawyers. The cases against Amazon, Integrity and other staffing companies affect up to 400,000 workers, with plaintiffs claiming hundreds of millions of dollars in damages, according to court filings.
Amazon spokeswoman Kelly Cheeseman said the allegations in the Integrity case of a lengthy security screening process were "simply not true." She added that Amazon's screening process is designed to take 90 seconds per employee at its facilities.
Mark Thierman, an attorney for the plaintiffs, said the ruling leaves thousands of workers "short-changed a half hour per day." Many workers will still be able to pursue similar claims under state law, Thierman added.
Justice Clarence Thomas wrote on behalf of the court that the screening process is not a "principal activity" of the workers' jobs under a law called the Fair Labor Standards Act and therefore is not subject to compensation.
For workers to be paid, the activity in question must be "an intrinsic element" of the job and "one with which the employee cannot dispense if he is to perform his principal activities," Thomas wrote.
The high court reversed an April 2013 ruling by the 9th U.S. Circuit Court of Appeals, which had found that the screenings were an integral part of the warehousing job done for the benefit of the employer and should be compensated.
Employees had sued Integrity Staffing Solutions for back wages and overtime pay, saying they should have been compensated for time spent in security screenings.
Amazon, the world's largest online retailer, is not directly involved in the case. A business group called the Retail Litigation Center, in a brief supporting the warehousing company, said the industry in general loses $16 billion annually in thefts.
The case is Integrity Staffing Solutions, Inc v. Jesse Busk and Laurie Castro, U.S. Supreme Court, No. 13-433.
