In Troester v. Starbucks Corp., the California Supreme Court determined that the federal de minimis doctrine does not apply to California wage claims. While this ruling does not completely eviscerate this legal defense for California employers, it places a very high burden on employers who are brave enough to raise this defense in California courts.
The facts in Troester are simple. Troester worked for Starbucks as a shift supervisor. In this role, he had the responsibility of completing the “close store procedure” at his store, which required him to transmit the store’s financial information to Starbuck’s corporate headquarters. Troester argued that prior to completing this procedure, Starbuck’s computer software required him to clock out of his store shift. Troester filed a putative class action against Starbucks in the Superior Court alleging that he and other putative class members were owed unpaid wages due to this close store procedure, which amounted to four to 10 additional minutes each day.
Starbucks subsequently removed the matter to federal Court and filed a motion for summary judgment based on the federal de minimis doctrine. Pursuant to this doctrine, an employer is not liable for unpaid wages if the unpaid time at issue is “insubstantial or insignificant” and “cannot as a practical administrative matter be precisely recorded for payroll purposes.” In determining whether this doctrine applies, federal courts consider three factors: (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. While acknowledging that all of the work at issue was compensable and regularly occurring, the District Court granted Starbuck’s motion. Troester appealed and the Ninth Circuit certified the question of the applicability of the federal doctrine to California unpaid wage claims.
After analyzing state law, the California Supreme Court determined that California’s wage and hour statutes and regulations did not adopt the federal doctrine. In rejecting the federal doctrine, the Supreme Court repeatedly referred to California statutes requiring employees to be compensated for “all time.”
The Court then discussed whether some version of the de minimis doctrine still applied in California pursuant to its existence as a general tenet of California law, as evidenced by California case law and California Civil Code section 3533, providing “The law disregards trifles.” On this issue, the Supreme Court held that the doctrine would not apply under the facts given to it by the Ninth Circuit. In its discussion, the Supreme Court pointed to multiple factors: (1) the total time at issue amounted to $102.67 over a 17-month period, which the Court determined was not de minimis for a large portion of the working population, (2) modern technological advances made the tracking and recording of the time at issue administratively possible, and (3) California law relating to employee rights is, to a great extent, focused on relatively short periods of time, such as requiring a 10-minute rest break.
The Supreme Court’s rejection of the federal de minimis doctrine potentially exposes California employers to claims for seconds or minutes of unpaid wages. There is, however, a tiny sliver of hope. The majority opined that there could be certain factual circumstances where compensable time was so minute or irregular that it would be unreasonable to expect the time to be recorded, a fact further emphasized by two concurring opinions. Even so, California employers should immediately review their timekeeping procedures to ensure that they are following best practices and appropriately tracking every single possible second of employee time.