Cadena v. Customer Connexx LLC

107 F.4th 902

Cariene CADENA; Andrew Gonzales,on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. CUSTOMER CONNEXX LLC; Janone, Inc., Defendants-Appellees.

No. 23-15820

United States Court of Appeals, Ninth Circuit

Argued and Submitted April 12, 2024 Pasadena, California

Filed July 10, 2024

Appeal from the United States District Court for the District of Nevada, Andrew P. Gordon, District Judge, Presiding, D.C. No. 2:18-cv-00233-APG-DJA

Joshua D. Buck (argued), Mark R. Thierman, and Leah L. Jones, Thierman Buck LLP, Reno, Nevada, for Plaintiffs-Appellants.

William R. Gignilliat, IV, (argued), Jackson Lewis PC, Greenville, South Carolina; Paul T. Trimmer, Jackson Lewis PC, Las Vegas, Nevada; Veronica T. Hunter, Jackson Lewis PC, Houston, Texas; for Defendants-Appellees.

Before: Marsha S. Berzon and Salvador Mendoza, Jr., Circuit Judges, and Michael T. Liburdi,^* District Judge.

OPINION

BERZON, Circuit Judge:

Plaintiffs, a certified collective of call-center workers, alleged that their employer, defendant Customer Connexx LLC ("Connexx"), violated the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., by failing to pay overtime wages for time spent booting up and shutting down their computers each day. In a previous appeal, we reversed the district court's grant of summary judgment to Customer Connexx and remanded for further proceedings. See Cadena v. Customer Connexx LLC (Cadena I), 51 F.4th 831, 834 (9th Cir. 2022). On remand, the district court again granted summary judgment to Customer Connexx, holding the time not compensable under longstanding precedents establishing that the FLSA does not require an employer to pay wages for work performed before or after scheduled work hours where the amount of time in question is "de minimis." See Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 692, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946); Lindow v. United States, 738 F.2d 1057, 1062 (9th Cir. 1984).

On appeal, plaintiffs argue that the de minimis doctrine is no longer good law after Sandifer v. U.S. Steel Corp., 571 U.S. 220, 134 S.Ct. 870, 187 L.Ed.2d 729 (2014). We disagree. The de minimis doctrine remains applicable to workers' claims for overtime wages under 29 U.S.C. § 207. Triable issues of material fact remain, however, as to whether the time here was de minimis. We reverse the district court's judgment and remand for further proceedings.

BACKGROUND

I. Facts

Customer Connexx, a wholly owned subsidiary of defendant JanOne, Inc. (collectively "Connexx"), operates a call center in Las Vegas that assists with customer service and scheduling functions for an appliance recycling business. Plaintiffs worked as customer service representatives or "call center agents," who primarily spent time on the telephone with customers; "leads," who supervised the call center agents; and quality assurance agents, who monitored calls of the call center agents, among other duties. The workers were required to use a computer timekeeping software program to clock in and out for each shift. Connexx instructed its workers to clock in before opening any other computer program necessary to perform their call center roles, and its policies prohibited off-the-clock work.

To clock in using the timekeeping software, workers needed a functioning computer. So the steps for clocking in generally included turning on or awakening the computer, logging in to the computer by typing in a user name and/or password, and clicking on a link to the timekeeping system to open the program and clock in.

Workers at the call center did not have permanently assigned workstations. Instead, workers went to computer workstations each shift on a first come, first served basis. According to the workers' deposition testimony, some of the computers were "old and slow"; others were faster. Workers sometimes had to try different work-stations before finding a workable computer.

Connexx required its call center workers to be clocked in and ready to accept calls at the scheduled start time of each shift. Because it took additional time to engage a computer before it was possible to clock in, the workers had to arrive at the call center some amount of time before the scheduled start time of each shift. Company policy prohibited the workers from clocking in seven or more minutes before the scheduled start time of a shift. Compensable work time was computed by rounding to the nearest quarter-hour.

At the end of each shift, workers generally finished any ongoing call, closed out of non-timekeeping programs that were open on the computer, and then clocked out. After clocking out, the workers had to log off the computer or turn it off.

The parties dispute how long it generally took workers to boot up and boot down the computers at the beginning and end of each shift. They also dispute whether Connexx required the workers to wait until the computer was fully powered down before leaving for the day.

In some circumstances, Connexx would allow a worker to request adjustment of the time records generated by the timekeeping software, such as when computer delays prevented a worker from clocking in at the scheduled start time of a shift. The parties dispute whether supervisors were permitted to adjust time records to reflect a worker's actual start time if it preceded the shift start time, rather than to reflect only the scheduled start time for the shift.

II. Procedural History

Two named plaintiffs, Cariene Cadena and Andrew Gonzales, filed a collective action complaint alleging that Connexx owed its call center workers unpaid overtime wages under the FLSA for booting up and booting down their computers before and after clocking in to the company's timekeeping software program each shift.¹ Of the additional plaintiffs who opted-in to the collective action, thirteen remain, for a total of 15 plaintiffs (collectively, "Cadena").²

In the prior appeal, we reversed the district court's earlier grant of summary judgment to Connexx. Cadena I, 51 F.4th at 834. Cadena I concluded that the time call-center employees spent booting up computers is compensable under the FLSA because it is an "integral and indispensable" part of their duties, id. at 840; noted that in Sandifer, the Supreme Court "questioned the application of the de minimis doctrine to the FLSA," id. at 841; and declined to resolve whether the doctrine continues to apply, id. We remanded the case for the district court to determine whether: (1) the time spent shutting down computers is compensable; (2) the time spent booting up or shutting down computers was de minimis such that Connexx is not liable for payment of overtime wages for that work under the FLSA; and (3) Connexx had no knowledge of the overtime work and therefore is not liable for that alternative reason. Id. We observed in Cadena I that the second and third questions "involve disputed factual questions that the district court should decide in the first instance on remand." Id.

On remand, the district court granted summary judgment to Connexx once again based on the prior record and briefing, declaring that there was no need for additional proceedings. The court concluded the de minimis doctrine is applicable to this case notwithstanding Sandifer. The court further held Connexx not liable for payment of overtime wages because, assuming that both boot down and boot up time are compensable, the time spent on those tasks was de minimis under the three-factor test established in Lindow, 738 F.2d at 1063. Because the time spent was de minimis, the court concluded, Connexx was not liable for overtime wages. In the alternative, the district court held that to the extent any of the time in question was not de minimis, Connexx is not liable because Cadena had not met her burden of establishing that Connexx failed to pay for that overtime, in light of the evidence indicating the plaintiffs could request adjustments to their time records.

DISCUSSION

We review the district court's grant of summary judgment de novo. See Corbin v. Time Warner Ent.- Advance/Newhouse P'ship, 821 F.3d 1069, 1074 (9th Cir. 2016). We "must determine, viewing the evidence in the light most favorable to the nonmoving party, whether the district court correctly applied the relevant substantive law and whether there are any genuine issues of material fact." Id. (quoting Balint v. Carson City, 180 F.3d 1047, 1050 (9th Cir.1999) (en banc)). We find a genuine issue of material fact "when the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. (quoting Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1031 (9th Cir. 2010)).

"Whether an activity is excluded from hours worked under the FLSA . . . is a mixed question of law and fact." Cadena I, 51 F.4th at 835 (quoting Ballaris v. Wacker Siltronic Corp., 370 F.3d 901, 910 (9th Cir. 2004)). " 'The nature of the employees' duties is a question of fact, and the application of the FLSA to those duties is a question of law.' " Id. (quoting Ballaris, 370 F.3d at 910).

I. The Continued Validity of the De Minimis Doctrine.

Our initial question is whether the de minimis doctrine remains good law after the Supreme Court's 2014 decision in Sandifer. The Sandifer Court held that the de minimis doctrine was not applicable to 29 U.S.C. § 203(o), a provision of the FLSA concerning time spent changing clothes or washing.³ See Sandifer, 571 U.S. at 233-34, 134 S.Ct. 870.⁴ Sandifer did not disturb our Circuit's applicable case law on the de minimis doctrine in the context of an FLSA claim under § 207, so the doctrine remains applicable in the circumstances here.

The Supreme Court first recognized the de minimis doctrine in its 1947 decision in Anderson. The Anderson Court held that, for purposes of calculating overtime under the FLSA, time that employees spent walking to and from their work benches at the beginning and end of their shifts was compensable because "the...