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FLSA Class Action Defense Cases–Rutti v. Lojack: Ninth Circuit Affirms Defense Summary Judgment In FLSA Class Action Except As To One Claim Seeking Compensation For Postliminary Activities

District Court Properly Granted Defense Motion for Summary Judgment as to Commute Time and Preliminary Activities Time, but Issue of Fact Existed as to Whether Postliminary Activity of Daily Transmissions to Employer Warranted Compensation Ninth Circuit Holds

Plaintiff filed a putative class action against his employer, Lojack, alleging violations of the federal Fair Labor Standards Act (FLSA); specifically, the class action complaint alleged that defendant failed to compensate its installation technicians for “time they spent commuting to worksites in Lojack’s vehicles and for time spent on preliminary and postliminary activities performed at their homes.” Rutti v. Lojack Corp., Inc., 578 F.3d 1084, 1086-87 (9th Cir. 2009) (footnote omitted). According to the allegations underlying the class action, most installation and repair work was performed on location, and plaintiff was “required to travel to the job sites in a company-owned vehicle.” Id. Lojack paid its installation technicians on an hourly basis, and plaintiff was paid “for the time period beginning when he arrived at his first job location and ending when he completed his final job installation of the day.” Id., at 1086. Plaintiff alleged, however, that he was not compensated for “off-the-clock” activities that he “performed before he left for the first job in the morning and after he returned home following the completion of the last job,” and that “Lojack required technicians to be ‘on call’ from 8:00 a.m. until 6:00 p.m. Monday through Friday, and from 8:00 a.m. until 5:00 p.m. on Saturdays,” during which time they had to “keep their mobile phones on and answer requests from dispatch to perform additional jobs, but they were permitted to decline the jobs.” Id. (footnote omitted). Defense attorneys moved for summary judgment; the district court granted the motion, “holding that [plaintiff’s] commute was not compensable as a matter of law and that the preliminary and postliminary activities were not compensable because they either were not integral to [plaintiff’s] principal activities or consumed a de minimis amount of time.” Id. Plaintiff appealed, id., at 1087. The Ninth Circuit affirmed in part, agreeing that plaintiff’s commute time and preliminary activities were not compensable, but reversed and remanded with respect to plaintiff’s “postliminary activity of required daily portable data transmissions,” id., at 1086.

The Ninth Circuit first held that the time plaintiff spent commuting was not compensable. See Rutti, at 1088-93. The Circuit Court explained that, under the Employee Commuting Flexibility Act, 29 U.S.C. § 254(a)(2), an employer may require an employee to commute in a company vehicle. See id., at 1088-90. Further, the Court held that the conditions placed by defendant on plaintiff’s use of the company vehicle did not render his commute time compensable. See id., at 1090-92 (citing Bobo v. United States, 136 F.3d 1465 (Fed. Cir. 1998), and Adams v. United States, 471 F.3d 1321 (Fed. Cir. 2006)). And finally, the Ninth Circuit held that California law did not require Lojack to compensate plaintiff for his commute time in the company’s vehicle. See id., at 1092-93. Accordingly, the Circuit Court affirmed the district court’s conclusion “that [plaintiff] is not entitled to compensation for the time spent commuting to and from his job sites in a vehicle provided by Lojack under either 29 U.S.C. § 254(a)(2) or California law.” Id., at 1093.

With respect to plaintiff’s off-the-clock activities, the Ninth Circuit found that one of those activities may be compensable and so reversed the district court order with respect to that one issue only. After discussing the applicable case law, including the definitions of “principal activities” and “de minimis,” Rutti, at 1093-95, the Court explained that plaintiff’s claims “may be divided between those that take place before he leaves home, i.e. his preliminary activities, and those that take place after he returns home, i.e. his postliminary activities.” Id., at 1096. And the Circuit Court concluded that plaintiff was not entitled to compensation for his preliminary activities claims. See id. But with respect to his postliminary activities, the Court explained at page 1096 that at the end of each day Lojack requires its technicians to “send a PDT transmission to Lojack using a modem provided by Lojack” and that these daily transmissions “appear to be ‘part of the regular work of the employees in the ordinary course of business,’ and are ‘necessary to the business and [are] performed by the employees, primarily for the benefit of the employer, in the ordinary course of that business.’” (Citation omitted.) It was therefore improper for the district court to conclude on summary judgment at this activity “was not integral to the [plaintiff’s] principal activities.” Id. Nor did it appear from the record that the time spent on this activity was de minimis. Id., at 1096-97. Accordingly, Lojack would be required to show more in order to prevail on this issue on summary judgment, id., at 1098.

Finally, the Court also held that plaintiff’s “off-the-clock activities do not extend his workday under the continuous workday doctrine.” See Rutti, at 1098-99. In essence, plaintiff argued that “because his work begins and ends at home, he is entitled to compensation for his travel time,” id., at 1098, but the Circuit Court rejected this argument, see id., at 1098-99. Accordingly, the Ninth Circuit “substantially agree[d] with the district court’s grant of summary judgment in favor of Lojack on [plaintiff’s] claims for overtime compensation.” Id., at 1099.

But the Court “vacate[d] the district court’s grant of summary judgment on [plaintiff’s] claim for compensation for the PDT transmissions because it appears that this function is integral to [plaintiff’s] principal activities for Lojack and the record does not compel a determination that the time consumed by this function is de minimis.” Id.

NOTE: The decision was far from unanimous. Judge Hall wrote separately to express the opinion that the postliminary claim also should have been affirmed on the ground that the amount of time involved in such activities was de minimis. See Rutti , at 1099-1100 (Hall, J., concurring and dissenting). On the other hand, Judge Silverman wrote separately to express the view that commute time should have been paid by Lojack because plaintiff “was required to drive the company vehicle, could not stop off for personal errands, could not take passengers, was required to drive the vehicle directly from home to his job and back, and could not use his cell phone while driving except that he had to keep his phone on to answer calls from the company dispatcher.” See id., at 1100 (Silverman, J., concurring and dissenting).

ADDITIONAL NOTE: The Ninth Circuit noted at page 1087 that the district court ruled on the summary judgment motion before addressing class action certification, relying on the Ninth Circuit’s observation in Wright v. Schock, 742 F.2d 541, 544 (9th Cir. 1984), that “It is reasonable to consider a Rule 56 motion first when early resolution of a motion for summary judgment seems likely to protect both the parties and the court from needless and costly further litigation.”

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