In complying with their obligations under federal and state wage-and-hour laws to pay employees for all hours worked, employers rightly and understandably crave certainty in the guidance provided to them by courts and administrative agencies. Unfortunately, as the Rolling Stones are famous for saying, “You can’t always get what you want.” Rather, the framework developed by courts and the U.S. Department of Labor are divergent, and as a result create two sets of different rules that confront employers. This article focuses on the application of these rules in the context of employee meal breaks as one example of this challenge, and offers recommendations for a path forward in the wake of uncertainty.

Given the mushrooming of Fair Labor Standards Act litigation (a more-than 350 percent increase in the number of federal cases filed over the past 10 years from approximately 2,000 in 2001 to more than 7,000 in 2011), the unsettled nature of the law in this area creates significant challenges for employers.

The FLSA, enacted by Congress in 1938 to address the plight of workers during the Great Depression, requires employers to pay overtime to non-exempt employees at a rate not less than one-and-a-half times the employees’ regular rate for all hours worked more than 40 in a work week. The FLSA does not provide a definition of work; it defines “employ” to include “to suffer or to permit to work.” In the years immediately following its enactment, courts struggled to implement the general precepts of the FLSA, in part because of the fact that the FLSA nowhere defines the word “work.” (See Lugo v. Farmer’s Pride, No. 07-cv-00749, 2008 U.S. Dist. LEXIS 3232 (E.D. Pa. Jan. 15, 2008).) In a series of opinions in the mid-1940s, the Supreme Court set out principles for analyzing whether time spent by employees qualified as work and was therefore compensable. (See Anderson v. Mt. Clemens Pottery, 328 U.S. 680 (1946); Skidmore v. Swift, 323 U.S. 134 (1944); Armour v. Wantock, 323 U.S. 126 (1944).) The precepts set out by the Supreme Court more than 60 years ago in Anderson, Skidmore and Armour continue to serve as the foundational precepts of what qualifies as compensable work under the FLSA to this day.

The legal issue in companion cases Skidmore and Armour was whether the on-call time of the employees was compensable under the FLSA. In Armour, fireguards at a factory worked a full day at the job site, then clocked out at 5 p.m., according to the opinion. Following their clocking out, the fire guards remained on-call in the fire hall provided by the company and located on the property until the following morning. While remaining on-site at the fire hall, the fire guards were required to respond to any alarms and to perform various other duties as needed, which totaled, on average, less than a half-hour a week. While the employer did not contest that the time actually performing work was compensable, the employer argued that the on-call time spent by the employees on the job site was not compensable. Likewise, in Skidmore, several employees remained in the fire hall of the plant to answer alarms. The employees were paid for each alarm answered, but were not otherwise paid for their on-call time. Rejecting a bright-line rule that on-call time was not compensable, the court reasoned “no principle of law found either in the statute or in court decisions precludes waiting time from also being working time.” However, the court in Armour stated that, “Whether time is spent predominantly for the employer’s benefit or for the employee’s is a question dependent upon all the circumstances of the case.”

In Anderson, the court confronted whether time spent by employees prior to the beginning of the shift (including time walking from the main entrance to the employees’ respective work areas, time spent performing preliminary duties and time waiting before the start of the shift) was compensable under the FLSA. In analyzing this question, the court articulated a “de minimis rule” stating that where “the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. … It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved.”

Part 785 of Title 29 of the Code of Federal Regulations issued by the administrator of the DOL in 1961 is titled “Hours Worked” and sets out the DOL’s regulations both generally, as to hours worked, and specifically, as to meal breaks. Where an “employer knows or has reason to believe that [an employee] is continuing to work,” the time “is working time” and therefore must be paid. “Bona fide meal periods” are not work time, and accordingly do not need to be paid. The DOL defines bona fide meal periods as “rest periods” where an employee “must be completely relieved from duty for the purposes of eating regular meals.” DOL regulations further provide that an employee is not completely relieved of duty if he or she “is required to perform any duties, whether active or inactive, while eating” — for example, “an office employee who is required to eat at his or her desk or a factory worker who is required to be at his machine is working while eating.” In terms of the amount of time required to qualify as a bona fide meal period, the DOL regulations provide that, “ordinarily 30 minutes or more is long enough for a bona fide meal period. A shorter period may be long enough under special conditions.”

The U.S. Court of Appeals for the Third Circuit has not yet analyzed which standard to apply in assessing whether non-exempt employees should be paid for time spent performing work during meal breaks. However, the three district court decisions evaluating this issue have imported the analysis from Armour and Skidmore into the meal break context. (See Lugo; Oakes v. Commonwealth, 871 F. Supp. 797 (W.D. Pa. 1995); McGrath v. City of Philadelphia, 864 F. Supp. 466 (E.D. Pa. 1994).) Recognizing the tension between the Supreme Court’s decisions finding that time spent by employees was only compensable if it was “predominantly for the benefit of the employer” and the more expansive DOL regulation 785.19 requiring that employees be “completely relieved from duty,” the courts in Lugo, Oakes and McGrath all adopted the “predominantly for the benefit” test.

None of the three decisions provides guidance on approximately how much time would trigger a finding that the time was predominantly for the benefit of the employer and, as a result, compensable. The McGrath court formulated the predominant benefit test “as requiring compensation only if meal periods are spent primarily for the employer’s benefit.” Reasoning that there was evidence in the record that plaintiffs received “a meal period of substantially shorter duration than 30 minutes,” the court denied summary judgment and allowed the case to proceed to trial.

What does it mean to be “substantially shorter” than 30 minutes, and how do employers create compliance programs in the face of generic pronouncements and vague standards? And should employers strive to comply with this less stringent requirement in the face of more exacting standards set forth by the DOL, with the possibility of a DOL audit lingering in the background? Of course, in any audit, the DOL most likely would apply its regulatory scheme requiring that employees be completely relieved of duty in order for the time not to be compensable.

So what is an employer to do in the wake of this uncertainty? Assess current areas of risk based on an industry-specific analysis of potential wage-and-hour pitfalls and create robust compliance programs that seek to completely relieve employees from duty during off-the-clock time. Of course, this is easier said than done in our fast-paced, electronic world.

While creating compliance programs and engaging in concerted efforts to reduce exposure to wage-and-hour litigation, employers should recognize that the challenges of implementing the FLSA largely stem from the application of a law developed to apply to factory floors rather than the digital age. And even though the Supreme Court’s 1940s pronouncements created a framework under which businesses continue to operate, they simultaneously recognized that the dictates of the FLSA should consider “the realities of the industrial world,” as the court held in Anderson. Employers and their advocates should take comfort in these words and use them in their efforts to modernize the application of the FLSA for the world we live in today. •

Andrea M. Kirshenbaum is a principal in the Philadelphia office of Post & Schell and is part of the firm’s employment and employee relations law practice group. She litigates and provides compliance counseling on wage-and-hour issues for employers. She can be contacted at akirshenbaum@postschell.com.