In December 2024, the Third Circuit Court of Appeals issued an important opinion in Secretary of Labor v. East Penn Manufacturing Co., 123 F.4th 643 (3d Cir. 2024). The underlying lawsuit arose out of a Pennsylvania factory that makes and recycles lead-acid batteries. The factory workers were required to put on uniforms and protective gear at the beginning of the workday and to undress and shower at the end of the workday. As compensation for these activities, the company provided the workers with paid “grace periods” of five minutes at the beginning of the day and ten minutes at the end of the day. The company “did not record how much time workers actually spent changing and showering.”
The U.S. Department of Labor sued the company, alleging that it failed to pay workers for all changing and showering time under the federal Fair Labor Standards Act (“FLSA”). In response, the company asserted, among other things, that the paid five-minute and ten-minute “grace periods” sufficiently compensated the workers by capturing the time that a worker would “reasonably” spend changing and showering.
The Third Circuit disagreed in a unanimous opinion by Stephanos Bibas. The Court explained that the FLSA’s text “focuses on actual time” and “say[s] nothing about a reasonableness limit.” Thus, the Court held, liability under the FLSA must be “based on the actual time that workers spend” performing the allegedly unpaid activity.
Notably, the Court rejected the employer’s argument that compensating workers based on “actual” rather than “reasonable” time would “reward employees for dragging their feet or tending to personal matters.” Relying on prior Third Circuit precedent, the Court explained: “If a worker lollygags, ‘the employer’s recourse is to discipline or terminate the employee – not to withhold compensation.’” – PW