Ninth Circuit Issues Split Decisions on Compensation for Travel Time and "Off-the-Clock" Work
Employees who drive company vehicles between home and work will find little to cheer about in a recent Ninth Circuit decision . . . unless they live in California. In Rutti v. Lojack Corporation, a three-judge panel refused to relax the rule that commuting time is non-compensable under the Fair Labor Standards Act (FLSA).
The employee, who installed vehicle recovery systems, contended that his travel time between home and worksites was compensable under the FLSA and California law because his employer required him to drive company vehicles and significantly restricted his activities while doing so. For example, the employer prohibited the employee from transporting passengers and engaging in personal pursuits, and required him to drive directly to and from the worksite with his cell phone turned on.
All three judges rejected that argument under the FLSA, holding that use of an employer's vehicle to commute is non-compensable even if it is a condition of employment and that the restrictions placed on the employee's activities were incidental to his principal job activities. The unanimous panel also rejected the employee's argument that his commuting time was compensable under the "continuous workday doctrine," under which an employee's workday generally lasts until he has completed all of his principal activities during the day.
But the Rutti panel parted ways when it came to deciding the issue under California law. A two-judge majority found the tightly-controlled use of the company vehicle was compensable under California law requiring compensation for all time during which employees are "subject to the control of an employer." So the employee's claim under California law goes back to the trial court for further litigation.
The Rutti panel also issued a split decision as to whether certain activities of the employee at home before and after work was compensable off-the-clock work. The full panel rejected the employee's argument that his preliminary (i.e., before work) activities were compensable. Those activities consisted of such things as receiving, mapping and prioritizing jobs and routes assigned to him that day and occasionally filling out simple forms. The court found those activities were either incidental to the employee's principal job activities or so "de minimis" as to be non-compensable.
The court next considered the employee's postliminary activities. (The panel noted that "postliminary" is in the FLSA regulations but not in the dictionary.) Those activities included sending after-work transmissions of data from portable data terminals to the employers' computer system, a process that could be either quick or time consuming. Two of the judges held that the evidence was insufficient to conclude that the postliminary activities were either incidental or "de minimis" and therefore reversed the trial court's grant of summary judgment on that issue.
New Bicycle Tax Credit Takes Effect in 2009
Here's another new employment law that goes into effect on January 1, 2009: the Bicycle Tax Credit (BTC). Passed as part of that $700 billion bailout plan we've all heard so much about, the BTC allows employers to reimburse employees up to $20 per month for bicycle-commuting related expenses; the employer can then claim a tax deduction for the reimbursements. Click here for an informative article on the tax credit from the San Francisco Chronicle. (Even though he eventually voted against the bailout bill that contained the BTC, the tax credit is the brainchild of Oregon Congressman Earl Blumenauer, a long-time bicycle advocate who just happens to be this author's congressman.)
If you are interested in starting a bike commuting reimbursement program at your workplace, you might want to consult a tax lawyer to make sure you follow all legal requirements. Want more information on bike commuting? Here's our favorite bike blog, bikeportland.org.
Utah: Employee Commuting May Be Within "Course and Scope" of Employment
Last week the Utah Supreme Court ruled that an employee's commute may in some cases be within the course and scope of his or her employment, such that an employer may be held liable for the employee's negligence during the commute.
In Newman v. White Water Whirlpool, the defendant employed Bradley Sundquist as an installer of marble countertops and tile. In his job, Sundquist would drive White Water's materials and equipment to jobsites in his own truck and trailer. One morning, on his way to White Water's offices, Sundquist's truck collided with a car driven by plaintiff Newman, injuring him severely. Newman sued both Sundquist and White Water, alleging that Sundquist was acting in the course and scope of his employment at the time of the accident, thus making White Water jointly liable for his injuries. The trial court dismissed the lawsuit on the basis that Sundquist was merely commuting, and therefore not acting in the course and scope of his employment.
The Utah Supreme Court disagreed, holding that a jury could find that Sundquist was acting in the course and scope of his employment at the time of the accident. Why? Because Sundquist's job required him to drive his truck carrying the employer's equipment and materials, and then returning unused materials to White Water, reasonable minds could conclude that he was not merely commuting but was in fact returning materials to his employer. If so, that would mean Sundquist was working at the time of the accident and White Water is liable for his negligence.
Utah employers should pay close attention to this ruling. Employees who merely commute to and from work without performing any duties during the commute are not acting in the course and scope of their employment and employers will not be liable for any accidents that they might cause. Employers may, however, be liable for the negligent acts of employees who are driving as part of their job duties. If you have an employee whose "commute" includes occasional job duties (such as ferrying equipment and supplies, talking on a cell phone, reviewing documents, etc.), you should realize that their negligence might be imputed on your company and take any appropriate steps to ensure that they are driving as safely as possible.
