Ninth Circuit Rules That Computer Startup Time is Compensable Under the FLSA

The U.S. Ninth Circuit Court of Appeals has overruled a Nevada District Court and found that time spent by call center workers booting up computers is integral to
the employees' duties of receiving customer phone calls and scheduling appliance
pickups, and therefore is compensable work time under the FLSA. The case is Cadena v. Customer Connexx LLC (9th Cir. 2022), issued on October 24th (copy attached below). This follows a 2021 Tenth Circuit ruling to the same effect, Peterson v. Nelnet Diversified Solutions, LLC, 15 F.4th 1033 (10th Cir. 2021).

The ruling does not necessarily determine the final outcome of the case, however. The Court, citing Forrester v. Roth's I. G. A. Foodliner, Inc., 646 F.2d 413, 414 (9th Cir. 1981), instructed the District Court to consider the employer's defense that it had a procedure for its employees to report additional time, and therefore is not responsible for compensating its employees for unreported time, because it did not know the work was being performed. As summarized by the Court, Forrester stands for the following rule:

[W]here an employer has no
knowledge that an employee is
engaging in overtime work and that
employee fails to notify the
employer or deliberately prevents
the employer from acquiring
knowledge of the overtime work, the
employer's failure to pay for the
overtime hours is not a violation of
[the FLSA].

However, the Court also noted the well-worn rule that the employer need only have "reason to believe" that the work is being performed for liability to attach, not actual knowledge that the work was going on.  This standard can be a difficult one for an employer to overcome, but certainly a good place to start is a clearly communicated policy that all working time must be reported, and that off the clock work is not permitted.