This week, the Court explores whether time booting up a computer is compensable under federal labor law and addresses district courts’ discretion to adjust fees for serial American With Disabilities Act litigants.
CADENA v. CUSTOMER CONNEXX LLC
The Court holds that time spent booting up a computer is compensable under the Fair Labor Standards Act, where in-person call center employees used computer programs not only to clock in but also to place calls and perform other duties.
The panel: Judges Bybee, Callahan, and Collins, with Judge Bybee writing the opinion.
Key highlight: “Because Appellants cannot perform their principal duties—receiving customer calls and scheduling—without a functional computer, booting up their computers at the beginning of their shifts is integral and indispensable and therefore compensable under the FLSA.”
Background: Connexx’s call center provides customer service and scheduling for an appliance recycling business. At the start of a shift, employees turn on their computers, log in using a username and password, and open various programs, including the timekeeping system. At the end of their shift, employees finish their calls, close the programs, clock out, and log off or shut down their computers. Both the boot up and shut down process takes several minutes.
Plaintiffs, hourly workers at the call center, filed suit alleging that Connexx violated the FLSA and Nevada law by not paying employees for time spent booting up their computers before clocking in and shutting down their computers after clocking out. The district court granted summary judgment to defendants on the FLSA claims, concluding that “[s]tarting and turning off computers and clocking in and out of a timekeeping system are not principal activities” because Connexx did not hire employees for that purpose. Having resolved the federal claims, the district court declined to exercise supplemental jurisdiction over the state-law claims.
Result: The Ninth Circuit reversed and remanded. The Court first explained that the Supreme Court has interpreted the FLSA to provide that “activities performed either before or after the regular work shift . . . are compensable . . . if those activities are an integral and indispensable part of the principal activities for which covered workmen are employed.” The first principal activity of the day begins the workday and “any [waiting] time that occurs after the beginning of the employee’s first principal activity and before the end of the employee’s last principal activity . . . is covered by the FLSA.” But “time spent waiting to perform the first principal activity of the day is ordinarily not compensable.”
Applying those principles, the Court observed that plaintiffs’ “principal duties” here were “answer[ing] customer phone calls and perform[ing] scheduling tasks.” Because those “duties cannot be performed without turning on and booting up their work computers, and having a functioning computer is necessary before employees can receive calls and schedule appointment,” the Court held that “turning on the computers is integral and indispensable to the employees’ duties and is a principal activity under the FLSA.” The district court had focused on the fact that employees were waiting to clock in, but as the Ninth Circuit pointed out, the computers were also used to launch phone programs, scripts, customer information, and email programs that were integral to the employees’ duties. The timekeeping system was “a red herring,” as “[a]ll of the employees’ principal duties require the use of a functional computer.” The Court noted that the Tenth Circuit had reached a similar conclusion in another call center case, Peterson v. Nelnet Diversified Solutions, LLC, 15 F.4th 1033 (10th Cir. 2021).
Finally, the Court declined to affirm on Connexx’s asserted alternative ground. As it explained, whether the boot up time fell within the “de minimis” doctrine and whether Connexx knew about the alleged overtime both “involve disputed factual questions that the district court should decide in the first instance on remand.”
The Court confirms district courts’ discretion to substantially reduce the fee awards for repeat ADA litigants.
The panel: Judges M. Smith, R. Nelson, and Drain (E.D. Mich.), with Judge M. Smith writing the opinion.
Key highlight: “[W]hile Shayler may be dissatisfied with the district court’s explanations, they are sufficient to undergird its fee award under Ninth Circuit precedent. At bottom, this was a simple, relatively uncontested case. Given the repetitive nature of high-frequency ADA litigation, there was nothing irrational about the district court’s conclusions that, in effect, much of the work here could have been performed by junior associates or even paralegals, or that much of the motion practice in the case was superfluous.”
Background: Plaintiff James Shayler, a high-frequency plaintiff in ADA suits, filed an ADA claim alleging that PCH’s building failed to provide accessible parking spaces. He moved for summary judgment. PCH did not oppose, but Shayler then filed a reply anyway. After the district court granted summary judgment, Shayler moved for more than $34,000 in fees and costs under the ADA’s fee-shifting provision. Applying a blended billing rate of $300 and a 65% downward multiplier, the district court instead awarded a little less than $10,000. The court emphasizing the “boilerplate” nature of Shayler’s filings in the case and the unreasonable amount of time his attorneys had devoted to litigating it. Shayler appealed.
Result: The Ninth Circuit affirmed. The Court began by highlighting the problem of serial ADA litigants, noting that “[t]he ability to file essentially the same complaints over and over again, combined with the hope of intimidating the defendant into an early settlement (or of obtaining a default judgment), allows for a quick recovery of attorney’s fees with relatively minimal difficulty.” The Court then rejected Shayler’s attempts to demonstrate the district court had abused its discretion. The Court concluded that the district court had adequately explained its decision to apply a blended billing rate, citing its concern “that serial ADA litigation does not involve particularly complex work justifying partner-level billing rates.” As the Court of Appeals emphasized, the district court had also cited other recent district court decisions adopting this same rate in “repeat-player ADA cases.” Similarly, the Court held the district court had also adequately explained its downward multiplier, as the court had identified specific items in Shayler’s billing record (such as the hours for the reply supporting an unopposed summary judgment motion) that were unnecessary.