Employment Department: Barista Versus Starbucks!

This lawyer gets up at 4 a.m. and works out at a gym. My workout partner is a business owner who will remain nameless. He complains a lot about California employment law and how it’s driving him out of business. He owns 15 businesses. One case that has him really nervous is what he calls the Starbucks case. “The Starbucks case,” he moans, gripped with loathing and racked with dread. So, here I will summarize and explain (best that I can) the Starbucks case. It’s called: Troester v. Starbucks Corporation, S234969.

The Case went all the way to the California Supreme Court. It was decided about a year ago. While that seems like a long time, it’s not in Law-time. It’s like dog-years. Seven human years are equivalent to one year in Law-time. Anyways, to the case:

The De Minimis Doctrine: What If Something Is Too Small For The Legal System To Deal With?

This case involves the “De Minimis” Doctrine. What is that? In the law, there’s a rule written in Latin of course which is: de minimis non curate lex. This translates to, ‘“the law does not concern itself with trifles.” Courts don’t sweat the small stuff. Makes sense. Especially considering little odd bits of work time that are too small to record. Clock out. Pick up a piece of trash on the way out. Should an employer have to pay for that because it wasn’t recorded? You get the idea. Federal courts have used the doctrine. (read more about the case and get from this website )

Ah, but this is California. What about the state? Should California employment law and the Industrial Welfare Commission (IWC) use the De Minimis Doctrine too? Is there a California version of De Minimis (like the California version of a traffic stop)?

What Are The Starbucks Facts?

A Starbucks employee brought a class action against Starbucks. According to the employee, Starbuck’s computer software required him to clock out on every closing shift before initiating the software’s “close store procedure.” Transmitting sales, inventory, etc. Afterward, the employee set the alarm and walked coworkers to their cars per Starbucks policy. Sometimes he had to reopen the store to let others grab things they forgot. He brought patio furniture mistakenly left outside. You can see the issue: He had clocked out but there were a few scuttle tasks remaining for him to do. 

How long was he working while off the clock? Ten minutes. The District Court which sided with Starbucks’s summary judgment (when you ask the court to decide for you without having to go to trial because it’s so obvious you’re right), found the wronged employee was working off the clock an average of ten minutes. 

How much money is that? Over 17 months it’s about 12 hours and 50 minutes. He was making 8 bucks an hour at the time so: $102.67. The District Court said, “Hey because this is too hard to track so this falls under the De Minimis Doctrine.”

Then there was an appeal. There’s always an appeal, isn’t there? The Ninth Circuit said not so fast. Sure Federal Court’s use De Minimis Doctrine, but does the De Minimis apply to California State Law? The Ninth Circuit, which is Federal, decided the State should make that decision.  The Ninth Circuit turned the question over to the California Supreme Court. (Yes they can do that.).  

The Ninth Circuit Asked The California Supreme Court to Weigh In

The California Opinion starts at the beginning: where do California employment laws come from? Wage and hour claims are controlled by two sources of authority: the Labor Code, enacted by State Legislature, and 18 wage orders, adopted by the Industrial Welfare Commission (https://www.dir.ca.gov/IWC/).

The Labor Code and Wage Orders are presumed to protect employees. The Federal labor laws do the same thing. So what’s the difference? It works like this. Federal law sets the minimum protection to employees. However, states are allowed to grant more protections if they wish. You cannot lower employee protections below the Federal standard but you may exceed it. California exceeds it. 

So what’s California’s Labor Code and Wage Order say about De Minimis? IWC wage order No. 5-2001 (Wage Order No. 5) controls places like Starbucks. Subdivision 2(K) defined worked hours as the time when an employer controls the employee, including the time an employee is suffered or permitted to work. Suffered or permitted? What does that mean? It’s when the boss knew or should have known that an employee was working. (here’s the case cite, in case you want to check the Court’s writing: Troester v. Starbucks Corp. (2018) 5 Cal.5th 829, 840, as modified on denial of reh’g (Aug. 29, 2018)).

At the end of a lot of discussion, the California Supreme Court found that the Labor Code and Wage Orders had not implemented the De Minimis Doctrine. 

Wait A Minute, Shouldn’t California Have Its Own Doctrine? 

After all, it seems like a common-sense rule. That was Starbucks’ backup argument. Starbucks argued that all laws, state or federal, contain a De Minimis Doctrine in the background to prevent absurd, ridiculous, or frivolous claims.  This is codified in the California Civil Code § 3533 “The law disregards trifles.” Starbucks proposed a bunch of hypotheticals to argue the point but the Court stayed focused on the facts in front of it. 

In thinking about the De Minimis Doctrine as it applies to statutes, these little trifles that a court shouldn’t be bothered with, the California Supreme Court used the statute’s purpose as a guiding principle. If applying the doctrine helps achieve the statute’s purpose, then generally, it should be applied. However, if using the De Minimis Doctrine undermines the statute’s purpose, then it should be disregarded. The De Minimis Doctrine should not be used if the statute is specifically concerned with small things. 

Smaller Things

The California Supreme Court held that the California Labor Code and Wage Orders are specifically concerned with small things. These laws enforce two ten-minute breaks. The Courts have carefully policed those breaks on numerous occasions. The employer has to pay a penalty of one hour of pay for failing to give employees breaks. Besides, the Court reasoned, split-second absurdities are not the same as minutes worked after clocking out. If it’s difficult to record those minutes why should employees be 100% responsible for that difficulty? Not to mention Class Actions are designed to capture De Minimis violations.

Conclusion

The Court sided with the employee. The De Minimis Doctrine does not apply here, to these facts at least. However, the Court left open the questions for work activities that were much smaller and more irregular. 

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