Starting the Work Day, Quirky Question # 19

Quirky Question # 19:

Our company provides automobiles and vans to some of our employees who have to conduct product installations or repairs at customers’ work sites.  Some times these work sites are closer to the employees’ homes than is our central office; some times they are farther away.

Figuring that the distances roughly balance out between the shorter and longer trips, we start paying our employees when they arrive at the customers’ locations.  This approach also enables our employees to stop for coffee or food on the way to the job site without feeling that they are ripping us off.  A friend at another company recently told me that this approach may cause us problems down the road.

We have been doing this a long time without any employee complaints.  In fact, our installation and service employees like the fact that they can go directly to the customers’ locations rather than having to check in at the home office first.  Are we missing something important?

Dorsey’s Analysis:

Your question cuts across various industries.  For example, it’s quite common in the photocopy industry to provide service employees with company-owned vehicles.  Similarly, in the construction industry, it is common for certain employees to be issued company-owned vehicles that they may use to travel to a construction site without first stopping at a home office.

Your question raises the issue of what constitutes compensable time prior to the commencement of the work day.  Similarly, by extension, the facts you describe also raise a question about whether your employees are compensated for the time they spend driving home from their final customer’s location.

An employer’s approach to this issue (whether it involves the vehicle question you posed or other types of pre- or post-work activities) can have ramifications under the Fair Labor Standards Act (FLSA) and/or parallel state wage and hour laws.  Historically, there was relatively little interest in these types of issues by the plaintiffs’ employment bar.  That was then, this is now.  FLSA and state wage and hour claims now are receiving incredible amounts of attention and are yielding some of the largest settlements and verdicts (many involving eight- and nine-figure sums).

I can certainly understand why your firm has approached this issue as you describe.  It seems wasteful to have an employee commute 30 miles to a central office before starting his/her day, only to send that person 25 miles back in the same direction after he/she has “clocked in” at the home office.  I don’t doubt that the employee would prefer to drive the 5 miles directly to the customers’ location, rather than spending an hour-plus in the car.  Similarly, I am sympathetic to the concerns you articulate regarding the employee’s desire to stop for food or a beverage on the way to the job site, without feeling that he/she is exploiting your company.

Nevertheless, in a recent decision by the Washington Supreme Court, that state’s high court rejected the approach your company has been following.  In the case of Stevens vs. Brink’s Home Security Inc., No. 79815-0 (Wash. October 18, 2007), the court ruled that the alarm installation employees who drove directly from their homes in company-provided vehicles were entitled to compensation for their commuting time (both before and after the time spent with customers) pursuant to Washington’s Minimum Wage Act (MWA).

Interestingly, the defendant in the Stevens case offered its employees two options: a) they could drive to the central office and pick up a company vehicle at the start of the day, returning it at the end of the day; or b) they could retain the company vehicle and go directly to the job site from their homes.  With respect to the second option, the employees were compensated for drive time in excess of 45 minutes.  A class of employees, all of whom had selected the second option, brought the lawsuit, seeking overtime compensation for the time spent driving to the worksite and driving home from the worksite, regardless of the length of the commute.

The Washington Supreme Court affirmed the trial court’s award of summary judgment to the plaintiff class, awarding them damages, pre- and post-judgment interest and attorneys’ fees.  Concluding that the time the Brinks’ employees spent driving to and from the first and last job site was compensable, Washington’s high court noted that Brinks “controlled” the use of the company’s vehicles.  The court pointed out that the employees were precluded from having passengers in the vehicles and had to obey other company rules regarding vehicle use.  The court’s analysis is a bit thin with respect to this aspect of the opinion since the company “rules” were largely routine (wear seat belts, obey traffic laws, park legally, don’t carry alcohol, and lock vehicle).  More meaningfully, the court also noted that the employees received directions regarding where to go for their first job via phone and computer messages, and had to plan their route before departing.  Moreover, while on route, they might receive instructions from the home office redirecting them to a different location.  Based on these facts, the court found that this level of control demonstrated that the time spent by the employees driving to and from work constituted “hours worked” under the Washington minimum wage statute.

For Washington employers, barring distinguishing factors, drive time in a company vehicle (whether going to the first job of the day, or returning home at the end of the day), is compensable and should be included in employers’ calculations when determining employees’ overtime eligibility.  For your company, and employers in other states, the Stevens analysis provides some useful insights and guidance.  To what extent are your firm and other employers “controlling” the use of the company vehicles?  Do the employers prohibit all passengers, or would it be permissible for an employee driving the vehicle to drop a child off at school or a spouse off at work, on the way to a jobsite?  Are employees permitted to run errands with the company vehicles, either at the beginning or the end of the day?  How do employees learn where they will be assigned to work on a particular day and do they have to engage in any preparatory activities before arriving at the job site?  Do employees have contact with the home office on the way to the job site and, are they sometimes told to report elsewhere for work?  Depending on how these and similar questions are answered and depending on the similarities between other states’ statutes and the language of Washington’s MWA, your company and other firms may be confronting unanticipated overtime liability.

I recommend that you evaluate your policies and practices carefully in this area and consider whether it would be prudent to alter your approach.  Note, too, as referenced above, that there are a number of other contexts where the commencement and end of the official work day has been litigated.  Often, these situations implicate the donning and doffing of protective or other types of specialty clothing or equipment.  As I’ve stated in other blog analyses, however, these are questions that I’ll reserve for another day.

Dorsey & Whitney

Dorsey & Whitney

Dorsey is a business law firm, applying a business perspective to clients' needs. We make it our first priority to know the context in which you do business - your market, your competitors, your industry.

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