On May 8, 2012, the 7th Circuit, in an opinion authored by Judge Posner, issued its much anticipated ruling in Sandifer v. U.S. Steel Corp., __ F.3d __, 2012 WL 1592543 (7th Cir. May 8, 2012). Sandifer was on interlocutory appeal from the Northern District of Indiana. The Seventh Circuit was asked to determine, among other things, whether clothes-changing time which is non-compensable by virtue of Section 203(o) of the FLSA may nonetheless be a principal activity that starts the continuous workday, thereby rendering any subsequent time spent walking from the locker room to the work station compensable work time. In short, the court had to answer whether employers must pay for walk time or waiting time that follows or precedes non-compensable donning and doffing activities as part of the continuous work day. The Seventh Circuit answered the question no, labeling a contrary ruling “paradoxical.” “If clothes-changing time is lawfully not compensated, we can’t see how it could be thought a principal employment activity, and so section 254(a) [of the Portal-to-Portal Act] exempts the travel time in this case.” This ruling directly conflicts with a 2010 Sixth Circuit decision, as well as the Department of Labor’s most recent stance on the issue, a fact that the Court itself acknowledged, thus teeing the issue up for potential Supreme Court review.

By way of background, over that past five years, district courts have been sharply divided on the issue of whether an excluded Section 203(o) activity can nonetheless start the clock for purposes of walking and waiting time. Several district courts have ruled that walk time and wait time after a Section 203(o) activity is compensable if not subject to some other defense such as de minimis or good faith. See, e.g., McDonald v. Kellogg Co., 2010 WL 3724649 (D. Kan. Sept. 16, 2010), vacated in part, McDonald v. Kellogg Co., 2010 WL 4386899 (D. Kan. Oct. 29, 2010); In re Tyson Foods, Inc., 694 F. Supp. 2d 1358, 1369-70 (M.D. Ga. 2010); Arnold v. Schreiber Foods, Inc., 690 F. Supp. 2d 672, 683-85 (M.D. Tenn. 2010); Andrako v. United States Steel Corp., 632 F. Supp. 2d 398, 413 (W.D. Pa. 2009); Gatewood v. Koch Foods of Mississippi, LLC, 569 F. Supp. 2d 687, 702 & n.31 (S.D. Miss. 2008).Sisk v. Sara Lee, 590 F. Supp. 2d 1001 (W.D. Tenn. 2008). Several other district courts have ruled to the contrary, i.e., walk and wait time after a Section 203(o) activity is not compensable. See, e.g., Hudson v. Butterball, 2009 WL 3486780 (W.D. Mo. Oct. 14, 2009); Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 724 (E.D. La. 2008); Sisk v. Sara Lee, 590 F. Supp. 2d 1001 (W.D. Tenn. 2008). The U.S. Department of Labor has similarly vacillated on the issue. The DOL first opined that clothes-changing time excluded under Section 203(o) could not be a “principal activity.” See U.S. Dep’t of Labor, Opinion Letter, 2007 WL 2066454 (May 14, 2007); U.S. Dep’t of Labor, Opinion Letter, 2002 WL 33941766 (June 6, 2002). Then, in June 2010, the Department of Labor changed course, asserting that non-compensable clothes-changing time could nevertheless be a principal activity that starts the continuous workday. See U.S. Dep’t of Labor, Administrator’s Interpretation No. 2010-2, 2010 WL 2468195 (June 16, 2010).

Before the Seventh Circuit, the only circuit court to address the issue was the Sixth Circuit in Franklin v. Kellogg Co., 619 F.3d 604 (6th Cir. 2010). Although the Sixth Circuit did not follow the DOL’s recently pronounced Administrator’s Interpretation on the issue, it reached the same result: clothes-changing activities that were non-compensable by virtue of Section 203(o) could still be “principal activities” that start the continuous workday under the Portal-to-Portal Act and, consequently, any post-donning and pre-doffing walk and/or wait time could similarly be compensable. In Sandifer, the Seventh Circuit labeled the Sixth Circuit’s ruling in Franklin “clearly wrong,” stating that the “Franklin opinion offers only a conclusion, not reasons.” To justify the ruling, Judge Posner, writing for the Court, went to great lengths to explain how the Seventh Circuit’s ruling actually benefits employees and a contrary result hurts employees. He explained in detail how finding walk-time compensable would not benefit employees in the long run, as it would increase labor costs, ultimately resulting in lower wages for employees. Judge Posner further cited the history of the FLSA and the subsequent enactment of the Portal-to-Portal Act as support, concluding that one of Congress’ central purposes in enacting the Portal-to-Portal Act was to leave the determination of what is “work” in borderline cases to labor-management negotiations, and if Section 203(o) applies, labor and management have agreed that clothes-changing activities are not work and do not start the work day.

In the end, this an important opinion for all employers with unionized work forces who have uniform, dress or other similar requirements. Although employers with facilities in the Sixth Circuit are still subject to the contrary ruling, the Sandifer ruling assures labor and management alike that the issue if far from finally resolved, so employers may want to stop and think before abandoning or altering uniform requirements or moving time clocks. A strong probability of Supreme Court review is on the horizon.