Peterson v. Nelnet Diversified Solutions, LLCPeterson v. Nelnet Diversified Solutions, LLC
Case Information
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 17-cv-01064-NYW
ANDREW PETERSON,
on behalf of himself and all similarly situated persons,
Plaintiff,
v.
NELNET DIVERSIFIED SOLUTIONS, LLC,
Defendant. ______________________________________________________________________________ AMENDED MEMORANDUM OPINION AND ORDER ______________________________________________________________________________ Magistrate Judge Nina Y. Wang
This civil action comes before the court on Plaintiff Andrew Peterson’s (“Plaintiff” or “Mr. Peterson”) and Defendant Nelnet Diversified Solutions, LLC’s (“Defendant” or “Nelnet”) cross-motions for summary judgment (“Plaintiff’s MSJ” and “Defendant’s MSJ”, respectively) [#158; #168] as well as Nelnet’s Motion to Decertify FLSA Collective Action (“the Decertification Motion”) [#171, filed May 15, 2019]. The undersigned fully presides over this case pursuant to 28 U.S.C. § 636(c), the consent of the Parties [#11], and the Order of Reference dated June 26, 2017 [#12]. For the reasons stated in this Memorandum Opinion and Order, Defendant’s Motion for Summary Judgment is GRANTED , Plaintiff’s Motion for Summary Judgment is DENIED , and Defendant’s Decertification Motion is DENIED AS MOOT . Because there are no federal claims remaining, the court declines to exercise supplemental jurisdiction and DISMISSES without prejudice Plaintiff’s remaining state law claim. [1]
BACKGROUND
Plaintiff Andrew Peterson (“Plaintiff” or “Mr. Peterson”) initiated this action on April 28,
2017, by filing a Complaint asserting a collective action under the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 216(b), for unpaid overtime wages “on behalf of himself and all current
and former Account Managers and Call Center Representatives.”
[2]
[#1]. Mr. Peterson worked
for Defendant Nelnet, which is in the business of servicing loans, at its Aurora, Colorado
location from approximately September 2011 to September 2014. [
Id.
at ¶¶ 10, 11]. Mr.
Peterson alleged that Nelnet violated the FLSA by failing to pay him and other call center
representatives premium overtime compensation for hours worked in excess of forty hours in a
workweek. [
Id.
at ¶ 2]. In support of his claim, Mr. Peterson averred that Nelnet failed to
accurately track or record the actual hours worked by CCRs as follows: “(i) [by] failing to
provide [call center representatives] with a way to accurately record the hours they actually
worked; (ii) permitting [call center representatives] to work before and after they ‘clock in’ to
Nelnet’s timekeeping system; and (iii) allowing work during uncompensated lunch breaks.” [ at ¶ 6]. In his original Complaint, Mr. Peterson asserted claims for: (1) violation of the FLSA on
behalf of himself and the collective; (2) violation of Colorado Minimum Wage Order on behalf
of himself and a Rule 23 class of individuals (“Second Cause of Action”); and (3) violation of
the Colorado Wage Act on behalf of himself and a Rule 23 class of individuals (“Third Cause of
Action”). [#1]. Defendant subsequently filed a Motion to Dismiss, [#19], which was mooted
basis for remand of this action to state court pursuant to 28 U.S.C. § 1446
et seq. See Hinson v.
Norwest Fin. S.C., Inc.
,
[2] When referring to “Plaintiff” the court intends to refer both to Mr. Andrew Peterson and the collective joined in this litigation. The court will use “Mr. Peterson” when referring to Mr. Peterson’s individual state law claim and the arguments made in support of that claim. when Plaintiff filed his Amended Complaint as a matter of right. [#29; #30]. The Amended Complaint included the same three claims with additional factual detail. [#29]. Defendant filed an Answer to the Amended Complaint on October 5, 2017. [#37].
On January 31, 2018, Plaintiff filed a Motion for Court Authorized Notice Pursuant to 29 U.S.C. § 216(b) of the FLSA (“Motion for Conditional Certification”). [#50]. On April 25, 2018, the court granted the Motion for Conditional Certification in part, allowing a collective to go forward as to Advisors, Collectors, and Flex Advisors for pre-shift uncompensated log-in time (collectively, “CCRs”). [#79]. Shortly thereafter, the parties stipulated to the following definition of the conditionally certified collective:
Current and former Flex Advisors, Collectors, or Advisor Is who worked at Nelnet Diversified Solutions, LLC’s Aurora, Colorado; Lincoln, Nebraska; and Omaha, Nebraska Customer Interaction Center locations at any time from July 15, 2014 to April 25, 2018 and who worked off-the-clock without compensation at the beginning of their shifts prior to clocking into the timekeeping system. Individuals who worked as Collectors in Direct Account Placement or “DAP” are not included in this collective definition.
[#82].
On June 29, 2018, the notice administrator mailed the FLSA collection action notice to the putative collective members who worked at the relevant locations in Aurora, Lincoln, and Omaha. [#92]. Ultimately, 359 individuals opted into the FLSA collective, a few of whom have since been dismissed from the collective for unrelated reasons, primarily failure to participate in discovery. [#99; #100; #101; #102; #105; #108 at 11 n.3].
On November 16, 2018, the Parties submitted a Joint Status Report, in which Plaintiff indicated “[t]he Plaintiff is no longer pursuing any Rule 23 class action claims.” [#117 at 1]. Plaintiff further indicated “[i]f the case reaches a trial, such trial would therefore be narrowed to the compensability of activities that plaintiff alleges he was required to perform to become call- ready before clocking in pre-shift and related potential damages issues.” [ Id. at 2]. The Parties then indicated that they believed trial could be completed in five days. [ ]. Based on this Status Report, the court dismissed the Second and Third Causes of Action from the Amended Complaint and ordered the Parties to file a Supplemental Scheduling Order. [#119]. Following a Motion to Reconsider based on an ambiguity as to whether the Aurora-based FLSA collective members were still asserting their Colorado state law claims individually if not as a class, the court affirmed its prior order and denied further relief, finding that the relevant claims remaining were the conditional class’s FLSA claims and Mr. Peterson’s individual state law claims. [#128; #153]. Shortly thereafter, the Parties filed the instant cross-motions for summary judgment and Defendant filed the Decertification Motion. After an extension of time harmonized the briefing schedule on the pending motions, briefing closed on June 21, 2019, and the matters are now ripe for decision.
LEGAL STANDARD
Summary judgment is appropriate only if “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a);
Celotex Corp. v. Catrett
,
Whether there is a genuine dispute as to a material fact depends upon whether the
evidence presents a sufficient disagreement to require submission to a jury or conversely, is so
one-sided that one party must prevail as a matter of law.
Anderson
,
ANALYSIS
The court begins by considering the cross-motions for summary judgment. The court begins with the undisputed material facts and then examines whether the time at issue qualifies as compensable time. Finding the time compensable, the court then proceeds to consider whether the time is de minimis and concludes that the time at issue is so brief and recording it poses such an administrative challenge that the time is de minimis as a matter of law. Accordingly, the court concludes that summary judgment should enter for Defendant Nelnet.
UNDISPUTED MATERIAL FACTS
The following undisputed material facts are drawn from the Parties’ cross-motions for summary judgment. [3]
1. Defendant Nelnet Diversified Solutions LLC is in the business of servicing student loans. [#168-1 at 5, 39:16–20].
2. To this end, Nelnet maintains several “customer interaction centers” in Aurora, Colorado; Lincoln, Nebraska, and Omaha, Nebraska. [ Id. at 41:17–22].
3. At these centers, Nelnet employees service student loans and interact with debtors over the phone and through email. [ at 2, 9:4–15]. This case is concerned with those employees who were worked as Flex Advisors, Collectors, or Advisors I from July 15, 2014 to April 25, 2018 (“the CCRs” or “the employees”).
4. CCRs are paid once they clock into the timekeeping system at their individual workstations. [4] [#168-8 at 2, 12:12–24]. Before a CCR may clock in to the system, he or she must first perform several steps.
5. First, the CCR selects a workstation and moves the mouse or presses a key to wake the computer up from standby mode. [#168-11 at 3].
6. The CCR then inserts an “Imprivata” security badge and enters his or her credentials (username, password). [ Id. ].
7. The computer automatically launches Citrix, which loads the CCR’s personal desktop, and Nelnet’s Intranet which contains a link to the timekeeping system. [ Id. ]. 8. Once the Intranet has loaded, an employee has access to the timekeeping system and may, and nearly always does, clock into the system and begin receiving payment. [ Id. ; #168-5 at 2–3, 7:4–10:24]. The time from the Imprivata badge swipe to the Citrix session initiating is referred to as the “Boot-Up Time” and the time from Citrix initiating to the timeclock check in is referred to as the “Citrix-Active Time” and collectively, “pre- shift activities.”
9. Completing these pre-shift activities is necessary to conduct the CCRs’ principal job duties. [ Id. ; #159-1 at 39, 17:8–13].
10. The median Boot-Up Time is 0.5 minutes in Omaha, 0.9 minutes in Lincoln, and 1.02 minutes in Aurora. [#168-16 at 17].
11. The median 10th percentile Citrix-Active Time—which the parties accept as the relevant measure—is 1.1 minutes at Omaha, 1.3 minutes in Lincoln, and 1.25 minutes in Aurora. [ Id. ].
12. Nelnet policy provided that CCRs were to be “call ready” within six minutes of their scheduled shift, and, by custom, permitted CCRs to clock in five minutes prior to the start of a shift. [#168-31 at 2; #168-32 at 1].
13. Nelnet policy is that an employee should clock in at this point before launching any further programs. [ at 12–13, 161:9–162:8].
14. To become call ready after booting up the computer and launching Citrix and the Intranet, a CCR must launch several additional programs. [ at 162:9–23].
15. Nelnet permits its employees to use their computers for personal tasks and the timekeeping system design permits the employee to clearly delineate when the work begins and ends. [#168-23 at ¶ 13].
16. CCRs are also permitted to do personal tasks when waiting for the pre-shift activities to complete which are basic, rote activities that do not require much if any thought or effort. [#168-18 at 2–3, 57:7–18, 138:3–140:2].
17. Nelnet does not, and has never, used the timestamps associated with logging into Citrix or insertion of the Imprivata Badge for timekeeping purposes. [168-9 at ¶ 10]. [5]
18. It would be technically challenging to link the Imprivata or Citrix timestamps to the timekeeping system typically used for compensation. [#168-23 at ¶¶ 10–15; #168-9 at ¶¶ 11–16].
19. Linking the CCR’s compensation to the Imprivata Badge insertion or Citrix login would most likely require custom-made software which Nelnet neither possesses nor knows how to create. [#168-23 at ¶ 12; #168-9 at ¶ 12].
ANALYSIS
I. Are the Pre-Shift Activities Covered by the FLSA
The Parties refer to the two categories of pre-shift time, the Boot-Up Time (defined as the time between the employee’s badge swipe and the time stamp initiating the process of booting up each Citrix sessions) and the Citrix-Active Time (defined as the time between completing the launch of the Citrix virtual desktop application and completion of clocking in), as distinct. E.g. , [#158 at 13–14; #168 at 24]. As discussed more fully below, the court’s analysis renders any distinction between the two categories immaterial, and so the court simply refers to these two categories as the “pre-shift activities.”
A. Legal Standard—Compensable Time
The FLSA does not provide a definition of work, and United States Supreme Court has
long-described “work or employment” under the FLSA as “physical or mental exertion (whether
burdensome or not) controlled or required by the employer and pursued necessarily and
primarily for the benefit of the employer and his business.”
IBP, Inc. v. Alvarez
,
Relevant here, § 254(a)(2) provides that “no employer shall be subject to any liability”
for “activities which are preliminary to or postliminary to said principal activity or activities”
which occur before or subsequent to “principal activities or activitie s” in the workday. This
distinction is not always easily made. The Supreme Court has recognized that some activities
which are temporally preliminary to the principal gainful activity the employee is employed to
perform are compensable as those same principal activities when such preliminary activities are
“an integral and indispensable part of the principal activities for which workmen are employed.”
Steiner v. Mitchell
,
But when a preliminary task is integral and indispensable to the performance of the
employee’s principal activities, that preliminary task is compensable.
Steiner
,
B. Application
Nelnet argues that the pre-shift activities at issue are not compensable because they are not principal activities but rather preliminary activities which are neither integral or indispensable to work. [#168 at 18-22; #174 at 6-13]. Relying on Reich v. IBP, Inc. , 38 F.3d 1123, 1124 (10th Cir. 1994) and Smith v. Aztec Well Servicing Co. , 462 F.3d 1274 (10th Cir. 2006), Nelnet also argues that the pre-shift activities cannot be integral to Plaintiffs’ principal activities, because the pre-shift activities are not demanding and permit a CCR to engage in personal discussions and diversions during the process. [#168 at 19; Material Fact ¶ 16]. Nelnet also contends that computers are not integral and indispensable but instead merely enhance the performance capacity of the CCRs. [#168 at 20 (“That Opt-Ins can complete their work assisting borrowers more efficiently using electronic records (rather than voluminous paper files) is insufficient to render logging in to computers and loading job-relevant programs “integral and indispensable.”)].
Plaintiff argues that the pre-shift activity time is compensable because the work performed during that time is the first “principal activity,” relying on Department of Labor Fact Sheet #64. [#179 at 4-6]. Plaintiff further contends that even if the logging in process is not considered a “principal activity,” it is still compensable because the pre-shift activities are integral and indispensable, as a CCR cannot use the Citrix system until it has been successfully initiated, and the Citrix system is required by Nelnet in order for the CCRs to make and receive calls for loan servicing. [#158 at 15; 179 at 6–7].
1. Are Pre-Shift Activities “Principal Work” or “Preliminary Work”?
Fact Sheet #64.
Plaintiff contends that the Department of Labor’s Wage and Hour
Division’s Fact Sheet #64 (“Fact Sheet”), attached to Plaintiff’s Motion for Summary Judgment
as Exhibit E. [#159-1 at 88], establishes that the pre-shift activities are “principal work,” and is
entitled to significant deference under
Skidmore v. Swift & Co
.,
Under
Skidmore
, the deference due to an administrative agency interpretation of the law
depends on “the thoroughness evident in its consideration, the validity of its reasoning, its
consistency with earlier and later pronouncements, and all those factors which give it power to
persuade, if lacking power to control.”
Gonzales v. Oregon
,
Bustillos
.
For its part, Nelnet argues that this court should simply follow
Bustillos v. Bd.
of Cty. Commissioners of Hidalgo Cty.
, No. CV 13-0971 JB/GBW,
The court respectfully declines to find
Bustillos
controlling in this instance simply
because the activities at issue are similar and further declines to suggest that logging into a
computer system should be treated in all cases as “the digital equivalent of travel or of waiting in
line to clock in.” [#168 at 18]. The controlling authority makes clear that courts must determine
on a case-by-case basis whether an employee’s activities are compensable under the FLSA.
See
Smith v. Aztec Well Servicing Co
.,
Bustillos
relied on
Integrity Staffing
, but this court finds the ingress/egress argument
unavailing because the screening at issue in
Integrity Staffing
was wholly unrelated to the
performance of the employees’ tasks—the employees had completed their tasks and were
screened as they left the warehouse.
The
Bustillos
court then went on to analogize to
Aztec Well
and out-of-circuit donning
and doffing cases to emphasize that “pre- and post-shift activities that can be accomplished with
minimal effort and time are non-compensable.” 2015 WL 7873813 at *18. But this court
concludes that this case is more like
Crenshaw v. Quarles Drilling Corp.,
The court finds the Aztec Well court’s discussion of § 790.7(d) to be illuminating on this point. § 790.7(d) provides that while commuting and travel time is not normally compensable, when “walking, riding, or traveling is not segregable from the simultaneous performance of his assigned work (the carrying of the equipment, etc.) . . . it does not constitute travel ‘to and from the actual place of performance’ of the principal activities he is employed to perform [as exempted under the Portal Act, 29 U.S.C. § 254(a)(1)].” § 790.7(d). While the Aztec Well court found that showing up with basic safety gear was “not segregable from the simultaneous performance of [the employees’] assigned work,” the court finds that the pre-shift activities in this case are distinguishable and so neither Aztec Well nor Bustillos are availing. A logger who neglects to carry “a portable power saw or other heavy equipment (as distinguished from ordinary hand tools) on his trip into the woods to the cutting area” simply cannot perform his tasks under any circumstances. A logger is expected to show up to the work site with a hard hat, but the employer provides the chainsaw which the employee must prepare to perform the work expected of him. Similarly, the CCRs would be unable to perform the labor for which they were hired if they did not complete the pre-shift activities to prepare the equipment their employer provides for them to use in performing their tasks. In short, the court finds that Aztec Well and § 790.7(d) support the court’s finding that the pre-shift activities are integral to the principal activities, and respectfully disagrees with the Bustillo court’s determination to the contrary to the extent that court’s analysis is in tension with the court’s analysis here.
The Pre-Shift Activities are Not, by their Nature, Principal Activities.
There is no
dispute that “the principal activity of work” of the CCRs is the servicing of loans. Material Fact
¶ 1. The CCRs service student loans and interact with debtors over the phone and through email.
at ¶ 3. And aside from the language from Fact Sheet #64 characterizing “starting the
computer to download work instructions, computer applications, and work-related emails,” as
“principal work,” there is no real dispute that the CCRs are not hired to log into a computer
system.
See Integrity Staffing
,
This conclusion, however, does not resolve whether the time associated with the pre-shift activities are compensable. This court finds that the appropriate approach is to consider, based on the circumstances presented here, whether Plaintiffs’ pre-shift activities are compensable under Steiner . 350 U.S. at 256. Indeed, to hold otherwise might suggest that login activities, regardless of the principal work at issue, were categorically compensable or noncompensable. The case law interpreting the FLSA does not suggest to this court that painting with such a broad brush is appropriate, compare Steiner , 350 U.S. at 256 (holding that clothes-changing and showering were an integral and indispensable part of the principal activity of manufacturing automotive-type wet batteries) with Gorman , 488 F.3d at 594 (holding that donning a helmet, safety glasses, and steel-toed boots, though indispensable, were not integral to working at a nuclear power plant). Accordingly, the court now turns to whether the pre-shift activities are compensable as preliminary work that is integral and indispensable to the principal activities of the employees under the FLSA.
2. Are the Pre-Shift Activities Integral and Indispensable?
Time and complexity.
First, this court finds that Nelnet’s arguments that the pre-shift
activities are not compensable because they take a short period of time to complete and that
CCRs can perform other tasks during the same time are more appropriately considered within the
inquiry of whether the
de minimis
exception applies. The length of time and the complexity of
the task alone are not necessarily material to the analysis of such activities are “an intrinsic
element of those activities and one with which the employee cannot dispense if he is to perform
his principal activities.”
Integrity Staffing
,
Integral and Indispensable Preparatory Work.
Court have long held that pre-shift
preparation of tools or equipment is considered integral and indispensable to the principal
activities when the use of such tools in a readied or activated state is an integral part of the
performance of the employee’s principal activities.
See, e.g.
,
Von Friewalde v. Boeing
Aerospace Operations, Inc.
, 339 F. App’x 448, 454 (5th Cir. 2009) (checking out specialized
tools is compensable). Thus, sharpening knives for work in a slaughterhouse qualifies because
the employees regularly use the knives in performing their duties.
King Packing
, 350 U.S. at
263. And setting up and testing an MRI machine qualifies as well because the machine must be
in its ready-to-use state for patients coming in at the start of the day.
See Kosakow v. New
Rochelle Radiology Associates, P.C.
,
Here, the court finds that setting up the computer and loading the relevant programs to
become call-ready is “an integral and indispensable part of the principal activities for which
workmen are employed” under
Steiner v. Mitchell
,
Ingress Process. Nelnet argues that the pre-shift activities are the equivalents of historically non-compensable ingress to the workstation and waiting in line to clock in. The court respectfully disagrees. Nelnet analogizes extensively to the ingress process which is specifically classified as non-compensable preliminary time under the Portal Act, 29 U.S.C.A. § 254(a)(1). See, e.g. , [168 at 13 (referring to it as “digital ingress or wait time”)]. But this analogy fails because, specific statutory exemption for travel time aside, the ingress process is not a part of the performance of the day’s labor, it is rather simply a necessary precondition like the antecedent commute from the worker’s home to the place of employment. Here, the pre-shift activities are not only necessary, but the CCR makes regular use of the prepared electronic tools in performing their substantive tasks. Therefore, the necessary preliminary work is intertwined with the substantive performance of the principal tasks which renders such preliminary work integral and indispensable. An employee is not employed to arrive at the office or pass through a security checkpoint, but she is employed to use certain tools in performance of her tasks, and pre-shift preparation of those tools is integral and indispensable to the performance of the principal labor for which the employee is employed.
Indeed, although the parties separate the day between the pre-shift activities and the
remainder of the day, the court finds that there is no basis to distinguish the Boot-Up Time and
the Citrix-Active Time from subsequent time where the CCR is required to launch several
additional programs to become call-ready but has clocked in and begun receiving compensation.
[Material Fact ¶ 14]. Nelnet specifically argues that these acts are not distinct. [#168 at 12 n.5
(“[N]either the time spent logging-in to the computer nor loading job-related programs is
compensable.”)]. But under the “continuous-workday rule,” once the employee’s work day
starts with the first principal activity, all activity is ordinarily compensable until the work day
ends,
Castaneda v. JBS USA, LLC
,
Donning and doffing cases help illustrate the distinction between necessary work and
necessary work intertwined with the substantive performance of the employee’s tasks. When the
gear required of an employee is both required and must be donned and doffed at the employer’s
facility, that time is compensable. When the gear is not required or may be donned and doffed at
home, then that time is not compensable. Donning and doffing a police uniform is not integral
because one can do that at home,
Bamonte v. City of Mesa
,
Wait Time . Nelnet’s analogy to wait time is more compelling but ultimately unpersuasive. Generally, an employee waiting to begin a principal activity is engaged in preliminary, non-compensable time. 29 C.F.R. § 790.7(g) (“Other types of activities which may be performed outside the workday and, when performed under the conditions normally present, would be considered “preliminary” or “postliminary” activities, include checking in and out and waiting in line to do so . . . .”); see also, e.g. , IBP, Inc. v. Alvarez , 546 U.S. 21, 42 (2005) (waiting to begin the process of donning protective gear is “two steps removed from the productive activity” and not compensable); Bridges v. Empire Scaffold, L.L.C. , 875 F.3d 222, 226 (5th Cir. 2017) (holding that time spend waiting for company bus and driving to worksite were not compensable). Here, the pre-shift activities are only one step removed from the principal activity and, again, necessarily intertwined with the performance of such tasks. That the pre-shift activities involve periods of waiting alternating with rote input no more precludes a finding of indispensability than waiting at a stop light would in Crenshaw or Mitchell . And the availability of personal entertainment during this process no more precludes such finding than the Crenshaw or Mitchell plaintiffs listening to the radio or talking with one another would.
The court finds that Defendant’s other authority is also distinguishable. For example,
Nelnet cites to
Butler v. DirectSAT USA, LLC
,
II. Are the Pre-Shift Activities Nevertheless Noncompensable as De Minimis ?
Nelnet argues that the pre-shift activity time in this case, which in the usual course takes no more than two and a half minutes on the high end, constitutes de minimis activity and is therefore not compensable under Anderson v. Mt. Clemens Pottery Co. , 328 U.S. 680, 692 (1946). [#168 at 23]. Plaintiff counters that this time occurred reliably with every shift, and even if the amount is small, the claim in the aggregate is not. [#174 at 15]. The court finds this time is de minimis .
The Tenth Circuit, adopting the test applied in the Ninth Circuit formulated in
Lindow v.
United States
,
Regularity and Ascertainability. The court finds that the time in case regularly occurring, readily ascertainable, and therefore is not “uncertain and indefinite.” The parties do not dispute that the pre-shift activities occurred every time a CCR logged onto a system before beginning work, nor do the parties dispute that the pre-shift activities have a definite start with waking up the computer and inserting the Imprivata badge. Nelnet disputes the ease with which it could use such information for timesheet purposes, but that is not the court’s concern for this factor. For the de minimis analysis, the court is concerned with whether the occurrence and length of the unpaid time is certain and definite, and in this case it is. “An employer may not arbitrarily fail to count as hours worked any part, however small, of the employee’s fixed or regular working time or practically ascertainable period of time he is regularly required to spend on duties assigned to him.” Jimenez v. Bd. of Cty. Commissioners of Hidalgo Cty. , 697 F. App’x 597, 599 (10th Cir. 2017) (quoting 29 C.F.R. § 785.47). The time is regularly occurring and may be readily ascertained and this factor weighs in favor of Plaintiff. The court now turns to Nelnet’s argument that it is practically burdensome for such time to be reliable recorded given the use of the timekeeping system which cannot receive input from the insertion of the badge. [#168 at 25–26].
Administrative Burden. The operative question is whether the time at issue in this case “cannot as a practical administrative matter be precisely recorded for payroll purposes.” § 785.47. Nelnet relies on Corbin v. Time Warner Ent.-Advance/Newhouse P’ship , 821 F.3d 1069, 1082 (9th Cir. 2016), which the court finds instructive. [#168 at 26]. In Corbin , the Defendant’s timekeeping system rounded an employee’s reported time to the nearest quarter- hour and Plaintiff alleged this deprived him of one (1) minute of compensable time over several years of employment. Id. at 1073. Applying the same test applicable in the Tenth Circuit, the Ninth Circuit found that the administrative burdens of capturing this additional time were outweighed by the practical administrative burden. at 1081–82.
First, the practical administrative burden on [Defendant] to cross-reference every employee's log-in/out patterns is quite high. To do so, [Defendant] would have to double-check four time stamps (clocking in/out for work; clocking in/out for lunch) for each employee on each day on the off-chance that an employee accidentally loaded an auxiliary program . . . before loading [the relevant timekeeping software]. Indeed, Corbin’s argument that [Defendant] should have done such an analysis would require [Defendant] to undermine its policy prohibiting off-the-clock work by proactively searching out and compensating violations. Moreover, Corbin's contention that the de minimis doctrine does not apply because [Defendant] could ascertain the exact log-in/out times by scouring its computer records is baseless; the de minimis doctrine is designed to allow employers to forego just such an arduous task.
Id. [7]
In this case, Nelnet argues that it faces a similar burden and states that it “would be administratively infeasible for Nelnet to incorporate the Timestamps for timekeeping and payroll purposes, whether using the Timestamps alone or in conjunction with the existing Timekeeping System and payroll system.” [#168 at 26]. Indeed, to get the undisputed times at issue in this case, Nelnet’s expert had to do precisely the same laborious cross-checking task the Ninth Circuit rejected in Corbin . [ Id. ]. The fundamental problem is that the evidence before the court, even taken in the light most favorable to Plaintiff, is insufficient to permit a factfinder to conclude that the Imprivata badge swipe may be linked to the timekeeping system and can, as a practical administrative matter, be precisely recorded for payroll purposes without either procuring a custom-ordered software to link the two or undergoing the laborious cross-checking at issue in Corbin . [ at 11, 26]; Material Facts ¶¶ 17–19.
Plaintiff’s argument that there are multiple methods Defendants could have used to
accurately record this data, including adding timeclocks at the desks to replace the current
system, designing new software, or cross-referencing the data, is unsupported by admissible
evidence. [#174 at 18]. Plaintiff does not present any admissible evidence that would permit a
factfinder to concluded that these alternatives are not burdensome, nor does Plaintiff rebut
Nelnet’s proffered material facts with admissible evidence establishing the implausibility of such
alternatives. Thus, the court finds this prong weighs heavily in favor of Defendant. Defendant is
not obliged to use any specific timekeeping system, and Plaintiff fails to set forth admissible
evidence that his proposed solutions, e.g., requiring Nelnet to entirely change the timekeeping
system to a punch-clock, to undergo laborious manual cross-checking, or to design a new type of
software to link the two unrelated systems, would not be burdensome.
Aguilar v. Mgmt. &
Training Corp.
, No. CV 16-00050 WJ/GJF,
The Aggregate Size of the Claim. Under the multi-factor test in Reich , the court may look to either the total value of the claim, the total number of workers, or the value of the claim per individual worker. 144 F.3d at 1334. The court finds that under any measure this factor weighs in favor of Nelnet.
The court begins by disregarding the non-joined putative members of the collective.
Plaintiff argues in part that the size of the claim is large because there are approximately 3,150
additional employees who did not join this collective. [#174 at 19]. But the test refers to the size
of the
claim
and the work performed by the
claimants. Reich
,
Although the courts within the Tenth Circuit have not expressly held, the application of
this doctrine in the Ninth Circuit—which applies the same test—considers the average claim per
employee, aggregating a day’s
de minimis
activities. There’s no doubt that nearly 30,000 man-
hours of work in
Hubbs
was significant in absolute terms, but it averaged out to only “an average
gap time that is less than three minutes per shift.”
Hubbs
,
By contrast, other courts have emphasized the need to look at the entire amount at issue
in the litigation.
See Rutti v. Lojack Corp.
,
In absolute terms, the Parties agree that the lost wages total approximately $30,000, well
below what other courts have found to be
de minimis
amounts.
Aguilar
,
When considered on a per-capita basis, Plaintiff fares no better. There are 336 opt-in
plaintiffs and plus the one named Plaintiff leaves the court with 337 total plaintiffs. For $30,000
of damages, that comes out to $84 per plaintiff over the collective period, from July 15, 2014 to
April 25, 2018, based on regular periods of between one and two minutes of uncompensated
work. The court does not have sufficient information before it to determine precisely the average
lost wages per work day as undoubtedly not every plaintiff worked full time during the entirety
of the collective period, but there is no evidence in the record to suggest that the figure amounts
to more than cents, rather than dollars, per day.
Singh v. City of New York
,
After weighing the relevant factors, this court concludes that the Boot-Up Time and the Citrix-Active Time, collectively “pre-shift activities,” constitute de minimis time and are therefore not compensable. The court reaches this conclusion, inter alia , due to the unrebutted evidence that adjusting to account for this time would require a substantively different timekeeping system, representing a serious administrative burden on the Defendant. Plaintiff has simply failed to adduce sufficient evidence to persuade the court, or even create a genuine issue of material fact, that Defendant was seriously and systematically undercompensating its employees. Even with hundreds of Opt-Ins, the amount allegedly underpaid over the course of the collective action period is at best $30,000 and likely less. Given the serious administrative burden and the “few seconds or minutes of work beyond the scheduled working hours” at issue, the court concludes that this time is de minimis . Accordingly, summary judgment shall enter in favor of Defendant.
III. The Court Declines to Exercise Supplemental Jurisdiction.
Defendant briefly states that this court should decline to exercise supplemental jurisdiction over the sole remaining state law claim in this case asserted by Mr. Peterson in his individual capacity. [#168 at 30]. Mr. Peterson opposes this request. [#174 at 20].
A court may dismiss a case when, as here, the court dismisses all claims over which it had original jurisdiction. 28 U.S.C. § 1367(c)(3). In determining whether to exercise supplemental jurisdiction over state law claims, a court enjoys substantial discretion to balance the exercise of jurisdiction with the needs of the case and judicial economy. City of Chicago v. Int'l Coll. of Surgeons , 522 U.S. 156, 172–74 (1997). The Supreme Court and Tenth Circuit have both held that “If federal claims are dismissed before trial, leaving only issues of state law, ‘the federal court should decline the exercise of jurisdiction by dismissing the case without prejudice.’” Bauchman for Bauchman v. W. High Sch. , 132 F.3d 542, 549 (10th Cir. 1997) (quoting Carnegie-Mellon University v. Cohill , 484 U.S. 343, 350 (1988)). While not an ironclad rule inflexibly applied, the Tenth Circuit has stated that courts “usually should” decline to exercise jurisdiction in such circumstances. Koch v. City of Del City , 660 F.3d 1228, 1248 (10th Cir. 2011).
The sole remaining claim in this case is Mr. Peterson’s individual state law claim under
the Colorado Wage Claim Act. [#29 at ¶¶ 67–77]. In considering the exercise of jurisdiction,
the court considers the parties’ interests in the efficient resolution of the matter in the forum with
which they are familiar and before a judicial officer familiar with the case, with the principles of
federalism and comity inherent in committing issues of state law to state courts.
Cohill
, 484 U.S.
at 350. Consistent with the principle that “[n]otions of comity and federalism demand that a
state court try its own lawsuits, absent compelling reasons to the contrary,” the court declines to
exercise jurisdiction.
Thatcher Enterprises v. Cache Cty. Corp.
,
CONCLUSION
For the forgoing reasons, IT IS ORDERED that:
(1) Plaintiff Andrew Peterson’s Motion for Summary Judgment [#158] is DENIED ; (2) Defendant Nelnet’s Motion for Summary Judgment [#168] is GRANTED; (3) Defendant Nelnet’s Decertification Motion [#171] is DENIED AS MOOT ; (4) The court DECLINES to exercise supplemental jurisdiction under § 1367(c)(3); (5) Plaintiff’s state law claim is DISMISSED WITHOUT PREJUDICE; (6) The Clerk of the Court is directed to ENTER JUDGMENT in favor of Defendant Nelnet Diversified Solutions, LLC; and (7) Defendant, as the prevailing party, shall be awarded its costs pursuant to Rule 54(d)(1) of the Federal Rules of Civil Procedure and D.C.COLO.LCivR 54.1.
DATED: September 3, 2019 BY THE COURT: Nina Y. Wang United States Magistrate Judge
Notes
[1] The language regarding remand to state court was inadvertently included in the court’s original Memorandum Opinion and Order. Having not been filed originally in state court, there is no
[3] The Parties agree as to all the relevant material facts, but occasionally disagree with another party’s precise framing of a material fact or present a putative material fact which is actually an inference or conclusion drawn from other material facts without direct evidentiary support. The Parties also proffer many material facts which the court does not find relevant to its disposition of the matter. The court accepts and recounts below only the relevant material facts, disregarding another party’s objection as to the correct interpretation of that fact and disregarding those alleged facts which are not relevant or directly supported by evidence. For ease of reference, the court will cite to the relevant underlying exhibit initially, but future reference to this section will cite to these facts in the following format: “Material Fact ¶ 1.”
[4] Nelnet has used several different timekeeping systems in the relevant timeframe but because the exact system is not relevant, the court does not distinguish between these systems.
[5] Plaintiff challenges Material Facts ¶¶ 17–19 on the basis that “Defendant admitted to never consulting Citrix, Imprivata, or anyone internally about linking its records with Plaintiffs’ time stamps and therefore any claim that such a practice is impossible or impracticable is baseless.” [#174 at 6]. Citing the deposition of Jason Latimer, Plaintiff notes that he stated that “to [his] knowledge” Nelnet never examined the feasibility of linking Imprivata or Citrix to the timekeeping system. [#174-2 at 4–5, 6–7]. This statement is insufficient to rebut the uncontroverted testimony of Wendi Beck, Managing Director of Benefits, Compensation, and Payroll for Nelnet, who definitively states that linkage would be “not possible” given the design of the systems at issue [#168-23 at ¶¶ 10–16] and Greg Counts, IT Director for Nelnet, who similarly states that Nelnet has “no technological means” to link the systems at issue and that Nelnet would “most likely” have to build specialized software to accomplish such a task. [#168-9 at ¶¶ 10–16]. To be a “genuine” factual dispute, there must be more than a mere scintilla of evidence and the dispute must be more than “merely colorable.” Vitkus v. Beatrice Co. , 11 F.3d 1535, 1539 (10th Cir. 1993). Plaintiff’s reliance on Mr. Latimer’s lack of knowledge whether such linkage was considered does not create a genuine material dispute that linking the two systems at issue would be possible as Plaintiff offers no evidence such as an expert opinion or admission that the linkage is possible but Nelnet merely failed to ask.
[6] The Tenth Circuit has addressed donning and doffing protective gear in a slightly different manner. Instead of considering the relation between the protective gear and the work performed, the Tenth Circuit has focused on the definition of “changing clothes” which is exempted from the definition of “hours worked” under 29 U.S.C. § 203( o ). Salazar v. Butterball, LLC , 644 F.3d 1130, 1136 (10th Cir. 2011). The Butterball court did not address the integral and indispensable question. at 1138 n.4.
[7] The court notes that the Corbin court is assuming that time spent booting up Plaintiff’s computer and loading work programs before clocking into the timekeeping is compensable.