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In re Amazon.Com, Inc.

United States Court of Appeals, Sixth Circuit

March 31, 2017

In re: Amazon.Com, Inc., Fulfillment Center Fair Labor Standards Act (FLSA) and Wage and Hour Litigation.
v.
Amazon.com, Inc.; Amazon.com.KYDC, Inc.; Amazon.com.KYDC, LLC; Zappos.com, Inc.; Zappos Fulfillment Centers, Inc.; Kelly Services, Inc., Defendants-Appellees. Tina Vance and Aaron Vance, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants,

          Argued: December 7, 2016

          Appeal from the United States District Court for the Western District of Kentucky at Louisville. Nos. 3:13-cv-00765; 3:14-md-02504-David J. Hale, District Judge.

         ARGUED:

          David W. Garrison, BARRETT JOHNSTON MARTIN & GARRISON, LLC, Nashville, Tennessee, for Appellants.

          Richard G. Rosenblatt, MORGAN LEWIS & BOCKIUS LLP, Princeton, New Jersey, for Amazon Appellees.

          Gerald L. Maatman, Jr., SEYFARTH SHAW LLP, Chicago, Illinois, for Appellee Kelly Services.

         ON BRIEF:

          David W. Garrison, Jerry E. Martin, Scott P. Tift, Seth M. Hyatt, BARRETT JOHNSTON MARTIN & GARRISON, LLC, Nashville, Tennessee, David O. Suetholz, KIRCHER, SUETHOLZ & GRAYSON, PSC, Louisville, Kentucky, J. Chris Sanders, CHRIS SANDERS LAW, PLLC, Louisville, Kentucky, for Appellants.

          Richard G. Rosenblatt, MORGAN LEWIS & BOCKIUS LLP, Princeton, New Jersey, Kathryn A. Quesenberry, DINSMORE & SHOHL LLP, Louisville, Kentucky, for Amazon Appellees.

          Gerald L. Maatman, Jr., Rebecca P. DeGroff, SEYFARTH SHAW LLP, Chicago, Illinois, for Appellee Kelly Services.

          Before: SILER, BATCHELDER, and GRIFFIN, Circuit Judges.

          OPINION

          GRIFFIN, Circuit Judge.

          In Integrity Staffing Solutions, Inc. v. Busk, 135 S.Ct. 513 (2014), the Supreme Court held that post-shift security screening is a noncompensable postliminary activity under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., as amended by the Portal-to-Portal Act, 29 U.S.C. § 251 et seq. See id. at 518-19. At issue here is whether Integrity Staffing resolves a similar claim under the Kentucky Wages and Hours Act (KWHA), Ky. Rev. Stat. § 337.285. Because we conclude the Kentucky Supreme Court would apply Integrity Staffing to the state's wage and hour law, we affirm the district court's dismissal of plaintiffs' KWHA claims.

         I.

         Online retailers Amazon.com, Amazon.com.KYDC, Inc., Amazon.com.KYDC, LLC, Zappos.com, and Zappos Fulfillment Centers (collectively, "Amazon") operate a warehouse fulfillment center in Shepherdsville, Kentucky, where hourly workers fill orders, track merchandise, and process returns. Plaintiffs Tina and Aaron Vance began working at the center in 2012-Tina as an employee of Amazon, and Aaron as a joint employee of Amazon and staffing agency Kelly Services. Both regularly worked at least forty hours a week. Amazon tracked the Vances' hours with a "time clock" system; employees "clocked in" at the beginning of their shifts, and "clocked out" at the end of the workday.

         However, before permitting "clocked out" employees to leave, Amazon required them to -in plaintiffs' words-"proceed through a lengthy theft-prevention security screening operation." Workers passed through a metal detector while security guards "inspect[ed] any bags or personal items" they intended to take home. If an employee set off the metal detector, the guard "search[ed]" him or her further "using a metal detecting wand." "This mandatory, post-shift theft-prevention screening" took anywhere from 10 to 30 minutes. Defendants never paid Tina or Aaron overtime compensation for the time they spent undergoing the post-shift security screening-"a required job activity, " designed "solely to benefit Defendants."

         II.

         The Vances filed the present action against Amazon and Kelly Services in 2013, alleging that such nonpayment violates the Fair Labor Standards Act and its state-law counterpart, the Kentucky Wages and Hours Act. Plaintiffs were not the only employees who disputed Amazon's practices. By early 2014, the Vances' case was one "of five related actions" pending in district courts across the country. Each involved similar allegations: "that Amazon.com and various staffing agencies violate federal and state wage and hour laws by requiring workers . . . to pass through lengthy anti-theft security screening after clocking out . . . without compensation for that time."

         The United States Judicial Panel on Multidistrict Litigation transferred the actions to the Western District of Kentucky for consolidation. Recognizing the Supreme Court already granted certiorari in Integrity Staffing, the district court stayed the other four cases pending the Court's decision.

         The Integrity Staffing Court determined the security screenings were noncompensable under the Portal-to-Portal Act. 135 S.Ct. at 518. Enacted as an amendment to the FLSA, the Portal-to-Portal Act "narrowed the coverage of the [Act]" by excluding certain "preliminary" and "postliminary" activities from the FLSA's compensation requirements. See IBP, Inc. v. Alvarez, 546 U.S. 21, 27 (2005). Integrity Staffing clarified that post-shift security screenings are among those noncompensable, "postliminary" activities. 135 S.Ct. at 518.

         In view of the Court's ruling, the Vances withdrew their FLSA claims. They maintained, however, that Integrity Staffing did not foreclose their claim to overtime under the KWHA for two reasons. "First, " plaintiffs explained, Integrity Staffing "was not an FLSA decision but rather a Portal-to-Portal Act decision. . . . Second, Kentucky has never enacted a Portal-to-Portal Act of its own and the KWHA contains no comparable exclusions from coverage." (Emphasis in original.)

          In granting defendants' motions for judgment on the pleadings, the district court rejected both arguments. "The main problem with the plaintiffs' position, " it wrote, "is that they treat the Portal-to-Portal Act as separate and distinct from the FLSA. Yet the Portal-to-Portal Act amended the FLSA. . . . It does not alter the FLSA's construct or make substantive changes to the FLSA's concepts about work, overtime, or the like. It simply clarifies that some activities do not count as 'work.'" And while "Kentucky's laws do not contain Portal-to-Portal language, " the Kentucky Supreme Court refers to federal law in construing the KWHA. Given that "Kentucky looks to federal law to determine what is work under its wage and hour laws, " the district court concluded that Kentucky courts would find "federal law explaining what is not ...


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