Wisconsin Supreme Court Split Over Hormel Wage and Hour Claims

02 March 2016 Legal News: Litigation and Labor & Employment Publication
Authors: Daniel A. Kaplan Carmen N. Decot (Couden)

Legal News: Litigation and Labor & Employment

Yesterday, the Wisconsin Supreme Court issued its long-awaited decision in UFCW v. Hormel Foods Corp., 2016 WI 13 (March 1, 2016). Unfortunately, many are wondering if the decision will provide useful guidance for Wisconsin employers on the application of two significant wage and hour concepts: (i) whether certain activities are preliminary and/or postliminary, such that the activities need not be included in an employee’s work time for compensation purposes, and (ii) does Wisconsin recognize the de minimis doctrine, and when would (or might) time spent in an otherwise compensable activity be deemed de minimis so that the time need not be compensated? Before turning to how the Wisconsin Supreme Court dealt with these two concepts, a basic understanding of the underlying case facts and issues is necessary.

Hormel Foods owns and operates a cannery in Beloit. At that facility, Hormel mainly prepares, cans, and ships “shelf-stable” canned goods, including Hormel Chili, Mary Kitchen Hash, and Chi-Chi’s Salsa. According to the description provided by Justice Gableman in his opinion, “[the manufacturing] process [at the Beloit facility] is largely assembly like: outside suppliers deliver raw product in a receiving area; the product is cooked; the cooked product is placed into a can or glass container; and the canned product is sent through a final heating process[, which is] ... called ‘12-D cook’ for canned products or ‘acidification’ for glass products, that renders the product shelf-stable.” The employees involved in production are required to wear hardhats, hearing protection, eye protection, hair nets (and beard nets if they have facial hair), shoes (that may not be taken out of the facility) and clean clothes that are provided by Hormel (commonly referred to as “whites”). The whites and other items are “donned” (put on) at the start of the employee’s shift, and “doffed” (taken off) at the end of their shift. Some employees may also don and doff the whites and items at the start and end of their meal period if they plan on leaving the facility during their lunch break. All of the production employees are represented by the United Food and Commercial Workers Union (UFCW).

Hormel does not compensate the production employees for the time spent donning and doffing their whites and other items; rather, after employees change, they normally clock in on their way to their work station, and clock out after their shift ends before returning to their locker rooms to doff their whites and other items. The plaintiff-employees (led by the UFCW) commenced an action seeking compensation for the time spent donning and doffing before and at the end of their work shifts, as well as for time spent donning and doffing during their meal periods to the extent it prevented them from enjoying a full 30-minute meal break.

Prior to trial, which was presented to a judge (as opposed to a jury) to decide, Hormel and the plaintiffs agreed that the amount of time spent donning and doffing at the beginning and end of each shift, for which they were seeking compensation, was 5.7 minutes per day per employee. When the 5.7 minutes were added up for each employee throughout the relevant time period, and overtime calculations were taken into account, the plaintiffs alleged that Hormel owed them approximately $180,000 in unpaid wages. In addition, they agreed that the amount of “lost pay” for meal period time totaled $15,000.

Hormel made two primary arguments upon which it relied when asserting that it did not owe the plaintiffs for the donning and doffing time at issue: (1) that the donning and doffing at the beginning and end of each shift were non-compensable preliminary and postliminary activities, and (2) even if the activities constituted compensable work time, in this case it was not compensable due to the application of the de minimis doctrine. Unfortunately for Hormel, the trial court disagreed, concluding that the donning and doffing was integral and indispensable to the employees’ food production activities, and therefore could not be viewed as non-compensable preliminary or postliminary activities, and that Hormel had failed to carry its burden to establish the application of the de minimis doctrine.

Hormel appealed to the Wisconsin Court of Appeals, which certified the two issues for resolution by the Wisconsin Supreme Court.

What the Wisconsin Supreme Court Did
As even casual observers likely know, the Justices on the Wisconsin Supreme Court do not always agree with one another. That fact is apparently also true when it comes to interpreting and applying the two wage and hour concepts at issue in Hormel.

The Wisconsin Supreme Court has seven Justices. Of the seven, one Justice – Justice Rebecca Bradley – did not participate. The six remaining Justices split off into three distinct “camps” of two Justices a piece, and the court issued three separate opinions. The camps are identified by the author of the respective opinion: (i) Justice Abrahamson (with whom Justice Ann Walsh Bradley joined), (ii) Chief Justice Roggensack (with whom Justice Prosser joined), and (iii) Justice Gableman (with whom Justice Ziegler joined).

The Roggensack and Gableman camps both agreed that the meal period claim could not be sustained; albeit for different reasons. As such, the meal period claim was extinguished. The Abrahamson camp disagreed, and would have sustained the meal period claim.

The Abrahamson and Roggensack camps agreed that the donning and doffing activities at the Hormel facility were not preliminary nor postliminary activities; rather, they were integral and indispensable activities to the plaintiffs’ food production jobs, and therefore were compensable activities. (The Gableman camp disagreed with this conclusion.) Further, both the Abrahamson and Roggensack camp agreed that, at least in this instance, the de minimis doctrine did not apply. (Again, the Gableman camp disagreed.) As such, Hormel was liable to the plaintiffs for the time at issue (5.7 minutes per day for each employee). Interestingly, however, although agreeing in the outcome – that the plaintiffs are owed for the donning and doffing time at issue at the beginning and end of each work day – the Roggensack camp did not agree with the Abrahamson camp’s conclusion on how or when the de minimis doctrine would normally apply. (And, the Gableman camp did not agree with either camp’s interpretation on this issue either.)

            Preliminary/Postliminary Activities

As noted above, both the Abrahamson and Roggensack camps concluded that the donning and doffing activities at the beginning and end of each work shift were not preliminary or postliminary activities, and therefore, such activities were compensable. They reached that opinion because the donning and doffing, according to the conclusion reached by the trial judge (with which they agreed), were necessary to bring Hormel into compliance with applicable federal food and safety regulations and, were therefore, “integral and indispensable to sanitation and safety in the employees’ principal work activities, namely food production.” As Justice Abrahamson stated:

Putting on and taking off the required clothing and equipment at the beginning and end of the day is tied directly to the work the employees were hired to perform – food production – and cannot be eliminated altogether without degrading the sanitation of the food or the safety of the employees.

Justice Gableman disagreed, principally based on an assertion that the Abrahamson and Roggensack camps’ opinion was premised on a wrong assumption: that the whites and items were required to be worn in order to produce safe and sanitary food. Justice Gableman noted that since the final cooking phase to prepare the shelf-stable products involved cooking the products in the cans or acidification in the bottles, there was no actual sanitary need for production employees to be in anything other than street clothes. Rather, the requirement to wear whites was simply an employer requirement – but because it was not necessary for actual production purposes, then the donning and doffing were not “integral” and “indispensable” to the food production. Accordingly, he and Justice Ziegler would have concluded that the donning and doffing at issue were non-compensable, preliminary and postliminary activities.

While there is an apparent disagreement between the various camps on the principal facts and their impact on what was or was not necessary for the production of safe and sanitary food, it does appear that all of the Justices would have agreed that if the donning and doffing of the clothing and items were necessary to allow for safe and sanitary food production, then such donning and doffing would also have been integral and indispensable, and therefore would constitute compensable work time. While not perfect, this does provide employers with some guidance on the application/determination of what is and what is not preliminary or postliminary activities in the food manufacturing industry in Wisconsin. Unfortunately, the same cannot be said with respect to the various opinions as they relate to the application of the de minimis doctrine.

            The De Minimis Doctrine

As noted above, both the Abrahamson and Roggensack camps concluded that the de minimis doctrine did not apply to the donning and doffing time. However, they did so for different reasons.

The Abrahamson camp concluded that the de minimis doctrine would not apply, if recognized under Wisconsin law (on which it did not opine), because the aggregate amount at stake was not a “trifle.” Rather, the average plaintiff employee was “out” approximately $500 per year, an amount which the Justice concluded was “certainly significant” to an employee.

The Roggensack camp seemingly would have concluded the de minimis doctrine would have applied in the Hormel case but for the fact that the parties had stipulated to the amount of time at issue – i.e., 5.7 minutes per employee per day. According to the Roggensack camp, if the amount of time had not been stipulated, “it would appear to be almost an administrative impossibility to [determine the amount of time spent each day by each employee] accurately.” Therefore, the Roggensack camp would have found the time de minimis even if the aggregate amount was not a trifle.

The Gableman camp suggested that both of the other camps were wrong to lend any focus to the “aggregate” amount at issue, and the proper determination was whether the matter involved seconds or minutes of unscheduled work, which could legally be ignored as trifles. Since the amount of time at issue was 2.903 minutes on average (the difference to 5.7 minutes being the amount of time necessary to walk to the production area after donning or before doffing), Justices Gableman and Ziegler would have applied the de minimis doctrine to find the donning and doffing time non-compensable.

Unfortunately, the import of the three opinions when it comes to the application of the de minimis doctrine is difficult to gauge. Because none of the three opinions address the same issues in reaching their conclusions, it remains unclear how the Justices may resolve a question on the application of the doctrine if involving slightly different facts or arguments. Therefore, Wisconsin employers still lack any direct guidance on whether the de minimis doctrine exists in the first instance in Wisconsin, and secondly, if it does exist, how or when it should be applied.

Wage and hour claims are the most frequently pursued employment claims in our society today. Whether it be claims based on alleged misclassification (exempt v. non-exempt status) or off-the-clock work (such as donning and doffing claims), some additional guidance on two prominent concepts in this arena would have been useful. Unfortunately, the Hormel decision may not provide the sort of guidance many Wisconsin employers can utilize.  

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this update or would like to discuss this topic further, please contact your Foley attorney or the following:

Daniel Kaplan
Madison, Wisconsin

Carmen Couden
Milwaukee, Wisconsin

Ryan Parsons
Milwaukee, Wisconsin

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