On-call time under the Fair Labor Standards Act.

• Date: 01 August 1997
• Author: Phillips, Eric
• Published date: 01 August 1997
• Author: Phillips, Eric

INTRODUCTION

Economic pressures, changing family structures, and technology have increasingly bluffed the line between work time and personal time. The rise of independent contracting, the growing number of families in which both parents work, and the expanding reach of computer networks, fax machines, pagers, and mobile telephones, to provide a few examples, have bluffed the once-familiar distinction between work time and leisure time.(1) This distinction is particularly unclear for on-call employees.

An on-call employee is one who may be physically away from the workplace but who remains connected to it by telephone, beeper, computer, or radio, and who must respond to the employer if called.(2) While on call, an employee generally does not face the constraints he may face while on a regular shift at his employer's premises. He may be able to go shopping or watch television during his on-call hours, for example. At the same time, even though he may have a greater measure of freedom than he does while working a normal shift, he is never truly free from work. The employer may interrupt the employee's personal activities without warning, and the threat of interruption may prevent him from engaging in certain activities altogether, either because he would not be able to return to work quickly enough, or because some activities -- such as attending movies or sporting events -- require a solid block of time and thus would be impractical. Moreover, non-payment for on-call time can be inequitable: employers obtain value from the on-call services, enabling them to reduce staff or limit compensable hours worked without compensating the employees who have forgone personal activities.(3)

The distinction between work and personal time is especially important for on-call employees covered by the Fair Labor Standards Act (FLSA or the Act).(4) The minimum wage and overtime requirements of the FLSA require proper categorization of an employee's service as either work or leisure time. Employers must pay any employee covered by the FLSA(5) at least the minimum wage for all hours they "work," and must pay an overtime premium for hours in excess of a forty-hour week.(6) The FLSA does not permit an employee to waive or contract around these minimum requirements.(7) Thus, the definition of work is important: if on-call duty is not "work," the employee need only receive compensation for time spent actively responding to his employer's call.(8) If on-call duty is "work," however, the employee must be paid at least the minimum wage for the time spent on call.

Although on-call arrangements are not new, until recently courts rarely dealt with the question of whether on-call arrangements constituted work for purposes of the FLSA. The FLSA offers little direct guidance on this matter,(9) and while the Supreme Court has ruled on cases involving "waiting time" -- time spent on the employer's premises or within "hailing distance"(10) -- it has never squarely addressed the issues raised by on-call time. Only in the past decade have federal appellate courts examined whether particular on-call arrangements require compensation under the FLSA.(11)

Because on-call arrangements do not fit neatly into traditional notions of "work," and because the FLSA does not adequately define the term, courts have struggled to create a rational approach for determining whether an on-call employee is working, and thus entitled to the statutory minimum wage and overtime guarantees for his time on call.(12) Courts have disagreed with each other,(13) often applying conclusory analysis(14) and have permitted extraneous issues to muddle their analyses.(15) In light of the predominantly factual basis of the question raised in on-call cases, a mechanical test likely cannot resolve the issue.(16) Courts therefore must examine all the circumstances involved in the on-call arrangement.(17)

This Note attempts to clarify the analysis for determining whether an employee is "working" while on call. Part I explains that neither the FLSA nor the Supreme Court provides clear guidance for defining "work" in on-call cases. Part II argues that when deciding on-call cases, courts should look to how the on-call arrangement both burdens the employee and benefits the employer. Part III contends that courts should eliminate two extraneous issues from their current analysis of on-call cases: whether an employee may trade an on-call shift, and whether employees and employers can decide for themselves through a contract whether on-call service is work.

1. The Muddled Legal History of On-Call Employment

   This Part sets out the basic guideposts courts have used to examine on-call time and explains why they lead to inconsistent results. Section I.A describes the statutory and regulatory schemes governing the definition of work and finds that they are either vague or incomplete. Section I.B reviews the relevant Supreme Court decisions on this issue and concludes that they similarly fail to provide concrete guidance. Section I.C contends that neither the statute nor Supreme Court decisions adequately facilitates consistent application by lower courts.

   1. Statutory and Regulatory Guideposts

      The FLSA does not define work. It merely states that to "`[e]mploy' includes to suffer or permit to work."(18) The Department of Labor's regulations under the FLSA also provide no clear guidance. Under the regulations,

      [a]n employee who is required to remain on call on the employer's

      premises or so close thereto that he cannot use the time effectively for

      his own purposes is working while "on call". An employee who is not

      required to remain on the employer's premises but is merely required

      to leave word at his home or with company officials where he may be

      reached is not working while on call.(19)

      This definition properly indicates that the burden on the employee is the paramount consideration in resolving the question,(20) but ultimately is of little help to courts in determining whether an on-call employee must receive the minimum wage or overtime.(21)

      The regulations are both too vague and too narrow. On one hand, they leave the courts with a great deal of discretion and lead to contradictory conclusions in similar situations.(22) Although the regulations focus on whether an employee can use his time "effectively," that focus does not provide sufficient guidance. On the other hand, the regulations do not account adequately for the possibility that an employee may be entitled to compensation under the FLSA even when he is waiting on call more than a short distance from his employer's premises.(23)

   2. Supreme Court Guideposts

      The Supreme Court, in two "waiting time" cases, Armour & Co. v. Wantock(24) and Skidmore v. Swift & Co.,(25) set out several helpful principles that lower courts have used in determining whether an on-call employee is working. These cases involved firefighters who waited on or near the employer's premises to be called to activity. In Armour, the Court determined that time spent waiting for work could be classified as work time under the FLSA.(26) In Skidmore, the Court indicated that the touchstone in such cases is whether the "time is spent predominantly for the employer's benefit or for the employee's."(27) Any such inquiry, the Court noted, is heavily fact-dependent(28) and "involves scrutiny and construction of the agreements between the particular parties, appraisal of their practical construction of the working agreement by conduct, consideration of the nature of the service, and its relation to the waiting time, and of all of the surrounding circumstances."(29)

      Lower courts have relied on Armour and Skidmore when determining whether the FLSA requires compensation in on-call cases. But while the guideposts contained in those waiting-time cases are useful and provide the basis for the broad contours of this Note, they do not adequately tell courts how to reach consistent conclusions in cases involving on-call arrangements. Waiting-time cases present very broad principles applied to factual situations that differ from on-call cases. On-call cases are more difficult to resolve than waiting-time cases because, unlike the situations in Armour and Skidmore, in which the employees were required to remain on or close to the employer's premises,(30) most contemporary on-call arrangements provide for greater physical freedom, permitting employees to go home and perform certain tasks for the employer without having to return to the employer's premises.(31) At the same time, the burden on the on-call employee may be greater. On-call shifts sometimes may last longer than waiting shifts and, in extreme cases, on-call employees may be placed on can the entire time they are not performing their regular service.(32) The differences between on-call cases and waiting-time cases thus compel a different analysis.

   3. Confusion in the Lower Courts

      Lower courts have not applied consistent analysis to on-call cases. The courts have disagreed over the broad outline of the test for determining what is work. The Sixth and Eleventh Circuits require compensation only when a severe burden has been placed on the employee,(33) whereas the Tenth Circuit merely asks whether the burden on the employee interferes with the employee's personal pursuits.(34) The elements of the test also vary among the circuits. For example, the Ninth Circuit looks at eight different factors,(35) while other courts apply fewer.(36) Some of these factors -- for example, the ability to trade on-call shifts -- have not been embraced uniformly,(37) and as discussed in Part III, do not further the analysis. In addition, nearly all circuits to consider on-call cases have failed to give adequate weight to the benefit an employer receives from the on-call arrangement.(38) Consequently, courts have reached different conclusions in cases with similar facts.(39)

2. Defining Work in On-Call Cases

   This Part seeks to bring greater...