Travel time poses wage and hour risks for construction employers

By G. Phillip Shuler

A federal appeals court has recently ruled that drilling rig employees were not owed compensation for travel time, even though they were encouraged by their employer to ride with co-workers and sometimes hauled equipment and paperwork with them, because those tasks were not an indispensable part of their jobs. Smith v. Aztec Well Service, 10th Cir. No. 04-2153 (2006).

In addition to encouraging the employees to ride together to the jobsite with their immediate foreman, the employer required employees to assemble at a particular location where they purchased food, water and drinks to be used at the jobsite.

Prior to departing for the jobsite, the employees would load their personal safety equipment (hard hats, gloves, steel-toed boots and coveralls) into the transport vehicle. The foreman would, on occasion, transport equipment and paperwork to the jobsite for his boss (toolpusher, rig manager) which was loaded by employees.

Safety and other work related issues were discussed while traveling, which consumed from 30 minutes to three hours one way. The standard practice in the industry was to not compensate crew members for travel to and from the jobsite.

Aztec was granted partial summary judgment by the trial court on claims arising after the date it issued a written travel policy which stated as follows:

1. Aztec does not control or direct the travel or transportation of any employee to or from the jobsite.

2. No employee is required to travel to or from the jobsite with the foreman.

3. No employee is required to perform any service or duty for the company while traveling to or from the jobsite.

The Court of Appeals agreed that no reasonable jury could conclude the employees were engaged in compensable work after this travel policy was issued. However, for claims arising before issuance of the travel policy, the jury concluded that Aztec violated the Fair Labor Standards Act (FLSA) by failing to compensate the employees for their travel time. The trial court granted Aztec's motion for judgment as a matter of law and overturned the jury verdict.

The Court of Appeals agreed with the trial court. The Court of Appeals rejected the employees' claims that: 1) Aztec's requiring them to ride together to the jobsite with their foreman made the travel time compensable; 2) their work day began and ended at the pick up location because of tasks performed there; and 3) their travel time was itself work within the meaning of the FLSA because they transported equipment and paperwork necessary for work at the jobsite and engaged in safety and work related discussion while traveling.

The court noted that the FLSA did not define "work," but that the Supreme Court had originally concluded that work was physical or mental exertion controlled or required by the employer and primarily for the employer's benefit and has held that time spent walking or riding from an employer's entrance to a workstation was compensable. However, Congress subsequently amended the FLSA in the Portal-to-Portal Act, 29 U.S.C. § 254(a), which provided:

No employer shall be subject to any liability or punishment under the Fair Labor Standards Act of 1938, as amended … on account of the failure of such employer to pay an employee minimum wages, or to pay an employee overtime compensation, for or on account of any of the following activities of such employee:

1. Walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform; and

2. Activities which are preliminary to or postliminary to said principal activity or activities, which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities.

Thus, the Court of Appeals reasoned that unless activities engaged in before or after work are an integral and indispensable part of the principal activities for which the employees are employed, time spent in traveling from home to work is not compensable. The court noted a Dept. of Labor (DOL) regulation which provided that: [w]here an employee is required to report at a meeting place to receive instructions or to perform other work there, the travel from the designated place to the work place is part of the day's work and must be counted as hours worked.

However, the court concluded that Aztec employees' principal activities began at the jobsite, not at the pick-up location, and that the DOL regulation cited above covered travel time after the beginning of the employee's first principal activity which, in this case, began at the jobsite.

The court concluded that, even if the employees were required to travel with their foreman, nothing in the Portal-to-Portal Act made an exception just because employees were required to travel together.

The court concluded that the employees' loading of their personal safety equipment at the pick-up location did not initiate compensable time because it took only a brief time, required little concentration and was not integral and indispensable to their principal activities.

The court distinguished its earlier decision holding that travel time was compensable because employees transported equipment necessary to their jobs by stating that there was no evidence that they regularly transported equipment as part of their daily travel.

The court also rejected the claim that the entire time spent traveling was rendered compensable because occasional safety and work related discussions were held in transit, finding that they were not integral and indispensable to the employees' principal activities at the jobsite but more a technique to stay awake while driving.

The Aztec case certainly has some relevance to the construction industry. The decision highlights that it is important to have well written policy prohibitions regarding travel time. The case also highlights that it is the specific facts that will determine whether travel time is or is not compensable. It is very important for the employer to prohibit work related activities (e.g., transport of essential equipment) as much as possible.