February 10, 2014
February 10, 2014
By J.L. Wilson
Associated Oregon Industries
Oregon’s largest business advocate
Class Action Certification Denied on Key Payroll Timekeeping Issue
Late last year, AOI filed an amicus brief, in conjunction with Oregon Forest Industries Council (OFIC), in defense of Murphy Company, a southern Oregon company that manufactures plywood.
The case was Arthur v Murphy. It was adjudicated in U.S. District Court, District of Oregon, Medford Division.
At issue was Murphy’s system of punch in/punch out timekeeping that gives employees up to a 7-minute “grace period” between punching in and starting a shift or ending a shift and punching out. Several AOI members employ this system of timekeeping for their employees.
Under company policy, the “grace period” is intended to be personal time, to be used by the employee in any manner they wish, so long as the employee is at their work station at the time their shift begins. Company policy makes clear the “grace period” is not considered work time. Employees are free to tend to personal matters during this time.
In this case, the petitioner was seeking certification as a class action lawsuit. Many AOI members could be ensnared in subsequent litigation over the compensability of punch in/punch out “grace periods” if the suit was certified.
The lawsuit alleges that the “grace period” constitutes compensable work time, and that Murphy Company is liable for the wages of employees between punching in and the start of the shift as well as between when the employee ends their shift and punches out.
The AOI/OFIC amicus brief supported the employee timekeeping practice employed by Murphy Company and other AOI members across Oregon. The amicus argued that the defining characteristic of “work” under Oregon law is the exercise of employer control, which does not occur during punch in/punch out “grace periods.” The amicus argued that the hallmark of the “grace period” is employee flexibility to tend to personal matters that are not under employer control.
The amicus concludes that the scheduled time – and not the punch time – determines the employee’s pay because the employer assumes (based on its formal policy) that the employee is not working and not under its control during the “grace period.”
Federal Judge Mark Clarke agreed with Murphy, AOI and OFIC, and found that there was nothing unlawful about Murphy’s employee timekeeping system.
Judge Clarke denied certification for class action. For any Oregon employer using a “grace period” or timekeeping system similar to Murphy Company, it’s an excellent opinion and result.