On May 8, 2012, the US Court of Appeals for the Seventh Circuit issued a decision in Sandifer v. U.S. Steel Corp. A key litigated issue was whether hourly workers were entitled to compensation for time spent:

Former and current hourly workers at U.S. Steel's Gary, Indiana, steel works brought a collective action under the FLSA against their employer, claiming U.S. Steel violated the FLSA by failing to compensate them for clothes-changing time and travel time. The workers' current and former collective bargaining agreements (CBAs) did not require compensation for either.

The district court ruled that the FLSA did not require clothes-changing time to be compensated but ruled in favor of the plaintiffs on their travel time claim. The court certified the issue of travel time for an interlocutory appeal, which the Seventh Circuit accepted. Although the Seventh Circuit dismissed the plaintiffs' cross-appeal challenging the district judge's ruling that clothes-changing time was not compensable because they had not asked for leave to appeal, the Seventh Circuit did consider the clothes-changing ruling in reaching its decision on the compensability of travel time.

The Seventh Circuit held that travel time was not compensable, overruling the district court's prior holding, and directed the district court to dismiss the plaintiffs' case.

The Court first noted that Section 203(o) of the FLSA excludes from a worker's compensable time any time spent changing "clothes," if excluded by the worker's CBA (29 U.S.C. § 203(o) (2011)). The court dismissed the plaintiffs' argument that the clothes at issue were instead "personal protective equipment," finding the workers' uniform to fall within the FLSA's definition of "clothes." Since the CBA in this case did not require compensation for clothes-changing time, the Seventh Circuit ruled the district court had correctly dismissed the plaintiffs' donning and doffing claim.

In addition, the Seventh Circuit found that the district court had incorrectly ruled in favor of the plaintiffs' travel time claim. The Portal-to-Portal Act exempts travel time to and from the place of performance or the principal activity of the employee's employment from the FLSA's minimum wage and overtime provisions if those activities take place either before the beginning of or after the end of the principal activity (29 U.S.C. 254(a) (2011)). The Court held that since clothes-changing time was not compensable under either the FLSA or the CBA, it could not be considered a principal employment activity; therefore, the Portal-to-Portal Act exempted the travel time.

The court noted its departure from recent and revised guidance by the DOL, which it attributed to the DOL's failure to provide substantive information on the reason for the new interpretation other than a change in the political climate.

The Seventh Circuit's decision helps define "clothing" under the FLSA, a term left to judicial interpretation. It offers employers support for the argument that clothing with some protective purpose is not necessarily protective clothing for purposes of the FLSA and that related changing time and travel time falls outside the compensation requirements of the FLSA. In addition, it undercuts the DOL's argument that employers must adhere strictly to departmental guidance.

For more information on compensable time, see Practice Note, Compensable Time.