Third Circuit Court of Appeals Adopts “Predominant Benefit” Test under FLSA for Determining Meal Time Compensability

By Ralph R. Smith, 3rd, Esq.

When must an employer under the Fair Labor Standards Act (“FLSA”) compensate an employee for meal breaks taken during the course of an employee’s work day?  Throughout the country, various Federal Circuit Courts of Appeals have answered this question in different ways, but in the circuit court where New Jersey, Pennsylvania and Delaware are located (i.e. the Third Circuit), that circuit court had never answered this question until only recently in a significant precedential case for employers in this judicial region.

In Babcock v. Butler County, Docket No. 14-1467 (3rd Cir. 2015),  Sandra Babcock, a corrections officer at the Butler County Prison in Butler, Pennsylvania, filed a putative class action alleging Butler County improperly failed to pay her, and those similarly situated, overtime under the FLSA by not compensating the corrections officers for a portion of their meal periods.  Butler County Prison corrections officers worked eight and one-quarter-hour shifts, which included a one-hour meal break. Under the terms of the collective bargaining agreement (“CBA”) that covered prison guards, forty-five minutes of the one-hour meal break was paid and the other fifteen minutes was unpaid. The CBA also imposed constraints on what corrections officers could and could not do during the meal break. Corrections officers had to remain on call for emergencies during the meal period and also remain in uniform and in close proximity to emergency response equipment. They also were not permitted to leave the prison during the meal break without permission from the warden or deputy warden and likewise not permitted to go outside or smoke cigarettes.

Because of the foregoing restrictions on their ability to engage in certain personal activities during their meal period, the guards argued that they should have been compensated for the entire meal period.  In response, Butler County filed a motion to dismiss, arguing that the meal breaks were not compensable because the corrections officers received the “predominant benefit” of the meal period. The district court agreed and dismissed the action.

On appeal, the Third Circuit noted in its decision that two tests had been adopted primarily by other circuit courts to address the question of when compensation for meal breaks must be provided under the FLSA:  the “predominant benefit” test and the “relieved from all duties” test.  Ultimately, the Third Circuit adopted the “predominant benefit” test for these issues because it was the standard that the majority of other circuit courts had previously adopted to address such issues.

Under this test, the court assesses whether it is the employee or employer who receives the benefit of the meal break.  Applying this test to the case before it, the Court concluded that, even with the restrictions cited by the Plaintiff, on balance the corrections officers received the predominant benefit of the meal period and there was no legal duty to compensate them for the unpaid 15 minutes of the meal break.  In reaching this conclusion, the court noted that the correction officers could request authorization to leave the prison to take their meal break, and another important factor was that, if the meal break was disrupted, the terms of the CBA required that the guard be paid overtime.  Finally, in concluding its analysis, the Court cautioned that any inquiry into the predominant benefit standard had to be made on a case-by-case basis while taking into account the totality of the circumstances.

Wage and hour issues can be especially thorny ones for employers, particularly like those here that require an analysis as to whether an employee’s activities qualify as the performance of some service for an employer, thus requiring paid compensation for that time.  As Babcock illustrates, the answer to that question will often depend on which group is getting the benefit of the activities at that time, and how far (if at all) the employer’s rules place a restriction on an employee’s ability to engage in personal activities, especially when they effect time deemed to be a “break” from work for employees.  If you are wrong in assessing whether your employees should be paid, the consequences could be quite severe for not paying wages appropriately.