Department of Labor regulations issued under the Fair Labor Standards Act (29 C.F.R. § 785.18) state that any break time less than 20 minutes for nonexempt employees is considered compensable working time. Earlier this month, the Third Circuit Court of Appeals granted summary judgment to DOL in a case challenging an employer’s claim that this rule did not apply to its flexible time policy.

In Secretary USDOL v. Amer. Future Systems, Inc., the employer eliminated its traditional policy of providing two daily paid breaks. Instead, the employer implemented a policy that allowed employees to take as many breaks as they wished during the working day. Employees were required to log out of the employer’s computer system when not working. Any time spent logged out more than 90 seconds was not considered compensable working time. DOL sued on behalf of employees who contended that the policy violated the FLSA regulation on short break times. The district court agreed, granting summary judgment to DOL.

On appeal, the employer argued that the 20-minute break rule does not apply to the employer’s flexible time policy. By eliminating breaks and providing employees with control over their working schedule, the time taken away from work was not actually break time. The defendant contended that it should be allowed to demonstrate that employees took time off for a number of purposes, many of which did not benefit the employer.

The Third Circuit rejected these arguments, affirming summary judgment and in fact imposing liquidated damages against the employer. The court refused to accept the employer’s distinction between traditional break time and its flex time policy. This alternative would allow employers to escape paying employees for short breaks by merely calling the breaks by a different name. The Third Circuit also rejected as burdensome and unworkable the defendant’s call for the compensation of short periods of time off to be determined by whether the breaks benefit the employer or employee.

The FLSA was adopted in the 1930s, and the key time-worked regulations have been in place since the 1950s. At that point, no one had heard of flexible time arrangements. As with compensatory time and other innovative scheduling plans, employers’ attempts to modernize the working day can run afoul of inflexible federal rules that determine compensable working time.