Court Opinion

ID: 9363166
Source: CourtListenerOpinion
Date Created: 2023-01-13 18:57:32.86767+00
Date Added: 2024-06-11T17:15:29.649787
License: Public Domain

FILED
                             FOR PUBLICATION
                                                                             OCT 24 2022
                   UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

CARIENE CADENA; ANDREW                         No.    21-16522
GONZALES, on behalf of themselves and
all others similarly situated,                 D.C. No.
                                               2:18-cv-00233-APG-DJA
             Plaintiffs-Appellants,

 v.                                            OPINION

CUSTOMER CONNEXX LLC; JANONE,
INC.; DOES, 1 through 50, inclusive,

             Defendants-Appellees.

                   Appeal from the United States District Court
                            for the District of Nevada
                   Andrew P. Gordon, District Judge, Presiding

                      Argued and Submitted June 14, 2022
                           San Francisco, California

Before: Jay S. Bybee, Consuelo M. Callahan, and Daniel P. Collins, Circuit
Judges.

                             Opinion by Judge Bybee
                                  SUMMARY *

                                   Labor Law

   The panel reversed the district court’s summary judgment in favor of defendant
Customer Connexx LLC and remanded for further proceedings in a collective action
brought under the Fair Labor Standards Act by call center workers.

   The workers provided customer service and scheduling to customers over a “soft
phone,” operated only through their employer-provided computers. They alleged
that their time booting up and shutting down their computers was an integral and
indispensable part of their principal duties, making the time compensable under the
FLSA, as amended by the Portal-to-Portal Act.

    The panel concluded that the district court correctly identified the workers’
principal duties as answering customer phone calls and scheduling appliance
pickups. Agreeing with the Tenth Circuit, the panel held that the workers’ duties
could not be performed without turning on and booting up their work computers,
and having a functioning computer was necessary before the workers could receive
calls and schedule appointments. Accordingly, turning on the computers was
integral and indispensable to the workers’ duties and was a principal activity under
the FLSA. It therefore was compensable.

    The panel reversed the district court’s summary judgment on the FLSA claim and
remanded to the district court for consideration of whether time spent shutting down
computers was compensable, whether the time spent booting up and down the
computers was not compensable under the de minimis doctrine, and whether
Connexx had no knowledge of the alleged overtime such that it was not in violation
of the FLSA’s overtime requirements.

   *
     This summary constitutes no part of the opinion of the court. It has been
prepared by court staff for the convenience of the reader.
                                   COUNSEL

Joshua D. Buck (argued), Mark R. Thierman, and Leah L. Jones, Thierman Buck
LLP, Reno, Nevada, for Plaintiffs-Appellants.

Veronica T. Hunter (argued) and Paul T. Trimmer, Jackson Lewis PC, Las Vegas,
Nevada, for Defendants-Appellees.

Frances Y. Ma (argued), Attorney; Rachel Goldberg, Counsel for Appellate
Litigation; Jennifer S. Brand, Associate Solicitor; Seema Nanda, Solicitor of Labor;
United States Department of Labor, Office of the Solicitor, Washington, D.C.; for
Amicus Curiae Secretary of Labor.
BYBEE, Circuit Judge:

      Plaintiffs-Appellants Cariene Cadena and similarly situated employees

(Appellants) are employed by Customer Connexx LLC (Connexx) to operate a call

center in Las Vegas, Nevada. Appellants’ primary responsibilities are to provide

customer service and scheduling to customers over a “soft phone,” operated only

through their employer-provided computers. We are asked to determine whether

their time booting up and shutting down their computers is an integral and

indispensable part of their principal duties, making the time compensable under the

Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201–19. The district court granted

summary judgment for Connexx. We reverse and remand for further proceedings.1

                               I.   BACKGROUND

      Connexx, a wholly owned subsidiary of JanOne Inc., operates a call center

in Las Vegas, Nevada that provides customer service and scheduling for an

appliance recycling business. Appellants work in-person at the call center in a

variety of hourly-paid, non-exempt positions, including as call center agents whose

primary responsibilities are to provide customer service and scheduling functions

      1
       Our holding is limited to the facts presented in this case—that is,
Appellants using employer-provided computers to perform their duties while
working at a central work site. We are not asked to consider, and offer no opinion
on, whether the same time would be compensable under the FLSA if Appellants
worked remotely or used their personal computers to perform these duties.
                                         2
for customers over the phone.2 Like many employers, Connexx has a policy

prohibiting “off the clock” work and requires hourly employees to record their

actual hours worked each day. Employees clock in and out using a computer-

based timekeeping program, which they must do before accessing other job-

relevant programs. To reach the timekeeping program, employees must awaken or

turn on their computers, log in using a username and password, and open up the

timekeeping system. Appellants are not assigned to a particular computer and they

testified that, depending on the age of the computer and whether the computer was

off or in sleep mode, it would take anywhere from a minute to twenty minutes for

the computer to boot-up so they could clock in. Appellants estimate the average

boot up time is between 6.8 to 12.1 minutes. Connexx allows employees to correct

inaccuracies in their timecards that occur due to technical issues using a “punch

claim form.”

      Once clocked in, Appellants load various programs and scripts and confirm

that their phone is connected and ready to accept calls. Connexx agents use a

phone program called “Five9,” an application that operates through employees’

      2
        Appellants include the two named plaintiffs, Cariene Cadena and Andrew
Gonzales, and fifteen opt-in plaintiffs who, after receiving notice of the
conditionally certified FLSA collective action, executed consent forms to join the
collective action.
                                          3
computers rather than through a physical phone. At the end of their shift,

employees wrap up any calls they are on, close out of job-relevant programs, clock

out, and then log off or shut down their computers.3 Connexx employees gave

varied accounts of how long it took to log off of their computers, ranging from less

than a minute to fifteen minutes, and Appellants estimate it took an average of 4.75

to 7.75 minutes to log off and boot down the computers.

      Appellants filed suit in Nevada state court on behalf of themselves and

similarly situated employees alleging violations of the overtime provisions of the

FLSA and Nevada law. They contend that they were not

paid for the time spent booting up their computers prior to clocking in to the

electronic timekeeping system or closing down their computers after clocking out

of the timekeeping program. Defendants removed the case to federal court.

      The district court conditionally certified the FLSA collective action and

notice was sent to putative collective action members, resulting in fifteen opt-in

      3
         Appellants allege that employees were instructed “to make sure that [their]
computer[s] [are] completely shut down.” Connexx claims that employees were
never instructed to turn off their computers and presented testimony from various
employees that it was a personal preference to shut their computer down all the
way and that most people would leave after logging out without waiting for the
computer to shut down. However, other employees testified that they were advised
or instructed to shut down their computers all the way. Because Connexx filed for
summary judgment, we will assume for purposes of this appeal that employees
were instructed to shut down their computers at the end of their shift.
                                          4
plaintiffs currently in the suit. Connexx moved to decertify the FLSA collective

action and for summary judgment on the FLSA claim. The district court granted

summary judgment to Defendants, holding that “[s]tarting and turning off

computers and clocking in and out of a timekeeping system are not principal

activities” because Connexx did not hire employees for that purpose, but “to

answer customer phone calls and perform scheduling tasks.” The district court

noted that Connexx “could dispense with the electronic timekeeping method and

the employees could still perform their work.” The court compared booting up to

“the electronic equivalent of waiting in line to clock in or out of a physical

timeclock, which is non-compensable.” The court concluded that those tasks “are

not integral and indispensable to the employees’ duties as call center customer

service agents.” Having disposed of the FLSA claim, the district court declined to

exercise supplemental jurisdiction and remanded the state law claims to state court.

The district court denied Appellants’ motion for reconsideration.

      Appellants timely filed a notice of appeal. The United States Department of

Labor (DOL) filed an amicus brief in support of Appellants.

                          II.   STANDARD OF REVIEW

      We have jurisdiction under 28 U.S.C. § 1291. We “review a district court’s

grant of summary judgment de novo, and may affirm on any basis supported by the

                                           5
record.” Gordon v. Virtumundo, Inc., 575 F.3d 1040, 1047 (9th Cir. 2009) (citing

Burrell v. McIlroy, 464 F.3d 853, 855 (9th Cir. 2006)). “Our review is governed

by the same standard used by the trial court under Federal Rule of Civil Procedure

56.” Id. (citing Adcock v. Chrysler Corp., 166 F.3d 1290, 1292 (9th Cir. 1999)).

“Viewing the evidence in the light most favorable to the nonmoving party, we must

determine whether there are any genuine issues of material fact and whether the

district court correctly applied the relevant substantive law.” Id. (quoting

Devereaux v. Abbey, 263 F.3d 1070, 1074 (9th Cir. 2001) (en banc)).

      “Whether an activity is excluded from hours worked under the FLSA, as

amended by the Portal-to-Portal Act, is a mixed question of law and fact.” Ballaris

v. Wacker Siltronic Corp., 370 F.3d 901, 910 (9th Cir. 2004). “The nature of the

employees’ duties is a question of fact, and the application of the FLSA to those

duties is a question of law.” Id.

                                III.   DISCUSSION

      Appellants have raised a single issue for our review: Whether Appellants’

time spent booting up and shutting down their computers, through which they

access their phone and customer service programs, is an integral and indispensable

part of their duties and thus compensable under the FLSA. We will begin with

important background on the FLSA, including the Portal-to-Portal Act, which

                                           6
amended the FLSA; DOL regulations; and the relevant jurisprudence. We will

then apply those standards to Connexx’s call center employees.

A.    The Fair Labor Standards Act

      Enacted in 1938, the FLSA requires employers to pay employees one and

one-half times their regular pay for any time worked over forty hours per

workweek. 29 U.S.C. § 207. In 1946, the Supreme Court held that “the statutory

workweek includes all time during which an employee is necessarily required to be

on the employer’s premises, on duty or at a prescribed workplace.” Anderson v.

Mt. Clemens Pottery Co., 328 U.S. 680, 690–91 (1946). The Court’s interpretation

in Mt. Clemens extended to preliminary activities like “walking to work on the

employer’s premises,” “putting on aprons and overalls,” and “turning on switches

for lights and machinery.” Id. at 691–93.

      In response, in 1947 Congress passed the Portal-to-Portal Act, 29 U.S.C.

§§ 251–62, to correct the “unexpected liabilities” created by the FLSA being

“interpreted judicially in disregard of long-established customs, practices, and

contracts between employers and employees.” Id. § 251(a). The Act provided that

      no employer shall be subject to any liability or punishment under the
      [FLSA] . . . 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
      ...—

                                            7
                (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.

Id. § 254(a).

       In the wake of the Portal-to-Portal Act, the Supreme Court revised its prior

understanding of the FLSA and held that “activities performed either before or

after the regular work shift . . . are compensable . . . if those activities are an

integral and indispensable part of the principal activities for which covered

workmen are employed.” Steiner v. Mitchell, 350 U.S. 247, 256 (1956). Activities

that are “integral and indispensable” are themselves treated as “principal activities”

under the Portal-to-Portal Act. See IBP, Inc. v. Alvarez, 546 U.S. 21, 37 (2005).

The first principal activity of the day begins the workday and “any [waiting] time

that occurs after the beginning of the employee’s first principal activity and before

the end of the employee’s last principal activity . . . is covered by the FLSA.” Id.;

see 29 C.F.R. § 790.8(a) (interpreting “‘principal’ activities” as the activities an

employee is “employed to perform”); id. § 790.7(b) (“‘preliminary activity’

                                             8
mean[s] an activity engaged in by an employee before the commencement of his

‘principal’ activity or activities”). The Portal-to-Portal Act did not change earlier

interpretations of the term “work,” see IBP, 546 U.S. at 28, which the Court

defined as “physical or mental exertion (whether burdensome or not) controlled or

required by the employer and pursued necessarily and primarily for the benefit of

the employer and his business,” Tennessee Coal, Iron & R.R. Co. v. Muscoda Loc.

No. 123, 321 U.S. 590, 598 (1944); see 29 C.F.R. § 790.6(b) (defining “workday”

as “the period between the commencement and completion on the same workday

of an employee’s principal activity or activities[,] . . . includ[ing] all time within

that period whether or not the employee engages in work throughout all of that

period”).

      The “integral and indispensable test is tied to the productive work that the

employee is employed to perform” and does not include all activities an employer

requires. Integrity Staffing Sols., Inc. v. Busk, 574 U.S. 27, 36 (2014). “An

activity is therefore integral and indispensable to the principal activities that an

employee is employed to perform if it is an intrinsic element of those activities and

one with which the employee cannot dispense if he is to perform his principal

activities.” Id. at 33. Applying these standards, the Court has held that preparation

of equipment necessary to perform principal activities is compensable. See

                                            9
Steiner, 350 U.S. at 256 (time spent changing clothes at beginning of a shift and

showering after at a battery factory was indispensable because workers were

exposed to toxic dust); Mitchell v. King Packing Co., 350 U.S. 260, 263 (1956)

(pre-shift knife sharpening was integral and indispensable to the jobs of

“knifemen” employed to butcher animals at a meatpacking plant); see also 29

C.F.R. § 785.24 (providing examples of tasks that are compensable under the

integral and indispensable test). DOL regulations provide other examples of

compensable preparatory time. 29 C.F.R. § 790.8(b)(1) (stating that a lathe

operator’s time spent oiling, greasing, or cleaning his machine, or installing a new

cutting tool, is compensable); id. § 790.8(b)(2) (stating that a garment worker, who

is required to report early to distribute clothing at the work-benches of other

employees or get machines ready for operation by others, similarly must be paid

for that time).

       In contrast, the Court has said that time spent waiting to perform the first

principal activity of the day is ordinarily not compensable. See IBP, 546 U.S. at

40–42 (holding the time spent waiting to don protective equipment, as the first

principal activity of the day, is not compensable); 29 C.F.R. § 785.24 (“[A]ctivities

such as checking in and out and waiting in line to do so would not ordinarily be

regarded as integral parts of the principal activity or activities.”). And in Integrity

                                           10
Staffing Solutions, the Court found that Amazon warehouse employees who were

required to undergo security screening before leaving the warehouse were not

entitled to compensation because the screening was not “an intrinsic element” of

the job the employees were employed to perform—retrieving products from

shelves and packaging them for shipment. 574 U.S. at 29–30, 35. The Court made

clear that the integral and indispensable test does not encompass all activities that

are required by the employer. Id. at 36. But it does encompass those activities that

the employee is employed to perform. Id. at 37.

B.    Whether Booting Up and Down Employees’ Computers Is Integral and
      Indispensable to Their Principal Duties

      To determine whether booting up and down the computers is compensable

under the FLSA, we must first identify the employees’ principal duties—that is, the

work that they are employed to perform. The parties do not dispute the nature of

the employees’ duties and the district court correctly identified employees’

principal duties as “answer[ing] customer phone calls and perform[ing] scheduling

tasks.”

      The manner in which employees perform these duties is relevant. Connexx

operates a physical call center with numerous computer workstations on a single

floor. Employees are not assigned to any particular computer, so they select a

                                          11
workstation when they arrive on a “first come, first serve” basis. Based on whether

the employee who used that computer last shut down the computer or left it in

sleep mode, the employees either fully turn on the computer or wake the computer

from sleep mode. Employees enter their credentials to log in and then are able to

load the electronic timekeeping program and clock in. Employees accept customer

calls through the “Five9” program. Five9 is a “soft phone” which allows

employees to receive customer calls through their computers. There is no

hardware, other than the computer running the program, needed to accept customer

calls. Employees also load scripts through the Five9 program that correspond to

the specific utility program for which Connexx is providing scheduling services.

As necessary, employees may also load programs like Microsoft Excel and Office

365.

       The key question is whether turning on and off the computers is integral and

indispensable to the employees’ principal activities of receiving customer phone

calls and scheduling appliance pickups. If it is, turning on the computer itself is a

principal activity, see IBP, 546 U.S. at 37 (“[A]ny activity that is ‘integral and

indispensable’ to a ‘principal activity’ is itself a ‘principal activity’ ”), and the time

spent waiting for the boot up process is a part of the continuous workday, see id.

(“[D]uring a continuous workday, any [waiting] time that occurs after the

                                            12
beginning of the employee’s first principal activity and before the end of the

employee’s last principal activity . . . is covered by the FLSA.”). If turning on the

computer is not integral and indispensable, it is outside of the continuous workday

and non-compensable. See id.; see also 29 C.F.R. § 790.7(b) (“‘[P]reliminary

activity’ mean[s] an activity engaged in by an employee before the commencement

of his ‘principal’ activity or activities . . . .”). Here, the employees’ duties cannot

be performed without turning on and booting up their work computers, and having

a functioning computer is necessary before employees can receive calls and

schedule appointments. Accordingly, turning on the computers is integral and

indispensable to the employees’ duties and is a principal activity under the FLSA.4

      The district court concluded that “[s]tarting and turning off computers and

clocking in and out of a timekeeping system are not principal activities because

[Connexx] did not hire its customer service agents to turn computers on and off or

      4
         Our analysis and conclusion here is limited to whether booting up the
computers is compensable because the task is integral and indispensable to the
employees’ duties and therefore a principal activity under the FLSA. Because
shutting down the computers is not integral and indispensable to the employees’
ability to conduct calls, it is not compensable under this theory. Time spent
shutting down the computers may be compensable if the task is determined to be a
principal activity in and of itself. As previously noted, the parties dispute whether
employees were instructed to shut down their computers at the end of their shifts.
See supra n.2. We leave to the district court on remand to determine whether
shutting down the computers is compensable under any circumstances.
                                            13
to clock in and out of a timekeeping system.” In our view, the district court erred

in characterizing the inquiry. The district court asked whether “engaging with a

computer and loading a timekeeping program to clock in” is integral to the

employees’ duties. We acknowledge that clocking in may not be integral to the

tasks for which the employees were hired and could be accomplished by other

means, such as the traditional time clock or a time sheet. We think the correct

inquiry is whether engaging the computer, which contains the phone program,

scripts, customer information, and email programs, is integral to the employees’

duties. That is, we should evaluate the importance of booting up the computer to

the employees’ primary duties of answering calls and scheduling rather than to

their need to clock in using the electronic timekeeping system.

      When the employees’ duties are understood in this way, the electronic

timekeeping system becomes a red herring. It is a convenience to the employer.5

It has no impact on the “integral and indispensable” analysis except to show us

      5
         The district court analogized boot up time to waiting in line to clock in.
The comparison is not appropriate. If there is an analogy to be made to waiting in
line to clock in, it would be the time it takes the computer to pull up the
timekeeping program once an employee has booted up the computer. Our holding
does not, as Connexx suggests, effectively prohibit employers from using
computer timekeeping programs or contradict DOL regulations implying that no
specific form of timekeeping is required. See 29 C.F.R. § 785.48 (“Time clocks
are not required.”).

                                         14
when Connexx began counting the employees’ time. The district court erred by

analyzing logging in to a computer in order to clock in to the timekeeping system

as one act and then concluding that the employees could perform their work

without clocking in. When framed correctly, the answer to the question—whether

booting up the computers is integral and indispensable to the employees’ customer

service duties—is clear. All of the employees’ principal duties require the use of a

functional computer, so turning on or waking up their computers at the beginning

of their shifts is integral and indispensable to their principal activities. Because

clocking in to the timekeeping program occurs after booting up the computer—the

first principal activity of the day—it is compensable. See IBP, 546 U.S. at 37.

      We recognize that not all activities an employer requires as a part of an

employee’s duties are compensable. See Integrity Staffing Sols., 574 U.S. at 36

(warning that treating all employer-required activities as integral and indispensable

is overbroad). But when, as here, the required activity bears such a close

relationship to the employees’ principal duties that employees cannot eliminate the

required activity and still perform their principal duties, the activity is

compensable. Unlike in Integrity Staffing Solutions, where the employer could do

away with security screening without impairing the warehouse employees’ ability

                                            15
to retrieve and package products, Connexx call center employees cannot perform

their principal duties without first booting up their computers.

      The Tenth Circuit recently reached the same conclusion when faced with a

similar claim from call center representatives. In Peterson v. Nelnet Diversified

Solutions, LLC, 15 F.4th 1033 (10th Cir. 2021), the employees’ principal

responsibilities were to “service student loans and interact with debtors over the

phone and through email.” Id. at 1035–36. Before clocking in to an electronic

timekeeping system, each employee had to wake up her work computer, enter her

credentials, and load the desktop and the company’s intranet system, which

contained the link to clock in. Id. at 1036. The median amount of time spent on

boot up was “approximately two minutes per shift.” Id. The district court found

the time was compensable but concluded that it was de minimis. Id. On appeal,

the Tenth Circuit affirmed that the time was compensable but reversed on the

applicability of the de minimis doctrine, holding that the regularity and absence of

administrative difficulty in recording the time made it compensable. Id. at 1049.

In so holding, the court found an “obvious connection between the computers and

software programs and the work the [call center representatives] are employed to

perform” and because “the data and tools necessary to [perform the employees’]

principal duties exist on the computer,” booting up the computer is integral and

                                          16
indispensable to their duties. Id. at 1041–42. The Tenth Circuit also concluded

that “turning on a computer, entering passwords, and launching software is not

analogous to waiting in line to punch a clock, particularly when—very much

unlike a time clock—the computer itself is an integral tool for the work the

individual is employed to perform.” Id. at 1041.

      Connexx argues that Peterson is distinguishable because the call center

employees there were all required to perform “several preshift tasks before they

clocked in” including booting up the computer and loading relevant programs,

whereas here, as soon as the computer is turned on, the employees can access the

timekeeping system. Connexx’s proffered differences do not hold up. While the

employees in Peterson did have to enter their badge or credentials and the

company’s intranet system was automatically launched before the link to the

timekeeping software appeared, see id. at 1036, this is not fundamentally different

from the process to which Connexx employees have testified. Connexx employees

have to turn on or wake up their computers, enter their login credentials, and wait

for their desktop to load, before they can launch their timekeeping software and

clock in.

      Because Appellants cannot perform their principal duties—receiving

customer calls and scheduling—without a functional computer, booting up their

                                         17
computers at the beginning of their shifts is integral and indispensable and

therefore compensable under the FLSA.

C.    Alternative Grounds for Affirmance

      Connexx urges us to affirm on two alternative grounds. First, Connexx

argues that we should affirm because even if the boot up time is not preliminary, it

is non-compensable under the de minimis doctrine. The de minimis doctrine is not

codified in the FLSA, but has its origins in the Court’s pre-Portal-to-Portal Act

decision in Mt. Clemens. There the Court invoked the ancient principle of de

minimis non curat lex—the law does not concern itself with trifles—and stated that

the FLSA “d[id] not . . . preclude the application of a de minimis rule” where “the

matter in issue covers only a few seconds or minutes of work beyond the scheduled

working hours.” Id. at 692 (emphasis added). We have since recognized the

doctrine in the FLSA context. Lindow v. United States, 738 F.2d 1057, 1062 (9th

Cir. 1984) (“As a general rule, employees cannot recover for otherwise

compensable time if it is de minimis.”); see Alvarez v. IBP, Inc., 339 F.3d 894,

903–04 (9th Cir. 2003), aff’d on other grounds, 546 U.S. 21 (2005). DOL has

recognized the doctrine in its regulations. See 29 C.F.R. § 785.47 (“[I]nsubstantial

or insignificant periods of time beyond the scheduled working hours, which cannot

as a practical administrative matter be precisely recorded for payroll purposes, may

                                          18
be disregarded.”). More recently, however, the Court has questioned the

application of the de minimis doctrine to the FLSA. Sandifer v. U.S. Steel Corp.,

571 U.S. 220, 234 (2014) (“A de minimis doctrine does not fit comfortably within

the statute at issue here, which, it can fairly be said, is all about trifles . . . .”). The

district court acknowledged Connexx’s argument that the time was de minimis but

did not reach the issue because it ruled on the preliminary/postliminary ground.

       Second, Connexx argues that we can affirm on the alternative basis that

Connexx had no actual or constructive knowledge of the alleged overtime. In

general, “an employee must be compensated for all hours worked,” including “[a]ll

time during which an employee is suffered or permitted to work whether or not he

is required to do so.” 29 C.F.R. § 778.223(a). DOL has further explained that

“[t]he rule is also applicable to work performed away from the premises or the job

site, or even at home. If the employer knows or has reason to believe that the work

is being performed, he must count the time as hours worked.” 29 C.F.R. § 785.12

(emphasis added). We have summarized the rule:

       [W]here an employer has no knowledge that an employee is engaging
       in overtime work and that employee fails to notify the employer or
       deliberately prevents the employer from acquiring knowledge of the
       overtime work, the employer’s failure to pay for the overtime hours is
       not a violation of [29 U.S.C. § 207].

                                             19
Forrester v. Roth’s I. G. A. Foodliner, Inc., 646 F.2d 413, 414 (9th Cir. 1981).

Connexx argues that since it had a procedure for its employees to report additional

time, it is not responsible for compensating its employees for unreported time

because it did not know the work was being performed. The district court did not

reach this issue.

         We decline to take up either issue. Both questions involve disputed factual

questions that the district court should decide in the first instance on remand. We

express no view on the merits of either issue.

                                 IV.   CONCLUSION

         We reverse summary judgment on the FLSA claim and remand to the district

court for consideration of whether time spent shutting down computers is

compensable, whether the time spent booting up and down the computers is not

compensable under the de minimis doctrine and whether Connexx had no

knowledge of the alleged overtime such that it is not in violation of 29 U.S.C.

§ 207.

         REVERSED AND REMANDED.

                                           20