Peterson v. Nelnet Diversified Solutions, No. 19-1348 (10th Cir. 2021)Annotate this Case
Over 300 call-center representatives (CCRs) who worked at call centers operated by Nelnet Diversified Solutions, LLC (Nelnet) alleged Nelnet failed to pay them for time devoted to booting up their work computers and launching certain software before they clock in. The district court concluded these activities were integral and indispensable to the CCRs’ principal activities of servicing student loans by communicating and interacting with borrowers over the phone and by email and therefore constitute compensable work under the Fair Labor Standards Act (FLSA) of 1938. But it nevertheless denied the CCRs’ claim, finding that the de minimis doctrine applied to excuse Nelnet’s obligation to pay the CCRs for this work. After granting summary judgment to Nelnet, the district court awarded costs to Nelnet as the prevailing party. The CCRs appealed the district court’s de minimis ruling, and separately appealed the district court’s order awarding prevailing-party costs to Nelnet. The Tenth Circuit agreed with the district court that the CCRs’ preshift activities were compensable work under the FLSA. But its application of the three-factor de minimis doctrine leads it to a different result: the Tenth Circuit concluded that although the CCRs’ individual and total aggregate claims were relatively small, Nelnet failed to establish the practical administrative difficulty of estimating the time at issue, which occured with "exceeding regularity." Therefore, in Appeal No. 19-1348, the district court’s order awarding summary judgment to Nelnet was reversed. And because the Court reversed on the merits, Nelnet was no longer the prevailing party. Accordingly, in Appeal No. 20-1217, the district court's order awarding costs to Nelnet was reversed, and CCR's costs appeal was dismissed as moot.