Integrity Staffing Solutions v. Jesse Busk

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    “Jesse Busk and Laurie Castro were former employees of Integrity Staffing Solutions, Inc. (Integrity), a company that provides warehouse space and staffing to clients such as Busk and Laurie both worked in warehouses in Nevada filling orders placed by customers. At the end of each day, all the workers were required to pass through a security clearance checkpoint where they had to remove their keys, wallets, and belts, pass through a metal detector, and submit to being searched. The whole process could take up to 25 minutes. Similarly, up to ten minutes of the workers’ 30-minute lunch period was consumed by security clearance and transition time. In 2010, Busk and Castro sued Integrity and argued that these practices violated the Fair Labor Standards Act (FLSA) as well as Nevada state labor laws.”

    This case was recently brought up to me over the holiday. I attempted to explain that an employer desires to pay not the lowest wage he can imagine, but the lowest wage that is simultaneously too high for any other potential employer of the person, who would otherwise obtain the person in his place. I argued that employees take into account the time they consider working in their decision to stay at the job or not and that if Amazon had to pay employees for standing in the security lines, their wages would be adjusted downwards to compensate.

    Am I correct in thinking that this entire case is pretty much a pointless waste of time?


    You are correct to point out that entrepreneurs cannot pay wages in excess of a worker’s marginal revenue product and therefore, legally mandated benefits to workers require entrepreneurs to lower non-legally mandated benefits. Workers are actually made worse-off in the bargain since they cannot obtain their preferred compensation package from entrepreneurs. Moreover, in an unhampered market, if an entrepreneur hires workers under difficult working conditions, say coal mining or standing in security lines, then he may be required to skew his total compensation package toward wages instead of other benefits in his effort to satisfy the preferences of his workers (if workers have a preference for non-difficult working conditions).

    You might suggest to your friends to read William Hutt’s book on collective bargaining.

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