Legal Battle Over "Engaged to Wait": 2nd Circuit Revives Wage-and-Hour Collective Action Against Supermarket Chain Lidl

Published: October 14, 2026
Author: Kate Tornone (Adapted and Expanded)

Main Facts

In a pivotal legal development for retail and hourly workforce management, the 2nd U.S. Circuit Court of Appeals has ruled that employees of supermarket chain Lidl may move forward with allegations that the company violated federal labor laws. The collective action centers on claims that workers were routinely required to report to work ahead of their scheduled shifts but were blocked from clocking in until a store manager physically arrived to unlock the premises.

The core of the dispute involves unpaid pre-shift waiting time. According to the lawsuit, known as Santos v. Lidl, hourly employees were instructed to arrive at their stores 15 minutes before their morning shifts officially commenced. However, because they lacked the security credentials or keys to enter the building independently, these workers were forced to wait outside or in common areas until management unlocked the doors. During this mandatory waiting period, employees could not access the time-tracking system, meaning the time spent waiting on the premises went entirely uncompensated.

While a lower federal court initially dismissed the complaint—categorizing the waiting time as a noncompensable "preliminary activity" under the Portal-to-Portal Act—the 2nd Circuit vacated that decision. The appellate court’s ruling hinges on a fundamental distinction under the Fair Labor Standards Act (FLSA): whether an employee was "engaged to wait" (which must be compensated) or "waited to be engaged" (which does not).

The implications of this ruling stretch far beyond the supermarket aisles of Lidl. The case serves as a high-stakes reminder to employers across retail, warehousing, logistics, and service sectors regarding the legal perils of mandatory early reporting policies where physical barriers prevent employees from recording their time immediately upon arrival.

Chronology of the Case

To understand how the legal battle reached this critical juncture, it is essential to trace the timeline of the litigation, regulatory frameworks, and judicial review:

• May 2026 / Pre-Litigation Practice: Grocery employees at various Lidl locations report a standard operating procedure requiring them to arrive on-site roughly 15 minutes prior to their scheduled start time for morning shifts. Workers state they are physically present, ready, and willing to work, but are unable to log into timekeeping software because the stores remain locked.
• The Initial Lawsuit (Santos): Affected workers file a collective action lawsuit alleging time-shaving and wage-and-hour violations under the FLSA and applicable state labor laws. They argue that controlling their arrival time and requiring their presence outside the locked store makes the waiting period an integral part of their principal duties.
• Lower Court Dismissal: Lidl successfully moves to dismiss the time-shaving allegations. The district court agrees with the defense, ruling that the pre-shift waiting time is a "preliminary activity" excluded from compensation by the Portal-to-Portal Act amendments to the FLSA.
• The Appeal: The plaintiff appeals the lower court’s dismissal to the 2nd U.S. Circuit Court of Appeals. The appellant argues that because Lidl dictated the exact time she needed to arrive at the workplace, that time constitutes compensable hours worked. Lidl counters that the time should remain unpaid, pointing out that nothing legally prevented the employee from utilizing that time for personal activities—such as reading—or leaving the parking lot.
• October 14, 2026 – 2nd Circuit Reversal: The 2nd Circuit vacates the lower court’s dismissal and remands the case for further proceedings. The appellate panel rules that the lower court misapplied the Portal-to-Portal Act regulations, highlighting that employees instructed to report at a specific time and place who are ready to work—but delayed by circumstances beyond their control—are "engaged to wait" and must be paid.

Supporting Data and Regulatory Framework

Questions surrounding compensation for waiting time have long been a complex and frequently litigated area of American labor law. Because the FLSA does not explicitly define every nuance of hours worked, courts and the U.S. Department of Labor (DOL) rely heavily on historical regulations, case law, and specific situational examples.

The Portal-to-Portal Act and FLSA Regulations

Enacted in 1947 as an amendment to the FLSA, the Portal-to-Portal Act relieved employers from paying for certain activities performed before or after an employee’s principal work activities, such as walking to a workstation or changing clothes. However, the statute and its accompanying regulations draw a sharp line regarding mandatory presence.

Under 29 CFR § 790.7, the federal government distinguishes between two distinct scenarios:

1. Waiting to Be Engaged: "Waiting before the time established for the commencement of work would be regarded as a preliminary activity when the employee voluntarily arrives at his place of employment earlier than he is either required or expected to arrive." In this instance, the time is generally noncompensable.
2. Engaged to Wait: "Where, however, an employee is required by his employer to report at a particular hour at his workbench or other place where he performs his principal activity, if the employee is there at that hour ready and willing to work but for some reason beyond his control there is no work for him to perform until some time has elapsed, waiting for work would be an integral part of the employee’s principal activities."

The 2nd Circuit emphasized this exact statutory dichotomy in the Lidl case, noting that the plaintiffs were not arriving early of their own volition; rather, they were following corporate scheduling mandates but were blocked by managerial delays.

Department of Labor Guidance and Practical Examples

To assist employers and human resources professionals in navigating these murky waters, the DOL provides concrete examples through its administrative guidance and compliance assistance tools:

• The Crossword Puzzle Messenger: A messenger who works on a crossword puzzle while sitting at a desk awaiting dispatch assignments is considered "engaged to wait" because they are unable to use the time effectively for their own purposes. That time constitutes compensable hours worked.
• The Factory Worker: A manufacturing employee who chats with colleagues while waiting on the factory floor for broken machinery to be repaired is similarly deemed to be "engaged to wait."
• The Long-Distance Truck Driver: Conversely, the DOL cites scenarios where waiting time is not compensable. For example, a truck driver sent from Washington, D.C., to New York City arriving at noon, who is "completely and specifically relieved from all duty until 6:00 p.m." when the return trip begins, is waiting to be engaged. That multi-hour window belongs entirely to the employee, and no compensation is required.

In the Santos litigation, the 2nd Circuit found that Lidl employees waiting outside a locked store more closely resembled the messenger or the factory worker than the relieved truck driver. They were tethered to the employer’s premises and schedule, awaiting the singular trigger—a manager with a key—to commence their duties.

Official Responses and Stakeholder Positions

As this high-profile wage-and-hour case moves forward following the appellate remand, corporate and legal stakeholders have staked out distinct positions regarding pre-shift protocols and time-tracking compliance.

Lidl’s Defense Strategy

Throughout the litigation, representatives for the supermarket chain have maintained that the pre-shift waiting period does not cross the threshold into compensable work. Lidl’s legal counsel argued before the 2nd Circuit that employees retained a degree of personal freedom during those 15-minute windows. Specifically, the defense contended that workers were not strictly confined to strict duties and could theoretically read, catch up on messages, or choose to leave the immediate parking lot if they wished.

Furthermore, Lidl emphasized that the brief delay was merely a logistical prelude to the actual opening of the store, aligning with traditional interpretations of preliminary acts under the Portal-to-Portal Act. Note: Lidl did not respond to direct requests for comment from HR Dive by press time.

Plaintiffs’ Position and Employee Advocates

Attorneys representing the class of Lidl workers framed the company’s policy as an unfair shifting of operational burdens onto hourly wage earners. The plaintiffs argued that if a company mandates an arrival time under threat of disciplinary action or negative performance reviews, that time ceases to be voluntary.

By forcing employees to report before management arrives to open the store, Lidl effectively demanded unpaid readiness. Employee advocates point out that low-wage retail workers operate on tight household budgets where missing even 15 minutes of pay per shift—compounded across multiple days, weeks, and hundreds of workers—represents a substantial deprivation of lawfully earned wages.

Implications for Employers and Human Resources Professionals

The reinstatement of the collective action against Lidl sends a resounding warning shot to corporate employers, particularly those operating retail storefronts, restaurants, branch offices, and distribution centers where physical access is controlled by staggered management shifts.

1. Audit Opening and Closing Procedures

HR professionals and operations managers must immediately review how hourly employees gain entry to facilities at the start of a shift. If workers are instructed or expected to arrive before the store is unlocked, operational policies must be adjusted. Safe practices include:

• Enabling multiple trusted hourly employees or shift leads with opening keys or digital access codes so that staff can enter and clock in immediately upon arrival.
• Ensuring that time-tracking systems (whether mobile apps, biometric scanners, or desktop portals) are accessible the moment an employee steps onto the premises or is required to report.

2. Re-Evaluate "Waiting Time" Policies

Employers must scrutinize timekeeping guidelines to ensure compliance with the FLSA and state-level equivalents. If an employer restricts an employee’s movement, requires their presence at a specific location at a specific time, or places them on standby, that time is almost certainly compensable under the "engaged to wait" doctrine. Treating such intervals as unpaid grace periods or preliminary routines exposes organizations to massive class-action liability.

3. Heightened Risk of Collective Action Litigation

Wage-and-hour lawsuits remain one of the most prolific sources of litigation for large employers. Because these claims can be certified as collective actions or class actions involving thousands of past and present workers, even seemingly minor time discrepancies (such as 15 minutes of unpaid waiting per shift) can quickly balloon into millions of dollars in back pay, liquidated damages, and attorney fees.

As Santos v. Lidl returns to the lower court for further proceedings, employers across the nation would be wise to audit their pre-shift routines, ensuring that every minute an employee spends at the direction of the company is properly recorded and fully compensated.