According to a federal judge in California, the answer is "Yes." Judge Wilken of the U.S. District Court for the Northern District of California issued a summary judgment ruling on October 16, 2009 holding that temporary employees of Kelly Services were owed overtime for time spent in interviews for job placement. The rationale for the decision included findings that Kelly arranged the interviews, helped the applicants prepare for the interviews, and debriefed them afterwards. The judge rejected Kelly's arguments that the interviews were purely voluntary, and for the benefit of the applicants (since they presumably wanted a job), and found that the interviews were "controlled" by Kelly. The Judge did throw a bone to the temp agency by declaring that time spent traveling to interviews was not compensable.
This case will no doubt be relied upon as a basis for class actions against temporary staffing companies around the country. Any employer in this industry should be aware of this ruling and take a hard look at its policies to alleviate arguments of "control" over job interviews. In the meantime, one can only hope that the appellate court will apply a bit more common sense.