Labor & Employment Law Daily California Apple store employees must be compensated for time spent during exit bag searches
Tuesday, September 8, 2020

California Apple store employees must be compensated for time spent during exit bag searches

By Wayne D. Garris Jr., J.D.

Based on the state high court’ response to a certified question on California wage-hour law, the court determined that the bag search procedure involved “a significant degree of control” by Apple and that even those employees who involuntarily brought personal items to work were still entitled to compensation.

Reversing a district court’s grant of summary judgment in favor of Apple, the Ninth Circuit held that a class of Apple Store employees were entitled to compensation under California law for time spent waiting for and undergoing exit searches of their bags and personal belongings. In response to the court’s prior certification of a question of California law, the California Supreme Court concluded that the time spent during the exit searches was compensable as “hours worked” under California Industrial Welfare Commission Wage Order 7. Accordingly, the appeals court remanded for further proceedings with instructions to grant the plaintiffs’ motion for summary judgment on the issue of whether time spent by class members waiting for and undergoing exit searches pursuant to Apple’s policy at issue is compensable as “hours worked” under California law and to determine the remedy to be afforded to individual class members (Frlekin v. Apple, Inc., September 2, 2020, Marshall, C.).

Exit searches. Under Apple’s “Employee Package and Bag Searches” policy, the tech giant’s retail employees who bring a bag or package to work may not leave the premises before undergoing a search. All personal packages and bags must be checked by a manager or security every day and any time employees wish to leave the store. Also, personal technology must be verified against the employee’s “personal technology card,” which lists the serial numbers of employees’ personal Apple devices.

Employees are confined to the store premises until they submit to the search, which involves locating a store manager or security guard and waiting for that individual to become available. During a search, employees are required to open their bags, unzip internal compartments, and remove their personal Apple devices and technology cards to prove ownership. Employees are required to clock out before waiting to undergo the bag search. The entire process, between waiting to be searched and the search itself, can take anywhere from five to 20 minutes. Failure to comply with the policy can lead to discipline or discharge.

Class certification. In July 2015, the district court certified a class defined as “all Apple California non-exempt employees who were subject to the bag-search policy from July 25, 2009, to the present.” The district court also specified that “bag searches” would be adjudicated as compensable or not based on whether an employee voluntarily brought a bag to work “purely for personal convenience.” Therefore, the certified class did not include employees who were required to bring a bag or iPhone to work because of special needs, such as a reasonable accommodation.

The parties filed cross-motions for summary judgment on the issue of liability. The district court granted Apple’s motion and denied the employees’ motion. The court ruled that time spent by class members during exit searches was not compensable as “hours worked” under California law because such time was neither “subject to the control” of the employer nor time during which class members were “suffered or permitted to work.” The employees appealed.

California Supreme Court. The court certified to the California Supreme Court the following question: Is time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages, bags, or personal technology devices voluntarily brought to work purely for personal convenience by employees compensable as “hours worked” within the meaning of Wage Order 7? The Supreme Court concluded that the time is compensable as hours worked.

The California Supreme Court reasoned that Apple’s employees were subject to Apple’s control while waiting for and undergoing searches and thus they were entitled to compensation. Specifically, the searches were required by Apple, involved a significant degree of control, were primarily for Apple’s benefit, and were enforced under threat of discipline. In light of state high court’s response, the appeals court concluded that the district court erred in granting summary judgment to Apple.

Compensability. The court also held that the employees were entitled to summary judgment on the issue of whether time was compensable without regard to any special reason any employee brought a bag to work—the issue of “compensability.”

Disputed facts. Apple argued that there were several issues that precluded summary judgment in favor of the employees. First, some employees did not bring bags or devices to work or, for other reasons, did not have to undergo bag checks. Further, Apple disputed whether the policy was enforced through discipline. The court rejected these arguments as they addressed the issue of individual remedies, not the primary issue here which was whether time spent undergoing the search is compensable under the law.

De minimis. Lastly, Apple argued that there were disputed facts as to whether the time spent by class members for the exit search was de minimis. However, Apple failed to raise this issue before the district court so it could not raise it for the first time before the court.

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