Apple Beats Wage Claims in 12,000-Member Class Action

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By Jon Steingart

Nov. 9 — Apple Inc. prevailed in a class action brought by more than 12,400 California retail store employees who claim they should have been paid for the time they spent undergoing anti-theft searches at the end of their shifts.

Even though Apple won this class action under California's wage laws, it could still be exposed to disability discrimination claims, Orly Lobel, a professor of law at the University of San Diego, told Bloomberg BNA Nov. 9.

The Apple employees chose to bring bags to work and subject themselves to the company's search policy, so they didn't satisfy the state wage law's compensable time requirement of being “subject to the control of the employer,” according to the summary judgment ruling, issued Nov. 7 by Judge William Alsup of the U.S. District Court for the Northern District of California.

When the court certified the class (33 HRR 766, 7/20/15), Alsup distinguished between carrying certain items out of necessity and others out of convenience. He invited employees with “special needs” who fell into the former category to intervene so the court could address whether they faced an “illusory choice,” but none did, he said. Employees who need to carry items for medical reasons could pursue disability discrimination claims, Lobel said.

Supreme Court Provides ‘Useful Guidance.'

Courts often have been asked to decide whether non-work time spent at a work site is compensable. The U.S. Supreme Court ruled in 2014 that workers at an Amazon.com warehouse weren't entitled to wages for time spent undergoing end-of-shift searches to prevent theft.

Alsup distinguished that case from Apple's because the Amazon case was decided under federal wage laws. But the high court's ruling in Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513, 190 L. Ed. 2d 410, 23 WH Cases2d 1485 (U.S. 2014), provided “useful guidance” in the Apple case, Alsup said (32 HRR 1321, 12/15/14).

Alsup dismissed the Apple workers' federal claims following the Supreme Court's Integrity Staffing Solutions ruling. Citing that decision, he found the workers were not “suffered or permitted to work.” That's because the time they spent awaiting and going through searches had no “relationship to their job responsibilities,” he said.

Bags Conceal Medications, Mustache Wax

At the end of their shifts, the employees are required to clock out before being searched by a store manager or security guard. The serial numbers of any Apple products in the employee's possession are checked against a list of company products the worker owns. Employees estimate the wait time as up to 20 minutes and even longer during busy periods such as product launches and holiday seasons, but the company contends it only takes a few seconds, Alsup said.

In a 2012 e-mail to CEO Tim Cook, an unidentified Apple Store employee called the searches demoralizing. “Managers are required to treat ‘valued' employees as criminals,” the worker wrote. Cook forwarded the message the same day to two executives, asking, “Is this true?”

When Alsup certified the class, he found some employees brought bags in which they carried “necessities of life,” such as prescription medications. Others brought items of “nothing more than personal convenience,” such as makeup and mustache wax, the judge said.

Employee Choice Dooms Claims

Apple could have safeguarded its property by prohibiting employees from bringing bags and Apple products to work, Alsup said. Allowing them to bring these items was an “optional benefit,” conditioned upon compliance with the company's security screening, the judge said.

In order to be “subject to the control of an employer” during a putative compensable period, employee action must be constrained and the activity must be mandatory, Alsup said. There is no question that the searches constrained employees by requiring them to wait when they wanted to leave, but the searches weren't mandatory for employees who didn't bring bags or personal Apple products, he said.

“Employee choice is dispositive,” Alsup said. “That free choice is fatal to their claims,” he said.

But was it really free? asked Catherine Fisk, a University of California at Irvine law professor. “I'm not sure that is a meaningful choice,” she told Bloomberg BNA Nov. 9. For example, she said, employees who drive to work can leave their belongings in their cars, but “employees who take the bus or public transportation” don't have that option. Calling it a free choice was “unrealistic,” she said.

McLaughlin & Stern LLP, the Kralowec Law Group and the Law Firm of Louis Ginsberg P.C. represented the workers. Littler Mendelson P.C. represented Apple.

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com