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Court Orders Apple to Pay Calif. Retail Workers for End-of-Shift Search Time

Apple's logo on a store window.

Bangkok, Thailand 21/12/2018 The logo of Apple brand in front ot First Apple store in Bangkok, Thailand.

The Ninth Circuit Court of Appeals sided with Apple, Inc. retail store employees in a wage-and-hour class action, seeking compensation for time they spent waiting for and undergoing exit searches. Wednesday’s opinion found that, as a matter of law and as set forth by the California Supreme Court via certified question, the waiting and search time is compensable under California Industrial Welfare Commission Wage Order 7.

The labor law case dates back to 2015 when five named plaintiffs filed the suit on behalf of current and former California Apple retail store employees. Under Apple’s 2009 policy, employees were required to have their bags searched by management or security prior to leaving the workplace for breaks, lunches, and at the end of their shifts. According to the appellate ruling, employees estimated that they waited 5 to 20 minutes to complete the process, while some reported waiting up to 45 minutes. They were not paid for the time spent because, under Apple’s policy, they were required to clock out beforehand.  

In 2015, the district court certified a class of employees. Later that year, it granted summary judgment in favor of Apple, ruling that “time spent by class members waiting for and undergoing exit searches pursuant to the Policy is 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 plaintiffs appealed and the Ninth Circuit panel certified the wage order question to the California Supreme Court

In finding the time compensable, the California high court held that Apple retail employees “‘are subject to Apple’s control while awaiting, and during, Apple’s exit searches,’ and therefore Apple ‘must compensate those employees … for the time spent waiting for and undergoing’ the exit searches pursuant to the Policy.” It reasoned that because the searches occur at the work site, involve a substantial degree of control, and are “imposed primarily for Apple’s benefit, and are enforced through threat of discipline,” it falls within the ambit of the hours worked control clause.

Accordingly, the Ninth Circuit reversed the district court’s decision. It remanded the case for further proceedings with instructions to grant the plaintiffs’ motion for summary judgment on the matter and determine the remedy to be afforded to individual class members.

The plaintiffs are represented by Kralowec Law Group and McLaughlin & Stern LLP. The defendant is represented by Littler Mendelson P.C. and Gibson Dunn & Crutcher LLP. Amicus Curiae California Employment Lawyers Association is represented by Cohelan Khoury & Singer.

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