Why This Matters

Last week, the California Supreme Court dealt tech giant Apple Inc. a blow when the Court ruled that California law requires the company to compensate employees for the time they spend waiting for company-required searches before leaving Apple’s retail stores.

To the extent California employers require their workers to undergo unpaid security screenings, the Apple ruling means employers must now either compensate their employees for that time or dispense with their mandatory bag-check/security screening policies.  If the latter isn’t an option, employers may be best served by speeding up their security screens.  The Supreme Court suggested several measures an employer could adopt to limit the scope of searches, such as imposing “reasonable restrictions on the size, shape or number of bags” workers bring and providing workers with off-site lockers in which to store their personal items.

Background

Apple, which has 52 retail stores in California, requires its workers to submit to exit searches of their bags, packages, purses, backpacks, brief cases, and personal Apple devices, such as iPhones, to deter theft.  Failure to comply with the search policy can lead to termination.  Under the policy, employees are supposed to find a manager or security officer to perform the search after they clock out.  Employees estimate that waiting for and undergoing the searches can take five to 20 minutes, or, on busiest days, up to 45 minutes.

Plaintiffs brought a class action against Apple arguing that it failed to pay plaintiffs minimum wage and overtime wages for time spent waiting for and undergoing Apple’s security searches.  The U.S. Ninth Circuit Court of Appeals, where the case is now pending, asked the California Supreme Court to clarify whether state law requires compensation for the time spent waiting for and participating in the search.

The Court held that state law does require compensation for time spent waiting for and participating in a security screen.  Relying on the language of Industrial Wage Order 7, which defines hours worked as “the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so,” the Court concluded that the employees were under Apple’s control.  Among other elements, the court noted that the workers couldn’t leave while they were waiting to be screened and that they had to perform specific tasks before they could go, such as finding a manager or security guard to screen them.

Apple argued that employees could avoid such searches by choosing not to bring bags or other personal items to work, and that its policy (allowing its employees to bring personal items to work) benefited the employee.  In response, the Court stated:  “Under the circumstances of this case and the realities of ordinary, 21st century life, we find farfetched and untenable Apple’s claim that its bag-search policy can be justified as providing a benefit to its employees.”  The court noted that workers may need a bag to hold ordinary, everyday items, including wallets, keys, cellphones, eye glasses, and water bottles.

The court’s decision is retroactive.