Apple Inc. was recently granted victory in a class action lawsuit which was filed by its own retail employees. The lawsuit came about as a result of Apple’s implementation and enforcement of its “Employee Package and Bag Searches” policy. A judge representing the United States District Court for the Northern District of California issued a ruling in favor of the tech giant in a lawsuit related to its brick and mortar stores in California, as employees sought pay back for the time required to conduct the employee searches.
Growing concerns in with employee theft of products from Apple’s retail stores led the company to institute the written policy, which imposed mandatory employee searches of bags, purses, backpacks or briefcases, whenever employees left the store. The policy requires employees finishing their work shift to find a manager or member of the store’s security team to search their bags and packages before leaving the store. Employees who fail to do so and simply leave the store at the end of their shift are subject to disciplinary action, up to and including termination. The employee bag searches were conducted across all 52 Apple retail stores in California.
According to the employees, the package and bag searches were not quite as efficient as expected. Employees claimed managers and security guards were not always available to conduct the searches for various reasons, resulting in lengthy delays to begin and complete the search. As a result, employees felt that they should be compensated for the time taken as they waited for management to conduct the required employee search.
It is highly unlikely this practice would have resulted in a lawsuit if Apple paid employees for the time taken to check bags after the end of employee shifts. Employees had to clock out prior to undergoing a search, and their recorded hours worked did not account for the time waiting for a search to be completed. The lawsuit included claims under both the Fair Labor Standards Act (“FLSA”), as well as various California wage and hour laws.
After the Apple employees initiated their lawsuit, the United States Supreme Court determined in a nearly identical matter that the time warehouse workers spent undergoing employee bag searches after clocking out but before leaving the workplace each day is not compensable under the FLSA. Although the screenings may have been in some way related to the work that the employees performed at the warehouse, time spent waiting for employee searches was not compensable because “the employees could skip the screenings altogether without the safety or effectiveness of their principal activities being substantially impaired.” The Court additionally made clear that its decision applies regardless of whether the employee bag searches were only for the employer’s benefit.
The judge presiding over the case found the determining issue to be whether the employee could avoid the search by choosing not to bring a bag or other items to work that would subject them to the employee search rule. After finding that “plaintiffs could all freely choose not to bring bags to work, thereby avoiding Apple’s restrictions during exit searches,” he concluded that this “free choice is fatal to their claims.”
According to Bloomberg, a law professor familiar with the case estimated Apple could have been slapped with a $60 million tab for unpaid wages and penalties, had things gone the employees’ way.