Yet another wage and hour obligation has been placed on California employers as a result of a recent court decision. On February 13, 2020, the Supreme Court of California held that time spent by retail store employees waiting for and undergoing an employer’s exit search is compensable work time. Friekin v. Apple Inc., 2020 Cal. LEXIS 547 (Feb. 13, 2020, Sup. Ct. Case No. S243805). The Supreme Court issued this decision in response to a certified question from the federal Ninth Circuit Court of Appeals regarding this California-specific wage and hour issue.

An Apple retail worker filed a class action lawsuit against Apple in 2013 alleging she and other Apple employees were required to clock out before undergoing a mandatory exit search of bags, purses, backpacks and personal Apple devices. Ms. Freikin sought compensation from Apple for time employees spent waiting in line for and undergoing the search. Employee estimates of the time spent awaiting and undergoing an exit search ranged from five to 20 minutes, depending on manager or security guard availability. On the busiest days, Apple employees reported waiting up to 45 minutes to undergo an exit search.

Chief Justice Tani Gorre Cantil-Sakauye, writing for a unanimous Supreme Court, applied longstanding California law (“established more than a century ago”) that requires employers to pay their employees a minimum wage for all “hours worked.” The applicable California regulation 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.”  Id., § 11070, subd. 2(G) (italics added).

After observing that wage and hour laws must be construed to “promote employee protection,” the Supreme Court found that Apple controlled its employees during the exit search time in several ways. First, Apple required employees to comply with the bag-search policy under threat of discipline. Second, Apple confined employees to the premises as they waited for and underwent an exit search. Third, Apple compelled employees to perform specific and supervised tasks while awaiting and during the search. These include locating a manager or security guard and waiting for that person to become available, unzipping and opening all bags and packages, moving around items within a bag or package, removing any personal Apple technology devices for inspection, and providing a personal technology card for device verification.

Based on these facts, the Supreme Court concluded that Apple employees were clearly under Apple’s control while waiting, and during, the exit searches. The Supreme Court rejected Apple’s argument that employees could avoid such searches by simply choosing not to bring a bag, package, or personal Apple technology device to work as impractical. Ironically, Apple’s advertising of the iPhone as an “integrated and integral” part of the lives of everyone” persuaded the Supreme Court that Apple’s employees had little choice in deciding whether to bring their own smartphones to work. Finally, the Supreme Court rejected Apple’s argument that its holding should apply prospectively only.

This decision reminds employers that California courts and agencies will construe California’s wage and hour laws broadly for employees’ benefit. Employers with exit search and other employee search practices should capture and pay employees for the time spent under the employer’s control during such searches. Employers should also strongly emphasize a prohibition against all “off the clock” work in written policies and trainings, and provide employees with a mechanism to report and get paid for any time worked “off the clock.”

If you have questions about this development, please contact Tyler M. Paetkau at 650-645-9027 or tyler.paetkau@procopio.com or any member of the firm’s Labor and Employment Group.