SearchingforOvertime

Frlekin v Apple, Inc.

457 P.3d.526 (Cal. 2020)

Facts

All Apple retail employees are subject to search before leaving their shifts at the company's retail stores. In 2015, a certified class-action suit against Apple alleged that the companyforced all employees who came to work with a bag, purse, backpack, briefcase, or Apple product to be searched prior to leaving the store. Suchforced exit reviews were off-the-clock. Amanda Frlekin and other Apple employees sought compensationforthe time they spent being searched and/or waiting to be searched before they could leave the store. Apple put the search process in place because of problems with theft from its stores. The policy provided:

Employee Package and Bag Searches

All personal packages and bags must be checked by a manager or security before leaving the store.

General Overview

All employees, including managers and Market Support employees, are subject to personal package and bag searches.

Failure to comply with this policy may lead to disciplinary action, up to and including termination.

Do

Find a Manager or member of the security team (where applicable) to search your bags and packages before leaving the store.

Do Not

Do not leave the store prior to having your personal package or back [sic] searched by a member of management or the security team (where applicable).

The guidelinesforconducting the searches were as follows:

Ask the employee to open every bag, brief case [sic], back pack, purse, etc.

Ask the employee to remove any type of item that Apple may sell. Be sure to verify the serial number of the employee's personal technology against the personal technology log.

Visually inspect the inside of the bag and view its contents.

Be sure to ask the employee to unzip zippers and compartments so you can inspect the entire contents of the bag. If there are bags within a bag, such as a cosmetics case, be sure to ask the employee to open these bags as well.

At no time should you remove any items inside the bag or touch the employee's personal belongings. If something looks questionable, ask the employee to move or remove items from the bag so that the bag check can be completed.

In the event that a questionable item is found, ask the employee to remove the item from the bag. Apple will reserve the right to hold onto the questioned item until it can be verified as employee owned. (This will make the employee more aware to log in all items at start of shift.)

If item cannot be verified by. [the manager on duty], contact Loss Prevention....

At the lower court, Apple argued that employees had a choice: they could bring their devices and bag, purse, backpack and be searched or come to work without such and leave when their shifts ended.

The lower court granted Apple's motionforsummary judgment. Frlekin and the other plaintiffs appealed to the Ninth Circuit. Before the Ninth Circuit could answer the question aboutovertime, it needed the California law onovertimeand asked a federal panel of judges to make these determinations.

Judicial Opinion

CANTIL-SAKAUYE, Chief Justice

Applying a strictly textual analysis, Apple employees are clearly under Apple's control while awaiting, and during, the exit searches. Apple controls its employees during this time in several ways. First, Apple requires its employees to comply with the bag-search policy under threat of discipline, up to and including termination. Second, Apple confines its employees to the premises as they waitforand undergo an exit search. Third, Apple compels its employees to perform specific and supervised tasks while awaiting and during the search. This includes locating a manager or security guard and waitingforthat person to become available, unzipping and opening all bags and packages, moving around items within a bag or package, removing any personal Apple technology devicesforinspection, and providing a personal technology cardfordevice verification.

Despite the plain language and history of the "hours worked" control clause, Apple maintains that its exit searches are not compensable because Apple employees may avoid such searches by choosing not to bring a bag, package, or personal Apple technology device to work.

InMorillion v. Royal Packing Co.,995 P.2d 139 (Cal. 2000), the employer required its employees to meet each day at specified assembly areas and ride the employer-provided bus to and from agricultural fields where the employees worked. As a rule, employees were prohibited from using their own transportation to and from the fields. Employees who drove their personal vehicles to work were subject to disciplinary action, including the loss of a day's wages.

We held that the employees inMorillionwere entitled to compensationfortheir compelled travel time under the applicable wage order because they were "'subject to the control of an employer'" during that time. We rejected the employer's argument that the employees were not under its controlforthe duration of the bus ride because they could engage in personal activities during that time, explaining that "[a]llowing [the employees] the circumscribed activities of reading or sleeping does not affect, much less eliminate, the control [the employer]exercises by requiring them to travel on its buses and by prohibiting them from effectively using their travel timefortheir own purposes." We concluded that "[t]he level of the employer's control over its employees, rather than the mere fact that the employer requires the employees' activity, is determinative."

We explained: "[The employer] required [its employees] to meet at the departure points at a certain time to ride its buses to work, and it prohibited them from using their own cars, subjecting them to verbal warnings and lost wages if they did so.

Here, the employer-controlled activity primarily serves the employer's interests. The exit searches are imposed mainlyforApple's benefit by serving to detect and deter theft. In fact, they are an integral part of Apple's internal theft policy and action plan. The exit searches burden Apple's employees by preventing them from leaving the premises with their personal belongings until they undergo an exit searcha process that can take five to 20 minutes to completeand by compelling them to take specific movements and actions during the search.

Apple acknowledges that the exit searches promote its interest in loss prevention, but nevertheless urges this court to view the searches as part of a broader policy that benefits its employees. Apple argues, in this regard, that it could havetotally prohibitedits employees from bringinganybags or personal Apple devices into its stores altogether, and thus employees who bring such items to work may reasonably be characterized as having chosen to exercise an optional benefit. However, Apple has not imposed such draconian restrictions on its employees' ability to bring commonplace personal belongings to work. Under the circumstances of this case and the realities of ordinary, 21st century life, we find far-fetched and untenable Apple's claim that its bag-search policy can be justified as providing a benefit to its employees.

Moreover, Apple's exit searches are enforceable by disciplinary action. Employees who do not comply with the policy may also be compelled to attend a "Warning Meeting," citedfor"Behavior to be Corrected," and assigned to a "Coaching Tracker." This factor also strongly suggests that plaintiffs are under Apple's control while waitingfor, and undergoing, the exit searches.

Apple employees may be able to avoid the employer-controlled activity if they make prior arrangements (i.e., by not bringing a bag, package, or iPhone to work). But, the potential antecedent "choice" by some employees not to bring any searchable items to work does not invalidate the compensation claims of the bag-toting or Apple-device-carrying employees who are required to remain on the employer's premises while awaiting an exit search of those items.

Apple employees may bring a bag to hold any number of ordinary, everyday items, such as a wallet, keys, cell phone, water bottle, food, or eyeglasses. It is to be expected that many Apple employees feel they have little genuine choice as a practical matter concerning whether to bring a bag or other receptacle containing such items to work. Moreover, given that Apple requires its employees to wear Apple-branded apparel while working but directs them to remove or cover up such attire while outside the Apple store, it is reasonable to assume that some employees will carry their work uniform or a change of clothes in a bag in order to comply with Apple's compulsory dress code policy. Apple's proposed rule conditioning compensability on whether an employee cantheoreticallyavoid bringing a bag, purse, or iPhone to work does not offer a workable standard, and certainly not an employee-protective one.

The irony and inconsistency of Apple's argument must be noted. Its characterization of the iPhone as unnecessaryforits own employees is directly at odds with its description of the iPhone as an "integrated and integral" part of the lives of everyone else. Asamicus curiaeCalifornia Correctional Peace Officers' Association aptly observes, "Apple's position everywhereexcept in defending against this lawsuitis that use of Apple's productsforpersonal convenience is an important and essential part of participating fully in modern life." Given the importance of smartphones in modern society, plaintiffs have little true choice in deciding whether to bring their own smartphones to work (and we may safely assume that many Apple employees own Apple products, such as an iPhone).

Apple's exit searches are required as a practical matter, occur at the workplace, involve a significant degree of control, are imposed primarilyforApple's benefit, and are enforced through threat of discipline. Thus, according to the "hours worked" control clause, plaintiffs "must be paid." We reiterate that Apple may tailor its bag-search policy as narrowly or broadly as it desires and may minimize the time requiredforexit searches by hiring sufficient security personnel or employing adequate security technology. But it must compensatethose employees to whom the policy appliesforthe time spent waitingforand undergoing these searches.

Apple asserts that if we conclude the time waitingforand undergoing exit searches is compensable as "hours worked," our holding should be given prospective application only. We are not persuaded. The general rule that judicial decisions are given retroactive effect is basic in our legal tradition. However, "fairness and public policy sometimes weigh against the general rule that judicial decisions apply retroactively."

Apple contends that it reasonably relied onMorillion's holding that purely voluntary activities do not constitute employer control. But that is neither an accurate description of our holding inMorillion, nor a fair characterization of the nature of the exit searches at issue in this case. It did not, as Apple contends, hold thatanyemployer-controlled activity must be unavoidably required in order to be compensable as "hours worked." In short, [Apple] cannot claim reasonable reliance on settled law. Accordingly, we see no reason to depart from the general rule that judicial decisions apply retroactively.

We conclude that plaintiffs' time spent on Apple's premises waitingfor, and undergoing, mandatory exit searches of bags, packages, or personal Apple technology devices, such as iPhones, voluntarily brought to work purelyforpersonal convenience is compensable as "hours worked."

Case Questions

1.Why does the court hold that Apple employees are under Apple control during the search?

2.What is the distinction between this case and theMorillioncase?

3.Why does the "don't bring anything to work with you option" not persuade the court?