Apple on Hook for Millions for Off-Clock Employee Searches

(CN) – Employees at Apple retail stores should be paid for time spent having their personal bags checked by security when they want to leave the store, the California Supreme Court said Thursday.

The opinion answers a question by the Ninth Circuit, which is hearing the appeal of a 2015 decision by a federal judge in San Francisco who said employees were not being restrained and could avoid bag searches by not bringing bags or their own Apple products to work.

Customers leave an Apple store on the 3rd Street Promenade in Santa Monica, Calif. (AP Photo/Richard Vogel)

California Supreme Court Chief Justice Tani Cantil-Sakauye said it was ironic that Apple would suggest employees avoid the exit search by leaving their own personal iPhones at home given the company’s ardent philosophy around its products.

“The irony and inconsistency of Apple’s argument must be noted,” Cantil-Sakauye writes. “Its characterization of the iPhone as unnecessary for its own employees is directly at odds with its description of the iPhone as an “integrated and integral” part of the lives of everyone else.”

According to the unanimous opinion, the ruling should be retroactive. In November 2015, the potential class included 12,000 current and former Apple store employees in California.

Apple argued that its policy did not restrain its employees’ actions during the actual search and that employees could just as easily opt out by not bringing a bag to work.

But Cantil-Sakauye writes based on the language in the control clause from the Industrial Welfare Commission, “Apple employees are entitled to compensation for the time during which they are subject to Apple’s control.

“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,” Cantil-Sakauye writes.

Apple makes its employees comply with the policy or face termination. Employees are also held at the store and are required to perform “specific and supervised tasks” before and during the search, like finding a manager or security guard, unzipping and opening compartments in said bag and moving things around at the instruction of the person performing the search.

Employees also have their personal Apple devices removed, inspected and verified during the search.

The court relied on the Fourth Appellate District’s holding in Bono Enterprises, Inc. v. Bradshaw which took the literal definition of the world “control” into consideration when it found that employees were entitled to compensation when they were required to remain onsite at their work during a lunch break.

Apple argued an employee’s activity would need to be “required” and the search “unavoidable” to fall into the compensable category. The company argued employees could avoid the search by not bringing personal items to work.

But to bend the control clause to Apple’s policy would limit the scope of when an employee can be compensated, Cantil-Sakauye wrote for the court.

Apple argued its employees are not subjected to a mandatory procedure, unlike the agriculture employees in Morillion v. Royal Packing Co. who were required to take a shuttle bus to the fields for their day’s work or face a penalty.

Compensation in other cases around employer-provided transportation depended on whether the bus ride was mandatory or optional.

“Moreover, in the commute context, an employer’s interest generally is limited to the employee’s timely arrival. Generally speaking, it would not seem to matter to the employer how or when an employee travels, so long as the employee arrives on time,” Cantil-Sakauye wrote.

“In the present case, by contrast, Apple controls its employees at the workplace, where the employer’s interest – here, by deterring theft – is inherently greater.”

The court also noted Apple requires employees to wear Apple-branded clothing while on the job, but that apparel must be covered up as soon as they leave the story. It makes sense, then, that an employee would bring a bag with clothing to change into after work.

Cantil-Sakauye also said that suggesting an employee leave their mobile phone at home to avoid the exit search is not consistent with the tech giant’s philosophy that the smartphone – namely, its iPhone – is an essential part of modern-day life.

The exit search policy can be as narrow or broad as Apple wants to make it but employees must be compensated for their time undergoing it, Cantil-Sakauye wrote.

Class attorney Kimberly Kralowec said Thursday’s opinion “carefully adhered to the text and purpose of the wage orders” and that the control test was meant to ensure employees can be compensated for more of their time, not less.

“Today is a good day for California employees,” Kralowec said in an email.

An email to Apple for comment was not immediately answered.

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