The California Supreme Court handed Apple another legal loss on Thursday, ruling the Cupertino firm broke California law by not paying retail employees for the time spent waiting for mandatory bag searches at the end of their shifts.
The unanimous court decision [PDF], shared by Bloomberg Law dates back to a 2013 class-action lawsuit. Employees alleged that Apple subjected them to mandatory bag searches that were conducted off the clock, meaning they were uncompensated for their time.
Apple actually won the initial trial, when the court ruled that Apple employees chose to bring personal bags to work, but the employees appealed the case and it was sent to a higher court.
The U.S. 9th Circuit Court of Appeals, which is now handling the case, asked the California Supreme Court to clarify whether California state law requires compensation. The Cali Supremes ruled that the law does indeed require employee compensation for the time spent waiting for a bag check.
“Hours worked is defined 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,” reads the court’s opinion.
Based on the language of the control clause, Apple employees are entitled to compensation for the time during which they are subject to Apple’s control. (Cal. Code Regs., tit. 8, Sn. 11070, subd. 2(G).) 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 wait for and 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 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.
Apple requires that all bags, packages, and Apple devices that belong to retail employees be checked by a manager or security before being allowed to leave the store for any reason. Employees are required to clock out before the exit search. It has been estimated that employees spent time waiting and undergoing searches ranging from five to 20 minutes. Busy days could see employees waiting as long as 45 minutes to have their bag checked.
Today’s decision is retroactive, and the case will now return to the court of appeals where the judges will apply the California Supreme Court’s interpretation of the law. Apple could be on the hook for as much as $60 million should it be required to offer employees back compensation for the time spent waiting and undergoing bag checks.