Michael Kun Quoted in "3 Takeaways from the Calif. Supreme Court's Apple Ruling"

The California Supreme Court has ruled that state law requires retailers to pay workers for time they spend waiting to be searched, handing a loss to Apple and exposing businesses to potentially costly class actions. Here, Law360 runs down the big takeaways from the court’s decision.

Calif., Feds Split on Bag Checks

Thursday's ruling deepens a divide between California and federal law as to what constitutes work time that must be paid.

The California Supreme Court took up the case at the request of the Ninth Circuit, which is reviewing a Northern District of California ruling that granted Apple summary judgment in a class action brought by workers at its California retail stores. The workers argued they waited as long as 45 minutes without pay to have their bags searched for stolen merchandise and their iPhones verified as their own, per Apple’s anti-theft policy.

The federal court asked whether this time counts as “hours worked” under California’s Wage Order 7, a quasi-wage statute regulating pay, hours and working conditions in the retail industry. The wage order defines hours worked as the time workers spend under an employer’s control and in which they are “suffered or permitted” to work, even if they aren’t required to.

The California Supreme Court said the search time was work under the wage order because Apple controlled the workers during that period. Among other elements, the court noted that the workers couldn’t leave while they were waiting to be screened and that they had to perform specific tasks before they could go, such as finding a manager or security guard to screen them. The court also rejected Apple’s claim the searches were voluntary because the workers could choose not to bring bags or phones to work.

Michael Kun, an attorney in Epstein Becker Green’s Los Angeles office, said the decision is “a frustrating one for many employers” because it doesn’t mesh with federal law as discussed by the U.S. Supreme Court in a similar case known as Integrity Staffing Solutions Inc. v. Busk. In Busk, the high court said temporary workers in an Amazon warehouse weren’t owed security line pay under the Portal to Portal Act, which amended federal wage law to require pay only for tasks that are “integral and indispensable” to workers’ main duties.

“California employment laws often diverge from federal laws, and typically in ways that benefit employees, rather than employers,” said Kun, who co-chairs Epstein’s wage and hour practice.

Security Time Suits No Slam Dunk

Because the California Supreme Court said its decision applies retroactively, it’s “virtually certain” to lead to an uptick in lawsuits seeking pay for time workers spend in security lines, Epstein’s Kun said. But such suits won’t necessarily be an easy win for plaintiffs.

“While some [management] lawyers may encourage employers to wave the white flag and pay huge settlements in those cases, the truth is that those cases will now need more creativity and thoughtfulness from defense lawyers,” Kun said.

For example, attorneys for management may be able to beat class actions by showing there are many differences among members of the proposed group. If some workers bring bags to work and others don’t, that may make it harder for workers to win class certification, he said.