Frlekin v. Apple Inc.

• Decision Date: 13 February 2020
• Docket Number: S243805
• Citation: 8 Cal.5th 1038,457 P.3d 526,258 Cal.Rptr.3d 392
• Court: California Supreme Court
• Parties: Amanda FRLEKIN et al., Plaintiffs and Appellants, v. APPLE INC., Defendant and Respondent.

8 Cal.5th 1038

457 P.3d 526

258 Cal.Rptr.3d 392

Amanda FRLEKIN et al., Plaintiffs and Appellants,

v.APPLE INC., Defendant and Respondent.

S243805

Supreme Court of California.

February 13, 2020

The Kralowec Law Group, Kralowec Law, Kimberly A. Kralowec, Kathleen S. Rogers, San Francisco; McLaughlin & Stern, Lee S. Shalov and Brett R. Gallaway for Plaintiffs and Appellants.

The Turley & Mara Law Firm, William Turley, San Diego, and David T. Mara, for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiffs and Appellants.

Kingsley & Kingsley, Eric B. Kingsley, Encino, and Ari J. Stiller for Bet Tzedek Legal Services as Amicus Curiae on behalf of Plaintiff and Appellant Amanda Frlekin

Messing Adam & Jasmine, Gregg McLean Adam, Yonatan L. Moskowitz; David A. Sanders and Daniel M. Lindsay, Sacramento, for California Correctional Peace Officers’ Association as Amicus Curiae on behalf of Plaintiffs and Appellants.

Leonard Carder, Aaron D. Kaufmann ; Cohelan Khoury & Singer, Michael David Singer, San Diego, and Janine R. Menhennet, San Diego, for California Employment Lawyers Association as Amicus Curiae on behalf of Plaintiffs and Appellants.

Littler Mendelson, Richard H. Rahm, San Francisco, Julie A. Dunne, San Diego; Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Los Angeles, Joshua S. Lipshutz, Bradley J. Hamburger, Justin T. Goodwin, Lauren M. Blas, Los Angeles, and Christian Briggs for Defendant and Respondent.

Sheppard, Mullin, Richter & Hampton, Karin Dougan Vogel, Samantha D. Hardy, San Diego, Richard J. Simmons, Los Angeles, and John Ellis, San Francisco, for Retail Litigation Center, Inc., and National Retail Federation as Amici Curiae on behalf of Defendant and Respondent.

Paul Hastings, Paul W. Cane, Jr., San Francisco, Zachary P. Hutton and Blake R. Bertagna, Costa Mesa, for California Employment Law Council and Employers Group as Amici Curiae on behalf of Defendant and Respondent.

Horvitz & Levy, Jeremy B. Rosen, Felix Shafir and Eric S. Boorstin, Burbank, for Chamber of Commerce of the United States of America, California Chamber of Commerce and Civil Justice Association of California as Amici Curiae on behalf of Defendant and Respondent.

Corbin K. Barthold, Los Angeles, for Washington Legal Foundation as Amicus Curiae on behalf of Defendant and Respondent.

Opinion of the Court by Cantil-Sakauye, C. J.

Industrial Welfare Commission wage order No. 7-2001 (Wage Order 7) requires employers to pay their employees a minimum wage for all "hours worked." ( Cal. Code Regs., tit. 8, § 11070, subd. 4(B).) "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." (Id. , § 11070, subd. 2(G).)

We granted the request of the United States Court of Appeals for the Ninth Circuit to decide the following question of California law, as reformulated by this court (see Cal. Rules of Court, rule 8.548(f)(5) ): Is time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages, bags, or personal technology devices voluntarily brought to work purely for personal convenience by employees compensable as "hours worked" within the meaning of Wage Order 7? For the reasons that follow, we conclude the answer to the certified question is, yes.

I. FACTUAL AND PROCEDURAL BACKGROUND

Defendant Apple Inc. (Apple) is a leading personal technology provider. It operates retail stores worldwide, including 52 in California, that display and sell Apple products.

Apple requires its retail store employees to undergo exit searches pursuant to its "Employee Package and Bag Searches" policy (hereafter the bag-search policy), which imposes mandatory searches of employees’ bags, packages, purses, backpacks, briefcases, and personal Apple technology devices, such as iPhones. The bag-search policy states:

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. Personal technology must be verified against your Personal Technology Card (see section in this document) during all 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 ba[g] searched by a member of management or the security team (where applicable).

• Do not have personal packages shipped to the store. In the event that a personal package is in the store, for any reason, a member of management or security (where applicable) must search that package prior to it leaving the store premises.

Apple also provides guidelines to Apple store managers and security team members conducting the searches pursuant to the bag-search policy. The guidelines reiterate that "[a]ll Apple employees, including Campus employees, are subject to personal package checks upon exiting the store for any reason (break, lunch, end of shift)." The guidelines instruct Apple managers to "[a]sk the employee to open every bag, brief case, back pack, purse, etc.," "[a]sk the employee to remove any type of item that Apple may sell," and "[b]e sure to verify the serial number of the employee’s personal technology against the personal technology log." The guidelines also direct Apple managers to "ask the employee to unzip zippers and compartments so [managers] can inspect the entire contents of the bag" and "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," the manager must "ask the employee to remove the item from the bag." The guidelines provide that "Apple will reserve the right to hold onto the questioned item until it can be verified as employee owned."

The record indicates that Apple employees bring a bag to work for a variety of reasons.

For example, some employees bring bags to carry Apple-provided apparel, which employees must wear while working but are required to remove or cover up while outside the store. Others bring bags containing their cell phones, food, keys, wallets, or eyeglasses. Managers estimated that 30 percent of Apple employees bring such bags to work; employees estimated that "nearly all" do.

Apple employees are required to clock out before submitting to an exit search pursuant to the bag-search policy. Employee estimates of the time spent awaiting and undergoing an exit search range from five to 20 minutes, depending on manager or security guard availability. On the busiest days, Apple employees have reported waiting up to 45 minutes to undergo an exit search. As a rule, they are not compensated for this time.

Plaintiffs Amanda Frlekin,¹ Taylor Kalin, Aaron Gregoroff, Seth Dowling, and Debra Speicher, suing on their own behalf and on behalf of a class of similarly situated Apple retail store employees, filed a complaint against Apple in federal district court. The operative complaint alleges, among other things, that Apple failed to pay plaintiffs minimum and overtime wages for time spent waiting for and undergoing Apple’s exit searches in violation of California law.²

The district court certified a class of all Apple California nonexempt employees who were subject to the bag-search policy from July 25, 2009 to the present. In order to limit the issues regarding plaintiffs’ individualized reasons for bringing packages, bags, or Apple personal technology devices to work, the district court specified in its certification order that the bag searches would be adjudicated as compensable or not based on the most common scenario — that is, an employee who voluntarily brought an item subject to search under the bag-search policy to work purely for personal convenience. In other words, the certified class did not include potential plaintiffs who were required to bring a bag or iPhone to work due to special needs (such as medication or disability accommodations).

Cross-motions for summary judgment followed. The district court granted Apple’s motion and denied plaintiffs’ motion. It ruled that time spent by class members waiting for and undergoing exit searches is not compensable as "hours worked" under California law. As relevant here, the court determined that the "hours worked" control clause in Wage Order 7 requires proving both that the employer restrains the employee’s action during the activity in question and the employee has no plausible way to avoid the activity.

Plaintiffs appealed to the Ninth Circuit, which asked us to address the state law issue. ( Frlekin v. Apple, Inc. (9th Cir. 2017) 870 F.3d 867, 869 ( Frlekin ).)

II. DISCUSSION

The Industrial Welfare Commission (IWC) was established more than a century ago "to fix minimum wages, maximum hours of work, and standard conditions of labor." ( Martinez v. Combs (2010) 49 Cal.4th 35, 50, 109 Cal.Rptr.3d 514, 231 P.3d 259 ( Martinez ); Stats. 1913, ch. 324, § 13, p. 637.) "Pursuant to its ‘broad statutory authority’ [citation], the IWC in 1916 began issuing industry-and occupation-wide wage orders specifying minimum requirements with respect to wages, hours, and working conditions [citation]." ( Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1026, 139 Cal.Rptr.3d 315, 273 P.3d 513.)

We construe wage orders, like wage and hour laws, so as to promote employee protection. ( Mendiola v. CPS Security Solutions, Inc. (2015) 60 Cal.4th 833, 840, 182 Cal.Rptr.3d 124, 340 P.3d 355 ( Mendiola ).) Our prior decisions have made clear that "wage orders are the type of remedial legislation that must be liberally construed in a manner that serves its remedial purposes" of protecting and benefitting employees....