State Supreme Court hears argument in Apple Store employee bag check case

A lawyer representing a class of more than 12,000 Apple Store employees urged the state Supreme Court to consider the time they spend undergoing bag checks compensable under state wage order law during oral arguments Wednesday.

Kimberly A. Kralowec of Kralowec Law PC in San Francisco said the time was compensable under Wage Order 7 of the Industrial Welfare Commission, which defines "hours worked" 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."

KRALOWEC

Kralowec argued the time Apple store employees wait to have their bags checked -- part of Apple's in-house anti-theft protocol -- meets the control standard because the workers must a) remain in the store, b) find a manager to complete the check, and c) could face disciplinary action, including termination, if they refuse the bag check. Frlekin v. Apple Inc., S243805.

"Under the plain text of the wage order, the time is compensable," Kralowec said. "The employer's choice is choosing to exercise the control."

Kralowec stood pat as justices peppered her with hypotheticals meant to undermine that interpretation. Justices Goodwin H. Liu and Leondra R. Kruger wondered if the time would be compensable if the tech giant added lockers to its retail stores and did away with the bag checks. Would employees get paid more if they brought an additional bag or satchel to work and spent more time going through the security check, Lui asked.

"Each side absorbs its own costs," Liu said. "Apple has to pay the managers and employees have to suffer though the checks."

"Under California law, the expenses of running your business is on the employer, not to be put on the back of the employee," countered Kralowec. "It's a black letter rule."

But Liu's questioning touched upon an underlying issue: the federal de minimis rule, which sets a cap on compensable off-clock time. In past cases, both the state high court in Troester v. Starbucks Corporation and the 9th U.S. Circuit Court of Appeals in Rodriguez v. Nike Retail Services Inc., ruled de minimis does not apply to California wage and hour statutes and regulations.

BOUTROUS

In authoring the opinion in Troester, Liu called for Starbucks to compensate minutes worked off the clock on a regular basis but stopped short of adopting de minimis, noting it had yet to be used in a California court. Instead, the state high court would decide similar wage claims on a case-by-case basis, a stance that could mire the court in tedious vacillation, argued Theodore J. Boutrous of Gibson, Dunn & Crutcher LLP in Los Angeles.

"Once this court gets into regulating work hours, it becomes a morass," said Boutrous, who represents Apple in the matter. "Where does my personal work and my work life begin?"

Boutrous also argued Kralowec's employer-control argument did not apply to the case because the class stipulated employees voluntarily bring bags and satchels to work prior to certification. Applying Morillion v. Royal Packing Co. (2000) 22 Cal. 4th 575, 585, Boutrous contended the time could only be compensable if employees were required to bring in their bags.

"That was consented away," Boutrous said of the mandatory requirement. "This is not work and not compensable."