Employers pay when employees bring their baggage to work

In last Thursday's ruling in Frlekin v. Apple, Inc., 2020 DJDAR 1169, California again parted ways with federal wage and hour standards to increase protections for the Golden State's employees. The California Supreme Court unanimously held that employees must be paid for time spent in mandatory, onsite security checks, rejecting arguments that since employees could choose to leave personal items at home, such security checks were for employees' personal convenience.

Like many retailers, Apple requires post-shift security checks at its retail stores to deter theft. Employees must have security personnel search their bags, purses, backpacks and personal items before they leave the store. Employees also must verify that they own all Apple technology devices found in their bags, such as iPhones. Apple claims that roughly one-third of employees bring bags or personal items to work, but the employees estimate that "nearly all" do. According to Apple employees, this process usually takes between five and 20 minutes, but some employees reported waiting up to 45 minutes for security checks on busy days.

In Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. 27 (2014), the U.S. Supreme Court reached a different result. Under the Fair Labor Standards Act, as amended by the Portal-to-Portal Act, employers need not compensate employees for activities that are "preliminary" or "postliminary" to the performance of their "principal activities" -- narrowly defined as the core activities that workers are employed to perform. Accordingly, post-shift security checks were noncompensable postliminary activities. The court explained, "Integrity Staffing did not employ its workers to undergo security screenings, but to retrieve products from warehouse shelves and package those products for shipment to Amazon customers." This is true, the court reasoned, even if the security checks are required by the employer.

It's not surprising that the employee-friendly California Supreme Court took a different path. Our Supreme Court has repeatedly stated that the Wage Orders are remedial legislation that "must be liberally construed" for the protection of employees. Because California's wage and hour laws differ substantially from the Portal-to-Portal Act, the court stated that federal law "should be given no deference" in this instance.

California's Wage Order require employers to pay employees for all "hours worked," which is defined as all time that employees are "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." In Frlekin, the Supreme Court decided that employees must be paid for mandatory, onsite security checks because they are "clearly" and "obviously" under the employer's control during that time. The court noted that Apple employees cannot leave the premises until their items are searched. The security checks are imposed for the company's benefit to deter and detect theft. Any employee who fails to comply with the mandatory policy is subject to discipline, up to and including termination.

Confirming the old adage that "hard cases make bad law" (Northern Securities Co. v. U.S., 193 U.S. 197 (1904) (Holmes, J., dissenting)), the Frlekin court repeatedly expressed its disbelief that employees could avoid bringing bags and backpacks to work, noting an alleged Apple policy requiring them to wear Apple-branded apparel in the store, but not permitting them to do so outside the premises. As a practical matter, the court said that employees have "little genuine choice" in bringing such items to work. Given the "realities of ordinary, 21st century life," the court found this claim "far-fetched and untenable."

The court called out Apple's "irony and inconsistency" by quoting the tech giant's CEO, Tim Cook, who recently said that the iPhone has "become so integrated and integral to our lives, you wouldn't think about leaving home without." According to the court, Apple's own employees are no different -- they also have little choice in deciding to bring their iPhones to work. Apple's contrary argument, the court noted (no doubt with intended snark) "rings especially hollow."

So what options do employers have to control the cost of reasonable loss prevention policies? In theory, employers could simply forbid employees to bring personal items into the workplace, other than the clothing they are wearing. The Frlekin decision hints at willingness to place limits on this discretion -- the court rejected Apple's argument "that it could have totally prohibited ... any bags," and stated that Apple could impose "reasonable restrictions on the size, shape or number of bags" employees bring in -- but offered no textual grounding for such limits. It is certainly not hard to imagine that the duty to reasonably accommodate for disability would impose some limits on such discretion. Some employees will have a medical need to bring a bag to work containing medicine or medical devices, and most woman of child-bearing age will have such a need at times.

Another option is to permit employees to bring in personal items only in bags provided by the employer. Such bags could be designed to minimize inspection time.

Other measures include providing employee lockers outside of the store or security perimeter, or quick "self-service" security checks that quickly preserve a record of the contents of employee's bags, but do not require a live person to inspect them. (For example, employees must open an employer-approved container and show the inside to a security camera, which would take only seconds before the employee exits.)

Regardless, California employers must now carefully consider the costs and potential benefits of employee security checks before mandating them. 