Apple’s $29.9M class settlement over employee bag checks is OK’d

A federal judge in San Francisco granted preliminary approval to the largest security check class action in California history.

U.S. District Judge William Alsup on Tuesday approved a $29.9 million class settlement, resolving a case involving Apple Inc. employees who had to go through mandatory, uncompensated searches of their bags, purses, backpacks or briefcases when they left the store.

The lawsuit only covered 14,683 people who worked at Apple's 52 California stores from 2009 to 2015. Frlekin et al. v. Apple Inc., 13-CV-03451 (N.D. Cal., filed July 25, 2013).

Apple defended the policy by saying it was necessary to prevent employee theft of its electronic devices, arguing that employees who wanted to avoid the security check could leave bags at home.

The Cupertino based technology giant dropped its bag check policy in December 2015, according to the settlement agreement approved by Alsup. He deferred a decision on attorney fees.

The judge had granted summary judgment for Apple, but Kimberley A. Kralowec of Kralowec Law PC successfully appealed that decision to a 9th U.S. Circuit Court of Appeals panel, which revived the case.

The 9th Circuit ruling was reached after the panel asked the California Supreme Court if time spent undergoing exit searches of bags brought for personal convenience was compensable as hours worked.

The state high court ruled the answer was yes and U.S. District Judge Consuelo B. Marshall of the Central District of California -- sitting on the 9th Circuit panel by designation -- reversed Alsup's decision for Apple in a September 2020 ruling.

Kralowec wrote in a motion for approval of the settlement last month that plaintiffs' attorneys would seek $9.9 million in attorney fees, or a third of the settlement, citing the difficulty of the case and the need to successfully appeal the district court judge's decision.

Individual class members would receive, on average, $1,286.96, assuming zero additional opt-outs, on a pro rata basis, Alsup wrote. The calculation would use Apple business records to determine the number of shifts that each class member worked during the class period.

Attorneys for Apple and the class agreed to pay at least 25% of the settlement in attorney fees, a provision, the judge wrote, that the 9th Circuit has described as "a red flag indicating a potentially collusive settlement."

Alsup also did not approve $10,000 payments to the lead plaintiffs, which he wrote was another red flag.

Kralowec could not be reached for comment Wednesday. Julie A. Dunne, a partner with DLA Piper who represents Apple, also could not be reached. Apple representatives did not return a telephone call and email seeking comment.

The settlement was reached with the help of JAMS mediator Edward A. Infante, a retired U.S. magistrate judge.