Facts

Issac Rodriguez was employed by Nike Retail Services, Inc. as a non-exempt employee at its retail outlet store in Gilroy, CA. He was instructed and required to undergo an off-the-clock security check or visual bag inspection before exiting the Nike store at any time. Rodriguez brought an action against Nike, alleging that Nike did not pay Rodriguez and all other non-exempt employees' applicable minimum and overtime wages in connection to the time spent waiting for security checks and visual inspections.

PLAINTIFFS' CONTENTIONS: Plaintiffs contended that defendants violated California labor law when defendants failed to pay its employees in connection to the time spent waiting for security checks and visual inspections. Plaintiffs contended that the "de minimis" rule does not apply because these were not trivial or short burdens and fell within their work duties and it did not apply under the California wage codes.

DEFENDANTS' CONTENTIONS: Defendants denied all of the contentions. Defendants contended that its conduct complied with California law. Defendants contended that wait times for security checks were exempt from compensation under the "de minimis" rule which exempts employers from having to pay workers for short or trivial burdens that fall outside of work duties.

Result

The case settled for $8,250,000. Nike will establish a $5.1 million fund to be split among a class of over 16,000 hourly retail employees who worked between February 2010 and November 2019. Nike also agreed to amend its policies to have security checks as on-the-clock work. Nike will also set aside $3 million in class counsel fees and costs.