Amanda Frlekin and others worked for Apple Inc. as retail store employees in its retail stores in California. Apple requires them to undergo exit searches pursuant to its “Employee Package and Bag Searches” policy, which imposes mandatory searches of employees' bags, packages, purses, backpacks, briefcases, and personal Apple technology devices. Failure to comply with this policy may lead to disciplinary action, up to and including termination.
Apple employees bring a bag to work for many reasons. 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. However, employees estimated that “nearly all” do.
Apple employees are required to clock out before submitting to an exit search. 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.
The employees sued Apple in a class action alleging that Apple failed to pay its employees minimum and overtime wages for time spent undergoing Apple's exit searches in violation of California law. The case reached the California Supreme Court, which had to answer this question: Is time spent on the employer's premises undergoing required exit searches of items voluntarily brought to work by the employees compensable as “hours worked”?
The Supreme Court ruled that, yes, time spent on the employer's premises undergoing security or bag checks should be paid as “hours worked.” “Hours worked” means 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.
The Court noted that the level of the employer's control over its employees, rather than the mere fact that the employer requires the employees' activity, determines whether an activity is compensable as “hours worked.” If an activity is required by the employer, this may also prove that an employee is subject to the employer's control. However, the mandatory nature of an activity is not the only factor to consider. Additional relevant factors — such as the location of the activity, the degree of the employer's control, whether the activity primarily benefits the employee or employer, and whether the activity is enforced through disciplinary measures — may also be used to evaluate whether an employer-controlled activity is compensable.
In applying these factors, the Court found that the employees were subject to Apple's control during the exit searches. The Court noted that Apple's exit searches are required business reasons, occur at the workplace, involve a significant degree of control, are imposed primarily for Apple's benefit, and are enforced through threat of discipline. Thus, according to the “hours worked” control clause, employees “must be paid.”
The court stated that Apple may tailor its bag-search policy to minimize the time required for exit searches by hiring sufficient security personnel or employing adequate security technology. But it still must compensate those employees for the time spent waiting for and undergoing these searches.