After a legal battle that has taken 7 years to settle, Nike Retail Services has agreed to pay $8.25 million to workers that were made to undergo routine bag checks despite being clocked out after work and during breaks.
The lawsuit against Nike was first filed in 2014 by named plaintiff Isaac Rodriguez. Rodriguez claimed that the company owed him and other employees unpaid wages for the time they spent waiting to undergo bag checks while clocked out.
Initially, the plaintiffs did not have much luck as US District Judge Beth Freeman dismissed the plaintiffs’ claim back in 2017 due to the bag checks being “de minimis,” or too minimal in time, as they did not exceed 10 minutes.
However, Isaac Rodriguez and the rest of the plaintiffs would have their hope restored after the consequential California Supreme Court ruling over Troester v. Starbucks. In 2018 the ruling on Troester v. Starbucks, which held similar claims of unpaid wages, established that the federal “de minimis” does not affect unpaid wages claims made under California law. The California Supreme Court, thus, declared that the state will grant greater protection for workers citing that workers must be paid “all hours worked” and “any work beyond eight hours a day.”
Therefore, soon after the the ruling of Troester v. Starbucks, the Ninth Circuit reversed Judge Freeman’s ruling in 2019 allowing the class action lawsuit against Nike to once again make its case.
Nike’s approach was to convince the Ninth Circuit that the bag checks administered at stores still met the new stricter “de minimus” standards under California law. Nike utilized video footage to claim that 81.4% of security checks took less than 30 seconds while only 3.3% took longer than 60 seconds.
Plaintiff’s pushed back on Nike arguing that the assumptions they make from the video footage is flawed since the video only covers a 30 day period. In order to contradict Nike, the plaintiff’s brought in testimony from managers who claim that the regular time workers had to wait in order to undergo bag checks was at least one minute.
Overall, the Ninth Circuit stuck to their decision in reviving the case as they came to the conclusion that even if most inspections took less than a minute the case should still be reconsidered in a district court due to the new legal landscape that Troester v. Starbucks created.
Thus, with the class action suit going back to court, Nike recently agreed to an $8.25 million settlement. The proposed settlement will have Nike create a fund of $5.2 million to be split among the 16,658 employees who worked at Nike from February 2010 to November 2019. Furthermore, $3 million will go to the plaintiff’s attorneys to pay for fees and expenses.
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