Key Takeaways From Apple’s $30M Bag Check Settlement

$30m Bag Check Suit

Following a near $30 million settlement between Apple Inc. and California employees who say it should have been paid for time they spent waiting to have their bags checked after a shift underscores the Golden State’s strict rules on what qualifies as work time.

The settlement was submitted for approval on Nov. 12, proved to be a stunning turnaround in the long-running case in which Apple initially won summary judgement before it was reversed on appeal. The Ninth Circuit held that Apple should pay employees, making clear that the company was liable and leaving it to a lower court to determine the amount of unpaid wages. It mirrored the opinion offered by the California Supreme Court, which said that state law required Apple to pay workers for the time, even though they could avoid waiting altogether by leaving personal belongings at home.

The question of whether Apple should pay resulted from employees’ decision to bring a bag to work, which they could elect to avoid by leaving personal items at home or in their car.

In settlement documents filed with the court, lawyers for nearly 14,000 workers and Apple said the payout is a reasonable way to wrap up the claims. It stipulates that the workers’ lawyers will not respond to press queries, and neither side responded to a request for comment.

Additionally, under the federal Fair Labor Standards Act, an employer doesn’t have to pay for time that employees have to be on site before or after a shift but are engaged in tasks that aren’t integral to their main role. That’s why the U.S. Supreme Court found in the 2014 case Integrity Staffing Solutions Inc. v. Busk that Amazon didn’t have to pay distribution center employees for time spent in security screening.

The Apple case highlights that the analysis under California’s wage and hour law is simpler, Aaron Kaufmann of Leonard Carder LLP, said. “If you can’t do what you want with your time because the employer controls you, it just seems fundamentally fair that your employer should pay for that,” he continued.

Jon Meer, partner for Seyfarth Shaw LLP, said that the Supreme Court’s bright line standard put everybody on notice that compensation is usually required.

He continued by saying that while he appreciates the clear guidance, he thinks businesses may find that devoting energy to compliance isn’t the best use of their resources. Instead, some companies may find the simpler approach is to stop doing bag checks entirely or scale back the practice by skipping them when employees step out for a midshaft break.

“Where you have hyper-technical requirements that require you to account for seconds, it’s going to be hard for an employer to be perfect all of the time,” Meer said.

Physical changes to the workplace can help ensure that employees are paid for all work time.

“Many companies have relocated their time clocks closer to the exits so that as soon as an employee completes their exit inspection, they can clock out and only have to walk 3 or 4 feet to the doorway,” he said.

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