California Supreme Court Holds Employers Must Pay Non-Exempt Employees for On-Site Security Screenings

February 26, 2020

Zachary P. Hutton, Jeffrey D. Wohl & Daniel N. Rojas

In Frlekin v. Apple Inc., No. S243805, 2020 WL 727813 (Cal. Feb. 13, 2020), the California Supreme Court held that the time non-exempt employees spend waiting for and undergoing mandatory “bag check” security screenings qualifies as compensable “work” under California law. The court rejected the employer’s argument that the screenings did not qualify as “controlled” work time because employees could avoid the screenings by not bringing bags or other personal items to work. The ruling departs from federal law, under which time spent undergoing mandatory security screenings does not qualify as compensable work time. Because federal law is not preemptive, however, California employers must comply with the state’s more-protective rules.

The court in Frlekin did not overrule or call into question cases holding that employers do not need to compensate employees for time voluntarily spent commuting to work in company vehicles or engaging in other optional activities or programs that primarily benefit employees. Instead, it identified several factors that courts “may and should consider” when deciding whether employer-controlled activities qualify as compensable work time:

whether the activity is required or optional;
the location of the activity (and whether it occurs on-site or off-premises);
the degree of the employer’s control on the employee’s actions;
whether the activity primarily benefits the employee or employer; and
whether the activity is enforced through disciplinary measures.

In light of Frlekin, California employers may wish to take the following steps

If employers make use of on-site security screenings, they should take steps to ensure non-exempt employees receive pay for all “hours worked” as now understood under Frlekin.
Employers should evaluate whether non-exempt employees perform any other activities (especially on-site pre-shift or post-shift activities) that may qualify as compensable work under the court’s decision.

Case Summary

In Frlekin, the plaintiffs sued in federal court, alleging, among other things, that Apple violated California law by not paying non-exempt employees for the time they spent waiting for and undergoing exit security searches at its retail stores. Under Apple’s policy, if employees chose to bring a bag, purse, backpack, and/or personal device to work, they were required to clock out before submitting to an exit search. Apple was understandably concerned about the theft of store products.

In order to limit individualized inquiries, the district court certified a class consisting only of employees who brought a bag to work “merely for personal convenience.” Both parties then moved for summary judgment. The court denied the plaintiffs’ motion and granted Apple’s motion. The court determined that the definition of “controlled” work time under California law required proving both that the employer restrained the employee’s activity in question and that the employee had no plausible way to avoid the activity. It concluded the security bag checks were not compensable because the activity was not required; instead, employees could avoid the security screening by not bringing a bag or personal device to work.

The plaintiffs appealed to the Ninth Circuit, which certified the following question to the California Supreme Court: “Is time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages, bags, or personal technology devices voluntarily brought to work purely for personal convenience by employees compensable as ‘hours worked’ within the meaning of Wage Order 7?”

The California Supreme Court answered “yes,” focusing solely on the “control” prong under the Wage Order. First, the court found the employees remained under Apple’s control while awaiting, and during, the exit searches because Apple (1) required employees to comply with the bag-search policy under threat of discipline; (2) confined its employees to the premises as they waited for and underwent exit searches; and (3) compelled employees to perform supervised tasks while awaiting, and during, the search (i.e., locating a manager or security guard to conduct the search, unzipping and opening all bags and packages, moving around items within a bag or package, and removing any personal devices for inspection).

Next, the court rejected Apple’s argument that exit searches were not compensable under Morillion v. Royal Packing Co., 22 Cal. 4th 575 (2000), and its progeny because employees could avoid searches by choosing not to bring a personal bag to work. The court noted, among other things, that the nature of the controlled activity in those cases involved “optional services that primarily benefit[ed] the employee.” In contrast, the court found the exit searches were required mainly for the employer’s benefit “by serving to detect and deter theft.”

The court also found that the exit searches were, as a practical matter, required because employees might need to bring a bag to “hold any number of ordinary items, such as a wallet, keys, cell phone, water bottle, food, or eyeglasses.”

At bottom, the court reaffirmed that the “level of the employer’s control over its employees, rather than the mere fact that the employer requires the employees’ activity, is determinative concerning whether an activity is compensable ...”

The court identified several factors relevant to whether employer-controlled tasks qualify as compensable:

whether the activity is required or optional;
the location of the activity (and whether it occurs on-site or off-premises);
the degree of the employer’s control on the employee’s actions;
whether the activity primarily benefits the employee or employer; and
whether the activity is enforced through disciplinary measures.

In applying these factors, the court found that the employer’s “exit searches are required as a practical matter, occur at the workplace, involve a significant degree of control, are imposed primarily for [the employer’s] benefit, and are enforced through threat of discipline.” Thus, the time qualified as compensable work under California law.

Lastly, the court rejected the argument that its decision should only apply prospectively, holding instead that its decision applies retroactively because it does not represent a departure from existing law.

Contrast to Federal Law

The California Supreme Court acknowledged that its conclusion is at odds with the U.S. Supreme Court’s ruling in Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. 27 (2014), that time spent undergoing mandatory security screenings is not compensable under the Fair Labor Standards Act (“FLSA”). The court distinguished Busk because it was decided based on the FLSA’s Portal to Portal Act amendments, which California law does not follow. The court noted that California law specifically rejected the Portal to Portal Act after it was enacted and adopted a broader definition of “compensable work.”

Compensability of Other Activities

The California Supreme Court did not overrule or call into question cases holding that employers need to compensate employees for time voluntarily spent commuting to work in company vehicles or engaging in other optional activities or programs. Instead, it cited approvingly cases holding such time is not compensable, including Overton v. Walt Disney Co., 136 Cal. App. 4th 263, 271 (2006) (time spent waiting for employer-provided shuttle not compensable because use of shuttle was optional, and alternative means of transportation existed); Hernandez v. Pacific Bell Telephone Co., 29 Cal. App. 5th 131, 141 (2018) (time spent commuting voluntarily in company-provided vehicle not compensable); and Rodriguez v. Taco Bell Corp., 896 F.3d 952, 957 (9th Cir. 2018) (compensation not required “[i]f employers offers a benefit or service that employees could choose, but were not required to take advantage of”).

However, California employers may wish to evaluate whether their non-exempt employees perform any other activities (especially on-site pre-shift or post-shift activities) that may qualify as compensable work under the court’s decision in Frlekin.

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