California's Supreme Court believes Apple should have to pay store employees for time spent doing off-the-clock bag and phone checks by managers or security personnel.
In a court order released Thursday, Judge Tani Cantil-Sakauye said the decision is retroactive for employees, although it is unclear how much Apple will need to pay. In January, Apple reported record quarterly revenue of almost $92 billion and a profit of $22.3 billion.
The decision stems from a 2013 case when two employees — Amanda Frlekin and Dean Pelle — led a class action lawsuit that alleged Apple should have been paying employees for security searches after they clocked out. After a U.S. district judge dismissed the case in 2015, lawyers for the employees appealed to the state Supreme Court later that year.
The state's high court ruling doesn't mean Apple employees get back pay immediately. The case now returns to a California district court, where a judge will likely use the supreme court opinion to make a final ruling, said Steven Katz, a Los Angeles employment lawyer with Constangy, Brooks, Smith & Prophete who has represented employers in similar cases against large retailers.
If the district court rules in favor of the employees, Apple will need to calculate a settlement amount that awards its employees back pay, Katz said. In Apple's case, that settlement would likely be in the seven-figure range, Katz said. All told, it could take more than a year for employees to get back pay, he added.
Apple did not respond to requests for comment about the ruling. The company does not publicly disclose a headcount for its store-based employees, but reported about 137,000 full-time workers company-wide as of September 2019.
Judge knocks Apple's reasoning
Cantil-Sakauye wrote in her decision that Apple's argument had holes, such as its contention that employees don't need to bring bags to work.
"Given that Apple requires its employees to wear Apple-branded apparel while working but directs them to remove or cover up such attire while outside the Apple store, it is reasonable to assume that some employees will carry their work uniform or a change of clothes in a bag in order to comply with Apple's compulsory dress code policy," she wrote.
Katz said the Apple uniform policy "made a big difference when the justices were forming their views on this legal case."
"I've never seen an employer, in terms of retail, that made it virtually impossible not to bring a bag to the premises," Katz said.
Ultimately, California's high court ruled that Apple's searches are required, which by law means they must pay employees.
"Apple may tailor its bag-search policy as narrowly or broadly as it desires and may minimize the time required for exit searches," Cantil-Sakauye wrote. "But it must compensate those employees to whom the policy applies for the time spent waiting for and undergoing these searches."