Companies Must Consider Impact on Culture, Compensable Time with Employee Security Searches, Particularly In California
Published by Eric A. Welter on July 30, 2015
On December 9, 2014, the United States Supreme Court issued a much-anticipated decision in Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513 (2014), holding that the time warehouse workers spend undergoing security searches before leaving each day is not compensable time under the Fair Labor Standards Act (FLSA). Although this decision was seen […]
On December 9, 2014, the United States Supreme Court issued a much-anticipated decision in Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513 (2014), holding that the time warehouse workers spend undergoing security searches before leaving each day is not compensable time under the Fair Labor Standards Act (FLSA).
Although this decision was seen as a big win for employers who require their employees to undergo unpaid pre- and post-shift activities, i.e. security searches, decontamination procedures, site-to-site transportation, etc., employers may still be required to compensate employees for these pre- and/or post-shift activities if the state law applied is more stringent than the FLSA. Moreover, requiring employees to undergo pre- and/or post-shift activities without compensating them for their time spent undergoing such activities has a negative impact on employees’ attitudes and the reputation of the company and its culture.
The Integrity Staffing Solutions decision only addressed claims under the FLSA, and it did not address state laws that may be more stringent. In California, it is likely that time spent waiting for and undergoing security searches is compensable.
Under California law, “hours worked” is defined as “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.” See Industrial Welfare Commission (IWC) Order No. 4-2001.
In 2000, the California Supreme Court cited the IWC’s definition of hours worked and determined that “an employee who is subject to an employer’s control does not have to be working during that time to be compensated.” Morillion v. Royal Packing Co., 22 Cal. 4th 575, 582 (2000). The Supreme Court also held that time employees are required to spend travelling to and from a remote work site on their employers’ buses is compensable. Id.
In 2009, the Central District of California found that defendant employers could not raise a tribal issue of fact that employees were not under their control during the security screenings the employees were required to undergo prior to clocking in for their shifts. Cervantez v. Celestica Corp., 618 F. Supp. 2d 1208, 1218, 1219 (C.D. Cal. 2009).
Accordingly, California will be more stringent in its application of its wage laws with respect to pre- and/or post-shift activities and will likely find that time spent undergoing pre- and/or post-shift security checks is compensable.
Apple Inc., the California technology giant, will soon find out how stringent California law will be with respect to its requirement for employees to undergo unpaid security checks. In 2013, a lawsuit was filed against Apple in the Northern District of California alleging that employees should be paid for the time they spent undergoing security searches at meal breaks and after their shifts.
The case is Friekin v. Apple, 13-cv-03451 (N.D. Cal. 2015). The plaintiffs are seeking to certify a class of more than 12,400 former Apple employees from 52 Apple retail stores throughout California. At a recent hearing, U.S. District Court Judge William Alsup stated “It’s all or nothing. Either this policy is not compensable to anyone, or the entire class wins.” Assuming 12,000 employees were deprived of 15 minutes of pay per person at a minimum wage of $9 an hour, Apple could be hit with damages for compensable time exceeding $60 million, plus millions of dollars in penalties.
Although $60 million is likely little more than a drop in the bucket for Apple, what is more concerning is the effect such unpaid post-shift security searches are having on the attitudes of Apple’s employees and across Apple’s culture. In a 2012 email, one Apple employee described the searches in front of customers as “demoralizing” and felt that “[m]anagers are required to treat ‘valued’ employees as criminals.”
The sentiment generated from these unpaid security checks is not beneficial for Apple, who seems to pride itself on having an employee-friendly culture and which has historically maintained cult-like loyalty from its employees.
Before implementing unpaid security searches (or any other unpaid pre- and/or post-shift activity), employers must consider the laws of the states in which they operate to determine if they will be liable for compensating their employees for time spent undergoing such activities.
In states that follow the FLSA, employers, in reliance on Integrity Staffing Solutions, have a stronger argument that they do not have to compensate their employees for time spent undergoing pre- and/or post-shift activities.
In states that have more stringent standards than the FLSA, like California, employers must weigh the benefit of requiring their employees to undergo a pre- and/or post-shift activity with the potential detriment of having to pay them for their time.
Additionally, all companies, regardless of jurisdiction, should consider what effect the unpaid pre- and/or post-shift activity will have on the employee’s attitudes and the culture of the company. Such an image consideration is particularly important for large, well-known companies who do not want to have negative publicity from perceived poor treatment of their employees.Topics: Apple Inc., California, California Supreme Court, Compensable Time, Fair Labor Standards Act, FLSA/Overtime, Inc. v. Busk, Integrity Staffing Solutions, post-shift activity, pre-shift activity, security searches, Wage and Hour