Every Minute Counts - How Making Employees Wait Can Create Employer Liability

Posted: December 2, 2020 | News

In the arena of employment litigation, every minute matters.  Attorneys for employees are filing lawsuits over minutes or fractions of a minute and bringing claims for those minutes or fractions of minutes for multiple employees over the course of months or years.  The recent Ninth Circuit Court of Appeals decision in Frlekin v. Apple is instructive in showing how employers can accrue liability for the smallest increments of time.

Employers often put in place procedures to avoid the risk of theft by employees.  This can take the form of security cameras, inventory control procedures, and sometimes includes checking employees’ belongings as they leave the premises. An employer that utilizes checks of its employees’ belongings is hoping to avoid loss by employee theft.  However, these employers may be unwittingly creating an exposure in favor their employees.

In September 2020, the Ninth Circuit Court of Appeals reviewed a policy of employee exit searches.  The Frlekin case was a wage and hour class action alleging that Apple was liable to its employees for the time the employees spent waiting for and undergoing “required exit searches of packages, bags, or personal technology devices brought to work purely for personal convenience by employees.”  Frlekin v. Apple, Inc. (9th Cir. 2020) 979 F.3d 639, 642.

The Ninth Circuit, in analyzing the potential liability against Apple, asked the California Supreme Court to decide whether the time spent waiting for and undergoing exit searches constituted hours worked under California law. 

The California Labor Code authorizes Wage Orders, which are issued by the Industrial Welfare Commission, to apply standards for employers to follow in ensuring that employees receive appropriate compensation.  Wage Order No. 7 applied to the Apple employees in the Frlekin case.  Wage Order No. 7, similar to most other Wage Orders, provides, “‘Hours worked’ means 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.” 

In analyzing whether the time spent by employees waiting for exit searches constituted hours worked, the California Supreme Court found that, “Apple’s exit searches are required as a practical matter, occur at the workplace, involve a significant degree of control, are imposed primarily for Apple’s benefit, and are enforced through threat of discipline. Thus, according to the ‘hours worked’ control clause, plaintiffs ‘must be paid.’”  Frlekin v. Apple, Inc. (2020) 8 Cal.5th 1038.

The Ninth Circuit, relying upon the California Supreme Court guidance, determined that because the time spent waiting for exit searches constituted hours worked, the District Court judgment that had dismissed the claims against Apple was in error.  The Ninth Circuit reversed the decision and sent the matter back to the District Court.

The rationale underlying the Frlekin decision can apply to several other employee situations.  Employers who do not have sufficient time clocks to punch in at the start of the day may have similar issues.  In this case, employees would be subject to employer control, but unable to be paid as they must wait in line to record their start time. 

Employers who require on-site health inspections, such as temperature scanning in this time of COVID, also may be subjecting their employees to hours worked without pay if they are requiring the scans prior to the employee clocking in for their shift. 

Similarly, employers who have protocols where non-exempt employees are responsible for locking and securing their facilities after they clock out may also be subjecting those employees to hours worked without pay.  The converse would also be true for non-exempt employees engaged in unlocking and opening facilities prior to clocking in. 

With uncertain financial futures, many employees may seek attorneys to bring any possible claims for compensation.  These small fractions of time may not seem like a big problem, but for larger employers these claims can be aggregated into a class action lawsuit on behalf of all employees or a claim under the Private Attorneys General Act (“PAGA”). 

If you have any questions or concerns regarding whether your company has policies or practices that may result in your employees incurring unintentional unpaid time, the attorneys at Ferruzzo & Ferruzzo, LLP are available to provide guidance.

 

This blog is not meant to provide specific legal advice. For advice specific to your business, please contact any of the employment attorneys in our Employment Practices Group who are ready to assist you.

James F. Rumm

James F. Rumm, Esq. is a Senior Associate and member of Ferruzzo & Ferruzzo, LLP’s Employment Practices Group.  James focuses on employment litigation, wage and hour class action defense, defense of discrimination, harassment and retaliation claims, complex business litigation, and trial work. James has trial experience in a wide range of areas including business litigation matters, employment litigation, personal injury and product liability matters. James has also argued on several occasions before both the California Court of Appeal and the Ninth Circuit Court of Appeals.