INSIGHT: Will Apple Innovation Carry Into California Wage and Hour Law Ruling?

Apple has (with some justification) portrayed itself as one of the great innovators of this (or any) age. What is one to make, then, of its legal arguments in a case called Frlekin v. Apple, which was argued in the California Supreme Court on Dec. 4.

Frlekin concerns whether Apple has an obligation to compensate its employees when it stops and searches them as they exit Apple stores after completing their work shift. Notably, Apple only stops employees who carry Apple products or bags.

California generally requires that an employer must compensate its employees whenever they are subject to the employer’s control, or are suffered or permitted to work. And in a series of cases beginning in the early 2000s, the California Supreme Court, in interpreting the California Labor Code and Wage Orders promulgated by the now-defunct Industrial Welfare Commission, has repeatedly determined that California law extends significantly greater protections to California workers than does federal law or the laws of most other states.

For example, in 2000, in Morillion v. Royal Packaging Company, the court determined that fruit pickers were entitled to receive compensation from the point at which they were required to board a company bus to begin the journey to the work site, as opposed to when they disembarked at the place where the fruit picking would occur.

Similarly, in 2018, in Troester v. Starbucks, the court declined to extend, to California wage and hour laws, the federal de minimis rule (which allows employers to disregard and not compensate for small amounts of work time).

In Frlekin, the Ninth Circuit Court of Appeals asked the California Supreme Court to address the following question: “Is time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages or bags voluntarily brought to work purely for personal convenience, by employees compensable as ‘hours worked’ within the meaning of California Industrial Welfare Commission Wage Order No. 7?”

Apple argues that Morillion is dispositive. The key in Morillion, according to Apple, is that the employees were required to board the employer’s bus. Apple employees, in contrast, are not required to bring Apple products or bags to work. If they choose to do so, and are subject to search as a result, Apple argues that the employer is neither controlling them nor suffering or permitting them to work.

Times Have Changed

But does Morillion—a case decided almost two decades ago, and some seven years before the first iPhone was unveiled—provide the best standard to address compensability in the modern workplace?

Apple and other tech innovators have not only changed our lives but also our workplaces. We all have smart phones and a host of other devices because tech companies have convinced us that these products are important and improve our lives. And often these products do improve our lives by saving us time. We shop, we bank, we track our health and a whole host of other things in a fraction of the time these tasks took 20 years ago.

Apple itself recognizes how omnipresent its product have become. For example, in Carpenter v. United States, in an amicus brief filed in a criminal case in the U.S. Supreme Court involving police tracking individuals through cell phone usage, Apple highlighted how smart phones are an ubiquitous and essential part of an individual’s ability to fully participate in modern life.

Technology can affect legal decisions, too. One only need to look at the Troester ruling to see how. One underpinning of the federal de minimis rule is that small amounts of time are difficult, and costly, for employers to track.

Tech Advances Could Affect Ruling

However, the California Supreme Court noted how technological innovations make it much easier and cost-effective for employers to accurately track smaller increments of employee work time than in the past. In declining to extend the federal rule to California law, the court balanced these burdens on the employer against California’s strong policy favoring compensability of all work time—ultimately favoring the latter.

During oral argument in Frlekin, the justices jostled with these same issues: compensability versus burdens on the employer versus innovation in the workplace. They also seemed to prod the litigants for what a practical rule would look like.

Ultimately, the modern Apple workplace seems likely to produce a different rule than the Morillion bus circa 2000 did. How readily applicable to other workplaces the rule will be remains to be seen. However, it seems likely that, as we and our workplaces continue to evolve, this will not be the last such evolution in how we apply our wage and hour laws.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Gregg Adam is a founder of Messing Adam & Jasmine LLP in its San Francisco office and represents employees, including in wage and hour matters.