Court Opinion

ID: 4562344
Source: CourtListenerOpinion
Date Created: 2020-09-02 17:00:41.097554+00
Date Added: 2024-06-11T12:01:18.275407
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

AMANDA FRLEKIN; TAYLOR                 No. 15-17382
KALIN; AARON GREGOROFF;
SETH DOWLING; DEBRA                      D.C. Nos.
SPEICHER, on behalf of              3:13-cv-03451-WHA
themselves and all others           3:13-cv-03775-WHA
similarly situated,                 3:13-cv-04727-WHA
           Plaintiffs-Appellants,

               v.                          OPINION

APPLE, INC., a California
corporation,
           Defendant-Appellee.

      Appeal from the United States District Court
        for the Northern District of California
       William Alsup, District Judge, Presiding

         Argued and Submitted July 11, 2017
        Submission Withdrawn August 16, 2017
            Resubmitted August 26, 2020
              San Francisco, California

                 Filed September 2, 2020
2                       FRLEKIN V. APPLE

Before: Susan P. Graber and Michelle T. Friedland, Circuit
    Judges, and Consuelo B. Marshall, * District Judge.

                   Opinion by Judge Marshall

                          SUMMARY **

                            Labor Law

    The panel reversed the district court’s grant of summary
judgment in favor of defendant Apple, Inc., in a wage-and-
hour class action brought by employees who sought
compensation under California law for time spent waiting
for and undergoing exit searches.

    Upon the panel’s certification of a question of California
law, the California Supreme Court concluded that 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 was compensable as
“hours worked” within the meaning of California Industrial
Welfare Commission Wage Order 7.

    The panel reversed the district court’s grant of Apple’s
motion for summary judgment and remanded with
instructions to (1) grant plaintiffs’ motion for summary

    *
      The Honorable Consuelo B. Marshall, United States District Judge
for the Central District of California, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
                    FRLEKIN V. APPLE                     3

judgment on the issue of whether time spent by class
members waiting for and undergoing exit searches pursuant
to Apple’s “Employee Package and Bag Searches” policy is
compensable as “hours worked” under California law, and
(2) determine the remedy to be afforded to individual class
members.

                       COUNSEL

Kimberly A. Kralowec (argued) and Kathleen S. Rogers,
The Kralowec Law Group, San Francisco, California; Lee S.
Shalov and Brett R. Gallaway, McLaughlin & Stern LLP,
New York, New York; for Plaintiffs-Appellants.

Julie A. Dunne (argued), Littler Mendelson P.C., San Diego,
California; Richard H. Rahm, Littler Mendelson P.C., San
Francisco, California; Theodore J. Boutrous Jr., Joshua S.
Lipshutz, Bradley J. Hamburger, and Lauren M. Blas,
Gibson Dunn & Crutcher LLP, Los Angeles, California; for
Defendant-Appellee.

Michael D. Singer and Janine R. Menhennet, Cohelan
Khoury & Singer, San Diego, California, for Amicus Curiae
California Employment Lawyers Association.

                        OPINION

MARSHALL, District Judge:

   Plaintiffs Amanda Frlekin, Taylor Kalin, Aaron
Gregoroff, Seth Dowling, and Debra Speicher brought this
wage-and-hour class action on behalf of current and former
non-exempt employees who have worked in Defendant
4                    FRLEKIN V. APPLE

Apple, Inc.’s retail stores in California since July 25, 2009.
Plaintiffs seek compensation for time spent waiting for and
undergoing exit searches pursuant to Apple’s “Employee
Package and Bag Searches” policy (the “Policy”), which
states:

       Employee Package and Bag Searches

       All personal packages and bags must be
       checked by a manager or security before
       leaving the store.

       General Overview

       All employees, including managers and
       Market Support employees, are subject to
       personal package and bag searches. Personal
       technology must be verified against your
       Personal Technology Card (see section in this
       document) during all bag searches.

       Failure to comply with this policy may lead
       to disciplinary action, up to and including
       termination.

       Do

            •   Find a manager or member of the
                security team (where applicable) to
                search your bags and packages before
                leaving the store.
                     FRLEKIN V. APPLE                      5

       Do Not

           •   Do not leave the store prior to having
               your personal package or back [sic]
               searched by a member of
               management or the security team
               (where applicable).

           •   Do not have personal packages
               shipped to the store. In the event that
               a personal package is in the store, for
               any reason, a member of management
               or security (where applicable) must
               search that package prior to it leaving
               the store premises.

   Apple also provides guidelines to Apple store managers
and security team members conducting the searches
pursuant to the Policy, which state:

       All Apple employees, including Campus
       employees, are subject to personal pack age
       [sic] checks upon exiting the store for any
       reason (break, lunch, end of shift). I t [sic] is
       the employee’s responsibility to ensure all
       personal packages are checked b y [sic] the
       manager-on-duty prior to exiting the store.

       When checking employee packages, follow
       these guidelines:

           •   Ask the employee to open every bag,
               brief case, back pack, purse, etc.

           •   Ask the employee to remove any type
               of item that Apple may sell. Be sure
6             FRLEKIN V. APPLE

        to verify the serial number of the
        employee’s personal technology
        against the personal technology log.

    •   Visually inspect the inside of the bag
        and view its contents. Be sure to ask
        the employee to unzip zippers and
        compartments so you can inspect the
        entire co ntents [sic] of the bag. If
        there are bags within a bag, such as a
        cosmetics case, be sure to ask the
        employee to open these bags as well.

    •   At no time should you remove any
        items inside the bag or touch the
        employee’s personal belongings. If
        something looks questionable, ask the
        employee to move or remove items
        from the bag so that the bag check can
        be completed.

    •   In the event that a questionable item
        is found, ask the employee to remove
        t he [sic] item from the bag. Apple
        will reserve the right to hold onto the
        questioned i tem [sic] until it can be
        verified as employee owned. (This
        will make the employee mor e [sic]
        aware to log in all items at start of
        shift).

    •   If item cannot be verified by [the
        manager on duty], contact Loss
        Prevention . . . .
                      FRLEKIN V. APPLE                        7

    Employees estimate that the time spent waiting for and
undergoing an exit search pursuant to the Policy typically
ranges from five to twenty minutes, depending on the
manager or security guard’s availability. Some employees
reported waiting up to forty-five minutes to undergo an exit
search. Employees receive no compensation for the time
spent waiting for and undergoing exit searches, because they
must clock out before undergoing a search pursuant to the
Policy.

    On July 16, 2015, the district court certified a class
defined as “all Apple California non-exempt employees who
were subject to the bag-search policy from July 25, 2009, to
the present.” Because of concerns that individual issues
regarding the different reasons why employees brought bags
to work, “ranging from personal convenience to necessity,”
would predominate in a class-wide adjudication, the district
court (with Plaintiffs’ consent) made clear in its certification
order that “bag searches” would “be adjudicated as
compensable or not based on the most common scenario,
that is, an employee who voluntarily brought a bag to work
purely for personal convenience.” Therefore, the certified
class did not include employees who were required to bring
a bag or iPhone to work because of special needs (such as
medication or a disability accommodation).

    The parties filed cross-motions for summary judgment
on the issue of liability. On November 7, 2015, the district
court granted Apple’s motion and denied Plaintiffs’ motion.
The district court ruled that time spent by class members
waiting for and undergoing exit searches pursuant to the
Policy is not compensable as “hours worked” under
California law because such time was neither “subject to the
control” of the employer nor time during which class
8                   FRLEKIN V. APPLE

members were “suffered or permitted to work.” Plaintiffs
timely appealed.

    We certified to the California Supreme Court the
following question of state law:

       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?

Frlekin v. Apple, Inc., 870 F.3d 867, 869 (9th Cir. 2017).
The California Supreme Court granted our request to decide
the following question of California law, as reformulated by
the California Supreme Court (see Cal. Rules of Court, rule
8.548(f)(5)):

       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?

Frlekin v. Apple Inc., 457 P.3d 526, 529 (Cal. 2020). The
California Supreme Court concluded the answer to the
question certified, as reformulated, is yes. Id.

    Following the California Supreme Court’s decision, the
parties filed supplemental briefs addressing whether there
                          FRLEKIN V. APPLE                               9

are factual disputes that would preclude summary judgment
for Plaintiffs on remand. 1

                                    I.

    We have jurisdiction pursuant to 28 U.S.C. § 1291.

                                   II.

    We review a district court’s order granting summary
judgment de novo. Mayes v. WinCo Holdings, Inc., 846 F.3d
1274, 1277 (9th Cir. 2017). “A grant of summary judgment
is appropriate when there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Id. (internal quotation marks omitted). The
evidence is viewed “in the light most favorable to the non-
moving party.” Albino v. Baca, 747 F.3d 1162, 1168 (9th
Cir. 2014) (en banc).

                                   III.

   California Industrial Welfare Commission Wage Order
No. 7 provides: “Every employer shall pay to each employee

    1
       Plaintiffs request that we take judicial notice of the following
records of the California Supreme Court: (1) Answer Brief on the Merits
filed March 19, 2018 (relevant excerpt); (2) Defendant and Respondent
Apple Inc.’s Petition for Rehearing filed Feb. 28, 2020 (relevant
excerpt); (3) Answer to Petition for Rehearing filed March 9, 2020
(relevant excerpt); (4) Order Denying Rehearing filed May 13, 2020; and
(5) Letter from the Supreme Court of California filed May 14, 2020.
Plaintiffs’ Motion for Judicial Notice is granted because these documents
are court filings in the California Supreme Court proceeding regarding
the question we certified. See Fed. R. Evid. 201(d); Reyn’s Pasta Bella,
LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (observing
that the court “may take judicial notice of court filings and other matters
of public record”).
10                      FRLEKIN V. APPLE

. . . not less than the applicable minimum wage for all hours
worked in the payroll period . . . .” Cal. Code Regs. tit. 8,
§ 11070(4)(B). The Wage Order further 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.” Id. § 11070(2)(G). The California
Supreme Court has explained that the two parts of the
definition—“time during which an employee is subject to the
control of an employer” and “time the employee is suffered
or permitted to work, whether or not required to do so”—
establish “independent factors, each of which defines
whether certain time spent is compensable as ‘hours
worked.’” Morillion v. Royal Packing Co., 995 P.2d 139,
143 (Cal. 2000).

      In answering the question certified, as reformulated, the
California Supreme Court held that Apple’s employees “are
subject to Apple’s control while awaiting, and during,
Apple’s exit searches,” and therefore Apple “must
compensate those employees . . . for the time spent waiting
for and undergoing” the exit searches pursuant to the Policy.
Frlekin, 457 P.3d at 538. The California Supreme Court
reasoned: “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.’”
Id. 2

     2
      The California Supreme Court declined to consider whether the
time spent waiting for and undergoing exit searches pursuant to the
Policy is compensable under the “suffered or permitted to work” clause.
Frlekin, 457 P.3d at 538.
                     FRLEKIN V. APPLE                       11

    The district court had held to the contrary in granting
summary judgment to Apple. Accordingly, the court erred
in granting summary judgment to Apple.

    Plaintiffs’ motion for summary judgment had similarly
sought a ruling solely on what the district court characterized
as the “main issue of compensability”: whether “time spent
pursuant to Apple’s bag-search policy is compensable
without regard to any special reason any employee brought
a bag to work.” The California Supreme Court’s holding is
equally dispositive of that motion and, therefore, Plaintiffs
are entitled to summary judgment on the main issue of
compensability.

    In its supplemental briefing, Apple contends that
disputed, material facts preclude summary judgment in favor
of Plaintiffs because some class members “did not bring
bags or devices to work,” “were never required to participate
in checks,” or “worked in stores with remote break rooms
where they stored their belongings,” and because it is
disputed whether the Policy was enforced through
discipline. Those purported disputed facts pertain solely to
individual remedies, not to the main legal question as to
class-wide relief. As Apple itself recognized in opposing
summary judgment, those purported disputed facts are
irrelevant to whether time spent by class members waiting
for and undergoing exit searches pursuant to the Policy is
compensable as “hours worked” under California law. On
remand, the district court shall resolve any relevant factual
disputes as part of its ordinary determination of individual
remedies, such as by requiring sworn claim forms.

    Apple also argues that there are disputed facts regarding
whether time spent by class members undergoing a search is
de minimis. Apple failed to raise this argument before the
district court in opposing Plaintiffs’ motion for summary
12                   FRLEKIN V. APPLE

judgment; the argument is therefore forfeited. Davidson v.
O’Reilly Auto Enters., LLC, — F.3d —, 2020 WL 4433118,
at *7 (9th Cir. Aug. 3, 2020).

    Because no material facts are in dispute as to whether
time spent by class members waiting for and undergoing exit
searches pursuant to the Policy is compensable as “hours
worked” under California law, Plaintiffs are entitled to
summary judgment on that legal question.

                            IV.

    We reverse the district court’s grant of Apple’s motion
for summary judgment and denial of Plaintiffs’ motion for
summary judgment, and we remand for further proceedings
with instructions to (1) grant Plaintiffs’ motion for summary
judgment on the issue of whether time spent by class
members waiting for and undergoing exit searches pursuant
to the Policy is compensable as “hours worked” under
California law, and (2) determine the remedy to be afforded
to individual class members.

     REVERSED and REMANDED with instructions.