Long lines and waiting for security inspections are the new normal not only at airports and stadiums, but also at office buildings and theatres—just to name a few places. According to the plaintiff in Rodriquez v. Nike Retail Services, Inc., N.D. Cal. Case No. 5:14-cv-01508, he and other Nike retail employees also had to wait for security inspections when they left for breaks or after their shifts at Nike’s retail stores. The plaintiff claims that he and other employees were required to wait for such inspections after clocking out, and he and a class of Nike retail employees should have been, but were not, paid for the time spent waiting.
On August 19, 2016, the Northern District of California granted the plaintiff’s motion for class certification and certified a class of all current and former non-exempt Nike retail store employees from February 25, 2010, to the present. Opposing class certification, Nike made three overarching arguments:
- It had a waiting time policy, and exit inspections were not off the clock;
- Based on the recent ruling granting summary judgment in Frlekin v. Apple Inc., N.D. Cal. Case No. C 13-03451 WHA, 2015 WL 6851424 (N.D. Cal. Nov. 7, 2015), in favor of Apple on similar claims, employees were not working when they were waiting for exit inspections; and
- The exit inspections took de minimis time.
The Court rejected each of Nike’s arguments:
First, the Court concluded that “it is far from clear that Nike always pays employees for time spent waiting,” and “there is no explicit policy, written or unwritten, that states that waiting time is compensable.” Aug. 19, 2016 Order at 2, 4, 7.
Second, the Court concluded that the recent order in Frlekin v. Apple Inc. was inapplicable to the plaintiff’s motion for class certification because:
- It was a ruling on summary judgment; and
- Nike’s exit-inspection policy differs from Apple’s, as it requires that all employees—not just those with bags—undergo an exit inspection. Because all employees were required to be inspected before leaving the store, employees were working during the time spent waiting. See Aug. 19, 2016 Order at 10-12.
Third, the fact that exit inspections took de minimis time did not preclude class certification, but instead raises serious questions about damages, which will be litigated on a class-wide basis.
Like Nike, many retailers and other employers inspect employees and their bags or other items before they leave work for a break or at the end of their shifts. In a similar case against Converse, Inc., Chavez v. Converse, Inc. et al., N.D. Cal. Case No. 5:15-cv-03746, the plaintiff recently argued that a class of Converse retail employees should be certified for the same reasons that the class was certified against Nike, and the court’s decision on class certification is pending. A similar case was also filed against Macy’s in the Northern District of California, but the court concluded that the plaintiff had agreed to arbitration with a class arbitration waiver, so the court granted Macy’s motion to compel arbitration of the plaintiff’s claims. See Narez v. Macy’s West Stores, Inc., Case No. 5:16-cv-00936. It appears that Nike and Converse did not have similar arbitration agreements in place.
Claims for waiting time pay for exit inspections appear to be a new trend in California. Since exit inspections are widespread within the retail industry and across other industries, the decision granting summary judgment in the Apple case, the decision to compel arbitration in the Macy’s case, the decision to certify the class action against Nike, and the pending decision in the Converse case may have broad implications for employers.
If you have any questions regarding the above article, please contact Anthony V. Lupo, Michael L. Stevens, or Jeffrey R. Makin.