Apple to Settle Unpaid Bag Check Class Action Suit for $30 Million

Author: Robert S. Teachout, Brightmine Legal Editor

November 30, 2021

Apple has agreed to pay $30 million to settle claims that the company unlawfully failed to pay employees for time spent undergoing bag checks whenever they exited the store. If approved by the court, the settlement will resolve a long-running class action lawsuit that started in 2013 and covered over 14,000 current and former Apple Store employees.

Employees claimed that Apple was required to pay them for time spent complying with the company's "Employee Package and Bag Searches" policy. Under the policy, employees were required to clock out before leaving the store for any reason, including breaks, meals or ending their shift. Before leaving the store, an employee had to find a manager or store security officer to conduct a search of the employee's personal bag to ensure no unpurchased merchandise was being removed. The exit bag search would typically take from five to 20 minutes, depending on the availability of a manager or security guard, but could sometimes take up to 45 minutes.

A district court granted summary judgement to Apple, ruling that the time spent by class members waiting for and undergoing exit searches was not compensable as "hours worked" under California law because such time was neither "subject to the control" of the employer nor time during which employees were "suffered or permitted to work."

On appeal, the 9th Circuit Court of Appeals in September 2020 reversed the lower court's decision, noting that the California Supreme Court had concluded that time spent by employees on the employer's premises waiting for, and undergoing, required exit searches of packages, bags or personal technology devices was compensable as "hours worked" within the meaning of California's Wage Order 7. The Court sent the case back to the district court for further proceedings.

Under the agreement, Apple will pay $29.9 million to employees who worked in its California Apple stores, with payouts based on the number of shifts and years they worked for Apple during the period covered by the lawsuit between 2009 and 2015. Lawyers for the employees expect the average payout per class member will be $1,286.

Apple discontinued its exit bag search policy in December 2015.