`
`FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`
`
`No. 15-17382
`
`D.C. Nos.
`3:13-cv-03451-WHA
`3:13-cv-03775-WHA
`3:13-cv-04727-WHA
`
`
`OPINION
`
`AMANDA FRLEKIN; TAYLOR
`KALIN; AARON GREGOROFF;
`SETH DOWLING; DEBRA
`SPEICHER, on behalf of
`themselves and all others
`similarly situated,
`Plaintiffs-Appellants,
`
`
`
`v.
`
`
`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`Submission Withdrawn August 16, 2017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
`
`
`
`
`Case: 15-17382, 09/02/2020, ID: 11810295, DktEntry: 88-1, Page 2 of 12
`
`FRLEKIN V. APPLE
`
`2
`
`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.
`
`
`
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`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
`
`
`
`Case: 15-17382, 09/02/2020, ID: 11810295, DktEntry: 88-1, Page 4 of 12
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`FRLEKIN V. APPLE
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`4
`
`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.
`
`
`
`Case: 15-17382, 09/02/2020, ID: 11810295, DktEntry: 88-1, Page 5 of 12
`
`
`
`
`Do Not
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`FRLEKIN V. APPLE
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`5
`
`• 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
`
`
`
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`6
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`
`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 . . . .
`
`
`
`Case: 15-17382, 09/02/2020, ID: 11810295, DktEntry: 88-1, Page 7 of 12
`
`
`
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`FRLEKIN V. APPLE
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`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
`
`
`
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`FRLEKIN V. APPLE
`
`8
`
`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
`
`
`
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`FRLEKIN V. APPLE
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`
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`are factual disputes that would preclude summary judgment
`for Plaintiffs on remand.1
`
`9
`
`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”).
`
`
`
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`FRLEKIN V. APPLE
`
`10
`
` .
`
` . . 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.
`
`
`
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`
`
`
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`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
`
`
`
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`FRLEKIN V. APPLE
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`12
`
`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.
`
`