Nike settles unpaid bag check claims for $8.25M

Dive Brief:

Nike has agreed to pay $8.25 million to settle a class action lawsuit by workers alleging they should have been paid for time spent in security checks (Rodriquez, et al. v. Nike, No. 5:14-CV-1508 (N.D. Calif., April 23, 2021)).
The class includes 16,658 current and former non-exempt retail store employees who worked in California for the athletic shoe retailer from Feb. 25, 2010, to Nov. 15, 2019.
The employer changed its security check policy to have security inspections performed on the clock effective Nov. 15, 2019, according to the plaintiff's motion for approval of the settlement.

Dive Insight:

The proceedings in this case follow a familiar pattern. Converse prevailed in a 2017 case in California federal court, where it argued that its bag checks took less than 10 seconds. But the 9th U.S. Circuit Court of Appeals revived the claims in July 2019, when it also revived the Nike claims.

Nike attempted to argue that its security checks weren't payable time because they took only seconds, and it moved for summary judgment based on the de minimis doctrine, according to the plaintiffs' motion for approval of the settlement. Nike was, at first, successful as the court granted it's motion for summary judgment in 2017. However, about two years later, after briefing and oral argument, the 9th Circuit reversed the lower court's decision based on 2018 litigation against Starbucks which held that the federal de minimis doctrine does not apply to wage and hour claims brought under California law. Wage and hour requirements are more stringent under California law than those found under federal law.

Security checks are a common topic in wage and hour litigation, especially in California. In December 2020, a California judge approved a $4.5 million settlement in a 2018 lawsuit alleging that Walgreens failed to pay workers at a distribution center for time spent in pre- and post-shift security checks and also failed to pay premium wages to employees who were denied rest breaks required by California law. In September 2020, a three-judge panel of the 9th U.S. Circuit Court of Appeals ruled that Apple retail employees should be paid for time spent in bag searches. And Dick's Sporting Goods paid out nearly $3 million in a class action lawsuit to current and former California employees who said they were subject to off-the-clock security checks.