Walgreens to settle California bag check suit for $4.5M

Dive Brief:

A California judge has signed off on a $4.5 million settlement in a 2018 lawsuit alleging that Walgreen's failed to pay non-exempt workers at a distribution center for time spent in pre- and post-shift security checks, rounded down time on employees' timecards and failed to pay premium wages to employees who were denied rest breaks required by California law (Lucas Meija, et al. v. Walgreen Co, et al., No.19-cv-00218 (E.D. Calif. Nov. 24, 2020)).
About 2,600 workers will split the net settlement amount of $2.8 million. Each individual participant will receive an estimated $1,200.
Walgreen's did not respond to a request for a comment by press time.

Dive Insight:

Several employers have been taken to court over their bag check policies in California, where wage and hour requirements are more stringent than federal law. In September 2020, for example, a three-judge panel of the 9th U.S. Circuit Court of Appeals ruled that Apple retail employees must be paid for time spent in bag searches. Dick's Sporting Goods paid out nearly $3 million to a class of almost 11,000 current and former employees in California who said they were required to undergo off-the-clock security checks. In other instances, lawsuits by workers for Nike and Converse were allowed to move forward.

Time spent on pre- and post-shift activities "may or may not" be considered hours worked under the federal Fair Labor Standards Act, according to the U.S. Department of Labor, depending on the circumstances.

The U.S. Supreme Court has also grappled with the issue of what is and is not compensable. A 2014 ruling from the nation's top court concluded that only tasks that are an "indispensable" and "integral" part of an employee's duties — the ones classified as "principal activities" — are compensable time.

Some employers have been successful in arguing that time spent in mandatory bag checks is so small as to be negligible for pay purposes. Converse was granted summary judgment by a California court in a class-action mandatory bag-check lawsuit. The employer argued that the off-the-clock time required for the inspections was de minimis and, as a result, not compensable. While the plaintiffs claimed they waited more than two minutes in some cases, Converse was able to show that the bag inspections lasted less than 10 seconds on average.