Potential H&M Class Action Lawsuit Over Unpaid Security Bag Checks
San Jose, CA A former H&M employee, Ser Lao, has sued fashion retailer H&M in federal court for allegedly failing to provide employees with correctly itemized wage statements, and failing to pay employees minimum wage, overtime, and premium pay for missed meal and rest periods.
Lao’s California unpaid wages lawsuit also alleges that H&M violated California Labor Code by refusing to pay employees for the time they spent after clocking out while having their bags checked to make sure that they were not stealing merchandise.
The United States District Court for the Northern District of California, San Jose Division, has now been asked to certify the class to proceed as a class action. Meanwhile, the State Supreme Court is poised to issue an epic decision on the exact same issue in Troester v. Starbucks.
Back in 2014, the U.S. Supreme Court held that time spent awaiting bag checks was not compensable time under the Federal Fair Labor Standards Act (“FLSA”) in Integrity Staffing Solutions, Inc. v. Busk. Integrity Staffing involved employees who sued to obtain payment for time they spend in security checks after their work shifts, which totaled around 25 minutes per day. Thus, it is fairly common whenever employees claim their employers violated the FLSA by not paying them for short periods of time spent preparing or winding down from work off-the-clock to raise the de minimis defense, particularly in a donning and doffing lawsuit. This means that the time at issue was too negligible to really count for FLSA purposes. Generally, the de minimis doctrine has been applied to periods of time spent off the clock that are ten minutes long or less.
But the California Supreme Court is currently hearing a major case that will determine whether the de minimis defense can apply to claims brought under the California Labor Code. Although Lao’s claim is being heard in federal court, his claim that H&M failed to pay him for security checks specifically alleges a violation of state law—California Labor Code Sections 201-203. Lao’s attorneys have asserted that the California Supreme Court’s upcoming decision in Troester will not affect his claims in federal court.
According to one of Lao’s former lawyers, Larry W. Lee, in documents submitted to the Court, H&M employees should be paid for time spent in security checks because store policy requires all employees to go through a security check after their shift. If some activity is required by company policy, this might tend to prove that employers should pay employees for the time. H&M has responded to this argument by claiming that the policy does not apply to all employees, but only those who want to leave the stores with a bag in their hand. Employees who don’t leave with a bag only need to go through a very quick visual inspection. The Federal District Judge, Honorable Edward J. Davila, has implied that the visual inspection would likely fall within the parameters of the de minimis doctrine. The court has not yet ruled on whether the longer bag check would also fall under that doctrine. Regardless of how the court comes down on the merits of the issue, Lao’s lawyers have argued that the issue should not prevent certification of a class, and that the California unpaid wages lawsuit should be able to proceed as a class action.
When one Court is in the process of deciding a case that could affect the outcome of a case pending before another Court, it is common for litigants to request a “stay.” This means that the forum where the stay is requested holds off on deciding the case pending before it until the higher court has issued its decision. Part of the rationale behind ordering a stay is to conserve judicial resources. If the U.S. Supreme Court were poised to rule on an issue, it would not make sense for a lower court to expend resources simultaneously deciding a case that could ultimately be overturned by the U.S. Supreme Court’s decision. The issuance of a stay also serves the policy goal of judicial consistency. It may have made sense for Lao’s lawyers to request a stay of the case against H&M pending the California Supreme Court’s decision in Troester, yet they chose not to do so, claiming it would have no action on the present action—likely because Lao is arguing that the security checks are not de minimis, but a real and significant chunk of employees’ time.
LawyersandSettlements.com
