Ser Lao v. H&M Hennes & Mauritz, L.P.

Background

This was a California wage-and-hour class action brought by Ser Lao against H&M Hennes & Mauritz, L.P. Lao alleged that H&M violated California law by requiring employees to undergo an off-the-clock security check before leaving its stores. The claims at issue in this order were the second and third causes of action, which sought minimum and overtime wages for time spent on those checks.

Lao also challenged H&M’s practice of paying final wages to separated employees with Money Network ATM cards without first obtaining their consent. The court expressly did not consider that issue in this order.

H&M’s written Internal Theft Prevention Policy required employees who entered a store carrying a bag, purse, briefcase, backpack, or similar item to have the item visually searched before leaving. The policy also stated that employees without such items did not need to wait for a manager before exiting, although they had to inform management that they were leaving and had to leave coats or jackets unzipped and unbuttoned.

H&M argued that the policy required checks only for employees carrying bags. Lao argued that the policy was applied to all employees and required a visual inspection, including opening coats or jackets. Witnesses gave conflicting testimony on this point. The court had previously certified a security-check class for claims involving waiting time and security checks at the end of shifts and when stores closed.

Motions and legal standard

Both parties moved for partial summary judgment on liability concerning the security-check policy. Summary judgment is available only when there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. At this stage, the court cannot weigh conflicting evidence or decide which witnesses are more credible.

California law treats time during which an employee is subject to the employer’s control, or is allowed or required to work, as compensable “hours worked.” Lao based his claims on California Labor Code provisions governing minimum and overtime wages.

H&M’s motion

H&M argued that it was entitled to judgment because employees could avoid the bag checks by choosing not to bring bags to work. H&M asked the court to follow an earlier Northern District of California decision involving Apple that addressed employees’ ability to avoid exit searches by not bringing bags.

The court did not decide whether to follow that earlier decision. Instead, it denied H&M’s motion because the evidence created a genuine dispute about whether H&M’s policy required visual inspections of all employees or only bag inspections for employees carrying bags. The court stated that it could not weigh the conflicting witness testimony on summary judgment.

Lao’s motion

Lao argued that H&M required every employee to undergo an off-the-clock visual inspection at the end of a shift or when a store closed. He contended that this requirement placed employees under H&M’s control and made the time compensable.

H&M responded that, under California Supreme Court and Ninth Circuit decisions discussed in the opinion, security-check time might not be compensable if it was extremely brief or irregular. The court agreed that irregular security checks might not require payment under those decisions.

The court denied Lao’s motion because the scope of the policy was disputed. If the policy applied only to employees carrying bags, the court could not decide as a matter of law that the checks were not too brief or irregular to be compensable. The court also noted evidence that bag checks could take only a few seconds and that not every employee brought a bag to work each time. Whether the checks were too brief or irregular to justify relief therefore could not be decided on summary judgment.

Disposition

The court denied H&M’s motion for partial summary judgment and denied Lao’s cross-motion for partial summary judgment. The order did not resolve the Money Network ATM-card issue.