Chavez v. Converse, Inc.

Background

Eric Chavez brought a California Labor Code employment class action alleging that Converse failed to pay employees for time spent undergoing exit searches. The court had certified a class of current and former non-exempt Converse retail-store employees who worked in California from July 10, 2011, to the present.

Converse operated 20 stores in California. Its policy required employees leaving a store—including during breaks, lunches, or while visiting on a scheduled day off—to have a member of management inspect their belongings. Employees generally showed that jacket or sweatshirt pockets were empty, and employees carrying bags had to open them for inspection. The policy warned that an employee who refused to cooperate, interfered with, or hindered a search could be suspended pending an investigation that might include termination. As of November 19, 2019, Converse no longer required employees to undergo exit searches.

The court had previously granted summary judgment for Converse based on the federal rule concerning very small amounts of time. After the California Supreme Court held in Troester v. Starbucks Corp. that this federal rule did not apply to California wage claims, the Ninth Circuit reversed and sent the case back for further proceedings. Chavez then moved for partial summary judgment on the issue of whether Converse controlled employees during exit searches. The court noted that Converse had filed its own motion, but this order did not resolve that motion.

Legal standard

Under Federal Rule of Civil Procedure 56, summary judgment must be granted when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. A genuine dispute exists when a reasonable jury could find for the opposing party. The court does not make credibility determinations or weigh conflicting evidence at this stage.

California law requires employers to pay at least the minimum wage for all hours worked, including time during which the employer exercises control over an employee. The court relied on a case-specific approach asking whether the employee could use break or non-work time however the employee wanted. Employer control does not necessarily depend only on whether the employer required a particular activity.

Court’s analysis

The court held that Converse exercised control over employees under the written exit-search policy. Employees were required to arrange for a manager to inspect their belongings, and refusing to comply could result in serious discipline, including possible termination. Employees also were not free to engage in whatever activities they wished during the search. For example, the policy required coats and jackets to be carried to the exit rather than worn during the inspection.

Converse argued that the policy did not require employees to spend any particular amount of time undergoing a search. The court rejected that argument because the policy could allow searches lasting several minutes, and employees were not free to do as they wished for the duration of a search. The court explained that the possibility of a zero-second search did not eliminate Converse’s control.

The court recognized a factual dispute about whether searches took any time and whether employees without bags had to undergo a check. It held that this dispute concerned damages: if an employee spent no time being searched, there would be no time to compensate, while time spent being searched or waiting for management might be compensable.

The court also rejected Converse’s argument concerning walking time because Chavez had disclaimed walking time as part of the exit-search claim. Finally, the court noted evidence from Converse’s own expert that employees spent an average of 9.2 seconds waiting for or engaging in exit inspections, with 5.4 seconds attributable to bag checks, and concluded that the possibility of avoiding some search time by not bringing a bag, coat, or jacket did not defeat Chavez’s motion.

Disposition

The court granted Chavez’s motion for partial summary judgment. As to claims one, three, four, five, six, and seven, it found as a matter of law that Converse exercised control over employees when it subjected them to exit searches. The order did not resolve Converse’s separate motion.