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Rodriguez v. Nike Retail Services, Inc.

United States Court of Appeals, Ninth Circuit

June 28, 2019

Isaac Rodriguez, as an individual and on behalf of all others similarly situated, Plaintiff - Appellant,
v.
Nike Retail Services, Inc., Defendant-Appellee.

          Argued and Submitted June 14, 2019 San Francisco, California

          Appeal from the United States District Court No. 5:14-cv-01508-BLF for the Northern District of California Beth Labson Freeman, District Judge, Presiding

          Max W. Gavron (argued), Nicholas Rosenthal, and Larry W. Lee, Diversity Law Group APC, Los Angeles, California; William L. Marder, Polaris Law Group LLP, Hollister, California; Dennis S. Hyun, Hyun Legal APC, Los Angeles, California; for Plaintiff-Appellant.

          Jon D. Meer (argued) and Michael Afar, Seyfarth Shaw LLP, Los Angeles, California, for Defendant-Appellee.

          Before: MARY M. SCHROEDER and MILAN D. SMITH, JR., Circuit Judges, and JED S. RAKOFF, [*] District Judge.

         SUMMARY [**]

         Federal De Minimis Doctrine

         The panel reversed the district court's summary judgment in favor of Nike Retail Services, Inc., and held that after Troester v. Starbucks Corp., 421 P.3d 1114 (Cal. 2018), the federal de minimis doctrine - which precludes recovery for otherwise compensable amounts of time that are small, irregular, or administratively difficult to record - does not apply to wage and hour claims brought under the California Labor Code.

         The panel held that the district court's grant of summary judgment cannot be affirmed on the record below. The panel remanded for further proceedings consistent with Troester.

          OPINION

          RAKOFF, DISTRICT JUDGE

         Defendant Nike Retail Services, Inc. ("Nike") requires its retail employees to undergo "off the clock" exit inspections every time they leave the store. Seeking compensation for the time spent on these exit inspections, plaintiff Isaac Rodriguez brought a class action on behalf of himself and similarly situated Nike employees. The District Court granted summary judgment for Nike, holding the Rodriguez's claims were barred by the federal de minimis doctrine, which precludes recovery for otherwise compensable amounts of time that are small, irregular, or administratively difficult to record. The California Supreme Court subsequently held in Troester v. Starbucks Corp., 421 P.3d 1114 (Cal. 2018), that the federal de minimis doctrine does not apply to wage and hour claims brought under California law. Accordingly, we reverse and remand to the District Court for further proceedings consistent with Troester.

         FACTUAL AND PROCEDURAL HISTORY

         A. The District Court's Order Granting Summary Judgment for Nike

         Nike has 34 retail stores in California. At these stores, employees (other than those exempt from applicable wage and hour laws) are required to track their hours by "punching" in and out on a time clock. Separately, these employees are required to submit to exit inspections each time they leave the store on a break or at the end of the day. These inspections can be longer or shorter depending, for example, on whether an employee needs to wait at the exit for someone to check them, whether the employee is carrying a box or bag that must be inspected, or the like. Regardless of how long the inspections take, however, they occur after the employee has punched out, such that exit inspections are "off the clock" and are thus uncompensated.

         Plaintiff Isaac Rodriguez worked at Nike's Gilroy, California retail store from November 2011 to January 2012. On February 25, 2014, Rodriguez filed a class-action complaint in Santa Clara County Superior Court, and on April 1, 2014, Nike removed the case to the District Court. On December 8, 2014, Rodriguez filed his First Amended Class Action Complaint, which brings claims under: (1) California Labor Code §§ 1194 and 1197 (failure to pay minimum wages); (2) California Labor Code §§ 510 and 1194 (failure to pay overtime wages); and (3) California Business and Professions Code § 17200 et seq. (unfair business practices). On August 19, 2016, the District ...


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