Nike Agrees to Pay Retail Staff $8.25M to Settle Bag Check Claims

A class action lawsuit alleging Nike made its retail staff undergo rigorous bag and security checks every time they left the store has ended in an $8.25 million proposed settlement.

In a motion for preliminary approval of the class action settlement filed Friday in a California federal court, Plaintiff Isaac Rodriguez restated his claims that Nike Retail Services required its retail staff to do bag and security checks before exiting the store at any time.

“Although said security checks and visual inspections were required after clocking out and before leaving the store, Defendant did not pay Plaintiff and other non-exempt employees any applicable minimum and overtime wages in connection with the time spent waiting for security checks and visual inspections, and the time spent undergoing said inspections,” the proposed settlement states. 

Nike denies it broke the law and says its security checks were completely legal. 

However, the settlement would end a wage dispute that was first filed in California state court in 2014. Rodriguez worked at a Nike store in Gilroy, California, until about Jan. 2012.

It would see Nike establish a $5.2 million fund to be split among a Class of about 16,658 hourly retail employees who worked at Nike anytime between Feb. 2010 and Nov. 2019, the class action settlement states. Based on this number each employee would get about $320.  

In 2019, Nike changed its internal policies, making the bag check an on-the-clock activity as the retail staff requested. The proposed settlement also includes $3 million in fees and expenses for the attorneys for the Class.

The class action was brought under California labor laws. It gained Class certification in 2016, but was struck down in 2017 under the de minimis doctrine, after Nike argued its average inspection only takes seconds and thus is not compensable under the law. 

However the workers appealed and Ninth Circuit judges reversed the 2017 judgement. 

“Defendant changed its security check policy to have security inspections performed on the clock effective November 15, 2019, and the Parties agreed to cut off class membership as of that date.”

The settlement is opt-out, and if anyone chooses to opt out, their allocated funds will be split among the other Class members. 

Meanwhile, in January, Nike agreed to provide its workers with clear face masks to accommodate deaf and hard of hearing customers who need to read employees’ lips, as part of another class action settlement brought by workers.

What do you think of this latest settlement agreement between Nike and its employees? Let us know in the comments! 

The Class is represented by Larry W. Lee, Nicholas Rosenthal, Kristen Agnew, and Max Gavron of Diversity Law Group; Dennis Hyun of Hyun Law Group APC; and William Marder of Polaris Law Group LLP . 

The Nike Bag Check Class Action Lawsuit case is Isaac Rodriguez v. Nike Retail Services Inc. et al., Case No. 5:14-cv-01508, in the U.S. District Court for the Northern District of California.

Read About More Class Action Lawsuits & Class Action Settlements:

• Consumers Asked to Return $1K Nike ‘Satan Shoes’ in Recall
• Unpaid Overtime Law: Off the Clock, Employee Misclassification Class Action Lawsuit
• Nike Workers Get Clear Face Masks in Class Action Settlement Deal
• Employee Background Check Class Action Lawsuit Investigation