Did Apple Fail to Pay Overtime at the Correct Rate?

In a recent California overtime class action lawsuit, the plaintiff alleged that Apple's compensation practices violated labor law. Allegedly, Apple awards restricted stock units to their non-exempt employees. However, they allegedly do not incorporate the stock units into their regular pay rate for overtime pay calculations.

The Case: Costa et al. v. Apple Inc.

The Court: U.S. District Court for the Northern District of California

The Case No.: 5:23-cv-01353

What is a Class Action?

A class action is a legal proceeding. One or more plaintiffs may bring a class action lawsuit on behalf of a larger group, which is referred to as the “class.” Any proceeds resulting from a class-action lawsuit first pay legal fees, and are then shared amongst the qualifying class members.

The Plaintiff: Costa et al. v. Apple Inc.

The plaintiff in the case, Francis Costa, filed a class action against Apple claiming that their policy of awarding stock units to non-exempt employees without including the value in their regular pay rate to calculate overtime pay rates violates labor law. Costa filed the California overtime class action in California federal court. According to the plaintiff, Apple "intentionally, willfully, and regularly" violated the FLSA. Costa hopes to represent a nationwide class of any current or former non-exempt workers employed by Apple within the past three years who were awarded restricted stock units that vested during the same period.

 The Defendant: Costa et al. v. Apple Inc.

The defendant in the case, Apple Inc., allegedly includes the restricted stock units awarded to the employee on the payroll record. Still, the payroll records do not reflect the value of the vested restricted stock units included in the overtime pay rate calculations.

 What Are Overtime Pay Rate Calculations?

 To calculate an employee's regular rate of pay, you would need to add up all compensation earned during the workweek (excluding overtime premiums), and divide it by the total number of hours worked during the same workweek. This includes all forms of compensation such as hourly pay, salaries, commissions, bonuses, and some types of non-discretionary payments.

 The Case: Costa et al. v. Apple Inc.

 The case, Costa et al. v. Apple Inc., argues that Apple violated labor law when they allegedly failed to include the value of vested restricted stock unit compensation  as part of the regular rate of pay when they calculated the employee's overtime pay rate. The plaintiff demanded a jury trial and requested an award of declaratory relief and an award of unpaid overtime wages and liquidation and statutory damages. A California federal judge approved a $30 million class action settlement in August. The settlement resolved claims Apple allegedly violated labor law by requiring workers to comply with off-the-clock bag checks before and after their work shifts.

 If you have questions about how to file a California overtime class action lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago