Law & Apple: Disgruntled employees and unfair patent pPricing
By Adrian Hoppel From Maclife
A basic rule of employment is that you pay your employees for the time your require them to be at work. Generally, courts don’t look too kindly on companies that force you to stay at work and refuse to pay you for it. Especially if you’re keeping them there, off the clock, just to make sure they’re not stealing from you, which is apparently exactly what Apple’s retail store policy does. Now a couple of former Apple employees are taking on the vaunted Cupertino legal team to make it right. A class-action suit representing over 42,000 employees could get pretty, pretty, pretty expensive. And if that’s not enough for Apple to worry about, the company is back in the ring with Google, bickering about negotiating tactics. All in another week of Law & Apple!
Former Apple vs. Apple
GigaOM is reporting that two former Apple retail employees have launched a class-action suit against Apple. The basis of the claim is that Apple allegedly requires workers to wait around, without pay, for up to a half-hour a day, until supervisors can search their bags for stolen goods.
Amanda Frlekin, a former Specialist who worked at Apple’s Century City store in L.A. for about three years; and Dean Pelle, a former Specialist at Apple stores in Atlanta, New York and West Palm Beach, Florida for about six years; filed the suit, claiming that Apple’s “personal package and bag search” policy costs thousands of employees around $1,500 a year.
According to the suit, Apple retail staff “are required to wait in line and be searched for … merchandise taken without permission and/or other contraband.” Apparently, there is a logjam of security checks as most employees “leave for lunch at the same time and/or end their shift at the same time. This creates lengthy lines and backups.”
The lawsuit, which can be read here, claims that Cupertino is violating the Fair Labor Standards Act and state laws in New York and California.
Apple has about 42,000 workers in their retail stores, which according to the New York Times take in more money per square foot than any other U.S. retailer.
You can’t really fault Apple for wanting to keep a tight rein on its products, especially after all the reports of employees destroying goods in the back room. However, it’s a little crazy to hold employees without pay for any period of time, and to have a company policy that punishes any employees who will not wait around off the clock with “disciplinary action, up to and including termination” is really pretty nasty. Surely, as profitable as each store is, Apple can afford to pay its employees for an extra 15 minutes if it wants to check their pockets.
Apple vs. Motorola
Last Friday, Florian Mueller of FOSS Patents gave a splendid review of Apple’s ongoing litigation with Motorola, with a particular focus on the “Posner case” and the “Wisconsin case.” The litigation is complicated but compelling, as it represents some of the only direct legal action between Apple and Google (which bought Motorola specifically to be able to litigate against Apple).
While Google has not won a single case with the Motorola patents, despite spending $12.5 billion on them, it has attempted to leverage them against Apple. And by “leverage,” we mean (according to Apple) charge Cupertino 12 times the rate Google charges other companies to use the same patents.
Apple’s claim of the exorbitant rate is detailed in its opening brief here. Google’s patents are Standard Essential Patents (SEP) that are, by mutual agreement, to be offered to other companies at “fair, reasonable, and non-discriminatory terms” (FRAND). Apple offered Motorola a flat, $1-per-phone rate to avoid legal action. According to Mueller, “Apple was willing to pay even without Motorola having proven Apple’s actual use of a single valid Motorola SEP, just to put this issue behind it. Apple didn’t rule out paying more.”
Instead of accepting that offer, or making any other sort of reasonable offer, Motorola demanded “that Apple take a license at a rate that was more than 12 times what Motorola was charging other licensees for the same technology,” according to Apple’s brief.
The basis of the argument is Apple’s contention that the owner of SEP must make a real FRAND offer, even if Apple chooses not to accept the offer. Motorola believes this would allow Apple to force it to make a low offer, but then Apple would be able to negotiate even lower, as Cupertino would not be required to accept the mandatory offer. Sort of a court-ordered lowball offer that Apple could whittle down. Apple is not denying or commenting on this claim, but is holding the stance that “whatever may happen after an offer, the offer must be made.”
The case could dictate how SEP and FRAND are handled in the U.S. moving forward, which is important. Already out of the gate, however, you get the sense that while Apple’s plan for forced FRAND pricing might not be fair, its original offer to avoid all of this was more than fair, and none of this ever had to end up in court in the first place.
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