A California federal judge indicated Wednesday that he is likely to certify a class in a lawsuit accusing Apple of underpaying workers by failing to include stock compensation in overtime pay calculations. The case, brought by a former Apple tech support employee under federal and state labor laws, could represent thousands of Apple employees in California and New York.

Judge Leans Toward Class Certification

During a Zoom hearing, U.S. District Judge William H. Orrick expressed his inclination to grant class certification, citing the plaintiffs’ evidence as sufficiently cohesive to proceed as a group.

The plaintiffs’ expert presented a formula for calculating damages across the proposed class, which Judge Orrick described as “straightforward” and “commonly applied.”

“I’m inclined to grant class certification,” Judge Orrick stated, though he stopped short of issuing a formal ruling.

Allegations Against Apple

The lawsuit, initiated in March 2023 by Francis Costa, alleges Apple violated the Fair Labor Standards Act (FLSA) by excluding the value of restricted stock units (RSUs) from overtime calculations. Costa, who worked in tech support, expanded the complaint to include state law claims for employees in California and New York.

In November 2023, the court preliminarily certified the FLSA collective action, enabling notices to be sent to potential participants who must opt-in to join under federal law.

The plaintiffs argue that Apple’s policy resulted in widespread underpayment for overtime work, violating wage laws and creating liability for damages.

Apple Pushes Back

Apple, represented by Theane Evangelis of Gibson Dunn & Crutcher LLP, has opposed the motion for class certification and filed a motion to decertify the FLSA collective action.

Evangelis argued that employees’ circumstances varied too widely to support class certification, pointing to differences in RSU awards, exempt and non-exempt roles, and arbitration agreements.

“Instead, the court will need to conduct hundreds, if not thousands, of mini-trials on dispositive questions,” Evangelis said. She also criticized the plaintiffs’ expert report as lacking coherence.

“Their expert's model is the model of arbitrariness,” Evangelis added, challenging the feasibility of prorating RSUs for employees who alternated between exempt and non-exempt roles.

Plaintiffs Counter Apple's Criticism

Michele Fisher of Nichols Kaster PLLP, representing the plaintiffs, defended the expert report and described Apple’s arguments as “nitpicking.” Fisher emphasized that the affected group is cohesive and manageable, with only a small subset—about 1%—involved in roles requiring prorating.

“We have a workable method, and these claims can be managed effectively,” Fisher told the court.

Next Steps

Judge Orrick said he would issue a written decision soon, acknowledging the significant work ahead if his tentative ruling holds.

“I’ll try and get an order out as soon as I can because if I stick with my tentative, you have a lot of work to do,” the judge said.

The case highlights the complexities of wage and hour claims involving stock-based compensation, a growing area of litigation in tech companies with equity-heavy pay structures.

Legal Representation

The plaintiffs are represented by Daniel S. Brome, Michele R. Fisher, and Alexandra M. Robinson of Nichols Kaster PLLP, along with Loren B. Donnell and Michael J. Palitz of Shavitz Law Group PA. Apple is represented by Theane Evangelis and a team from Gibson Dunn & Crutcher LLP.