Late last year, in a controversial, split decision, the California Supreme Court ruled that employers cannot require employees to remain “on-call” during rest periods, and that state law prohibits both on-duty and on-call rest periods.
The relevant facts are as follows. The plaintiffs, including named plaintiff Jennifer Augustus, worked as security guards for defendant ABM Security Services, Inc. (ABM). One of the requirements of employment at ABM was for guards to keep their pagers and radio phones on and to remain vigilant and responsive to calls when needs arose. During discovery, ABM acknowledged it did not relieve guards of these duties during rest periods. It further included such duties as escorting tenants to parking lots, notifying building managers of mechanical problems, and responding to emergency situations.
Plaintiffs sued ABM, alleging the company failed to provide the rest periods that state law entitles employees to receive. Plaintiffs then moved for summary judgment, arguing that ABM had a policy of requiring its guards to remain on duty during breaks, and that such a policy violates state law. In its opposition, ABM argued that, if it required anything at all during guards’ rest periods, it was merely that guards remain “on call” and not “on duty.”
The trial court granted summary judgment for plaintiffs, essentially finding that an on-duty or on-call break is no break at all, and awarded plaintiffs $90 million in damages. The Court of Appeal reversed the trial court ruling.
ISSUES BEFORE THE SUPREME COURT
The California Supreme Court addressed two issues on appeal: (1)“…whether employers are required to permit their employees to take off-duty rest periods under Labor Code section 226.7 and Industrial Welfare Commission (IWC) wage order No. 4-2001 (Cal. Code Regs., tit. 8, § 11040 (Wage Order 4)), and (2) whether employers may require their employees to remain “on call” during rest periods.”
LABOR CODE 226.7/IWC WAGE ORDER 4
California Labor Code Section 226.7(a) provides, in relevant part, that, “No employer shall require any employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commission.” Wage Order 4, subdivision 12(A) provides, in relevant part, “Every employer shall authorize and permit all employees to take rest periods…. Authorized rest period time shall be counted, as hours worked for which there shall be no deduction from wages.” Wage Order 4 further provides, in relevant part,
“Wage Order 4, subdivision 12(A) also provides that employers must authorize 10 minutes, net rest time per four hours worked; a rest period should fall in the middle of each work period if practicable; and a rest period need not be authorized for employees whose total daily work time is less than three and one-half hours. Subdivision 12(B) provides that failure to comply with subdivision 12(A) obliges employers to pay the employee one hour of pay “for each workday that the rest period is not provided.”
“Wage Order 4, subdivision 11(A) provides in part, “No employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes…. Unless the employee is relieved of all duty …, the meal period shall be considered an ‘on duty’ meal period and counted as time worked. An ‘on duty’ meal period shall be permitted only when the nature of the work prevents an employee from being relieved of all duty and when by written agreement between the parties an on-the-job paid meal period is agreed to…. [T]he employee may, in writing, revoke the agreement at any time.”
The Court first analyzed whether state law requires employers to authorize off-duty rest periods (i.e., time during which an employee is relieved from all work-related duties and free from employer control.) After analyzing the statutes and relevant case history, the Court concluded that the construction of Wage Order 4, in light of its broader purpose, “…obligates employers to permit—and authorizes employees to take—off-duty rest periods. That is, during rest periods employers must relieve employees of all duties and relinquish control over how employees spend their time. ”
ON CALL REST PERIODS
The Court then turned to the second question on appeal: can an employer satisfy its obligation to relieve employees from duties and employer control during rest periods when the employer nonetheless requires its employees to remain on call? The Court concluded that the answer is no, because “on-call” and “off-duty” are incompatible. It held that, “…one cannot square the practice of compelling employees to remain at the ready, tethered by time and policy to particular locations or communications devices, with the requirement to relieve employees of all work duties and employer control during 10-minute rest periods.” A rest period is a period of time “…free from labor, work, or any other employment-related duties.” In order for it to be a true rest period, the employee must be free of the employer’s control, which cannot be accomplished if the employee is still “on-call.”
IMPACT ON EMPLOYERS
Some businesses may be unintentionally subject to liability as a result of these rest break claims. If a business owner is unsure of whether he or she is in compliance with this holding, they should review their written policies and consult with an attorney who has expertise in this area.