Crazy Important California Supreme Court Decision.

Happy New Year!  With all the Holiday festivities and cheer behind us, it is now my duty to revamp stress levels back to their original unhealthy elevated heights.  In the midst of egg nog sipping and chestnut cracking, on December 22, 2016, the California Supreme Court issued a decision in the long-awaited case, Augustus v. ABM Security Services, Inc., regarding rest periods, which will undoubtedly spike your stress levels to an unprecedented height.  This case had to do with “off-duty” rest periods and “on-call” rest periods.  I believe its holding will have a major effect on every California business.  HR professionals and management need to immediately review their rest period policies to determine whether they comply with the Court’s holding.

A brief recital of the background and facts are as follows:  ABM Security Services, Inc., employs thousands of security guards at residential, retail, office, and industrial sites throughout California.  Security guards were required to keep pagers and radio phones on –even during rest periods – and to remain vigilant and responsive to calls when needs arose, i.e., escorting tenants to parking lots, notifying building managers of mechanical problems, or occurrence of some other “emergency situation.”  In 2005, Plaintiffs, who worked as security guards for defendant, filed a putative class action on behalf of all ABM security guards alleging that ABM failed “to consistently provide uninterrupted rest periods” as required by state law.

The record contained no evidence that the rest period of any member of the plaintiff class was ever actually interrupted by a call to return to duty.  Nor did the record contain any evidence concerning how quickly guards were expected to respond if such a call came or to what, if any, discipline a guard might be subject to for failing to respond before his or her break period expired.  There was also undisputed evidence that showed that if any guard’s rest period was, in fact, interrupted, he or she would have been permitted to take a full rest period after the situation was resolved.  In spite of this, the trial court granted summary judgment for plaintiffs (no trial), finding ABM liable and awarding approximately $90 million in statutory damages, interest, and penalties.  However, the Court of Appeal reversed the trial court’s decision and held that state law does not require employers to provide off-duty rest periods, and moreover, “simply being on call” does not constitute performing work.  The California Supreme Court granted review to consider whether the Court of Appeal was correct.

The first issue the Court resolved was whether state law requires employers to authorize “off-duty” rest periods.  The Court pointed out that in Wage Order 4, subdivision 11(A), which pertains to meal periods, that it states, “[u]nless the employee is relieved of all duty… , the meal period shall be considered an ‘on duty’ meal period and counted as time worked.”  Whereas, in Wage Order 4, subdivision 12(A), which pertains to rest periods, no such “on duty” language is found.  Thus, the Supreme Court reasoned that because the absence of such language in subdivision 12(A), authorizing on-duty rest periods, was a telling indication that the IWC did not contemplate on-duty rest periods.  In addition, the Court pointed out that the on-duty meal period exception is exceedingly narrow and only applies in limited circumstances.  Therefore, it wouldn’t make sense for a broad rest period exception where employers could unilaterally require employees to take on-duty rest breaks without receiving additional compensation.  The Court held that during rest periods, employers must relieve employees of all duties and relinquish control over how employees spend their time.  The Court pointed out that there are practical limitations on an employee’s movement during a short 10 minute break in that an employee generally can only travel at most five minutes from a work post before returning to make it back on time.  Therefore, the Court stated, “one would expect that employees will ordinarily have to remain onsite or nearby.”  However, my reading of the case leads me to believe that no longer may employers require employees to remain on company premises during rest periods, as long as the employee makes in back in time.

The second issue the Court resolved was whether an employer can “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’s answer was “No.”  The Court noted that neither Wage Order 4 nor section 226.7 provides an answer to whether on-call rest periods are permissible because neither even mentions on-call time or on-call rest periods at all.  The Court reasoned that “one cannot square the practice of compelling employees to remain at the ready, tethered by time and policy to particular locations or communication devices, with the requirement to relieve employees of all work duties and employer control during 10-minute rest periods.”  The Court explained that a rest period means an interval of time free from labor, work, or any other employment-related duties and that employees must also be freed from employer control over how they spend their time.  Any obligation to remain on call during a 10-minute rest period would force the employee to carry a device or otherwise make arrangements so the employer could reach the employee during a break, or respond when the employer seeks contact with the employee, or perform other work if the employer so requests.  The Court held that these obligations are “irreconcilable with employees’ retention of freedom to use rest periods for their own purposes.”

The Supreme Court reversed the Court of Appeal and concluded that employers must relinquish any control over how employees spend their break time, and relieve their employees of all duties – including the obligation that an employee remain on call.  I recommend that all HR professionals and management revisit their rest period policies and practices as soon as possible, to make sure that they do not require employees to be on-call or to remain on company premises during rest periods.  Seek legal counsel if necessary.

James C. Anderson, Esq., Triebsch & Frampton, APC

Disclaimer:  The information provided is just a summary for general information purposes only and is not intended as legal advice.  Please review the actual laws, regulations, and cases to obtain all the latest updates, details, and implications and to reach your own conclusions as to what the law means.  Also seek legal and accounting advice as needed.

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