State Supreme Court Rules: Employees Must “Rest” in Peace
The California Supreme Court has issued its long-awaited decision in Augustus et al. v ABM Security Services Inc., __Cal.4th__, 2016 WL 7407328 (Cal. Dec. 22, 2016) clarifying employer obligations for rest periods (hereinafter “breaks”). Review was granted by the Supreme Court to evaluate whether or not employee breaks are intended to be “off duty” within the same meaning generally used for meal periods, and whether or not remaining “on call” during a break is considered to be “on duty” regardless of whether the employee is called upon to perform any work.
The case involved security guards who were instructed, even during their breaks, to keep their pagers and radios on and to remain vigilant and responsive to calls when needs arose. If during a break an employee was interrupted, the employee could restart his or her break. If the employee was not interrupted, the employee was considered to have taken a compliant break. Plaintiffs filed their class action in 2005 alleging that remaining on call was akin to an “on duty” break which is unlawful under California law. Plaintiffs claimed they were owed rest period premiums for all of their missed breaks.
The trial court granted summary judgment in favor of the Plaintiffs and awarded $90 million dollars in damages, interest, and penalties against the employer. Upon appeal, the decision was reversed with the appellate court concluding that “simply being on call” is not equivalent to actually performing work. The Supreme Court of California granted review in order to consider whether the appellate court was accurate in its interpretation of Labor Code Section 226.7 and Wage Order 4 (the applicable wage order).
The first argument the Court resolved was whether rest periods must be “off duty” time. The Court answered in the affirmative finding that the law makers intended the time to be “off duty” as evidenced by harmonizing the Labor Code and Wage Order’s treatment of rest periods and meal periods. The Court concluded that Labor Code Section 226.7 applies identically to both meal and rest periods, reflecting the intention for the periods of time to be defined the same. The Court also noted that Wage Order 4, subdivision 11(A) allows, in limited circumstances, “on duty” meal periods. Absence of the same language regarding rest periods is indicative of the intention that employees should be relieved of all duties during a rest period, since the law makers did not include an option for an “on duty” break.
The second argument evaluated was whether an employer satisfies its obligation to relieve employees of all duties if the employer still requires the employees to remain on call during a break. The Court determined it was incongruent to require relief of work duties but still allow employer control. Under the ABM policy, the employees were instructed to remain ready and capable to work during their breaks, which affected the employees’ freedom to use breaks for their own purposes. The Court found this level of control incompatible with the definition of a rest period.
The Supreme Court concluded that during required rest periods an employer must relieve employees of all duties as well as relinquish any control over those employees during that time frame. The Court consequently found in favor of the employees, and upheld the $90 million verdict in favor of the employees. Notably, the Court did so despite the absence of any evidence that any employee was actually interrupted and called back to work during a rest period.
What does this mean for California employers? Except for limited circumstances requiring DLSE or Wage Order approval, employers are obligated to relieve employees from all duties during their rest periods. In addition, employers must reevaluate their policies that exert any control over this paid period of non-work time. An internal policy that requires an employee to carry an electronic device for contact, to be available, to monitor an area of work in case a customer presents, etc. can be construed as control and leave an employer open to liability for damages, interest, and penalties relating to missed rest periods. In addition, because this decision is based on an interpretation of current law, it is likely to spur additional litigation regarding prior rest period policies and practices in place, potentially spanning back three to four years, depending on the statute of limitations for the specific claim asserted.