December 29, 2016
Compliance Matters

Late last week, the California Supreme Court issued another huge blow to employers in an important case involving state mandated rest breaks. ( Augustus v ABM Security Services, Inc.)  The Supreme Court upheld a $90 million judgment in favor of a class of more than 14,000 security guards who were required to carry radios during their paid 10-minute rest breaks. 
The class action lawsuit was filed back in 2005, and alleged that ABM violated California's rest break law by requiring its security guards to carry a radio during their rest breaks and to respond to emergencies if needed.  Under the policy, the company paid the guards a one-hour missed rest break premium whenever the guards were actually interrupted during their rest breaks.  The guards asserted that the payment was not enough, and that California law requires employers to actually relieve employees of all duties during rest breaks.  According to the suit,  the fact that the guards had to leave their radio "on" in case a call came in meant that the guards were effectively on duty despite the fact that they were otherwise relieved of all duty.
The trial court granted summary judgment in favor of the security guards based on what it determined was an unlawful rest break policy.  The trial court ruled that the security guards were entitled to the one-hour missed rest break penalty for every shift they worked, and awarded the guards close to $90 million.  The Court of Appeal later reversed this ruling, concluding that on-call rest breaks complied with California law so long as the employees were not actually interrupted during their rest breaks.  The guards appealed to the California Supreme Court.
In a 5-2 decision issued on December 22, 2016, the Supreme Court agreed with the trial court and reinstated the $90 Million award. The Supreme Court concluded that the State's rest period law requires employers to provide employees with rest periods that are totally free from work duties or employer control.  The Court also noted that the Labor Code section on meal and rest breaks (section 226.7) prohibits employers from requiring employees to perform any work during meal or rest breaks.  The Supreme Court reasoned that since the employees were expected to respond to a radio call during their rest break, the policy violated the rest break law because an employee remains under the employer's control during rest breaks when on call.
The Court expressly ruled that "employees must not only be relieved of work duties, but also be freed from employer control over how they spend their time" and that "carrying a device or otherwise making arrangements so the employer can reach the employee during a break, responding when the employer seeks contact with the employee, and performing other work if the employer so requests" are "irreconcilable with employees' retention of freedom to use rest periods for their own purposes." 
The Court recognized that a 10-minute rest break imposes practical limitations on an employee's movement because they can only travel up to five minutes from their work area to return on time.  Although the Court noted "one would expect that employees will ordinarily have to remain onsite or nearby" during rest breaks, the Court did not specifically endorse an employer policy that requires employees to remain on the employer's premises during rest breaks.  Although such a policy is common, and permissible under prior DLSE guidance, the Court's broad statements against any employer control during rest breaks suggests that an employer policy mandating that employees stay on the premises during rest breaks likely would be unlawful.
In light of the Supreme Court's decision in Augustus, employers should review their rest break policy to ensure compliance.  At a minimum, "on-call" rest breaks are not permitted, and employers cannot require employees to carry radios, cell phones, or similar devices during breaks and be available should the employer reach out to them during their rest break.  Employer policies should instruct employees who use such devices to turn them off during breaks.  Employers should also delete any requirement to remain on premises during rest breaks.  Although employees may, as a practical matter, choose to stay on the premises during rest breaks, mandating such a requirement may similarly be found to limit the employee's activities during the break and a violation of the statute.  
The Supreme Court also noted that, under the Wage Order, the Labor Commissioner has discretion to permit on-call rest breaks if the employer can establish an "undue hardship", and that on-call rest breaks do not materially affect the welfare or comfort of employees.  We expect that the Labor Commissioner will only permit on-call rest breaks in rare cases, such as when the employee works alone and there is ample down time during the work day for the employee to rest. 
If you have any questions about this article, please contact any member of the Firm. We can be reached at (818) 508-3700, or online at 

Richard S. Rosenberg
Jeffrey P. Fuchsman
Ballard Rosenberg Golper & Savitt, LLP

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