The California Supreme Court holds that California wage and hour laws prohibit on-duty and on-call rest breaks.

On December 22, 2016, the California Supreme Court ruled that California “employers must relieve their employees of all duties and relinquish any control over how employees spend their break time” during legally required rest breaks. Augustus v. ABM Security Services, Inc., No. S224853, Supreme Court of California (December 22, 2016). In so doing, the court reinstated a $90 million judgment for a class of security guards, ruling that ABM Security Services unlawfully subjected employees to its control by requiring them to remain on-call during rest breaks by carrying pagers and radio phones and responding to calls when needed.

Background

ABM employed security guards at residential, retail, office, and industrial sites throughout California, with a number of guards at each site. It required guards to remain vigilant during rest breaks through pagers and radio phones to respond in case of emergency or need for service. A class of security guards sued ABM alleging that the company violated state law by failing to provide them with rest breaks, because they were required to carry the pagers and radio phones during breaks.

The trial court certified a class and then granted summary judgment on the rest break claim in favor of the guards, concluding that ABM’s policy subjected the guards to ABM’s control in a manner that rendered a rest break indistinguishable from the rest of the workday. The court reasoned that because the guards were always under ABM’s control and obligated to perform work, they never received a rest break. Ultimately, the trial court awarded the guards $90 million in statutory damages, interest, and penalties, including a one-hour rest break premium for each day a guard worked. The California Court of Appeal reversed the trial court, holding that that state law does not require employers to provide off-duty rest breaks, and that “simply being on call,” without more, does not constitute performing work.

The California Supreme Court granted review on two issues: (1) whether Cal. Labor Code Section 226.7 coupled with California Wage Order 4-2001 (Wage Order 4) requires off-duty rest breaks; and (2) whether employers may require employees to remain on-call during rest breaks.

The Supreme Court’s Holding

Employers Must Provide Off-Duty Rest Breaks

In a unanimous opinion, the court concluded the Labor Code and Wage Order 4 require off-duty rest breaks. Relying on the majority opinion in Brinker Restaurant Corp., v. Superior Court, 53 Cal. 4th 1004, 1038-39 (2012), the court reasoned that because the Labor Code prohibits employers from requiring “any employee to work during any meal and rest break mandated” by applicable IWC wage orders and applies the premium-pay remedy in identical fashion to both meal and rest breaks, it can be inferred that “employers’ responsibilities are the same for meal and rest period.” The court, therefore, concluded that employers must relieve employees of all duty and relinquish all control over how employees spend their time during rest breaks.

The court also analyzed the applicable language on meal and rest breaks in applicable Wage Orders. Because the applicable Wage Order includes language authorizing on-duty meal breaks in narrow circumstances in subdivision 11(A), but no language authorizing on-duty rest breaks in subdivision 12(A), the court found that rest breaks must always be off-duty. Finally, the court reasoned that the Wage Order’s provision prohibiting deduction of wages for rest breaks would be pointless unless employees are relieved from all duties during rest breaks.

Required On-Call Rest Breaks Do Not Satisfy the Off-Duty Rest Break Obligation

In a five-to-two opinion, the court held that employers cannot require employees to remain on-call during rest breaks. The court reasoned that because employees must not only be relieved of work duties, but also be freed from employer control over how they spend their time, employers cannot compel employees “to remain at the ready, tethered by time and policy to particular locations or communications devices…” The court conceded that because rest periods are 10 minutes in length, they impose practical limitations on an employee’s movement, such that “one would expect that employees will ordinarily have to remain onsite or nearby.” However, if an employee also has to “remain at the ready and capable of being summoned to action,” such “obligations are irreconcilable with employees’ retention of freedom to use rest periods for their own purposes.” The court added that its holding did not categorically prohibit employees from ever being called back to work during a rest break, as an employer had the “ability to reasonably reschedule a rest period when the need arises,” and thereby provide employees with another rest period to replace the interrupted one. However, the court noted that employers should only do so as an exception due to “irregular or unexpected circumstances such as emergencies…”

What the Decision Means for Employers

In light of the court’s holding, California employers should review their rest period policies and practices. Care should be taken to avoid any policies or procedures that appear to impose work duties or exert control over employee activities during a rest break. In particular, employers should revisit any on-call requirements imposed on employees while on rest breaks (or meal breaks).