THE CALIFORNIA SUPREME COURT’S HOLIDAY GIFT TO EMPLOYEES

California employers have long had the right, under certain narrowly limited circumstances, to require employees to take “on-duty” meal breaks.  On December 22, 2016, the California Supreme Court in Augustus v. ABM Security Services, Inc. (No. S224853), held that such right does not extend to rest breaks.  The majority held further that employers may not require employees to remain on-call during their rest breaks.

Jennifer Augustus initiated her action against ABM Security Services, Inc., on behalf of herself and a class of similarly situated security guards.  They sought relief for ABM’s alleged violation of California’s rest break requirements.  The company required its security guards to keep their pagers and radio phones on during rest breaks so that they would remain vigilant and responsive to calls, including calls regarding emergencies.  Plaintiffs alleged that as a consequence of this requirement, ABM failed to provide them with rest breaks that were uninterrupted by work.  The trial court granted the Plaintiffs’ motion for summary judgment and awarded approximately $90,000,000 in statutory damages, interest and penalties.  The Court of Appeal reversed.  The California Supreme Court reversed the Court of Appeal’s decision.

In its opinion, the Supreme Court relied on the established principle that “[d]uring required rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time.”  Slip op. at 1.  Employees remain subject to the employer’s control if they are required to remain on duty during their rest breaks.  As to the applicable wage order’s (Wage Order 4) requirement that “[a]uthorized rest period time shall be counted, as hours worked for which there shall be no deduction from wages,” the Court concluded that “[t]his sentence makes sense only if employees are relieved of duties during rest periods.”  Id. at 9.  In addition, the Court distinguished Wage Order 4’s text regarding meal breaks and rest breaks, noting that the wage order expressly authorizes on-duty meal breaks under limited circumstances, without similarly allowing on-duty rest breaks (language allowing on-duty rest periods likewise is absent in other wage orders, except for Wage Order 5 pertaining to certain employees who care for children).  Id. at 11-12.  Thus, the Court concluded that on-duty rest breaks are not authorized by Wage Order 4.

The majority also concluded that employers may not require employees to remain on-call during their rest breaks.  The on-call requirement is “irreconcilable with employees’ retention of freedom to use rest periods for their own purposes.”  Id. at 16.  The majority recognized, though, that “[n]othing in our holding circumscribes an employer’s ability to reasonably reschedule a rest period when the need arises.”  Id. at 18.

Accordingly, employers may not require their employees to remain on-duty or on-call during their rest breaks.  An employer may interrupt an employee’s rest break without penalty when the need arises, however, so long as it provides a reasonable substitute rest break during that workday.  If it fails to do so, the employer must pay the additional hour of pay required by California Labor Code Section 226.7(c).  As the $90,000,000 judgment against ABM implies, such payments can be very costly.

Wishing you all the best for the new year,

Shane Sagheb