Special Alert: California Supreme Court’s Rest Break Decision in Augustus v. ABM Security Services, Inc.
California Supreme Court Holds that Employers Must Relieve Employees of All Work During Rest Periods and that Security Guards Who Were Required to Remain “On-Call” During Their Breaks Were “Performing Work” In Violation of the Law
Augustus v. ABM Security Services, Inc. (SC S224853/B243788, December 22, 2016)
On December 22, 2016 the California Supreme Court issued its decision in a high profile rest period case—and it is not good news for employers. The Court determined Labor Code section 226.7 and Industrial Welfare Commission Wage Order No. 4-2001 require that employees be relieved of all duties during rest breaks, and that security guards who simply remain on call during rest breaks are “performing work” in violation of the law.
A group of security guards brought a class action lawsuit against their employer alleging the employer’s policy of requiring them to be “on call” during rest breaks violated California law. While the guards were required to carry a radio, pager or phone in case of an emergency, there was no evidence that any guard’s break was ever interrupted. The trial court granted summary judgment for the employees, concluding an employer must relieve its employees of all duties during rest breaks, including the obligation to remain on call. The employees also moved for summary judgment on the issue of damages, seeking unpaid wages, interest, penalties, attorneys’ fees and an injunction. Finding no triable issue as to whether the employer was subject to approximately $90 million in statutory damages, interest, penalties, and attorneys’ fees, the court granted the motion and subsequently awarded attorneys’ fees and costs. The employer appealed. Finding the trial court relied on an incorrect interpretation of law, the court of appeal reversed.
The California Supreme Court disagreed, and reinstated the $90 million judgment against the employer.
First—relying in part on the “liberal construction of regulations to favor the protection of employees” and the plain-meaning of term “rest”—the Court held that under Labor Code section 226.7 and Wage Order 4-2001 workers must be relieved from all work duties and “free from employer control” during their ten minute rest periods. The Court held that “on duty” rest periods essentially required employees to perform “free” work.
Second, the Court held that under these same provisions, security guards who remain on call during rest breaks are indeed “performing work” in part because “a rest period means an interval of time free from labor, work, or any other employment-related duties,” and employees must be “freed from employer control over how they spend their time.” The Court held, “[a]n employer cannot satisfy the obligations under Wage Order 4 subdivision 12(a) while requiring that employees remain on call.” Despite the seemingly innocuous nature of requiring security guards to remain on call during their ten-minute rest periods the Court held that “a broad and intrusive degree of control exists when an employer requires employees to remain on call and respond during breaks.” As examples, the Court cited an employee’s inability to take a ten minute walk, inability to attend to personal matters such as phone calls or pumping breast milk. The Court seemed to think merely asking employees to remain on call and respond if needed during breaks rendered them incapable of doing anything else during that period of time. In short, the Court held that employees on a rest break must be completely free from employer control.
Practice Tips: In light of this holding, employers need to make sure employees do not perform any work during rest periods. Employers should eliminate any requirement that employees remain available to perform any work-related tasks during rest periods. Employees certainly must not be “on call” or “on duty” during rest periods. Employers should essentially treat rest periods as if they are meal periods and “relinquish all control” of employees including allowing them to leave the employer’s premises.
If a rest break is interrupted by an urgent work matter, the employee should be authorized and permitted to take an uninterrupted rest break at the earliest opportunity. Employers should ensure it is both a policy and a practice to “replace” any missed or incomplete rest periods—even if the employee is only involved in a minimal task during a ten minute rest period. In other words, if an employee does not obtain a full ten minute rest period that is completely “free from employer control” the employer should provide a “make-up” rest period or pay the statutory penalty. Employers should also consider reviewing company policies and/or handbooks to ensure the description of rest periods is consistent with the California Supreme Court’s interpretation.