CA Supreme Court: On-Premises, On-Call Time = Hours Worked (All Sleeping Time Too).

The California Supreme Court (unanimously) affirmed the Court of Appeal's decision in Mendiola v. CPS Security Solutions, Inc.  We posted about the Court of Appeal's decision here.  However, the Supreme Court actually went farther than the Court of Appeal in deciding that security guards' on-premises, on-call time is compensable as hours worked.

At issue were security guards who were required to remain on premises and on call at times when they were not active.  When "on-call" time applied, they could stay in trailers provided for their use on the construction sites to which they were assigned.  They were paid for time actually worked, but not for time they were "on call" in the trailers. There are more details in the post linked above.

The Supreme Court agreed with the court of appeal that the on-call time involved significant enough employer control to constitute hours worked.  Here's some of the key analysis:

California courts considering whether on-call time constitutes hours worked have primarily focused on the extent of the employer’s control.  * * * Indeed, we have stated that “[t]he level of the employer’s control over its employees . . . is determinative” in resolving the issue. * * *  ‘When an employer directs, commands or restrains an employee from leaving the work place . . . and thus prevents the employee from using the time effectively for his or her own purposes, that employee remains subject to the employer’s control.  According to [the definition of hours worked], that employee must be paid.’ ”  (Id. at p. 583.)
Courts have identified various factors bearing on an employer’s control during on-call time:  “ ‘(1) whether there was an on-premises living requirement;  (2) whether there were excessive geographical restrictions on employee’s movements;  (3) whether the frequency of calls was unduly restrictive;  (4) whether a fixed time limit for response was unduly restrictive;  (5) whether the on-call employee could easily trade on-call responsibilities;  (6) whether use of a pager could ease restrictions; and  (7) whether the employee had actually engaged in personal activities during call-in time.’  ([Owens v. Local No. 169 (9th Cir. 1992) 971 F.2d 347,] 351, fns. omitted.)”  (Gomez v. Lincare, Inc. (2009) 173 Cal.App.4th 508, 523-524 (Gomez).)    Courts have also taken into account whether the “[o]n-call waiting time . . . is spent primarily for the benefit of the employer and its business.”  

The Supreme Court, applying these factors, easily found sufficient control:

The guards here were required to “reside” in their trailers as a condition of employment and spend on-call hours in their trailers or elsewhere at the worksite.  They were obliged to respond, immediately and in uniform, if they were contacted by a dispatcher or became aware of suspicious activity.  Guards could not easily trade on-call responsibilities.  They could only request relief from a dispatcher and wait to see if a reliever was available.  If no relief could be secured, as happened on occasion, guards could not leave the worksite.  CPS exerted control in a variety of other ways.  Even if relieved, guards had to report where they were going, were subject to recall, and could be no more than 30 minutes away from the site.  Restrictions were placed on nonemployee visitors, pets, and alcohol use. 

Additionally, the Court of Appeal correctly determined that the guards’ on-call time was spent primarily for the benefit of CPS.  

So, we're not talking about a beeper or a requirement that on call employees call into work within 30 minutes of a page.  We're also not talking about special rules applicable to ambulance drivers. We're talking about people required to live on the premises during on-call periods. We are also not talking about the specific sleep provisions contained in Wage Order 5 and 9. So,
relax those of you who have on-call employees who are not required to stay at work.

Of note, though, the Court rejected federal regulations that allow on-premises employees to be uncompensated when they are free to engage in personal pursuits.  Therefore, the level of control that one must exercise over an on-premises employee is not dependent on federal case law.

The Court of Appeal cut CPS some slack, holding that an employee could agree that 8 of a 24 hour shift was unpaid sleep time under certain conditions. But the Supreme Court was having none of it.
Analyzing the control issue, the Court said that the employees were sleeping on premises, they were restricted and, therefore, they were "engaged to wait."

Finally, the Court took a slap at the Legislature concerning the difficulty employers have in deterring how to conduct themselves under the myriad wage hour laws:

We acknowledge CPS’s efforts to ascertain whether its policy complied with California’s labor laws and recognize the difficulty it and other employers can face in this regard.  Several factors may contribute to ongoing uncertainty, including the defunding of the IWC and the lack of adequate funding for DLSE enforcement.  Such issues, however, must be addressed by the Legislature

So, employers should ensure that their on-call policies comply with this new decision, particularly employers who exercise significant control.  The Court did not reject or modify the multiple factor test for on-call employees who are not required to live or sleep on premises.

The case is Mendiola v. CPS Security Solutions and the opinion is here.

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