Sit Down. Rest for a Period. OK, Now Get Up and Rewrite All Your Policies and Procedures.

The California Supreme Court has just issued a Christmas present to the plaintiffs' bar. The Court was generous with a coal delivery to employers as well.  

OK, holiday segue over.  Whatever you thought you knew about rest breaks in California was wrong.  The high Court today decided Augustus v. ABM, which presented two issues: 

1.  Must an employee be relieved of all duty for a paid, ten-minute, rest period? 

2.  If you are "on call" during a  rest period, does it count as a lawful break? 

The Court in a 5-2 opinion decided these questions "Yes," and "No." And that means employers must institute major changes and that there will be waves of new class action lawsuits in 2017.  

A Little Background

The case arose in the security guard industry.  ABM required its guards to take rest breaks with pagers in case there was a need for their services.  There was disputed evidence over whether they actually were bothered during breaks, and how often.  There was evidence that employees were able to surf the internet, eat snacks, etc. even while tethered to that pager for the ten minutes of break time that must occur every four hours (or major fraction thereof) under California law.  

A trial judge in LA granted the plaintiffs' motion for summary judgment and awarded the class some $90 million in penalties, including an hour of penalty time for each day worked.  Because the employees were on call, the trial court said, they were NEVER on break.  The court of appeal reversed that decision and held that being on call, without being called, is still a break. 

Supreme Court Decision 

The Supreme Court, however, agreed with the trial court. Here is the Court's rule regarding rest periods:

state law prohibits on-duty and on-call rest periods. During required rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time.  

I'll spare you the analysis.  Essentially, the Court decided that only a completely duty-free rest period fulfills the Legislature's intent of promoting employee welfare and safety. Justice Cuellar, one of the two new justices, authored the majority opinion.  The other new member of the Court, Justice Kruger, wrote a concurring / dissenting opinion, joined by Justice Corrigan.

This holding has several consequences:

1.  Relieving employees of all duties is the same standard as the Court previously applied to meal periods in the Brinker case.  Yes, rest periods are paid, while meal periods are not.  Yes rest periods  are only 10 minutes; meal periods are 30 or more.  None of that matters.  

2.  To ensure the employee is relieved of all duty, employers must treat employees during rest periods the same as they are treated for meal periods. No rest breaks at your desk or in the work area if being in the work area means the employee is even potentially going to be interrupted.  No requiring employees to help customers if they come in during the break.  Potential interruption - being on call - means a non-compliant break.  A non-compliant break means a one-hour penalty per day.   

3.   Employers should schedule rest periods and should be able to explain how there is "coverage" for the employees on break. Breaks should be structured and managed so the employee is incapable of helping a customer or even discussing work with a manager.  There should be a rest area, where management is trained employees are off limits.  Or, if possible, employers may require employees to leave the work area or go outside.   Employers in certain circumstances may have to consider hiring extra workers to cover rest periods to prove that they receive employees of all duty. 

4.   "Relinquishing control" requires changes.  It was generally understood that an employer could restrict an employee from leaving the work premises during a paid rest period.  Under California law, prohibiting employees from leaving the premises is "control."  That is why employers cannot restrict employees from leaving during meal periods. Recognizing that rest breaks are shorter than meal periods, the Supreme Court expressly stated that an employee's inability to leave the premises and timely return from break does not constitute employer "control" in the rest break context. But the Court did not say employers can require employees to remain on premises, either.  So, from a risk avoidance standpoint, the safer practice is to banish employees from the work area. (Of course, if an employee returns from break late, the employee is subject to discipline. And that employee will claim retaliation for taking a break.)  

5.  Naturally, employers may find the above restrictions unreasonable. When interruptions happen, as they must from time to time, the Court noted that the break can be rescheduled, or the employer can pay the penalty.  However, the Court also mentioned that regular interruptions are not allowed.

6.  Employers' rest period policies should affirmatively state that employees are free from any duty, must take breaks as scheduled, and are prohibited from working, being available to work, etc. during rest periods. 

7.  The Court noted that the DLSE has the power to grant exemptions under certain circumstances when it is impossible to afford employees completely duty free breaks.  The exemption provision is section 17 of Wage Order No. 4.  Employers may wish to become familiar with this provision and, if appropriate, use it. 

17. EXEMPTIONS
If, in the opinion of the Division after due investigation, it is found that the enforcement of any provision contained in Section 7, Records; Section 12, Rest Periods; Section 13, Change Rooms and Resting Facilities; Section 14, Seats; Section 15, Temperature; or Section 16, Elevators, would not materially affect the welfare or comfort of employees and would work an undue hardship on the employer, exemption may be made at the discretion of the Division. Such exemptions shall be in writing to be effective and may be revoked after reasonable notice is given in writing. Application for exemption shall be made by the employer or by the employee and/or the employee’s representative to the Division in writing. A copy of the application shall be posted at the place of employment at the time the application is filed with the Division.

8. Caveat: This case is decided under Wage Order 4, a wage order that applies to many office workers and other occupations not covered by the Industry Orders.  The other Wage Orders also contain rest period provisions. Some are different (such as Wage Order 5's).  So, read your wage order and know which one(s) apply before assuming Augustus is applicable to your business. (In most cases, it is.)  

Status of On-Call / Standby Time After Augustus?

You may ask yourself, if merely carrying a pager does not constitute being "relieved of duty," then must I now pay my employees when they are at home, "on call"?  And must unpaid on-call employees be given paid, duty free rest periods? 

No. The standards regarding rest breaks at work are not the same as the standards applicable to employees who are "on call" at home.  Why? Because the Supreme Court said so:

Plaintiffs argue that the on-call break time here constituted compensable work under Mendiola, supra, 60 Cal.4th 833, so there was no way it could satisfy ABM‘s obligation to provide duty-free rest periods. ABM cites Mendiola for the opposite proposition. But Mendiola is distinguishable. For one thing, shifts lasting eight hours (e.g., Mendiola) or longer (Madera Police Officers Assn. v. City of Madera (1984) 36 Cal.3d 403, 412 [involving 24-hour shifts]) are significantly different from breaks, which are short in duration, break up work periods, and thereby protect employees‘ health and safety (Murphy, supra, 40 Cal.4th at p. 1113). For another thing, factors relevant to the extent of employer control during an on-call shift of eight hours or more are inapposite in the context of a rest or meal period. (Mendiola, at p. 841 [e.g., on-premises living requirement, excessive geographical restrictions, etc.].)

The Court's statement, appearing in a footnote, means that this case has nothing to do with "on call" time occurring when the employee is punched out.

So, that's Augustus v. ABM.  The opinion is here.  It is a major decision about rest periods that require virtually all employers to review policies and make changes. 

California Supreme Court Takes a Stand on Sitting Down

The California Supreme Court in Kilby v. CVS Pharmacy (opinion here)  issued a unanimous opinion interpreting California Wage Orders' (section 14(A)) requirement that employers provide

[a]ll working employees  . . . suitable seats when the nature of the work reasonably permits the use of seats.”

Also, Section 14(B) says:

When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.” 

Why is the state's highest court doing this?  In this case, the Ninth Circuit Court of Appeals asked the California Supreme Court to interpret California law, because the Ninth Circuit is trying to figure out whether certain class actions filed in federal court have merit.  No case interpreted this portion of the Wage Order before, because the class action lawyers were busy suing over rest periods, wage statements, and a host of other matters.  They finally made it down to section 14 - "suitable seating," and so here we are.  

With that background, here are the questions the California Supreme Court sought to answer:

(1) Does the phrase “nature of the work” refer to individual tasks performed throughout the workday, or to the entire range of an employee's duties performed during a given day or shift?

(2) When determining whether the nature of the work “reasonably permits” use of a seat, what factors should courts consider? Specifically, are an employer‟s business judgment, the physical layout of the workplace, and the characteristics of a specific employee relevant factors?  

(3) If an employer has not provided any seat, must a plaintiff prove a suitable seat is available in order to show the employer has violated the seating provision?.

This case involved CVS employees.  The named plaintiff, Kilby, had a customer service job that included duties such as: "operating a cash register, straightening and stocking shelves, organizing products in front of and behind the sales counter, cleaning the register, vacuuming, gathering shopping baskets, and removing trash. CVS did not provide Kilby a seat for these tasks."

This case also was consolidated with Henderson v. JP Morgan Chase Bank, which involved tellers at a bank.  They are covered by Wage Order 4 rather than 7.  The seating requirement, section 14(A), is identical in both Wage Orders.  The tellers 

had duties associated with their teller stations, including accepting deposits, cashing checks, and handling withdrawals. They also had duties away from their stations, such as escorting customers to safety deposit boxes, working at the drive-up teller window, and making sure that automatic teller machines were working properly. These duties varied depending on the shift or branch location and whether the employee was a lead or regular teller.

Against this backdrop, the Court answered the above questions.

1.   So, how does a court look at the "nature of the work" 

courts must examine subsets of an employee's total tasks and duties by location, such as those performed at a cash register or a teller window, and consider whether it is feasible for an employee to perform each set of location-specific tasks while seated. Courts should look to the actual tasks performed, or reasonably expected to be performed, not to abstract characterizations, job titles, or descriptions that may or may not reflect the actual work performed. Tasks performed with more frequency or for a longer duration would be more germane to the seating inquiry than tasks performed briefly or infrequently.

* * *

An employee may be entitled to a seat to perform tasks at a particular location even if his job duties include other standing tasks, so long as provision of a seat would not interfere with performance of standing tasks.

Mushy.  But what this means is that if a teller spends a certain period of time at a teller window, one looks at the tasks s/he performs at that location and then looks whether it's feasible to perform the tasks seated.  If not, can there be a seat available so that some tasks are performed seated.

The Court also looked at how employers  have to provide suitable seating for employees who may have to stand when they are actively working, but who may experience "lulls" in operation:

if an employee‟s actual tasks at a discrete location make seated work feasible, he is entitled to a seat under section 14(A) while working there. However, if other job duties take him to a different location where he must perform standing tasks, he would be entitled to a seat under 14(B) during “lulls in operation.” Although the seating inquiries under sections 14(A) and 14(B) are analytically different, the seat provided to an employee under section 14(A) may satisfy the requirement of section 14(B) to the extent it is within “reasonable proximity to the work area” (§14(B)) and is available when work is not required to be performed. 

2.  What does "reasonably permits" mean?  

The Court then turned to an examination of what factors courts would consider to determine if the nature of the work "reasonably permits" the use of a seat.  What if the employer thinks that employees should stand as a matter of respect or service?  What if the physical layout does not accommodate seats, even if the duties of the job might?  Etc.   

You crave simplicity and bright line rules?  No such luck:

Whether an employee is entitled to a seat under section 14(A) depends on the totality of the circumstances. Analysis begins with an examination of the relevant tasks, grouped by location, and whether the tasks can be performed while seated or require standing. This task-based assessment is also balanced against considerations of feasibility. Feasibility may include, for example, an assessment of whether providing a seat would unduly interfere with other standing tasks, whether the frequency of transition from sitting to standing may interfere with the work, or whether seated work would impact the quality and effectiveness of overall job performance. This inquiry is not a rigid quantitative analysis based merely upon the counting of tasks or amount of time spent performing them. Instead, it involves a qualitative assessment of all relevant factors.

Ok but what about business judgment? Can't the employer pay the employee to stand?  Well sure:

There is no question that an employer may define the duties to be performed by an employee. As the DLSE observes, “[a]n employer's business judgment largely determines the nature of work of the employee both generally, as well as duties or tasks specifically.” Contrary to plaintiffs‟ suggestion, such duties are not limited to physical tasks. Providing a certain level of customer service is an objective job duty that an employer may reasonably expect. An employee's duty to provide a certain level of customer service should be assessed, along with other relevant tasks and obligations, in determining whether the nature of the work reasonably permits use of a seat at a particular location. Providing “customer service” is an objective job function comprised of different tasks, e.g., assisting customers with purchases, answering questions, locating inventory, creating a welcoming environment, etc.

Wait, did I say "sure"?  Hold the phone:

However, “business judgment” in this sense does not encompass an employer's mere preference that particular tasks be performed while standing. The standard is an objective one. An employer's evaluation of the quality and effectiveness of overall job performance is among the factors that can be objectively considered in light of the overall aims of the regulatory scheme, which has always been employee protection. An objective inquiry properly takes into account an employer's reasonable expectations regarding customer service and acknowledges an employer's role in setting job duties. It also takes into account any evidence submitted by the parties bearing on an employer's view that an objective job duty is best accomplished standing. It protects employees because it does not allow employers unlimited ability to arbitrarily define certain tasks as “standing” ones, undermining the protective purpose of the wage order.

So, can an employer can pay an employee to stand?  Can the boss require employees to be standing when on the clock and customers are in view, because it's "classier"?  It seems the employer can define customer service duties, which include standing tasks. But a third party - jury or judge - will decide if they are objectively reasonable.  "I, for one, welcome our new overlords," said no business owner, ever.

The Court similarly considers the physical layout of the workplace to be a relevant consideration to whether it is reasonable to have suitable seating available.  But, employers - and architects - take note:

just as an employer's mere preference for standing cannot constitute a relevant “business judgment” requiring deference, an employer may not unreasonably design a workspace to further a preference for standing or to deny a seat that might otherwise be reasonably suited for the contemplated tasks. As the DLSE observes in its amicus curiae brief, the seating requirement is “a workplace condition aimed at the welfare of employees performing work and not an „engineering‟ or technically-based standard,” and “[w]hile facts regarding technical aspects of workplace configurations or studies may be relevant to determining whether suitable seating can be provided, the application of the standard is essentially one of overall reasonableness applied to the particular facts.” As the DLSE suggests, reasonableness remains the ultimate touchstone. Evidence that seats are used to perform similar tasks under other, similar workspace conditions may be relevant to the inquiry, and to whether the physical layout may reasonably be changed to accommodate a seat. As the DLSE states, reasonableness must be based on the particular circumstances.

3. Whose Burden Is It to Prove Suitable Seating Either Is or Is Not Available?

It is the employer's burden to show that no suitable seat was available, not the employee's burden to show that there was one.   The Court spent little time on this.  However, the language of the wage order appears to place this burden on the employer.

In sum, this case will be difficult to interpret for employers looking for a bright line rule on whether seating should be provided in work situations when seating is not necessarily an obvious part of a job.  It remains to be seen whether there will be more litigation in this issue, or whether employers will reconfigure businesses to permit more seating in California to avoid these lawsuits.