California law requires employers in most private businesses to allow employees to take breaks, or rest periods, of at least ten minutes for roughly each four hours of work. Can an employer require employees during their breaks to keep their pagers and radio phones on, and remain vigilant and responsive to calls when need arises? According to a five-member majority of the California Supreme Court in Augustus v. ABM Security Services decided on December 22, 2016, the answer is no. (This decision will have limited impact on public agency employers. See the comments at the end of this article.)
ABM Security Services provides security guards at residential, retail, office, and industrial sites across California. The number of guards it employs statewide is in the thousands. The primary duty of the guards is to provide “an immediate and correct response to emergency/life safety situations” and “physical security for the building, its tenants and their employees. . . by observing and reporting all unusual activities.” This includes patrolling the premises where assigned, responding to emergencies, identifying and reporting safety issues, etc.
Several class actions were filed on behalf of the security guards alleging that ABM had failed to provide true rest periods because the company required the guards to remain on call during their breaks, and in essence on duty, because they were obligated to keep their radios and pagers on in case an incident arose and they were required to interrupt their break and respond to a need for service. The trial court granted summary judgment for the guards and awarded a judgment totaling about $90 million. The Court of Appeal reversed, but the Supreme Court sided with the guards and reinstated the trial court’s decision.
The California Labor Code (§ 226.7) reads in part: “An employer shall not require an employee to work during a meal or rest or recovery period mandated pursuant to an applicable statute, or applicable regulation, standard, or order of the Industrial Welfare Commission.” Wage Order 4, applicable to the security guards, in section 12, includes: “Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. However, a rest period need not be authorized for employees whose total daily work time is less than three and one-half (3 1/2) hours. Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages.” Both the Labor Code and Wage Order provide for daily penalties against employers who fail to provide the required rest periods.
The security guards alleged, and the Supreme Court majority ruled, that ABM’s requirement that the employees remain vigilant during their breaks, by having to leave their pagers and radios in service, and end the break early and respond to needs for service, meant they were not relieved of all duty during the breaks and were in essence still working. The Court noted the requirement in the Labor Code section that the employer “shall not require an employee to work” during a rest period. The Court held that, because a guard was required to remain on call during breaks, and be vigilant to what might come over their pager or radio phone, they were still working and did not have full use of their break time for personal use. The Court distinguished break time (i.e., rest period time), which must be “on the clock”, from meal periods, which can be unpaid if the employee is relieved of all duty. If an employee is called back to work during a lunch break, the time thereby becomes compensable. Rest breaks, however, are by definition always paid time anyhow. Therefore, if an employee has to work during a break, the employer gets that work for free.
In reaching its decision the Court several times referenced the shibboleths that Labor Code and Wage Order provisions are liberally construed to favor the protection of employees and that interpretations articulated by the state agency that enforces Wage Orders are granted “considerable judicial deference.” The two dissenters argued that the “bare requirement” of carrying a radio, phone or pager in case of emergency did not constitute “work” and did not render ABM in violation of its obligation to provide the guards with a rest period relieved of all work.
The Court majority responded to the understandable employer concern that the ruling prohibited the company from ever recalling employees to work from a rest period when the need arises. The Court replied that the company could reschedule the break for a later time in the same shift to replace the one that was interrupted. Alternatively, the employer could apply to the state agency for an exemption from the requirement. Apparently ABM had twice received one-year exemptions. Finally, the company could simply pay the employees the one-hour penalty pay called for in both the Labor Code and Wage Order for each day the required break was not provided.
Most of the Wage Orders by their own terms are specifically made inapplicable to public agencies, and it is generally the rule that Labor Code provisions are also not applicable to public employers unless they contain language providing that public employers must comply. Public agencies should check with legal counsel, however, to see if any Wage Order provision on meal and rest periods does apply to them. For example, the Wage Order 9 provisions on meal and rest breaks do apply to public agency bus drivers.
There is no provision of federal law requiring meal or rest periods for local public agency employees. However, if an agency provides unpaid meal or rest periods for its employees, and were to impose restrictions on employee free use of those breaks, a court considering a lawsuit brought by employees under the Fair Labor Standards Act could look to the decision in Augustus v. ABM Security Services for guidance and apply it by analogy. Accordingly, any such agency should check its current procedures to ensure it is not at risk of incurring liability.
Jeff Freedman, Partner in the Los Angeles office of Liebert Cassidy Whitmore, has over forty years of experience representing public agencies as well as private companies in all areas of labor and employment relations law. He can be reached at jfreedman@lcwlegal.com.
This article was originally published in the Municipal Management Association of Northern California (MMANC) Municipal Magazine