Augustus v. ABM: Cal. Supreme Court Clarifies Employers’ Obligation to Provide Duty-Free Rest Breaks

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Last month, the California Supreme Court issued Augustus, et al. v. ABM Security Services, Inc., __ Cal. 4th __, 2016 WL 7407328 (Cal. Dec. 22, 2016) (slip op. available here), a much-anticipated decision that clarified that employers may not require employees to take on-duty and/or on-call rest periods. Instead, the California Supreme Court held “employers [must] relinquish any control over how employees spend their break time, and relieve their employees of all duties—including the obligation that employees remain on call. A rest period, in short, must be a period of rest.” Slip op. at 21. This opinion is likely to spur further litigation regarding employers’ rest break policies.

The Augustus case arose out of the defendant ABM’s practice of requiring its security guard employees to leave their pagers and radio phones on during their rest breaks, while also remaining “vigilant” and responding to certain needs as they arose during their breaks. Slip op. at 1. In 2005, the plaintiffs filed a class action complaint alleging that this practice violated ABM’s legal obligation to provide duty-free rest breaks to its employees. After several years of litigation, the trial court granted plaintiffs’ motion for summary judgment and awarded the class approximately $90 million, reasoning that every instance when a class member carried a communication device during a rest break constituted a violation of the law. The Court of Appeal reversed. Although the appellate court agreed that the defendant did not relieve guards of all duties during rest periods and instead required that they remain on call, it concluded that state law does not require employers to provide off-duty rest periods, and, moreover, that simply being on call does not constitute performing work.

The California Supreme Court reversed again. After noting the long-standing policy of interpreting the Labor Code and Wage Orders in favor of employees, the court held that a rest period must be just that: a period of rest. Specifically, the court stated “a rest period during which an employer may require that an employee continue performing duties seems to place too much semantic emphasis on ‘period’—and too little on ‘rest.’” Slip op. at 8. The court also noted that its holding is consistent with several Division of Labor Standards Enforcement (DLSE) opinion letters. Further, the court declined the defendant’s suggestion to define a rest break violation in terms of whether the employer’s policy “unreasonably” interfered with the employees’ rest break rights because it would introduce uncertainty to the law. Id. at 18. The court also noted that the Industrial Welfare Commission could and did authorize on-call rest periods, such as in Wage Order 5, which applies to caretakers of children or infirm, but failed to do so in Wage Order 4, which applied to the class members here. Id. at 11-12.

The court then turned to the question of whether an employer may require employees to remain on call during rest periods. The court held that “one cannot square the practice of compelling employees to remain at the ready, tethered by time and policy to particular locations or communications devices, with the requirement to relieve employees of all work duties and employer control during 10-minute rest periods.” Slip op. at 15. The court explained that having to carry a communications device during a rest period and to respond to employer inquiries while on a rest break is “irreconcilable with employees’ retention of freedom to use rest periods for their own purposes.” Id. at 16. Emphasizing the protective nature of the Labor Code and Wage Orders, the court held that the employer’s power to call on employees to perform work during their rest breaks constituted “a broad and intrusive degree of control.” Id. at 16-17.

Justice Kruger issued a concurrence and a dissent. She concurred with the majority’s opinion that employers must provide off-duty rest periods to nonexempt employees. However, she disagreed that the mere requirement that an employee carry a communication device during the rest period constitutes a violation of the law. In particular, she emphasized that despite the trial court’s award of approximately $90 million to the class, the record was devoid of any evidence that any of the class members’ rest periods were actually interrupted. Slip op., Kruger concurring and dissenting op. at 3. Accordingly, Justice Kruger concluded that the court should instead reverse the Court of Appeal’s opinion and remand for consideration of whether the defendant’s on-call policy actually interfered with its employees’ ability to use their rest periods as periods of rest. Id. at 12-13.

The Augustus decision is an important clarification of the employers’ obligation to provide work-free rest periods. This decision, however, does not mean that employers with on-call policies will have to change them radically. As the California Supreme Court noted, employers that end up having to interrupt an employee’s rest period may simply provide the employee with another rest period or pay the premium of one hour’s wages pursuant to Labor Code Section 226.7. Slip op. at 19. Alternatively, the employer may apply to the DLSE for an exemption. Id. at 19 n.14.

Authored By:
Stan Karas, Senior Counsel