On December 31, 2014, in Augustus v. ABM Security Services, Inc., a California appeals court, in an unpublished option, reversed a trial court's order granting summary judgment in favor of the Plaintiffs and requiring ABM Industries to pay approximately $90 million in damages to a class of security guards who alleged they did not receive proper rest breaks.

The security guards alleged that because they remained on-call and were required to keep their radios and pagers on and respond to emergencies when the need arose, the Company failed to relieve them of all duties during their rest breaks as required by California law and therefore owed them an extra hour of pay for each day worked.

The Court of Appeals concluded that simply being on-call when the employee is otherwise permitted to engage, and does engage, in various non-work activities, does not constitute performing "work" under California Wage Order No. 4, which requires the employer to provide rest breaks. The court went on to reject the Plaintiffs' arguments that the employer is required to relieve the employee of all duty on a rest break and relinquish any control over how the employee spends his time and vacated the trial court's judgments. The court held, however, that rest breaks and meal breaks are qualitatively different and remanded the issue of meal subclass certification to the trial court for reconsideration.

Planning Tip: Companies who require California employees to remain on-call during their paid rest breaks should take note of this decision and can re-evaluate their compensation practices.

Policies should permit employees to engage in non-work activities during their break time, and employers may be able to otherwise require California employees to be on-call during such paid rest breaks without triggering additional penalty pay.