A California appellate court recently held that employers must reimburse employees for a “reasonable percentage” of their cell phone bills if employees must use their phones for work-related calls, regardless of the details of their plans or who pays their bills.
In Cochran v. Schwan’s Home Services, Inc., plaintiff Cochran filed a putative class action on behalf of himself and other customer service mangers against his employer (Schwan’s Home Services, Inc.) for violation of California Labor Code Section 2802, unfair business practices, penalties under the Private Attorneys General Act, and related causes of action for failure to reimburse employees in the class for mandatory use of personal cell phones for business.
California Labor Code Section 2802 requires that employers reimburse employees for work-related expenses. However, Schwan’s argued that it should not have to reimburse employees for any portion of their cell phone bills if they had unlimited plans because they were not incurring any additional expense for business calls. The court disagreed and reversed the lower court’s denial of certification of a class of 1,500 customer service managers.
The court concluded that both the nature of the plans (e.g., unlimited minutes, limited minutes, etc.) and who pays (Schwan’s maintained that Cochran’s girlfriend paid his bill) are irrelevant. Ultimately, employers cannot pass on their operating expenses to employees and cannot dig into their personal lives to determine who pays for the bill.
Employers should carefully review their cell phone reimbursement policies and procedures in light of this decision.