On December 22, 2016, the California Supreme Court issued a critical decision in Augustus v. ABM Security Services, Inc., 2016 D.J. 12608 (2016), relating to California’s rest period obligations. The California Supreme Court declared that state law prohibits on-duty and on-call rest periods. It stated that employers must (1) relieve their employees of all duties during rest periods and (2) relinquish any control over how employees spend their break time. However, the decision did not end there. The California Supreme Court examined a number of related considerations, including the practical limitations created by a ten-minute rest period, policies that place restrictions on employees during rest periods, the circumstances under which premium payments may be due for missed rest periods, and the possibility of rescheduling or restarting rest periods when they cannot be provided or are interrupted.

1.Background Of The Case

The plaintiffs worked as security guards for ABM Security Services, Inc. (“ABM”) and alleged that ABM required guards to keep their pagers and radio phones on—even during rest periods—and to remain vigilant and responsive to calls when needs arose. The guards’ lawsuit alleged that the company failed to provide rest periods as required by California law.

The trial court granted summary judgment for the guards, finding the employer liable for approximately $90 million. The California Court of Appeal reversed the decision. On December 22, 2016, the California Supreme Court reversed that decision, finding that “state law requires employers to provide their employees with rest periods that are free from duties or employer control.”

2. The California Supreme Court Decision

The California Supreme Court discussed the need for off-duty rest periods and the impermissibility of on-call rest periods. The Court’s reasoning is summarized below.

a. Off-Duty Rest Periods

The Court examined whether state law requires employers to authorize off-duty rest periods. Unlike the language that expressly requires employees to be “relieved of all duty” during meal periods, the rules relating to rest periods had no similar language. The Court found that distinction immaterial, stating that the ordinary meaning of “rest” conveys “the opposite of work.” It found this interpretation to be supported by Labor Code Section 226.7, which prohibits employers from requiring “any employee to work during any meal or rest period . . .” The Court then reasoned that it made sense to infer that employers’ responsibilities were “the same for meal and rest periods.”

b. On-Call Rest Periods

The California Supreme Court next examined the question of whether employers can satisfy their obligation to relieve employees from duties and employer control during rest periods when they nonetheless require employees to remain on call. It concluded that the answer is “no.” It stated 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.” It explained that a rest period “means an interval of time free from labor, work, or any other employment-related duties. And employees must not only be relieved of work duties, but also be freed from employer control over how they spend their time.”

c. The Practical Limitations Of A Ten-Minute Rest Period

In examining the on-call question, the California Supreme Court recognized that “practical limitations” on an employee’s movement exist because rest periods are ten minutes in length. As a result, “during a rest period an employee generally can travel at most five minutes from a work post before returning to make it back on time.” This resulted in an expectation that employees “will ordinarily have to remain onsite or nearby.” The Court confirmed that this practical constraint, “which is of course common to all rest periods, is not sufficient to establish employer control.” On the other hand, control may be found in some instances when there are “additional constraints imposed by on-call arrangements.” Some types of additional constraints were considered irreconcilable with an employee’s retention of freedom to use rest periods for his or her own purposes. For example, requiring an employee to be on call.

d. Rescheduling And Restarting Rest Periods And Other Options

The opinion also responded to a suggestion that an overly narrow reading of the law would prevent employees from ever being recalled to work while they are on rest breaks, regardless of the exigency. The California Supreme Court rejected this suggestion, stating, “Nothing in our holding circumscribes an employer’s ability to reasonably reschedule a rest period when the need arises.” It remarked that several options remain available to employers who find it especially burdensome to relieve their employees of all duties during rest periods, including the duty to remain on call. For example, “Employers may (a) provide employees with another rest period to replace one that was interrupted, or (b) pay the premium pay set forth” in the Wage Order and Section 226.7.

3. Practical Observations

In some respects the Augustus decision represents a sea change in California’s rest period rules and questions related to the requirements that employers “relinquish any control over how employees spend their break time” may be challenging. This is particularly perplexing when employees spend rest breaks in an employee break room, employee lounge, cafeteria or other area on the employer’s property. It is one thing for employers to regulate employees by preventing them from spending their break time as they wish, e.g., making personal calls on a cell phone or making child care arrangements. It is quite another matter where, for example, an employer simply applies its general rules during rest periods, such as rules prohibiting fighting, using company computers for improper purposes, or engaging in unlawful harassment. These questions are likely to be sorted out in future decisions.

4. Changes And Clarifications To Employer Policies May Be Necessary

Without question, the case warrants an immediate review of all rest period policies and practices that affect California workers. It is extremely likely that many employers will wish to clarify their policies and practices. Other proactive responses to the decision should also be considered, such as the use of new-hire forms and appropriate postings.

For additional information regarding this case, see the new (2017) edition of the Wage and Hour Manual for California Employers. The case will be examined at length at Castle Publications’ upcoming Wage and Hour Laws Seminars. Information about the book and seminars can be obtained through the following hyperlink: http://www.castlepublications.com/sem2.htm.