Why it matters 

Giving hope to employers reeling from a recent California Supreme Court ruling that workers must be paid for “all hours worked,” even for sleeping security guards on call, an appellate panel reversed a $90 million award to a class of security guards alleging they should have been paid for breaks when they remained on call. Security guard employees alleged they were required to remain on call during rest breaks and sought reimbursement for their time. The employer admitted that the guards were told to keep their radios and pagers on during rest breaks and “to remain vigilant” in order to respond if the need arose. A trial court certified a class and granted summary judgment for the guards, finding that the employer was liable for almost $90 million in statutory damages, interest, penalties, and attorneys’ fees. But the appellate panel reversed, holding that remaining on call does not itself constitute performing work. State law only mandates that an employee not be required to work on a rest break—not that the employee be relieved of all duties (like keeping a phone or pager handy), the court said. 

Detailed discussion

Jennifer Augustus was one of thousands of security guards employed by ABM Security Services in the state of California. She filed a putative class action alleging that the employer failed to provide the rest periods required by law because the guards were not relieved of all duties during their breaks, instead being forced to remain on call.

ABM admitted that it requires its security guards to keep their radios and pagers on during rest breaks, “to remain vigilant,” and to respond if the need arises, such as if a tenant requests an escort to a parking lot, a building manager must be notified of a mechanical problem, or an emergency situation occurs.

According to the guards, the policy rendered rest periods indistinguishable from normal security work and resulted in invalid rest breaks. The class did not present evidence indicating that anyone’s rest period had ever been interrupted, however.

The employer also noted that class members regularly took uninterrupted breaks during which they performed no work but engaged in leisure activities ranging from reading to surfing the Internet. The mere risk of an interruption did not negate or invalidate a rest break, ABM argued.

A trial court judge certified a class of workers and granted summary judgment for the employees, concluding that “if you are on call, you are not on break.” The judge awarded almost $90 million to the class in statutory damages, interest, penalties, and attorneys’ fees. Not surprisingly, the employer appealed.

The appellate panel analyzed the language of Wage Order 4, specifically subdivision 12: “Every employer shall authorize and permit all employees to take rest breaks, 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 hours. Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages.”

Although the text of the wage order does not describe the nature of the rest period, the court looked to Section 226.7 of the Labor Code, which states: “An employer shall not require an employee to work during a meal or rest or recovery period.”

Does simply being on call constitute “work”?

“We conclude it does not,” the appellate panel wrote. “The word ‘work’ is used as both a noun and verb in Wage Order 4, which defines ‘Hours worked’ as ‘the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.’ In this definition, ‘work’ as a noun means ‘employment’—time during which an employee is subject to an employer’s control. ‘Work’ as a verb means ‘exertion’—activities an employer may suffer or permit an employee to perform.”

Section 226.7 “uses ‘work’ as an infinitive verb contraposed with ‘rest.’ It is evident, therefore, that ‘work’ in that section means exertion on an employer’s behalf. Not all employees at work actually perform work,” the court said. “Remaining on call is an example. On-call status is a state of being, not an action. But section 226.7 prohibits only the action, not the status. In other words, it prohibits only working during a rest break, not remaining available to work.”

The panel noted that subdivision 11(A) of Wage Order 4, pertaining to meal periods, requires that an employee be “relieved of all duty” during a meal period. However, subdivision 12(A) contains no similar requirement. “If the [Industrial Welfare Commission (IWC)] had wanted to relieve an employee of all duty during a rest period, including the duty to remain on call, it knew how to do so. That it does not indicates no such requirement was intended,” the court said. “On the contrary, the IWC’s order that an on-duty meal period must be paid implies an on-duty rest period, which is also paid, is permissible: It would make no sense to permit a 30-minute paid, on duty meal break but not a 10-minute paid rest break.”

That the rest period was “indistinguishable” from other parts of the guard’s workday did not sway the court. “[S]ection 226.7 does not require that a rest period be distinguishable from the remainder of the workday, it requires only that an employee not be required ‘to work’ during breaks,” the panel wrote. “Even if an employee did nothing but remain on call all day, being equally idle on a rest break does not constitute working.”

“Admittedly, an on-call guard must return to duty if requested, but … remaining available to work is not the same as performing work,” the court said.

The court took a close look at Brinker Restaurant Corp. v. Superior Court, disagreeing with the class’s contention that the state’s highest court held in that case that an employer must relieve an employee of all duty on a rest break and relinquish any control over how the employee spends his or her time.

Although the court found Brinker instructive on several levels, the panel said the decision addressed the “relieved-of-all-duty requirement” in the context of meal periods only and “said nothing about an employer’s obligation to relieve an employee of all duty on a rest break.”

“In sum, although on-call hours constitute ‘hours worked,’ remaining available to work is not the same as performing work,” the court said. “Section 226.7 proscribes only work on a rest break.”

Initially released on December 31, 2014, the court made its decision public in February along with a few tweaks to its holding. The panel did not change its judgment—reversing summary judgment for the class but upholding class certification—and denied the plaintiffs’ motion for rehearing.

To read the opinion in Augustus v. ABM Security Services, Inc., click here.