Why it matters

In another case with significant ramifications for employers, the California Supreme Court has agreed to decide whether an employee on a break—and still “on call”—must be compensated for that time. The case involved a security company that admitted its guards were told to keep their radios and pagers on during rest breaks and “remain vigilant” should the need to respond arise. A trial court judge certified a class of security guards and entered judgment for roughly $103 million to compensate them for their time. An appellate panel reversed, holding that remaining on call does not itself constitute performing work. The applicable wage order only mandates that an employee not be required “to work” on a rest break—not that the employee be relieved of all duties, the court said. An affirmation of the appellate panel by the California Supreme Court would certainly ease the burden on employers. However, a January decision from the state’s highest court in Mendiola v. CPS Security Solutions addressing the same wage order and holding that workers must be paid for “all hours worked,” even sleeping security guards on call, could prove challenging to distinguish.

Detailed discussion

Three former security guards for ABM Security Services filed suit on behalf of themselves and other guards alleging that the employer failed to provide rest periods as mandated by California law because they were required to remain on call during breaks instead of being relieved of all of their duties.

Security guards employed by ABM are the “eyes and ears” of the building’s management, with duties to patrol buildings, hoist and lower flags, greet visitors, eject trespassers, and monitor and restrict access to buildings.

Wage Order 4 mandates that an employee who works more than three and one-half hours per day must be permitted to take a paid 10-minute rest period per every four hours of work or major fraction thereof. During that rest period, the employee shall not be required “to work.”

In the course of discovery, ABM admitted that it requires its security guards to keep their radios and pagers on during rest breaks, to remain vigilant, and to respond when needs arise, such as an emergency situation. The guards told the court that their rest periods were therefore indistinguishable from normal security work, rendering each rest break invalid under Wage Order 4.

A trial court judge certified a class of an estimated 10,000 security guards, and both parties moved for summary judgment. The class relied solely on ABM’s policy and offered no evidence indicating that anyone’s rest period had ever been interrupted. ABM responded with evidence—including the deposition testimony of the named plaintiffs—that guards regularly took uninterrupted rest breaks during which they performed no work but engaged in leisure activities such as smoking, reading, and surfing the Internet. The mere risk of interruption did not negate or invalidate a rest break, the employer told the court.

The trial court judge granted the motion in favor of the class and entered an award of $103 million in statutory damages, interest, penalties, and attorney fees.

ABM appealed. Considering the scope and duties that Wage Order 4, as well as California Labor Code Sections 226.7 and 512, imposes on a security company to afford rest periods to its employees, the appellate panel reversed.

Wage Order 4 sets out the necessary time periods for security guard rest periods, with Section 226.7 providing the only guidance as to the nature of a rest break: “An employer shall not require an employee to work during a meal or rest or recovery period.”

Does simply being on call constitute performing “work”? “We conclude that it does not,” the panel wrote.

The court bolstered its conclusion with a comparison between rest periods and meal periods. Subdivision 11(A) of Wage Order 4 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] 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,” the court wrote. “That it did not indicates no such requirement was intended. 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.”

Whether or not the on-call rest period was “indistinguishable” from other parts of the guards’ workday was “without merit,” the panel said. “[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. Even if an employee did nothing but remain on call all day, being equally idle on a rest break does not constitute working.”

Many of the tasks required for a guard on duty—greeting visitors, raising and lowering the flag, monitoring traffic or parking—were required of the guards while on rest periods, the court added. “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 distinguished the California Supreme Court’s 2012 decision in Brinker Restaurant Corp. v. Superior Court because “it said nothing about an employer’s obligation to relieve an employee of all duty on a rest break,” and concerned meal periods only. Meal breaks and rest breaks are qualitatively different, and Brinker applies to the mandate of Subdivision 11(A), but not Subdivision 12(A), the court said.

As for Mendiola v. CPS Security Solutions, the panel cited the decision for the proposition that not all employees at work actually perform work. “[A]n employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen … [I]dleness plays a part in all employments in a stand-by capacity.”

“Remaining on call is an example,” the panel wrote. “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.”

Reversing summary judgment in favor of the class as well as the damage awards, the court left intact the class certification order.

The class filed a petition for review with the California Supreme Court, which was granted on May 29. The state’s highest court said it will consider whether Section 226.7 and Wage Order 4 “require that employees be relieved of all duties during rest breaks,” as well as if “security guards who remain on call during rest breaks [are] performing work during that time under the analysis of Mendiola.”

To read the appellate court’s decision in Augustus v. ABM Security Services, click here.

To read the California Supreme Court’s grant of review, click here.