California Supreme Court Provides Clarification on Rest Periods

The California Supreme Court recently issued an important opinion clarifying employers’ obligations to provide employee rest periods. Specifically, in Augustus v. ABM Security Services, Inc., 2 Cal.5^th 257, the Court reinstated a trial court order awarding approximately $90 million to a class of employee plaintiffs and held that employers (1) must relieve their employees of all duties during rest periods, and (2) must relinquish any control over how employees spend their break time. This Bulletin discusses the background and additional considerations addressed by the Augustus Court in this critical decision.

Case Background

ABM Security Services employs several thousand security guards throughout California. A large class of the guards sued, claiming ABM failed to provide proper rest periods in compliance with California law. More specifically, the guards claimed ABM required them to keep their pagers and radios on during rest periods and to “remain vigilant” and responsive to calls when needs arose, including escorting tenants to parking lots, notifying building managers of mechanical problems and responding to emergency situations.

The Los Angeles Superior Court granted a motion for summary judgment brought by the employees and awarded them approximately $90 million in damages. The Court of Appeal reversed this order, finding that simply being “on call” did not constitute “performing work” and therefore did not violate California’s rest period laws.

The Applicable Law

California law, set forth in Cal. Labor Code Sections 226.7, 512 and Industrial Welfare Commission (“IWC”) Wage Order No. 4-2001, requires that employers provide a paid 10-minute rest period every four (4) hours of work (or fraction thereof) to any employee who works more than three-and-one-one-half hours per day. The law stipulates that employees should not be required “to work” during this break.

The California Supreme Court Opinion

The Supreme Court disagreed with the reasoning of the Court of Appeal and reversed, reinstating the $90 million damages award. It did so by adhering to the plain language of the Wage Order, which simply requires employees be relieved of all work-related duties and employer control during 10-minute break periods. The Court also found support for its position in what it termed the “practical realities” of rest periods. While a policy requiring employees to remain on an employer’s premises during rest periods does not establish employer control, requiring employees to carry devices or otherwise remain reachable during a break suggests impermissible employer control.

The Court recognized that employers do have options if an exigency arises and the employee is needed during his or her break. First, it said, “Nothing in our holding circumscribes an employer’s ability to reschedule a rest period when the need arises.” Additionally, the employer may provide employees with another rest period to replace one that was interrupted or pay the employee the premium pay required under the applicable IWC Wage Order and Labor Code Section 226.7. This premium equates to one additional hour of pay at the employee’s regular rate of pay for each day that a rest period is not provided.

What Should Employers Do in Light of the Augustus Opinion?

California employers have collectively paid hundreds of millions of dollars in verdicts, settlements and administrative claims as a result of failing to strictly adhere to the rest period requirements. The Augustus opinion should serve as a wake-up call to any employer who does not already comply with this law. At a minimum, employers should not only review their policies to ensure that employees receive 10-minute rest periods free from duties and employer control, but also take steps to ensure that managers are properly trained to implement this policy.

Conclusion

Employers with lingering questions concerning their rest period policies should not hesitate to contact their experienced employment law counsel.