Augustus v. ABM Sec. Servs., Inc.

• Citation: 385 P.3d 823,211 Cal.Rptr.3d 634,2 Cal.5th 257
• Decision Date: 22 December 2016
• Docket Number: S224853
• Court: United States State Supreme Court (California)
• Parties: Jennifer AUGUSTUS et al., Plaintiffs and Respondents, v. ABM SECURITY SERVICES, INC., Defendant and Appellant.

2 Cal.5th 257

385 P.3d 823

211 Cal.Rptr.3d 634

Jennifer AUGUSTUS et al., Plaintiffs and Respondents,

v.ABM SECURITY SERVICES, INC., Defendant and Appellant.

S224853

Supreme Court of California

Filed December 22, 2016

Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Theane Evangelis, Andrew G. Pappas, Bradley J. Hamburger, Los Angeles; Littler Mendelson, Keith A. Jacoby and Dominic J. Messiha, Los Angeles, for Defendant and Appellant.

Seyfarth Shaw, Jeffrey A. Berman, James M. Harris and Kiran A. Seldon, Los Angeles, for Employers Group as Amicus Curiae on behalf of Defendant and Appellant.

Paul Hastings and Paul Grossman, Los Angeles, for California Employment Law Council as Amicus Curiae on behalf of Defendant and Appellant.

Carothers DiSante & Freudenberger and Robin E. Largent, Sacramento, for National Association of Security Companies as Amicus Curiae on behalf of Defendant and Appellant.

Thompson & Knight and David R. Ongaro as Amici Curiae on behalf of Defendant and Appellant.

Horvitz & Levy, John A. Taylor, Jr., Robert H. Wright, Felix Shafir, Encino, and Shane H. McKenzie for Chamber of Commerce of the United States of America and National Association of Manufacturers as Amici Curiae on behalf of Defendant and Appellant.

Shaw Valenza and D. Gregory Valenza, Sacramento, for California Chamber of Commerce and California Building Industry Association as Amici Curiae on behalf of Defendant and Appellant.

Ogletree, Deakins, Nash, Smoak & Stewart, Robert A. Jones, Robert R. Roginson and Kathleen J. Choi, Los Angeles, for National Armored Car Association and Independent Armored Car Operators Association, Inc., as Amici Curiae on behalf of Defendant and Appellant.

Roxborough, Pomerance, Nye & Adreani, Drew E. Pomerance, Michael B Adreani, Marina N. Vitek, Woodland Hills; The Ehrlich Law Firm, Jeffrey Isaac Ehrlich ; Initiative Legal Group, Monica Balderrama, Los Angeles, G. Arthur Meneses ; Scott Cole & Associates, Scott Edward Cole, Matthew R. Bainer, Oakland; Law Offices of Alvin L. Pittman and Alvin L. Pittman for Plaintiffs and Respondents.

Law Offices of Louis Benowitz and Louis Benowitz, Beverly Hills, for California Employment Lawyers Association as Amicus Curiae on behalf of Plaintiffs and Respondents.

The Turley Law Firm, William Turley and David T. Mara, San Diego, for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiffs and Respondents.

Hina B. Shah for Women's Employment Rights Clinic of Golden Gate University School of Law, Asian Americans Advancing Justice-Asian Law Caucus, Asian Americans Advancing Justice-Los Angeles, Centro Legal de La Raza, Chinese Progressive Association, Legal Aid Society-Employment Law Center, National Employment Law Project, National Lawyers Guild-Labor and Employment Committee, San Francisco Progressive Workers Alliance, Wage Justice Center and Worksafe, Inc., as Amici Curiae on behalf of Plaintiffs and Respondents.

Cuéllar, J.

We granted review to address two related issues: whether employers are required to permit their employees to take off-duty rest periods under Labor Code section 226.7 and Industrial Welfare Commission (IWC) wage order No. 4-2001 (Cal. Code Regs., tit. 8, § 11040 (Wage Order 4)), and whether employers may require their employees to remain "on call" during rest periods. What we conclude is that state law prohibits on-duty and on-call rest periods. During required rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time. (See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1038–1039, 139 Cal.Rptr.3d 315, 273 P.3d 513 (Brinker ).)

Plaintiffs worked as security guards for defendant ABM Security Services, Inc. (ABM). A requirement of employment at ABM was for guards to keep their pagers and radio phones on—even during rest periods—and to remain vigilant and responsive to calls when needs arose. ABM's understanding about the scope of such needs, meanwhile, encompassed a variety of circumstances, including situations where a building tenant wished to be escorted to the parking lot, a building manager had to be notified of a mechanical problem, or the occurrence of some kind of "emergency situation." Plaintiffs sued ABM, alleging the company failed to provide the rest periods that state law entitles employees to receive. The trial court granted summary judgment for plaintiffs, finding ABM liable and awarding approximately $90 million—but the Court of Appeal reversed. Because state law requires employers to provide their employees with rest periods that are free from duties or employer control, we reverse the Court of Appeal.

I. BACKGROUND

ABM employs thousands of security guards at residential, retail, office, and industrial sites throughout California.¹ While the number of guards at each site varies, the guards' primary responsibility does not: to provide " ‘an immediate and correct response to emergency/life safety situations' " and " ‘physical security for the building, its tenants and their employees ... by observing and reporting all unusual activities. In essence, [a guard] is the eyes and ears' " of the site. Specific duties may include patrolling sites, responding to emergencies, identifying and reporting safety issues, providing escorts to parking lots, greeting and assisting tenants and visitors, monitoring and restricting access to sites, directing vehicular traffic and parking, monitoring and occasionally either restricting or assisting in moving property into and out of sites, making reports, and hoisting and lowering flags.

In 2005, plaintiff Jennifer Augustus filed a putative class action on behalf of all ABM security guards. The trial court subsequently consolidated the matter with similar actions filed by two other ABM guards. Plaintiffs filed a master complaint, which alleged ABM's failure "to consistently provide uninterrupted rest periods" as required by state law. During discovery, ABM acknowledged it did not relieve guards of all duties during rest periods. In particular, ABM required guards to keep their radios and pagers on, remain vigilant, and respond when needs arose, such as escorting tenants to parking lots, notifying building managers of mechanical problems, and responding to emergency situations.

Plaintiffs then moved for summary adjudication of their rest period claim in 2010.² It was undisputed, plaintiffs argued, that ABM had a policy of requiring its guards to remain on duty during breaks, and that such a policy violated state law. ABM opposed the motion. The company argued that, if it required anything at all during guards' rest periods, it was merely that guards remain on call—that is, to keep radios and pagers on—in case an incident required a response. ABM also offered evidence that class members regularly took breaks uninterrupted by service calls. But the trial court granted plaintiffs' motion, concluding that ABM's policy was to provide guards with rest periods subject to employer control and the obligation to perform certain work-related duties. The court reasoned that a rest period subject to such control was indistinguishable from the rest of a workday; in other words, an on-duty or on-call break is no break at all. The court subsequently granted plaintiffs' motion for summary judgment on damages, awarding approximately $90 million in statutory damages, interest, and penalties.

The Court of Appeal reversed. It agreed that ABM did not relieve guards of all duties during rest periods and instead required that they remain on call, compelling them to keep radios and pagers on and respond when necessary.³ But the court concluded that state law does not require employers to provide off-duty rest periods, and moreover, "simply being on call" does not constitute performing work. We granted review to consider whether the Court of Appeal was correct in light of Labor Code section 226.7 and Wage Order 4.⁴

II. DISCUSSION

To answer the questions before us we must interpret both the Labor Code and the IWC wage orders that cover employees in plaintiffs' situation.⁵ We review the Court of Appeal's interpretation de novo.

(Mendiola , supra , 60 Cal.4th at p. 840, 182 Cal.Rptr.3d 124, 340 P.3d 355.) When construing the Labor Code and wage orders, we adopt the construction that best gives effect to the purpose of the Legislature and the IWC. (Brinker , supra , 53 Cal.4th at pp. 1026–1027, 139 Cal.Rptr.3d 315, 273 P.3d 513 ; Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103, 56 Cal.Rptr.3d 880, 155 P.3d 284 (Murphy ).) Time and again, we have characterized that purpose as the protection of employees—particularly given the extent of legislative concern about working conditions, wages, and hours when the Legislature enacted key portions of the Labor Code. (Mendiola , at p. 840, 182 Cal.Rptr.3d 124, 340 P.3d 355 [" ‘to promote employee protection’ "]; Martinez v. Combs (2010) 49 Cal.4th 35, 53–54, 109 Cal.Rptr.3d 514, 231 P.3d 259 (Martinez ) [describing the Legislature's concerns]; Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 702, 166 Cal.Rptr. 331, 613 P.2d 579 (Industrial Welfare Com. ) [noting the "remedial nature" of legislative enactments and wage orders].) In furtherance of that purpose, we liberally construe the Labor Code and wage orders to favor the protection of employees. (E.g., Brinker , at pp. 1026–1027, 139 Cal.Rptr.3d 315, 273 P.3d 513 ; Murphy , at p. 1103, 56 Cal.Rptr.3d 880, 155 P.3d 284 ["statutes governing conditions of employment are to be construed broadly"].) In doing so, we accord the IWC's interpretations "considerable judicial deference" (Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 801, 85 Cal.Rptr.2d 844, 978 P.2d 2 ) and take account of interpretations articulated by the Division of Labor Standards Enforcement (DLSE), the state agency that enforces wage orders, for guidance (Peabody v. Time Warner Cable, Inc. (2014) 59 Cal.4th 662, 668, fn. 5, 174...