Hernandez v. Pac. Bell Tel. Co.

• Decision Date: 15 November 2018
• Docket Number: C084350
• Court: California Court of Appeals Court of Appeals
• Parties: Isreal HERNANDEZ et al., Plaintiffs and Appellants, v. PACIFIC BELL TELEPHONE COMPANY, Defendant and Respondent.

29 Cal.App.5th 131

239 Cal.Rptr.3d 852

Isreal HERNANDEZ et al., Plaintiffs and Appellants,

v.PACIFIC BELL TELEPHONE COMPANY, Defendant and Respondent.

C084350

Court of Appeal, Third District, California.

Filed November 15, 2018

Righetti Glugoski, Matthew Righetti and John Glugoski, San Francisco, for Plaintiffs and Appellants.

Sheppard, Mullin, Richter & Hampton, Thomas R. Kaufman, Paul Berkowitz, Los Angeles; Mayer Brown, Donald M. Falk, Palo Alto; AT&T Services and Laurie E. Barnes for Defendant and Respondent.

Jones Day, George S. Howard, Jr., Cindi L. Ritchey, San Diego, and Victoria E. Cho, Irvine, for Employers Group and California Employment Law Council as Amici Curiae on behalf of Defendant and Respondent.

Duarte, J.Plaintiffs are class representatives of current and former employees of defendant Pacific Bell Telephone Company who install and repair video and internet services in customers’ homes. They appeal a judgment in favor of defendant following cross-motions for summary judgment or summary adjudication. Plaintiffs sought compensation for the time they spent traveling in an employer-provided vehicle--loaded with equipment and tools--between their homes and a customer’s residence (the worksite) under an optional and voluntary Home Dispatch Program.

The trial court, like federal courts that have considered the question under California law, concluded the travel time is not compensable.

We agree and affirm. First, the Home Dispatch Program is not compulsory; because the plaintiffs here were not required to use the company vehicle to commute to work, they were not under the control of the employer. Further, simply transporting tools and equipment during commute time is not compensable work where no effort or extra time is required to effectuate the transport.

FACTUAL AND PROCEDURAL BACKGROUND

Pacific Bell provides U-verse services in California. U-verse allows customers to obtain video and high-speed internet services in their homes. Premises technicians (technicians), who are paid on an hourly basis, install and repair U-verse products at the customers’ homes. Technicians may not use their own vehicles while on the job; instead, they must use a company vehicle. They must take with them in the company vehicles all necessary equipment and tools to perform their job. The scheduled work day begins at 8:00 a.m. and lasts eight hours.

Before 2009 all technicians picked up company vehicles loaded with the equipment and tools necessary for U-verse installation and repair at a Pacific Bell garage. The work day began at the garage; technicians were paid for the time elapsed between pick up of the company vehicle at the garage and arrival at the first worksite. They were also paid for the time spent driving back to the garage from the final worksite at the end of the day.

In 2009 Pacific Bell began the Home Dispatch Program (HDP), which allowed technicians to take a company vehicle home each night instead of returning all vehicles to the Pacific Bell garage. Participation in the HDP is optional. Under the program, technicians drive the company vehicles, containing tools and equipment, to and from home each day. Technicians must be at the first worksite by 8:00 a.m. and they are not paid for any time before 8:00 spent driving from their homes to the first worksite. As a general rule, they are not paid for the time spent driving home with the equipment and tools after their last appointment. Technicians in the HDP make one visit a week to the Pacific Bell garage to load the equipment and tools needed for the week. They are paid for this driving and loading time. They may not leave equipment and tools at a worksite or at the Pacific Bell garage; they must take it home with the company vehicle. Technicians who elect not to participate in the HDP are compensated for time spent traveling to and from the Pacific Bell garage, as was the norm before the HDP was available.

Israel Hernandez and Larry Michael Sharp brought a class action, on behalf of all Pacific Bell premises technicians. The complaint alleged plaintiffs and the class were not paid for all the time they were under Pacific Bell’s control, because they were not paid for the time they were transporting equipment and tools in a company vehicle to and from the first and last jobs and for the time required to safeguard the equipment and tools. The complaint stated three causes of action--failure to pay the minimum wage, failure to pay wages timely, and unfair business practices--all based on the failure to pay for the transporting time. The court certified the class except for the safeguarding equipment claim.

The parties filed cross motions for summary judgment or summary adjudication on the class claims.¹ They stipulated to undisputed facts about the HDP, as set forth ante. Plaintiffs offered additional facts, including some about the HDP. Under the HDP, technicians could use the company vehicle only for company business, and only authorized persons could ride in or drive it. Technicians could not stop on the way to or from a customer’s house to run errands or drop off or pick up children from school. They could not talk on a cell phone while driving, even before it was against the law to do so.

Plaintiffs also requested judicial notice of various advice letters of the Labor Department Division of Labor Standards Enforcement (DLSE) and the trial court granted the request. In particular, one DLSE opinion letter responded to a question about whether certain commute time was compensable. (Cal. Dept. Industrial Relations, DLSE Counsel H. Thomas Cadell, advice letter, "Travel Time Pay for Employee with Alternative Worksites" (Apr. 22, 2003) (Cadell letter).) The employee in question resided in Bakersfield, had alternate worksites in Bakersfield and Palmdale, and did not transport any significant materials between worksites. The employer asked if the commute to Palmdale was compensable time. (Id. at p. 1.) In discussing the factors to consider, the response noted that if the travel involved the employee’s being required to deliver any equipment, goods, or materials for the employer, the travel time would be compensable. (Id. at p. 3.)

Pacific Bell argued that commuting in an employer-provided vehicle was compensable under California law only if such commuting was mandated, whereas participation in the HDP was optional and voluntary. It further argued the remaining class claims were derivative of the first and therefore also failed. Plaintiffs argued that where employees transport the employer’s equipment and tools, what is ordinarily commute time becomes compensable work time.

The trial court granted Pacific Bell’s motion for summary judgment and denied plaintiffs’ motion. In a subsequent order, the court modified its ruling to grant only summary adjudication on the class claims as the individual claims remained. The parties stipulated to dismiss the individual claims. The court entered judgment for Pacific Bell.

Plaintiffs appeal.²

DISCUSSION

I

Hours Worked

Plaintiffs contend the time a Pacific Bell technician who participates in the HDP spends traveling from that technician’s home to a worksite in a company vehicle, carrying equipment and tools, and the time traveling home from the final appointment at the end of the work day is compensable "hours worked."

The Industrial Welfare Commission (IWC) "is the state agency empowered to formulate regulations (known as wage orders) governing employment in the State of California." ( Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 561, 59 Cal.Rptr.2d 186, 927 P.2d 296.)

The IWC has promulgated 15 industry and occupational wage orders covering certain industries and occupations.

( Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 581, 94 Cal.Rptr.2d 3, 995 P.2d 139 ( Morillion ).) Although neither party specifies the wage order at issue here, all 15 of the industry and occupational wage orders contain the same definition of "hours worked." ( Ibid. ) Wage Order No. 4-2001 appears to be the applicable wage order as it covers professional, technical, clerical, mechanical, and similar occupations. ( Cal. Code Regs., tit. 8, § 11040.) It defines "hours worked" to mean "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." (Id., subd. (2)(G).) An employer must pay employees for all hours worked. ( Morillion, at p. 578, 94 Cal.Rptr.2d 3, 995 P.2d 139.)

The two phrases of the definition--"time during which an employee is subject to the control of an employer" and "time the employee is suffered or permitted to work, whether or not required to do so"--establish independent factors that each define "hours worked." ( Morillion, supra, 22 Cal.4th at p. 582, 94 Cal.Rptr.2d 3, 995 P.2d 139.) "Thus, an employee who is subject to an employer’s control does not have to be working during that time to be compensated under [the applicable wage order]." ( Ibid . ) The time an employee is "suffered or permitted to work, whether or not required to do so," includes time the employee is working but not under the employer’s control, such as unauthorized overtime, provided the employer has knowledge of it. ( Id . at pp. 584-585, 94 Cal.Rptr.2d 3, 995 P.2d 139.)

Plaintiffs contend the travel time between home and the customer’s residence meets both of these tests. Because the facts are not in dispute, this is a question of law we review de novo. ( Building Industry Association of the Bay Area v. City of San Ramon (2016) 4 Cal.App.5th 62, 73, 208 Cal.Rptr.3d 320.)

II

The Control Test

Plaintiffs contend that under the circumstances seen here, the travel time to and from the technician’s home and worksite satisfies the control test. Plaintiffs focus on the numerous restrictions placed on technicians under the HDP. Under the HDP, technicians can use the company vehicle only for company business and only authorized persons...