Mendiola v. CPS Sec. Solutions, Inc.
| Decision Date | 03 July 2013 |
| Docket Number | B240519 |
| Citation | 159 Cal.Rptr.3d 159 |
| Parties | Tim MENDIOLA et al., Plaintiffs, Cross-defendants and Respondents, v. CPS SECURITY SOLUTIONS, INC., et al., Defendants, Cross-complainants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
Blank Rome and Howard M. Knee, Los Angeles; Jim D. Newman, Gardena, for Defendants, Cross-complainants and Appellants.
Law Offices of Cathe L. Caraway–Howard, Los Angeles, for Plaintiffs, Cross-defendants and Respondents.
Appellants CPS Security Solutions, Inc., CPS Construction Protection Security Plus, Inc., and Construction Protective Services, Inc. (collectively CPS) provide security guards for building construction sites throughout California. A number of the security guards employed by CPS are designated "trailer guards." They are thus described because in addition to their regular patrols, they are expected to spend the night at their assigned jobsites in CPS-provided residential-type trailers, in order to be available to investigate alarms and other suspicious circumstances and to prevent vandalism and theft. During these nighttime periods, CPS considers the trailer guards "on call," and generally compensates them only for the time spent actively conducting investigations.1 In 2008, two lawsuits were filed against CPS, alleging violations of California law governing minimum wage and overtime compensation and seeking to represent the same class of California trailer guards. The trial court consolidated the cases and certified the class.2
Currently on appeal is the court's order granting a preliminary injunction requiring CPS to compensate trailer guards for all on-call time spent in the trailers. At issue are two distinct periods: weekdays, when the trailer guards are on patrol eight hours and on call eight hours, and weekends, when they are on patrol 16 hours and on call eight hours. We conclude that CPS must compensate the trailer guards for the nighttime hours spent on the jobsites during the week, as the trial court ruled. However, in accordance with settled principles of California law, we conclude that CPS is permitted to deduct eight hours for sleep time on those weekend days when the trailer guards are on duty for 24 hours. Accordingly, we affirm in part and reverse in part.
The operative complaint sought damages for failure to pay minimum wage and overtime compensation in violation of California Code of Regulations and Labor Code provisions, including Industrial Welfare Commission wage order No. 4).3 It also asserted other related claims, including a claim for declaratory relief, seeking a determination whether CPS's on-call compensation policy was unlawful under the applicable statutes and regulations. CPS cross-claimed for declaratory relief, also seeking a judicial determination of the lawfulness of its on-call policy.
The parties filed cross-motions for summary adjudication on the declaratory relief causes of action, filing a joint statement of undisputed facts in which they stipulated to the following: CPS contracts with its customers, construction companies at building sites throughout California, to provide security services. The package of services generally includes the presence of a security guard from 3:00 p.m. to 7:00 a.m., Monday through Friday, and for 24 hours on Saturday and Sunday.4
Prior to being hired by CPS, each trailer guard was required to sign a "Designation of Personal Time for In-Residence Guard," also referred to as an "On-Call Agreement[ ]." The On-Call Agreements designated eight hours per day, generally from 9:00 p.m. to 5:00 a.m., as "On-Call" hours. Under these agreements, each trailer guard agreed that the trailer home was his or her "residence," and agreed to "reside during [his or her] employment in the trailer home provided by the Company for [his or her] exclusive use." Those prospective hires who did not agree to the terms and conditions of employment as a trailer guard were offered positions as hourly guards, when available.
The trailers provided by CPS ranged in size from 150 to 200 square feet. The trailers had many of the amenities of home, including a living area, a bed, a functioning bathroom and kitchen, heat, and air-conditioning. The trailers were equipped with locks, and only the assigned trailer guard and CPS maintenance staff had the keys. Trailer guards were allowed to keep personal items in their trailers, including clothing, books, magazines, televisions, radios, and personal computers, and to engage in personal activities while on call in the trailers, including sleeping, showering, cooking, eating, reading, watching television, listening to the radio, and surfing the Internet. However, children, pets, and alcohol were not permitted on the premises, and adult visitors were permitted only if CPS's client permitted it.
On weekdays, trailer guards were generally scheduled to actively patrol the jobsites from 5:00 a.m. to 7:00 a.m. and from 3:00 p.m. to 9:00 p.m. (a total of eight hours).5 On weekends, trailer guards were on active patrol from 5:00 a.m. to 9:00 p.m. (16 hours). During these times, they were paid an hourly rate. For eight hours every day, generally 9:00 p.m. to 5:00 a.m., the trailer guards were considered to be on call, which meant present on the jobsite or in the trailer, except as specified in the On-Call Agreements.
Under the On-Call Agreements, if a trailer guard wished to leave the jobsite during on-call hours, he or she was required to (1) notify a dispatcher, (2) provide information as to where the guard would be and for how long, and (3) wait for the reliever to arrive.6 After leaving the jobsite, the guard was required to remain within a 30-minute radius and carry a pager or radio telephone. If called during that time, the guard was required to respond immediately. The trailer guards were not allowed to leave a jobsite before a reliever arrived. If no reliever was available, CPS had the right to order a trailer guard to remain at the jobsite, even if the trailer guard had an emergency. CPS did not consider on-call time when calculating hours worked, and trailer guards were paid for on-call time only if (1) an alarm, noise, motion or other condition on the jobsite required investigation or (2) they were waiting for or had been denied a reliever.7 When investigating a suspicious condition, the trailer guards were paid for the actual time spent conducting the investigation. If a trailer guard spent three or more hours engaged in investigations during the on-call period, the guard would be paid for the entire eight hours.
The parties stipulated that state and federal governmental agencies had weighed in on the legality of CPS's on-call policy or the legality of predecessor policies with similar features as set forth below.
Beginning in 1996, the Division of Labor Standards Enforcement (DLSE) conducted an investigation and audit of CPS's policy with regard to trailer guards and their nighttime posting, which was then designated "sleep time."8 Under the policy then in place, trailer guards who wished to leave a jobsite were required to request permission 12 hours in advance to enable CPS to secure a reliever, and were not paid if no reliever was available. In an April 1997 letter, the Chief Deputy Director of the Department of Industrial Relations and acting Labor Commissioner noted that both DLSE and the federal Department of Labor had concluded "hours worked" did not include "sleep time, meal times, and all other times during which the employee is either free to leave the premises or is free to engage in private pursuits."9 After review, the DLSE "f[ound] it appropriate to extend this rule to the live-in security guards of [CPS]" under the facts presented, which included the fact that "the guards [CPS] employ[ed] were homeless and [the trailer was] essentially their only place of residence."10
In 1999, the DLSE reversed its position on CPS's "sleep time" policy. In November 2002, CPS filed an action for declaratory relief seeking resolution of the policy's legality, which the parties settled by entering into an October 14, 2003 memorandum of understanding (MOU).11 Under the MOU, CPS agreed to change the terms of employment for its trailer guards to include the following: "During the period between 9:00 p.m. and 5:00 a.m. (herein called ‘free time’) seven days a week, CPS shall implement a policy that provides the Trailer Guards are free to leave the site at will during this free time, subject to the following conditions: (i) that the Trailer Guard will be on ‘stand-by’ and subject to being required to respond to alarms and other recalls to work during those hours; (ii) that, before any Trailer Guard leaves the site, he/she shall call in to a central location and inform CPS that he/she is leaving, how long he/she intends to be gone from the site, and where he/she intends to be; (iii) that the Trailer Guard shall carry a pager or other device that will allow CPS to contact him/her; (iv) that, if paged or otherwise summoned, the Trailer Guard shall answer the page or otherwise contact CPS immediately; and (v) that the Trailer Guard may be required to stay within a radius of distance that will allow him/her to return to the construction site within 30 minutes."12
In 1997, CPS had also requested a formal opinion from the United States Department of Labor (DOL) concerning its sleep time policy. In a letter dated March 24, 1997, the Assistant District Director of DOL advised CPS "that its sleep time agreements complied with federal regulations and that the designated sleep time hours did not need to be compensated as ‘hours worked,’ provided that the unpaid sleep time period was regularly scheduled and was at least 5 hours and not more than 8 hours per...
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