Mendiola v. CPS Sec. Solutions, Inc.

• Decision Date: 08 January 2015
• Docket Number: No. S212704.,S212704.
• Citation: 60 Cal.4th 833,182 Cal.Rptr.3d 124,340 P.3d 355
• Court: California Supreme Court
• Parties: Tim MENDIOLA et al., Plaintiffs, Cross-defendants and Respondents, v. CPS SECURITY SOLUTIONS, INC., et al., Defendants, Cross-complainants and Appellants. Floriano Acosta et al., Plaintiffs, Cross-defendants and Respondents, v. CPS Security Solutions, Inc., et al., Defendants, Cross-complainants and Appellants.

60 Cal.4th 833

340 P.3d 355

182 Cal.Rptr.3d 124

Tim MENDIOLA et al., Plaintiffs, Cross-defendants and Respondents

v.CPS SECURITY SOLUTIONS, INC., et al., Defendants, Cross-complainants and Appellants.

Floriano Acosta et al., Plaintiffs, Cross-defendants and Respondents

v.CPS Security Solutions, Inc., et al., Defendants, Cross-complainants and Appellants.

No. S212704.

Supreme Court of California

Jan. 8, 2015.

Blank Rome, Howard M. Knee, Los Angeles; and Jim D. Newman for Defendants, Cross-complainants and Appellants.

Law Offices of Cathe L. Caraway–Howard, Cathe L. Caraway–Howard, Los Angeles; Natividad Law Firm, Caesar S. Natividad, Diamond Bar; Locker Folberg and Miles E. Locker, San Francisco, for Plaintiffs, Cross-defendants 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, Katharine and George Alexander Community Law Center, Legal Aid Society–Employment Law Center, the Maintenance Cooperation Trust Fund, National Lawyers Guild–Labor and Employment Committee, UC Hastings Civil Justice Clinic, UCLA Labor Center and Worksafe Inc., as Amici Curiae on behalf of Plaintiffs, Cross-defendants and Respondents.

David A. Sanders ; Carroll, Burdick & McDonough, San Francisco, Gregg McLean Adam and Jennifer S. Stoughton for California Correctional Peace Officers' Association as Amicus Curiae on behalf of Plaintiffs, Cross-defendants and Respondents.

Opinion

CORRIGAN, J.

Here we hold that, under the California wage order covering security guards, these plaintiffs are entitled to compensation for all on-call hours spent at their assigned worksites under their employer's control.

I. BACKGROUND

The relevant facts are not in dispute.¹ As applicable here,² CPS employed on-call guards³ to provide security at construction worksites. Part of each guard's day was spent on active patrol. Each evening, guards were required to be on call at the worksite and to respond to disturbances should the need arise.

More specifically, a guard's obligations differed depending on the day of the week. On weekdays, each guard was on patrol for eight hours, on call for eight hours, and off duty for eight hours. On weekends, each guard was on patrol for 16 hours and on call for eight hours.

By written agreement, an on-call guard was required to reside in a trailer provided by CPS. The trailers ranged from 150 to 200 square feet and had residential amenities including a bed, bathroom, kitchen, heating, and air conditioning. Only the assigned guard and maintenance staff had keys to these onsite trailers. Guards could keep personal items in the trailers and generally use on-call time as they chose. However, children, pets, and alcohol were not allowed, and adult visitors were permitted only with the approval of the CPS client.

An on-call guard wanting to leave the worksite had to notify a dispatcher and indicate where he or she would be and for how long. If another employee was available for relief, the guard had to wait onsite until the reliever arrived.⁴ If no reliever was available, the guard had to remain onsite, even in the case of a personal emergency. If relieved, a guard had to be accessible by pager or radio phone and to stay close enough to the site to return within 30 minutes.

Guards were compensated as follows. They were paid hourly for time spent patrolling the worksite. They received no compensation for on-call time unless (1) an alarm or other circumstances required that they conduct an investigation or (2) they waited for, or had been denied, a reliever. Guards were paid for the actual time spent investigating disturbances. If three or more hours of investigation were required during on-call time, the guard was paid for the full eight hours.

Two class action lawsuits were filed in 2008 by CPS guards. The complaints alleged, inter alia, that CPS's on-call compensation policy violated minimum wage and overtime obligations imposed by the applicable Industrial Welfare Commission (IWC) wage order and Labor Code statutes.⁵ The trial court consolidated the cases and certified the class. Both sides sought declaratory relief as to the lawfulness of CPS's on-call compensation policy. The parties filed cross-motions for summary adjudication of the declaratory relief claims.

The trial court granted plaintiffs' motion, concluding that CPS's compensation policy violated Wage Order 4. Citing the extent of CPS's control during on-call hours and the fact that the guards' presence on worksites primarily benefitted CPS, the court concluded that the on-call hours constituted compensable “hours worked” within the meaning of the wage order. CPS sought review. The Court of Appeal affirmed in part and reversed in part. Both parties petitioned for review.

We conclude that plaintiffs' on-call hours constituted compensable hours worked and, further, that CPS could not exclude “sleep time” from plaintiffs' 24–hour shifts under Monzon v. Schaefer Ambulance Service, Inc. (1990) 224 Cal.App.3d 16, 273 Cal.Rptr. 615 (Monzon ) and Seymore v. Metson Marine, Inc. (2011) 194 Cal.App.4th 361, 128 Cal.Rptr.3d 13 (Seymore ).

II. DISCUSSION

We have explained that “wage and hour claims are today governed by two complementary and occasionally overlapping sources of authority: the provisions of the Labor Code, enacted by the Legislature, and a series of 18 wage orders, adopted by the IWC.” (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1026, 139 Cal.Rptr.3d 315, 273 P.3d 513 (Brinker ).) The IWC, a state agency, was empowered to issue wage orders, which are legislative regulations specifying minimum requirements with respect to wages, hours, and working conditions.⁶ ( Brinker, at pp. 1026–1027, 139 Cal.Rptr.3d 315, 273 P.3d 513 ; see Martinez v. Combs (2010) 49 Cal.4th 35, 52–57, 109 Cal.Rptr.3d 514, 231 P.3d 259 (Martinez ).) Of the 18 wage orders in effect today, “16 cover[ ] specific industries and occupations, one cover[s] all employees not covered by an industry or occupation order, and a general minimum wage order amend[s] all others to conform to the amount of the minimum wage currently set by statute.” (Martinez, at p. 57, 109 Cal.Rptr.3d 514, 231 P.3d 259, fns. omitted.) The number of wage orders, and their internal variations, reflects the reality that differing aspects of work in differing industries may call for different kinds of regulation.

Wage Order 4 requires that employers “pay to each employee ... not less than the applicable minimum wage for all hours worked in the payroll period....” (Wage Order 4, subd. 4(B), italics added.) It also requires that employees be paid one and one-half times their regular rate of pay for “all hours worked over 40 hours in the workweek” (id., subd. 3(A)(1), italics added) and for “all hours worked in excess of eight (8) hours ... in any workday” (id., subd. 3(A)(1)(a), italics added).⁷ The resolution of this case turns, in part, on whether the time spent on call constituted hours worked within the meaning of the wage order.

Wage Order 4 defines hours worked as “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.”⁸ (Wage Order 4, subd. 2(K).) In Morillion, we explained that “the two phrases—‘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’ ” can be viewed “as independent factors, each of which defines whether certain time spent is compensable as ‘hours worked.’ Thus, an employee who is subject to an employer's control does not have to be working during that time to be compensated....” (Morillion, supra, 22 Cal.4th at p. 582, 94 Cal.Rptr.2d 3, 995 P.2d 139.)

We independently review the construction of statutes (Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1250, 140 Cal.Rptr.3d 173, 274 P.3d 1160 ), and begin with the text. If it “is clear and unambiguous our inquiry ends.”

(Murphy, supra, 40 Cal.4th at p. 1103, 56 Cal.Rptr.3d 880, 155 P.3d 284.) Wage and hour laws are “to be construed so as to promote employee protection.” (Sav–on Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 340, 17 Cal.Rptr.3d 906, 96 P.3d 194 ; see Brinker, supra, 53 Cal.4th at pp. 1026–1027, 139 Cal.Rptr.3d 315, 273 P.3d 513.) These principles apply equally to the construction of wage orders. (Brinker, at p. 1027, 139 Cal.Rptr.3d 315, 273 P.3d 513.) Additionally, when the relevant facts are not in dispute, what qualifies as hours worked is a question of law, reviewed de novo. (See Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 794, 85 Cal.Rptr.2d 844, 978 P.2d 2.)

Hours Worked

It is well established that an employee's on-call or standby time may require compensation. “Of course an employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen. Refraining from other activity often is a factor of instant readiness to serve, and idleness plays a part in all employments in a stand-by capacity. Readiness to serve may be hired, quite as much as service itself, and time spent lying in wait for threats to the safety of the employer's property may be treated by the parties as a benefit to the employer.” (Armour & Co. v. Wantock (1944) 323 U.S. 126, 133, 65 S.Ct. 165, 89 L.Ed. 118 ; see Skidmore v. Swift & Co. (1944) 323 U.S. 134, 137, 65 S.Ct. 161, 89 L.Ed. 124 [“Facts may show that the employee was engaged to wait, or they may show that he waited to be engaged.”]; Madera Police Officers Assn. v. City of Madera (1984) 36 Cal.3d 403, 406, 204 Cal.Rptr. 422, 682 P.2d 1087 (Madera ) [concluding officers' on-call mealtime was compensable hours worked].)

California courts considering whether on-call time constitutes hours worked have primarily focused on the extent of the employer's control. (E.g., Ghazaryan v. Diva Limousine, Ltd. (2008) 169...