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Monday
Aug252014

For Whom the Calls Toll: Employers May Be Responsible for Cell Reimbursements

Wage and Hour DefenseClass Action Defense

by Sue M. Bendavid

818.907.3220

 

Here's another case that may result in further liability exposure for employers in California. The California Second Appellate District Court ordered the trial court to reconsider class certification for a group of 1,500 customer service managers who used personal cell phones for work related calls.

In Colin Cochran v. Schwan's Home Service, Inc., the plaintiff sued his employer for reimbursement for his personal cell phone service. Cochran argued that Schwan's violated Labor Code Section 2802 and engaged in unfair business practices. He sued for declaratory relief and statutory penalties under the Private Attorneys-General Act (PAGA) for himself and on behalf of a putative class of fellow employees.

The trial court refused to certify the class, noting that if the class members did not incur losses (e.g., because they had plans with unlimited minutes) there could be no liability on a class wide basis.  The trial court ruled that “statistics from a survey could not be used to prove liability, especially because there was no pattern or practice regarding the expenditures of the class members."

The argument against class certification was that the commonality requirement could not be met since the class members have different cell service carriers and many different phone plans provided by those carriers – thus determining expenditures for individual class members would not be feasible via the statistical sampling method proposed by Cochran.

Additionally, Cochran's girlfriend may have paid for the plaintiff's cell service which may render the class representative's claims for damages irrelevant.

Employee Class Action – It's All About the Sampling

The Court of Appeals disagreed, and cited Brinker Restaurant Corp v. Superior Court 2012 in the opinion: "if the defendant's liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages."

The Appellate opinion also referenced Duran v. U.S. Bank National Assn. 2014, and stated the trial court should consider the principals of Duran in considering whether to allow statistical sampling evidence in establishing either liability or damages, noting:

Duran noted that the use of statistical sampling to prove liability in overtime class actions is controversial, and explained that the use of it to prove damage is less so because "the law tolerates more uncertainty with respect to damages than to the existence of liability."

The court's opinion also stated that the trial court erred in assuming an employee does not suffer a loss under §2802 if a third party pays for the employee's cell service. Essentially, it's not the employer's business to delve into how employees handle their own, personal business.

In conclusion, the Court stated:

We hold that when employees must use their personal cell phones for work-related calls, Labor Code §2802 requires the employer to reimburse them. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills.

Employer Takeaway

Be careful if your employees use their personal cell phones for work related calls.

If possible, do not REQUIRE your employees to have a cell phone. If personal mobile devices are necessary, consider reimbursing your employees for calls and for part of the costs of service, even if that employee has an unlimited calling plan.

 

Sue M. Bendavid is the Chair of the Employment Practice Group at our firm. Contact her via email: sbendavid@lewitthackman.com, or via phone: 818.907.3220, for more information. 

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