A California Appeal Court has held that employees are only required to show that they were required to use their personal cell phone for work-related calls to be entitled to reimbursement under California Labor Code § 2802.
Executive Summary: A California Appeal Court has held that employees are only required to show that they were required to use their personal cell phone for work-related calls to be entitled to reimbursement under California Labor Code § 2802. In reaching this conclusion, the appeal court held that it does not matter whether the phone bill is paid by a third person or not paid at all. See Cochran v. Schwan's Home Service (Aug. 12, 2014).
In this case, a California-based customer service manager for a frozen food home-delivery company filed a class action against his employer, claiming California Labor Code § 2802 requires the company to reimburse its employees for mandatory work-related calls made on their personal cell phones. Section 2802 states in relevant part:
An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.
The trial court, however, denied class certification on the grounds that "an employee does not suffer an expenditure or loss under Section 2802 if his or her cell phone charges were paid for by a third person," or if the employee subscribes to a flat-rate plan such that the work-related calls do not create an extra expense on his or her cell phone bill.
On appeal, a California appellate court unanimously reversed the trial court's ruling, stating that reimbursement is always required where an employee uses a personal cell phone for mandatory work-related calls, "[o]therwise, the employer would receive a windfall because it would be passing its operating expenses onto the employee." The court further stated:
It does not matter whether the phone bill is paid for by a third person, or at all. In other words, it is no concern to the employer that the employee may pass on the expense to a family member or a friend, or to a carrier that has to then write off a loss [as part of a flat-rate plan].
Consequently, to establish liability under Section 2802, employees only have to show that they were required to use their personal cell phone for work-related calls to be entitled to reimbursement.
The appellate court then remanded the class certification matter to the trial court for reconsideration in light of its ruling.
Employers' Bottom line: If employees in California are required to use their personal cell phones as a part of their job duties, their employer must pay a reasonable percentage of their cell phone bill, regardless of the type of plan they are on or whether they are the ones paying the bill.
If you have any questions regarding this Alert, or other labor or employment related issues, please contact Allison Vasquez Saunders, asaunders@fordharrison.com, who is a partner in our Los Angeles office, or Heath Edwards, hedwards@fordharrison.com, who is a senior associate in our Atlanta office. You may also contact the FordHarrison attorney with whom you usually work.