CHANEY, J. —
Plaintiff Jennifer Augustus and others, formerly security guards employed by defendant ABM Security Services, Inc. (hereafter ABM), allege on behalf of themselves and a class of similarly situated individuals that ABM failed to provide rest periods required by California law in that it failed to relieve security guards of all duties during rest breaks, instead requiring its guards to remain on call during breaks. The trial court certified a class and granted plaintiffs' motion for summary adjudication, concluding an employer must relieve its employees of all duties during rest breaks, including the obligation to remain on call. Plaintiffs then moved for summary judgment on the issue of damages, seeking unpaid wages, interest, penalties, attorney fees and an injunction. Finding no triable issue as to whether ABM was subject to approximately $90 million in statutory damages, interest, penalties, and attorney fees, the court granted the motion.
The summary adjudication and summary judgment orders rest on the premise that California law requires employers to relieve their workers of all duty during rest breaks. We conclude the premise is false, and therefore reverse the orders. We affirm the certification order.
ABM employs thousands of security guards at locations in California. At some sites only a single guard is stationed, while at others dozens could be stationed. Augustus, Emmanuel Davis, and Delores Hall worked for ABM as security guards.
A typical ABM policy document, entitled "Post Orders," provides that "[t]he primary responsibility of Security at [a guarded facility] is to provide an immediate and correct response to emergency/life safety situations (i.e. fire, medical emergency, bomb threat, elevator entrapments, earthquakes, etc.) [¶] In addition, the Security officers must provide physical security for the building, its tenants and their employees. The security officer can accomplish this task by observing and reporting all unusual activities. In essence, the officer is the eyes and ears of the Building Management." According to the Post Orders, as part of his or her duties a security guard may be required to patrol guarded buildings, identify and report safety issues, hoist and lower flags, greet visitors, assist building tenants and visitors, respond to emergencies, provide escorts to parking lots, monitor and restrict access to guarded buildings, eject trespassers, monitor and sometimes either restrict or assist in moving property into and out of guarded buildings, direct vehicular traffic and parking, and make reports.
In 2005, Augustus filed a putative class action, seeking to represent all security guards employed by ABM. In 2006, her complaint was related to and consolidated with similar complaints filed by Davis and Hall, and a master complaint was filed. The master complaint alleges ABM "fail[ed] to consistently provide uninterrupted rest periods," or premium wages in lieu of rest breaks, as required by section 226.7.
In the course of discovery, ABM admitted it requires its security guards to keep their radios and pagers on during rest breaks, to remain vigilant, and to respond when needs arise, such as when a tenant wishes to be escorted to the parking lot, a building manager must be notified of a mechanical problem, or an emergency situation occurs. Plaintiffs contend a security guard's rest period is therefore indistinguishable from normal security work, which renders every rest break invalid.
A. Class Certification
In 2008, plaintiffs moved for class certification, arguing class certification was warranted because, inter alia, ABM had a uniform companywide policy requiring all guards to remain on duty during their rest breaks. Plaintiffs
Plaintiffs supported the motion with the deposition testimony of Fred Setayesh, an ABM senior branch manager, who admitted ABM guards are not relieved of all duties during rest breaks. For example, he explained, "if they have a radio, they want to have the radio on while they're having their meal; if they have a cell phone, a pager, if there is an emergency or situation just happen to happen at that moment, the person can assist the building operating staff and then go back and finish his or her break." Setayesh also testified that if the magnitude of the emergency was large enough, every security officer would be required to respond regardless of what they were doing at the time.
ABM opposed class certification, arguing that the determination of whether any particular on-call rest break was interrupted by a return to duty would require an individualized inquiry not amendable to class treatment. ABM submitted declarations and deposition testimony of numerous employees, including the named plaintiffs, each of whom stated he or she was provided and took uninterrupted rest breaks.
The trial court granted certification in 2009, stating without elaboration that plaintiffs had "provided substantial evidence that the common factual and legal issues predominate over individual factual and legal issues." The class was defined as all ABM employees who worked "in any security guard position in California at any time during the period from July 12, 2001 through entry of judgment ... [and] who worked a shift exceeding four (4) hours or major fraction thereof without being authorized and permitted to take an uninterrupted rest period of net ten (10) minutes per each four (4) hours or major fraction thereof worked and [had] not been paid one additional hour of pay at the employee's regular rate of compensation for each work day that the rest period was not provided."
B. Summary Adjudication
In 2010, plaintiffs moved for summary adjudication of their rest period claim, contending it was undisputed ABM's employees were required to remain on call during their rest breaks, which according to Division of Labor Standards Enforcement (hereafter DLSE) opinion letter No. 2002.02.22 rendered them per se invalid. Plaintiffs supported the contention with Setayesh's
ABM opposed the motion, submitting substantial and uncontroverted evidence, including the deposition testimony of the named plaintiffs themselves, that class members regularly took uninterrupted rest breaks during which they performed no work but engaged in such leisure activities as smoking, reading, and surfing the Internet. ABM noted plaintiffs' failure to provide any example of a rest break having actually been interrupted and submitted affirmative evidence that any rest period interrupted by a call back to service could be restarted after the situation necessitating the callback was resolved. ABM argued the mere risk of interruption, especially when there was no evidence of actual interruption, did not negate or invalidate a rest break.
The trial court granted plaintiffs' motion, concluding that "[w]hat is relevant is whether the employee remains subject to the control of an employer." "In order to make sense of the statutory scheme," the court reasoned, "a rest period must not be subject to employer control; otherwise a `rest period' would be part of the work day for which the employer would be required to pay wages in any event."
C. Summary Judgment
In 2012, plaintiffs moved for summary judgment on their damages claim, contending the only remaining task was to apply the court's earlier finding to undisputed facts. Plaintiffs contended that because ABM forced its security guards to remain on duty during their rest breaks, it owed each employee an additional hour of payment, a waiting time penalty, and interest for "every single rest break taken by every single class member, for the duration of the Class Period." Using ABM's payroll records, plaintiffs' expert determined there were 14,788 class members who worked a total of 5,166,618 days of at least 3.5 hours in length. Multiplying that number by an average pay rate of $10.87 resulted in $56,102,198 in unpaid wages and restitution. Plaintiffs added a claim for $41,288,882 in accrued interest and $5,689,860 in waiting time penalties, and requested that judgment be entered in favor of the class in the amount of $103,808,940, plus costs and attorney fees.
ABM opposed the motion and moved for decertification, arguing plaintiffs' claim for $104 million "because ABM had a policy which required security guards to carry radios, is a request whose absurdity speaks for itself." ABM argued no evidence had been developed as to who among the class members had been exposed to or followed ABM's policy requiring security guards to carry radios during rest periods. On the contrary, ABM presented numerous
In a tentative ruling issued before the hearing, the trial court incorporated its prior summary adjudication ruling and stated that "[p]ut simply, if you are on call, you are not on break." Although it acknowledged evidence existed that not all security guards were required to carry radios during their breaks, the court ruled that whether a guard actually carried a radio was immaterial, as "[t]here are many alternatives to the radio for hailing a person back to work: cell phone, pager, fetching, hailing and so on." The court found that this situation "conforms to the general pattern of evidence, which is that [ABM] required all its workers to be on-call during their breaks, and so these on-call breaks are all legally invalid."
After the hearing, the court adopted its tentative ruling and granted plaintiffs' motion and denied ABM's motion for decertification, finding this was "a 15,000-person one-issue case" that was "perfect for class treatment." The court awarded plaintiffs $55,887,565 in statutory damages pursuant to section 226.7, $31,204,465 in prejudgment interest, and $2,650,096 in waiting time penalties pursuant to section 203. ABM appealed from the resulting judgment.
Six months later, the court entered an amended judgment that awarded plaintiffs approximately $27 million in attorney fees, representing 30 percent of the common fund, plus $4,455,336.88 in fees under Code of Civil Procedure section 1021.5. ABM appealed from the amended judgment. We consolidated the two appeals.
A. Standards of Review
In reviewing an order granting summary judgment, we view the evidence and any reasonable inferences that may be drawn from it "in the light most favorable to the opposing party." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 [107 Cal.Rptr.2d 841, 24 P.3d 493].) We will affirm the order only "`if all the papers submitted show' that `there is no triable issue as to any material fact' [citation]." (Ibid.) However, the trial court's interpretation of section 226.7 and Wage Order No. 4 on materially undisputed facts
We will affirm an order granting class certification if any of the trial court's stated reasons is valid and sufficient to justify the order and is supported by substantial evidence. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326-327 [17 Cal.Rptr.3d 906, 96 P.3d 194] (Sav-On) [trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting a class action and therefore enjoy broad discretion to grant or deny certification]; Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1106 [131 Cal.Rptr.2d 1, 63 P.3d 913] ["a certification ruling not supported by substantial evidence cannot stand"].) However, even a ruling supported by substantial evidence will be reversed if improper criteria were used or erroneous legal assumptions made. (Sav-On, supra, 34 Cal.4th at pp. 326-327; Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435-436 [97 Cal.Rptr.2d 179, 2 P.3d 27].) A trial court's decision that rests on an error of law is itself an abuse of discretion. (In re Tobacco II Cases (2009) 46 Cal.4th 298, 311 [93 Cal.Rptr.3d 559, 207 P.3d 20]; Pfizer Inc. v. Superior Court (2010) 182 Cal.App.4th 622, 629 [105 Cal.Rptr.3d 795].)
B. Wage Orders and the Labor Code
Here, we consider the scope and duties Wage Order No. 4 and sections 226.7 and 512 impose on a security company to afford rest periods to its employees, and whether in light of those duties the trial court erred in granting summary judgment and declining to decertify the class.
C. Summary Judgment: The Nature of a Rest Period
ABM's duty to provide rest periods is defined by subdivision 12 of Wage Order No. 4, which provides in relevant part: "Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. However, a rest period need not be authorized for employees whose total daily work time is less than three and one-half (3 1/2) hours. Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages." (Wage Order No. 4, subd. 12(A).)
Here, although ABM's security guards were required to remain on call during their rest breaks, they were otherwise permitted to engage and did
"The word "work" is used as both a noun and verb in Wage Order No. 4, which 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." (Cal. Code Regs., tit. 8, § 11040, subd. 2(K).) In this definition, "work" as a noun means "employment" — time during which an employee is subject to an employer's control. "Work" as a verb means "exertion" — activities an employer may suffer or permit an employee to perform. (See Tennessee Coal Co. v. Muscoda Local (1944) 321 U.S. 590, 598 [88 L.Ed. 949, 64 S.Ct. 698] [work is "physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business"].) Section 226.7, which as noted provides that "[a]n employer shall not require an employee to work during a meal or rest or recovery period," uses "work" as an infinitive verb contraposed with "rest." It is evident, therefore, that "work" in that section means exertion on an employer's behalf.
"Not all employees at work actually perform work. "`[A]n employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen.... [I]dleness plays a part in all employments in a stand-by capacity.'" (Mendiola v. CPS Security Solutions, Inc. (2015) 60 Cal.4th 833, 840 [___ Cal.Rptr.3d ___, 340 P.3d 355] (Mendiola), quoting Armour & Co. v. Wantock (1944) 323 U.S. 126, 133 [89 L.Ed. 118, 65 S.Ct. 165].) Remaining on call is an example. On-call status is a state of being, not an action. But section 226.7 prohibits only the action, not the status. In other words, it prohibits only working during a rest break, not remaining available to work.
This conclusion is bolstered by contrasting subdivision 12(A) of Wage Order No. 4, which pertains to rest periods, and subdivision 11(A), pertaining to meal periods. Subdivision 11(A) requires that an employee be "relieved of all duty" during a meal period.
Plaintiffs argue a security guard's on-call rest time constitutes work for purposes of section 226.7 because it is indistinguishable from any other part of the guard's workday, as a guard is always on call. The argument is without merit. First, section 226.7 does not require that a rest period be distinguishable from the remainder of the workday, it requires only that an employee not be required "to work" during breaks. Even if an employee did nothing but remain on call all day, being equally idle on a rest break does not constitute working. At any rate, although the idea that a security guard never rests has a certain appeal, according to ABM's Post Orders a security guard who is on call performs few if any of the activities performed by one who is actively on duty. As described briefly above, a guard on duty must observe the guarded campus and perform many tasks, for example, greeting visitors, raising or lowering the campus's flags, or monitoring traffic or parking. No evidence in the record suggests an ABM guard taking a rest break is required to do any of these things. Admittedly, an on-call guard must return to duty if requested, but as discussed above and implicitly acknowledged in Mendiola, remaining available to work is not the same as performing work."
Plaintiffs argue both the DLSE in 2002 and the Court of Appeal in Faulkinbury v. Boyd & Associates, Inc. (2013) 216 Cal.App.4th 220, 237 [156 Cal.Rptr.3d 632] recognized that Wage Order No. 4 requires that all rest breaks be duty free. Not so.
In 2002 the DLSE was asked by an employer whether short intervals during which an employee was required to change work stations, which apparently occurred multiple times per shift, could be aggregated and count as a "net" 10-minute rest period. The DLSE opined it could not, stating: "[T]here must be a net 10 minutes of rest provided in each `work period' and the rest period must be, as the language implies, duty-free. This requirement would, of course, preclude the employer from using time during which the employee is required to change from one work station to another...." (Dept. of Industrial Relations, DLSE, Acting Chief Counsel Anne Stevason, Opn. Letter No. 2002.02.22, Rest Period Requirements (Feb. 22, 2002) p. 1 <http://www.dir.ca.gov/dlse/opinions/2002-02-22.pdf> [as of Oct. 14, 2014],
In Faulkinbury v. Boyd & Associates, a security guard company maintained no "policy regarding the provision of rest breaks to security guards and had an express policy requiring all security guards to remain at their posts at all times." (Faulkinbury v. Boyd & Associates, Inc., supra, 216 Cal.App.4th at p. 236.) The issue was whether the scope of the employer's rest break policy could be determined on a classwide basis. To examine that issue the court stated the policy would be measured at trial against the relevant rest break requirements, including Wage Order No. 4 and the 2002 DLSE opinion letter discussed above, both of which it quoted. The court concluded that "the lawfulness of [the employer's] lack of rest break policy and requirement that all security guard employees remain at their posts can be determined on a classwide basis." (216 Cal.App.4th at p. 237.) The court undertook no analysis of the 2002 DLSE opinion letter or Wage Order No. 4 and made no attempt to examine the merits of the employer's policy or determine the scope of the DLSE's opinion that rest periods must be duty free.
Plaintiffs argue the Supreme Court in Brinker held that an employer must relieve an employee of all duty on a rest break and relinquish any control over how the employee spends his or her time. We disagree.
In Brinker, the trial court certified a class of restaurant employees who alleged the defendants violated state laws requiring meal and rest breaks. (Brinker, supra, 53 Cal.4th at pp. 1017-1019.) The class definition included several subclasses, including rest period and meal period subclasses. (Id. at p. 1019.) The Court of Appeal held the trial court erred in certifying the subclasses and granted writ relief to reverse class certification. (Id. at p. 1021.) The California Supreme Court granted review "to resolve uncertainties in the handling of wage and hour class certification motions." (Ibid.)
As to a meal break claim, the Brinker court again first considered the nature of an employer's duty under the Labor Code and wage orders to provide a meal period, concluding, "an employer's obligation when providing a meal period is to relieve its employee of all duty for an uninterrupted 30-minute period." (Brinker, supra, 53 Cal.4th at p. 1038.) The court held: "An employer's duty with respect to meal breaks ... [citations] is an obligation to provide a meal period to its employees. The employer satisfies
The Supreme Court remanded the matter to the trial court to reconsider certification of the meal break subclass in light of the court's clarification of the law. (Brinker, supra, 53 Cal.4th at pp. 1049-1051.) The court explained its ruling on the merits, "solicited by the parties, has changed the legal landscape; whether the trial court may have soundly exercised its discretion before that ruling is no longer relevant. At a minimum, our ruling has rendered the class definition adopted by the trial court overinclusive: The definition on its face embraces individuals who now have no claim against [the employers]. In light of our substantive rulings, we consider it the prudent course to remand the question of meal subclass certification to the trial court for reconsideration in light of the clarification of the law we have provided." (Id. at pp. 1050-1051.)
Although Brinker is instructive on several levels, it said nothing about an employer's obligation to relieve an employee of all duty on a rest break. The discussion in Brinker regarding the relieved-of-all-duty requirement concerned meal periods only.
Plaintiffs rely on Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575 [94 Cal.Rptr.2d 3, 995 P.2d 139] and Aguilar v. Association for Retarded Citizens (1991) 234 Cal.App.3d 21 [285 Cal.Rptr. 515] for the proposition that on-call rest periods are legally invalid. Neither case supports the proposition. In Morillion, the Supreme Court held that the time during which employees were required travel to the employer's worksite on the employer's buses was compensable work time. (22 Cal.4th at p. 578.) In Aguilar, the court held that time employees were required to remain at group homes during an overnight shift, during which they could sleep but had to remain on call, was compensable work time. (234 Cal.App.3d at pp. 24, 30.) What constitutes compensable work time is not the issue here, as it is undisputed rest breaks are compensable. The question is whether section 226.7 prohibits on-call rest periods. On that issue, Morillion and Aguilar provide no guidance.
In sum, although on-call hours constitute "hours worked," remaining available to work is not the same as performing work. (See Mendiola, supra, 60 Cal.4th at p. 840 [distinguishing readiness to serve from service iteself]; see also Cal. Code Regs., tit. 8, § 11040, subd. 2(K) [distinguishing "`hours worked'" from work actually performed].) Section 226.7 proscribes only work on a rest break."
Because on-call rest breaks are permissible, the trial court erroneously granted summary adjudication in 2010 and summary judgment in 2012. Those orders and the consequent order granting plaintiffs' attorney fees under Code of Civil Procedure section 1021.5 must therefore be reversed.
D. Class Certification
ABM contends the trial court erred in certifying a class because there is no evidence of a uniform policy requiring employees to remain on call during rest breaks. We disagree.
ABM has maintained throughout the certification and summary judgment proceedings that the on-call nature of a rest break for a security guard is an industry necessity. For example, in its separate statement of additional facts in opposition to plaintiffs' motion for summary adjudication, ABM stated that "[g]uards simply must keep their radios or pagers on in case an emergency — fire, flood, criminal activity, medical crisis or bomb threat — should arise to ensure the safety of the facility and its tenants." ABM cited in support of this
From ABM's concession and Setayesh's testimony the trial court could reasonably conclude ABM possessed a uniform policy of requiring its security guards to remain on call during their rest breaks. Indeed, ABM never denied this policy below. Whether such a policy is permissible is an issue "eminently suited for class treatment." (Brinker, supra, 53 Cal.4th at p. 1033.)
ABM cites to substantial evidence indicating the policy was not uniformly applied, but such evidence would go only to the issue of damages. The trial court could reasonably conclude the necessity of individual proof of damages would not destroy the community of interest. (Faulkinbury v. Boyd & Associates, Inc., supra, 216 Cal.App.4th at p. 237.)
The orders granting summary adjudication and summary judgment are reversed and the amended judgment vacated. The order certifying the class is affirmed. Both sides are to bear their own costs on appeal.
Rothschild, P. J., and Johnson, J., concurred.