Must on-call, 24-hour, live-in employees be compensated by their employer for hourly wages for the full 24-hour shift including sleep time?

Posted in: Appellate Practice, Employment Law by Steven Vartabedian on

In Mendiola v. CPS Security Solutions, Inc. (filed 7/3/13) B240519, the Court of Appeal, Second Appellate District, Division Four, gives a Solomon-like answer. In this class action, the plaintiffs are trailer guards employed by defendant to provide around-the-clock security at construction sites. During the nighttime periods, defendant considered the trailer guards “on call” and generally compensated them only for the time spent actively conducting investigations. Individual employment contracts provided that employees working 24-hour weekend shifts would not be paid for the time period of 9 p.m. to 5 a.m. with exceptions The trial court granted a preliminary injunction requiring defendant to compensate plaintiffs for all on-call time spent in live-in trailers.

The appellate court’s disposition lays out the split-the-baby response, partially reversing the injunctive order: “On those days (24-hour weekend shifts), the guards must be compensated for 16 hours; eight hours may be excluded for sleep time, provided the guards are afforded a comfortable place to sleep, the time is not interrupted, the guards are compensated for any period of interruption, and on any day they do not receive at least five consecutive hours of uninterrupted sleep time, they are compensated for the entire eight hours.”

The primary focus of the appellate court’s discussion is California Industrial Welfare Commission (IWC) 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.” First, the defendant-employer claimed that plaintiffs were free to engage in personal activities while “on call,” thus not actively engaged in work unless prompted otherwise. Second, defendant argued the time period from 9 p.m. to 5 a.m. constituted excludable “sleep time,” whether or not the employee actually slept during all or part of this time period.

The first issue (on-call time) caused the court to recite seven factors in determining degree to which employees are free to pursue private matters: (1) on-premise living requirements, (2) geographic restrictions, (3) frequency of calls, (4) time limits to respond, (5) ability of employee to trade on-call times with others, (6) whether use of paging could ease restrictions, and (7) actual engagement in personal activities. (Gomez v. Lincare, Inc. (2009) 173 Cal.App.4th 508, 523.) Applying these factors to this case, the court found the employer exercised a high degree of control: employees were required to live at the jobsite and respond immediately in uniform to suspicious activity, they were very limited in being relieved of duties or being any distance from the worksite, and they were forbidden from normal freedoms (children, pets, alcohol and entertaining others). Thus on-call time, except for weekend around-the -clock “sleep time,” fell within “hours worked.”

Regarding the second issue of compensation for 24-hour shift weekend sleep time, the Mendiola court saw a distinction between these around-the-clock shifts and those of lesser continuous hours. Employees working the longer shifts are expected to spend a significant portion of time asleep or resting at the work site, thus there is no need to require additional compensation absent actual time being spent carrying out duties. Exclusion of payment of wages for this “sleep time” requires an agreement to exclude, as was the case here. The exclusion need not refer to “sleep time;” reference to pay exclusion from 9 p.m. to 5 a.m. was sufficient. Such agreements are enforceable so long as they provide for reasonable compensation where sleep time is in fact interrupted by duties, which again was the case here.

This opinion not only compromises the positions of the parties, but also emphasizes that reasonably set-forth contract terms spelling out the exemption of sleep-time are enforceable, and a wise thing for employers who follow the parameters discussed in Mendiola.

I would additionally note, as a matter of general appellate practice, that parties should be aware of the immediate appealability of orders granting injunctive relief in ongoing actions. (Code of Civil Procedure section 904.1 (a) (6).) This type of litigation might take years to ultimately resolve. Taking a timely appeal of an injunctive order as a matter of right can produce enormous benefits for a client.

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