Overton v. Walt Disney Co.

A new decision was published this week on when commute time is required to be paid by employers. Plaintiffs represented current and former employees of defendant Pacific Bell Telephone Company who install and repair video and internet services in customers’ homes.

Plaintiffs alleged they were owed for the time they spent traveling in an employer-provided vehicle that carried equipment and tools between their homes and a customer’s residence under an optional and voluntary Home Dispatch Program established by the employer.

Key Facts

The Plaintiff technicians were paid on an hourly basis and installed equipment at customer’s homes.  The technicians could not use their own vehicles while on the job, were required to use a company vehicle. They were also required to carry all necessary equipment and tools to perform their job in the company vehicle.  Their work day schedule started at 8:00 a.m. and lasted eight hours.

There were two options made available to the technicians for travel with the company vehicle.  The first option was the Home Dispatch Program (HDP), under which the technicians were allowed to take a company vehicle home each night instead of returning all vehicles to the Pacific Bell garage. The HDP was optional, and the techs were permitted drive the company vehicles, containing tools and equipment, to and from home each day. Technicians were not paid for any time before 8:00 spent driving from their homes to the first worksite. The technicians were not paid for the time spent driving home with the equipment and tools after their last appointment. If the technicians had to drive to the employer’s warehouse to restock equipment, they were paid for this time.

The second option available to the technicians was to pick their company vehicle up at the company garage prior to going to the first customer visit.  Under this option, they were compensated for time spent traveling to and from the garage.

Plaintiffs alleged three causes of action: failure to pay the minimum wage, failure to pay wages timely, and unfair business practices.  All causes of action were based on the failure to pay for the transporting time. Here are five key issues regarding the new decision in Hernandez v. Pacific Bell Telephone Company.

1. The Control Test

The court explained that the wage order defined “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.

The court noted that the California Supreme Court rejected an argument that to constitute “hours worked” the time must be spent actually working. Instead, the court held that as long as the employee is “subject to the control of an employer,” the time is considered compensable “hours worked.” Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 582-584.

In Morillion, although the employees could read or sleep on the bus, they could not use the time for their own purposes; they “were foreclosed from numerous activities in which they might otherwise engage if they were permitted to travel to the fields by their own transportation.” The court in Morillion noted that during the bus ride employees could not drop off their children, stop for food, or run other errands.  Therefore, the Supreme Court concluded, “When an employer requires its employees to meet at designated places to take its buses to work and prohibits them from taking their own transportation, these employees are ‘subject to the control of an employer,’ and their time spent traveling on the buses is compensable as ‘hours worked.’ ”  Therefore, under these facts, the employer controlled the employees within the meaning of “hours worked.”

In Morillion, the Court, however, made it clear that

“employers do not risk paying employees for their travel time merely by providing them transportation. Time employees spend traveling on transportation that an employer provides but does not require its employees to use may not be compensable as ‘hours worked.’ [Citation.] Instead, by requiring employees to take certain transportation to a work site, employers thereby subject those employees to [their] control by determining when, where, and how they are to travel. Under the definition of ‘hours worked,’ that travel time is compensable.” (Morillion, supra, 22 Cal.4th at p. 588.)

The court in this case noted: “The rule of Morillion applies only where use of the employer-provided transportation is compulsory.”  Plaintiffs relied on the case of Rutti v. Lojack Corp. (9th Cir. 2010) for support that the employees should be paid for this commute time.  The court rejected this argument in finding that the employees in Rutti were “required to use the company vehicle; here, plaintiffs were not.”

2. Time spent commuting in a company provided vehicle is only compensable when it is compulsory.

The court explained that employers are only required to pay for employee’s commute time in company provided vehicles if it is required.  The court examined the case of Overton v. Walt Disney Co. (2006) where Disneyland employees sued seeking compensation for the time riding the company provided shuttle from the employee parking lot one mile away from the theme park.  Because Disney did not require the employees to take the shuttle, and they were free to walk, bike, or could have been dropped off at the employee entrance, the court held that this was not considered work time.

3. Suffer or Permit to Work Test

Plaintiffs also argued that the drive time was compensable as “hours worked” under the “suffered or permitted to work” definition. They argue they were working while driving to and from home because they were transporting tools and equipment that were necessary for them to do their job.

The court explained that the phrase “suffered or permitted to work, whether or not required to do so” “encompasses a meaning distinct from merely ‘working.’ ”  The court explained: “Our high court explained an employee is “suffered or permitted to work” when the employee is working, but not subject to the employer’s control, such as unauthorized overtime when an employee voluntarily continues to work at the end of a shift with the employer’s knowledge.”

Here, the court explained that “the standard of ‘suffered or permitted to work’ is met when an employee is engaged in certain tasks or exertion that a manager would recognize as work. Mere transportation of tools, which does not add time or exertion to a commute, does not meet this standard.”  Therefore the court held that under the suffer or permit to work test, the employee’s time was not compensable.

4. Court rejected Plaintiffs’ reliance on workers compensation cases

Plaintiffs attempted to rely on two workers compensation cases, Joyner v. Workmen’s Compensation Appeals Board (1968) 266 Cal.App.2d 470 and Lane v. Industrial Acc. Com. (1958) 164 Cal.App.2d 523.  These cases held that where an employee is injured in a traffic accident on his commute home, while carrying equipment for his job, the employer relationship continued such that the employee’s injuries were compensable and not subject to the coming and going rule.  In rejecting these holdings as binding in this case, the court noted, “These cases address a different issue than the one before us and therefore we find them inapposite. Further, we note that in both of these cases, the employee was not being paid by his employer for his commute time when the accident happened.”

5. Simply carrying tools does not necessarily make employee commute time compensable.

Defendant made that because the employees were carrying tools in the vehicle during the commute, this made the time compensable work time.  The court rejected this argument in noting defendant’s argument that “if carrying equipment necessary for the job were always compensable, every employee who carries a briefcase of work documents or an electronic device to access work emails to and from work would need to be compensated for commute time.”

The court agreed with a federal district court’s decision in Dooley v. Liberty Mut. Ins. Co. that:  “To the extent that some of these cases state broadly that travel time is compensable if employees are transporting equipment without which their jobs could not be done, e.g., Crenshaw, 798 F.2d at 1350, I read these statements as implying that the transportation involves some degree of effort. Otherwise, as observed earlier, the commutes of police officers who carry guns, or indeed, employees who carry badges, would always be compensable.”  There is a difference in effort between transporting heavy equipment for servicing oil wells as compared to the “incidental” transportation of cable TV equipment and tools in the case at hand.  Therefore, the fact that employees carried tools from and from work in this case did not make the time compensable.

The case, Hernandez v. Pacific Bell Telephone Company (November 15, 2018) can be downloaded here.