Metropolitan News-Enterprise


Wednesday, August 13, 2014


Page 1


Court of Appeal Revives Class Action Over Employee Cellphone Use

Div. Two Says Employer Must Reimburse All Workers Required to Use Own Phones for Business




Employees who are required to use their personal cellphones for business are entitled to reimbursement, regardless of whether they have limited or unlimited minutes, the Court of Appeal for this district ruled yesterday.

Div. Two reinstated a putative class action brought on behalf of 1,500 employees of Schwan’s Home Service, Inc.

The plaintiff claims that the company required its customer service managers to use their personal cellphones for business, but does not provide reimbursement. Schwan’s contends that there was never any such requirement.

“We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them,” Justice Judith Ashmann-Gerst wrote, referring to the statute requiring an employer to “indemnify his or her employee for all necessary expenditures…incurred…in direct consequence of the discharge of his or her duties.”

The justice continued:

“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.”

Restitution Sought

The plaintiff, Colin Cochran, is seeking restitution for class members under §2802 and the Unfair Competition Law, as well as penalties under the Labor Code Private Attorneys-General Act of 2004. Los Angeles Superior Court Judge Teresa Sanchez-Gordon denied class certification on the ground that some class members would not be entitled to reimbursement because they did not pay their own bills or because of the nature of their plans, and that those determinations would predominate over questions common to the class.

Cochran argued that a measure of reimbursement common to the class could be established through statistical evidence and representative testimony. He offered a declaration by an expert in economics and statistics, who suggested either assuming that each class member averaged $2 per day in employer-required cellphone use—because the company at one time paid reimbursement in that amount—or using a survey to more accurately peg the amount.

The declaration included a 22-question draft survey and a proposed methodology for conducting the inquiry.

Ashmann-Gerst cited Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, which held that “sampling may provide an appropriate means of proving liability and damages” in a class action, and said reversal was required because of erroneous legal assumptions by the trial judge.

Trial Judge’s Assumptions

Sanchez-Gordon, the justice explained, assumed that it mattered whether the employee or someone else—such as the plaintiff’s girlfriend—paid the cellphone bill, and that it mattered whether the applicable cellphone plan had unlimited or limited minutes. Ashmann-Gerst said those inquiries are irrelevant because an employee who is required to use a cellphone for business is “always” entitled to have a reasonable portion of his or her phone bill reimbursed by the employer, even if the employer’s requirements did not increase the amount of the bill.

“It does not matter whether the phone bill is paid for by a third person, or at all,” the appellate jurist wrote. “In other words, it is no concern to the employer that the employee may pass on the expense to a family member or friend, or to a carrier that has to then write off a loss.  It is irrelevant whether the employee changed plans to accommodate worked-related cell phone usage.  Also, the details of the employee’s cell phone plan do not factor into the liability analysis.  Not only does our interpretation prevent employers from passing on operating expenses, it also prevents them from digging into the private lives of their employees to unearth how they handle their finances....To show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed.”

The court sent the case back to the trial court with directions to reconsider the motion.

Attorneys on appeal were Kevin T. Barnes, Gregg Lander, and Bruce Z. Kokozian for the plaintiff and Kutak Rock’s Matthew C. Sgnilek and Alan L. Rupe for the defendant.

The case is Cochran v. Schwan’s Home Service, Inc., 14 S.O.S. 3376.


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