Employees who while on call are required to stay at a worksite should be compensated for all their hours, including sleep time, the California Supreme Court ruled unanimously Thursday.
In a decision written by Justice Carol A. Corrigan, the state's highest court said security guards who were obligated to stay in trailers on worksites in case they were needed were entitled to be paid for their time, even if they spent it watching TV, scouring the Internet or dozing.
Lawyers said the decision has potential to have a wide impact, depending on the particular requirements an employer placed on workers while they were on call. The greater the control a private employer exerted on on-call workers, the more likely that employer would be obligated to pay for all employees' hours.
Golden Gate University law professor Hina B. Shah, who sided with employees in the case, called the decision "a tremendous victory for California workers."
"This decision will ensure that absent an explicit exemption, on-call workers in any industry are entitled to payment for all of their time," said Shah, who represented nonprofit groups as friends of the court.
She said the ruling would particularly affect domestic workers who live in homes while attending children or the elderly. Hospital and government workers would not be affected, she said.
Jim Newman, general counsel for CPS Security Solutions Inc., the defendant in the case, agreed the impact would be "huge," potentially affecting live-in domestic workers, agricultural employees and private contractors who patrol parks, fight fires or clean up after environmental disasters.
"The unintended consequences of this ruling are likely to be devastating for the state's economy, only now beginning to recover from the recent recession," Newman said.
The ruling stemmed from class-action lawsuits filed by security guards employed by the Gardena-based firm, which has 1,500 employees.
The company paid guards for the hours they patrolled a worksite but gave them no compensation for on-call time in company trailers unless the workers had to respond to an alarm or emergency or had asked to leave the premises for personal business and been denied a replacement, the court said.
Workers received pay for the entire eight hours they were on call only if they worked at least three, the court said.
The guards were under their employers' control because their movements were restricted, and they had to respond immediately if summoned, could not easily trade their on-call responsibilities and could not leave the worksite if another employee was unavailable to relieve them, the courts said.
"CPS exerted control in a variety of other ways," Corrigan wrote. "Even if relieved, guards had to report where they were going, were subject to recall, and could be no more than 30 minutes away from the site. Restrictions were placed on nonemployee visitors, pets, and alcohol use. "
Thursday's ruling partially overturned an appeals court decision, which said the guards were covered by minimum wage and overtime rules but did not have to be paid for the time they slept.
"We acknowledge CPS's efforts to ascertain whether its policy complied with California's labor laws and recognize the difficulty it and other employers can face in this regard," the court said.
The court blamed a lack of state funding and urged the Legislature to address the problem.