By: Kyle D. Kring and Kerri N. Polizzi
In Oliver et. al. v. Konica Minolta Business Solutions, U.S.A., Inc. (“Oliver“), certified for publication on June 24, 2020, a California Court of Appeal provided some additional guidance to assist employers in determining whether, and under what conditions, travel by hourly employees directly from their home to their first jobsite, and from the last jobsite to their home, is compensable.
Up to now, it has been the general rule in California that employee’s time spent commuting from home to the first work location (such as a jobsite or construction yard to pick up materials) and from the last work location to home does not constitute “hours worked” and is thus not compensable. This general rule is true whether the employee commutes from home to (1) an office, (2) a fixed location such as a construction yard to pick up materials, or (3) to an offsite jobsite or construction project. Travel time from one jobsite to another jobsite, in the same day, is compensable.
Until the Oliver case, no California appellate court had addressed the specific issue of the circumstances under which an employee who uses a personal vehicle to travel to a jobsite must be compensated for driving time from the employee’s home to the first jobsite and for driving time from the last jobsite to the employee’s home.
In Oliver, the Court of Appeal held that employees who are required by the employer – “strictly speaking or as a practical matter” – to transport tools and/or parts in their personal vehicles are sufficiently “subject to the employer’s control” during their commute to and from work if such requirement prevents the employees from using their commute time for personal pursuits.
Background Facts/Trial Court’s Order on Motions for Summary Judgment
Konica Minolta Business Solutions U.S.A., Inc. (“Konica”) sells businesses printing, copying, and scanning products. It also maintains and repairs its products. Plaintiffs worked as service technicians for Konica. Service technicians were required to drive their personal vehicles, which contained Konica’s tools and parts, to customer sites to make repairs to copiers and other machines. Service technicians usually drove from home to the fist customer location of the day and, at the end of the day, from the last customer location to their home.
Konica provided Plaintiffs with the tools and parts required to service Konica’s products. Pursuant to Konica’s company policy, Plaintiffs were required to drive a vehicle with at least 25 cubic feet of “lockable cargo space” to transport and store the tools and parts necessary to service Konica’s products at the customers’ locations. There was evidence, however, that this policy was not enforced. Company policy also required Plaintiffs to store a sufficient number of parts in their vehicles to properly service Konica’s products at customers’ locations. Manager approval was required for any exception to Konica’s parts storage policy.
While company policy required Plaintiffs to drive their personal vehicles to and from the worksites, Plaintiffs were not prohibited from engaging in personal endeavors during their commutes. Plaintiffs were expected to arrive at the first work location by 8:00 am and to leave the last work location by 5:00 pm. Konica compensated Plaintiffs for regular hours worked between 8:00 am and 5:00 pm, including travel time during that period.
Plaintiff filed a class action lawsuit against Konica seeking compensation for time spent commuting to the first work location of the day and commuting home from the last work location of the day, as well as reimbursement for mileage during those commutes. Plaintiff alleged that Konica had violated various provisions of the California Labor Code, including section 1194 by not paying overtime wages, section 226 by not providing accurate wage statements, and section 2802 by not reimbursing for work-related expenses. Plaintiff also alleged violations of the unfair competition law and a claim for civil penalties under the Private Attorneys General Act of 2004 (“PAGA”).
During the litigation, Plaintiffs and Konica both filed motions for summary judgment on the issues of whether Plaintiffs were entitled to wages for time spent commuting to and from work and whether Konica was required to reimburse Plaintiffs for mileage incurred during their commute.
The Plaintiffs argued that the commute time from their homes to the first job and the commute time from the last job to the employees’ homes was compensable worktime because employees were required to carry Konica’s supplies and tools in their personal vehicles for use at customer appointments throughout the workday. Plaintiffs argued that Konica exerted a sufficient level of “control” over their commute time to and from home and that such travel time constituted compensable work hours, and that they were entitled to reimbursement for the mileage driven to the first site and from the last customer site.
In turn, Konica argued that the presence of tools and parts in Plaintiffs’ vehicles did not “transform their ordinary commute into worktime” and that because Plaintiffs were not subject to Konica’s control or engaged in work-related tasks during their commute and did not incur expenses in direct consequence of the discharge of their duties, they were not entitled to payment for time worked or mileage during these commutes. The trial court agreed with Konica finding that the time spent commuting did not constitute “hours worked” under either the “control test” or the “suffer and permit test” and; therefore, Plaintiffs were not entitled to compensation or reimbursement for mileage incurred during that time. Plaintiffs appealed from this order.
Appellate Court’s Decision and Reasoning
Simply stated, the issue in Oliver was whether the commute by the service technicians constituted work for which Konica was obligated to pay wages and reimburse for mileage.
The court considered whether time spent commuting from Plaintiffs’ homes to the first worksite of the day and time spent commuting from the last worksite back to Plaintiffs’ homes constitutes “hours worked” within the meaning of Wage Order No. 4 (Professional, Technical, Clerical, Mechanical and similar occupations).
Wage Order No. 4 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.” Wage Order No. 4 is similar to Wage Order No. 16 (Construction) in this respect. Time during which an employee is subject to the employer’s control and time an employee is suffered or permitted to work are independent factors in determining whether such time is compensable “hours worked.” In other words, time is compensable if it meets either of these tests.
In determining that genuine issues of material fact existed as to whether Plaintiffs’ commute time was compensable “hours worked,” the court relied the legal principles set forth by the California Supreme Court in Morillion v. Royal Packing Co., 22 Cal. 4th 575 (2000). In Morillion, the California Supreme Court found that time spent commuting to and from work is generally not compensable, unless the travel time is compulsory. In Morillion, employees were required to travel the worksite in employer-paid buses. Because the employer required employees to meet at a designated area to transport them to and from the worksite in an employer-provided bus, the Court found the employees were subject to the employer’s control and therefore time spent commuting was compensable “hours worked.” The Court explained that the “level of the employer’s control over its employees…is determinative.”
The court in Oliver stated “…even if a service technician was required- ‘strictly speaking’ or ‘as a practical matter’- to carry tools and parts during the commute, the service technician would not be ‘subject to the control of [defendant]” during the commute if the service technician was able ‘to use the time effectively for the service technician’s own purpose.'” (Emphasis Added, Brackets in Original.) The court went on to state “[o]n the other hand, if a service technician was required during the commute to carry a volume of tools and parts that did not allow [the service technician] to use the time effectively for [the service technician’s] own purposes,‘ then the technician would be ‘subject to the control of [defendant]’ for purposes of determining ‘hours worked’ and entitlement to wages.” (citing Morillion)(emphasis added, brackets in original).
Continuing to cite Morillion, the Oliver court emphasized that “The level of the employer’s control over its employees, rather than the mere fact that the employer requires the employee’s activity, is determinative” of whether an activity is compensable under the control provision.”
The court then discussed another case, Hernandez v. Pacific Bell Telephone Co., 29 Cal. App. 5th 131 (2018), a California appellate court following Morillion, which found that employees who participated in an “optional and voluntary” company vehicle program were not entitled to compensation for commute time. The Pacific Bell program provided that “the employees could use the company vehicle only for company business, only authorized persons could ride in the vehicle, employees could not engage in personal errands during their commute, and employees could not talk on the cell phone when driving…” According to the court, the employees were not subject to the employer’s control while commuting under the program because they were not required to participate in the company vehicle program.
Most recently, in Frlekin v. Apple Inc., 8 Cal. 5th 1038 (2020), the California Supreme Court addressed the issue of employer control in the context of employees subject to mandatory personal bag searches before exiting the employer’s premises. The Court found that employees were entitled to compensation for time spent waiting for and undergoing such searches. The Court recognized that the mandatory versus optional distinction applied in commuting cases like Morillion and Hernandez was not dispositive where the issue was the level of employer control at the worksite, where the employer’s business interests are greater.
Based on the above-referenced prior cases regarding employer control, the Oliver court found that there were material questions of fact as to whether Plaintiffs were precluded from using their commute time effectively for their own personal purposes such that they were “subject to the control” of Konica. According to the court, the record was unclear as to whether Plaintiffs were required to carry parts and tools in their vehicles and whether the amount of parts and tools was so voluminous as to prevent Plaintiffs from using commute time effectively for their own purposes. The evidence showed that Konica may not have enforced its vehicle storage policy as some service technicians reported driving smaller cars, such as a Toyota Corolla and Honda Civic, with as little as 11 to 14 cubic feet of storage space. Additionally, some service technicians testified that their vehicles were so full of parts and tools that they could not see out the back window or they had to fold down the back seats in the car to accommodate the tools and parts. Other service technicians testified that due to the number and/or volume of tools and parts in their personal vehicles, they had to unload the tools and parts in order to use the car for personal pursuits.
The court found that if carrying tools and parts to and from work is optional, employees are not subject to the employer’s control and therefore not entitled to compensation. Further, even if employees are required to carry tools and parts in their vehicles, commute time is not compensable “hours worked” if employees could use the time effectively for their own purposes.
Because there were genuine disputed issues of material fact under the “control test,” the court did not consider whether the “suffered or permitted to work” factor applied. Regarding whether Plaintiffs were entitled to reimbursement for mileage incurred during their commute, the court found based on Konica’s concession that if Plaintiffs were owed wages for their commute time, then they are also owed reimbursement for commuting mileage, that genuine issues of material fact existed and therefore reversed the trail courts granting of summary judgment in favor of Konica.
Importance of Court’s Decision
Although the appellate court did not set a clear test explaining when commuting to and from the first and last jobsites is compensable, it did provide guidance for determining when employees are deemed to be “under control” of their employers while commuting to and from work. Unfortunately, the question of whether the volume of tools and parts an employee is required to carry as part of their commute affects the employee’s ability to use the commute time effectively for their own purposes is a very subjective standard.
When employees are restricted to the degree that that they cannot effectively use their commute time for personal pursuits (for example, when an employer’s equipment/tools take up most or all of the free space in the vehicle, the employee is prohibited from taking passengers to or from other locations on her/his way to the first jobsite or returning home from the last jobsite), such commuting time is likely to be held as compensable time, and mileage for such driving must be reimbursed.
As such, employers should review their vehicle use, travel time and expense reimbursement policies with their attorneys in light of this new and different guidance.
Kyle D. Kring is the Founding Partner of Kring & Chung, LLP. He can be reached at (949)-261-7700 or [email protected]. Kerri N. Polizzi is an Associate of Kring & Chung, LLP. She can be reached at (949)-261-7700.