Court of Appeal Holds That Travel Time in a Company Vehicle Is Not Compensable Time Unless Mandatory, Even When Transporting Company Tools and Equipment

On November 15, 2018, the California Court of Appeal clarified that an employer’s provision of a company vehicle for their employees’ use would not convert commute times into “hours worked.”  (Hernandez v. Pacific Bell Telephone Company (11/15/18, C084350)).  This holding confirms long standing law that an employee’s voluntary use of company transportation cannot be wielded as a knife against his or her employer.

Background

Plaintiffs were class representatives of current and former employees of Defendant Pacific Bell Telephone Company (“Pacific Bell”), who installed and repaired video and internet services in customers’ homes.  These employees were not allowed to use their own vehicles on the job, and were required to use a company vehicle loaded with all of the necessary company equipment and tools.

Before 2009, these employees were required to begin and end work at the Pacific Bell parking garage, and were paid for time spent traveling from the garage to their first appointment of the day and paid for time spent traveling back to the garage from their last appointment of the day.  But in 2009, Pacific Bell began to allow employees to take company vehicles home under the Home Dispatch Program (“HDP”).  The HDP was strictly voluntary.

The HDP allowed employees to drive directly to their first assignment of the day from home, and to home from the employee’s last assignment of the day.  Plaintiffs attempted to argue that such time spent commuting in company vehicles was compensable as “hours worked.”

Plaintiffs’ Alleged “Hours Worked”

The court explained that the two-part definition of “hours worked” is the same in all Industrial Wage Commission wage orders, consisting of “the time during which an employee is subject to the control of an employer” and “all the time the employee is suffered or permitted to work, whether or not required to do so.”  The court held that neither factor was satisfied here.

For the “control test” (the time an employee is subject to an employer’s control), the court held that to the extent employees could find their own transportation to work but chose to take employer-provided transportation instead, they were not under their employer’s control.  This analysis hinged on the employee’s voluntary choice to take employer-provided transportation despite the restrictions imposed on use by Pacific Bell (such as prohibiting personal errands or transporting passengers).  The court noted that employees still retained the option of beginning and ending work at the Pacific Bell parking garage, as all employees did before 2009.

As for the “suffer or permit to work” test (such as when an employee is doing work outside of the employer’s control but with the employer’s knowledge), the court held that work must rise to a level of exertion that a manager would recognize as work to qualify.  Accordingly, Plaintiffs’ argument that their transport of equipment in company vehicles to customers’ homes qualified as work was unconvincing according to the court — otherwise, simply carrying a briefcase for work could convert an employee’s commute into hours worked.

For these reasons, the court found that voluntarily commuting to and from work in a company vehicle, even when transporting company tools and equipment during that commute, was not compensable time.

Impact on California Employers

This decision clarifies an issue left unanswered by the 2010 decision in Rutti v. Lojack.  In Lojack, the court determined that under California law, unlike federal law, restrictions placed on the use of the vehicle rendered the time subject to the control of the employer, and as such, was compensable under California law.  Lojack left open the question of whether providing a company vehicle for commuting without restrictions would constitute compensable working time under California law.  Hernandez v. Pacific Bell holds that voluntarily commuting in a company vehicle does not constitute working time even where the employee is prohibited from using the vehicle for personal errands or transporting passengers.

However, the court’s decision should not be misunderstood to mean that an employer will be shielded from all liability for wage and hours claims regarding such commute times simply by providing the illusion of a “choice” to its employees.  Where a “de facto” requirement that an employee must commute in an employer’s vehicles can be established, an employer may still leave themselves vulnerable to liability for that commute time.

For further examination on the potential liabilities associated with providing company transportation to your employees, please contact the authors or your usual employment law counsel at Atkinson, Andelson, Loya, Ruud & Romo for further consultation.