Employees required to use personal cell phones entitled to reimbursement for work related costs

The California Court of Appeals recently held that Labor Code §2802 requires employers to reimburse employees obligated to use personal cell phones for work-related calls. In Cochran v. Schwan’s Home Service, Inc. (2014 WL 3965240), the plaintiff filed a class action suit against Schwan’s on behalf of a group of managers seeking reimbursement. At the class certification hearing, the district court found that individual questions predominated (costs incurred by each manager, whether each personally paid their bills, and whether some had separate work phone plans) and deferred certification. At the second briefing, the plaintiff’s expert suggested statistical sampling to determine liability. The court rejected the idea, stating that no pattern or practice regarding expenditures by the employees existed, making statistical sampling inapplicable. The court denied certification for lack of commonality and the plaintiff appealed.

The Court of Appeals reversed. Section 2802 was enacted to prevent employers from passing on operating expenses to employees. Regardless of whether the employee incurred an additional cost, the employer obtains a windfall not paying phone call charges. Section 2802 always requires reimbursement. To demonstrate liability under §2802, an employee must only show that he was required to use a cell phone for work-related calls and was not reimbursed. To be in compliance with the code, the employer must pay a reasonable percentage of the employee’s cell phone bill.  The court also held that statistical sampling, based on the principles set forth in Duran v. U.S. Bank National Assn. (59 Cal.4th 1) could be used to determine liability or damages for certification.

The Court reversed the denial of certification and remanded the case to the district court.