Last August, in Cochran v. Schwan’s Home Service, Inc., a California Court of Appeal held that employers must reimburse employees for required work-related use of personal cell phones, even if the employees incur no additional out-of-pocket expenses from that work-related use. The California Supreme Court has refused to grant review of the decision, so the Cochran case stands as established case law.

In Cochran, the plaintiff, Colin Cochran, was a customer service manager for a food delivery provider who was required to use his personal cell phone for work purposes. His employer did not reimburse him for this work-related personal cell phone use. Cochran filed a class action lawsuit on behalf all customer service managers who were not reimbursed for expenses relating to work-related use of their personal cell phones.  He argued that Labor Code 2802 required the employer to reimburse him, even though he had an unlimited service plan and incurred no additional out-of-pocket expenses for the business calls.

Labor Code section 2802 requires employers to reimburse an employee “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.”

In addressing class certification, the trial court found the customer service managers lacked sufficient commonality with respect to the expenses necessarily incurred as a result of work-related use of personal cell phones.  Specifically, the trial court reasoned that differences in cell phone plans, including unlimited plans where no out-of-pocket expenses were incurred, raised too many individual questions and would require an inquiry into every class member’s cell phone plan.  As a result, the trial court denied class certification.

On appeal, however, the court dispensed with the trial court’s reasoning by finding that an employer always is required to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, whether or not the employee incurred additional out-of-pocket expenses as a result of the work-related use.  Otherwise, the court found, the employer would receive a “windfall” by passing its operating expenses onto the employee.  Thus, the trial court’s ruling on certification was reversed.  This holding may require employers to reevaluate their policies and procedures related to personal cell phone use.

While Cochran made it clear that employers must reimburse employees for a “reasonable expense” of any necessary work-related use of their personal cell phones, it left open important practical questions.  Specifically, the court’s decision provides no guidance on when use of a personal cell phone will be considered necessary or how to calculate reimbursements.

Certainly a direct instruction would be considered necessary.  Arguably, however, personal cell phone use might also be considered necessary where employees are required to make work-related phone calls, or are otherwise expected to be available by phone, and a company-issued phone is not available.  The same could likely be argued for smartphones, tablets, or laptops where employees are expected to send or respond to work-related emails without a company-issued device.