Labor Code Requires Reimbursement of Employees’ Work-Related Use of Personal Cell Phone


Recently, in Cochran v. Schwan’s Home Service, Inc., (August 12, 2014, B247160) --- Cal.Rptr.3d ----, Cal.App. 2 Dist.), the California Court of Appeal for the Second Appellate District held that an employee is incurring an expense for purposes of California Labor Code section 2802 when he or she is required to make work-related calls on a personal cell phone. 


A class of customer service managers sued their employer, Schwan’s Home Service ("Schwan's"), for violation of Labor Code section 2802, alleging that they were not reimbursed for expenses pertaining to the work-related use of their personal cell phones.  The trial court refused to certify a class finding a lack of commonality as to whether the first element of a section 2802 claim was met – namely, the element of “expenditures by customer service managers.”  In concluding there was a lack of commonality as to this element, the trial court noted that class members had varying cell phone plans and paid those plans with different methods.  It found that Schwan's “would be entitled to ask whether each driver purchased a different cell phone plan because of their work cell phone usage.”  It also noted that there was a question as to whether the named plaintiff’s cell phone bill was paid by him or his live-in girlfriend.


The Court of Appeal rejected the trial court’s consideration of these factors.  It held that if an employee is required to make work-related calls on a personal cell phone, then he is or she is indeed incurring an expense for purposes of section 2802, regardless of whether the phone bill is paid for by a third person, or at all.  The Court of Appeal also rejected any consideration of whether the employee incurred any additional expense above and beyond what he or she would have paid for his or her cell phone but for the work usage.  It held that to show liability under section 2802, all an employee must show is that he or she was required to use a personal cell phone to make work-related calls, and that he or she was not reimbursed.

What This Means To You

Although this case remains subject to appeal, it establishes for the time being that Labor Code section 2802 requires reimbursement of “some reasonable percentage” of employees’ personal cell phone bills where employees are required to use their personal phones for work calls.  Labor Code section 2802 may not always apply to your entity, however.  For example, it was held in In re Work Uniform Cases (2005) 133 Cal.App.4th 328, that Labor Code section 2802 did not require certain government employers to indemnify employees for all necessary expenditures or losses incurred by employees in purchasing, replacing, cleaning, and maintaining their required work uniforms because the constitution specifically vested those government employers with the authority to prescribe their employees’ compensation and each employer had memorandum of understanding provisions on uniform allowances.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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