California Supreme Court Attempts To Clarify Issues Of Control

Seyfarth Synopsis:

On March 25, 2024, the California Supreme Court unanimously answered three questions regarding the meaning of  "hours worked” that had been certified to it by the Ninth Circuit Court of Appeal. This ruling illuminates what constitutes employer control sufficient to render particular activities compensable under Industrial Welfare Commission Wage Order No. 16. Huerta v. CSI Electrical Contractors.

The Facts

CSI Electrical Contractors (CSI) hired George Huerta and others to work at power facilities located in Monterey and San Luis Obispo counties. This employment was governed by two collective bargaining agreements, which provided for a thirty-minute unpaid meal period.

At the beginning of the workday, Huerta was required to report to a security gate located about ten to fifteen minutes from the employee parking lot. Cars formed a long line outside the security gate, while security guards scanned each worker’s badge, and occasionally looked inside cars and truck beds. This same procedure occurred at the end of the work day, and it could take up to a minute or more per vehicle, thereby causing exit delays of between five and thirty minutes.

Huerta was not paid for the time he spent waiting to pass through the security gate at the beginning or the end of the work day. Huerta was also subject to a speed limit between five to twenty miles per hour while inside the security gate due to the presence of endangered species near the site.

Huerta filed a wage and hour class action in the Superior Court of Monterey County on behalf of himself and similarly situated individuals against CSI claiming that he should have been paid for the time waiting for the security check and for the time spend driving from the security gate to the parking lot. The case was removed to the United States District Court for the Northern District of California.

The Lower Court Decisions

The district court granted Huerta’s motion for class certification. CSI then moved for, and was granted, partial summary judgment on Huerta’s class claims. CSI then filed a second motion for partial summary judgment on the remaining class claim that had survived the first motion for summary judgment. This motion was also granted.

Huerta appealed to the Ninth Circuit, which certified the following questions to the California Supreme Court:

1. Is time spent on employer premises waiting in a personal vehicle to scan an identification badge and have a security guard peer into a personal vehicle compensable as “hours worked”?
2. Is time spent on employer premises in a personal vehicle, driving from the employee parking lot to the security gate—subject to certain employer rules—compensable as “hours worked” or “employer-mandated travel”?
3. Is time spent on employer premises, where workers are prohibited from leaving but not required to engage in employer-mandated activities, compensable as “hours worked” when that time is designated as an unpaid meal period under a collective bargaining agreement?

The California Supreme Court Decision

The California Supreme Court answered the first question in the affirmative. It concluded that Huerta was subject to employer control while waiting in the line to exit through the security gate—even while in his personal vehicle. The Court reached this conclusion because the search was for CSI’s benefit (i.e., preventing theft of tools and endangered species on the site), and the employee was to do more than merely present a badge to exit (i.e., undergo the examination of the vehicle).

The Court answered the second question by holding that the time spent traveling to the security gate at the end of the workday could possibly be compensable as “employer-mandated travel” but not “hours worked.” Part of the reasoning for this conclusion was that the mere fact that the employee is required to follow employer mandated rules relating to safe travel does not render the employee subject to employer control (i.e., not hours worked). Under the language of the Wage Order at issue, travel time is compensable when an employee travels between two locations, and the employee’s presence at the first location serves some employment-related purpose. When an employee must be present at a location because it is the lone means of ingress/egress to a worksite, that does not necessarily render the employee’s presence at that location “required by the employer.”

The Court answered the third question by holding that, even if a qualifying collective bargaining agreement exempts employers from the requirements of Wage Order No. 16, an employee must be paid a minimum wage for meal periods when an employer prohibits employees from leaving the premises, and this prevents employees from engaging in personal activities they could otherwise engage in if permitted to leave.

What Huerta Means For Employers

The questions addressed by Huerta were narrow, and extremely fact specific. While the decision provides employers with some guidance as to what may constitute control, it does so in a very particular scenario.

At first glance the decision may appear more decisive in relation to the question presented regarding the compensability of travel time (though the Court expressly stated it was not reaching a decision on the facts presented). Some plaintiffs’ attorneys may argue for a broad reading to the decision, claiming that “employer related travel” and “hours worked” constitutes a difference without a distinction. However, the language on which the decision turned does not appear in other Wage Orders, thereby further limiting the scope of the holding.