As has been the long-standing rule in California, when determining compensable work time, employers must also be sure that they include any time where the employer exercises control over the employee. Previous case law has extended this to include time during which an employee is not necessarily working as long as the employer is exercising control over the employee. Morillion v. Royal Packing Co. (Cal. 2000). An example of where this has applied is during travel time where the employee is not working, but where specific travel policies may apply to the employee.
Most recently, the ninth circuit applied this rule against Walmart in upholding a potential $54.6 million award to Walmart’s delivery drivers. In the case, Ridgeway v. Walmart Inc. (9th Cir. 2020), Walmart drivers sought after wages which they allowed was owed for the time that they spent on mandatory layovers. In the case, the drivers were required to take a federally required ten-hour layover. In reviewing the matter, the court looked at several of Walmart’s policies that applied during the layover to consider if Walmart exercised sufficient control over the driver:
- Walmart’s written policy that required drivers to gain preapproval from management before taking a layover at home.
- Drivers were required to record the break at home, and the approving manager, on the trip sheet, and
- Drivers could be subject to disciplinary action, up to and including ‘immediate termination,’ for taking an unauthorized layover at home.
In reviewing these restrictions, the court determined that they were sufficient to establish Walmart’s control over the employee, which therefore entitled the drivers to minimum wage during the entire layover. This was the holding despite the fact that drivers (1) likely had some freedom to engage in other tasks during the layover and (2) had the ability to ask for permission to go home. By restricting the drivers from going home, Walmart established sufficient “control” over the employees.
In consideration of this case, California employers should ensure that they are properly tracking all compensable “hours worked” by their employees. Notably, they should properly track all time during which they “exercise control” over their employees. Such time may apply during any time where a company policy restricts an employee from freely spending her time as she sees fit.
If you have any questions on how this case, or the rules discussed, applies to your company, please do not hesitate to contact your Employers Council representative.