Court of Appeal Holds that California Employers Must Reimburse Employees for Personal Cell Phone Use at Work

The Court of Appeal for the Second Appellate District, in Cochran v. Schwan's Home Service, Inc., 228 Cal. App. 4th 1137 (2014), recently refuted one of the vogue arguments employers present to defeat class certification in expense reimbursement cases. The Plaintiff sought reimbursement on behalf of the class of customer service managers for cell phone expenditures. Admitting that the proposed class used their cell phones for work, that it knew of this fact and that it did not reimburse the class for these expenditures, the defendant argued that certification was not appropriate because "many people now have unlimited data plans for which they do not actually incur an additional expense when they use their cell phones," and, as such, "to determine whether an expense was incurred for a class member's business use will require an examination of each class member's cell phone plan."

The trial court agreed with the Defendant and denied certification. The trial court also focused on whether the plaintiff or his girlfriend paid the phone bill. The appellate court reversed the trial court explaining that the threshold question in a reimbursement claim under Labor Code section 2802 regarding cell phone use is this: "Does an employer always have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or is the reimbursement obligation limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job? The answer is that reimbursement is always required. Otherwise, the employer would receive a windfall because it would be passing on its operating expenses onto the employee. Thus, to be in compliance with section 2802, the employer must pay some reasonable percentage of the employee's cell phone bill."

The court also clarified that "[i]f an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for purposes of section 2802. It does not matter whether the phone bill is paid for by a third person, or at all."

If you are required to use your personal cell phone for work, and you do not receive reimbursement from your employer, please contact us to learn more about your legal rights.