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Mendiolas v. CPS Security Solutions, Inc.

California Court of Appeals, Second District, Fourth Division

July 3, 2013

TIM MENDIOLA et al., Plaintiffs, Cross-defendants and Respondents,
v.
CPS SECURITY SOLUTIONS, INC., et al., Defendants, Cross-complainants and Appellants.

APPEAL from an order of the Superior Court of Los Angeles County NoS. BC388956, BC391669 Jane L. Johnson, Judge.

Blank Rome and Howard M. Knee; Jim D. Newman for Defendants, Cross-complainants and Appellants.

Law Offices of Cathe L. Caraway-Howard for Plaintiffs, Cross-defendants and Respondents.

MANELLA, J.

Appellants CPS Security Solutions, Inc., CPS Construction Protection Security Plus, Inc. and Construction Protective Services, Inc. (collectively “CPS”) provide security guards for building construction sites throughout California. A number of the security guards employed by CPS are designated “trailer guards.” They are thus described because in addition to their regular patrols, they are expected to spend the night at their assigned jobsites in CPS-provided residential-type trailers, in order to be available to investigate alarms and other suspicious circumstances and to prevent vandalism and theft. During these nighttime periods, CPS considers the trailer guards “on call, ” and generally compensates them only for the time spent actively conducting investigations.[1] In 2008, two lawsuits were filed against CPS, alleging violations of California law governing minimum wage and overtime compensation and seeking to represent the same class of California trailer guards. The trial court consolidated the cases and certified the class.[2]

Currently on appeal is the court’s order granting a preliminary injunction requiring CPS to compensate trailer guards for all on-call time spent in the trailers. At issue are two distinct periods: weekdays, when the trailer guards are on patrol eight hours and on call eight hours, and weekends, when they are on patrol 16 hours and on call eight hours. We conclude that CPS must compensate the trailer guards for the nighttime hours spent on the jobsites during the week, as the trial court ruled. However, in accordance with settled principles of California law, we conclude that CPS is permitted to deduct eight hours for sleep time on those weekend days when the trailer guards are on duty for 24 hours. Accordingly, we affirm in part and reverse in part.

FACTUAL AND PROCEDURAL BACKGROUND

A. Complaints and Cross-Complaint

The operative complaint sought damages for failure to pay minimum wage and overtime compensation in violation of California regulations and Labor Code provisions, including Wage Order No. 4.[3] It also asserted other related claims, including a claim for declaratory relief, seeking a determination whether CPS’s on-call compensation policy was unlawful under the applicable statutes and regulations. CPS cross-claimed for declaratory relief, also seeking a judicial determination of the lawfulness of its on-call policy.

B. Cross Motions for Summary Adjudication

1. Stipulated Facts Concerning Trailer Guards

The parties filed cross-motions for summary adjudication on the declaratory relief causes of action, filing a joint statement of undisputed facts in which they stipulated to the following: CPS contracts with its customers, construction companies at building sites throughout California, to provide security services. The package of services generally includes the presence of a security guard from 3:00 p.m. to 7:00 a.m., Monday through Friday, and for 24 hours on Saturday and Sunday.[4]

Prior to being hired by CPS, each trailer guard was required to sign a “Designation of Personal Time for In-Residence Guard, ” also referred to as an “On-Call Agreement[].” The On-Call Agreements designated eight hours per day, generally from 9:00 p.m. to 5:00 a.m., as “On-Call” hours. Under these Agreements, each trailer guard agreed that the trailer home was his or her “residence, ” and agreed to “reside during [his or her] employment in the trailer home provided by the Company for [his or her] exclusive use.” Those prospective hires who did not agree to the terms and conditions of employment as a trailer guard were offered positions as hourly guards, when available.

The trailers provided by CPS ranged in size from 150 to 200 square feet. The trailers had many of the amenities of home, including a living area, a bed, a functioning bathroom and kitchen, heat, and air conditioning. The trailers were equipped with locks, and only the assigned trailer guard and CPS maintenance staff had the keys. Trailer guards were allowed to keep personal items in their trailers, including clothing, books, magazines, televisions, radios, and personal computers, and to engage in personal activities while on call in the trailers, including sleeping, showering, cooking, eating, reading, watching television, listening to the radio, and surfing the internet. However, children, pets, and alcohol were not permitted on the premises, and adult visitors were permitted only if CPS’s client permitted it.

On weekdays, trailer guards were generally scheduled to actively patrol the jobsites from 5:00 a.m. to 7:00 a.m. and from 3:00 p.m. to 9:00 p.m. (a total of eight hours).[5] On weekends, trailer guards were on active patrol from 5:00 a.m. to 9:00 p.m. (16 hours). During these times, they were paid an hourly rate. For eight hours every day, generally 9:00 p.m. to 5 a.m., the trailer guards were considered to be on call, which meant present on the jobsite or in the trailer, except as specified in the On-Call Agreements.

Under the On-Call Agreements, if a trailer guard wished to leave the jobsite during on-call hours, he or she was required to (1) notify a dispatcher, (2) provide information as to where the guard would be and for how long, and (3) wait for the reliever to arrive.[6] After leaving the jobsite, the guard was required to remain within a 30-minute radius and carry a pager or radio telephone. If called during that time, the guard was required to respond immediately. The trailer guards were not allowed to leave a jobsite before a reliever arrived. If no reliever was available, CPS had the right to order a trailer guard to remain at the jobsite, even if the trailer guard had an emergency. CPS did not consider on-call time when calculating hours worked, and trailer guards were paid for on-call time only if: (1) an alarm, noise, motion or other condition on the jobsite required investigation; or (2) they were waiting for or had been denied a reliever.[7] When investigating a suspicious condition, the trailer guards were paid for the actual time spent conducting the investigation. If a trailer guard spent three or more hours engaged in investigations during the on-call period, the guard would be paid for the entire eight hours.

C. Prior Governmental Opinions Related to Trailer Guards

The parties stipulated that state and federal governmental agencies had weighed in on the legality of CPS’s on-call policy or the legality of predecessor policies with similar features as set forth below.

1. DLSE

Beginning in 1996, the Division of Labor Standards Enforcement (DLSE) conducted an investigation and audit of CPS’s policy with regard to trailer guards and their nighttime posting, which was then designated “sleep time.”[8] Under the policy then in place, trailer guards who wished to leave a jobsite were required to request permission 12 hours in advance to enable CPS to secure a reliever, and were not paid if no reliever was available. In an April 1997 letter, the Chief Deputy Director of the Department of Industrial Relations and acting Labor Commissioner noted that both DLSE and the federal Department of Labor had concluded “hours worked” did not include “sleep time, meal times, and all other times during which the employee is either free to leave the premises or is free to engage in private pursuits.”[9] After review, the DLSE “f[ound] it appropriate to extend ...


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