First up, big news from the U.S. Supreme Court ending its 2019 Term.  But only relevant to a narrow class of employers.  After these SCOTUS opinions, two California cases that require attention.

Ministerial Exemption

The Court ruled 7-2 that  the “ministerial exemption” to federal employment law applied to certain religious school employees.  Reversing the Ninth Circuit in two consolidated cases, the Court held that the lower court read existing precedent too narrowly. The “ministerial exemption” is based on the First Amendment’s Free Exercise and Establishment Clauses, which allows religious schools to make certain employment decisions without interference from federal law.  However,

This does not mean that religious institutions enjoy a general immunity from secular laws, but it does protect their autonomy with respect to internal management decisions that are essential to the institution’s central mission. And a component of this autonomy is the selection of the individuals who play certain key roles.  *  *  *  *

Without that power, a wayward minister’s preaching, teaching, and counseling could contradict the church’s tenets and lead the congregation away from the faith. The ministerial exception was recognized to preserve a church’s independent authority in such matters. 

The question the Court addressed is whether certain teachers at different religious schools qualified as “ministers” under the exemption, although neither held that title.  Further explaining its previous decisions, the Court laid out this guidance in holding that the exemption applied:

What matters, at bottom, is what an employee does. And implicit in our decision in Hosanna-Tabor was a recognition that educating young people in their faith, inculcating its teachings, and training them to live their faith are responsibilities that lie at the very core of the mission of a private religious school.  *  *  *  *

There is abundant record evidence that they both performed vital religious duties. Educating and forming students in the Catholic faith lay at the core of the mission of the schools where they taught, and their employment agreements and faculty handbooks specified in no uncertain terms that they were expected to help the schools carry out this mission and that their work would be evaluated to ensure that they were fulfilling that responsibility. As elementary school teachers responsible for providing instruction in all subjects, including religion, they were the members of the school staff who were entrusted most directly with the responsibility of educating their students in the faith. And not only were they obligated to provide instruction about the Catholic faith, but they were also expected to guide their students, by word and deed, toward the goal of living their lives in accordance with the faith. They prayed with their students, attendedMass with the students, and prepared the children for their participation in other religious activities. *  *  *  *  Their titles did not include the term “minister,” and they had less formal religious training, but their core responsibilities as teachers of religion were essentially the same. And both their schools expressly saw them as playing a vital part in carrying out the mission of the church, and the schools’ definition and explanation of their roles is important. In a country with the religious diversity of the United States, judges cannot be expected to have a complete understanding and appreciation of the role played by every person who performs a particular role in every religious tradition. A religious institution’s explanation of the role of such employees in the life of the religion in question is important.

* * * *

When a school with a religious mission entrusts a teacher with the responsibility of educating and forming students in the faith, judicial intervention into disputes between the school and the teacher threatens the school’s independence in a way that the First Amendment does not allow.

Justice Alito wrote the majority opinion.  Justice Sotomayor, joined by Justice Ginsberg dissented. The opinion in Our Lady of Guadalupe School v. Morrissey is here.

Contraceptive Exemption

In another religion-related decision, the Court held that the Trump administration had the authority, under the Patient Protection and Affordable Care Act (“ACA”) aka Obamacare, to issue a regulation regarding mandatory coverage of contraception.  There already was such an exemption in place.  But the new regulation

significantly expanded the church exemption to include an employer that “objects . . . based on its sincerely held religious beliefs,” “to its establishing, maintaining, providing, offering, or arranging [for] coverage or payments for some or all contraceptive services.” 82 Fed. Reg.47812. The second created a similar “moral exemption” for employers with sincerely held moral objections to providing some or all forms of contraceptive coverage. 

Before the Court were two principal arguments: (1) the regulation was not permitted under the ACA and (2) the administration violated the Administrative Procedure Act by failing to implement the regulation properly.

The Court held that the administration had the authority to promulgate the regulation and did not violate the APA when it did so. The opinion is 5-4.  However, 7 justices upheld the judgment (so Justices Kagan and Breyer agreed with the result, but did not join the majority’s opinion).  Justices Sotomayor and Ginsberg dissented.

The bottom line is that the above-quoted rule is in effect and valid. You may read the opinions in Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania here.

Meals, Rest Breaks and Rounding

The Court of Appeal in David v. Queen of the Valley Medical Center (here) issued an important ruling on meal and rest periods and time rounding. David, a healthcare worker, claimed she was denied meal and rest periods because of the “pressure” that other employees placed on her to work through them, and the interruptions she experienced. The medical center, though, had a number of policies and procedures in place that defeated her claim because of the law governing employers’ obligations.

Here is a summary of the facts that, the Court found, established that the employer complied with its meal and rest period obligations as a matter of law:

The hospital provided meal breaks as required by law. QVMC provided one meal period for every five hours of work, and a second meal period for those who worked more than 10 hours. Plaintiff waived her second meal period. At her deposition, plaintiff testified a break nurse or a charge nurse relieved her for meal periods and that she always received a meal break by the end of her shift. Plaintiff did not recall missing a meal period or notifying a supervisor about a missed meal period. She could not remember a supervisor interrupting her meal periods with work-related questions or requests. Plaintiff’s supervisors never told her to end a meal break early; she was never discouraged from taking a meal break. Together this evidence establishes QVMC provided meal breaks required by law. (Brinker, supra,53 Cal.4th at pp. 1004, 1040 [“employer’s obligation is to relieve its employee of all duty” during meal period, but “need not ensure that no work is done”]; Donohue, supra, 29 Cal.App.5th at p. 1092 [employer had a “complete defense” to meal period violation claim].)

QVMC also provided rest breaks as required by law. Hospital employees received a 15-minute rest period for every four hours of work. At her deposition, plaintiff admitted her supervisors did not discourage her from taking rest breaks; she acknowledged her supervisors did not tell her to cut her breaks short. Plaintiff could not remember a supervisor interrupting her rest periods with work-related questions or requests. When plaintiff’s coworkers asked her questions, plaintiff told them she was on a break, and they left her alone. Plaintiff did not recall complaining to a supervisor about rest periods.

For a portion of the relevant time period, plaintiff affirmed she was provided with her meal and rest breaks when she clocked out of her shift. The few times that plaintiff did miss a break, she reported it and received an extra hour of pay pursuant to the hospital’s practice of paying a premium for a missed break “whenever . . . requested.” Viewed as a whole, this evidence demonstrates QVMC provided rest periods as required by law. (See Augustus v. ABM Security Services, Inc. (2016) 2 Cal.5th 257, 264 [discussing scope of employer’s obligation to provide off-duty rest periods].)

****

As in Donohue, QVMC had a mechanism for employees to report potential meal and rest period violations. And with the exception of a few isolated instances, plaintiff failed to report any such violation. (Donohue, supra, 29 Cal.App.5th at p. 1091.) She also affirmatively stated in her time correction sheets that she received breaks. Like Donohue, plaintiff’s declaration does not create a triable issue of fact because, as discussed above, it is inconsistent with her deposition testimony, where she could not remember missing a meal or rest period; could not remember having a supervisor interrupt her meal or rest breaks or being discouraged by a supervisor from taking a meal or rest period; and could not remember raising any concerns about meal periods with her supervisor.

Some additional hospital policies and procedures are worth noting / considering by employers seeking to avoid meal and rest period claims:

An employee who misses a meal or rest period must complete an “edit” or “correction” sheet, so QVMC can pay the employee a one-hour premium. The hospital’s practice is to pay a premium for a missed meal or rest period “whenever . . . requested.” * * * *

Plaintiff scheduled meal breaks by writing her name next to a time slot on a whiteboard. At the appointed time, the “break nurse” relieved plaintiff. If no break nurse was available, the charge nurse relieved plaintiff. * * * *

Beginning in June 2013, plaintiff’s time entries contained a prompt asking her whether she received meal and rest breaks. When plaintiff clocked out, she honestly answered the prompt. Plaintiff’s supervisors never discouraged her from reporting a missed meal or rest period.

The Court also refused to allow the plaintiff to contradict her deposition testimony with a declaration under penalty of perjury, drafted in opposition to the employer’s summary judgment motion.

plaintiff relies on her declaration in an effort to establish a triable issue of fact. The trial court was not persuaded, and neither are we. The gist of plaintiff’s declaration is charge nurses looked at the clock while plaintiff was on her breaks, which she interpreted as a signal to cut her breaks short. Assuming for the sake of argument charge nurses are supervisors—an issue we need not decide—this evidence does not support a reasonable inference plaintiff was pressured to end her breaks early. Plaintiff’s generic comment does not create a triable issue of fact regarding interrupted or insufficient breaks, particularly in light of her specific deposition testimony that a supervisor never told her to end her break early, never discouraged her from taking a break, and never told her to work while she was taking a break. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21 [party cannot create triable issue of fact by relying on a declaration contrary to deposition testimony].)

The Court upheld the hospital’s rounding policy as well, even though she had an expert testify that she lost nearly 8 hours of time over a long period (amounting to 0.26% of her work time):

QVMC’s rounding policy “is neutral on its face. It ‘rounds all employee time punches to the nearest quarter-hour without an eye towards whether the employer or employee is benefitting from the rounding.’ ” (AHMC Healthcare, Inc. v. Superior Court, supra, 24 Cal.App.5th at p. 1027.) It is also neutral in practice. (Corbin, supra, 821 F.3d at p. 1079.) The rounding policy did not systematically undercompensate plaintiff: sometimes, in a given pay period, she gained minutes and compensation; sometimes she lost minutes and compensation. (Ibid.) The overall loss of .26 percent in compensation over the relevant time period is statistically meaningless. (Ferra v. Loews Hollywood Hotel, LLC, supra, 40 Cal.App.5th at pp. 1253–1254 [rounding system neutral even where the plaintiff lost time in 55.1 percent of shifts]; AHMC Healthcare, Inc. v. Superior Court, supra, at p. 1028 [rounding system neutral, even though some employees lost 2.33 minutes per shift]; See’s Candy II, supra, 7 Cal.App.5th at p. 250 [evidence that the plaintiff had a shortfall and a surplus demonstrated rounding policy was “mathematically neutral over time”].) Under the authorities discussed above, QVMC satisfied its burden of establishing the rounding policy is lawful. (See’s Candy II, supra, 7 Cal.App.5th at p. 250.) Plaintiff’s bare assertion she is “owed 7.75 hours of wages” does not create a triable issue of fact, *****

So, good policies and practices plus a good plaintiff’s deposition = a win for the employer.

Commuting Time Can Be Compensable

If you were happy with the David case, you may be less pleased with  Oliver v. Konica Minolta Business Solutions (opinion here). The Court of Appeal in Oliver is the latest to weigh in on the thorny issue of whether commuting time can be compensable as “hours worked.”  (The default of course is that ordinary commutes are not compensable.)

This commute, though, was not ordinary.

Service technicians were required to drive their personal vehicles, which contained defendant’s tools and parts, to customer sites to make repairs to copiers and other machines. Service technicians did not report to an office for work. Instead, service technicians usually drove from home to the first customer location of the day and, at the end of the day, from the last customer location to home

So, the employer required employees to use a personal vehicle for work, which of course does not transform a commute into compensable time or everyone’s drive would be compensable.  The employer *also* required employees to carry around company equipment in their personal vehicles, with which they performed their mobile repairs.  Now, even that is not enough to turn an ordinary commute into “hours worked” in all cases.

But the Court here decided that there was a triable issue of fact regarding whether the employer’s requiring traveling service tech employees to use their own vehicles and carry company equipment turned the commute into working time.  Why? Because California defines “hours worked” not only as when employees perform actual work, but also when the employer exercises enough control over the employees’ time.  .

The Court viewed the legal issue as follows:

Here, we determine that if carrying tools and parts in a service technician’s personal vehicle during the commute was optional, then the service technician was not “subject to the control of [defendant]” for purposes of determining whether that time constituted “hours worked.” … Further, even if a service technician was required—“strictly speaking” or “as a practical matter”—to carry tools and parts during the commute, the service technician would not be “subject to the control of [defendant]” during the commute if the service technician was able “to use ‘the time effectively for [the service technician’s] own purposes.’ ”  * * * *

On the other hand, if a service technician was required during the commute to carry a volume of tools and parts that did “not allow [the service technician] to use ‘the time effectively for [the service technician’s] own purposes,” then the technician would be “subject to the control of [defendant]” for purposes of determining “hours worked” and entitlement to wages. (Morillion, supra, at p. 586; Cal. Code Regs., tit. 8, § 11040, subds. 2(K) & 4(B).)

Based on the facts of the case, the Court decided that a jury should decide whether “service technicians were subject to defendant’s control during their commute such that their commute time constituted “hours worked” for which wages must be paid, and (2) whether service technicians were entitled to reimbursement for commute mileage.

What was it about Konica’s policies that created this potential issue of liability?

we determine that there are material factual disputes in this case regarding whether service technicians were precluded from using their commute time effectively for their own purposes such that they were “subject to the control” of defendant. (Cal. Code Regs., tit. 8, § 11040, subd. 2(K).) On the one hand, if carrying tools and parts in a service technician’s personal vehicle during the commute was optional, then the service technician was not “subject to the control of [defendant]” for purposes of determining whether that time constituted “hours worked.” ***Further, even if a service technician was required—“strictly speaking” or “as a practical matter”—to carry tools and parts during the commute, the service technician would not be “subject to the control of [defendant]” during the commute if the service technician was able “to use ‘the time effectively for [the service technician’s] own purposes.’ ” ****

On the other hand, if a service technician was required during the commute to carry a volume of tools and parts that did “not allow [the service technician] to use ‘the time effectively for [the service technician’s] own purposes,” then the technician would be “subject to the control of [defendant]” for purposes of determining “hours worked” and entitlement to wages. * * * *

First, there is a factual dispute regarding whether service technicians were required, either strictly speaking or as a practical matter, to commute with tools and parts in their personal vehicles. Defendant had a written policy requiring parts to be stored in the service technician’s vehicle. Any exceptions to this policy required a manager’s approval. * * * *

Second, there is a factual dispute regarding the volume of tools and parts that service technicians were required to carry in their vehicles while commuting. Again, a reasonable inference arises that a service technician more readily satisfied defendant’s performance criteria if the service technician carried more, rather than less, parts in the vehicle. Moreover, defendant’s written policy required “a late-model vehicle in good repair and appearance with no less than twenty-five (25) cubic feet of lockable cargo space” to carry tools and parts. However, there was evidence that some service technicians did not comply with the written policy and drove cars with smaller cargo space. For example, whereas one service technician indicated that he routinely carried at least 400 pounds of equipment and tools in his van even with access to a storage locker, another service technician who did not have a parts storage location was able to keep almost all assigned parts in his Audi coupe. However, another service technician, who drove a Corolla, had a trunk and back seat “full” of tools and parts and, at times, could not see out the back window.

* * * *

Triable issues of material fact exist regarding whether service technicians were required to carry tools and parts in their personal vehicles during their commutes, and regarding the volume of tools and parts that they were required to carry during their commutes.

Couple of things –

First, this case now must be read with Hernandez v.Pacific Bell Telephone Co. (2018) 29 Cal.App.5th 131. The Court in Hernandez rejected the claim that the employee’s having to drive a company-owned van with equipment during the commute was compensable time. On the one hand, use of the Company vehicle was optional; the employee could commute in his or her own vehicle to the vehicle dispatch location and pick up the Company vehicle if the employee so desired.  On the other hand, the employees’ use of the Company vehicle included many restrictions on personal activities. In this case, the employer did not regulate the use of the employee’s own vehicle while it was carrying equipment.

Second, the Court did not reach whether the employer’s requiring employees to drive with company equipment in personal vehicles was “hours worked” under the “suffer or permit to work” standard.  So that issue is still open.

Third, if the employer had followed its own policy about the size of the personal vehicle and what must be included / carried, and if the employer had made this program optional, the employer probably would have won under Hernandez.  The Court of Appeal could not discern whether carrying equipment was truly optional, and whether employees with small cars were too hampered from engaging in personal pursuits, among other things.

And finally, if a court / jury decides in favor of the employees here, it will result in unspeakable liability for overtime, unpaid minimum wage, non-compliant meal and rest periods, and expense reimbursement.  So, if you have in place a program under which employees commute to remote locations while carrying company equipment, get a handle on this case and Hernandez.