Employer Reimbursement for Mobile Device Use

What Cochran v. Schwan’s Home Service Says and Why You should Pay Attention, Even if Your Business Isn’t in California
 
Next time you see one of those yellow Schwan’s Home Service yellow frozen food trucks driving around your neighborhood, look at it differently. While I’ve been told that the merchandise inside is tasty when thawed, a recent California decision in a case brought by a Schwan’s employee may have left a sour taste in the mouth of California employers. Beyond California’s borders, the decision is likely to affect the way employers manage—and accommodate—employee-owned mobile devices nationwide. See Cochran v. Schwan’s Home Service, Inc., B247160, (Aug. 12, 2014).

In this case, Mr. Cochran, a Schwan’s customer service manager, sued his employer for reimbursement over his required use of his personal cell phone for work purposes.  Mr. Cochran sought to create a class action, but the trial court refused to certify it, based on the fact that questions about the billing particularities of each class member would overwhelm the underlying issue. As a result, the class certification failed, but the issue of employer reimbursement survived in a very visible way.

The relevant section of California’s Labor Code (Section 2802) requires that employers to reimburse employees for all “necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or his or her obedience to the directions of the employer.”   According to the California Court of Appeal, “if an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for the purposes of Section 2802.”  One of the key words here is “required.”  The decision does not require that employers contribute to all employees’ mobile device bills.  However, if the mobile device is required—and it is determined that such mobile access is “necessary” in order for the employee to do his/her job--then some reimbursement is required.

The court went on to articulate that whether the employee has a flat rate plan, and thus incurs no additional expense for taking or making these calls, or whether the employee is actually and directly paying the bills or is covered by someone else’s plan are both irrelevant. As the court sees it, “reimbursement is always required,” because otherwise the employer receives a windfall at the employee’s expense. The fact remains, regardless of who is actually paying or whether or not there is any additional financial impact on the employee as a result of the employer’s calls and/or texts.

The decision expands on what is owed to the employee—beyond actual costs.  As increasing numbers of people go to fixed rate plans, it’s virtually impossible to distinguish what the actual cost of a particular call or text message really is. Nonetheless, the court determined that as long as the device is employee owned, and its use is a required portion of the job, the employer owes the employee a “reasonable percentage,” a phrase which conveniently—or inconveniently—wasn’t defined.  The court also steered clear from defining when use of a personal device is necessary, thus triggering the employer’s responsibility to “kick in.”

While the decision’s direct impact is limited to those in California, in fact, it raises a much larger and more geographically neutral issue. For example, a well-respected surgeon-friend asked me recently what I thought about mobile devices in the Operating Room.  This is something that honestly never occurred to me. However, as she was quick to point out, the mobile phone has replaced the beeper.  By using her mobile device, her team can communicate with her quickly in an emergency just as it would have—or might have—if she’d had a beeper.  While I responded that I thought that anything that has the potential to distract anyone in the OR, or any other “mission critical” work environment was a bad thing, the truth is, I’d never given the matter any thought. Particularly when I considered the phone as a beeper replacement, I had to think again. My opinion didn’t change, but I did think about the issue in a new light.

In fact, my friend provided me with the “Statement on Use of Cell Phones in the Operating Room” published in the Bulletin of the American College of Surgeons, as far back as 2008. Other medical organizations have similarly issued statements including the American Association of Nurse Anesthetists, the Association of periOperative Registered Nurses, and the American Hospital Association among others, thus proving the critical nature of risk created since mobile devices have invaded virtually every corner of our 21st Century worlds.  Similarly, I’m confident that other high-concentration professions have created and deployed their own safety statements about wireless device use.  In sharp contrast, as I searched for other policy statements from other professions, I found that the National Education Association, along with other classroom and teacher forums, has extensive links to articles and posts about how to use mobile devices more effectively IN the classroom.  In this context, if you can’t beat ‘em, join ‘em!

The greater issue is that while case law and position statements addresses specific circumstances involving mobile devices, with the presence of these devices virtually everywhere, mobility policies, which were originally designed to limit employer liability for potential employee negligence, now require much more comprehensive provisions addressing industry specifics as well as more generic topics. Data security and privacy top the list, but there are many other considerations that must be included in order for an employer to best manage the wireless devices that have invaded workspaces. Further, these policies, which should be acknowledged and signed, should be examined, evaluated, and rewritten by participants from an enterprise’s legal, risk, and insurance professionals as necessary—even on an annual basis.