The U.S. Court of Appeals for the Ninth Circuit recently addressed the compensability of commute time under the California Labor Code and the content required in a Private Attorneys General Act of 2004 (PAGA) letter. The Ninth Circuit examined the following:

• Is regular commute time compensable under the California Labor Code when an employee drives an employer-owned vehicle?  Possibly, the court determined, if the employee’s choice regarding whether to drive the employer-owned vehicle is illusory and the employer exercised sufficient control over the regular commute time. 
• Are conclusory statements with citations to the California Labor Code sufficient to satisfy the notice requirements for a PAGA claim?  No.  According to the court, a plaintiff must provide a description of the policies and practices being complained of so that the seriousness of the alleged offenses can be assessed by the California Labor and Workforce Development Agency (LWDA).

Alcantar v. Hobart Service, Case No. 13-55400 (9th Cir. Sept. 3, 2015).

Background  

The plaintiff was a Hobart service technician who performed after-sale maintenance and repair services on commercial food equipment.  He was assigned to a branch office, but spent most of his time driving between his home and customer locations in an employer-provided vehicle, carrying tools and necessary replacement parts for repairs.  He was paid for the time spent driving from home to his first assignment and from his last assignment back home only if the commute exceeded his commute to and from his branch office.

The plaintiff filed a class action alleging failure to pay overtime wages for time spent commuting.  He claimed that his regular commute time was compensable because technicians remained under the company’s control when they drove employer-owned vehicles.  He also asserted claims for PAGA penalties.  The district court granted the company’s motion for summary judgment, finding that the company did not require its technicians to commute in employer-owned vehicles, and that the plaintiff had failed to exhaust administrative remedies under PAGA with his cursory and conclusory notice to the LWDA.

Ninth Circuit’s Decision

The Ninth Circuit reversed in part, holding that while time spent commuting to and from work is not typically compensable, the time may be compensable if it constitutes “hours worked” because the employee was subject to the control of the employer.  Although the company submitted evidence that its technicians’ decision to drive the service vehicles to and from work was voluntary and therefore not subject to its control, the Ninth Circuit concluded there was a triable issue of fact regarding whether the choice to drive the service vehicle was truly voluntary.  Specifically, the Ninth Circuit noted that the technicians could be financially responsible for tools and service parts stolen from their vehicles, the company did not provide enough secure parking spaces at its facility to accommodate all of its service vehicles, and no service technicians had opted to leave their service vehicles at work.  The Ninth Circuit concluded that these facts created a triable issue regarding whether the service technicians’ choice to drive the service vehicles was illusory. 

Further, for some time during the class period, the company also expected technicians to respond to calls on company-issued cell phones while driving to and from their first and last assignments of the day.  Thus, employees were arguably expected to perform actual work during their commute.  On this record, the Ninth Circuit concluded that whether employees were under the control of the employer while commuting involved disputed issues of material fact, precluding summary judgment.

The Ninth Circuit affirmed the district court’s dismissal of the PAGA claim.  PAGA requires employees to give written notice to the LWDA of the specific provisions of the California Labor Code alleged to have been violated, including facts and theories to support the alleged violation.  The Ninth Circuit concluded that the plaintiff's letter contained a series of legal conclusions with no factual allegations or theories of liability.  Consequently, the letter did not allow the LWDA to intelligently assess the seriousness of the alleged violations and did not provide sufficient information to the company to determine what policies or practices the plaintiff was challenging.

Takeaways

In light of Alcantar, employers should review their policies and practices relating to company-provided vehicles to assess the compensability of commuting time both in and outside of California, where different definitions of "work" may be implicated.