On September 3, 2015, the U.S. Court of Appeals for the Ninth Circuit ruled that an employer must pay for employee commute time to and from work if the employer has a policy that requires its employees to use the company’s vehicles to commute between work and home and if the employer exerted control over the employees during their commute time.
Joséluis Alcantar sued Hobart Service (“Hobart”) and its parent company, ITW Food Equipment Group (“ITW”) on behalf of a putative class of non-exempt service technicians who provided after care maintenance and repairs to customers who had purchased ITW commercial food equipment. Alcantar alleged that Hobart did not compensate its technicians for the time they spent commuting in Hobart’s service vehicles from their homes to their job sites and from those job sites back home. Although Hobart compensated its technicians for time spent repairing equipment, time spent commuting from assignment to assignment, as well as commute time that extended beyond the employees’ “normal commute” (i.e., the time it would take for a technician to drive from his home to his designated branch location), Alcantar alleged that Hobart also should compensate its technicians for their normal commute time in the company’s vehicles. Specifically, Alcantar argued that, while the company’s vehicle use agreement states the technicians had the option to either commute in their company vehicles or leave their vehicles at their designated branch office, the option is “illusory” since the branch offices do not have enough secured parking spaces for technicians’ vehicles. Because the technicians are responsible for the tools and parts inside the vehicles, they risk having to pay for any stolen tools and parts if the vehicles are burglarized at the branch offices. Alcantar also alleged that the company’s vehicle use policy places several restrictions on the technicians’ use of company vehicles and requires technicians to respond to work calls during their “normal commute time.” As a result of these restrictions and requirements, Alcantar alleged the technicians were under the control of Hobart when commuting to and from work, and therefore, must be compensated for their time.
The district court denied class certification and granted summary judgment in favor of the employer on Alcantar’s individual commute time claim. On appeal, the Ninth Circuit remanded the case to the district court after concluding that, with respect to Plaintiff’s commute claim, the district court erred in denying class certification and further erred in granting summary judgment in favor of the employer.
The Ninth Circuit noted that, under the California Labor Code, an employee’s commute is not typically compensable even “when the employee commutes in a vehicle that is owned, leased, or subsidized by the employer.” Cal. Lab. Code § 510(b). The time may be compensable, however, if the employee can classify it as “hours worked.” The Industrial Welfare Commission has defined “hours worked” as “the time during which an employee is subject to the control of an employer,” including “all the time the employee is suffered or permitted to work, whether or not required to do so.” See Cal. Code Regs. tit. 8, § 11040(2)(K). As such, the court held that, to prevail at trial, Alcantar must prove 1) that Hobart’s restrictions on him during his commute in the company’s vehicle are such that he is under Hobart’s control; and 2) that employees are, as a practical matter, required to commute in Hobart’s vehicles.
Although the district court has yet to reach a post-remand decision on the merits of Alcantar’s commute time claim, this case serves as an important reminder to employers with employees who use company vehicles to commute to and from home. To avoid compensating employees for their commute time, employers should ensure they have written policies in place clearly stating employees are not required to use a company vehicle to commute to and from home. Employers should further ensure that there are no limitations or restrictions in place that may nonetheless force employees, as a practical matter, to use the employer’s vehicles to travel to and from work. Regardless of the vehicle employees use to commute to and from work, employers should ensure they are not placing any restrictions or requirements on their employees during their commute time such that the employees could argue they are subject to the control of the employer. To the extent employers do place restrictions and/or requirements on employees during their commute to and from work, employers should treat the commute time as compensable time worked.