The US Court of Appeals for the Ninth Circuit has issued a decision interpreting when California employers must compensate employees who are required to commute to work in company-owned vehicles. In Rutti, et al. v. Lowjack Corp., Inc., No. 07-56599 (9th Cir. March 2, 2010), the court held that California law requires that employees be compensated for all commute time during which they are under their employer’s control. The court also held that under federal law, employers must compensate employees for certain off-the-clock and pre- and post-commute activities, provided the activities are related to the employee’s principal activities and are not de minimis. Rutti is one of the few appellate decisions to address whether off-site, after-hours use of employer technology (here, off-site time spent communicating data to the employer’s computer system) is compensable.

In Rutti, the plaintiffs sought to bring a class action on behalf of all technicians employed by defendant Lojack to install anti-theft units in customers’ cars. The installations were performed at the customers’ locations. Lojack required its technicians to travel to these locations in company-provided vehicles, and paid them hourly from the time they arrived at the first job location until they finished the last job of the day.

Before their first job and after their last, Lojack required its technicians to perform certain off-the-clock activities from their homes. In the lawsuit, plaintiffs sought compensation for the time spent commuting to worksites in Lojack’s vehicles and for time spent on tasks performed before and after the regular work day.

In its decision, the Ninth Circuit explained that under the Employee Commuting Flexibility Act (ECFA), pre- and post shift activities may be compensable if they are “principal” and not de minimis. The court held that “principal activities” are to be liberally construed to include work of the employees in the ordinary course of business that is performed primarily for the benefit of the employer.

In determining whether an activity is de minimis, the Court of Appeals evaluated (i) the practical administrative difficulty of recording the additional time, (ii) the aggregate amount of compensable time, and (iii) the regularity of the additional work. The court noted that this three-prong test reflected a balance requiring an employer to pay for activities it requires of its employees and the need to avoid “split-second absurdities” that are not justified by the actuality of the working conditions.

Using this framework, the Court of Appeals found that Rutti’s post-shift, but not his pre-shift, activities may be compensable. The court held that Rutti’s evening activities—sending a transmission to Lojack using a Lojack-provided modem containing information concerning all the jobs performed that day—appeared to be part of the regular work of Rutti performed primarily for the benefit of Lojack, and the time spent sending the transmissions (up to fifteen minutes a night) was not necessarily de minimis, and in no event constituted a “split-second absurdity.” Thus, such time was subject to compensation.

However, the court construed pre-shift activities differently, holding that Rutti’s morning activities—receiving, mapping, and prioritizing jobs and routes for assignment—were related to his commute (as opposed to his principal job of installing anti-theft units in cars) and, in any event, took only a minute or so to perform every morning. Therefore, these were de minimis and non-compensable.

The court also held that, under California law, employees who drive company-owned vehicles to and from work may have to be paid for commute time, depending on the level of the employer’s control during the commute. The court found that Lojack had “total control” because Rutti (i) was required to drive a company vehicle, (ii) could not stop off for personal errands, (iii) could not take passengers, (iv) was required to drive the vehicle directly from home to his job and back, and (v) could not use his cell phone while driving except that he had to keep his phone on to answer calls from the company dispatcher. Given this level of control, the court held that Rutti had a valid state law claim for compensation.

Rutti also sought to be compensated for commute time under federal law. However, the Ninth Circuit rejected that claim, explaining that under the ECFA, Rutti’s commute was not compensable because his use of the vehicle was subject to an agreement between Rutti and Lojack, and Rutti could not identify any legally cognizable work Lojack required him to perform while commuting.

For more information about the Rutti decision or any related matter, please contact John Nadolenco at +1 213 229 5173, Steven E. Rich at +1 213 229 9586 or Jerome M. Jauffret at +1 213 229 5108.

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