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Cochran v. Schwan's Home Service, Inc.

California Court of Appeal, Second District, Division Two · 2014 · Published opinion (PDF)

Summary for general education only—not legal advice. This is not a Workplace Rights Advocacy case result. See Case Results for the firm’s own verdicts and settlements.

A published California Court of Appeal decision about personal cell phones and Labor Code § 2802. Colin Cochran, a customer service manager at Schwan’s Home Service, sought to represent about 1,500 customer service managers who used their own phones for work and were not reimbursed. He alleged failure to indemnify necessary business expenses, unfair competition, and penalties under the Private Attorneys General Act. The Los Angeles Superior Court denied class certification. It assumed there was no expense if someone else paid the bill, or if the employee did not buy a bigger plan because of work, and that liability turned on each person’s plan. The Court of Appeal reversed and sent the certification motion back.

Section 2802 requires an employer to indemnify an employee for necessary expenditures incurred as a direct consequence of the job or of following the employer’s directions. The purpose, as the California Supreme Court explained in Gattuso, is to stop employers from passing operating costs to workers. The court held that reimbursement is always required when the employer makes the employee use a personal cell phone for work calls. An unlimited-minute plan does not erase the duty. Neither does the fact that a family member, friend, or the carrier paid or absorbed the bill, or that the employee kept the same plan. To show liability, the employee need only show that a personal cell phone was required for work-related calls and that the employer did not reimburse that use. The amount is a reasonable percentage of the bill. Plan details matter to damages, not to whether the duty exists. If sampling is used to prove liability or damages, the trial court must follow Duran v. U.S. Bank.

In plain English: if the job requires you to use your own cell phone, California law requires the company to pay a reasonable share of the bill. “You already had an unlimited plan,” “your spouse pays the bill,” or “you did not add a line” is not a defense to liability. The opinion does not set a dollar figure or a percentage. Keep the policy, texts or emails that tell you to use your phone, and records showing you were not paid back. Related practice pages: expense reimbursement, wage and hour, and PAGA.

Related: Expense Reimbursement · Wage & Hour · Wage Theft · PAGA

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