In Cochran v. Schwan’s Home Service, ___ Cal.App.4th ___ (August 12, 2014), the California Court of Appeal (Second Appellate District, Division Two) reversed the order of the Los Angeles County Superior Court (Judge Sanchez-Gordon) denying class certification of plaintiff’s expense reimbursement claims.
Plaintiff was a customer service manager for defendant employer who filed a putative class action asserting that he and others in his position were not reimbursed for work-related use of personal cell phones. Thus, he alleged causes of action for, among other things, violation of California Labor Code Section 2802, which requires employers to reimburse their employees for necessary expenditures. The trial court refused to certify the class, however, due to lack of commonality, and because it found that a class action was not a superior method of litigating the claims. As to commonality, the court held that individual issues existed regarding each class member’s particular cell phone plan. As defendant argued, “many people now have unlimited data plans for which they do not actually incur an additional expense when they use their cell phone. In order to determine whether an expense was incurred for [a class member’s] business use will require an examination of each class member’s cell phone plan[.]” Thus, individualized inquiries of the class members’ cell phone plans and payments would be necessary to determine liability. Moreover, the court held, statistics from a survey proposed by plaintiff regarding cell phone expenditures could not be used to prove liability, especially because there was no pattern or practice regarding the expenditures or losses of class members. It concluded that Plaintiff failed to demonstrate how the cell phone plans and method of payment exhibited by a portion of the class would accurately reflect the plans and method of payment for the entire class. Plaintiff appealed.
The appellate court disagreed. First, the court concluded that under Labor Code Section 2802, an employer must always reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone. “Thus, to be in compliance . . . the employer must pay some reasonable percentage of the employee’s cell phone bill. Because of the differences in cell phone plans and worked-related scenarios, the calculation of reimbursement must be left to the trial court and parties in each particular case.” Second, the court held that “[f]f an employee is required to make work-related calls on a personal cell phone, then he or she is incurring an expense for purposes of section 2802.” Therefore, “details of the employee’s cell phone plan do not factor into the liability analysis.” Indeed, “[t]o show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed.” As to the reimbursement amount, it is “a reasonable percentage of their cell phone bills.” Finally, the court instructed the trial court to apply the principles set forth in Duran v. U.S. Bank National Assn., 59 Cal.4th 1 (2014), allowing the use of statistical sampling evidence to establish either liability or damages.