Employees Are Entitled to Reimbursements for Work-Related Calls Made on Their Personal Cell Phones, Even If a Cell Phone Plan Includes Unlimited Minutes

As cell phones have become ubiquitous in our lives nowadays, employees commonly use their personal cell phones to make work-related phone calls, sometimes while running work errands or on the way to or from the office.  The California Court of Appeal, Second District, recently held that not only must an employer reimburse an employee for this type of cell phone usage, the employer must do so even when the employee incurs no extra costs because the cell phone plan has unlimited calling minutes. 

In Cochran v. Schwan’s Home Service, a group of customer service managers sued their employer, Schwan’s Home Service, in a class action for reimbursements of their cell phone bills because of work-related cell phone calls.  They based the lawsuit on California Labor Code section 2802, which requires employers to reimburse employees for all necessary work-related expenses.  Schwan’s Home Service argued that the lawsuit should not move forward as a class action because each customer service manager had unique expenditures.  In particular, it argued that those employees who had unlimited cell phone plans were not entitled to reimbursements because they did not incur any additional expenses from making work-related calls.

The Court disagreed with Schwan’s Home Service and held that all employees must receive reasonable reimbursements, no matter the employee’s cell phone plan or even whether the employee personally pays the cell phone bill.  The purpose of California Labor Code section 2802 is to prevent employers from passing on operating expenses to employees and, therefore, pursuant to this purpose, employers must reimburse employees for the mere use of an employee’s cell phone, irrespective of the employee’s actual payments.  The Court left the lower court with the task of determining what amounts would be reasonable.

This case is a victory for employees who are asked to shoulder work responsibilities by using their personal phones without expectation of compensation.  As unlimited minute plans become more common, this case timely provides clear precedent for reimbursement irrespective of how the employee pays his or her cell phone bill.