California court mandates BYOD reimbursement

An appeals court rules that, under CA labor law, employee use of personal cell phones must be reimbursed, even if the employee has an unlimited or flat rate plan.


An appeals court judgment in California could raise havoc among the employer BYOD plans in the state. The ruling states that an employee who is required to use a personal cell phone for work must be compensated "...a reasonable percentage of their cell phone bills." This judgment is based in the court's analysis of California Labor Code section 2802.

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The case is Cochran v. Schwan's Home Service, Inc., a class action seeking such compensation. The appeal concerned a trial court denial of class status. The appeals court decision reverses the denial and orders the trial court to reconsider in light of its interpretation of section 2802.

The most relevant part of Section 2802 follows:

2802(a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer...

The appeals court weighs the circumstances heavily in favor of the employee. The compensation plan may not consider who is actually paying for the employee's personal cell phone. "To 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."

The decision leaves many open questions about the basis for compensation. If the employee has a family plan with several other members using voice data at a flat rate, does the number of members in the plan affect compensation? Some companies offer a flat stipend to employees for BYOD, but the court's use of the term "a reasonable percentage of their cell phone bills" may call this practice into question.

A brief analysis of the decision in The National Law Review notes that the decision does not become final for 30 days and remains subject to further appellate review. Nevertheless, they recommend that employers begin to review their cell phone policies in light of the decision.

Hat tip to Tom Kaneshige on

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