Case Title: Mendiola v. CPS Sec. Solutions

Citation: 

Docket Number: S212704

State: california

Court: California Supreme Court

Date: 2015-01-08T00:00:00Z

Document:
1 
Filed 1/8/15 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
TIM MENDIOLA et al., 
) 
 
 
) 
 
Plaintiffs, Cross-defendants 
) 
 
and Respondents, 
) 
 
 
) 
S212704 
 
v. 
) 
 
 
) 
Ct.App. 2/4 B240519 
CPS SECURITY SOLUTIONS, INC., et al., ) 
 
) 
(Los Angeles County 
   
Defendants, 
)  
Super. Ct. No. BC388956) 
 
Cross-complainants 
) 
 
 
and Appellants. 
) 
 
 
 
____________________________________) 
 
) 
FLORIANO ACOSTA et al., 
) 
 
 
) 
 
Plaintiffs, Cross-defendants 
) 
 
and Respondents, 
) 
 
 
) 
 
 
v. 
) 
 
 
) 
 
CPS SECURITY SOLUTIONS, INC., et al., )  
(Los Angeles County 
 
) 
Super. Ct. No. BC391669) 
   
Defendants, 
) 
 
Cross-complainants 
) 
 
and Appellants. 
) 
 
 
 
____________________________________) 
 
Here we hold that, under the California wage order covering security 
guards, these plaintiffs are entitled to compensation for all on-call hours spent at 
their assigned worksites under their employer‟s control. 
 
2 
I.  BACKGROUND 
The relevant facts are not in dispute.1  As applicable here,2 CPS employed 
on-call guards3 to provide security at construction worksites.  Part of each guard‟s 
day was spent on active patrol.  Each evening, guards were required to be on call 
at the worksite and to respond to disturbances should the need arise.   
More specifically, a guard‟s obligations differed depending on the day of 
the week.  On weekdays, each guard was on patrol for eight hours, on call for 
eight hours, and off duty for eight hours.  On weekends, each guard was on patrol 
for 16 hours and on call for eight hours.   
By written agreement, an on-call guard was required to reside in a trailer 
provided by CPS.  The trailers ranged from 150 to 200 square feet and had 
residential amenities including a bed, bathroom, kitchen, heating, and air 
conditioning.  Only the assigned guard and maintenance staff had keys to these 
onsite trailers.  Guards could keep personal items in the trailers and generally use 
on-call time as they chose.  However, children, pets, and alcohol were not allowed, 
and adult visitors were permitted only with the approval of the CPS client. 
An on-call guard wanting to leave the worksite had to notify a dispatcher 
and indicate where he or she would be and for how long.  If another employee was 
available for relief, the guard had to wait onsite until the reliever arrived.4  If no 
                                              
1  
The facts are taken from the Court of Appeal‟s opinion and the joint 
statement of undisputed facts. 
2  
Defendants, CPS Security Solutions, Inc., CPS Construction Protection 
Security Plus, Inc., and Construction Protective Services, Inc., are referred to as 
“CPS.” 
3  
CPS also employed guards who only worked shifts with no on-call 
responsibilities.  This case involves only on-call guards.   
4  
Relievers were paid for filling in. 
 
3 
reliever was available, the guard had to remain onsite, even in the case of a 
personal emergency.  If relieved, a guard had to be accessible by pager or radio 
phone and to stay close enough to the site to return within 30 minutes.  
Guards were compensated as follows.  They were paid hourly for time 
spent patrolling the worksite.  They received no compensation for on-call time 
unless (1) an alarm or other circumstances required that they conduct an 
investigation or (2) they waited for, or had been denied, a reliever.  Guards were 
paid for the actual time spent investigating disturbances.  If three or more hours of 
investigation were required during on-call time, the guard was paid for the full 
eight hours.   
Two class action lawsuits were filed in 2008 by CPS guards.  The 
complaints alleged, inter alia, that CPS‟s on-call compensation policy violated 
minimum wage and overtime obligations imposed by the applicable Industrial 
Welfare Commission (IWC) wage order and Labor Code statutes.5  The trial court 
consolidated the cases and certified the class.  Both sides sought declaratory relief 
as to the lawfulness of CPS‟s on-call compensation policy.  The parties filed cross-
motions for summary adjudication of the declaratory relief claims.   
The trial court granted plaintiffs‟ motion, concluding that CPS‟s 
compensation policy violated Wage Order 4.  Citing the extent of CPS‟s control 
during on-call hours and the fact that the guards‟ presence on worksites primarily 
benefitted CPS, the court concluded that the on-call hours constituted 
compensable “hours worked” within the meaning of the wage order.  CPS sought 
                                              
5  
The parties stipulated that IWC wage order No. 4-2001 (Cal. Code Regs., 
tit. 8, § 11040 (Wage Order 4)), which applies to all persons employed in 
professional, technical, clerical, mechanical, and similar occupations, governs 
here.  (Id., subd. 2(O) [listing “guards” as included occupation].)   
 
4 
review.  The Court of Appeal affirmed in part and reversed in part.  Both parties 
petitioned for review. 
We conclude that plaintiffs‟ on-call hours constituted compensable hours 
worked and, further, that CPS could not exclude “sleep time” from plaintiffs‟ 24-
hour shifts under Monzon v. Schaefer Ambulance Service, Inc. (1990) 224 
Cal.App.3d 16 (Monzon) and Seymore v. Metson Marine, Inc. (2011) 194 
Cal.App.4th 361 (Seymore).  
II.  DISCUSSION 
We have explained that “wage and hour claims are today governed by two 
complementary and occasionally overlapping sources of authority:  the provisions 
of the Labor Code, enacted by the Legislature, and a series of 18 wage orders, 
adopted by the IWC.”  (Brinker Restaurant Corp. v. Superior Court (2012) 53 
Cal.4th 1004, 1026 (Brinker).)  The IWC, a state agency, was empowered to issue 
wage orders, which are legislative regulations specifying minimum requirements 
with respect to wages, hours, and working conditions.6   (Brinker, at pp. 1026-
1027; see Martinez v. Combs (2010) 49 Cal.4th 35, 52-57 (Martinez).)  Of the 18 
wage orders in effect today, “16 cover[] specific industries and occupations, one 
cover[s] all employees not covered by an industry or occupation order, and a 
general minimum wage order amend[s] all others to conform to the amount of the 
minimum wage currently set by statute.”  (Martinez, at p. 57, fns. omitted.)  The 
number of wage orders, and their internal variations, reflects the reality that 
differing aspects of work in differing industries may call for different kinds of 
regulation. 
                                              
6  
The Legislature defunded the IWC in 2004, but its wage orders remain in 
effect.  (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1102, 
fn. 4 (Murphy); Lab. Code, § 1182.13, subd. (b).) 
 
5 
Wage Order 4 requires that employers “pay to each employee . . . not less 
than the applicable minimum wage for all hours worked in the payroll period 
. . . .”  (Wage Order 4, subd. 4(B), italics added.)  It also requires that employees 
be paid one and one-half times their regular rate of pay for “all hours worked over 
40 hours in the workweek” (id., subd. 3(A)(1), italics added) and for “all hours 
worked in excess of eight (8) hours . . . in any workday” (id., subd. 3(A)(1)(a), 
italics added).7  The resolution of this case turns, in part, on whether the time spent 
on call constituted hours worked within the meaning of the wage order.   
Wage Order 4 defines hours worked as “the time during which an employee 
is subject to the control of an employer, and includes all the time the employee is 
suffered or permitted to work, whether or not required to do so.”8  (Wage Order 4, 
subd. 2(K).)  In Morillion, we explained that “the two phrases — „time during 
                                              
7  
Wage Order 4 also requires that employees be paid one and one-half times 
their regular rate of pay “for the first eight (8) hours worked on the seventh (7th) 
consecutive day of work in a workweek” (id., subd. 3(A)(1)(a)) and “[d]ouble the 
. . . regular rate of pay for all hours worked in excess of 12 hours in any workday 
and for all hours worked in excess of eight (8) hours on the seventh (7th) 
consecutive day of work in a workweek” (id., subd. 3(A)(1)(b)). 
8  
All industry-specific wage orders contain the same definition of hours 
worked except Wage Order 4 and IWC wage order No. 5-2001 (Cal. Code Regs., 
tit. 8, § 11050 (Wage Order 5)), both of which include additional language.  
(Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 581 (Morillion).)  Wage 
Order 4‟s definition contains a second sentence:  “Within the health care industry, 
the term „hours worked‟ means the time during which an employee is suffered or 
permitted to work for the employer, whether or not required to do so, as 
interpreted in accordance with the provisions of the [federal] Fair Labor Standards 
Act.”  (Wage Order 4, subd. 2(K).)  Wage Order 5 applies to persons employed in 
the public housekeeping industry.  (Wage Order 5, subd. 1.)  Its definition of hours 
worked includes (1) the “control” and “suffered or permitted” language common 
to all wage orders, (2) the health care industry language that appears in Wage 
Order 4, and (3) language providing that, “in the case of an employee who is 
required to reside on the employment premises, that time spent carrying out 
assigned duties shall be counted as hours worked.”  (Wage Order 5, subd. 2(K).)   
 
6 
which an employee is subject to the control of an employer‟ and „time the 
employee is suffered or permitted to work, whether or not required to do so‟ ” can 
be viewed “as independent factors, each of which defines whether certain time 
spent is compensable as „hours worked.‟  Thus, an employee who is subject to an 
employer‟s control does not have to be working during that time to be 
compensated . . . .”  (Morillion, supra, 22 Cal.4th at p. 582.)   
We independently review the construction of statutes (Kirby v. Immoos 
Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1250), and begin with the text.  If it 
“is clear and unambiguous our inquiry ends.”  (Murphy, supra, 40 Cal.4th at 
p. 1103.)  Wage and hour laws are “to be construed so as to promote employee 
protection.”  (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 
340; see Brinker, supra, 53 Cal.4th at pp. 1026-1027.)  These principles apply 
equally to the construction of wage orders.  (Brinker, at p. 1027.)  Additionally, 
when the relevant facts are not in dispute, what qualifies as hours worked is a 
question of law, reviewed de novo.  (See Ramirez v. Yosemite Water Co. (1999) 20 
Cal.4th 785, 794.)  
Hours Worked 
It is well established that an employee‟s on-call or standby time may 
require compensation.  “Of course an employer, if he chooses, may hire a man to 
do nothing, or to do nothing but wait for something to happen.  Refraining from 
other activity often is a factor of instant readiness to serve, and idleness plays a 
part in all employments in a stand-by capacity.  Readiness to serve may be hired, 
quite as much as service itself, and time spent lying in wait for threats to the safety 
of the employer‟s property may be treated by the parties as a benefit to the 
employer.”  (Armour & Co. v. Wantock (1944) 323 U.S. 126, 133; see Skidmore v. 
Swift & Co. (1944) 323 U.S. 134, 137 [“Facts may show that the employee was 
engaged to wait, or they may show that he waited to be engaged.”]; Madera Police 
 
7 
Officers Assn. v. City of Madera (1984) 36 Cal.3d 403, 406 (Madera) [concluding 
officers‟ on-call mealtime was compensable hours worked].)   
California courts considering whether on-call time constitutes hours worked 
have primarily focused on the extent of the employer‟s control.  (E.g., Ghazaryan 
v. Diva Limousine, Ltd. (2008) 169 Cal.App.4th 1524, 1535 (Ghazaryan); Bono 
Enterprises, Inc. v. Bradshaw (1995) 32 Cal.App.4th 968, 974-975 (Bono), 
disapproved on other grounds in Tidewater Marine Western, Inc. v. Bradshaw 
(1996) 14 Cal.4th 557, 573-574.)  Indeed, we have stated that “[t]he level of the 
employer‟s control over its employees . . . is determinative” in resolving the issue.  
(Morillion, supra, 22 Cal.4th at p. 587.)  “ „When an employer directs, commands 
or restrains an employee from leaving the work place . . . and thus prevents the 
employee from using the time effectively for his or her own purposes, that 
employee remains subject to the employer‟s control.  According to [the definition 
of hours worked], that employee must be paid.‟ ”  (Id. at p. 583.)   
Courts have identified various factors bearing on an employer‟s control 
during on-call time:  “ „(1) whether there was an on-premises living requirement;  
(2) whether there were excessive geographical restrictions on employee‟s 
movements;  (3) whether the frequency of calls was unduly restrictive;  
(4) whether a fixed time limit for response was unduly restrictive;  (5) whether the 
on-call employee could easily trade on-call responsibilities;  (6) whether use of a 
pager could ease restrictions; and  (7) whether the employee had actually engaged 
in personal activities during call-in time.‟  ([Owens v. Local No. 169 (9th Cir. 
1992) 971 F.2d 347,] 351, fns. omitted.)”  (Gomez v. Lincare, Inc. (2009) 173 
Cal.App.4th 508, 523-524 (Gomez).) 9  Courts have also taken into account 
                                              
9  
Gomez also identified the parties‟ agreement as a factor to consider when 
determining whether on-call time constitutes hours worked.  (Gomez, supra, 173 
 
(footnote continued on next page) 
 
8 
whether the “[o]n-call waiting time . . . is spent primarily for the benefit of the 
employer and its business.”  (Gomez, at p. 523; see Madera, supra, 36 Cal.3d at 
p. 409; Ghazaryan, supra, 169 Cal.App.4th at p. 1535.)  Here, the Court of Appeal 
properly concluded that the “guards‟ on-call hours represent hours worked for 
purposes of Wage Order No. 4.”     
The guards here were required to “reside” in their trailers as a condition of 
employment and spend on-call hours in their trailers or elsewhere at the worksite.  
They were obliged to respond, immediately and in uniform, if they were contacted 
by a dispatcher or became aware of suspicious activity.  Guards could not easily 
trade on-call responsibilities.  They could only request relief from a dispatcher and 
wait to see if a reliever was available.  If no relief could be secured, as happened 
on occasion, guards could not leave the worksite.  CPS exerted control in a variety 
of other ways.  Even if relieved, guards had to report where they were going, were 
subject to recall, and could be no more than 30 minutes away from the site.  
Restrictions were placed on nonemployee visitors, pets, and alcohol use. 
Additionally, the Court of Appeal correctly determined that the guards‟ on-
call time was spent primarily for the benefit of CPS.  The parties stipulated that 
“CPS‟s business model is based on the idea that construction sites should have an 
active security presence during the morning and evening hours when construction 
                                                                                                                                                              
 
(footnote continued from previous page) 
 
Cal.App.4th at p. 523.)  The court in Ghazaryan came to a contrary conclusion.  
“[U]nder California law „the existence of an “agreement” regarding the 
understanding of the parties [as to the compensation policy] is of no importance.  
The ultimate consideration in applying the California law is determining the extent 
of the “control” exercised.‟ ”  (Ghazaryan, supra, 169 Cal.App.4th at p. 1535, 
fn. 10; see Lab. Code, § 1194, subd. (a) [“[n]otwithstanding any agreement to 
work for a lesser wage . . .”].)  We need not resolve that conflict here. 
 
9 
workers arrive and depart the site, but that theft and vandalism during the night 
and weekend hours can be deterred effectively by the mere presence of a security 
guard in a residential trailer.”  Thus, even when not actively responding to 
disturbances, guards‟ “mere presence” was integral to CPS‟s business.  Indeed, the 
parties also stipulated that CPS would have been in breach of its service agreement 
had a guard or reliever not been at the worksite during all contracted for hours.10     
CPS’s Arguments                 
CPS notes that on-call guards engaged in personal activities, including 
sleeping, showering, eating, reading, watching television, and browsing the 
Internet.  Although relevant, this fact does not compel a different conclusion.  
Morillion held that time spent traveling to and from work on employer-provided 
buses constituted compensable hours worked.  (Morillion, supra, 22 Cal.4th at 
p. 578.)  It rejected the employer‟s claim “that plaintiffs were not under its control 
during the required bus ride because they could read on the bus, or perform other 
personal activities. . . . Allowing plaintiffs the circumscribed activities of reading 
or sleeping does not affect, much less eliminate, the control [the employer] 
exercises by requiring them to travel on its buses . . . .  Similarly, as one amicus 
curiae suggests, listening to music and drinking coffee while working in an office 
setting can also be characterized as personal activities, which would not otherwise 
render the time working noncompensable.”  (Id. at p. 586; see Bono, supra, 32 
Cal.App.4th at pp. 971-972 [time employee is required to remain at workplace 
                                              
10  
Employees sent to a worksite to relieve an on-call guard were paid even if 
events did not require that they investigate a disturbance.  This policy meant that 
an on-call guard who performed no investigation, and had not asked to be relieved, 
was not paid, but a reliever doing the same was paid.  This reality supports the 
conclusion that guards were “engaged to wait, [not] . . . wait[ing] to be engaged.”  
(Skidmore v. Swift & Co., supra, 323 U.S. at p. 137.) 
 
10 
during lunch constitutes hours worked even when relieved of all job duties]; 
Aguilar v. Association for Retarded Citizens (1991) 234 Cal.App.3d 21, 30 
(Aguilar) [time employee is required to remain at workplace is hours worked even 
if permitted to sleep].)  So too here.  The fact that guards could engage in limited 
personal activities does not lessen the extent of CPS‟s control.  It is the extent of 
employer control here that renders on-call time compensable hours worked under 
Wage Order 4.    
In arguing against this result, CPS urges that we should incorporate 29 
Code of Federal Regulations part 785.23 (part 785.23)11 into Wage Order 4 by 
implication.  As relevant here, part 785.23 provides, “An employee who resides on 
his employer‟s premises on a permanent basis or for extended periods of time is 
not considered as working all the time he is on the premises.  Ordinarily, he may 
engage in normal private pursuits and thus have enough time for eating, sleeping, 
entertaining, and other periods of complete freedom from all duties when he may 
leave the premises for purposes of his own.  It is, of course, difficult to determine 
the exact hours worked under these circumstances and any reasonable agreement 
of the parties which takes into consideration all of the pertinent facts will be 
accepted.”  CPS contends that, under this federal approach, its treatment of on-call 
time as generally uncompensated “free time” should be deemed lawful. 12  The 
Court of Appeal correctly rejected this argument. 
                                              
11  
Title 29 Code of Federal Regulations part 785 et seq. contains regulations 
concerning what constitutes hours worked within the meaning of the Fair Labor 
Standards Act of 1938 (29 U.S.C. § 201 et seq. (FLSA)). 
12  
The Court of Appeal concluded that, even if incorporated, part 785.23 did 
not apply to these facts.  We need not address this point. 
 
11 
Federal regulations provide a level of employee protection that a state may 
not derogate.  Nevertheless, California is free to offer greater protection.  We have 
stated that, “[a]bsent convincing evidence of the IWC‟s intent to adopt the federal 
standard for determining whether time . . . is compensable under state law, we 
decline to import any federal standard, which expressly eliminates substantial 
protections to employees, by implication.”  (Morillion, supra, 22 Cal.4th at 
p. 592.)  More recently, we have “cautioned against „confounding federal and state 
labor law‟ [citation] and explained „that where the language or intent of state and 
federal labor laws substantially differ, reliance on federal regulations or 
interpretations to construe state regulations is misplaced.‟ ”  (Martinez, supra, 49 
Cal.4th at p. 68.)   
CPS identifies no analog to part 785.23 in Wage Order 4.  By contrast, 
Wage Order 5, which applies to public housekeeping workers, does contain 
analogous language.  Its definition of hours worked provides that, “in the case of 
an employee who is required to reside on the employment premises, that time 
spent carrying out assigned duties shall be counted as hours worked.”  (Wage 
Order 5, subd. 2(K), italics added.)  Wage Order 4, as noted, does not contain 
language limiting hours worked to “time spent carrying out assigned duties.”  (See 
Morillion, supra, 22 Cal.4th at p. 592.)   
Furthermore, other language in Wage Order 4 demonstrates that the IWC 
knew how to explicitly incorporate federal law and regulations when it wished to 
do so.  For example, the wage order provides that, within the health care industry, 
hours worked should be interpreted in accordance with the FLSA.  (Wage Order 4, 
subd. 2(K).)  But the order makes no reference to federal law applying in the case 
of guards.  The language chosen by the IWC does not support CPS‟s argument 
that a broad importation was intended.  Indeed, it supports the contrary conclusion:  
 
12 
The IWC intended to import federal rules only in those circumstances to which the 
IWC made specific reference.    
The Exclusion of Sleep Time from 24-Hour Shifts 
The remaining question is whether sleep time may be excluded from 
plaintiffs‟ 24-hour shifts.  On this issue, the Court of Appeal relied on Monzon, 
supra, 224 Cal.App.3d 16, and Seymore, supra, 194 Cal.App.4th 361, to conclude 
that all industry-specific wage orders implicitly incorporate a federal regulation 
that permits the exclusion of eight hours of sleep time from employees‟ 24-hour 
shifts.  We reject that analysis as fundamentally inconsistent with our opinion in 
Morillion, supra, 22 Cal.4th 575.   
In Monzon, ambulance drivers and attendants sued to recover unpaid 
overtime compensation.  (Monzon, supra, 224 Cal.App.3d at p. 22.)  The workers 
fell not under Wage Order 4, but instead under IWC wage order No. 9 (Cal. Code 
Regs., tit. 8, § 11090 (Wage Order 9)).  (Monzon, at p. 22.)  To resolve the case, 
the Monzon court considered whether the parties had lawfully agreed to exclude 
eight hours of sleep time from otherwise compensable hours worked in a 24-hour 
shift.  (Ibid.)  Both Wage Orders 4 and 9 impose daily and weekly overtime 
obligations.  (Wage Order 9, subd. 3(A); see ante, at p. 5 & fn. 7.)  Unlike Wage 
Order 4, however, Wage Order 9 also contains a narrow exception to its daily 
overtime provision.  The exception states:  “The daily overtime provision . . . shall 
not apply to ambulance drivers and attendants scheduled for 24-hour shifts of duty 
who have agreed in writing to exclude from daily time worked not more than three 
(3) meal periods of not more than one (1) hour each and a regularly scheduled 
uninterrupted sleeping period of not more than eight (8) hours.”  (Wage Order 9, 
subd. 3(K); see Wage Order 5, subd. 3(J) [virtually identical provision].) 
While Wage Order 9‟s “sleeping period” exception may be open to several 
interpretations, the Monzon court concluded it did not apply in that case because 
 
13 
the parties had not entered into a written agreement, which the exception requires.  
(Monzon, supra, 224 Cal.App.3d at pp. 40-41.)  The majority nonetheless 
determined that the parties had lawfully agreed “to exclude sleep time from 
compensable time.”13  (Monzon, at p. 41, italics added.)  It reasoned that the 
sleeping period exception requiring a written agreement only governs whether the 
daily overtime provision applies; noncompliance with the exception‟s 
requirements does not prevent the parties from agreeing that sleep time does not 
constitute hours worked and thus need not be compensated.  (Id. at p. 45.)  In 
concluding that the parties so agreed, the majority relied upon 29 Code of Federal 
Regulations part 785.22 (part 785.22).  (Monzon, at p. 45.) 
Part 785.22(a) provides:  “Where an employee is required to be on duty for 
24 hours or more, the employer and the employee may agree to exclude . . . a bona 
fide regularly scheduled sleeping period of not more than 8 hours from hours 
worked, provided adequate sleeping facilities are furnished by the employer and 
the employee can usually enjoy an uninterrupted night‟s sleep. . . . Where no 
expressed or implied agreement to the contrary is present, the 8 hours of sleeping 
time . . . constitute hours worked.”  Monzon discussed part 785.22, the history of 
Wage Order 9‟s “sleeping period” exception, and the views of the Division of 
                                              
13  
To be clear, Wage Order 9, subdivision 3(K) allows ambulance drivers and 
attendants working 24-hours shifts to agree in writing to exclude sleep time from 
daily overtime.  Such an employee would nevertheless receive his or her regular 
rate of pay for every hour worked as well as overtime for all hours worked over 40 
hours in the workweek.  Monzon, by comparison, permitted such workers to agree, 
orally or in writing, to exclude sleep time from compensable hours worked.  That 
is, such employees would be paid nothing for the sleeping period.  The remaining 
16 hours would remain subject to Wage Order 9‟s daily overtime provisions. 
 
14 
Labor Standards Enforcement (DLSE).14  (Monzon, supra, 224 Cal.App.3d at 
pp. 43-45.)  The majority then concluded that the “IWC considers an agreement to 
exclude sleep time” from hours worked in a 24-hour shift to be “acceptable.”  (Id. 
at p. 45.)  Over a dissent (id. at pp. 49-50 (conc. & dis. opn. of Johnson, J.)), the 
majority held that such an agreement need not be in writing.15  (Monzon, at p. 46; 
contra, Aguilar, supra, 234 Cal.App.3d at p. 34.) 
Monzon is not a paragon of clarity.  At times it appears that its reliance on 
part 785.22 is based on the similarity between the state and federal definitions of 
hours worked.  (E.g., Monzon, supra, 224 Cal.App.3d at pp. 45-46.)  We have 
subsequently rejected such reasoning.  (Morillion, supra, 22 Cal.4th at p. 590.)  
Alternatively, Monzon could be read as basing its reliance on evidence that the 
IWC intended to adopt the federal standard with regard to ambulance drivers and 
attendants.  (E.g., Monzon, at p. 45.)  Whatever its rationale, Monzon dealt solely 
with ambulance drivers and attendants and made specific reference to the realities 
of that industry.  The DLSE subsequently recognized the limited scope of 
Monzon‟s holding.  (E.g., Dept. Industrial Relations, DLSE Opn. Letter No. 
1998.05.29 (May 29, 1998) p. 2.)  At oral argument, plaintiffs‟ counsel invited us 
to disapprove Monzon.  However, the narrow Monzon rule has stood to regulate 
the compensation of ambulance drivers and attendants for nearly 25 years.  
Moreover, its application is not at issue here.  It is sufficient to note that Monzon‟s 
holding is limited to its facts.   
                                              
14  
The DLSE is the state agency empowered to enforce California‟s labor 
laws.  (Morillion, supra, 22 Cal.4th at p. 581.) 
15  
Oddly, this interpretation means an employer needs a written agreement to 
avoid paying overtime compensation, but does not need a written agreement to 
avoid paying any compensation at all. 
 
15 
In 2011, Seymore substantially expanded Monzon‟s 1990 holding.  In 
Seymore, ship crewmembers, also governed by Wage Order 9, sued to recover 
unpaid overtime compensation.  (Seymore, supra, 194 Cal.App.4th at pp. 365, 
373.)  The Court of Appeal considered whether the parties had lawfully agreed to 
exclude eight hours of sleep time from otherwise compensable hours worked in a 
24-hour shift.  (Id. at p. 365.)  Relying on Monzon, the court concluded that they 
had.  (Id. at pp. 381-382.)  The court deemed irrelevant that Monzon and Wage 
Order 9‟s sleeping period exception both concerned only ambulance drivers and 
attendants.  (Seymore, at p. 381.)  Seymore reasoned that the sleeping period 
“exemption is not the source of the more general sleep time exclusion; the 
exclusion of sleep time from compensable hours worked by 24-hour employees is 
implied from the terms of [part 785.22].”  (Id. at p. 382.)  Seymore continued, 
“[Monzon] read into [Wage Order 9] . . . the provisions of the federal regulation, 
. . . part 785.22” and, unlike Wage Order 9‟s sleeping period exception, part 
785.22 applies to all employees who work 24-hour shifts.  (Seymore, at p. 382.) 
We disapprove Seymore v. Metson Marine, Inc., supra, 194 Cal.App.4th 
361, as an improper extension of Monzon.  As we stated in Morillion, courts 
should not incorporate a federal standard concerning what time is compensable 
“[a]bsent convincing evidence of the IWC‟s intent . . . .”  (Morillion, supra, 22 
Cal.4th at p. 592, italics added.)  Unlike Monzon, which at least could point to 
some evidence of the IWC‟s intent concerning ambulance drivers and attendants, 
Seymore identified no such indication, much less convincing evidence, that the 
IWC intended to permit the exclusion of sleep time from compensable hours 
worked for all employees working 24-hour shifts.   
In concluding that CPS and plaintiffs could agree to exclude on-call hours 
from plaintiffs‟ 24-hour shifts, the Court of Appeal here cited Monzon and 
Seymore, extending Seymore‟s reasoning to its fullest conclusion.  That is, the 
 
16 
court below rejected the notion that the ability to exclude sleep time from 24-hour 
shifts is limited to ambulance drivers and attendants or employees covered by 
Wage Order 9.  “We agree with the courts in Seymore and Monzon that because 
the state and federal definitions of hours worked are comparable and have a 
similar purpose, federal regulations and authorities may properly be consulted to 
determine whether sleep time may be excluded from 24-hour shifts.  Further, we 
find this determination to be applicable to all wage orders that include essentially 
the same definition of „hours worked‟ found in Wage Order No. 9, including 
Wage Order No. 4.”  (Italics added.)  This conclusion is both sweeping and 
incorrect. 
With regard to the relevance of similarities between state and federal 
definitions of hours worked, Morillion is particularly instructive.  In concluding 
that employees‟ travel time was compensable under state law, we stated that “we 
do not believe the similarity or differences between the [state and federal] 
definitions of „hours worked‟ is dispositive of whether plaintiffs‟ compulsory 
travel time is compensable under state law.”  (Morillion, supra, 22 Cal.4th at 
p. 590.)  The relevant issue in deciding whether the federal standard had been 
implicitly incorporated was whether state law and the wage order contained an 
express exemption similar to that found in federal law.  (Ibid.) 
Wage Order 4 contains no analog to part 785.22.  By contrast, the IWC has 
adopted similar language in other wage orders.  For example, Wage Order 5 
provides that, for “[e]mployees with direct responsibility for children who . . . are 
receiving 24 hour residential care,” “[t]ime spent sleeping shall not be included as 
hours worked.”16  (Wage Order 5, subd. 3(E)(2), (2)(d).)  Wage Orders 5 and 9 
                                              
16  
In its statement as to the basis for this provision, the IWC stated that “the 
definition of „sleeping‟ is intended to be consistent with the meaning in the 
 
(footnote continued on next page) 
 
17 
contain the previously discussed sleeping period exception.  (Wage Order 5, 
subd. 3(J); Wage Order 9, subd. 3(K).)  Wage Order 5 also provides that, for 
employees who are required to reside on the employment premises, hours worked 
includes “that time spent carrying out assigned duties,” which would obviously 
exclude time spent sleeping.  (Wage Order 5, subd. 2(K).)   
The absence of language addressing sleep time in Wage Order 4 seriously 
undermines the notion that the IWC intended to incorporate part 785.22 sotto 
voce.17  (See Morillion, supra, 22 Cal.4th at p. 592.)  Because application of part 
785.22 would “eliminate[] substantial protections to employees,” we decline to 
import it into Wage Order 4 by implication.  (Morillion, at p. 592.)  A contrary 
result would have a dramatic impact, particularly in light of the Court of Appeal‟s 
conclusion that part 785.22 is implicitly incorporated into all 16 industry-specific 
wage orders, even though only Wage Orders 5 and 9 contain language providing 
for the exclusion of sleep time. 
                                                                                                                                                              
 
(footnote continued from previous page) 
 
[FLSA] and in the IWC‟s other wage orders that sleep time is not included in the 
definition of „hours worked.‟ ”  (IWC, Statement as to the Basis for Amendments 
to Wage Order No. 5 Regarding Employees Working in Group Homes (Jan. 1, 
2002) p. 4.)  CPS contends that this means the IWC intended to permit the 
exclusion of sleep time from hours worked as to all wage orders.  The argument 
fails.  The meaning of the cited statement is less than clear and could just as easily 
have been referring to those specific wage orders that explicitly mention the 
exclusion of sleep time. 
17  
We have observed “that where the IWC intended the FLSA to apply to 
wage orders, it has specifically so stated.”  (Morillion, supra, 22 Cal.4th at p. 592.)  
As previously noted (ante, at p. 11), Wage Order 4 itself demonstrates that the 
IWC knows how to expressly incorporate federal law and regulations when it 
desires to do so.  (E.g., Wage Order 4, subd. 1(A)(1)(e), (2)(f), (3)(e).)  
 
18 
In support of its conclusion, the Court of Appeal also opined that there were 
“sound reasons for permitting an employer who engages an employee to work a 
24-hour shift . . . to exclude . . . eight hours for sleep time . . . . Most employees 
would be sleeping for a similar period every day, whether on duty or not, and the 
compensation provided for the other 16 hours . . . ensures that the employees 
receive an adequate wage.”  We rejected a nearly identical argument in Morillion.  
(Morillion, supra, 22 Cal.4th at pp. 587-588 [rejecting the argument that 
employees would have had to commute anyway].)  More importantly, we 
instructed courts not to “engage in needless policy determinations regarding wage 
orders the IWC promulgates.”  (Ibid.)  Judicial review of “ „wage orders is 
properly circumscribed. . . . “A reviewing court does not superimpose its own 
policy judgment upon [the IWC] in the absence of an arbitrary decision . . . .” ‟ ”  
(Martinez, supra, 49 Cal.4th at p. 61.)   
We recognize that the DLSE has, at various times, seemed to approve 
CPS‟s policy of excluding sleep time as complying with state law.  In 1996, the 
DLSE began an investigation into CPS‟s compensation practices.  In a 1997 letter 
to CPS, the acting labor commissioner concluded that the company could, 
pursuant to a written agreement, exclude sleep time.  That position was 
subsequently and explicitly disavowed, however, in a 1999 letter to CPS from the 
newly appointed labor commissioner, and again in a 2002 letter to CPS from the 
DLSE chief counsel.  The 1999 and 2002 letters rejected the position taken in the 
1997 letter as incorrect and in conflict with established California law, and also 
dismissed CPS‟s reliance on federal regulations.  CPS subsequently filed an action 
for declaratory relief against the labor commissioner, who filed a cross-complaint.  
Before trial, the parties settled and signed a memorandum of understanding 
(MOU).  Pursuant to the MOU, which expired in 2007, CPS adopted its current 
 
19 
compensation policy and the labor commissioner took the position that CPS‟s 
policy complied with all applicable wage orders.   
The DLSE‟s past views offer little help in resolving the issue here.18  
Although entitled to consideration and respect, the agency‟s construction of wage 
orders is not binding on this court, especially when its stance has been vacillating 
and contradictory.  (Murphy, supra, 40 Cal.4th at p. 1105, fn. 7.)  Moreover, we 
note that, while the DLSE is charged with administering and enforcing 
California‟s labor laws, it is the Legislature and the IWC that possess the authority 
to enact laws and promulgate wage orders.  (Aguilar, supra, 234 Cal.App.3d at 
p. 26.)    
There is no evidence that the IWC intended to incorporate part 785.22 into 
Wage Order 4.  Accordingly, we conclude that the wage order does not permit the 
exclusion of sleep time from compensable hours worked in 24-hour shifts covered 
by Wage Order 4.  We express no opinion as what may be required in other 
circumstances regulated by other wage orders. 
                                              
18  
We acknowledge CPS‟s efforts to ascertain whether its policy complied 
with California‟s labor laws and recognize the difficulty it and other employers 
can face in this regard.  Several factors may contribute to ongoing uncertainty, 
including the defunding of the IWC and the lack of adequate funding for DLSE 
enforcement.  Such issues, however, must be addressed by the Legislature.  At oral 
argument, CPS‟s counsel urged that our decision only apply prospectively.  “The 
general rule that judicial decisions are given retroactive effect is basic in our legal 
tradition.”  (Newman v. Emerson Radio Corp. (1989)  48 Cal.3d 973, 978.)  We 
see no reason to depart from the general rule here.  (Sierra Club v. San Joaquin 
Local Agency Formation Com. (1999) 21 Cal.4th 489, 509 [acknowledging the 
existence of “ „narrow exceptions to the general rule‟ ” (italics added)].)  This is 
particularly true given that, until Seymore, supra, 194 Cal.App.4th 361, was 
decided three years ago, Monzon, supra, 224 Cal.App.3d 16, was properly 
interpreted as applying only to ambulance drivers and attendants.   
 
20 
 
III.  CONCLUSION 
We affirm the Court of Appeal‟s conclusion that plaintiffs‟ on-call time 
constituted hours worked within the meaning of Wage Order 4 and was subject to 
the wage order‟s minimum wage and overtime provisions.  We reverse the court‟s 
conclusion that state and federal regulations permitted CPS to exclude sleep time 
from plaintiffs‟ 24-hour shifts. 
 
 
 
 
 
 
 
CORRIGAN, J. 
 
WE CONCUR: 
CANTIL-SAKAUYE, C. J. 
WERDEGAR, J. 
CHIN, J. 
LIU, J. 
BAXTER, J.* 
FYBEL, J.** 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
_____________________________ 
* 
Retired Associate Justice of the Supreme Court, assigned by the Chief 
Justice pursuant to article VI, section 6 of the California Constitution. 
 
** 
Associate Justice of the Court of Appeal, Fourth Appellate District, 
Division Three, assigned by the Chief Justice pursuant to article VI, section 6 of 
the California Constitution.
 
1 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Mendiola v. CPS Security Solutions, Inc. 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 217 Cal.App.4th 851 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S212704 
Date Filed: January 8, 2015 
__________________________________________________________________________________ 
 
Court: Superior 
County: Los Angeles 
Judge: Jane L. Johnson 
 
__________________________________________________________________________________ 
 
Counsel: 
 
Blank Rome, Howard M. Knee; and Jim D. Newman for Defendants, Cross-complainants and Appellants. 
 
Law Offices of Cathe L. Caraway-Howard, Cathe L. Caraway-Howard; Natividad Law Firm, Caesar S. 
Natividad; Locker Folberg and Miles E. Locker for Plaintiffs, Cross-defendants and Respondents. 
 
Hina B. Shah for Women‟s Employment Rights Clinic of Golden Gate University School of Law, Asian 
Americans Advancing Justice - Asian Law Caucus, Katharine and George Alexander Community Law 
Center, Legal Aid Society - Employment Law Center, the Maintenance Cooperation Trust Fund, National 
Lawyers Guild - Labor and Employment Committee, UC Hastings Civil Justice Clinic, UCLA Labor 
Center and Worksafe Inc., as Amici Curiae on behalf of Plaintiffs, Cross-defendants and Respondents. 
 
David A. Sanders; Carroll, Burdick & McDonough, Gregg McLean Adam and Jennifer S. Stoughton for 
California Correctional Peace Officers‟ Association as Amicus Curiae on behalf of Plaintiffs, Cross-
defendants and Respondents. 
 
 
 
 
 
 
2 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Howard M. Knee 
Blank Rome 
2029 Century Park East, 6th Floor 
Los Angeles, CA  90067 
(424) 239-3400 
 
Jim D. Newman 
CPS Security Solutions, Inc. 
436 W. Walnut Street 
Gardena, CA  90248 
(310) 878-8165 
 
Cathe L. Caraway-Howard 
Law Offices of Cathe L. Caraway-Howard 
8117 Manchester Avenue, Suite 505 
Playa Del Rey, CA  90293 
(310) 488-9020 
 
Hina B. Shah 
Women‟s Employment Rights Clinic 
Golden Gate University School of Law 
536 Mission Street 
San Francisco, CA  94105-2968 
(415) 442-6649