Mendiola v. CPS Security Solutions , 60 Cal. 4th 833 ( 2015 )


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  • 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.
    1
    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.
    2
    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].)
    3
    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).)
    4
    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).)
    5
    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
    6
    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)
    7
    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.
    8
    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.)
    9
    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.
    10
    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:
    11
    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
    12
    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.
    13
    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.
    14
    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
    15
    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)
    16
    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).)
    17
    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
    18
    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.
    19
    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.
    20
    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.
    1
    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
    2