Our world is filled with technology. In fact, mobile devices out number both personal computers and humans, it’s not surprising that we use our mobile devices for both business and pleasure. In a recent published opinion the California Court of Appeal issued a ruling that is sure to cause issues to any workplace that has a BYOD program. Some businesses utilize a BYOD or Bring Your Own Device program where the employee uses their own technology in the performance of their job. The California Court of Appeal has now told employers that if California employees must use their cell phones for work-related calls, they must be reimbursed a reasonable portion of their cell phone bills for that use. Colin Cochran v. Schwan’s Home Service, Inc., Court of Appeal (August 12, 2014) “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”.

This ruling applied to a class action by service managers seeking reimbursement of work-related cell phone expenses, but will also apply to smart phones used to access business data in the Cloud and on network servers.Under Cochran ruling, California employers that require employees to use their personal devices to conduct business as a condition of employment will need to initiate reimbursement plans or face litigation risk.

Section 2802 of the California Labor Code requires employers to reimburse employees for expenses “necessarily incurred” with the stated purpose of “prevent[ing] employers from passing their operating expenses on to their employees.” I know what you are thinking - you can have the employee waive the right to reimbursement. Wrong!  California Labor Code section 2804 prohibits waivers of an employee’s rights to reimbursement.The overall theory behind the decision was reflected in the California Supreme Court’s decision in Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. 4th 554 (2007), the Court noted that the purpose of section 2802 is to “prevent employers from passing their operating expenses on to their employees.”

Most importantly, if your business is exposed to and loses such a lawsuit this can have far reaching and expensive consequences, considering that section 2802 allows employees to recover attorney fees incurred in “enforcing the rights granted by” that section. It is highly likely that the attorney fees incurred will surpass the cost or providing a company phone or paying for a portion of the employees cell phone.

If you have a employees that must utilize mobile devices that are not provided by the company, it would be highly advisable to meet with and discuss your policies and procedures with a attorney in order to develop a policy that both allows the employee to effectively perform their job and protect the employer from sitting in the courthouse.