By Taylor Crousillac, Senior Associate
March 21, 2016
Introduction
Bring-your-own-device (“BYOD”) refers to the increasing trend of employers allowing employees to use their own personal cell phones in lieu of employer-provided devices to access company computer networks and email systems. This trend does not appear to be slowing down, and some experts are predicting that by 2017, half of employers will require employees to supply their own personal cell phone for work-related purposes.[1] BYOD programs can increase employee productivity and satisfaction in the workplace, but such programs come with their own risks, including privacy concerns for the employee and security concerns for the employer.[2] Even the U.S. Supreme Court recognizes the unique legal challenges posed by modern cell phones.[3] Currently, there are no statutes at the federal or state level—including Louisiana—directly addressing BYOD policies and practices, and there is limited—but developing—case law on BYOD.[4] Whether the employee or employer has the responsibility to pay for the work-related use of an employee’s personal device is an unresolved issue in Louisiana. But a creative attorney might be able to construct an argument for employee reimbursement on the basis of Louisiana Civil Code article 2298.
I. The Potential Payment Problem
The most basic reason why an employer would object to paying for part of an employee’s cell phone bill is that the employer believes that the employee would be paying for the phone regardless. That argument is not unfounded. For example, 64% of Americans owned a smart phone in 2015.[5] Aside from phone calls, text messaging, and internet use, email is the most common use for cell phones; topping social networking, playing videos, and using maps and navigation.[6] Thus, if an employee is likely to have a smart phone and is also already using the device for personal emails, then why should employers spend money subsidizing an employee’s phone bill? One California state court of appeals has addressed this issue directly.
II. A Starting Point: Cochran v. Schwan’s Home Service, Inc.[7]
Cochran, a California appellate court decision, involved a plaintiff who filed a class action against his employer on behalf of himself and other employees who were not reimbursed by their employer for expenses pertaining to the work-related use of their personal cell phones.[8] The plaintiffs based their argument for reimbursement on Section 2802(a) of California’s Labor Code, which states that, “[a]n 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.”[9] According to the legislative history of Section 2802, the section was “designed to prevent employers from passing their operating expenses on to their employees.”[10] The appellate court reversed the trial court’s decision to deny class certification based on its interpretation of Section 2802(a).[11]
According to Cochran, Section 2802(a) of California’s Labor Code called for a straightforward solution. Under the statute, an employer is always obligated to reimburse an employee for his or her use of that employee’s personal cell phone for work-related reasons.[12] The court appeared to base its decision on the face of the statute itself and equitable principles. It stated that reimbursement was always required because “[o]therwise, the employer would receive a windfall because it would be passing its operating expenses on to the employee.”[13]
Additionally, the court noted that it is irrelevant if a third party is paying the employee’s bill and that the specific details of the employee’s cell phone plan are likewise irrelevant—for example, unlimited calls or texts.[14] The specific damages may prove difficult to determine in a case like this. The court, however, found that under Section 2802, “the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was necessary.”[15] Importantly, the court also made reference to the significant privacy concerns that an employee has related to his or her personal cell phone. By refusing employers the ability to question who is paying an employee’s cell phone bill and the specifics of the plan, it “prevents [employers] from digging into the private lives of their employees to unearth how they handle their finances vis-à-vis family, friends and creditors.”[16] In light of this interpretation of Section 2802, the appellate court remanded the case to the trial court to reconsider the plaintiffs’ motion.[17]
III. Potential Impacts of Cochran to BYOD Law in Louisiana
Although Cochran has an important impact on California’s BYOD law, its potential impact on other states, such as Louisiana, remains unclear. For instance, the holding of Cochran is narrow as it comes from only one California appellate circuit and interprets a particular California state statute. Thus, even the persuasive authority of the decision is limited. That is not to say, however, that it could not be used in another jurisdiction as the basis for a reimbursement claim for an employee’s work-related use of a personal cell phone, especially in a jurisdiction with a statute similar to Section 2802 of California’s Labor Code.
Louisiana does not have an equivalent state statue, but there is an argument for employee reimbursement on the basis of Louisiana Civil Code article 2298.[18] Article 2298, the state’s codification of the doctrine of unjust enrichment, states, “[a] person who has been enriched without cause at the expense of another person is bound to compensate that person.”[19] On its face, an argument under Civil Code article 2298 would appear to implicate the same equitable concerns espoused in Cochran.[20] In particular, the employee would be using his or her personal finances to benefit the employer. It is worth noting here that an employee’s argument for compensation would be significantly weakened if an employee signed an employment agreement making it clear that the employee would be expected to use his or her personal phone for these work related purposes. The argument for reimbursement is best suited for an instance in which there was no mention of this situation in the employment contract, or if there was no employment agreement at all between the parties.
Finally, Civil Code article 2298 handles damages in much the same way as Cochran. Article 2298 states in its second paragraph, “[t]he amount of compensation due is measured by the extent to which one has been enriched or the other has been impoverished, whichever is less.”[21] This approach calls for a facts and circumstances inquiry similar to the approach the Cochran Court espoused in its discussion on damages under Section 2802.[22]
Conclusion
The issue of reimbursement for use of an employee’s personal cell phone for work-related purposes has the potential to generate litigation in Louisiana, and the chances of litigation will only increase in the future as personal cell phones continue to invade the workplace. Although there is no current Louisiana state statue or case law on the subject, one could potentially combine Civil Code article 2298 and the reasoning in Cochran to create a blueprint for an employee reimbursement claim in Louisiana.
[1] See Gartner Predicts by 2017, Half of Employers Will Require Employees to Supply Their Own Device for Work Purposes, Gartner (May 1, 2013), http://www.gartner.com/newsroom/id/2466615 [https://perma.cc/R3K2-MMHV].
[2] See generally Melinda L. McLellan et al., Wherever You Go, There You Are (with Your Mobile Device): Privacy Risks and Legal Complexities Associated with International “Bring Your Own Device” Programs, 21 Rich. J.L. & Tech. 11 (2015).
[3] See Riley v. California, 134 S. Ct. 2473, 2488–89 (2014) (noting that modern cell phones implicate privacy concerns far beyond those implicated in the search of other objects that might be kept on an arrestee’s person).
[4] See McLellan et al., supra note 2, at 6.
[5] Aaron Smith, U.S. Smartphone Use in 2015, Pew Res. Center (Apr. 1, 2015), http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/ [https://perma.cc/C3TQ-9MK6]. This number has risen sharply in recent years. In the spring of 2011, only 35% of Americans owned a smartphone. Id.
[6] Id.
[7] Cochran v. Schwan’s Home Serv., Inc., 176 Cal. Rptr. 3d 407 (Ct. App. 2014).
[8] Id. at 409.
[9] Cal. Lab. Code § 2802(a) (West, Westlaw 2016).
[10] See Gattuso v. Harte-Hanks Shoppers, Inc., 169 P.3d 889, 893 (Cal. 2007).
[11] Id. at 413.
[12] Id. at 412.
[13] Id. (emphasis added).
[14] Id. at 413 (The court stated that “it is no concern to the employer that the employee may pass on the expense to a family member or friend, or to a carrier that has to then write off a loss. It is irrelevant whether the employee changed plans to accommodate work-related cell phone usage. Also, the details of the employee’s cell phone plan do not factor into the liability analysis.”).
[15] Id. (internal quotations omitted).
[16] Id.
[17] Id.
[18] La. Civ. Code art. 2298 (2016).
[19] Id.
[20] See Cochran, 176 Cal. Rptr. 3d at 412 (arguing that without reimbursement, the employer would be receiving a windfall at the expense of the employee).
[21] La. Civ. Code art. 2298.
[22] See supra note 15.