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Employment Law

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Court Clarifies Obligation of Employer to Pay Employees for Using Employer Shuttle from Parking Lot to Work
Everett F. Meiners, Parker Milliken Clark O’Hara & Samuelian, Los Angeles. Contributing author to Advising California Employers and Employees published in December 2005 by CEB.

Introduction
The Facts
Analysis of Morillion
Application to Disney
Caution Required in Applying Ruling

Introduction
In Morillion v Royal Packing Co. (2002) 22 CA4th 575, the California Supreme Court held that an employer who required his employees to ride on a company bus to their place of work was obligated to pay the employees for the time spent on the bus, even though no actual work took place during the bus ride.

In Overton v Walt Disney Company (February, 1, 2006, BC281489), an employee at Disneyland believed that because he took a company shuttle bus from an assigned parking area (approximately one mile from the work check-in-point), he should be compensated for that time under the Morillion rule. The Second District of the California Court of Appeal found that because the employee was not “required” to take the shuttle bus and, in fact, had alternative ways to arrive at the check-in-point, the employer did not have a legal obligation under Morillion to pay the employee for the time spent on the company shuttle bus.

The Facts
The plaintiff, Bobby Overton (“Overton”), was employed by the Walt Disney Company (“Disney”) as a security guard. He was assigned to park at a lot which was about a mile away from the time clock he punched in to commence work. Disney provided a shuttle bus for its employees to ride from this lot to the check-in-point. Previously, Overton had been assigned to a closer parking lot. At the new lot, in order to punch in on time, he had to arrive “substantially earlier” and wait for the shuttle to ride to the check-in-point. Overton and other employees believed that they should be compensated for this time and filed a class action lawsuit.

On cross-motions for summary judgment, it was undisputed that although 90 percent of Disney employees drove their own cars or car pooled to work, and parked in their assigned lots, at least 10 percent used alternative forms of transportation, including buses, trains, being dropped off and van pools. In using these other forms of transportation, the employees arrived at their check-in-point without going to the assigned parking lot or riding the company shuttle bus. In addition, it was agreed that employees using the parking lot assigned to Overton were not required to ride the shuttle bus because they were permitted to walk or bicycle to the check-in-point.

Overton contended that because he was required to use the designated parking lot, and the only practical means of arriving at the check-in-point was to ride the shuttle, that he was on company time and Morillion required him to be compensated. Disney contended that Overton was not “required” to ride the shuttle but could arrive at the check-in-point by a variety of means and therefore the time waiting for and riding the shuttle did not need to be compensated.

Analysis of Morillion
The Court of Appeals provided an extensive analysis of the Morillion decision, stating that the issue is whether the employee is “subject to the control of an employer.” In Morillion, the court stated that, “The level of an employer’s control over its employees, rather than the mere fact that the employer required the employee’s activity, is determinative.” The Court of Appeal noted that the employer in Morillion “required plaintiffs to meet at the departure points at a certain time to ride its buses to work, and it prohibited them from using their own cars, subjecting them to verbal warnings and lost wages if they did so.” In Morillion, the Court expressly stated that “employers may provide optional free transportation to employees without having to pay them for travel time, as long as employers do not require employees to use this transportation.”

Application to Disney
Disney did not “require” its employees who were assigned to a parking lot to use it or to take the shuttle bus to the check-in-point. There were alternative means of transportation to the check-in-point. Employees only had to park in their assigned lot if they drove.

The Court of Appeal rejected Overton’s argument that, as a practical matter, he was required to use an employer-provided shuttle, once he parked his car. The court stated that even if such a “de-facto” argument might be accepted under Morillion, it was not applicable in this case because Overton was not required to park in the assigned lot and could have made arrangements other than company provided transportation to arrive at the check-in-point.

Caution Required in Applying Ruling
Although this decision is good news for employers, there are obvious limits and employers must be careful not to “require” a specific method of transportation to check-in-points from assigned parking lots. As noted in Morillion, the degree of control over the employees is the key to determining whether or not they are considered on working time while using company provided transportation.

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