Last week, in a decision of interest to California employers, a California judge denied Amazon’s request to dismiss a lawsuit that claims the company had no policy in place to reimburse employees for expenses incurred while working from home, in violation of state law.
Background
A senior software development engineer sued Amazon for reimbursement of expenses he alleged he incurred while he was instructed to work remotely due to the COVID-19 pandemic— including for internet and electricity. He filed the suit on behalf of himself and 4,000 other similarly situated California-based Amazon employees. According to the complaint, the expenses necessary for the plaintiff and class members to perform their jobs at home amounted to about $50 to $100 per month per employee. In Amazon’s motion to dismiss the lawsuit, the company argued that it was not liable because it was the government—and not the company—who ordered employees to work from home, and also the plaintiff didn’t submit reimbursement requests.
District Court Order
A U.S. District Judge rejected Amazon’s claims in an order written last week. On Amazon’s first point, Judge Vince Chhabria wrote that even if the software engineer was working from home as a result of government orders, Amazon is not thereby absolved of liability for the remote work expenses incurred.
In citing California’s reimbursement statute, Cal. Labor Code § 2802(a), the Court wrote that “[w]hat matters is whether Williams incurred those expenses ‘in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.’”
On Amazon’s second point, Judge Chhabria wrote that the plaintiff plausibly alleged that the expenses he incurred were necessary to do his job and that Amazon had reason to know that he incurred these “basic costs related to that work”, even though he did not submit explicit reimbursement requests. Therefore, Amazon’s motion to dismiss the lawsuit was denied. Judge Chhabria did, however, dismiss the plaintiff’s Unfair Competition Law claim (with leave to amend).
Takeaway for Employers
In light of the decision to allow the claims against Amazon to proceed, employers should ensure that they have implemented applicable policies for reimbursing employees for remote work expenses, and reviewed those policies with trusted employment counsel. Employers should consider whether to implement policies that provide monthly stipends to employees that are required to work from home, or instead instruct employees to submit expenses for reimbursement. Employers should also consider what items, including internet, electricity, and physical space, are necessary for employers to perform their work at home, as well as the estimated amounts of such expenses.
