Implementing BYOD? Wait! The courts have something to say!

A Californian court has ruled that companies must reimburse employees for work-related use of personal devices even if the employee isn’t the one actually footing the bill…

Very recently, the California Court of Appeal made a very unambiguous ruling. I quote:

“We hold that when employees must use their personal cell phones for work-related calls, Labor Code section 2802 requires the employer to reimburse them. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills.”

Digging deeper into the ruling, what we have is this:

“Does an employer always have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or is the reimbursement obligation limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job? The answer is that reimbursement is always required. Otherwise, the employer would receive a windfall because it would be passing its operating expenses onto the employee (emphasis added by me).”

What were the legal reasons for this problem?

I gave you the end result. Now, let’s work our way back to the source of this court action…

In 2012, a trial court heard a class action against Schwan’s Home Service filed by Colin Cochran. The substance of Mr. Cochran’s claim was that the company had not adequately reimbursed him (along with comparable employees) for work-related usage of his personal cellphone under the Bring-Your-Own-Device (BYOD) banner. The trial court initially ruled in the company’s favor because, among other reasons, Cochran’s plan was unlimited and was actually paid for by his girlfriend.

As I wrote at the outset of this piece, the California Appeal Court overturned all of that. The basic breakdown of their reasoning is this (MASSIVE DISCLAIMER – I AM NOT A LAWYER, AND WHAT FOLLOWS IS IN NO WAY FORMAL LEGAL INTERPRETATION OR ADVICE):

  • Even if you incur no extra cost (because of an unlimited data plan), you are still paying for a portion of your work-related expenses.
  • Even if someone else is paying for it, the device is still benefiting the business purposes of the employer – the bill must therefore be recognized as an actual operating cost.

Is the real culprit the lack of clarity on BYOD?

The above was the legal reasoning. The thing is though, there were arguably deeper problems that led to the whole affair being brought before courts. I would imagine that the chief reason was a lack of clarity with respect to BYOD policy at the company.

As we detailed in our free guide“A Practical Guide to BYOD”, having a clear and clearly-communicated policy regarding BYOD costs, responsibilities, and usage rights is now critically important for organizations. BYOD is a massive trend, and it brings with it security risks and even greater hidden costs (except maybe it’s not so hidden anymore, thanks to the California Court of Appeal).

Those last points might appear to be plain common sense, but the simple fact of the matter is that the majority of IT managers who were questioned in a number of different studies regarding BYOD readiness have admitted to being unready to manage BYOD. For that matter, one study has shown IT managers to not even have enough resources to track and manage the majority of assets that their companies actually own. What happens when they inevitably can’t deal with the crush of devices that they don’t own?

Well, one answer, apparently, is legal action. Repeated legal action. And if you thought the regular course of management was challenging enough, imagine how much more costly it will be if you end in court over BYOD. Dealing with time lost and legal fees wasted simply can’t be fun. It certainly isn’t good business.

Now, I’m not saying that all cases of miscommunication about BYOD policies are going to result in being taken to court. What I am saying is that if you don’t have a plan in place, you’re probably going to spend a lot more time dealing with problems that were avoidable in the first place. And because you’ll be unprepared and forced to deal with challenges on someone else’s terms, it’ll be more costly than if you’d simply planned things out in the first place.

What to do about BYOD?

Admittedly, the Canadian and American legal systems are two different beasts. However, there are more than enough similarities to think that a business-related matter that actually became a legal problem down in the States could become an issue here in Canada as well. Remember: The United States is Canada’s largest trade partner. It stands to reason that whatever business laws are passed down there might influence laws up here.

In light of that, the best thing to do is to be aware of this newest issue surrounding BYOD, and have a plan in place immediately. If your organization has adopted BYOD, then you need to secure BYOD immediately. You have to make certain that you have clear BYOD policies and that you actually communicate them to your employees – before the molehill becomes a mountain. You also have to understand that, if the legal shift in the US becomes a Canadian reality as well, there is nothing that forces employees to adopt reasonable phone plans for their BYOD implements.

Basically, if you haven’t yet thought deeply about BYOD, it’s really time you did it. If you’re not sure where to start, download and read “A Practical Guide to BYOD”. We’ve outlined the issues you need to know and understand in order to properly manage BYOD (among other usage models). We’d also love to hear from you if have any insights or experiences regarding this whole issue; please leave your comments below!

In the meantime, feel free to contact us at Cimpl if you have any further questions about BYOD, mobile device management policies, or any other telecom expense management related concerns!

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