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Company Cell Phone Repayment

I work as an outside repairman for a company that fixes industrial machinery. When I started, the company issued me a cell phone to use while I was on the road (where I spend the majority of my time). My boss said that the telephone was for work, but that it was “expected” that I would also use it to make personal calls. He even recommended that I get rid of the cell phone I already had.  He said the phone’s plan included 500 minutes, but that at the end of the first month the bill would be reviewed and they could increase the plan at that time if the minutes exceeded the plan. I asked if there was a handbook or something for it and was told there was none.

I stopped carrying my own cell phone and started using the company’s. At the end of the first month, I didn’t get a bill. So, I figured everything was fine. Two more months passed, and still no bill. About halfway through my third month, I was offered a much better job at my brother’s company so I put in my notice. The next day the regional manager called me into his office and presented me with three cell phone bills totaling approximately $700 for airtime that exceeded the allocated minutes on the plan. These charges included all calls in excess of the 500 minutes allocated on the plan, regardless of whether they were personal or business-related. The calls for business alone added up to over 600 minutes per month! He demanded that I bring in a check for the full amount or he would deduct it from my next paycheck, which would leave me with basically nothing.

I’ve talked to some of the other guys, and they said this is what the regional does when he is angry at someone. There are at least three other guys who have had similar experiences.

What can I do? I can’t pay $700 for calls my boss told me I could make, and I’m not sure the other guys will back me because they’re afraid for their jobs. Any ideas?

Steven Shelton Responds:

The first issue here is whether an employer can require an employee to pay for minutes used on a cell phone, even if those minutes include calls made as part of the employee’s job. The answer, as with most legal questions, is “it depends.”

First, the easy part: your employer cannot make you pay for the use of cell phone minutes you incurred as part of your job. Under Michigan law, it is illegal for an employer to require employees to pay “kick-backs” or to pay for the use of the employer’s equipment. Under MCL 408.478, “An employer, agent or representative of an employer, or other person having authority from the employer to hire, employ, or direct the services of other persons in the employment of the employer shall not demand or receive, directly or indirectly from an employee, a fee, gift, tip, gratuity, or other remuneration or consideration, as a condition of employment or continuation of employment.” This statute serves several purposes. One key purpose is in the prevention of schemes to avoid paying the contracted for wage; an employer might hire an employee at $8 an hour, but charge $4 per hour for “equipment rental”, thus paying only $4 per hour in real wages.

In Sands Appliance Services v. Wilson, 463 Mich 231 (2000), the Michigan Supreme Court held that the ban on demanding remuneration from an employee applies only when the demand is made as a condition of employment, and specifically noted that an employer could demand an employee pay for personal telephone calls because such calls are not a requirement of one’s work. Conversely, however, calls that one is required to make for one’s work are a condition of employment, and an employer who requires employees to pay for such calls violates the statute.

So the general rule is this: an employer can make you pay for personal calls, but not calls required for your job. In your specific case, it would appear that the employer wants to charge you for all calls made in excess of the 500 minute plan, regardless of the nature of those calls. Such a demand is a clear violation of the statute and is entirely unenforceable. It is also a crime for your employer to make such a demand under MCL 408.484.

The question of the personal calls is a bit trickier in this case because your employer told you two key things: that you were allowed to make personal calls (with no mention of needing to pay them back); and that they would review the plan after the first month, making any adjustments as needed.

In this case, I think it is unlikely that your employer could require you to pay for your personal calls. The explanation requires a brief discussion of the concept of “promissory estoppel.”

Promissory estoppel is an equitable doctrine designed to prevent one party from being unjustly harmed by reasonably relying upon the promise of another. The elements of promissory estoppel are: (1) a promise; (2) circumstance in which the promisor should have reasonably expected to induce action of a definite and substantial character on the promisee; (3) actual reliance on this promise by the promisee; and (4) circumstances that would make it unjust not to enforce the promise. Schipani v. Ford Motor Co., 302 N.W.2d 307, 102 Mich. App. 606. When promissory estoppel is applied, the promisor is required to put the promisee in the position she would have been in had the promisor followed through on the promise.

In your case, you were promised that after the first month, the telephone bill would be reviewed and a plan with more minutes would be implemented. This was a definite promise, and it was certainly expected that you would take a definite action; your immediate supervisor even recommended that you no longer carry your personal mobile telephone. You reasonably and foreseeably relied upon this representation, and in the end, the employer did not give you an opportunity to review the telephone bill as promised. As a result, several hundred dollars of telephone charges are now being held against you. It seems relatively clear here that promissory estoppel applies, and that you should be put into the position you would be in had your boss followed through on the promise: no charges to you for your cell phone calls.

The second issue here is what your employer might be able to do to intimidate other employees into making false statements. The rights you are seeking to exercise are guaranteed under Michigan’s Payment of Wages and Fringe Benefits Act, MCL 408.470 et seq. This Act prohibits employers from doing a variety of unscrupulous, unethical, or despotic things: withholding wages or benefits, deducting charges from an employee’s pay, telling employees they cannot discuss their salaries, requiring employees to pay the employer kickbacks, and so on. Under Section 13 of the Act (MCL 408.483), “An employer shall not discharge an employee or discriminate against an employee because the employee filed a complaint, instituted or caused to be instituted a proceeding under or regulated by this act, testified or is about to testify in a proceeding, or because of the exercise by the employee on behalf of an employee or others of a right afforded by this act.”

In other words, the statutes prevent your employer from taking any retaliatory action against you or anyone else who speaks up on your behalf. If, for example, another employee were to verify that he had been told the same things you were told, it would be illegal for your boss, the regional manager, or anyone else in the company to take retaliatory action of any kind against this employee. In fact, under Section 14 of the Act (MCL 408.484), if anyone at the company undertook some kind of retaliatory action, that person would be guilty of a crime punishable by up to one year in jail.

Any employee who was discharged or discriminated against would have the right to file a complaint with the Michigan Department of Labor within thirty days. MCL 408.483(2). The Department would then conduct an investigation, and if the charges of retaliatory discrimination were to be substantiated, the Department would “order the rehiring or reinstatement of an employee to his or her former position with back pay.” Id.

One more thing: if your employer should withhold any part of your wages or wrongfully take money or other property from you, you could probably sue to recover under Michigan’s conversion statute (MCL 600.2919a). This statute entitles a plaintiff to treble damages, so it would be worthwhile for you to look into it if your boss follows through on his threats.



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