A new California Court of Appeals ruling has dealt a major blow to bring your own device (BYOD) policies. Although the case focused on employees working in retail, the court's decision may have implications for any employer with a BYOD policy in place. It could potentially have repercussions for healthcare down the road.

In a class action lawsuit, a customer service representative named Colin Cochran sued his employer, Schwan's home food delivery service on behalf of 1,500 customer service reps who had been denied reimbursement for work calls made on their personal mobile phones. Overturning the verdict of the California Supreme Court, the Court of Appeals ruled that employers must reimburse employees for some "reasonable portion" of their phone bill, even if the employee's phone plan was unlimited (so the work calls cost them no additional money) or was paid for by a third party.

"It does not matter whether the phone bill is paid for by a third person, or at all," the court wrote. "In other words, 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. Not only does our interpretation prevent employers from passing on operating expenses, it also prevents them from digging into the private lives of their employees to unearth how they handle their finances vis-a-vis family, friends and creditors." 

The case is significant because it is the first major ruling about the responsibilities of employers to reimburse employees for using their personal devices in a work context. For many businesses, it could represent a significant additional expenditure. As CIO.com points out, the ruling as of now applies only to phone calls, but it could be extended to apps and data usage in the future.

While it's unclear exactly how many doctors use personal devices at work, a 2012 KLAS survey showed that 86 percent of hospitals had some kind of BYOD policy in place. And by the end of 2012, people like Brian Balow, a member of the law firm Dickinson Wright who specializes in HIPAA concerns, believed BYOD in hospitals to be an already-lost battle for CIOs.

In most cases, HIPAA should already prevent doctors and nurses from using their personal devices to make phone calls or send text messages about patients. But hospitals with BYOD policies have instituted security measures that allow doctors to safely use their own devices. Whether more stringent reimbursement requirements will curtail this popular trend in healthcare remains to be seen.

It's possible that the ruling, if applied beyond California, could tip the scales on CIOs' decision on whether to allow hospital workers to bring their own devices or to employ an enterprise model where they purchase devices for employees. Paying for devices -- and data plans -- in bulk could be cheaper (and easier) than reimbursing each doctor or nurse based on how much they use a mobile device.