July 2008
 Compliance Matters
COURT CLARIFIES MEAL AND
AND REST BREAK RULES
 
Last week, the California Court of
Appeal in San Diego issued a very
important decision involving the
Brinker Restaurant chain.  The new
case clarifies the rules that California
employers must follow to be in
compliance with the State's meal and
rest break requirements.

Below we explain the court's ruling
and offer suggestions for what
employers may do to take advantage
of this important decision.

Background
 
For the past several years, California
employers have been beset by an
onslaught of class action lawsuits
claiming non compliance with the
State's meal and rest break rules.
Due to considerable uncertainty in the
law, employers have been paying out
millions in settlement of these cases.
Employers and employees alike were
anxiously awaiting the Brinker
Restaurant ruling.

Meanwhile, another decision by the
California Supreme Court last year
only made matters worse for
employers by upping the ante
considerably for State mandated meal
and rest period penalty
compensation.  State law says that
whenever the employer does not
comply fully with the meal and rest
break rules, the employer shall pay
the employee one additional hour of
compensation for each non compliant
meal and rest break.  In a case
involving retailer Kenneth Cole, the
California  Supreme Court ruled that
employees could sue employers going
back four years to collect meal and
rest break penalty compensation.

The Brinker Restaurant case squarely
addressed how an employer is to
comply with the State's meal and rest break rules.

On the meal break issue, State law
mandates that employers "provide" a
meal break whenever employees are
scheduled to work more than 5 hours
in a day.  Employee advocates have
been pushing for an expansive
reading of the term "provide" that
would obligate employers to ensure
that every employee takes their full
30 minute meal break each and every
day.

Worker groups also were pushing for
a very inflexible reading of the rule
that would require the penalty
compensation if the meal break was
taken too early or too late in the
shift.

Employers urged the Brinker
Restaurant court to adopt a more
common sense and commercially
reasonable interpretation of the term
"provide" to mean that employers
merely have to offer the breaks-not
babysit the employees to ensure that
employees actually took them.
 
Businesses asked the court to allow
employees to decide for themselves if
and when they would take these
breaks.  Under that interpretation, an
employer would be on the hook for
the State mandated penalty
compensation only if the employer
either prevented or impeded the
employee from taking a meal or rest
break.
 
Employers also sought flexibility as to when the breaks could be scheduled.

The Court's Ruling
 
Late last week, the California Court of
Appeal finally issued its ruling.  The
court specifically addressed what it
means to "provide" a meal break.  The Court also made significant
rulings involving an employer's
responsibility for rest breaks and so-
called off-the-clock work.  Finally, the
court entered a significant ruling on
whether these cases can even be
prosecuted on a class action basis.

One note of caution.  Though these
case rulings are very favorable to
employers, it's a sure bet that the
plaintiffs will ask the California
Supreme Court to vacate the
decision.  We would not recommend
making any changes in reliance upon
the new case until the decision is
final, which may be as late as
November of this year.
 
Reflecting just how important this
issue is, Governor Schwarzenegger
took the extraordinary step of issuing the following press statement endorsing the  court's decision:  "We are pleased that the California Court of Appeal issued today a decision squarely addressing many of the central issues in dispute concerning meal and rest periods. The confusing and conflicting interpretations of the meal and rest period requirements have harmed both employees and employers.  Today's decision promotes the public interest by providing employers, employees, the courts and the labor commissioner the clarity and precedent needed to apply meal and rest period requirements consistently."

The Brinker Restaurants case was a
class action challenging  the
company's compliance with the
State's meal and rest period rules.
The plaintiffs in that case also
alleged that Brinker Restaurants
worked employees off the clock.  The
Court of Appeal made the following
significant rulings:
 
REST PERIODS.  State law requires
employers to authorize and permit
employees to take a paid 10 minute
rest break for each four hours of work
or major fraction thereof.  Here is
what the Court had to say about rest
breaks:
  • While employers cannot impede, discourage or dissuade employees from taking rest periods, they need only provide, not ensure, rest periods are taken;
  • Employers need only authorize and permit rest periods every four hours or major fraction thereof.  Rest breaks need not, where impracticable, be in the middle of each work period;

MEAL BREAKS. State law requires employers to "provide" a 30 minute uninterrupted meal period to any employee who works a shift lasting five or more hours.  Here is what the court had to say about meal breaks:

  • Employers are not required to provide a meal period for every five consecutive hours worked; rather, it's one meal period if the shift lasts more than five hours...and a second one only where the employee works in excess of 10 hours.
 
  • While employers cannot impede, discourage or dissuade employees from taking meal periods, they need only provide them and not ensure they are taken.  Thus, the decision whether to take a meal break-and for how long-is up to the employee and no penalty  compensation will be due if the employee voluntarily elects not to take advantage of the meal break that the employer has offered.

OFF THE CLOCK WORK.  State law requires an employer to pay employees for all hours worked.  Here is what the Court  said on that subject:

  • While employers cannot coerce, require or compel employees to work off the clock, employers can only be held liable for employees working off the clock if the employer knew or should have known they were doing so.  Presumably, this would include the knowledge of any supervisory employee.

CLASS ACTIONS.  Many of these suits would never be brought if the lawyer had to prosecute each case individually.  To proceed as a class action, court rules require the lawyer representing the putative class to demonstrate that there are common issues among the employees that can be resolved all at once.  On the important issue of whether meal/rest break and off-the-clock  cases may even  proceed as a class action, the court made the following significant rulings:

  • Because the rest and meal breaks need only be "made available" and not "ensured," individual issues necessarily predominate and cases involving meal and rest period compliance typically will not be amenable to class action treatment.
  • For the same reason, off-the-clock claims are also not amenable to class action treatment.

WHAT NOW?  To be sure, the Brinker Restaurant case is welcome news for the State's employers.  However, the ruling is NOT final and it could be months or even years before it is.   In the meantime, we recommend that employers do several things.  At a minimum:

  • Hold off making any sweeping changes because of the ruling until the decision is final.
  • Review written meal and rest break policies to ensure legal compliance. If the company policy is not in writing, it's a good idea to develop one.
  • Train managers on the State's meal and rest period rules.
  • Monitor compliance on a weekly or pay period basis.
The debate over what it means to "provide" the meal break is far from over.  Since the stakes are huge in these cases, consider whether it's wise to pay employees the State mandated penalty compensation when the breaks are non-compliant. Ultimately, this will be a risk management decision.

 
For more information, call us today at (818) 508-3700,
or visit us on the web, at www.brgslaw.com.

Sincerely,

Richard S. Rosenberg
Partner
BRG&S, LLP

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