SUPREME COURT ISSUES LONG-AWAITED RULING ON STATE-MANDATED MEAL AND REST PERIODS
After a wait of more than three years, the California Supreme Court finally has issued a unanimous, landmark decision in the Brinker Restaurant case. The court's decision clarifies employers' duties in connection with providing meal and rest periods for employees. It also addresses important issues involving wage-hour class action lawsuits in general, especially where meal and rest period violations are claimed.
Meal Periods. The California Labor Code requires employers to "provide" a 30 minute uninterrupted meal period to any employee who works a shift lasting five or more hours. The Supreme Court's ruling gives a common-sense meaning to the term "provide" that is more favorable to employers than what the plaintiff's bar wanted, but not quite as employer-friendly as the Court of Appeal's original ruling in July 2008.
Here is what the Supreme Court ruled on meal breaks:
* The employer is obligated to relieve each employee of all work duties during the uninterrupted 30 minute meal break.
* The employee must be free to use the meal period "for whatever purpose he or she desires." In particular, the employer must be allowed to leave the premises during the meal period if he or she wishes.
* The employer is not required to "police" its employees to ensure that they actually perform no work during the meal period.
* However, if the employer "knew or reasonably should have known that the worker was working through the authorized meal period," then the employer must pay the employee for all work performed, and also is liable for penalties under the Labor Code.
* The court declared that "an employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks," or even by encouraging employees to work through their breaks. On the other hand, "employees cannot manipulate the flexibility granted them by employers to use their breaks as they see fit" to "generate" employer liability.
* The court cautioned that the details on how employers may comply with their duty to provide a 30 minute uninterrupted meal break "may vary from industry to industry." The court declined to list "the full range of approaches that in each instance might be sufficient to satisfy the law."
* Employers continue to have three choices if an employee works more than five hours on a shift: (a) give the employee an uninterrupted meal break, free from all work, starting before the employee's sixth hour of work; (b) consent to a mutual waiver of the meal break, but only if the shift does not exceed six hours; or (c) obtain a written agreement for a so-called "on-duty meal period" if the stringent guidelines for such agreements are met.
* The employer also must provide "a second meal period no later than the end of an employee's tenth hour of work," absent a valid and mutual waiver for shifts of twelve hours or less.
* In Brinker Restaurant, the plaintiffs claimed the employer had an "early lunching" practice that resulted in employees working more than five hours after their first meal break. However, the court ruled employers are not required to provide a "rolling" meal break five hours after an employee's first meal break, unless the employee works more than ten hours and does not waive the second meal break.
Rest Periods. Wage Order 5 requires every employer to "authorize and permit all employees to take rest periods, which ... shall be in the middle of each work period" if possible. Employees must be allowed ten minutes of rest for every four hours "or major fraction thereof."
Here is how the court interpreted the Wage Order on rest periods:
* "Major fraction" means more than one-half. Accordingly, every employee who works at least 3½ hours is entitled to at least one ten-minute rest break. An employee is entitled to a second rest break for shifts over six hours, a third rest break for shifts over ten hours, "and so on." The Supreme Court rejected the Court of Appeal's interpretation, which only required a second rest break for shifts of at least 7½ hours.
* An employer is not required to give the first rest break before the first meal break. Instead, the employer must made a good-faith effort to give the rest break in the middle of the work period, if practical to do so.
* Generally, for shifts of eight hours, one rest break should be before the meal break and one after. However, this may vary depending on the duration of shifts and other factors.
Class Actions. Brinker Restaurant is a class action lawsuit. The trial judge certified three different subclasses, based on the plaintiffs' claims for (1) rest period violations, (2) meal period violations, and (3) "off-the-clock" work.
The Supreme Court's decision did not end the case, but only decided whether it was appropriate for the trial judge to certify all or part of the case for class action treatment. Here is how the court ruled on the class action issues:
* The court upheld the trial judge's certification of the rest period class. Brinker Restaurant admitted it had a uniform policy on rest breaks. The court found that this policy violated the Wage Order because it did not provide employees with two rest breaks for all shifts over six hours.
* However, the certification of the meal break class was based in part on the incorrect assumption that meal breaks are required after every five hours of work. This makes the class definition overbroad, because it may include employees who were not denied their required meal breaks. The Supreme Court sent the case back down to the trial judge to reconsider whether or not the meal break class should be certified.
* The Supreme Court rejected the trial judge's certification of the "off-the-clock" class, which pertained to work performed by employees during their meal breaks. The court found that "for this claim neither a common policy nor a common method of proof is apparent," at least one of which must exist for class action treatment to be proper.
* Because Brinker Restaurant's employees are clocked out during lunch, this "creates a presumption they are doing no work." The plaintiffs must prove that they were, in fact, working during lunch, and that the employer "knew or should have known off-the-clock work was occurring." But the plaintiffs only had individual, case-by-case evidence of this, which is not enough to justify certifying a class on the off-the-clock claim.
What does this mean to you? For employers, the best thing about the Brinker Restaurant decision is the Supreme Court's interpretation of the meal break requirement. Employers can breathe a sigh of relief that they need not actively police employees to prevent them from working during meal breaks. However, the decision also makes clear that employers are liable if they knew or should have known that employees were working during meal breaks.
In addition, the Supreme Court gave the "green light" for California employers to schedule their employees' meal periods for early in the shift, without being required to give them a second meal period for shifts of ten hours or less.
The Brinker Restaurant decision also is helpful to employers on class action issues. In particular, the court's rejection of class certification on the "off-the-clock" claim may assist employers in defeating future class claims - especially where there is no evidence the employer has a policy or practice that violates the wage-hour laws.
The overall impact of Brinker Restaurant should become more clear as lower courts seek to interpret and clarify the ruling. In the meantime, employers must remain vigilant in complying with California's stringent wage-hour laws. At a minimum, we recommend that employers do the following:
* Create and disseminate a lawful meal and rest period policy.
* Train managers on the meaning of the policy and the circumstances under which the state mandated meal and rest period penalty compensation must be paid.
* Ensure that start and stop times for all meal periods are recorded in "ink or other indelible form" (unless all company operations cease during meal periods).
* Develop a program to systematically review compliance with the policy.
* Consider having employees sign a written acknowledgement that they understand the requirements of the company policy and post the policy near employee time clocks and where other such postings are made.
* Consider obtaining written meal period waiver agreements where such agreements are permitted.
* If you are using a so-called "on-duty meal period" agreement, be sure to have the agreement reviewed by counsel to insure compliance with the state's strict requirements.
We would be pleased to assist your company in performing a comprehensive wage-hour compliance audit. For more information, call us today at (818) 508-3700, or visit us on the web, at www.brgslaw.com.
If you have any questions about the posting requirement, or wish other information about the company's rights and obligations when it comes to union organizing, please contact Ken Ballard, Rich Rosenberg, Matt Wakefield or any of the other lawyers in the firm.
Sincerely,
Richard S. Rosenberg
Partner
BRG&S, LLP
Meal Periods. The California Labor Code requires employers to "provide" a 30 minute uninterrupted meal period to any employee who works a shift lasting five or more hours. The Supreme Court's ruling gives a common-sense meaning to the term "provide" that is more favorable to employers than what the plaintiff's bar wanted, but not quite as employer-friendly as the Court of Appeal's original ruling in July 2008.
Here is what the Supreme Court ruled on meal breaks:
* The employer is obligated to relieve each employee of all work duties during the uninterrupted 30 minute meal break.
* The employee must be free to use the meal period "for whatever purpose he or she desires." In particular, the employer must be allowed to leave the premises during the meal period if he or she wishes.
* The employer is not required to "police" its employees to ensure that they actually perform no work during the meal period.
* However, if the employer "knew or reasonably should have known that the worker was working through the authorized meal period," then the employer must pay the employee for all work performed, and also is liable for penalties under the Labor Code.
* The court declared that "an employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks," or even by encouraging employees to work through their breaks. On the other hand, "employees cannot manipulate the flexibility granted them by employers to use their breaks as they see fit" to "generate" employer liability.
* The court cautioned that the details on how employers may comply with their duty to provide a 30 minute uninterrupted meal break "may vary from industry to industry." The court declined to list "the full range of approaches that in each instance might be sufficient to satisfy the law."
* Employers continue to have three choices if an employee works more than five hours on a shift: (a) give the employee an uninterrupted meal break, free from all work, starting before the employee's sixth hour of work; (b) consent to a mutual waiver of the meal break, but only if the shift does not exceed six hours; or (c) obtain a written agreement for a so-called "on-duty meal period" if the stringent guidelines for such agreements are met.
* The employer also must provide "a second meal period no later than the end of an employee's tenth hour of work," absent a valid and mutual waiver for shifts of twelve hours or less.
* In Brinker Restaurant, the plaintiffs claimed the employer had an "early lunching" practice that resulted in employees working more than five hours after their first meal break. However, the court ruled employers are not required to provide a "rolling" meal break five hours after an employee's first meal break, unless the employee works more than ten hours and does not waive the second meal break.
Rest Periods. Wage Order 5 requires every employer to "authorize and permit all employees to take rest periods, which ... shall be in the middle of each work period" if possible. Employees must be allowed ten minutes of rest for every four hours "or major fraction thereof."
Here is how the court interpreted the Wage Order on rest periods:
* "Major fraction" means more than one-half. Accordingly, every employee who works at least 3½ hours is entitled to at least one ten-minute rest break. An employee is entitled to a second rest break for shifts over six hours, a third rest break for shifts over ten hours, "and so on." The Supreme Court rejected the Court of Appeal's interpretation, which only required a second rest break for shifts of at least 7½ hours.
* An employer is not required to give the first rest break before the first meal break. Instead, the employer must made a good-faith effort to give the rest break in the middle of the work period, if practical to do so.
* Generally, for shifts of eight hours, one rest break should be before the meal break and one after. However, this may vary depending on the duration of shifts and other factors.
Class Actions. Brinker Restaurant is a class action lawsuit. The trial judge certified three different subclasses, based on the plaintiffs' claims for (1) rest period violations, (2) meal period violations, and (3) "off-the-clock" work.
The Supreme Court's decision did not end the case, but only decided whether it was appropriate for the trial judge to certify all or part of the case for class action treatment. Here is how the court ruled on the class action issues:
* The court upheld the trial judge's certification of the rest period class. Brinker Restaurant admitted it had a uniform policy on rest breaks. The court found that this policy violated the Wage Order because it did not provide employees with two rest breaks for all shifts over six hours.
* However, the certification of the meal break class was based in part on the incorrect assumption that meal breaks are required after every five hours of work. This makes the class definition overbroad, because it may include employees who were not denied their required meal breaks. The Supreme Court sent the case back down to the trial judge to reconsider whether or not the meal break class should be certified.
* The Supreme Court rejected the trial judge's certification of the "off-the-clock" class, which pertained to work performed by employees during their meal breaks. The court found that "for this claim neither a common policy nor a common method of proof is apparent," at least one of which must exist for class action treatment to be proper.
* Because Brinker Restaurant's employees are clocked out during lunch, this "creates a presumption they are doing no work." The plaintiffs must prove that they were, in fact, working during lunch, and that the employer "knew or should have known off-the-clock work was occurring." But the plaintiffs only had individual, case-by-case evidence of this, which is not enough to justify certifying a class on the off-the-clock claim.
What does this mean to you? For employers, the best thing about the Brinker Restaurant decision is the Supreme Court's interpretation of the meal break requirement. Employers can breathe a sigh of relief that they need not actively police employees to prevent them from working during meal breaks. However, the decision also makes clear that employers are liable if they knew or should have known that employees were working during meal breaks.
In addition, the Supreme Court gave the "green light" for California employers to schedule their employees' meal periods for early in the shift, without being required to give them a second meal period for shifts of ten hours or less.
The Brinker Restaurant decision also is helpful to employers on class action issues. In particular, the court's rejection of class certification on the "off-the-clock" claim may assist employers in defeating future class claims - especially where there is no evidence the employer has a policy or practice that violates the wage-hour laws.
The overall impact of Brinker Restaurant should become more clear as lower courts seek to interpret and clarify the ruling. In the meantime, employers must remain vigilant in complying with California's stringent wage-hour laws. At a minimum, we recommend that employers do the following:
* Create and disseminate a lawful meal and rest period policy.
* Train managers on the meaning of the policy and the circumstances under which the state mandated meal and rest period penalty compensation must be paid.
* Ensure that start and stop times for all meal periods are recorded in "ink or other indelible form" (unless all company operations cease during meal periods).
* Develop a program to systematically review compliance with the policy.
* Consider having employees sign a written acknowledgement that they understand the requirements of the company policy and post the policy near employee time clocks and where other such postings are made.
* Consider obtaining written meal period waiver agreements where such agreements are permitted.
* If you are using a so-called "on-duty meal period" agreement, be sure to have the agreement reviewed by counsel to insure compliance with the state's strict requirements.
We would be pleased to assist your company in performing a comprehensive wage-hour compliance audit. For more information, call us today at (818) 508-3700, or visit us on the web, at www.brgslaw.com.
