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September 29, 2014

California Supreme Court Issues Employer-Friendly Decision On Employee Breaks and Class Status

The California Supreme Court has recently issued its much-awaited decision in Brinker Restaurant Corp. v. Superior Court. The Brinker decision was a rare "win" for employers in California and gave important guidance to employers regarding meal breaks, rest periods and class certification:

  • Meal breaks. Employers must "provide" meal breaks to employees during which the employee is relieved of all duty, leaving the employees to use the period however they desire. Importantly, the Court opined—counter to some lower-court decisions and the opinion of the California Division of Labor Standards Enforcement (DLSE)—that employers need not ensure that no work is done. Additionally, the Court found that a first meal period must fall after no more than five hours of work and a second meal period after no more than 10 hours of work, and that an employer need not schedule the meal periods at five-hour intervals throughout the shift.
  • Rest periods. Employees are entitled to 10 minutes of rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, and 30 minutes for shifts of more than 10 hours up to 14 hours.
  • Class certification. A class action may proceed if an employer's policy violates the law. But a class action may not proceed on claims that require proof of violations on an employee-by-employee basis.

In light of these decisions, employers—including out-of-state employers with employees working in California—are advised to review their meal and rest break policies to ensure they comply with the California Supreme Court ruling and are properly implemented and followed.

Background of the Brinker Case

A class action lawsuit was brought on behalf of the hourly employees of the Brinker Restaurant Corporation. The plaintiffs claimed that Brinker had violated state law requiring employers to provide meal periods and rest periods to nonexempt employees during the workday, under Labor Code sections 226.7 and 512, and certain Industrial Welfare Commission (IWC) wage orders.1

The plaintiffs claimed that Brinker (1) failed to provide rest periods to employees, (2) failed to provide meal breaks to employees, and (3) required employees to work off the clock during meal breaks by altering employee time records to misreport the amount of time worked and break time taken.

The trial court certified the class, a decision that was reversed by the appellate court. The California Supreme Court accepted review and agreed to resolve the substantial uncertainty and contradictory lower court decisions over employers' rest and meal period obligations and the suitability of such claims for class treatment.

Rest Periods

The Court found that under California law employees need only have a 10-minute rest period available for each four hours of work "or major fraction thereof." The Court rejected the plaintiffs' assertion that employers have a legal duty to permit their employees a rest period before any meal break. The Court reasoned that "[n]either text [of the applicable Labor Code sections and the IWC Wage Order] nor logic dictates an order for [meal breaks and rest periods], nor does anything in the policies underlying the wage and hour laws compel the conclusion that a rest break at the two-hour mark and a meal break at the four-hour mark of such a shift is lawful, while the reverse, a meal break at the two-hour mark and a rest break at the four-hour mark, is per se illegal."

Despite this victory for Brinker (and California employers), the Court then found that employees who claimed they had worked one or more work periods in excess of 3.5 hours without receiving a 10-minute break could proceed as a class, because Brinker had adopted a common, uniform corporate rest break policy equally applicable to all employees. This was sufficient for class treatment.

Meal Breaks

Consistent with the DLSE's position and certain lower-court decisions, the plaintiffs contended that employers must "ensure that work stops for the required thirty minutes," rather than merely provide such a break to be taken at the employees' option. The Court disagreed with the plaintiffs and concluded that the employer need only provide an uninterrupted 30-minute break free from work, but the employer must not impede or discourage employees from taking such a break. With respect to the timing of meal breaks, the Court found that the only requirement is that the employer provide a first meal period no later than the end of an employee's fifth hour of work, and a second meal period no later than the end of an employee's 10th hour of work. In doing so, the Court rejected the "rolling-5 rule," in which a meal break must be given after every five consecutive hours of work.

In the concurrence, the Court reiterated that employers have both the duty to provide meal breaks and to record their having done so. As a result, even though employers are not required to police whether employees actually take a meal break (and whether the employee works during the break), they still need to keep an accurate record of whether breaks were taken. Accordingly, employers should have policies requiring employees to punch in and out for meal breaks.

Class Certification for "Off-The-Clock Work"

The Court held that class treatment of those employees who allegedly were required to perform work while clocked out during their meal breaks was inappropriate as "neither a common policy nor a common method of proof [was] apparent." Importantly, the Court noted that the plaintiffs had failed to produce "substantial evidence of a systematic company policy to pressure or require employees to work off the clock." Moreover, the Court found that clocked-out employees are presumed to be doing no work; thus, in order to recover, the employees must prove that Brinker knew or should have known that off-the-clock work was occurring.

Employer Action Points

The Brinker decision clarifies the law with respect to meal breaks and rest periods in a manner that is relatively "employer friendly." Despite this, California law still poses significant risks to California employers with regard to lawsuits (class action or otherwise) regarding rest and meal-period violations. In order to minimize these risks, we recommend that employers with California employees do the following:

  • Review written policies to ensure compliance with the law (i.e., policies should contain a clear statement that employees are provided with, and are expected to take, rest breaks and meal periods, and are not to work "off the clock").
  • Document the fact that all existing and incoming employees are provided with the above policies (e.g., by using a signed employee acknowledgement).
  • Ensure that managers provide rest breaks and meal periods to employees, and obtain the proper documentation of the meal periods.
  • Adopt and enforce policies requiring employees to punch out for meal periods, and retain those records as you would any other wage-and-hour records.
  • Confirm that exempt employees have been appropriately classified to avoid a claim that meal and rest periods should have been, but were not, provided properly or at all.
© 2014 Much Shelist, P.C.

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Much Shelist is a full-service business law firm based in Chicago. Since our founding in 1970, and as we have grown to approximately 85 attorneys, we have nurtured a collaborative culture that emphasizes sophisticated, senior-level attention to client matters, combined with a collegial, creative atmosphere that allows us to deliver the highest level of service to every client. In addition, we are firmly committed to remaining independent, thus creating an environment of stability for our clients and our attorneys.

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