Third Circuit Adopts Predominant Benefit Test For Meal Periods, Leaving Ninth Circuit As Sole Holdout
The Third Circuit Court of Appeals recently joined the chorus of Circuits adopting the pro-employer “predominant benefit test” when weighing the compensability of meal periods under the Fair Labor Standards Act (“FLSA”). As a result, the Ninth Circuit is the lone Circuit to apply a different standard, opting to follow the U.S. Department of Labor regulations providing that an “employee must be completely relieved from duty” in order for a meal period to be deemed bona fide and thus not compensable.
In Babcock v. Butler County, a putative class action lawsuit, employees at the Butler County prison alleged that their employer required them to abide by certain restrictions beneficial to the employer during their one-hour meal periods, and that they were not paid for 15 minutes of the one-hour break, in violation of the FLSA. The issue before the Third Circuit was whether the 15 minutes was compensable under the FLSA. The Third Circuit covers the States of Delaware, New Jersey and Pennsylvania.
While there is no provision of the FLSA that directly addresses the issue, the regulations provide that bona fide meal periods are not work time, and that employees “must be completely relieved from duty for the purposes of eating regular meals … [and that an] employee is not relieved if he is required to perform any duties, whether active or inactive, while eating.” The courts, however, have generally avoided a literal reading of the regulations. Indeed, despite the “completely relieved from duty” language followed by the Ninth Circuit, the other Circuits, now including the Third, have taken the position that a meal period is compensable if an employee is performing activities predominantly for the benefit of the employer. This approach is derived from Supreme Court precedent from 1944 holding that “[w]hether time is spent predominantly for the employer’s benefit or for the employee’s is a question dependent upon all the circumstances of the case.” (Emphasis added.). As a result, the “predominant benefit test” is necessarily a fact-intensive inquiry.
Although the Third Circuit decision in Babcock was split, on appeal the parties and the justices agreed that applying the “predominant benefit test” was appropriate. In support of the argument that the meal period was spent predominantly for the benefit of the employer, the employees specifically claimed that, during the one-hour meal period, they were subject to the following restrictions: they were not permitted to leave the prison building (unless granted permission by the warden); they were required to remain in uniform; they were required to remain in close proximity to emergency response equipment; and they were required to respond to any emergencies.
While there were restrictions that clearly benefitted the employer, the District Court found, and the Third Circuit agreed, that the restrictions did not predominantly benefit the employer. Rather, under the totality of the circumstances, the employees enjoyed the predominant benefit of their uninterrupted hour-long meal period. Simply put, outside of the restrictions described above, the employees were free to comfortably and adequately spend their meal period how they wished, including eating away from their desks or seeking approval to leave the premises, without their time or attention devoted primarily to official responsibilities. Although deemed a relevant, but not dispositive, factor, the Third Circuit noted that the parties’ collective bargaining agreement set forth the terms of the one-hour meal period, including that the fifteen minutes would be unpaid.
Until the Supreme Court weighs in on the split between the Circuits, employers located in those states covered by the Ninth Circuit – Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington – will need to ensure that employees are provided a “completely relieved from duty” meal period, or risk being in violation of the FLSA. Employers located in any of the other states stand to benefit from the pro-employer “predominant benefit test,” which as evidenced by the decision in Babcock, permits employers to place some restrictions on employee meal periods, so long as the employees remain free to comfortably and adequately spend their meal period without primarily engaged in their official responsibilities. Note, the First Circuit, covering the States of Maine, Massachusetts, New Hampshire and Rhode Island, has not had an opportunity to establish a test to determine whether a meal period is compensable under the FLSA. However, the District Court in Massachusetts has had three opportunities, and adopted the “predominant benefits test.”