James Michalski is Senior Counsel and Linda Auerbach Allerdice a Partner in our Los Angeles office
As indicated in our alert last week, in a unanimous opinion filed on April 12, 2012, the California Supreme Court answered significant questions as to California employers' obligations to provide meal and rest periods to their non-exempt employees and the circumstances under which claims alleging that the employer violated these requirements can be litigated on a class basis. Brinker Restaurant Corp. v. Superior Court (Hohenbaum), No. S166350, 2012 WL 1216356.1
- Regarding meal periods, the court said employers must relieve their employees of all duty, leaving the employees to use the period however they desire. It also said, however, that employers need not ensure that no work is done. The court further concluded 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.2
- With respect to rest periods, the court held that: "Employees are entitled to 10 minutes 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, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on."3
- Concerning class certification, the court ruled that a claim that an employer's policy violates the law will generally be suitable for class treatment, while claims that require proof of violations on an employee-by-employee basis will not.
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
Brinker Restaurant Corporation and several related entities ("Brinker") own and operate restaurants throughout California, including Chili's Grill & Bar and Maggiano's Little Italy. The name plaintiffs in the litigation are or were hourly nonexempt employees at one or more of Brinker's restaurants. State law obligates employers to provide nonexempt employees meal periods and rest periods during the workday under Labor Code sections 226.7 and 512, and Industrial Welfare Commission (IWC) wage order No. 5–2001 (Wage Order No. 5). Wage Order No. 5 covers restaurants but other wage orders cover other industries with similar rest and meal period provisions.
Hohnbaum and the other named plaintiffs ("Hohnbaum") filed a putative class action seeking to represent hourly employees who staff Brinker's restaurants. Hohnbaum claimed that Brinker: (1) failed to provide employees rest breaks, or premium wages in lieu of them; (2) failed to provide employees meal breaks, or premium wages in lieu of them, and (3) required employees to work off-the-clock during meal periods and unlawfully altered employee time records to misreport the amount of time worked and break time taken.4 The putative class consisted of hourly employees who staff Brinker's restaurant, with three subclasses pertinent to the three claims.5 In the course of litigation, two distinct theories underlying the meal break claim emerged: (1) Brinker provided employees fewer meal periods than required by the Labor Code and Wage Order No. 5; and (2) Brinker sometimes required "early lunching," a single meal period soon after the beginning of a work shift followed by six, seven, eight, or more hours without an additional meal period.6
After the trial court certified three classes of employees alleging that Brinker had failed to provide meal and rest periods in the number and at the times required by state law, the court of appeal reversed and ordered each subclass vacated. The California Supreme Court accepted review and agreed to resolve lingering uncertainty over employers' rest and meal period obligations and the suitability of such claims for class treatment.7
Rest Periods
In reviewing the trial court's certification of a rest period subclass, the court addressed two threshold legal issues: the amount of rest time that must be authorized, and the timing of any rest periods.8 The court found the text of Wage Order No. 5, subdivision 12(A)'s second sentence, dispositive: employees receive 10 minutes for each four hours of work "or major fraction thereof."9 The court also considered the impact of the wage order's additional proviso on rest periods that "a rest period need not be authorized for employees whose total daily work time is less than three and one-half (3 1/2) hours."10 In harmonizing the two rules, the court held "[t]he combined effect of the two pertinent sentences, giving full effect to each, is this: Employees are entitled to 10 minutes 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, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on."11
As to the timing, or scheduling, of the rest period, the court rejected Hohnbaum's assertion that employers have a legal duty to permit their employees a rest period before any meal period.12 The court used the example of an employee working a six-hour shift to show the lack of legal support for Hohnbaum's claim. In that scenario, the employee is entitled (absent a waiver) to a meal period and a single rest period. As the court explained "either the rest period must fall before the meal period or it must fall after." The court then found that "[n]either text nor logic dictates an order for these, 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."13
The court then found the rest period subclass, i.e., employees who worked one or more work periods in excess of 3.5 hours without receiving a 10-minute break, amenable to class treatment.14 Although Hohnbaum presented many theories of liability, the court found critical that Brinker had adopted a common, uniform corporate rest break policy equally applicable to all employees. This was sufficient. Claims alleging a uniform policy consistently applied to a group of employees are of the sort "routinely, and properly, found suitable for class treatment."15
Meal Periods
In reviewing the trial court's certification of a meal period subclass, the court again addressed two threshold legal issues: the nature of an employer's duty to provide employees with meal periods, and the timing applicable to the provision of meal periods.16 The first issue involved the extent to which the employer has to police the conduct of its employees during a meal break. Hohnbaum argued that an employer must "ensure that work stops for the required thirty minutes," whereas Brinker contended an employer is obligated only to "make available" meal periods, with no responsibility for whether they are taken.17 The court concluded that the employer need only provide an uninterrupted 30-minute break free from work, and it must not impede or discourage employees from taking such a break.18 But "the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer's obligations[.]"19
As to timing, the court ruled that California law requires (absent a waiver) "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."20 There are no additional timing requirements.21 Specifically, the court squarely refused to require "a second meal period no later than five hours after the end of the first meal period if a shift is to continue."22 This rejected the so-called "rolling-5 rule," which, as some plaintiffs had advocated in earlier cases, posited that a meal period must occur after every five consecutive hours of work.
Last, the court directed the lower courts to reconsider whether a meal period subclass could be certified because its "substantive rulings" in the case (as solicited by the parties) had "changed the landscape" on the timing of meal periods. Specifically, the subclass defined as "Class Members who worked one or more work periods in excess of five (5) consecutive hours, without receiving a thirty (30) minute meal period" improperly included "individuals who now have no claim against Brinker," i.e., it could include some employees who may only be making a claim because Brinker did not provide a second meal period within five hours of the first one.23
Off–the-Clock Work Class Certification
The court then ruled that class treatment of those employees who allegedly were required to perform work while clocked out during their meal periods was inappropriate as "neither a common policy nor a common method of proof [was] apparent."24 Hohnbaum presented no "substantial evidence of a systematic company policy to pressure or require employees to work off the clock."25 Moreover, clocked-out employees are presumed to be doing no work; the employees must prove that Brinker knew or should have known that off-the-clock work was occurring to recover. Nothing before the trial court demonstrated how this could be shown through common proof.26 Thus, the court of appeal properly vacated certification of this subclass.27
Obligation to Record Meal Periods
Significantly, Justice Kathryn M. Werdegar's concurring
opinion emphasized that employers have both the duty to provide
non-exempt employees meal periods and to record their
having done so.28 Thus, the court's ruling that
employers need not police what employees do during meal periods
does not eliminate the need for employers to have employees record
the "in" and "out" times for the meal
period(s). Employers should adopt and enforce policies requiring
employees to punch out for meal periods and keep those records as
they would keep any other wage and hour records.
Steps Employers Should Take
In light of these holdings, to limit the risk of lawsuits over rest and meal period violations, the following best practices are noted:
- Review written policies to ensure they state that employees are provided with, and are expected to take, rest breaks and meal periods in compliance with the California Labor Code and applicable Wage Orders, and are not to work "off the clock."
- Disseminate the written meal period and rest break policies to all new employees.
- Train managers on the necessity of providing rest breaks and meal periods to employees, and the need for 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; disseminate information regarding the proper steps for documenting (recording) meal periods.
- Document these steps and have employees sign an acknowledgement of receipt of these policies and instructions.
- Republish the policies on a regular basis to all employees.
- Confirm that exempt employees have been appropriately classified to avoid a claim that meal and rest periods should have been but were not properly provided at all.
The landmark Brinker opinion provides myriad substantive wage and hour rules to apply in the workplace.
Holland & Knight's labor and employment law counsel can assist your business in implementing these new standards or answer questions posed by these developments. We can also review existing policies your company might have for compliance with the IWC wage orders and the California Labor Code.
Footnotes
1. At *1.
2. 2012 WL 1215356 at *1.
3. Id. at *10.
4. Id. at *2.
5. Id. at *3.
6. Id. at *2.
7. Id. at *4.
8. Id. at *9.
9. Id.
10. Id.
11. Id. at *10.
12. Id. at *11.
13. Id.
14. Id. at *12.
15. Id. at *13.
16. Id. at *14.
17. Id. at *14.
18. Id. at *18.
19. Id.
20. Id. at *22.
21. Id.
22. Id. at *20.
23. Id. at *25.
24. Id. at *26.
25. Id.
26. Id.
27. Id.
28. Id.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
