On Tuesday, November 8, 2011, the California Supreme Court heard oral argument in the long-awaited case of Brinker v. Superior Court (Sup. Ct. Case No. S166350). The case raised a variety of highly litigated and highly contested issues, including: (1) the scope of an employer's meal period obligations to employees; (2) the scope of an employer's rest period obligations to employees; and (3) whether a trial court must or may determine the elements of a plaintiff's claim before deciding whether the claim may proceed on a class-wide basis. While the oral argument briefly addressed issues (2) and (3), it is unsurprising that the bulk of argument pertained to question (1).
Based on the justices' questions, it appears that a majority of them are leaning towards the following holdings:
- that employers are not obligated to ensure that employees take
meal periods;
- however, employers have an affirmative obligation to make meal
periods available to employees, though what it may take to meet
that affirmative obligation is far from clear;
- Labor Code section 512, the statute entitling employees to meal
periods, sets a floor for employees' entitlement to meal
periods, and does not preclude the Wage Orders from providing more
generous meal period entitlements; and
- Section 11 of Wage Order 5-2001 contemplates that meal periods must be made available after every 5 consecutive hours, unless the waiver under Section 11(a) applies (this is often referred to as the "rolling 5-hour obligation," and comparable language appears in nearly all of the other Wage Orders). Rex Heinke of Akin Gump Strauss Hauer & Feld LLP argued for Respondents Brinker Restaurant Corporation, et al. ("Brinker"). Kimberly Kralowec of The Kralowec Law Group and Michael Rubin of Altshuler Berzon, LLP argued for Petitioner and Real Party in Interest Hohnbaum, et al. ("Hohnbaum").
Summary of Hohnbaum Argument
Argument by Kralowec
Almost immediately after Hohnbaum's argument began, Justice
Kennard asked whether it is Hohnbaum's position that the
different language regarding meal periods in Section 512 and Wage
Order 5 could be harmonized and, if they cannot be harmonized,
which should control. Hohnbaum responded that the two provisions
could be harmonized but, if the Court were to conclude otherwise,
Section 512 would not prevent the Wage Order from providing greater
protections to employees. In response to follow-up questions from
Justices Baxter and Chin, Hohnbaum argued that Labor Code section
226.7 was the most recently-enacted legislation addressing meal
periods, and it "specifically incorporated" the meal
period standards from the IWC Wage Orders, codifying those meal
period standards. Justice Kennard expressed some skepticism for
that position, to which Hohnbaum responded that the legislature
used the same word "provide" with respect to both meal
periods and rest breaks, which clearly have different standards.
This is evidence of the legislature's intention to use the word
"provide" as shorthand to codify the meal period and rest
break standards from the Wage Orders.
Chief Justice Cantil-Sakauye then asked whether IWC v. Superior
Court (1980) 27 Cal.3d 690 (holding in part that the IWC could
adopt more restrictive provisions than provided for in the Labor
Code) would affect the Court's interpretation of Section 512.
Hohnbaum responded (unsurprisingly) that IWC v. Superior
Court is consistent with the principle that the Labor Code
provides a "floor" for employee protections, but the IWC
may adopt more protective standards.
Justices Chin, Liu, Kennard, Baxter, and Corrigan then challenged
Hohnbaum directly on the "ensure" standard advocated by
Petitioner. Their questions focused on whether an employer is
really required to discipline and pay an employee who willfully
works through a meal period of his or her own free will, just
because he or she wants to. They also questioned the practicality
of requiring employers to enforce meal periods, and whether an
employee who is completely free from the employer's control for
a full 30 minutes and chooses to work, would still have been
provided a meal period. Justice Kennard also referenced the number
of Court of Appeal decisions and Federal District Court decisions
that rejected the ensure standard. Hohnbaum's attorney fell
back on familiar arguments: (1) that the Wage Order prohibits an
employee from "employ[ing]" a person for a work period of
more than 5 hours without a meal period of at least 30 minutes,
which incorporates the "suffer or permit to work"
definition of "employ;" (2) that employers are obligated
to pay and, if they choose, discipline employees who work
unauthorized overtime against the employer's instructions; (3)
that the IWC allegedly determined that an ensure standard is
necessary because, without it, employers will deny meal periods;
and (4) allowing an employee to voluntarily decide not to take a
meal period would render the waiver language in Section 11 of Wage
Order 5-2001 surplussage. In a final exchange on this issue,
Hohnbaum's attorney attempted to dodge questions from Justice
Corrigan about whether it is really Hohnbaum's position that an
employer's only recourse is to discipline an employee who
freely and voluntarily chose to work through a meal period even
though the employer told the employee to take it. Hohnbaum finally
admitted that it was, and that such willful disobeyance would
constitute insubordination like a failure to comply with any other
company policy.
Argument by Rubin
Rubin addressed Hohnbaum's class certification contentions
on appeal. Specifically, he began by arguing that at least some of
Hohnbaum's claims (such as time shaving and failure to require
a meal period every five hours) were amenable to class
certification because they could be determined with reference to
time records. In an exchange with Justice Liu, Hohnbaum admitted
that time records could not be used to test the rest period claim,
because an employer does not have an obligation to maintain
accurate records of rest periods taken. In the course of this
exchange, Hohnbaum conceded that the employer's obligation with
respect to rest periods is merely to make them available, not
ensure that they are taken.
Hohnbaum went on to argue, however, that there was undisputed
evidence in the record that Brinker dissuaded employees from taking
rest periods on a class-wide basis. Although Hohnbaum admitted that
Brinker had a rest period policy since at least 2005, he argued
that the policy did not comply with Wage Order 5-2001. Justice
Werdegar asked whether that wasn't enough on its own to support
certification. Hohnbaum said that it would be. He went on to argue
that the only reason Brinker identified for employees choosing to
work through rest breaks was that they wanted to keep working to
get their tips. Because Brinker does not pool tips, Hohnbaum said
that employees who were on break when tips were paid did not
receive any share of the tips paid, even though they performed
substantial work while not on break. Hohnbaum asserted that this
policy effectively penalized employees for taking rest breaks by
denying them tips to which they were entitled. Justice Corrigan
asked whether Hohnbaum believed that employers were therefore
required to implement tip pooling policies or else run afoul of
rest break obligations. Hohnbaum back-peddled a bit, and shifted
focus to other alleged failures by Brinker to ever pay an employee
for a missed rest break or conduct any compliance monitoring.
Justice Baxter asked whether it wouldn't be sufficient to
certify the rest period class based on the allegedly common policy
of denying employees a second rest period in an 8 hour workday.
Hohnbaum said that was part of it, but he again returned to other
rest period theories including the tip issue. Justice Liu
interjected and asked why employers are not allowed to structure
tip compensation policies in any reasonable manner. Hohnbaum
responded that they may do so, and he was not asking the Court to
adjudicate the merits of Brinker's tip policy at this time.
Nevertheless, he asserted that in "one narrow
circumstance," a tip policy may violate meal period and rest
break laws where the employer does not give any portion of a tip to
an employee who performed work toward the tip, but was on break
when the tip was given. Justice Liu agreed that such a policy would
"maybe pressure" employees not to take rest breaks, but
those employees would nevertheless be collecting tips for other
employees who were on break, so asked why such a policy would be
unlawful. Hohnbaum concluded by saying that the policy was unlawful
because it impeded employees from taking rest breaks, and that it
was at least one factor that should be taken into account when
considering whether Brinker had a common policy of denying rest
breaks.
Summary of Brinker Argument
Justice Kennard opened up Respondent's argument by asking
whether Brinker believed the word "provide" to be as
important to the meal period analysis as the Court of Appeal did.
Brinker responded that the statutory language was critical, as it
was adopted by the legislature four times, twice in Section 512 and
twice in Section 226.7. Kennard asked why Brinker did not agree
that the term "provide" includes an affirmative
obligation with respect to meal periods. Brinker clarified that
"provide" does impose an affirmative obligation, but the
obligation is just to make meal periods available, not ensure that
they are taken. Kennard then quoted at length from a portion of the
DLSE's amicus brief regarding the IWC's amendments to the
2001 Wage Orders, discussing the need for flexibility in scheduling
meal periods, and asked Brinker whether it agreed with the
DLSE's analysis. Brinker said that the amendments were intended
to toughen up meal period obligations by creating premium payments
for violations, but that the amendments were also intended to
create flexibility regarding the realities of the modern economy,
so Brinker agrees with the DLSE's position on that issue.
In response to questions from Justice Baxter, Brinker said that it
could not be determined whether those meal period amendments were
in response to the legislature's passage of Labor Code section
512, or whether it was the IWC's intention to mirror the
language of Section 512.
Justice Werdegar then interrupted and asked whether the meal period
analysis was affected by the Wage Order's language that
"[u]nless an employee is relieved of all duty ... the meal
period shall be considered an 'on duty' meal period,"
and what an employer must therefore do to provide a meal period.
Brinker responded that the on duty language means that an employer
must tell employees that they do not have to work during a meal
period, but that there is no language in the statutes or in the
Wage Order that an employer must force employees to do no work
during a meal period. Justices Werdegar and Liu asked follow-up
questions on that issue, to which Brinker responded by clarifying
its position that an employer must affirmatively relieve an
employee of all duty, which would include arranging a work day such
than an employee could have a 30 minute meal period "without
work piling up" in the employee's absence. Justice Kennard
finished up this section by "asking" whether it is
Brinker's position that the fight is about whether there is any
flexibility in the meal period laws; that Hohnbaum's position
is that there is not, and that an employee must stop all work at
the end of five hours, even if a nurse is providing life-sustaining
treatment to a patient, or else the employer must pay the premium.
Brinker agreed.
The discussion then turned to the "rolling five hour"
issue in a series of exchanges between Brinker and Justices Baxter,
Liu, Werdegar, and Chief Justice Cantil-Sakauye. These exchanges
focused on Brinker's contention that: Section 11(a) of Wage
Order 5 does not refer to a "consecutive" 5 hours of
work; the IWC knew how to write a provision that referred to a
consecutive five hours of work (discussing Section 11(a) of Wage
Order 12 and prior language in Section 11 of Wage Order 5); and the
Chief Justice's extended quote from minutes of a meeting of the
IWC in 1952 discussing the first use of the current language in
which the IWC says that the purpose was to prevent an employer from
requiring an employee to work more than 5 hours without a meal
period.
Brinker admitted in response to questions from Justice Werdegar
that Section 512 discussed the number of meal periods per day, but
not the timing of those meal periods. Justice Werdegar asked
whether that did not then leave the timing of meal periods up to
the IWC. Brinker said that it did, and the IWC knew how to control
timing when it wanted. Justice Werdegar referred to the 1952
minutes quoted by the Chief Justice. Brinker discounted those
minutes by arguing that the intent discussed in the minutes is not
actually reflected in the Wage Order language. Werdegar asked
whether Hohnbaum's position is not at least arguably correct
based on the language of the Wage Order. Brinker said no, and noted
that the IWC amended the meal period language in 1947 to adopt
express language regarding meal periods after consecutive hours of
work, then changed the language in 1952 to its current form, which
should be read as an express rejection of the rolling five hour
interpretation.
Justice Liu then challenged Brinker on the following language in
Section 11(a) of Wage Order 5: "No employer shall employ any
person for a work period of more than five (5) hours without a meal
period of not less than 30 minutes, except that when a work period
of not more than six (6) hours will complete the day's work
the meal period may be waived by mutual consent of the employer and
employee." In a pointed exchange, Liu strongly implied that he
reads that language as unambiguously saying that an employee is
entitled to a meal period after each five hour work period, because
an alternate reading would render "except that when..."
language surplussage. Liu offered the example of an employee who
worked from 9:00a - 12:00p, then from 12:30p - 6:30p, asking
whether the employee worked "for a work period of more than
five hours" during the 12:30p - 6:30p portion that would have
triggered the meal period obligation. Without waiting for an
answer, Liu went on to say that the IWC's intent was "made
absolutely clear" by the "except that when..."
clause, which might be applicable in his example. Brinker responded
by again arguing the IWC's legislative history, to which Liu
responded by asking whether it was necessary to review legislative
history when the regulatory language is unambiguous. Brinker said
that Section 512 was a clear expression of the legislature's
intent, to which Liu responded by again asking whether Section 512
might just be a "baseline" protection.
Before Brinker could respond, Justice Chin changed topics and asked
Brinker whether it was necessary for the trial court to consider
the elements of Hohnbaum's claims as part of deciding class
certification. Brinker said that it was required to do so under
applicable law, and any argument to the contrary is irrelevant
given that Hohnbaum asked the trial court to address the issue as
part of the class certification ruling.
Justice Baxter then asked whether, given the uncertainty of the law
regarding the merits of Hohnbaum's claims, a decision in this
case could be prospective only. Brinker's attorney said that he
was not prepared to respond, because he had not researched or
analyzed that issue. Chief Justice Cantil-Sakauye noted that the
Court's practice has been to apply clarifications of law
retroactively, and she asked whether Brinker considered the
Court's decision on these issues to be clarifications of the
law. Brinker said that it did.
Hohnbaum's Rebuttal (by Kralowec)
Hohnbaum began by asserting that, if the Wage Order did not
control the timing of meal periods, an employee could be made to
take an early lunch, then required to work for another 9 hours
without being entitled to a second meal period. Moreover, employers
have a number of ways to comply with a rolling five hour meal
period obligation, including by scheduling a meal period anytime
between the 3rd and 5th hours of work during an 8-hour workday; by
ending a shift after 5 hours; by paying the premium; or (in
response to a question by Justice Werdegar) by mutual waiver if the
conditions are met.
Justice Corrigan asked Hohnbaum to respond to Brinker's
contention that the IWC knew how to say that it wanted to impose a
"consecutive hours of work" standard. Hohnbaum noted that
the 1952 amendment implemented the term "work period,"
which Hohnbaum asserted is a term of art that incorporates the
notion of consecutive hours. Hohnbaum also asserted that the
specific language used in Wage Order 12 was used by the IWC to
address a specific issue in the motion picture industry, and is
therefore not comparable.
Conclusions
As discussed above, a majority of the justices seemed hostile to
the idea that employers would be required to force employees to
take meal periods. However, it appears highly likely that the Court
will at least conclude that employers have an affirmative
obligation to do something to make off-duty meal periods available
to employees. It is unclear what the scope of that affirmative
obligation will be, but employers should, at a bare minimum,
implement legally-compliant meal and rest policies if they have not
done so already.
A majority of the Court also seemed inclined to find that the Wage
Orders require a rolling five hour meal period, which is a more
protective standard than what is required by Section 512. Although
not all of the Justices asked questions on the issue, the Court did
not challenge Hohnbaum very strongly on his position that the Wage
Orders may provide for greater meal period entitlements than are
afforded under Section 512.
Given the lack of significant discussion on the scope of rest
period obligations, or the class certification issues, it is
difficult to predict how the Court will come down on these
issues.
The most troubling exchanges from an employer's perspectives
may be the ones discussing: (1) whether the Court's ruling will
be retroactively applicable (which may not become part of the
Court's ruling); (2) whether the obligation to provide meal
periods may include an obligation to arrange the work day such than
an employee could have a 30 minute meal period "without work
piling up" in the employee's absence; and (3) whether
Brinker's failure to provide for tip pooling could be evidence
of a policy of discouraging breaks.
Now that the case has been submitted, the California Supreme
Court's deadline to issue a decision is February 7, 2012. All
employers with employees in California should stay tuned, though,
because the decision could be issued before that deadline.
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.
