Employers Prevail on Duty to Provide Meal Periods; Mostly Good on Certification

“We will decide no case before its time.” Alright, that’s not really the California Supreme Court’s motto, but it certainly did take its time deciding the Brinker case. During the three and a half years the case was pending before the state Supreme Court, neither employers nor claimants could say what an employer’s meal period obligations might be or how to prove them. Likely hundreds of millions of dollars changed hands in settlement given the uncertainty of the law.

By way of background, California employers are required to “provide” meal and rest periods for their non-exempt employees within a certain number of hours. Cal. Labor Code §§ 226.7, 512. To oversimplify, the employer must provide a 10-minute paid rest period for every 4 hours of work (or major fraction), and an unpaid 30-minute meal period for every 5 hours of work. California also penalizes employers for one hour of pay per type of violation per day if they fail to follow the law. The rest period requirement has generally not been the center of controversy, because courts quickly concluded that the employer need only make such breaks available. The question, however, has been whether employers need only make meal periods available, or whether they must actually force (or less threateningly “ensure”) employees to actually take them.

In 2005, one California appellate court appeared to say that the employer had an affirmative duty to make sure that the employees actually took their meal periods. See Cicairos v. Summit Logistics, Inc., 133 Cal. App. 4th 949, 35 Cal. Rptr. 3d 243 (2005). Federal district courts quickly distinguished Cicairos and read California law to mean that the employer has no affirmative duty to require employees to take such breaks. See, e.g., White v. Starbucks Corp., 497 F. Supp. 2d 1080 (C.D. Cal. 2007); Brown v. Federal Express Corp., 249 F.R.D. 580 (C.D. Cal 2008).

Meanwhile, the California appellate courts split on the issue when a different appellate district decided the case of Brinker Restaurant Corp. v. Superior Court, 2007 WL 2965604 (Ct. App. Oct. 12, 2007). If you’re counting, that is precisely four years and six months ago. The trial court in Brinker had construed the law to require the employer to ensure that meal periods were actually taken. It certified classes for rest periods, meal periods, and for so-called “off the clock” time. The court of appeals reversed, however, finding that the employer need only make meal periods available and also concluding that the classes had not been properly certified. In October, 2008, the California Supreme Court accepted review.

While the case was sitting (OK, if you want to be polite, you can say “pending”), class action lawsuits alleging meal period violations continued to be filed. A number of cases were stayed pending the decision in Brinker. See, e.g., Iniguez v. Evergreen Aviation Ground Logistics Enterprise, Inc., 2009 WL 3157420 (C.D. Cal. Sept. 25, 2009). Others were resolved on other grounds, such as, in cases affecting the trucking industry, preemption under the Federal Aviation Administration Authorization Act (“FAAAA”). See Dilts v. Penske Logistics LLC, No. 08-cv-318, 2011 U.S. Dist. LEXIS 1224221 at *15 (C.D. Cal. Oct. 19, 2011). Countless claims settled given the long time the Brinker case was undecided, the uncertainty of the ultimate ruling, and (for employers) the escalating potential risk while the cases were pending.

Today the California Supreme Court announced its holding in Brinker. Was it worth the wait? Well . . . Yes.

The 53-page decision addresses a host of issues, including rest periods, meal periods, whether the court should consider the merits of a case on certification, as well as others. For the most part, employers prevailed on the important substantive aspects of the case, but the certification parts of the order are more mixed. Commentators and parties will likely quibble over this lengthy opinion for years, but the key points appear to be:

1. Duty to Provide Meal Periods. Employers do not need to ensure that employees are actually taking their meal periods, and are not even liable if they are aware that the employees are working through them so long as they have provided a meaningful opportunity to make them freely available. In the words of the Court:

To summarize: An employer’s duty with respect to meal breaks under both section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.

The employer may however be liable for straight pay if it “knew or reasonably should have known that the worker was working through the authorized meal period.”

2. No Bright-Line Test. There is no bright-line test for when the employer has satisfied its obligation to provide a meal period:

What will suffice may vary from industry to industry, and we cannot in the context of this class certification proceeding delineate the full range of approaches that in each instance might be sufficient to satisfy the law.

This is an issue that can lead to litigation, but may also make it more difficult to certify a class because the context may vary between different situations. (So it’s both good and bad for employers).

3. No “Rolling” Period for Meal Periods. The Court rejected a “rolling” time period urged by the plaintiffs that would have made it more difficult for employers to administer the law’s requirements and could have had devastating financial consequences if decided differently and retroactively applied

4. Courts Deciding Certification Can Peek at The Merits. The Court held that it should defer to the trial court’s decision to certify a class so long as it is supported by “substantial evidence.” More importantly, citing the United States Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), it held that the trial court may “properly evaluate” the merits of a case when “evidence or legal issues germane to the certification question bear as well on aspects of the merits.” This is generally a positive standard for employers as oftentimes the merits will demonstrate that certification is not appropriate. Similarly, it can also tip the court’s hand and signal that settlement may be appropriate if the claim is ultimately certified.

5. Computation of Number of Rest Periods. The Court adopted a somewhat more employee-friendly approach to rest periods than the employer urged for situations in which the employee worked more than four hours (or fraction thereof), but less than a multiple of four. The requirement of the Wage Order is of a 10-minute rest period for every four hours of work, and the employer argued that the right to a rest period did not accrue until the completion of a full multiple of 4 hours so that, for example, an employee working 7 hours would only have a right to a single rest period. Following the language of the Wage Order, the Court concluded that an employee working 3-1/2 hours or more was entitled to a 10-minute rest period both for the initial 4 hours and for any additional 4-hour segment in which the employee worked more than two hours. For example, an employee working 6 hours (4+2) is entitled to one rest period, an employee working more than 6 hours but up to 10 is entitled to two rest periods, one working more than 10 hours (4+4+2) to three rest periods, etc.

The Court, however, rejected broad timing arguments raised by the plaintiff that the rest period must come before a meal period. Still, it appeared to approve guidance from the Department of Labor Standards enforcement that “[a]s a general matter,” if there are two rest periods they should fall on either side of the meal period. For most employers this should not be a problem as that is how employees typically take their breaks, but it does leave open the problem of timing for atypical shifts.

6. Rest Period Class Could be Certified Due to Uniform Policy. In that light, the Court found that a rest period class had been properly certified in light of the company’s uniform policies that allegedly did not satisfy the employer’s obligations under these timing requirements. This is a positive for the employees, but leaves open the question of whether such a class could survive if the employer’s policies were in compliance with the California requirements.

7. Trial Court Must Revisit Meal Period Class. The Court largely punted on the issue of whether the meal period class should have been certified, finding that the trial court had improperly construed the law with respect to the need to ensure employees took their meal periods and how the time for such periods had been computed. It therefore remanded the case for further consideration under the correct standard.

8. “Off-the-Clock” Claim Should Not Have Been Certified. It found that no substantial evidence supported the existence of an “off-the-clock” class and therefore found that it should not have been satisfied. This is a very good aspect of the decision for employers because, as is true in most cases, it recognized that it would need to determine liability on an individual basis.

Overall, the Brinker decision is more good for employers than not. As to the most important issue, it adopted a more employer-friendly view of the meal period requirements. While the employees won a technical issue regarding the calculation of rest periods, for most employers this should not prove especially problematic. With regard to certification, the court did affirm certification given a uniform arguably non-compliant break policy, but did not issue broad pronouncements that such cases should be certified in the future and, in fact, found absent a uniform policy (as in the case of off the clock time) a claim should not be certified. This holding may prove especially important for employers in the future as it cuts into the heart of many wage and hour putative class claims.

The bottom line: Brinker has been decided. California employers need only make meal periods available for their employees. A class may be appropriate in the case of employers with uniform policies that do not comply with California law, but absent such a policy it may be difficult for plaintiffs to maintain a class claiming wage and hour violations.

Authorship credit: Greg Mersol, Margaret Rosenthal, Sabrina Shadi, Gil Brosky, and Jeff Vlasek