It turns out the lunch really is free.
With low-hanging fruit like claimed misclassification of low-level supervisors already plucked, plaintiffs increasingly turn to more novel claims. In many instances, these involve more technical violations of state and federal law, but some really call into question whether the suit is for the benefit of the employees or the attorneys.
Case in point. In Rodriguez v. Taco Bell Corp., Case No. 16-15465 (9th Cir. July 18, 2018), the employer provided 30-minute unpaid meal periods to employees in compliance with California law (and consistent with federal law as well). It also offered its employees discounted meals, as long as they consumed those meals on the premises. This requirement existed to ensure that the meals were actually eaten by the employees themselves and not purchased for friends or family.
This sounds like a nice benefit, and it was. Employees both used and liked the discounted meals.
So one can only wonder why the plaintiffs’ attorneys brought an action challenging this benefit as either vitiating the concept of a meal period altogether or as compensation that should be refigured into the regular rate for purposes of computing overtime. Whether or not successful, claims such as this might cause the employer simply to discontinue the program, taking away a nice gesture that the employees actually appreciated.
Fortunately, this crossed the line even by Ninth Circuit standards. The district court granted summary judgment on most of the plaintiffs’ claims, and the Ninth Circuit affirmed. As to the claim that the time shouldn’t be counted as break time, because the employees had to stay on premises to enjoy the discount, the court noted several things. First, of course, this was something that the putative class as a whole and even the named plaintiff found convenient and regularly used. Second, Taco Bell required nothing of the employees during their meal period but applied the requirement to consume the discounted meal on premises only to deter theft. Finally, the court noted the obvious – that the choice of whether or not to accept the discounted meal was solely up to the employees. If they wanted to eat a meal from home or one purchased elsewhere, they could certainly do so.
As to whether the discount should be included in the regular rate, the court found the same problems. Further, the court observed that the plaintiffs had not introduced any evidence of the actual value of the discounts given. It therefore affirmed the lower court’s grant of summary judgment.
Sadly, claims like these are becoming more common, with plaintiffs’ counsel attacking as violating state or federal law various popular benefits like discounted or free meals for restaurant employees, employee discounts generally and similar perks. Not coincidentally, these claims are often brought by former employees who can no longer use those benefits, leaving the next generation of employees to suffer the consequences. In this instance, even the Ninth Circuit found the claims untenable, hopefully serving to deter such claims in the future.
The bottom line:
While popular perks may be a source of wage and hour claims, even plaintiff-friendly courts have trouble discouraging employers from offering them.