Supreme Court Finally Renders its Brinker Ruling: Sizzle or Fizzle?

Wailter

Photo by zoetnet, flickr creative commons

On April 12, 2012, The California Supreme Court finally rendered its long awaited ruling in the Hohnbaum v. Brinker case.  The opinion sought to clarify key issues concerning meal periods and rest breaks for hourly wage workers, and the extent to which lawsuits alleging violations were amenable to class action certification.  However, such clarity may still be lacking because in a way, the Court seemed to rule both ways.  On the key issue of whether meal periods are mandatory or optional, the Court ruled that they are mandatory, but that it was optional for an employee to work during a meal period.

In summary, the Court ruled that:

1)  Employer must relieve employees of all duty for at least 30 minutes by the end of the fifth hour of work, but need not police how employees use their meal period;

2) The meal period can be at any time in the shift (even at the beginning) as long as it is no later than the end of the fifth hour;

3) If a meal period occurred at the beginning of a shift, the next one need not be within five hours of the first (which in some cases would result in two meal periods in one 8 hour shift).  Rather, a second meal period isn’t required until the end of the tenth hour of work.

4) Two rest breaks must be allowed for any shifts over 6 hours (not 7 or 8 hours, as some had believed prior to the ruling);

5) Rest breaks need not be provided prior to a meal period, so long as they are provided in the middle of the 4 hour work periods “in so far as is practical.”

6) The Court also made technical rulings regarding class action certification that are beyond the scope of this article.  Suffice it to say, in cases in which employers do not have records of scheduling meal periods or providing rest breaks, class action lawsuits survive the ruling.

The case was of particular interest to the hospitality industry, in which work flow and tips often create incentives for both employer and employee to skip rest breaks and meal periods.  Another key employee incentive to skip lunch breaks is that unlike rest breaks, meal periods are unpaid and often lengthen the time at work.  In previous years, California’s Labor Commissioner has enforced rest breaks and meal periods differently, with the former being at the employee’s option whether to take the break or not, and the latter being mandatory, whether the employee wanted a lunch break or not.  Prior to the year 2000, the meal period and rest break laws did not receive much scrutiny.  However, that year the California legislature attached monetary recoveries to meal period and rest break violations.  This triggered a slew of lawsuits, one of which resulted in the Supreme Court Brinker Opinion.  It was widely anticipated that the Supreme Court would place meal periods on the same footing with rest breaks, i.e., at the option of the employee.  (However, I had been advising clients confronting allegations of meal period violations that they would probably benefit more from the pre-Brinker ruling confusion and anticipation than they would from the Brinker ruling itself.)

The ruling is more limited and nuanced than the industry hoped for.  To the extent that it will be interpreted by some as relaxing prior meal period requirements, it may prove to be a trap for the unwary.  The ruling essentially states that a meal period is required but employers needn’t police the meal period to make sure employees aren’t doing any work.  The decision also distinguishes this situation (in which an employee does some work during the meal period) from an on-duty meal period or a waiver of a meal period. Unlike rest breaks, an employer will unlikely be protected by simply advising employees that they are entitled to take a meal period.  In that case, if an employee didn’t take the meal period, it may be viewed as either an improper on-duty meal period or as an improper meal period waiver.  Employers will need to treat the meal period as they have under prior law – actually schedule it.  This ruling may actually result in more litigation, because (1) it may be misunderstood by a lot of employers; and (2) employers will now be subject to claims for regular wages during meal periods, and for overtime when that work pushes the daily total past 8 hours.

With respect to meal periods, the primary benefit to employers will likely be that it reduces the monetary amount of exposure in some cases because, as the court stated:

“Proof an employer had knowledge of employees working through meal periods will not alone subject the employer to liability for premium pay; employees cannot manipulate the flexibility granted them by employers to use their breaks as they see fit to generate such liability.  On the other hand, an employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks.” p. 36

“Premium pay” is the primary remedy for meal and rest period violations: a full hour’s wage for each day a meal or rest period is not provided.  But therein lays the dilemma.  In the restaurant industry, for example, many food & beverage servers will choose to continue working during their scheduled meal periods since their tips often provide compensation greater or equal to their wage.  It may even be the rare case when a server chooses to use the meal period for non-work purposes.  Must the employer pay them their wage anyway? What amount?  The Court’s opinion also contained this passage in a footnote:

If work does continue, the employer will not be liable for premium pay.  At most, it will be liable for straight pay, and then only when it “knew or reasonably should have known that the worker was working through the authorized meal period.” Fn. 19, p. 35

However, if there is a pattern of employees working through meal periods, the employer may be hard pressed to show that it did “not undermine a formal policy of providing meal periods,” thus creating liability for premium pay.  Moreover, paying employees may itself create a catch 22.  If the employer does not pay, it may be liable for back wages and penalties.  Yet if it does pay, it may serve as evidence of “undermining” the meal periods.  Additionally, if the employer pays employees only their regular wage for time worked, it will need to be constantly wary that a worked meal period plus regular shift time does not add up to overtime.

Of more certain but limited benefit to employers may be the ruling on the timing of meal periods.  The Court allowed that a meal period could be at the beginning of a shift and rejected the “rolling” five hour interpretation of the statutory mandate that meal periods occur no later than the fifth hour of work.  In other words, the Court ruled that if a meal period occurred at the beginning of a shift, the next one need not be within five hours of the first, thus resulting in some cases in two meal periods in one 8 hour shift.

In the Court’s own words, here are some additional passages from the ruling:

“On the most contentious of these, the nature of an employer’s duty to provide meal periods, we conclude an employer’s obligation is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he or she desires, but the employer need not ensure that no work is done.” P.3

“Thus, employees working shifts lasting over two hours but under three and one-half hours, who otherwise would have been entitled to 10 minutes’ rest, need not be permitted a rest period.  The 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.”  pg. 20.

“Hohnbaum asserts employers have a legal duty to permit their employees a rest period before any meal period.  Construing the plain language of the operative wage order, we find no such requirement and agree with the Court of Appeal, which likewise rejected this contention.” Pg. 22

Justice Werdegar’s concurrence probably best explains the litigation trap:

“Employers covered by Industrial Welfare Commission (IWC) wage order No. 5-2001 have an obligation both to relieve their employees for at least one meal period for shifts over five hours and to record having done so.  If an employer’s records show no meal period for a given shift over five hours, a rebuttable presumption arises that the employee was not relieved of duty and no meal period was provided.”

In other words, to be protected by this opinion, employers are still going to have to schedule meal periods.  Payroll records may still have to show employees clocking out for a meal period by the end of the fifth hour of work.   There will likely be more litigation about when an employee is doing work during the meal period of his or her own accord, or with the implicit encouragement of the employer; as well as litigation concerning when an employee is owed wages for work voluntarily performed during meal periods.  This ruling is no panacea for employers, employees, or litigants.

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