On July 18, 2018, the Ninth Circuit Court of Appeals threw out a proposed class action lawsuit alleging that Taco Bell had violated California’s meal period and overtime requirements by requiring employees who purchased discounted meals to stay on the premises during their meal period. The Court held that Taco Bell did not violate California law and affirmed an order granting summary judgment in favor of Taco Bell in a proposed class action suit titled Rodriquez v. Taco Bell Corp. (9th Cir. Case No. 16-15465).
California law generally requires that employers provide non-exempt employees a thirty minute duty free meal period if the employee works more than five hours in a workday. To satisfy the requirement that non-exempt employees must be free of employer control during unpaid meal periods, such employees must, as a general rule, be free to leave the premises of their employer during unpaid meal periods.
In this case, Taco Bell had a policy which offered employees an option to purchase discounted meals during their meal periods so long as the employee remained in the restaurant while on break. Rodriquez argued that Taco Bell failed to relieve employees of all duty during their meal periods because employees were required to stay on the premises if they wanted a discounted meal. The employees sought to recover meal period premiums and overtime pay on the basis that the meal periods should have been treated as compensable time because Taco Bell did not relinquish all control over the employees’ activities.
In finding that Taco Bell’s discounted meal policy was consistent with California law, the Ninth Circuit applied the standard established by the California Supreme Court in Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012). In Brinker, the Court explained that employers comply with California’s meal period laws when they relieve employees “of all duty, relinquish control over their activities and permit them a reasonable opportunity to take an uninterrupted 30-minute break, and do not impede or discourage them from doing so.”
The Ninth Circuit held that Taco Bell complied with the Brinker standard because employees were free to use their meal period as they wished—the requirement to remain on the premises applied only if an employee voluntarily chose to purchase a discounted meal.
The Ninth Circuit did not view the discounted meal policy as a requirement imposed on employees. Instead, the panel viewed the subsidized meal policy as a benefit to employees that the employer could discontinue. The panel also denied plaintiff’s claim for overtime pay during these meal periods, stating that because “plaintiff is not entitled to be paid for her time eating the meals, she is not entitled to overtime pay for it.”