On February 16, 2011, in Tien v. Tenet Healthcare Corp., the California Court of Appeal upheld a trial court’s denial of class certification on meal and rest period claims brought against a health services company that operates hospitals across the state. The court sided with Brinker and Brinkley, holding that employers need only make meal and rest periods available, and that individualized issues predominated as to whether employees took meal periods, and why meal periods may not have been taken, thereby precluding certification of the proposed class.

Background

Tenet Healthcare Corporation is a health services company with subsidiaries and affiliates operating hospitals in various states including California. Three hourly employees sued Tenet and its 37 subsidiary hospitals in California for alleged meal period violations, rest period violations, waiting time penalties, and pay stub violations. Plaintiffs moved to certify four subclasses based on each of their claims. In June 2008, the trial court initially granted certification on the meal period, waiting time penalty, and pay stub claims, but denied class certification as to the rest period claim.

After the court had issued its class certification order, Brinker Restaurant Corp. v. Superior Court (Brinker) and Brinkley v. Public Storage, Inc. (Brinkley) were decided by California Courts of Appeal, holding that California’s meal break requirement meant employers need only make meal periods available to employees, as opposed to ensuring that they are taken. Relying primarily on Brinkley, the trial court in Tien reconsidered its ruling on class certification and issued a subsequent order denying class certification on all claims. The court found the evidence supported that meal periods were made available to employees, and that individual questions predominated. Shortly after the trial court’s revised order, the California Supreme Court granted review in Brinkley pending review of the Brinker case, and the Brinkley opinion was no longer citable as precedent.

Plaintiffs moved to vacate the trial court’s order denying certification, arguing that the court improperly relied upon Brinkley in reconsidering class certification and should instead have relied on Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949. Plaintiffs argued that under Cicairos an employer was obligated to ensure employees took meal periods, and that the court was bound to follow this holding in the absence of any published authority to the contrary.

The trial court declined to modify its order denying certification. The court informed counsel: “Cicairos appears to me to be a minority view adopted by one court when a number of courts have taken the Brinkley/Brinker view and analysis and it seems stronger to me.” The plaintiffs then appealed.

The Appeal

The Court of Appeal rejected plaintiffs’ contention that the trial court had improperly relied on the analysis in Brinkley. The court instead sided with Brinker and Brinkley, holding that the ordinary dictionary meaning of “provide” means “to supply or make available,” and does not mean employers must ensure employees take meal breaks. The court cited with approval several federal district court decisions holding that an employee is deprived of a meal period only when forced to forgo his or her meal period.

The court distinguished Cicairos because it addressed unique circumstances in which an employer had a policy against providing breaks and actively deprived employees of their opportunities to take breaks. The court further explained that while an employer may not frustrate the exercise of meal breaks, this does not mean there is an obligation to ensure that an employee actually takes breaks.

The court acknowledged the overwhelming evidence that Tenet’s policies allowed meal periods, which satisfied Tenet’s legal obligation to provide them. Although the court acknowledged the law was unsettled as to the employer’s duty to provide a meal period, it noted that the trial court’s findings were consistent with the “the common-sense notion” that individual questions about the reasons an employee might not take a meal period are more likely to predominate if the employer need only offer meal periods, but need not ensure employees take those meal periods.

The court held individual questions predominated on whether putative class members took their meal periods and why meal periods may not have been taken taken. The individualized questions included: (1) employees signing, or not signing, missed meal logs which created inconsistencies with time records showing whether meals were taken; (2) certain employees receiving meal periods although time records showed otherwise; (3) employees not clocking out through the hospital’s timekeeping system, but signing correction slips documenting they took their meals; and (4) some employees shorting the clock by starting their meals before clocking out. The court found these individualized issues precluded class certification.

Similarly, the court upheld the denial of class certification on plaintiffs’ rest break claim. Given that Tenet was obligated only to authorize and permit rest breaks, the court held that liability arose for Tenet only if its policy was a policy in name only and unobserved in practice. In addition, the court found that because employees did not record their 10-minute breaks, the reasons, if any, that employees might not take their breaks were predominately individualized questions of fact not appropriate for class treatment.

Finally, the court affirmed the denial of class certification on plaintiffs’ pay stub claim. The court held that class certification of pay stub claims required class members to show actual injury from noncompliant pay stubs. Plaintiffs argued that employees suffered the injury of not being able to understand their pay stubs. The court found that individual questions of actual injury predominated over common questions because the court would have to determine whether each individual class member actually suffered any injury in this manner.

What Tien Means for Employers

Tien is helpful to employers, particularly those in the healthcare industry, who are facing class actions based on meal period, rest period and paystub claims. The shelf life of this case, however, may be limited, if plaintiffs seek and the case is granted review by the California Supreme Court. Until then, employers facing motions for class certification on meal and rest periods should rely on this opinion.