Litigation in California state and federal courts has exploded in the wage and hour arena in the past several years. The award – originally $172 million – in the 2005 Wal-Mart missed-break litigation in Alameda County has fostered a cottage industry of attorneys looking for violations of California Labor Code regulations governing the smallest aspects of the workday, down to the exact hour in which an employer must offer rest and meal breaks to its employees. On behalf of putative classes of an employer’s entire workforce, representatives seek to recover penalties (which, as a result of the 2007 decision in Murphy v. Kenneth Cole, are subject to a three-year statute of limitations), lost wages for “off-the-clock” work and damages for alleged unfair business practices (which claims are subject to an extended four-year statute of limitations), as well as injunctive relief to try to force employers to implement different policies and/or to be subject to a third-party monitor who visits the workplace to ensure compliance. Needless to say, this trend has not been friendly to the California business community.
But recently there has been some good news for employers. The California Court of Appeals, Fourth Appellate District (on transfer from the California Supreme Court), vacated the trial court’s certifi cation of a potential class of nearly 60,000 restaurant workers alleging violations of California’s meal and rest break laws, as well as off-the-clock work claims, in Brinker Restaurant Corporation v. Superior Court of San Diego County. The July 22, 2008, decision by the Court of Appeals held that each of these claims is not amenable to treatment as a class action because individual issues predominate over the common questions of fact.
In this favorable decision for employers, the court also held that California employers: (1) need only “provide, not ensure” meal and rest breaks are taken; (2) need only allow rest periods every four hours or major fraction thereof, and not necessarily in the middle of the employee’s shift if it would be impracticable; (3) are not required to provide meal breaks for every fi ve consecutive hours worked; and (4) are only liable for their employees working “off the clock” if they knew or should have known that they were doing so. The meal break holding relied upon and tracked a decision from earlier this year by the U.S. District Court for the Central District of California in Brown v. Federal Express Corporation, in which the court also refused to certify a proposed class action of break and off-theclock claims.
In Brinker, the Court of Appeals fi rst clarifi ed that in the context of wage and hour claims, trial court judges must determine the elements of plaintiffs’ claims before deciding whether common questions of fact predominate, in order to support certifying the alleged class. As a threshold issue, the court must determine what law applies to plaintiffs’ claims, and only after that determination can a court know whether individualized inquiry is necessary and whether the claims are amenable to class treatment.
With respect to rest breaks, the Court of Appeals emphasized three main points. First, rest periods need not be given precisely every three and one-half hours. Employees are entitled to only one 10-minute rest period every four hours “or major fraction thereof,” calculated based on the total daily hours worked. Second, employers have some discretion regarding when rest breaks can be taken. Breaks need not be allowed in the “middle of a work period if, because of the nature of the work or the circumstances of a particular employee, it is not ‘practicable.’” Third, employees can waive their right to take rest breaks. In other words, employers do not have an obligation to ensure that their employees take the rest breaks provided to them under state law. Similarly, with respect to meal breaks, the Court of Appeals held that an employer need only make available, not ensure, meal periods for their employees, and that the employer and employee can waive the meal period by “mutual consent.”
The Brinker court also noted that meal and rest break claims are not amenable to class action treatment, because the trier of fact cannot determine on a classwide basis: (1) why the putative class members missed rest and meal breaks, and (2) whether the employees received the full 10 or 30 minutes provided for such breaks. These inquires must be made on a case-bycase basis. For example, for a meal break claim: “[i]t would need to be determined as to each employee whether a missed or shortened meal break period was the result of an employee’s personal choice, a manager’s coercion or, as plaintiffs argue, because the restaurants were so inadequately staffed that employees could not actually take permitted meal breaks.” Further, neither statistical and survey evidence nor declarations show why employees do not take breaks and work off the clock. When there is no class-wide policy prohibiting breaks, the reasons that employees don’t take their breaks require individualized determination.
Finally, the court concluded that, like meal and rest break claims, individual issues predominate such that off-the-clock claims are not amenable to class treatment either. Employers may only be held liable for offthe- clock claims if they knew, or should have known, that their employees were working off the clock – an individualized inquiry according to the court.
While this case is certainly favorable for employers, it does not create carte blanche for employers to ignore meal and rest break requirements, and off-theclock work being performed by their employees. The Brinker court made clear that employers cannot “impede, discourage or dissuade” their employees from taking these breaks or compel them to work off the clock. Employers should continue good practices of providing timely meal and rest breaks required under California law. Additionally, employers should implement written policies prohibiting off-the-clock work (as Brinker Restaurant Corporation did in this case).
Perhaps the biggest positive result for California employers is that the Brinker decision includes very favorable language about the individualized nature of inquiries into allegations of class-wide break and offthe- clock violations. California courts have, of late, been relatively liberal in certifying such claims to proceed on a class-wide basis – as did the lower court in this case. The court’s ruling that breaks must be “provided” but not “enforced” was a key component in their decision to reverse certifi cation, because it meant that the court would have to examine the individual circumstances that led to each allegedly missed break to determine whether the employer actively prevented the break from occurring and knew of the unpaid work, since it was conceded that Brinker had company policies providing breaks and prohibiting off-the-clock work.