Brinker Restaurant Corporation v. Superior Court: Employers Must Only Provide Meal Periods and Rest Breaks, and Not Ensure They Are Taken
October 22, 2008
James W. "Jim" Michalski- Los Angeles
A recent decision of the California Court of Appeal, Fourth Appellate District, may make it easier for California employers to comply with the state’s meal and rest break requirements and limit the risk of class actions asserting violations of those requirements. The Court ruled that the law requires California employers only to offer meal periods and rest breaks to employees, not to ensure that breaks are taken; that employers have some flexibility to schedule rest breaks so as to meet operational needs; that employers are not liable for off-the-clock work unless they knew or should have known employees were working off-the-clock; and that the individualized nature of meal and rest break and off-the-clock claims means they cannot be pursued in a class action. Brinker Rest. Corp. v. Superior Court, No. D049331. Although the Brinker case is a big win for employers, it remains to be seen whether the California Supreme Court will decide to review the issue.
The Law
California Statutes and wage orders require California employers to offer employees rest and meal breaks. California Labor Code Section 226.7(a) provides: “No employer shall require any employee to work during any meal or rest period mandated by an applicable order of the [Industrial Welfare Commission].” IWC Wage Order, No. 5-2001, which governs all employees in the public housekeeping industry, including restaurants, requires employers to permit employees to “take rest periods, which insofar as practicable, shall be in the middle of each work period.” “Authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof.” (Emphasis added) However, “a rest period need not be authorized for employees whose total daily work time is less than three and one-half (3 1/2) hours.” (Emphasis added)
Labor Code Section 512(a) states, in pertinent part, that: “an employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes, except that if the total work period per day of the employee is no more than six hours, the meal period may be waived by mutual consent of both the employer and employee.” Wage Order 5-2001, regulating restaurants, is essentially identical.
The Facts and the Claims
Brinker Restaurant Corporation operates 137 restaurants in California. Its written meal period policy requires each employee to acknowledge that he or she is “entitled a 30-minute meal period when I work a shift that is over five hours,” and its rest period policy requires the employee to acknowledge that, “If I work over 3.5 hours during my shift, I understand that I am eligible for one [10-]minute rest break for each four hours that I work.” Failure to follow these policies “may result in disciplinary action up to and including termination.” Brinker’s Hourly Employee Handbook also states that employees must clock in and out for every shift and that working “off-the-clock” for any reason violates company policy.
Several Brinker employees filed lawsuits claiming Brinker does not provide meal periods or rest breaks, and forced employees to work off-the-clock. These individuals sought to represent a class of more than 59,000 Brinker employees to recover unpaid overtime wages based upon these claimed rest break, meal period and off-the-clock work violations. In April 2006, the trial court granted class certification, and Brinker appealed.
Rest Breaks
The Court of Appeal first addressed the rest break issue. The employees claimed Brinker violated the Labor Code and wage order by failing to give them a rest period every three-and-one-half hours. The Court of Appeal rejected this interpretation, ruling that an employee is entitled to a rest break before working four hours only if he or she is “scheduled for a shift that is more than three and one-half hours, but less than four hours.” The Court also rejected the employees’ claim that Brinker must give them a rest break before the first scheduled meal period. Such a reading would violate the wage order’s clear intent “to provide employers with some discretion to not have rest periods in the middle of a work period” if it is not “practicable” because of “the nature of the work.” This flexibility in scheduling breaks is “of particular importance” for employers in the restaurant industry because the middle of a work period is often during a mealtime rush, when an employee “might not want to take a rest break in order to maximize tips and provide optimum service.” As long as employers make rest breaks available to employees, and strive, where practicable, to schedule them in the middle of the first four-hour work period, then “employers are in compliance with” that portion of the wage order. Finally, because determining whether employees were forced to forego rest breaks or voluntarily chose not to take them would require thousands of mini-trials, the rest break claims were “not amenable to” litigation as a class action.
Meal Period
The Court of Appeal then turned to the meal period claims. The employees first claimed that they were entitled to a meal period for every five hours worked on a rolling basis. The Court of Appeal disagreed, ruling that an employer is only required to provide one meal period if an employee works at least five hours per day, but is not required to provide a meal period every five hours on a rolling basis.
The Court then rejected the employees’ claim that Brinker had an affirmative duty to ensure that the employees take their meal breaks. Employers “need not ensure meal breaks are actually taken, but need only make them available,” the Court ruled. And, “because meal breaks need only be made available, not ensured,” each employee’s claim would depend upon individual issues about why he or she did not take meal breaks and the claims could not be considered on a class basis.
Off-the-Clock
The Court also ruled that the off-the-clock work claims could not be heard on a class basis. It noted that an employer can be held liable for off-the-clock work only if it “knows or should have known the employee was working off-the-clock,” and that Brinker had a written corporate policy prohibiting off-the-clock work. These facts meant that each employee’s off-the-clock work claim would require a separate trial and class treatment of these claims was also inappropriate.
Practical Significance
Brinker is a welcome first move toward a possible reduction in the current wave of wage and hour class action suits alleging a failure to provide proper meal periods and rest breaks. On July 25, 2008, the California Labor Commissioner issued a Memorandum to the Division of Labor Standards Enforcement (DLSE) noting the Court of Appeal opinion and ordering that Deputy Commissioners in the DLSE adhere to the logic of Brinker and not prosecute wage and hours claims inconsistent with its holding.
This is a continuing story, however, as the plaintiffs in Brinker have filed a petition for review with the California Supreme Court. Under the rules, the Supreme Court will decide whether to take the case within about three months. Given the issues at stake and the Court’s demonstrated willingness to decide wage and hour issues, we believe that the Supreme Court will accept the case for review. Thereafter, it may take the Court a year or two to decide the case.
It is not clear whether the DLSE will continue to follow Brinker if the California Supreme Court decides to grant review of the Court of Appeal decision. We will keep you posted on whether the California Supreme Court grants review and, if so, what the DLSE’s policy on meal and rest breaks will be in the interim. In any case, employers should review their policies to ensure they provide the appropriate rest breaks and meal periods in compliance with the Labor Code and appropriate wage order governing their industry and utilized occupations. Also, employers should adopt policies similar to Brinker’s, requiring employees to acknowledge their right to rest breaks and prohibiting off-the-clock work, to minimize their exposure to overtime claims involving meal periods, rest breaks and off-the-clock work.
For more information, contact:
James W. Michalski
213.896.2585
james.michalski@hklaw.com
toll free: 1.888.688.8500
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