California Supreme Court issues long-awaited meal period decision

Editor’s note: Western United Dairymen’s labor counsel Anthony Raimondo has provided this critical analysis of the important California Supreme Court decision on employers providing meal and rest periods to employees

By Anthony P. Raimondo

On April 12, 2012, the California Supreme Court issued the highly anticipated decision in Brinker Restaurant Corp. v. Superior Court, a case that provides badly needed clarification with respect to employers’ obligation to provide meal and rest periods.  Unfortunately, especially for agricultural employers, the decision leaves some critical issues unresolved that will create confusion regarding management of meal and rest breaks on farms and ranches.

Brinker involved restaurant workers who often took a meal break an hour or two into their shift, and then worked a six to seven hour period before finishing the shift.  Such patterns are common in the restaurant industry, where workers arrive, do some preparatory work, take a meal break, and then work a busy meal shift.  The California Supreme Court considered several critical issues, and provided answers to questions that have plagued employers for years.

What is an employer’s rest period obligation?

Under California law, employers must “authorize and permit” 10 minutes of paid rest for each four hours worked, or “major fraction” of four hours.   Rest breaks must occur as near as is practicable to the middle of the work period.  Employers have been confused about this obligation, believing that it requires a 10 minute rest period every four hours of a shift.  The court provided clear guidance on rest periods.
According to the court, employers can determine the total amount of rest time owed to employees by dividing the total number of work hours in the shift by four, and then multiplying the result by 10 minutes.  For example, if an employee works eight hours, the employee is entitled to twenty minutes of rest.   The Court explained that a “major fraction” of four hours is anything more than two hours.  If anything more than two hours is left after dividing the total hours worked by four, then the employee is entitled to an additional ten minutes of rest.   For example, a ten hours worked (10 divided by 4 = 2, with two hours left over) requires twenty minutes of rest, but an 11 hours worked (11 divided by 4 = 2.75) requires thirty minutes of rest because there is more than a “major fraction” of four hours left over after dividing by four.  The Court acknowledged that shifts under 3.5 hours do not require a rest break, and explained, “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.”
Rest periods must occur “as near as is practicable” to the middle of the work period. In Brinker, employees only worked an hour or two before their meal break, and took two rest breaks after their meal, during the longer portion of their shift.  The Court rejected the plaintiffs’ argument that there must be at least one break before and after the meal.
In a decision favorable to employers, the Court explained that the timing of the rest periods depends upon the work pattern of the particular shift.  In most ordinary circumstances, this means that the first rest period will occur halfway between the start time and the meal period, and the second will occur halfway between the end of the meal period and the end of the shift.  Bu the Court explained that this pattern is not mandatory, and may change depending upon the circumstances.   According to the Court, it was not automatically a violation for employees to work an hour or two without a rest break before taking their meal period.   But the Court left unanswered the question of what circumstances must exist in order to deviate from authorizing a rest period in the middle of each work period.  

Based on this decision, all employers should have written policies that inform employees of their right to take rest periods, must provide a reasonable opportunity to take those meal periods (i.e., the work must not be so busy that they cannot take a break), and must not interfere with the right to take meal periods.  The best policies will provide employees with a contact person they can complain to if they feel that they are having any problems taking their rest periods.  Employers should make as much effort as possible to schedule rest periods as near to the middle of each work period as they can.
What is an employer’s meal period obligation?
The Brinker case raised several key issues about the meal period obligation.  First, the plaintiffs argued that employers have an affirmative duty to ensure that employees actually take their meal period, and face liability if an employee misses a meal period, even if the employee voluntarily skipped the meal period.   Second, the plaintiffs argued that there can be no more than five hours between meal periods.  This was a critical issue because the employees took an early meal period, and typically worked six or seven hours of their eight hour shift after taking their meal break.   The plaintiffs argued that the employer was obligated to provide a second meal period five hours after the first meal period, but the employer argued that the second meal period was required only if employees worked over 10 hours.
The Court provided a detailed history of the meal period obligation under the Wage Orders, noting that until the passage of AB 60 in 1999, the meal period obligation was regulated solely by the Industrial Welfare Commission Wage Orders.  One component of AB 60 was Labor Code Section 512, which codified the meal period obligation in the Labor Code.
The Court made the following key holdings with respect to the meal period obligation:
* Employers are not required to force their employees to take meal periods.

The employer satisfies its obligation to provide meal periods if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.   Employers are not required to police employees to make sure they are taking their meal breaks.  If an employee voluntarily works through a meal period, there is no liability to the employer, although the employer has to compensate the employee for the work performed during the meal period unless the employer does not know of have any reason to know that the employee performed the work.

* The first meal period must occur after no more than five hours of work.

The Court decided that the first meal period must be provided after no more than five hours of work.  Therefore, if an employer does not provide an opportunity to take the meal break until after the fifth hour of work, the employer will face the penalty.  The Court did acknowledge the continuing availability of on-duty meal period agreements, but recognized that such agreements are only allowed when the nature of the work prevents the employee from taking a proper meal period. Employers who use an on-duty meal period agreement should be cautious to ensure that the circumstances of the employment truly prevent the employee from being relieved of all duty during the meal period, and should try to make sure that on-duty meals are limited to only unusual circumstances and do not become a regular practice.

* Meal periods are not required every five hours.  A second meal period is only required after 10 hours of work.

The Court explained that, while there was a time when the Wage Orders required meal periods to occur every five hours, the IWC changed that approach with the passage of AB 60, when all of the Wage Orders were rewritten.  But under the current approach, a first meal period is required after no more than five hours of work, and a second meal period is required after 10 hours of work.  

Class Action Issues

Class certification remains a highly unpredictable process from case to case, but the Court did indicate that class certification is proper where plaintiffs can allege a common policy that violates the law.   Employers should have policies that cover their workforce in writing, and must make sure that those policies comply with the law in order to avoid the allegation of an unlawful common policy that can be the link between employees that can be used as the basis to certify a class.

What is the impact on agriculture?

Agricultural occupations are governed by Wage Order 14, which is unique among the wage orders.  It has a more relaxed meal period standard than the other Wage Orders.  The other Wage Orders require employers to “provide” meal periods, while Wage Order 14 only requires employers to “authorize and permit” meal periods.  The regulatory history of the meal period provision of Wage Order 14 demonstrates that the IWC saw a greater need for flexibility in agriculture than in other industries.

For agriculture, the Brinker case leaves a great deal open to interpretation.  Much of the Court’s decision was based upon an analysis of Labor Code Section 512, but that section does not apply to agricultural occupations, so there is some question as to whether Brinker controls with respect to issues under Order 14.  For example, Order 14 does not mention a second meal period after 10 hours of work, and Labor Code Section 512 does not apply.  The question of whether as second meal period is required after 10 hours of agricultural work remains unanswered. Until the Court provides guidance as to how much flexibility agricultural employers have in setting policies on meal and rest breaks, agricultural employers should be conservative in order to avoid exposure to liability.

How can employers comply?

The following steps are elements of a compliant meal and rest period practice:
* Written policies should track the language of the applicable Wage Order, and should be in a language spoken by the workers.  Policies should be stated in employee handbooks, and can even be posted by time clocks and in other common areas.  Policies should provide an avenue for employees to complain about problems with meals and breaks.  Complaints should be documented.

* Employees should take their meal periods no later than the end of their fifth hour of work.  Monitor time records, and if employees are taking meal periods late, then follow up and make sure the employee is directed to take the meal period after no more than five hours of work.  All such incidents should be documented.

* Inform employees that they are entitled to take a second meal period after ten hours of work.  Inform employees that if they work over 12 hours, then the second meal period is mandatory.  

* Monitor time records for employees who routinely fail to punch out for lunch.  Follow up with any such employees to find out what is happening.  If there is a problem for them with respect to their meal periods, correct it.  If there is no problem, document the employee’s statement that the missed meal periods were voluntary.

* Eliminate systems that automatically deduct meal time from pay checks.  Some employers automatically deduct a half hour for the meal period, whether or not the employee punches out.  This is a dangerous practice because employees who work through lunch are entitled to be paid for all of their hours worked.  The best practice is for employees to punch out for their meals, and to be paid for all of their time on the clock.

Meal and rest period claims remain some of the most common wage and hour claims alleged against employers in part because such claims can drive an employer’s potential exposure very high very quickly.  While Brinker may not answer all of the questions about meal and rest periods, the case provides needed guidance to employers that can be used to protect businesses from liability.  This is a critical time to review policies and procedures to be sure that they are in compliance with the law.

The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Anthony Raimondo at McCormick Barstow LLP in Fresno, at (559)433-1300.