Meal and Rest Break Compliance After the Brinker Decision Navigating Wage and Hour Implications for Employers

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Meal and Rest Break Compliance After the Brinker Decision Navigating Wage and Hour Implications for Employers THURSDAY, MAY 31, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Rex S. Heinke, Partner, Akin Gump Strauss Hauer & Feld, Los Angeles Donna M. Mezias, Partner, Akin Gump Strauss Hauer & Feld, San Francisco The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 Meal and Rest Break Compliance After Brinker Navigating Wage and Hour Implications for Employers What the California Supreme Court Decision Means For Meal and Rest Break Class Actions in California May 31, 2012 Rex S. Heinke Donna Mezias 2012 Akin Gump Strauss Hauer & Feld LLP

6 A BRIEF HISTORY In 2004, plaintiffs filed a class action lawsuit, alleging that Brinker, owner of 137 restaurants throughout California, failed to provide meal and rest periods required by California law and unlawfully required them to work off the clock during meal periods. The trial court granted class certification in July 2006, finding that Defendant's arguments regarding the necessity of making employees take meal and rest periods actually points toward a common legal issue of what defendant must do to comply with the Labor Code. Although a determination that defendant need not force employees to take breaks may require some individualized discovery, the common alleged issues of meal and rest violations predominate. Brinker petitioned the Court of Appeal for a writ of mandate, arguing that the trial court had failed to determine the elements of plaintiffs claims. Had it correctly decided those elements, Brinker argued, the trial court could only have concluded that class certification was improper because the resolution of plaintiffs claims would require a host of individual inquiries. In a July 2008 decision, the Court of Appeal reversed the grant of class certification. 6

7 THE SUPREME COURT S DECISION The California Supreme Court accepted review, and in April 2012 held that: First, under California law, employers must only provide their employees with a 30-minute, uninterrupted meal period for every five hours they work, not ensure that their employees take a 30-minute uninterrupted meal. Second, on the Rolling 5 or early lunching issue regarding the timing of meal periods, the Court held that employers must provide a first meal period no later than five hours into an employee s shift, and a second meal period no later than the end of an employee s 10th hour of work, not every five consecutive hours. Third, the Court held that a rest break must be provided for each of these periods of work: 3.5 to 6 hours; 6 to 10 hours; and 10 to 14 hours. 7

8 THE SUPREME COURT S DECISION Finally, the Court held that rest breaks do not have to be provided before meal breaks. Instead, they must only be provided in the middle of each four hour work period insofar as practicable. The case was remanded to the trial court to decide class certification on the provide issue. 8

9 THE BIG ISSUE: PROVIDE v. ENSURE ISSUE: Under California law, does an employer s obligation to provide meal periods mean that employers must force employees to take them and ensure that work stops for the required thirty minute meal period, or is the employer s obligation only to make meal periods available? PLAINTIFFS POSITION: An employer is obligated to ensure that employees actually stop working during the thirty-minute meal period. BRINKER S POSITION: While employers must offer meal periods during which employees are relieved of all duty, the employee can choose not to take it. 9

10 THE BIG ISSUE: PROVIDE v. ENSURE HOLDING: The Supreme Court affirmed the Court of Appeal s decision that employers must only provide their employees with a 30-minute, uninterrupted meal period for every five hours they work, not ensure that their employees take a 30-minute uninterrupted meal. An employer s obligation is to relieve its employees of all duty during meal periods, relinquish control over their activities, permit them a reasonable opportunity to take an uninterrupted 30-minute break, and not impede or discourage them from doing so. However, an employer is not obligated to police meal breaks and ensure no work thereafter is performed. IMPLICATIONS: The Supreme Court remanded the case to the trial court to decide whether a class could be certified under the provide standard. 10

11 MEAL PERIOD TIMING: THE ROLLING 5 / EARLY LUNCHING ISSUE ISSUE: Can employers schedule meal breaks at any time during a shift, or must employers provide a meal break every five consecutive hours worked? The Labor Code and Wage Orders require every employee who works more than five hours to be provided an unpaid meal period, except that employees who work six hours or less in a workday may agree to waive the meal period. Employees who work more than 10 hours must be given a second meal period. If they will not work more than 12 hours in the workday and did not waive their first meal period, employees may agree to waive the second meal period. PLAINTIFFS POSITION: No employee should work more than five hours without a meal period, so employers must authorize a meal break every five consecutive hours worked. BRINKER S POSITION: An employee s right to a meal period is determined by the total number of hours worked per day not by the number of consecutive hours following the last meal. Employers may schedule meal breaks at the beginning or end of a shift. 11

12 MEAL PERIOD TIMING: THE ROLLING 5 ISSUE HOLDING: The Supreme Court held that Labor Code section 512 requires a first meal period no later than five hours into an employee s shift, and a second meal period no later than the end of an employee s 10th hour of work, not every five consecutive hours. The Court further concluded that the Wage Order does not impose additional timing requirements. IMPLICATIONS: The Supreme Court s decision eliminated this claim as a basis for lawsuits. 12

13 REST PERIODS: HOW MANY? ISSUE: Must employers determine the total hours worked daily and authorize rest periods at the rate of 10 minutes net rest time per 4 hours or major fraction thereof, or must employers time rest periods at the two-hour, six-hour, and ten-hour marks of an employee s shift? PLAINTIFFS POSITION: Employees who work between two and six hours on a shift are entitled to a ten-minute rest break. If they work between six and ten hours they are entitled to a second rest break, and if they work between ten and fourteen hours they are entitled to a third rest break. BRINKER S POSITION: Employees are not entitled to breaks on this schedule. If they work between three and one-half and four hours they are entitled to a rest period. HOLDING: The Wage Order s reference to a major fraction of four hours means anything more than two hours. A rest break therefore must be provided for each of these periods of work: 3.5 to 6 hours; 6 to 10 hours; and 10 to 14 hours. (No rest period required for shifts under 3.5 hours.) IMPLICATIONS: The Supreme Court has settled the rules in this area. 13

14 REST PERIODS: WHEN? ISSUE: Must a rest break always precede a meal break? PLAINTIFFS POSITION: A rest break must be authorized and permitted before the first meal period. BRINKER S POSITION: Because the Wage Order states only that rest periods insofar as practicable shall be in the middle of each work period, an employee could take a meal period one hour into a shift and still take an after-meal rest break in the middle of the fourhour work period. HOLDING: Employers must make a good faith effort to authorize and permit rest breaks in the middle of each work period, and as a general rule should try to schedule one before and one after a meal, but may deviate from that preferred course where practical considerations render it infeasible. 14

15 OFF-THE-CLOCK CLAIMS ISSUE: Did Brinker require employees to work off-the-clock during meal periods and engage in time shaving (unlawfully altering employee time records) to misreport the amount of time worked and break time taken? HOLDING: The Supreme Court affirmed the Court of Appeal s decision vacating class certification as to plaintiffs off-the-clock claims, finding that there was no evidence of a uniform policy or practice that violated the law. IMPLICATIONS: The Supreme Court s decision eliminated off-theclock cases unless the employer has a uniform policy or practice that violates the law. 15

16 STATISTICAL AND SURVEY EVIDENCE ISSUE: Can Plaintiffs meal period, rest period, and off-the-clock claims be decided by way of survey, statistical, or other representative evidence, or does the need for individualized inquiries into whether a particular manager at a particular restaurant on a particular shift discouraged or prohibited a break or encouraged or permitted off-the-clock work preclude class treatment? HOLDING: The Supreme Court did not address this, but in her concurring opinion, Justice Werdegar suggested that representative testimony, surveys, and statistical analysis all are tools which may be used to render class proceedings manageable. Only Justice Liu joined this concurrence. IMPLICATIONS: This issue is still unresolved. 16

17 BACK TO THE TRIAL COURT: NOW WHAT? MEAL PERIOD CLAIMS: Because the proposed meal period subclass includes all employees who worked in excess of five consecutive hours without a meal period, the Supreme Court held, in light of its conclusion that the Labor Code and Wage Order do not impose a timing requirement, that the class definition as presently drawn includes individuals with no possible claim. The Court remanded the question of meal class certification to the trial court for reconsideration in light of its clarification of the law as to the provide v. ensure and Rolling 5 issues. IMPLICATIONS: Plaintiffs have lost the Rolling 5 issue, so they presumably will not seek certification of it. The provide issue remains to be litigated. 17

18 BACK TO THE TRIAL COURT: NOW WHAT? REST BREAK CLAIMS: The Supreme Court reversed the Court of Appeal s judgment as to the rest period subclass. IMPLICATIONS: The parties will now litigate Brinker s policy and any other issues, including damages. 18

19 THE LAW AT ISSUE California Labor Code section 512: (a) 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. An employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived. (b) Notwithstanding subdivision (a), the Industrial Welfare Commission may adopt a working condition order permitting a meal period to commence after six hours of work if the commission determines that the order is consistent with the health and welfare of the affected employees. 19

20 THE LAW AT ISSUE California Labor Code section 226.7: (a) No employer shall require any employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commission. (b) If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee's regular rate of compensation for each work day that the meal or rest period is not provided. 20

21 THE LAW AT ISSUE IWC Wage Order Regulating Wages, Hours, and Working Conditions in the Public Housekeeping Industry (8 Cal. Code Regs ): 11. Meal Periods (A) No employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes, except that when a work period of not more than six (6) hours will complete the day's work the meal period may be waived by mutual consent of the employer and the employee. (B) If an employer fails to provide an employee a meal period in accordance with the applicable provisions of this order, the employer shall pay the employee one (1) hour of pay at the employee's regular rate of compensation for each workday that the meal period is not provided. 21

22 THE LAW AT ISSUE IWC Wage Order Regulating Wages, Hours, and Working Conditions in the Public Housekeeping Industry (8 Cal. Code Regs ): 12. Rest Periods (A) Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The 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. 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. (B) If an employer fails to provide an employee a rest period in accordance with the applicable provisions of this order, the employer shall pay the employee one (1) hour of pay at the employee's regular rate of compensation for each workday that the rest period is not provided. 22