How Will the Brinker Decision Impact your Business? Presented by Stacie D. Yee. 37 Offices in 18 Countries

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Marion Freeman
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1 How Will the Brinker Decision Impact your Business? Presented by Stacie D. Yee 37 Offices in 18 Countries 10/30/2012

2 What is Brinker? Brinker Restaurant Corp. and Brinker International, Inc. operate several well-known chain restaurants including Chili s throughout California. Chain sued by hourly employees seeking compensation as class for Failure to provide mail periods or premium pay Failure to provide rest periods or premium pay Requiring employees to work-off-the-clock during meal periods time shaving or unlawfully altering employee time records The Cal. Supreme Court granted review of the case to resolve uncertainties in the handling of wage and hour class certification motions. 2

3 What did Brinker decide? When rest periods are due Timing of rest periods Employer obligations regarding meal periods Timing of meal periods Are meal and rest period claims certifiable? Are off-the-clock claims certifiable? 3

4 Rest Period Obligations Rest breaks are required as follows: Zero to less than 3.5 hours worked = No rest periods owed 3.5 hours to 6 hours worked = One rest period 6 hours to less than 10 hours worked = Two rest periods 10 hours to less than 14 hours worked = Three rest periods What is a major faction? anything more than two hours in the prior four-hour work period 4

5 Rest Period Obligations (cont d) Employers are not obligated to ensure that employees take rest breaks. Employers must provide employees a reasonable opportunity to take their rest breaks. If employees voluntarily choose to work through rest periods, no premium is due. 5

6 Rest Period Obligations (cont d) Rest break timing requirements: Ideally rest break should occur in the middle of the work period with one rest break falling on either side of the meal period Does not have to occur before a meal period.... Review your rest break policy. Update to address number of breaks available based on hours worked Include major fraction language 6

7 Meal Period Obligations Employers are not obligated to ensure that employees take meal periods. Employers must provide employees a reasonable opportunity to take their meal periods. relieve employees of all duty relinquish control over activities do not impede or discourage employees from taking meal periods 7

8 Meal Period Obligations (cont d) If employer met obligation and employee voluntarily chooses to work through a meal period, no premium is due. Employees may not manipulate pay by creating right to premium wages by working through a meal period. BUT employers are required to pay employees for the time spent working during meal periods if employer knows or has reason to know employee worked for all or part of the time. 8

9 Meal Period Obligations (cont d) Timing of Meal Periods Court rejected rolling 5 hour meal periods First meal period must be provided no later than the end of the fifth hour of work. May be waived by mutual consent if employee works no more than six hours. Early lunching Second meal period must be provided no later than the end of the tenth hour of work unless: Waived by mutual consent and First meal period not waived. 9

Meal Period Obligations (cont d) On Duty Meal Periods On Duty Meal Periods permitted in limited circumstances: The nature of the work prevents an employee from being relieved of all duty; On duty

10 Meal Period Obligations (cont d) On Duty Meal Periods On Duty Meal Periods permitted in limited circumstances: The nature of the work prevents an employee from being relieved of all duty; On duty meal period treated as hours worked Employee agrees in writing to the on duty meal period Must be revocable No premium pay obligation If you don t meet the test, then duty free meal breaks must be provided or premium pay is due. 10

11 Are Meal/Rest Period Class Actions Certifiable? Brinker involved whether the issues that may be jointly tried, when compared to those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants. If the defendant s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages. 11

12 Certification Lessons Whether common or individual questions predominate will often depend upon resolution of issues closely tied to its merits. Trial court must determine whether the elements necessary to establish liability are susceptible of common proof or whether there are ways to manage effectively proof of any elements that may require individualized evidence. (Duran v. US Bank Corp.) Any peek the court takes at the merits must be limited to those aspects that effect the decision essential to class certification. 12

13 Certification of Rest Break Claims Brinker held the rest break claims could be certified for class action. The employer policy did not comply with the statement of the law therefore there was a common illegal policy applicable to all members of the Rest Break subclass. Court declined to comment on whether a rest break claim could be certified so long as the employer had a compliant policy. Court also left open the kind of circumstances that would excuse providing break mid-way through a working period so possibilities for class claims remain based on when breaks are scheduled and whether the employer complied with the policy. 13

14 Certification of Meal Period Claims Supreme Court remanded the case the trial court has to reconsider certification in light of the correct statement of the law. Trial court decision was faulty because of a mistake of law. Court s majority opinion did not address whether claims under the relieved of all duty standard are susceptible to class treatment. Two justice concurrence went out of its way to reject defendant s argument that meal period claims cannot be certified because individual issues will predominate. 14

15 Does this apply retroactively? Supreme Court asked for briefs in January 2012 regarding whether it s decision could only apply prospectively. What did they say about that? NOTHING! That means the rules apply retrospectively which is good news for many employers, but the time to change break policies to match new interpretation is NOW. 15

16 What Plaintiffs Lawyers Are Saying Look for cases based on universal practices and policies. Certification is still possible but it has to be backed up by evidence. Statistical evidence and representative samples, dead or alive? 16

17 Best Practices Post-Brinker Review your meal and rest break policies Train your employees, supervisors and managers Keep your ear to the ground Pay for all time worked during rest or meal periods. Pay premiums when business requirements do not permit employees to have a duty free meal and/or rest period. Consider creating a form for this purpose. Do not allow employees to work off the clock and put it in writing. If you have employees taking on duty meal periods, review the basis and need for doing so. Prepare forms and document meal period waivers as appropriate. 17

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18 Worldwide Locations North America 18 Cincinnati Cleveland Columbus Houston Los Angeles Miami New York Northern Virginia Palo Alto Phoenix San Francisco Tampa Washington DC West Palm Beach + Independent Network Firm Latin America Europe & Middle East Asia Pacific Bogotá+ Buenos Aires+ Caracas+ La Paz+ Lima+ Panamá+ Rio de Janeiro Santiago+ Santo Domingo Beirut+ Berlin Birmingham Bratislava Brussels Bucharest+ Budapest Frankfurt Kyiv Leeds London Madrid Manchester Moscow Paris Prague Riyadh Warsaw Beijing Hong Kong Perth Seoul Shanghai Singapore Tokyo

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

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, 2012 1pm Eastern