Joint Employer Responsibility for Meal Periods

A recent decision from the California Court of Appeal explains how a staffing agency may satisfy its obligation to its employees to provide meal periods in accordance with the California wage orders. See Serrano v. Aerotek, Inc., Case No. A149187 (1st Dist. Ct. App. 3/9/2018).

Aerotek was a staffing agency that placed temporary employees with its clients. Its contract with the client stated that the client was responsible for the work environment, and the the client would comply with applicable federal, state and local laws. The client set the work schedules for the temporary employees, and managed their breaks. Aerotek had a handbook for temporary employees assigned to clients, which contained a meal period policy that complied with California law -- that is, that employees were to be provided with an uninterrupted 30-minute off-duty meal break by the end of the fifth hour of work.

One of the temporary employees filed a class action complaint against Aerotek and the client, alleging that the client did not actually provide meal periods in accordance with the law. Aerotek had a manager at the client's workplace, who declared that no Aerotek employee had ever complained to him that he or she had been from taking a meal period, even though Aerotek's policy required them to notify Aerotek if they believed they were being prevented from taking meal breaks. In written discovery, the temporary employee conceded that she was unaware of any actions by Aerotek that prevented her from taking her meal periods.

Employers are not required to police meal breaks. They need only provide a reasonable opportunity for employees to take their breaks, and refrain from impeding or discouraging them from doing so. See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004. Aerotek fulfilled that obligation by establishing a policy that followed California law, and by not interfering with the taking of meal breaks. Even if Aerotek was aware that its temporary employees were not actually taking meal periods by the end of their fifth hour of work, it would not violate the meal period requirement. It did not have to make sure that the employees actually took their meal periods. The Court of Appeal affirmed the trial court's grant of summary judgment to Aerotek.

The Brinker Meal Period Decision

California Supreme Court

The California Supreme Court has handed down its long anticipated ruling in Brinker Restaurant Corp. v. Superior Court, Case No. S166350. Applying rules of construction and common sense, the Court ruled that employers need not force their employees to take a meal break:

"An employer's duty with respect to meal breaks under both [Labor Code] section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees. The employer satisfies this obligation 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.  What will suffice may vary from industry to industry ... On the other hand, the employer is not obligated to police meal breaks and ensure no work thereafter is performed.  Bona fide relief from duty and the relinquishing of control satisfies the employer's obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay." The law requires a first meal period no later than the end of an employee's fifth hour of work, and a second meal period no later than the end of an employee's 10th hour of work.

The Court also put to rest any question there may have been about the separate rest period entitlement: "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."

What does the decision mean for employers?

Because the Supreme Court has foreclosed the argument that the lack of a record of a meal period within the first five hours of employment automatically makes the employer liable for a meal period violation, the decision should limit the circumstances in which class action certification is appropriate for such claims. In the absence of an employer policy that violates the meal period, each individual employee would have to prove that he or she was prevented from taking a meal break. But, in the case before it, the Court did not rule out a class action, leaving it to the Superior Court to determine, in light of the conclusions reached in the decision, whether common issues predominated over individual ones.

Further, the Supreme Court's decision does not read the meal period requirement out of California law. Employers must still ensure that all their non-exempt employees are completely relieved of duty for 30 minutes by the end of the first five hours of work.

What should employers do?

Now that the Supreme Court has conclusively determined the extent of the employer's obligation with respect to meal periods, employers should review their policies and practices to make sure that they are in compliance.

1. Employers should make sure that all supervisors and managers are informed of the legal requirement recited in the Supreme Court's opinion, and that any violations will result in discipline.

2. Employers should review their employee handbooks to make sure that it informs employees of their right to 30 duty free minutes by the end of their fifth hour of work. The acknowledgment of receipt of the handbook should contain a separate initialed acknowledgment of the employer's policy to provide meal periods.

3. Employers should make sure that their timekeeping systems accurately record meal periods. Section 7 of the California wage orders requires employers to maintain accurate records of meal periods.

4. Employers should consider encouraging employees to take their meals away from the work location. This will avoid claims that an employee was not relieved of all duty because someone asked a work-related question, or requested performance of a work duty.

5. Employers should self-assess the one-hour of premium pay imposed by California Labor Code section 226.7, if they need an employee or group of employees to work without a meal period. Although the Labor Code and wage orders permit employees to give written waivers "when the nature of the work prevents an employee from being relieved of all duty," such waivers are revocable at the employee's option and may be subject to challenge for having been coerced.

Employers Need Not Ensure Employees Take Meal Periods

California Labor Code section 512 bars employers from having an employee work more than five hours without providing the employee with a meal period of not less than 30 minutes. The wage orders promulgated by the Industrial Welfare Commission mimic that provision. See, for example, IWC Order No. 5, page 7, section 11. For years, controversy has raged over whether it is enough for employers to make the time available, or whether employers must ensure that employees actually take their meal periods. The California Supreme Court is expected to settle the issue when it finally decides Brinker Restaurant Corp. v. Superior Court, Case No. S166350, for which it granted review on October 22, 2008. (The Court of Appeal opinion under review is available here.) The case has been fully briefed, but is not yet set for oral argument.

In the mean time, the Courts of Appeal from time to time publish opinions on the issue. In the most recent decision, Lamps Plus Overtime Cases, Division Eight of the Second District Court of Appeal agreed with other recent decisions that it is enough to make the time available, and not interfere. "This mandatory language does not mean employers must ensure employees take meal breaks. Rather, employers must only provide breaks, meaning, make them available. Our interpretation of the meal break requirement is supported by the definition of the word 'provide' as used in Labor Code sections 226.7, subdivision (b), and 512, subdivision (a) ('providing'), as well as California Code of Regulations, title 8, section 11070, subdivisions 11 and 12. ... 'Provide' means 'to supply or make available.' (Webster's Tenth Collegiate Dictionary (1993) p. 937.)"

"The notion that an employer must ensure all employees take their meal and rest periods is utterly impractical. 'Requiring enforcement of meal breaks would place an undue burden on employers whose employees are numerous or who . . . do not appear to remain in contact with the employer during the day.' [Citation omitted] It would also create perverse incentives, encouraging employees to violate company meal break policy in order to receive extra compensation under California wage and hour laws."

We discussed the meal period rule in previous posts on February 20, 2011, October 19, 2008, and September 21, 2008. The Labor Commissioner has posted the answers to frequently asked questions about meal periods here.

UPDATE (October 5, 2011)

The California Supreme Court will finally hear argument in the Brinker case on November 8, 2011. By law, it must hand down its decision within 90 after submission of the case following argument. In the mean time, the Court granted review of the Lamps Plus Overtime Cases referenced in this blog post on July 20, 2011.

Meal Or Rest Period Violation Premium

As a general rule, California employers must allow their employees two 10-minute rest periods and a 30-minute meal period during a regular work day. If the employer does not do so, under Labor Code section 226.7, it "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." A recent case against United Parcel Service decided that an employee may recover up to two premium payments per work day -- one for any meal period violation and one for any rest period violation.

In United Parcel Service, Inc. v Superior Court, No. B227190 (Feb. 16, 2011), UPS argued that the phrase "for each work day" meant that only one premium payment was due for any work day, no matter how many violations there were. The Second District Court of Appeal disagreed, holding that the phrase "meal or rest period" authorized an award of one premium payment per work day for any meal period violations, and an award of an additional premium payment per work day for any rest period violations. In a case brought by a single employee, the consequences of the ruling would be insignificant, an award of two hours of pay as opposed to one hour of pay. But, in a wage and hour class action, the numbers will add up.

The Court subsequently granted rehearing, and then issued a new opinion on June 2, 2011, adhering to its view that the Labor Code authorized one premium payment per work day for meal period violations, and another for rest period violations. The new opinion is available here.

To reduce liability, employers should monitor compliance with the meal and rest period rules. If a violation is discovered, the employer should consider self-assessing the premium payment. If it does not, any employees who do not receive their breaks will have four years within which to assert their claims, during which time interest will accrue. For any employee who quits or is fired, the employer will also be subject to additional waiting time penalties under Labor Code section 203 for not paying wages on time. That is because the California Supreme Court ruled in 2007 that premium pay under section 226.7 constitutes wages. See Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4th 1094, 155 P.3d 284 (2007).

Wage/Hour Violations Continue To Cost Employers Millions

Almost every week brings word of a new verdict, court decision or settlement involving wage and hour violations. Many employers just do not seem to understand the federal and state statutes and regulations on these subjects mean what they say. The fact that you have not been caught so far does not mean that your policies and practices would pass muster with the enforcement agencies.

This week's news is a $2.5 million settlement of a class action against MJM, Inc., an insurance investigative company, on behalf of a class of 372 of its investigators. The settlement provided up to $1.7 million to settle claims for unpaid overtime and meal period violations, and $833,000 for attorney fees. The company had claimed that there were no meal period violations because the business realities of investigation work exempted it from providing meal breaks. Labor Code section 512 and the wage order provision contain no such exemption. Read the motion for preliminary court approval, which describes the background of the case and the details of the settlement.

Because the consequences of non-compliant practices can be so serious, employers should consider having an audit conducted of their wage and hour policies and practices. To set up an appointment to discuss the scope and cost of such an audit, send an email to calvin.house@gphlawyers.com. For further information, you will find a GPH Lawyers blog entry about recent developments in the law related to meal periods here, and a set of tips on how to avoid wage and hour violations here.

Meal Periods Mandatory?

One of the California Courts of Appeal has rejected the common wisdom about the meal period rule. While other courts and the Labor Commissioner have ruled that employers must ensure (that is, force) employees to take their 30-minute meal periods, the San Diego Division of the Fourth District has ruled it sufficient for employers to make meal periods available. There is no need to police employee compliance. Brinker Restaurant Corp. v. Superior Court, 165 Cal.App.4th 25 (2008) (ruling on a class certification motion by restaurant workers).

The Law

California Labor Code section 512 bars employers from having an employee work more than five hours without providing the employee with a meal period of not less than 30 minutes. The wage orders promulgated by the Industrial Welfare Commission mimic that provision. See, for example, IWC Order No. 5, page 7, section 11, which was applicable in this case. The statute and the wage orders also provide that the meal period may be waived by mutual consent of the employer and the employee if the work period is less than six hours.

Earlier Interpretations

The limitation of the express waiver provision to work periods of less than six hours had led the Labor Commissioner and at least one Court of Appeal to conclude that employers had an obligation to police the meal period provision. In a January 2002 opinion letter, the Labor Commissioner stated that employers had an "affirmative obligation" to ensure that employees were relieved of all duty. In Cicairos v. Summit Logistics, Inc., 133 Cal.App.4th 949 (2005), the Third District Court of Appeal in Sacramento quoted the language from the opinion letter. As a result, many lawyers have advised their employer clients to "ensure" that their employees take meal periods.

The Brinker Case

The Brinker court, relying on recent decisions from federal district courts in California, rejected the common wisdom, and ruled that there was no duty to ensure that employees take meal periods. It looked to the Merriam-Webster Collegiate Dictionary definition of "provide" to conclude that it is sufficient for employers to make meal periods "available."

UPDATE > While the Brinker case is good news for employers, it will not be the final word. The California Supreme Court granted review of the decision on October 22, 2008. That depublished the opinion from the official reports, and makes it no longer citable. It may take up to two years to get a final decision from the Supreme Court.

The Department of Labor Standards Enforcement has revised its Enforcement Manual (see Section 45-2-1 on page 45-4) to account for the Brinker decision. This should still be persuasive while we await final word from the Supreme Court.