California Appeals Court Clarifies Work and Break Rules: Employers gain flexibility in rest and meal periods, “off-the-clock” work

Employers in California finally have some help navigating the state's complicated (and often costly) meal and rest period and timekeeping statutes and regulations. On July 22, 2008, the California Court of Appeal issued a comprehensive decision in Brinker Restaurant Corporation v. Superior Court, a wage hour class action alleging meal and rest period and “off-the-clock” violations by Brinker Restaurant Corporation.

Although this decision giving employers greater flexibility could be reversed, it establishes prevailing California law for the near term. California employers should embrace the ruling, which is summarized in this advisory, and take the initiative now to ensure they are in compliance.

The plaintiffs were restaurant workers who claimed that they had been denied their statutory meal and rest periods under Labor Code Sections 226.7 and 512, and the California Code of Regulations, and that they had not been compensated for work they performed before and after work and during meal periods.

The meal and rest period requirements at the root of this case have long confounded California employers and been the source of costly class action claims. Until now, the California Division of Labor Standards Enforcement (DLSE) has required employers essentially to force their employees to take meal periods and to guarantee that employees did not work more than five consecutive hours without taking one, and to require rest periods mid-way through any shift of more than two hours.

These interpretations of the law, said the court, were inconsistent with the plain language of the statutes and resulted in untenable requirements that caused employers to have to pay an extra hour of wages under Section 226.7 whenever employees missed or had incomplete meal or rest periods, chose to waive them, refused to take them, or took them too early or late in their shifts, or claimed they did.

The court effectively put an end to the most common of these claims by ruling that employers merely are required to make meal and rest periods available to employees, but are not required to ensure that they are taken, and employers have greater flexibility regarding timing than the DLSE had said. Specifically, the court ruled that:

• while employers cannot impede, discourage or dissuade employees from taking rest periods, they need only provide, not ensure, that rest periods are taken;
• employers need only authorize and permit rest periods every four hours or major fraction thereof (which is at least 3.5 hours, not 2 hours), and that they need not, where impracticable, be in the middle of the work period;
• employers are not required to provide a meal period for every five consecutive hours worked;
• while employers cannot impede, discourage or dissuade employees from taking meal periods, they need only provide them and not ensure that they are taken; and
• while employers cannot coerce, require, or compel employees to work off the clock, they can be held liable for this only if they knew or should have known employees were doing so.

In addition, the court took a big bite out of class action litigation based on these claims, ruling that because the company's policies complied with the law and there was evidence that the company took steps to be sure its policies were followed, the issue of whether an individual employee missed rest and meal periods or worked off the clock was inevitably an individualized, fact-specific analysis. As such, said the court, class action certification was erroneous.

Brinker is a decision of the Court of Appeal for California's Fourth Appellate District (the San Diego area). While it is now the prevailing law throughout California, the decision is not binding on other Courts of Appeal, so it is possible that in the future, a contrary ruling will be issued. In addition, it is anticipated that the Brinker plaintiffs will seek review by the California Supreme Court. If the Supreme Court grants review, the Court of Appeal decision will cease to have authoritative value and we will have to await the Supreme Court's decision.

But in the meantime, in view of this ruling, now is a good time for California employers to take a fresh look at their scheduling and timekeeping policies both to ensure that they are in compliance with the law, and to take advantage of the court's ruling. In particular, employers should make certain that their policies clearly state that employees should not perform any work off the clock and that they are provided with and should take their meal and rest periods.

Employers are advised also to make certain that their practices are in compliance with their policies, by training managers and issuing directives to employees. Employers may also want to revisit the timing of meal and rest periods to determine whether the more flexible scheduling policies endorsed by Brinker will be more suitable to their workplace. Employers also should make sure that appropriate employee waivers are in place (for instance, waiving meal periods on short work days, and allowing for on-duty meal periods when circumstances warrant), and that rest and meal period policies do not promise an extra hour of pay where it is no longer required.