For employers in the public housekeeping industry, such as restaurant and hotel employers, what is the scope of their duty to provide meal breaks and rest breaks to their nonexempt employees? On November 8th, 2011, the California Supreme Court will hear argument on this issue in Brinker Restaurant Corporation v. Superior Court (Hohnbaum) (Supreme Court No. S166350).
Brinker is a large corporation that owns such popular restaurant chains as Romano’s Macaroni Grill and Chili’s Grill and Bar. In 2006, a class action case was brought against Brinker on behalf of its hourly employees for alleged violations of California labor laws. Among the claims against Brinker were:
- Brinker failed to provide rest breaks to nonexempt employees, and failed to compensate them for the lost rest breaks;
- Brinker failed to provide meal breaks for days in which the nonexempt employees worked in excess of five hours, and failed to compensate them for the lost meal breaks; and
- Brinker engaged in “early lunching” by requiring employees to take meal breaks soon after they arrived for their shifts, and then required them to work for more than five hours, and sometimes more than nine hours straight without a meal break.
In California, a trial court may authorize a class action where the question involved is one of 1) a common or general interest, 2) many persons, or when the parties are numerous; and 3) when it is impracticable to bring them all before a court. The trial court found that based on the plaintiffs’ evidence on Brinker’s meal and rest break practices, there were sufficient common issues among the plaintiffs so that they all could be represented in one class. Consequently, the court ordered that the class be certified. Brinker thereafter filed a petition seeking to overturn the order.
The California Court of Appeal, Fourth Appellate District reversed. Brinker Restaurant Corp. v. Super. Ct., 165 Cal. App. 4th 25 (2008), rev. granted, 196 P.3d 214 (Cal. 2008). The Fourth District noted that the trial court’s decision to certify the class would not be overturned unless 1) it was unsupported by substantial evidence; 2) it rested on improper criteria; or 3) it rested on erroneous legal assumptions. To determine whether common issues predominated, the trial court was required to examine the issues framed by the pleadings and the law applicable to the causes of action alleged.
Here, the Fourth District found that the trial court erred in certifying the class because the trial court incorrectly interpreted the legal principles upon which it based its decision.
The plaintiffs alleged that Brinker violated California Labor Code Section 226.7 and Industrial Welfare Commission (IWC) Wage Order No. 5-2001 because Brinker failed to provide rest breaks every four hours, or a major fraction thereof, worked per day to nonexempt employees, and failed to pay them for those lost rest breaks. Section 226.7 provided that “[a]n employer shall require any employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commission.” Wage Order No. 5-2001 provided that
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 [3.5] hours. Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages.
Based on their interpretation of the wage order, the plaintiffs claimed that Brinker was required to provide rest breaks every three and one-half hours, and that rest breaks should be given before meal breaks.
The Fourth District found the plaintiffs’ claims to be unavailing. The appellate court found that the phrase “per four (4) hours or major fraction thereof” did not mean a rest period must be provided to an employee every three and one-half hours. Wage Order No. 5-2001 stated that rest breaks must be calculated on the total hours worked daily. Hence, if an employee had a work period of seven hours, then the employee was entitled to a rest break after four hours of work because the employee worked a full four hours. However, if an employee was scheduled for a work period of more than three and one-half hours but less than four hours, then the employee was entitled to a rest break after working a “major fraction” of the four-hour period.
The Fourth District also disagreed that employers must provide rest breaks before meal breaks. The language of Wage Order No. 5-2001 stated only that rest breaks would be in the middle of a work period “insofar as practicable.” Hence, an employer was not required to schedule rest periods in the middle of the work period if it was not practical to do so. As the Fourth District pointed out:
This discretion is of particular importance for jobs, such as in the restaurant industry, that require flexibility in scheduling breaks because the middle of a work period is often during a mealtime rush, when an employee might not want to take a rest break in order to maximize tips and provide optimum service to restaurant patrons.
The court noted that “[a]s long as employers make rest breaks available to employees, and strive, where practicable, to schedule them in the middle of the first four-hour work period,” then the employers complied with California law.
The plaintiffs also alleged that Brinker violated California Labor Code Sections 226.7 and 512, and IWC Wage Order No. 5, by 1) failing to provide meal breaks for days on which nonexempt employees worked more than five hours; 2) failing to provide second meal breaks for days employees worked in excess of ten hours; and 3) failing to pay the employees for the lost meal breaks. The plaintiffs also claimed that Brinker violated California law because the company allegedly had an early lunching policy. This policy required employees to take their meal breaks soon after they arrived for their shifts and then required them to work in excess of five hours without an additional meal break.
The Fourth District was unpersuaded by the plaintiffs’ claims. The appellate court found that, under Labor Code Section 512(a), an employer was only required to make a first thirty-minute meal break available to an employee who was permitted to work more than five hours per day, unless the employee was permitted to work a total work period per day that was six hours or less, and both the employee and the employer agreed by mutual consent to waive the meal break. In addition, an employer had a duty to make a second thirty-minute meal break available to an hourly employee who had a work period of more than ten hours per day unless 1) the total hours the employee was permitted to work per day was twelve hours or less; 2) both the employee and the employer agreed by mutual consent to waive the second meal break; and 3) the first meal break was not waived. The court found that, if it were adopt the plaintiffs’ interpretation, then language in the first sentence of section 512(a), such as the phrase “per day,” would be rendered superfluous.
The plaintiffs further claimed that Brinker was required to ensure that its hourly employees took their meal breaks. The Fourth District disagreed, stating that Brinker “need only provide meal periods[.]” Evaluating the plain meaning of the word “provide,” and applying the rules of statutory interpretation, the Fourth District concluded that the employer was only required to make such meal breaks available to employees, and not ensure that they were actually taken. According to the appellate court, to accept the plaintiffs’ position would be bad public policy because it would force employers
[T]o police their employees and force them to take meal breaks. With thousands of employees working multiple shifts, this would be an impossible task. If they were unable to do so, employers would have to pay an extra hour of pay any time an employee voluntarily chose not to take a meal period, or to take a shortened one.
The Fourth District concluded that had the trial court come to the same interpretation as the appellate court, then the trial court would have found that there were many individualized questions as to whether Brinker violated applicable labor laws. Hence, the Fourth District found that the plaintiffs’ rest break and meal break claims were not amenable to class treatment.
On October 22, 2008, the California Supreme Court granted review of the case. Oral argument was set for November 8, 2011.
Why This Case Matters
Employers must balance the requirements of California law with the nature and demands of their businesses. The California Supreme Court would help clarify the law regarding when and in what manner employers in the public housekeeping industry provide meal breaks and rest breaks to their nonexempt employees. The high court’s decision could, however, have drastic consequences for such employers. If the California Supreme Court should disagree with the Fourth District’s interpretation of the relevant labor laws, then some employers could be required to take further steps to assure that their employees take their meal breaks, or that rest breaks are scheduled at specific times. Consequently, employers could be forced to reevaluate and, quite possibly, make costly changes to how they conduct their businesses.
An analysis of the November 8 oral argument will be forthcoming.