July 15, 2010
It is not surprising that California courts are providing the backdrop for large plaintiff employment verdicts and the advancement of pervasive class action litigation over untimely or missed meal breaks. What is somewhat surprising, however, is that the California Supreme Court is poised to give employers some relief in ruling on the single most important unresolved issue in California employment law today. Employers in virtually every industry in the state await a conclusive finding concerning California Labor Code 512's requirement that employers "provide" a 30 minute meal period for employees that work more than 5 hours in a day. The key issue involves whether "provide" means employers must force employees to take meal periods or merely make meal periods available.
The stakes are very high for employers since the determination of class certification in meal period cases also turns on the definition of "provide." In fact, the first certified meal period case that has been tried in California (Savaglio v. Wal-Mart stores, Inc.) resulted in a jury award exceeding $172 million to 116,000 plaintiff employees. There, the Court instructed the jury that "provide" meant that Wal-Mart not only had to to offer the opportunity of a meal period for employees, but also had to ensure the employees took the period.
Cicairos v. Summit Logistics, Inc.: Truck Drivers Apply the "Breaks"
Large retailers are not the only companies watching the California Supreme Court closely. The transportation industry is in lock step, especially after the Third Appellate District in California ruled on the meaning of "provide" in Cicairos v. Summit Logistics, Inc. (2005) 133 CA4th 949.
In Cicairos, the defendant trucking company used an "activity based compensation system" in determining plaintiff's wages. Specifically, the company utilized a computerized onboard system called "XATA" to record various factors such as speed, starts and stops, and time. Plaintiff truck drivers were required to input factors manually into the onboard computer system so that activities could be accurately monitored. A driver could communicate that a certain trip took longer than expected by inputting one of the reasons for delay (e.g., road construction). In the absence of the inputting of one of these designated reasons for delay, a trip that lasted longer than expected resulted in the driver not being paid for extra time. The alleged effect of the system was that most drivers ate lunch while driving or frequently just skipped meals. The Court reasoned that since the defendant did not schedule meal periods or include rest break activity codes into the computer system, management pressured drivers to skip lunch and make more than one daily trip.
In doing so, the Cicairos court reversed the trial court's granting of summary judgment for the defendant noting that the defendant had the ability to regulate their drivers' activity to a certain extent through the XATA computer system. Given this ability, the defendant's obligation to provide the plaintiffs with an adequate meal period was not satisfied by assuming meal periods were taken. Rather, the employer has an affirmative obligation to ensure that workers are actually relieved of all duty.
Federal Courts Distinguish Cicairos
While the Cicairos ruling was unfortunate in that it now required employers to ensure their drivers took a meal break, federal courts have expressed their own view on the meaning of "provide." Recent federal court decisions have interpreted the statutory language as mandating employers to only provide the opportunity for the employee to take a meal break.
One such decision is White v. Starbucks, 497 F.Supp.2d 1080 (N.D. Cal. 2007). There, the plaintiff was a store manager who testified at deposition that he did not recall ever missing a meal when he worked at one store location. Any meals that he missed at another store location were the result of his own personal decision to skip those meals. Further, there was no evidence that store managers pressured employees to skip breaks. This situation was distinguishable from the allegations in Cicairos where the defendant knew that employees were driving while eating and did not take steps to remedy the problem. The Court felt it was inappropriate to require an employer with no reason to suspect employees were missing breaks to find a way to force employees to take breaks or pay an employee an additional hour of time when he or she voluntarily chose to skip a break. The Court reasoned that employees could manipulate the process and manufacture claims by skipping breaks or taking breaks of fewer than 30 minutes entitling them to compensation of one hour of pay for each violation. The Court felt that this could not have been the intent of the California legislature to create perverse and incoherent incentives.
Another federal court distinguished the Cicairos ruling in a transportation-related case, Moreno v. Guerrero Mexican Food Products, CV05-7737 DSF (C.D. Oct. 11, 2007). There, the United States District Court for the Central District of California ruled that California's meal period laws obligated employers to notify employees that they are free to take a 30 minute break. However, the same laws did not create an obligation to ensure that employees take advantage of those made available to them. The plaintiff drivers in Moreno contended that the defendant was required to ensure that they took meal breaks even on the road. The Court applied a constitutional definition of "applied" as meaning "make available." Hence, the Court ruled that the defendant did not have to ensure that employees ceased working during the meal period, but only to make the break time available.
The Moreno decision is important in that it noted that ensuring a meal break would not be practical in many industries. The Court stated that an undue burden would be placed on employers whose employees are numerous or do not remain in contact with the employer during the day. Despite this ruling, the Court denied defendant's motion for summary judgment on the meal period claim. The Court ruled that the employer's informal and verbal advisement of the meal break right to its employee drivers was insufficient to establish the company had adequately authorized employees to take their meal periods. And even after the defendant formally notified drivers after February 2006 that they were entitled to take meal breaks and mandated that the drivers record such breaks on their hand-held computers, the Court found that some drivers had routes that were not flexible enough to allow meal breaks. While denying defendant's motion for summary judgment, it also held that the case was not appropriate to be tried as a class action.
The California federal courts continued to distinguish Cicairos in Brown v. Federal Express Corp., 249 FRD 580 (C.D. Cal. 2008). In Brown, the Central District refused to grant certification of a meal break class since individual issues predominated based on the fact that employers must only provide meal breaks and not require that they be taken. In reviewing the applicable wage orders and Labor Code Sections 512 and 226.7, the Court found nothing in said laws to support the position that California employers are required to ensure employees take meal breaks. Indeed, it is the "employer's obligation to ensure that its employees are free from its control for thirty minutes, not to ensure that the employees do any particular thing during that time." (In making this statement, the Brown court looked for guidance from the California Supreme Court's view on meal breaks in the landmark case entitled Murphy v. Kenneth Code Prods., Inc., (2007) 40 Cal.4th 1094.) The decision in Murphy ultimately found that an "employee forced to forego his or her meal periodloses a benefit to which the law entitled him or her." Thus, the additional one hour of pay constituted compensation, not a penalty.
The Brown court found that requiring "enforcement" of meal breaks would be too burdensome on employers, especially when the employees do not remain in constant contact with the employer. The court continued and stated that it "does not believe the California Supreme Court would adopt the enforcement rule" advocated by employees. The Brown court was not persuaded by the employee's interpretation of the decision in Cicairos. The Brown court believed Cicairos did not require employers to ensure employees took their meal breaks, rather Cicairos stands for the proposition that employers must make meal breaks available and relieve them of duty.
Based on the Brown court's interpretation of the standard regarding meal breaks, it refused to certify a meal break class because a showing that Federal Express' policies deprived employees of their breaks would "require substantial individualized fact finding." The Federal Express drivers had different driving styles, different driving conditions, different routes, worked in different facilities across California, and had different managers, which the court would be forced to analyze in determining the reason an employee forewent a meal break. The "highly individualized factual inquiries just described predominate over the few legal and factual issues shared by the proposed class." The court would, in essence, be forced to hold over 5,000 mini-trials in order to determine the reason behind the missed meal break.
The most recent federal court decision concerning a meal period class certification claim occurred in Kenny v. Supercuts, Inc., 252 FRD 641 (ND Cal 2008). In Kenny, time records indicated that employees did not clock out for a full 30 minute meal break about 40% of the time. However, the percentage varied drastically depending on the employee involved. The Court followed Brown and held that employers are only required to provide employees with the opportunity to take a meal break. The next step in their analysis was to determine if there was evidence of a formal or informal company policy discouraging employees from taking the break. Since there was no evidence of such a policy, the Court denied class certification reasoning that it was necessary to determine why each individual employee did not clock in and out for a full 30-minute meal break.
Brinker and Brinkley Set the Stage for the Supreme Court
California's Fourth Appellate District weighed in on the break requirement in an unpublished ruling in Brinker Restaurant Corp. v. Superior Court, Cal. Ct. App. Oct. 12, 2007. The Court of Appeal reversed a trial court class certification order finding that the order was based on the false premise that the employer had a duty to ensure that its hourly employees' meal periods were provided to them.
Brinker operates 137 restaurants throughout California. The plaintiff employees allege that the company violated meal and rest period rules in addition to forcing employees to work off the clock. The company's meal policy states that employees are entitled to take a 30 minute meal period, during which they must clock out when they work a shift exceeding 5 hours. In addition, the company rest period policy allows employees who work more than 3.5 hours during a shift to be eligible for a 10 minute break for each 4 hours that they work. Employees who violate the policy were subject to disciplinary action including termination. The trial court granted the plaintiff's motion for certification of rest period, meal period and off-the-clock sub-classes. The Court of Appeal issued a Writ vacating the trial court's order holding that it abused its discretion in granting a class certification. The Court provided insight on the meal break and other issues in its ruling:
- Meal and Rest Periods Only Need to be Provided. The language of the Court's decision only prohibits employers from discouraging employees from taking meal and rest periods, but does not require employers to ensure that the breaks were taken.
- Rolling Five-Hour Meal Periods. Employers are not required to provide a meal period on a rolling five-hour basis. In other words, as long as the employer provides a meal period during a shift, an employee can work more than five consecutive hours without a meal break.
- Off the Clock Claims. The language of the decision suggested that employers will only be held liable to employees working off the clock if they knew or should have known of the situation.
Another case that will frame the meal period issue before the Supreme Court is Brinkley v. Public Storage, Inc., (2008) 167 Cal.App.4th 1278. There, the plaintiff accused his former employer of failing to ensure that employees were provided appropriate meal and rest breaks and providing incorrect paystubs. Defendant had instituted a policy that required all employees to take a 30 minute meal break if they were working a shift over 5 hours and to sign in and out for the breaks. The Court of Appeal upheld the trial court's partial granting of defendant's motion for summary judgment. The Court found that defendant produced substantial evidence that the employer provided meal periods to the plaintiff and other period sub-class members. Specifically, the defendant company showed that:
- Defendant had a written policy providing for meal periods;
- Plaintiff was aware of the policy;
- Defendant disciplined employees for not taking meal periods; and
- Defendant warned employees (including the plaintiff) at a meeting that they were required to take lunch and rest breaks.
Since the defendant met its burden with respect to the meal period claim, the burden shifted back to the plaintiff. Plaintiff claimed that he and other non-exempt employees missed meal breaks at times. However, the plaintiff did not produce admissible evidence that he or other employees were denied an opportunity to take the meal period. Plaintiff belatedly tried to argue that employees were not allowed to leave the premises or lock the office during meal periods. Therefore, they were effectively on duty and entitled to one hour of wages per meal. The Court dismissed this argument as being waived since it was not in the appellate brief or separate statement opposing the motion for summary adjudication.
In sum, the Court of Appeal felt that California law does not require the employer to ensure that employees take rest periods. An employer need only make rest periods available. Defendant was able to shift the burden back to the plaintiff by demonstrating that the company had a written policy permitting employees to take rest periods in substantial compliance with the wage order, and that the defendant advised the plaintiff and other employees at a meeting that they were required to take these periods. Plaintiff failed to meet its burden. Due to the conclusory nature of its allegations, plaintiff's claim that he could not take a rest break was insufficient to raise a triable issue of material fact.
Based on the guidance provided by the federal courts, it appears that the California Supreme Court is poised to uphold Brinker Restaurant and Brinkley, at least in part. It is anticipated that the Supreme Court will require employers to only make meal periods available rather than ensure they were taken. That being said, employers will still face liability for violations of the Labor Code where plaintiffs can demonstrate the company impeded or discouraged employees from taking rest periods or meal breaks. The net impact of the Supreme Court upholding Brinker and/or Brinkley creates a difficult burden of proof standard for plaintiffs. It is likely that the plaintiffs will have to prove not only that they did not receive their meal periods but also why they did not receive them. This standard of proof will make it difficult for plaintiffs to demonstrate liability against a company that has a meal break policy but subtly discourages employees from taking rest or meal periods.
Despite the anticipation of an employer-friendly resolution of the Brinkley and/or Brinker cases in the Supreme Court, it would behoove employers to develop meal break procedures with goals that include defeating class certification. Employers can protect themselves from the pandemic meal break litigation with the following simple steps:
- Implement and distribute written policies that comply with California meal and rest break requirements (the policies should require employees to report instances where they were forced to work without a meal break);
- Document management attempts to remind employees that meal and rest breaks must be taken;
- Institute a policy of disciplinary actions, including termination, of employees who fail to take meal and rest periods.
- Keep accurate time records to reflect at least that meal and rest periods were available to employees.
The American Trucking Association Gets Involved
How concerned is the transportation industry with the resolution of the meal break issue by the California Supreme Court?
The interest of the transportation industry in the nature and scope of the Supreme Court decision in Brinker is illustrated by the Amici Curiae brief filed by the American Trucking Associations, Inc. on August 17, 2009. ATA is, of course, the association of motor carriers and state trucking associations created to promote the interests of the trucking industry. Representing over 30,000 companies and almost every type of motor carrier operation in the United States, the ATA is an effective advocate for the trucking industry's interests. The ATA relies on the aforementioned case law and the language of Labor Code 226.7 and 512 in asserting that employers only need to make a meal period available pursuant to the law.
The ATA goes on to claim that the mandatory meal periods would be impossible to enforce for motor carrier operators. The association contends that monitoring employee compliance with the meal break requirements would be difficult, while enforcing these same requirements would be virtually impossible. The ATA notes that the Federal Motor Carrier Safety Administration had considered a mandatory rest break while amending hours of service regulations for interstate motor carriers in 2005. The FMCSA concluded that it would be difficult to enforce their personnel to verify meal and rest breaks, and that to do so would significantly interfere with the operational flexibility that motor carriers and drivers need to manage schedules. The ATA goes on to argue in its brief that mandatory meal periods at specified times would often cause carriers to choose between violating the requirements and putting their drivers in potentially unsafe situations. In addition, drivers would be placed in difficult situations by strict timing regulations. For example, traffic may make a driver's planned break at a certain location impossible. In order to meet the inflexible timing requirements suggested by the plaintiff in Brinker and take a meal break, the driver may be forced to pull off to the side of the road, a potentially dangerous situation. The driver would face the choice of violating California Vehicle Code 21718(a) by making a prohibited roadside stop or violating the break time requirements.
In sum, it appears the transportation industry views the Brinker and Brinkley cases as a "vehicle" to avoid the strict and onerous interpretation of the meal period requirements set forth in Cicairos. Although oral arguments have not yet been scheduled before the Supreme Court, the transportation industry and many other employers should anticipate guidance on the meal break issue later this year.
 In Cicairos, the Court of Appeal reversed a trial court's granting of a motion for summary judgment finding that the motor carrier exemption set forth in wage order number 9 of the Industrial Welfare Commission (IWC) applied to overtime claims but not to meal periods, rest breaks and itemized wage statements. The First Appellate District had ruled previously that wage order number 9 provided that California overtime regulations did not apply to employees whose hours of service are regulated by the United States Department of Transportation. Collins v. Overnite Transportation (2003) 105 Cal.App.4th 171.
 Moreno is not a published decision.
Raymond A. Greene specializes in litigation and trial work with an emphasis in employment and catastrophic personal injury matters including wage and hour litigation, emergency transportation response, sports and student issues and product/premises liability claims. Mr. Greene can be reached at 510-835-6706 and firstname.lastname@example.org.