California Labor & Employment Law Blog

By Ryan McCoy and Catherine Ngo

Several pieces of employment-related legislation are pending before the California Legislature this 2009-2010 term.  Some of the more noteworthy items are listed and described as follows:

AB 569 (Emmerson) - This bill would specifically exempt construction employees, commercial transportation drivers, and employees in the security services industry from the meal period provisions of Labor Code section 512 provided that the employees are covered by a collective bargaining agreement meeting certain conditions.  Thus, assuming a valid collective bargaining agreement, an employer in the above industries would not be required to provide a meal period to an employee who works more than five hours in a given work day.  The bill was passed by the Assembly 72-2, and currently the bill awaits hearing in the Senate Committee on Labor and Industrial Relations.

This bill is supported by the likes of the United Parcel Service ("UPS"), who has argued that the bill would allow unionized transportation companies to negotiate flexible terms for the timing of meal periods because current law significantly restricts the freedom of drivers to decide for themselves when they can take their meal periods.  Additionally, the Associated General Contractors argued in support of the bill that although many construction companies and their employees operate under a collective bargaining agreement, recent case law has rendered their agreements inoperative because the meal break statutes supersede any such private agreements.  The opposition appears to come primarily from those who believe that the statute should be applied to all industries, instead of just those provided for in the statute.  Of course, it is obvious that more clarity is needed with respect to meal and rest break provisions, and it is hoped that the California Supreme Court provides clarification on this issue in its pending decision in Brinker Restaurant Corp. v. Superior Court of San Diego County (Hohnbaum).

AB 2727 (Bradford) - This bill would prohibit an employer from denying an application for employment for the reason that the applicant has previously been convicted of a criminal offense unless the employer determines that a) there is a direct relationship between the prior conviction and the employment sought or b) the granting of employment would involve an unreasonable risk to property or persons.  This is an expansion from current legal prohibitions on consideration of criminal history.  Currently, the bill sits in the Assembly Appropriations Committee awaiting a re-hearing after initially passing the Committee on strict party lines.

According to the author, this bill is intended to codify existing federal EEOC policy into state law. However, this bill is strongly opposed by several groups representing private employers, including the California Chamber of Commerce, all of whom argue the bill goes beyond current EEOC policy.  The Chamber specifically argues that it "increases potential liability exposure for hiring decisions by restricting the ability of employers to make their decision based on a job applicant's criminal conviction."   Furthermore, the bill places yet another unreasonable burden on employers, which must take into account such factors as protection of the public, other employees, and property when making hiring decisions.

AB 2772 (Committee on Labor and Employment) - This bill clarifies that an employer wishing to appeal a Labor Commissioner decision with the superior court must first post a bond in the amount of the judgment rendered in the administrative hearing.  This bill is intended to supersede a California appellate ruling, Progressive Concrete Inc., v. Parker, 136 Cal.App.4th 540, 548 (2006), which held that the bond requirement of Labor Code section 98.2(b) is merely "directory," instead of "mandatory and jurisdictional."  This bill states that the bond is indeed mandatory, and the employer would thus be required to first post a bond with the reviewing court in the full amount of the Decision of Award issued by the Labor Commissioner.  There is no opposition to the bill currently on file.  The bill unanimously passed the Assembly Committee on Labor and Employment, and awaits hearing on the Assembly floor.

AB 2773 (Swanson) - This bill would eliminate current judicial discretion to deny attorneys' fees in a case other than a limited civil case, if the prevailing party recovers a judgment that could have been rendered in a limited civil case.  Thus, this bill would overrule the California Supreme Court in Chavez v. City of Los Angeles, 47 Cal.4th 970 (2010), which held that a trial court has discretion in a FEHA case to deny a successful plaintiff his attorneys' fees when the plaintiff chooses to proceed in an unlimited civil jurisdiction, but recovers less than the jurisdictional minimum.   After passing the Assembly Judiciary Committee on strict party lines, the bill now awaits hearing on the Assembly floor.

While its supporters contend that this bill will make the system more fair and equitable, groups such as the Civil Justice Association of California oppose the bill, arguing that it would "undo a judicial deterrent to filing frivolous lawsuits."  The California Chamber of Commerce has also commented that this bill "unreasonably increases business litigation costs by removing judicial discretion to reduce or eliminate exorbitant legal fees in fair employment and housing cases."

AB 2340 (Monning) - This bill gives California employees the right to take three days of unpaid leave in the event of the death of certain relatives.  More specifically, the bill prohibits an employer discharging, disciplining, or discriminating against an employee for requesting or taking up to three days of bereavement leave upon the death of a spouse, child, parent, sibling, grandparent, grandchild, or domestic partner.  The bereavement leave can be taken up to thirteen months following the death, and need not be on consecutive days.  Last week, this bill was passed by the Assembly Appropriations Committee on a 11-5 margin and will now make its way to the Assembly floor.  Notably, similar legislation was vetoed in 2007 by the Governor Schwarzenegger after passing both the Assembly and Senate.

SB 908 (Wyland) - This bill would exempt employers in the armored car industry from the requirement to provide a meal period to their employees.  The bill's author maintains that employees driving armored cars need specific statutory treatment due to both public safety and environmental concerns.  As such, this bill represents another attempt to exempt a specific class of employees from general meal break provisions.  As detailed in previous blog posts, the development of meal and rest break provisions is otherwise in somewhat of a holding pattern due to the looming California Supreme Court decision, Brinker Restaurant Corp. v. Superior Court of San Diego County (Hohnbaum).  Currently, this bill awaits hearing in the Senate Committee on Labor and Industrial Relations.

SB 990 (Dutton) - This bill also seeks to clarify meal break laws by making clear that the requirement to "provide" a meal break means "to make the break available."  The bill would also clarify circumstances under which an employee could waive a meal period or agree to an on-duty meal period.  This bill still awaits hearing in the Senate Committee on Labor and Industrial Relations.

SB 1304 (DeSaulnier) - This bill requires private employers to permit employees to take up to 30 days of paid leave for an organ donation and up to five days of paid leave for a bone marrow donation.  The bill also prohibits retaliation against employees who take this leave, and would authorize an employee to bring a civil action to enforce the provisions of this bill.  Though this bill is certainly well-intentioned and designed to encourage organ and bone marrow donations, many groups, including the California Chamber of Commerce, oppose the bill because a new private sector mandate is not the correct policy to advance an otherwise laudable goal.  As small business bankruptcies are at an all-time high in this state, many argue that increasing the cost of doing business in an already costly environment is not a good idea to pursue at this time.  After passing the Senate Judiciary Committee, this bill has been forwarded to the Senate Appropriations Committee.
 

SB 1370 (Ducheny) - This bill requires that employees who are paid by commission are provided with a written contract on the terms and conditions of employment.  Under existing law, contracts must be in writing if 1) the employer has no permanent and fixed place of business in California, 2) the employer is entering into a contract of employment with an employee for services to be rendered within California, and 3) the contemplated method of payment involves commissions. Under this legislation, any and all employment contracts that envision commissions as a form of payment must be in writing, regardless of where the employer is located and/or where the employee's services are to be performed.  This bill was passed by the Senate Committee on Labor and Industrial Relations, and awaits referral to the full Senate.
 

Employers potentially impacted by the foregoing pending legislation may wish to lodge support or opposition through appropriate channels. 

By Marie DiSante

The alleged failure to provide legally mandated meal breaks has been one of the most common claims raised against California employers in the recent past.  The lack of agreement as to what it means to "provide" a meal break has allowed the number of these cases to explode.  As any employer who has faced a meal break claim knows, the California Supreme Court granted review of a case entitled Brinker Restaurant Corp. v. Superior Court (Hohnbaum).  (The Court also granted review of Brinkley v. Public Storage, another case raising similar meal break issues.)  The Supreme Court's decision in the Brinker case is expected to provide some much needed clarity with respect to the obligation of employers to "provide" meal breaks, including whether the employer must ensure that the meal breaks are taken, or whether the employer simply needs to make those breaks available for employees, to be taken or skipped at the employee's discretion.

The Supreme Court granted review of Brinker in October 2008.  The case has been fully briefed by the parties, and the deadline for filing amicus briefs has passed.  (There were more than 20 such briefs filed.)  The ball now is in the Supreme Court's hands.  The next step is for the Court to schedule a date for oral argument.  There is no deadline by which the Court needs to schedule this argument, so we do not know how quickly it will take place.  So far the Court has given no indication of when the argument will occur, although many expect it to occur in the first half of 2010.  Once the Court conducts the oral argument, it has 90 days in which to issue its decision.

The Court issues its monthly oral argument calendar on the 10th of each month for the following month.  The Brinker case is not listed on the Court's March calendar, so oral argument will not take place until April at the earliest.  We will keep you posted on the status.

By Robin E. Weideman

As anticipated, a petition for review before the California Supreme Court was filed last week in Brinkley v. Public Storage, the most recent published decision by a California State court holding that an employer need only make meal periods available to employees, not ensure that the meal periods are actually taken.  The California Supreme Court has 60 days to decide whether or not to grant review.  In light of the Court's recent grant of review in Brinker v. Hohnbaum, involving the same issue, it is anticipated that the Court will grant review of Brinkley but issue a hold order delaying briefing pending resolution of the Brinker case.  If the Court grants review, Brinkley will no longer be citable precedent pending review.

By Robin E. Weideman

Today California’s Second Appellate District, Division Three, issued its decision in Brinkley v. Public Storage and held that California law only requires employers to make meal periods available to employees, not to ensure that the meal periods are actually taken.  This newly published decision is good news for California employers, given that Brinker is no longer citable precedent pending review by the California Supreme Court.

In holding that an employer need not ensure that meal breaks are taken, the Brinkley court relied on the reasoning of the recent federal court decisions reaching the same conclusion, including Brown v. Federal Express Corp. and White v. Starbucks.  The court held that the employer was entitled to summary adjudication of plaintiff’s meal period claim (which was brought as a class action) because there was no evidence that plaintiff or the class members were deprived of the opportunity to take meal breaks.  To the contrary, the evidence showed that the employer had a policy allowing for meal breaks, plaintiff and other class members were aware of the policy, and the employer reprimanded employees for not taking meal breaks.  The employer also submitted 21 declarations of class members indicating that they were allowed to take meal breaks at their discretion.  Although plaintiff submitted evidence that he and other class members at times missed meal breaks, the court held that this evidence did not support a finding that plaintiff or the class members were denied the opportunity to take meal breaks.

In addition to holding that employers need only provide employees the opportunity to take meal breaks, the court also held that there is no requirement that meal breaks be provided within the first five hours of work, finding that “nothing in the applicable statutes or wage orders supports [this] position.”  (Notably, the DLSE currently appears to be taking the contrary position that meal periods must be provided within the first five hours of work, according to the DLSE's most recent memo on the subject.  See our October 27 blog entry regarding the DLSE's memo.)

By Robin E. Weideman

On October 23, 2008, the DLSE withdrew its July 22, 2008 memo directing all DLSE staff to follow the Brinker decision, and issued a new memo setting forth its enforcement policy in light of the California Supreme Court’s recent grant of review of Brinker.  The new memo seems to suggest that the DLSE will still follow the reasoning and holding of Brinker, even though Brinker is under review.  The memo cites with approval the numerous federal court decisions holding that an employer need only provide meal breaks, not ensure that they are taken.  The memo also disapproves of the Cicairos v. Summit Logistics case, to the extent that case may be interpreted to hold that employers have an affirmative obligation to ensure that meal periods are taken.  To review the entire memo, click here.
 

By Kent J. Sprinkle

Today the California Supreme Court granted Plaintiff Adam Hohnbaum’s petition for review of the Court of Appeal's decision in Brinker Restaurant Corp. v. Superior Court (Hohnbaum).  We have followed the developments in this case dealing with the dispute on what it means to "provide" employees with meal and rest breaks.  The Court of Appeal in Brinker had resolved this issue favorably for employers, reversing the trial court's class certification order (which included meal and rest break claims and off-the-clock claims), concluding that, among other things, "while employers cannot impede, discourage or dissuade employees from taking meal (and rest) periods, they need only provide, not ensure, meal (and rest) periods are taken."

With the Brinker case now pending review by the Supreme Court, the decision by the Court of Appeal is no longer considered citable or binding on California courts.  However, the federal district court decisions addressing the same issue, two of which were cited favorably in the Brinker decision itself, remain good law that may be cited as persuasive authorities, though the federal decisions are not binding on state courts.  The federal district court cases include White v. Starbucks Corp., Brown v. Federal Express Corp., and Kenny v. Supercuts, Inc., each of which were discussed in prior blog entries.  Also, as discussed in our July 29, 2008 blog posting, the DLSE issued a memo dated July 25, 2008 directing its staff to follow the Brinker holding for all matters pending with the DLSE.  It remains to be seen whether the DLSE will adjust its position with Brinker pending review by the Supreme Court.

We will continue to monitor and post any further developments on this important issue, including any further information concerning the DLSE's position, as well as any proposed legislative action concerning the interpretation of "providing" breaks.  If you have any questions regarding drafting policies or the implications of this decision for your business, please contact us directly.
 

By Robin E. Weideman

On August 29, Plaintiff Adam Hohnbaum’s counsel filed the much anticipated petition for review before the California Supreme Court in the well-publicized meal period case Brinker v. Hohnbaum. The California Supreme Court has 60 days to decide whether to grant review, which  means that employers should know by late October whether the Brinker decision will remain citable precedent. In some instances, the Court extends the time period for determining whether to grant review by 30 days. If that happens, a decision should issue by November at the latest. We will continue to monitor the progress of the petition and post updates here.

On July 25, California's Labor Commissioner, Angela Bradstreet, issued a memo to all Department of Labor Standards Enforcement staff regarding the recent California Court of Appeal decision in Brinker v. Superior Court (Hohnbaum).  The Labor Commissioner specifically instructed, "All staff must follow the rulings in the Brinker decision effective immediately and the decision shall be applied to pending matters."  As a result, the DLSE will apply the following rules regarding meal and rest breaks:

1.  Employers must provide meal periods by making them available, but need not ensure that they are taken.  Employers, however, cannot impede, discourage or dissuade employees from taking meal periods.

2.  Employers are not required to provide a meal period for every five consecutive hours worked.  There is no "rolling five-hour" meal period requirement.  Instead, employers simply must make a 30-minute meal period available to an employee who is permitted to work more than five hours per day (unless a valid waiver is in place for an employee whose shift is six hours or less).  If the employee takes a meal period early in his/her shift and then works an additional five hours, there is no requirement to provide the employee with a second meal period (unless the employee works more than 10 hours per day, in which case a second meal period must be made available absent a valid waiver).

3.  Employers must provide rest breaks, but need not ensure that they are taken.  Employers, however, cannot impede, discourage or dissuade employees from taking rest periods.  Rest periods must be authorized and permitted every four hours or major fraction thereof.  "Major fraction thereof" means the time period between three and one-half hours and four hours.  Therefore, if an employee works between three and one-half hours and four hours, a rest period must be provided.  However, if the employee works more than four hours, a rest period must be provided only every four hours, not every three and one-half hours.

4.  Employers are not required to authorize and permit a first rest period before the first meal period.  As long as employers make rest periods available to employees and strive, where practicable, to schedule them in the middle of the first four-hour work period, employers are in compliance with the Wage Orders.

Employers with pending or future meal and rest break claims before the DLSE will want to review both the Labor Commissioner's July 25 memo, as well as the Brinker decision.  To review the full text of the Labor Commissioner's memo, click here: http://www.dir.ca.gov/DLSE/Brinker_memo_to_staff-7-25-08.pdf

Following the Fourth District Court of Appeals' issuance of its decision in the Brinker case yesterday, Governor Arnold Schwarzenegger released the following statement regarding the decision:

"We are pleased that the California Court of Appeal issued today a decision squarely addressing many of the central issues in dispute concerning meal and rest periods.  The confusing and conflicting interpretations of the meal and rest period requirements have harmed both employees and employers.  Today's decision promotes the public interest by providing employers, employees, the courts and the labor commissioner the clarity and precedent needed to apply meal and rest period requirements consistently."

In today's decision, the court held that employers must make meal periods available to employees and cannot impede, discourage or dissuade employees from taking meal periods.  However, once made available, the employer is not obligated to police the employee's use of that time by ensuring that the employee takes the meal period." 

(http://gov.ca.gov/press-release/10273/)

This month, California’s Department of Labor Standards Enforcement (“DLSE”) posted on its website a report on the public forums held last summer regarding California’s meal period rules and their effect on the workplace.  To view the report and related information, click here:  http://www.dir.ca.gov/dlse/mealandrest/MRForumReport.pdf; http://www.dir.ca.gov/dlse/mealandrest/MRsummaryComments.pdf; http://www.dir.ca.gov/dlse/mealandrest/MRForumTranscript.pdf.  The timing of issuance of the report is interesting, given that California’s Fourth District Court of Appeal is expected to issue a decision in the near future on what it means to “provide” a meal period under California law.  Oral argument before the Court of Appeal was held in mid-May in the Brinker v. Hohnbaum matter and a decision should issue by August.  The DLSE reportedly sent a letter to the Brinker court late last year urging the court to decide this unsettled issue in a published decision.  For more information on the Brinker v. Hohnbaum case, see our prior posts of October 23, 2007 and November 12, 2007.

By John Anthony

On June 25, 2008, The California State Senate Committee on Labor and Industrial Relations will hold hearings on Assembly Bill 1711.  Assembly Bill 1711 proposes a number of changes to sections of the California Labor Code regulating, among other rules, the meal break requirements imposed on the state’s employers as part of AB 1711.  Some of the bill's more important provisions are summarized below.

Meal Break Timing and On Duty Meal Periods

The proposed legislation requires that the meal period shall be completed before the end of the sixth hour of work.  The current interpretation is that the meal period must be commenced before the end of the fifth hour, so this bill would provide greater flexibility in the scheduling of meal breaks if enacted.

The bill also contains significant modifications to Labor Code section 512(b), regulating provision of an on-duty meal period.  Current regulations are vague about when an on-duty meal period is permitted.  The proposed amendments clarify that on-duty meal periods are permissible when the “nature of the work” prevents an employee from being relieved of all duties, namely when the employee works alone, or “is the only person in his or her job classification who is on duty and there are no other employees who can reasonably relieve him or her of all duties.”  Another condition is when the work requires a licensed employee, and the employee in question is the only licensed person on duty.  These proposed changes clarify when an on duty meal period would be permitted, but do not expand such meal periods in a way likely to be useful for most employers. 

Collective Bargaining Agreements

Under the proposed changes, the meal period requirements of Labor Code section 512 will not apply to employees covered by a collective bargaining agreement if the agreement expressly provides for meal periods and provides final and binding arbitration of disputes concerning application of its meal period provisions.  This would lead to much greater flexibility for unions and employers to negotiate their own meal and rest period provisions, and would likely be very helpful to unionized employers and their employees.  

What Next?

At some point after the scheduled hearing, the Senate Committee will vote on whether the bill should be sent to the Senate floor for a vote.  If the bill is passed by the Senate without amendment, the bill will be sent to Governor Schwarzenegger for his signature to become law.  If the bill is amended by the Senate, it will be sent back to the Assembly and if the Assembly concurs with any amendments, the bill will likewise be sent to the Governor.  We will continue to follow the progress of this bill. 

By Marie D. DiSante and Conner J. Moyle

On April 16, 2008, we posted information regarding Senate Bill 1539, which expressed the legislative intent to clarify the requirements of California law as they relate to employee meal periods.  See April 16, 2008 Blog Post.  Since that time, many clients and friends of the firm have requested that we prepare a sample letter that they may send to various legislative representatives showing their support for additional clarity and flexibility in the meal period rules.  We have prepared such a sample, and you may access the sample letter by clicking here.  We encourage you to modify the letter as necessary so that it reflects your own particular beliefs about the manner in which the meal period rules should be clarified or changed.

Please note that SB 1539 originally was sent to the Senate Appropriations Committee for further action.  Since that time, SB 1539 has been withdrawn from hearing before the Senate Appropriations Committee and re-referred to the Rules Committee.  See http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_1501-1550/sb_1539_bill_20080421_history.html.  The Rules Committee most likely will refer the bill back out to an appropriate policy committee prior to further substantive action.  Because the bill is not yet sitting before a particular policy committee for substantive action, we recommend sending letters in support of SB 1539 either to the Rules Committee or to the State Senator and/or Assemblyperson for the geographic area in which your business is located.  As an alternative, once the bill makes its way to a particular policy committee for substantive action, letters may be sent directly to that committee.  We will keep you posted on further developments in connection with SB 1539.

For more information on how you can get involved in helping to ensure that the legislature makes appropriate changes to California's meal period regulations, please contact Marie DiSante or Connor Moyle

By Alison L. Tsao

On April 15, 2008, the California Senate Labor and Industrial Relations Committee unanimously approved SB 1539 as amended to “declare the intent of the Legislature to enact legislation to address issues related to meal periods in employment.”   SB 1539, authored by Senator Ron Calderon (D-Montebello), sponsored and supported by the California Chamber of Commerce, California Restaurant Association, and approximately 40 trade and professional organizations, was introduced to provide a comprehensive solution to compliance with and enforcement of California’s meal period laws.

SB 1539 has generated bipartisan support from Committee members who have expressed concern over the inflexibility and ambiguity of meal period laws in California that have spawned a tidal wave of expensive litigation and liability for California employers.  As a result, Committee members have recognized the need for clarity and greater flexibility to meet the needs of both employers and employees.  SB 1539, as originally drafted, would have provided for the following changes to existing meal period law (among others):  (1) allowing the employee to waive either the first or second meal period if the employee is otherwise entitled to two meal periods in a day; (2) expanding conditions for employees to take on-duty meal periods; (3) allowing collective bargaining agreements to override provisions of the meal period rules; and (4) defining “providing an employee with” a meal period to mean “giving the employee an opportunity to take” a meal period.  The Committee amended SB 1539 to delete all of the substantive changes to the meal period laws, and amended the bill to simply declare the intent of the Legislature to enact legislation to address issues related to meal periods in employment.  While the meal period laws have not been changed, the Legislature’s declaration of intent is a good sign that lawmakers recognize the need for change and will continue to have further discussions to try to find consensus on a solution that contains adequate protections for employers and employees.  SB 1539 has been referred to the Senate Appropriations Committee.  Employers and employees are encouraged to contact the Senate Appropriations Committee to voice their opinions regarding SB 1539 to continue to build the momentum for change in meal period laws.  We will continue to monitor this legislation and apprise you of any developments.

By Kent J. Sprinkle

A federal district court recently addressed the ongoing debate in California regarding what it means to "provide" employees with meal breaks under California law.  California's Department of Labor Standards Enforcement takes the position that employers have an affirmative obligation to ensure that employees take their meal breaks and that employers are liable for one hour of premium pay for each meal period that is not taken (or that is not timely taken), regardless of the reason.  Plaintiffs' attorneys often cite to Cicairos v. Summit Logistics, 133 Cal.App.4th 949 (2005), as endorsing the DLSE's interpretation of the law.  In contrast, as discussed in a prior post on July 22, 2007, at least one federal district court rejected the DLSE's interpretation and instead determined that an employer complies with its obligation to "provide" meal periods if the employer makes the meal periods available to employees and provides the opportunity for employees to take them.  (White v. Starbucks, 497 F.Supp.2d 1080, 1088-89 (N.D. Cal. 2007)).  In White, the court held that in order to prevail on a meal period claim, the plaintiff would have to show that he was "forced to forego" meal periods, not simply that he did not take them. 

Another federal court has now weighed in on the subject and agreed with White v. Starbucks. In Brown v. Federal Express Corporation, et al., 2008 WL 906517 (C.D. Cal. Feb. 26, 2008), District Judge Dale Fischer denied class certification to a subclass of driver employees that were allegedly denied meal and rest breaks.  The plaintiffs and putative class members were current and former non-exempt hourly drivers employed by Defendant Federal Express Corporation.  The plaintiffs claimed that the putative class of drivers, who performed a variety of delivery and hauling duties with varied types of work and distances driven, were allegedly put under excessive pressure to make deliveries as quickly as possible, such that they were unable to take meal and rest breaks within the time required by law.  They also alleged that FedEx failed to pay an additional hour of pay to putative class members who missed their meal and/or rest breaks.  In denying class certification, the court held that FedEx's requirement to "provide" meal periods only meant making meal periods available to employees.  "It does not suggest any obligation to ensure that employees take advantage of what is made available to them."  Brown, 2008 WL 906517 *5.  Citing White v. Starbucks, Judge Fischer held that "[r]equiring enforcement of meal breaks would place an undue burden on employers whose employees are so numerous or who, as with Plaintiffs, do not appear to remain in contact with the employer during the day.  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.  In the absence of California Supreme Court precedent, this Court must apply the rule it believes the court would adopt under the circumstances. (internal citations omitted).  The court does not believe that the California Supreme Court would adopt the enforcement rule advocated by Plaintiffs."  Brown, 2008 WL 906517 at *6.

The court in Brown  also relied on language in the California Supreme Court's decision in Murphy v. Kenneth Cole Prods., Inc., 40 Cal.4th 1094, 1104 (2007), as supporting its interpretation of "providing" meal breaks.  "The California Supreme Court has described the interest protected by meal break provisions, stating that '[a]n employee forced to forgo his or her meal period . . . has been deprived of the right to be free of the employer's control during the meal period.' (citing Murphy, 40 Cal.4th at 1104).  It is an 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.  Indeed, in characterizing violations of California meal period obligations in Murphy, the California Supreme Court repeatedly described it as an obligation not to force employees to work through breaks."  (internal citations omitted).

Notably, the Brown court rejected Plaintiffs' argument that Cicairos v. Summit Logistics, Inc. compelled a contrary conclusion.  In addition to rejecting the notion that Cicairos mandates that "employers have 'an affirmative obligation to ensure that workers are actually relieved of all duty,'" the court in Brown also distinguished the decision, pointing out that in Cicairos, "the court found liability where an employer simply assumed breaks were taken, despite its institution of policies that prevented employees from taking meal breaks."  2008 WL 906517 at *6.  Though not discussed in such detail by the court in Brown, it is notable that a distinguishing fact (the policy that was considered to prevent employees from taking breaks) in Cicairos was the absence of a code for meal or rest breaks whereas the driver employees were required to enter codes for all sorts of other activities conducted during the work day.

After articulating the legal standard for what it means to "provide" meal periods, the Brown court found that there was no evidence of any particular policy at FedEx susceptible to common proof to show that drivers were affirmatively prevented from taking required breaks.  As a result, the court found that individual issues predominated on the meal period claims, and denied class certification.

While federal district court decisions are not binding on state courts or on the Ninth Circuit, the growing acceptance of the reasoning in White v. Starbucks is a good sign for employers.  The extended discussion in Brown regarding the Supreme Court's comments in Murphy is also a good sign, since the Murphy case, while not squarely addressing the standard for "providing" breaks, certainly provides a sound basis for the reasoning in Brown.  We will closely monitor further developments on this important issue and will post any news. 

Posted by Jennifer Barrera

A judge in the Northern District of California recently ruled that an on-duty meal period is not equivalent to a “waived” meal period.  In McFarland v. Guardsmark, LLC, the employee (a security guard) worked shifts in excess of ten hours, thereby entitling him to two meal periods under California's Labor Code.  The employee later filed a lawsuit against his employer, claiming the two on-duty meal periods in one shift were essentially two waived meal periods, and therefore violated his right to a duty-free meal period.  The employee relied upon an excerpt from the Department of Labor Standards Enforcement (“DLSE”) Operations Manual that implied the DLSE considers an on-duty meal periods as a “waived” meal period and that an employee cannot waive two meal periods in one shift.  The employer filed a motion for summary judgment and argued that an on-duty meal period is a type of paid meal period, not a waived meal period. 

In her ruling, the judge rejected the DLSE’s interpretation of on-duty meal periods and stated that courts are not required to defer to the DLSE’s manual.  The judge agreed with the employer and held that an on-duty meal period is not a waived meal period and, therefore, the employee may take two on-duty meal periods in one shift, assuming the other requirements for an on-duty meal period are satisfied. 

The employee’s attorneys have indicated that they are planning to appeal this ruling, and we will provide updates if the court's decision is ultimately reviewed on appeal.  In the interim, please contact us with any questions on this issue or to discuss the requirements an employer must satisfy to establish an on-duty meal period. 

Posted by David V. Greco

Employers facing class actions for failure to provide employees with meal and rest breaks received a bit of good news from a California appellate court when it denied class certification on such claims because it determined that common questions of law and fact did not predominate. 

Specifically, in Bell v. Superior Court, plaintiffs were drivers who claimed, among other things, that their employer failed to provide them meal and rest breaks as required by law.  Plaintiffs contended that the company had an unwritten policy of scheduling too much work to allow drivers to take their breaks and submitted declarations to support their claims.  In response, the company submitted evidence demonstrating that meal and rest breaks were provided, including personnel handbooks and manuals that set forth policies for meal and rest breaks and declarations confirming that drivers were trained to take breaks and that at least some drivers did so.  The court denied class certification, finding that individual issues predominated over common issues, based in part on its determination that there was no evidence of a company-wide policy prohibiting meal and rest breaks. 

What this means for California employers is that the existence of written policies directing employees to take meal and rest breaks (including those in employee manuals) is something that courts consider when determining whether or not to certify a class.  Drafting and implementing such policies is a relatively simple process, and one which – as shown by this case – can have significant positive repercussions at a later date. If you have any questions regarding drafting such policies or the implications of this decision for your business, please contact us directly.

Posted by Kent J. Sprinkle

There have been few decisions dealing with the question of whether employers are merely obligated to "provide" meal breaks to employees simply by making such breaks available or – as many plaintiffs have argued – whether the obligation to "provide" meal breaks in fact carries with it an obligation for employers to forcefully ensure that employees are actually taking such breaks, e.g., to actively police employees to ensure meal breaks are both offered and taken.  The answer to this question will clearly have a significant impact on whether such claims are amenable to class treatment in class actions. 

Appearing to address this issue favorably for employers, a California Court of Appeal in Brinker Restaurant Corp. v. Superior Court, 2007 WL 2965604 (Oct. 12, 2007) – a recent but as yet unpublished decision – reversed a trial court's class certification order (which included meal and rest break claims), stating that the trial court's order relied on improper criteria and incorrect assumptions, including its failure in deciding the issue of what it means to "provide" meal breaks.  The Brinker court held that the class certification order was erroneous and had to be vacated because, among other reasons, "the class certification order rests on an incorrect assumption with respect to the meal period claims to the extent those claims are based on the theory that [the employer] had a duty to ensure that its hourly employees took the meal periods it provided to them, and thus the court abused its discretion in finding that these claims are amenable to class treatment." 

Specifically, in Brinker, a group of restaurant employees sued their employer for alleged failure to provide certain rest breaks and meal breaks, or compensation in lieu of such breaks, and also claimed that the restaurant required them to perform "work off the clock" during meal periods.  The decision contains substantially positive analysis concerning these claims as well as their amenability to class treatment, including a discussion of when breaks must be provided in terms of timing during the workday and that rest periods may be waived.  However, a most notable feature of the opinion is that it apparently, although not expressly, endorses the interpretation that an employer's obligation to "provide" employees with a meal break merely means to "offer" meal breaks or to make such breaks available.  The Brinker Court cited White v. Starbucks Corp., 497 F.Supp.2d 1080 (N.D. 2007), a positive published federal decision which held that "provide" requires only that employers "offer" meal breaks.  Unfortunately, the Brinker decision avoids a completely clear ruling on this question, instead pointing to the trial court's error in simply failing to decide on the issue of the meaning of "provide," but the cite to White may be indicative of the trend in such cases.  Hopefully, the Brinker decision will ultimately be published and subsequent cases, especially class action cases, will benefit from having a clearer answer to the question of how to "provide" meal breaks once and for all.  

Posted by Nancy G. Berner

The California Assembly adjourned the 2007 session without voting on Assembly Bill 1711, a bill that proposes sweeping changes to the Labor Code provisions regulating meal and rest break requirements imposed on California employers.  The Labor Code amendments were proposed by Assembly Member Lloyd Levine on the last day members were permitted to make amendments, and we anticipate that Assembly Member Levine’s proposal will be debated and considered when the Legislature reconvenes in January.  Given the controversial issues addressed in this Assembly Bill, it is likely that other proposals will also be considered in the next legislative session.

Posted by Nancy G. Berner

Last week, California Assembly Member Lloyd Levine proposed broad changes to sections of the California Labor Code regulating, among other rules, the meal and rest break requirements imposed on the state’s employers as part of AB 1711.  The bill’s most important provisions are summarized below. 

Meal Break Timing and On Duty Meal Periods

The proposed legislation requires that the meal period shall be completed before the end of the sixth hour of work.  The current interpretation is that the meal period must be commenced before the end of the fifth hour, so this bill would provide greater flexibility in the scheduling of meal breaks if enacted.

The bill also contains significant modifications to Labor Code section 512(b), regulating provision of an on-duty meal period.  Current regulation leaves employers to guess when an on-duty meal period is permitted, and prudent employers generally guess “very rarely” based on prior opinion letters issued by the Division of Labor Standards Enforcement interpreting the on-duty meal break provisions. 

Mark S. Spring, our firm's Managing Partner, was the featured guest expert for the most recent In the Know Podcast series. In this podcast, Mr. Spring discusses the issues related to the California meal and rest break compliance difficulties and the recent waive of class action lawsuits against California employers related to the meal and rest break regulations. You will hear Mr. Spring discuss the ramifications of several recent court opinions and provide some recommendations that California employers can use to try to minimize the risk of being the next defendant in one of these class actions. To listen/download the podcast click here.

Posted by Jennifer D. Barrera

On August 2, 2007, California's newly-appointed Labor Commissioner, Angela Bradstreet, held a public hearing to obtain comments regarding meal and rest break laws and regulations in California.  This public hearing was sparked by recent court decisions concerning the standard for meal and rest breaks, including Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4^th 1094 (2007), White v. Starbucks Corp., 2007 WL 1952975 (N. D. Cal. July 2, 2007), and Brinker Restaurant Corporation et al. v. Hohnbaum et al. which is currently pending before the Fourth District Court of Appeal.  At the hearing, this topic proved to still be a sensitive issue between employers and employees. 

Employees from various industries voiced their concern that any modification of current law regarding meal and rest breaks would provide employers with the opportunity to essentially take away employees' rights to meal and/or rest breaks.  Employees alleged that any leniency in this area would allow employers to pressure them to forego their breaks by praising others who did so and setting higher standards of enforcement.  Moreover, employees claimed that reducing or eliminating the mandatory nature of breaks would reduce productivity and increase work-related injuries. 

Employers, on the other hand, testified that they had no interest in eliminating breaks for employees; rather, they simply want some flexibility in this area.  Employers complained that the current laws are too confusing, unrealistic, and overly burdensome on employers.  For example, employers in the transportation and trucking industry testified that it is impossible to ensure that their drivers who are out on the road are taking a thirty minute meal period at or before five hours of work, as the law currently requires them to do.  Additionally, employers in the restaurant industry stated that the unpredictable nature of their business makes scheduling breaks for employees impossible. Moreover, employees in this industry may resent their employers for forcing them to take meal breaks as it reduces their tip income and extends their workday.  The employers who attended this hearing also referenced the recent increase in litigation for alleged meal and rest break violations, including class actions, which are financially crippling businesses.

The Department of Labor Standards Enforcement is holding another public hearing in Southern California to obtain additional comments regarding meal and rest break laws and regulations on August 9, 2007, from 9:00 to 2:00 p.m. at California State University Northridge.  The DLSE is also accepting written comments and legal briefs on this issue until August 31, 2007.

The Division of Labor Standards Enforcement ("DLSE") has announced that it will be holding two forums to allow members of the public to address newly-appointed California State Labor Commissioner Angela Bradstreet and raise concerns regarding recent changes to meal and rest period enforcement practices in California.

The first forum will be held on August 2, 2007, from 9:00 a.m. to 2:00 p.m. at the Sacramento State Alumni Center located in Sacramento; the second forum will take place on August 9, 2007, from 9:00 a.m. to 2:00 p.m. at the California State University Northridge Student Union.  Specific information can be obtained by clicking here. 

Additionally, the public may submit written comments to the DLSE regarding these issues on or before August 31, 2007.

Posted by Robin E. Weideman

Employers have reason to hope that their liability for missed meal periods may be less than some first thought when the California Supreme Court issued its much-publicized ruling in Murphy v. Kenneth Cole Productions, Inc. Murphy held that that fines arising from meal and rest break violations in California constitute "wages," for which there is a three-year statute of limitations, rather than a "penalty," which would have carried only a one-year statute of limitations. In White v. Starbucks, _ F. Supp. 2d _, 2007 WL 1952975, at *7-*8 (N. D. Cal. July 2, 2007), a federal district court held that California Labor Code § 226 and the IWC Wage Orders’ requirements that employers “provide” employees with meal periods means simply that the employer must offer the employees meal periods; the employer is not required to ensure that the meal periods are taken. 

In White, the court further held that in order to prevail on a meal period claim, a plaintiff would have to show that he or she was “forced to forego” a meal period by the employer. The court reasoned as follows: “The interpretation that [plaintiff] advances -- making employers ensurers of meal breaks -- would be impossible to implement [in industries] in which large employers may have hundreds or thousands of employees working multiple shifts. Accordingly, the court concludes that the California Supreme Court, if faced with this issue, would require only that an employer offer meal breaks, without forcing employers actively to ensure that workers are taking these breaks. In short, the employee must show that he was forced to forego his meal breaks as opposed to merely showing that he did not take them regardless of the reason. . . .[Otherwise,] employees would be able to 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. This cannot have been the intent of the California Legislature, and the court declines to find a rule that would create such perverse and incoherent incentives.”

The plaintiff admitted that any meal periods he missed were as a result of his own decision to skip the meal periods. There was no evidence that Starbucks had “forced [plaintiff] to forego” meal periods. On these facts, the court held that Plaintiff could not succeed on his meal period claim and summary judgment was appropriate. 

The district court’s ruling in White is significant because it does not place the burden on the employer to force employees to take meal breaks. Rather, it simply requires that the employer provide the opportunity to take the meal break. One cautionary note: in reading White, employers must be mindful the ruling was issued by a federal district court. Although the opinion of a federal district court can be used to persuade other state and federal courts to decide the meal break issue similarly, neither the Ninth Circuit nor California state courts are bound by the district court’s ruling.       

Earlier this week, the California Supreme Court issued its long awaited ruling in Murphy v. Kenneth Cole, deciding that fines arising from meal and rest break violations in California constitute "wages," for which there is a three-year statute of limitations, rather than a "penalty," which would have carried only a one-year statute of limitations.  (For your convenience, a link to the decision appears below.)  Not only does this obviously triple the time period for the recovery of such wages, it also triggers potential liability for "waiting time" penalties for employees who have terminated during the prior three years, additional related penalties, and attorneys' fees.  To make matters worse, such claims typically include an allegation of unfair competition (B&P Code Section 17200), which carries a four year statute of limitations.

The California Supreme Court's decision even further underscores the importance of ensuring that employers' meal and rest break policies are compliant with California law, as well as the importance of ensuring those policies are being followed by all employees. In addition, employers may want to consider paying out the extra hour of pay to employees when it is clear that they were denied  a meal break or denied the opportunity to take a rest break.  Unfortunately, we expect this ruling will result in a significant increase in class action filings.

If you have any questions about how this ruling affects you, please do not hesitate to call or write any of the attorneys that you work with at CDF LLP.

Link to decision:  http://www.courtinfo.ca.gov/opinions/documents/S140308.PDF

The California Supreme Court granted review of National Steel and Mills (see below). Click here or here to read prior posts regarding how California courts are ruling on the issue about whether Labor Code § 226.7 penalties for meal and rest break violations are subject to a three year or a one year statute of limitations.

NATIONAL STEEL & SHIPBUILDING v. S.C. (GODINEZ)
Case: S141278, Supreme Court of California

Date (YYYY-MM-DD):2006-04-12
Event Description:Review granted/briefing deferred (rule 29.1) - civil case
Notes:
Petition for review GRANTED. Further action in this matter is deferred pending consideration and disposition of a related issue in Murphy v. Kenneth Cole Productions, Inc., S140308 (see Cal. Rules of Court, rule 28.2(d)(2)), or pending further order of the court. Submission of additional briefing, pursuant to California Rules of Court, rule 29.1, is deferred pending further order of the court. Werdegar, J., was absent and did not participate.
Votes: George, C.J., Kennard, Baxter, Chin, Moreno, and Corrigan, JJ.

MILLS v. S.C. (BED, BATH & BEYOND)
Case: S141711, Supreme Court of California

Date (YYYY-MM-DD):2006-04-12
Event Description:Review granted/briefing deferred (rule 29.1) - civil case
Notes:
Petition for review GRANTED. Further action in this matter is deferred pending consideration and disposition of a related issue in Murphy v. Kenneth Cole Productions, Inc., S140308 (see Cal. Rules of Court, rule 28.2(d)(2)), or pending further order of the court. Submission of additional briefing, pursuant to California Rules of Court, rule 29.1, is deferred pending further order of the court. Werdegar, J., was absent and did not participate.
Votes: George, C.J., Kennard, Baxter, Chin, Moreno, and Corrigan, JJ.

The Court's granting of review was likely given the conflicting lower court holdings on whether Labor Code § 226.7 penalties for meal and rest break violations are subject to a three year or a one year statute of limitations. [Click here, or here to read prior posts on Murphy]

The California Supreme Court asked the parties to brief the following issues:

Request for judicial notice granted. Petition for Review GRANTED. The parties are directed to brief and argue the following issues: (1) Is a claim under Labor Code section 226.7 for the required payment of 'one additional hour of pay at the employee's regular rate of compensation' for each day that an employer fails to provide mandatory meal or rest periods to an employee governed by the three-year statute of limitations for a claim for compensation (Code Civ. Proc., §338) or the one-year statute of limitations for a claim for payment of a penalty (Code Civ. Proc., §340)? (2) When an employee obtains an award on such a wage claim in administrative proceedings and the employer seeks de novo review in superior court, can the employee pursue additional wage claims not presented in the administrative proceedings?

On January 27, 2006, the Second Appellate District issued a holding that the payments required under Labor Code section 226.7 are penalties and, therefore, a one year statute of limitations governs the payments, as opposed to a three year statute of limitations if the payments are considered wages. This holding is one of many recent (and conflicting) holdings on this issue as illustrated below.

Cases Holding 226.7 Payments are Penalties (and therefore a one year statute of limitations applies):
1. Mills v. Superior Court (Jan. 27, 2006) ___ Cal.4th __, 2006 [PDF] [WRD]
2. Murphy v. Kenneth Cole Productions, Inc. (2005) 134 Cal.App.4th 728
3. Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 35, 381, fn. 16
4. Hartwig v. Orchard Commercial, Inc., Case No. 12-569901RB (This case only binding on any hearing before a Deputy Labor Commissioner or Hearing Officer.) [Click here to read further analysis on Hartwig]

Cases Holding 226.7 Payment are Not Penalties (and therefore a three year statue of limitations applies):
1. National Steel and Shipbuilding Company v. Superior Court (Jan. 20, 2006) __ Cal.4th __, 2006 WL 147520 (with Justice Irion dissenting)
2. Tomlinson v. Indymac Bank, F.S.B. (C.D. Cal. 2005) 359 F.Supp.2d 891 (This case is a federal case and therefore is not binding on California state courts. Indeed, Mills v. Superior Court, above, explicitly rejected Tomlinson's reasoning.)

California law currently requires employers to pay a penalty, measured in the amount of one hour's wages, to any employee who is denied a mandatory meal or rest break. The confusing language of the statute itself (codified at Labor Code Section 226.7) is no doubt partly responsible for the tidal waive of class action lawsuits that followed in the wake of its enactment in 2001. Indeed, the difficulty faced by employers in attempting to interpret and apply its ambiguous requirements was recently on display when two separate appellate courts reached diametrically opposite conclusions on the same question: i.e. is the payment required under the act really a "wage" or a "penalty?"

This seemingly semantic dispute has important real-world consequences. If the payment is a "penalty" then a one-year statute of limitations would apply. On the other hand, if the payment is a "wage," then the three-year statute of limitations would apply.

In December 2005, the First Appellate District held in Murphy v. Kenneth Cole Productions, Inc. that the payment is necessarily a penalty because it "is not compensation for labor performed, but is an arbitrary amount imposed on the employer in addition to the salary already paid during the time the employee was not eating or not resting. It is not overtime pay for an allowed work period, but a penalty for violating the law that prohibits work during those times."

Within barely a month, however, the Fourth Appellate District reached the opposite result, in National Steel and Shipbuilding Company v. Godinez that the payment must be characterized as a "wage" because it believed the objective of the statute was "to pay employees for additional work performed during mandated meal or rest periods and deter employers from requiring employees to work through these periods."

Moreover, on January 13, the Division of Labor Standards Enforcement (DLSE) withdrew its proposed interpretive regulations, which have been winding their way through the public comment process for nearly a year. [See related article]. Ironically, the DLSE claimed in a press release that the regs were withdrawn because the Murphy v. Kenneth Cole decision had rendered further clarification unnecessary. As astute observers have noted, however, the Division may not be keen to stake out a position on a question that has become a high-profile political struggle between pro-business interests and plaintiffs lawyers.

Thus, notwithstanding this recent flurry of judicial and administrative activity, the meaning of the meal and rest period statute is still in legal limbo. The California Supreme Court will ultimately need to provide any definitive interpretation and is expected to grant review of one (or, more likely, both) of the conflicting appellate cases. The Supreme Court is currently averaging one to three years from the grant of review to the issuance of a final opinion.