Update: Second Appellate District Holds Meal and Rest Break Payments are a Penalty
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.)