Courts Cannot Agree On What CA Meal Break Laws Require While Employers Continue to Pay the Price for Unclear Laws
Suing California employers in class action and representative PAGA lawsuits for alleged non-compliance with California meal break laws is big business in the state for plaintiffs’ attorneys. The popularity of these lawsuits began over a decade ago and that popularity has far from waned. Several years ago, the biggest issue that was litigated was whether employers had to “ensure” that employees took at least a 30-minute meal break or whether they simply had to provide employees the “opportunity” to do so. Employers across the state were sued for not “ensuring” that such breaks were taken (based, for example, on timesheets showing a meal break was taken late in the day or was less than 30 minutes in length). In 2012, the California Supreme Court provided some clarity in Brinker v Superior Court, holding that employers need only provide employees a reasonable opportunity to take a 30-minute meal break before the end of the fifth hour of work. That did not stop the lawsuits, however. Plaintiffs’ attorneys just began manufacturing new theories for meal break violations. One such theory is that if employee timesheets show late, short, or missed meal breaks, that automatically creates a rebuttable presumption against the employer that a compliant meal break was not provided (leaving it to the employer to have to “prove” that a meal break opportunity was, in fact, provided on any given day). This of course turns the traditional burden of proof in a lawsuit on its head, by effectively requiring the employer to prove it did not commit a violation, rather than requiring the plaintiff to prove that the employer did commit a violation. Another theory is that an employer’s lack of a formal meal break policy automatically means that the employer did not authorize and permit compliant meal breaks (regardless of whether employees, in fact, took such breaks on a day to day basis). Yet another emerging theory is that employers violate meal break laws by paying missed meal break premiums at the employee’s normal hourly rate of compensation as opposed to the employee’s “regular rate” for overtime purposes (which may be higher than the base hourly rate). The state’s Division of Labor Standards Enforcement provides no guidance for employers on whether these theories are correct or not, leaving it to the courts to weigh in on in expensive litigation. As is commonly the case, the courts disagree on the answers, leaving employers with unclear rules and exposure to costly litigation as well as potential liability.
It appears that at least some additional clarity is on the horizon. The Ninth Circuit recently certified two questions of meal break law to the California Supreme Court in Cole v CRST Van Expedited, Inc. (1) Does the absence of a formal policy regarding meal (and rest) breaks violate California law? and (2) Does an employer’s failure to keep records regarding meal (and rest) breaks taken by its employees create a rebuttable presumption that such breaks were not provided? The California Supreme Court is expected to accept the certification request and provide answers to these questions. Until that happens, the answer will depend on the venue.
On the issue of the proper rate of pay for meal and rest break premiums (the one hour of pay an employer is supposed to pay if an employee is denied a meal or rest break), there is a split of authority among federal district courts in California, with most ruling that the correct rate is the employee’s normal base hourly rate, but with at least one district court ruling differently and holding that the one hour of premium pay must be paid at the employee’s regular rate for overtime purposes (which is higher than the employee’s base hourly rate if the employee receives other forms of compensation such as shift differentials). The first published state court decision is expected on this issue in the next month in Ferra v. Loews Hollywood Hotel, which was argued last month in Los Angeles. Stay tuned.
It would, of course, be nice if the California Legislature would enact legislation providing clarity for California employers and preventing situations where employers can be held liable retroactively based on brand new interpretations of law. Don’t hold your breath for that to happen though. Employers, in the meantime, should do their best to have compliant, written meal and rest break policies and practices in place and to train managers and employees accordingly.