The Court of Appeal’s opinion in Brinker Restaurant Corp. v. Superior Court (Hohnbaum), ___ DJAR ____ (Jul. 22, 2008), addresses several heavily litigated issues regarding meal and rest period claims. If the decision withstands an anticipated petition for review to the Supreme Court, the court’s opinion will sharply curtail class action litigation over alleged meal and rest period violations.

Background

Brinker Restaurant Corporation operates over 100 restaurants in California. Adam Hohnbaum represented a putative class of some 59,000 restaurant workers who are “non-exempt” from overtime, minimum wage, and meal period laws (i.e., servers and other non-management personnel). The plaintiffs alleged a number of claims against Brinker, including failure to provide non-exempt employees with mandated 10-minute rest periods for every four hours worked; failure to provide 30-minute meal periods as required by law; and requiring employees to perform work “off the clock” when they were “punched out” for their meal periods.

The Labor Code and Industrial Welfare Commission Wage Orders require employers to provide rest and meal periods. Labor Code section 512(a) contains the basic meal period requirement: “An employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes. . . .” And, “an employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes.” Industrial Welfare Commission Wage Orders, including section 11 of Wage Order 5-2001 applicable to the restaurant industry, contain a similar requirement.

Rest periods are mandated in section 12 of the Wage Orders: “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 (31/2) hours. Authorized rest period time shall be counted, as hours worked, for which there shall be no deduction from wages.”

When employers do not comply with the meal or rest period laws, Labor Code section 226.7 (and the applicable Wage Order sections noted above) require employers to pay a premium wage: “If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided.”

So, the premium is due under both section 226.7 and the Wage Orders only when employers do not “provide” meal or rest periods. Does “provide” mean that employers must “ensure” or “force” employees to take them, or that the employer simply must make them available to employees? That is one of the primary issues the court resolved in the Brinker case.

Regarding “off-the-clock” work, the law requires payment of at least minimum wage for all “hours worked.” The Wage Orders define “hours worked,” in pertinent part, as “the time during which an employee is subject to the control of an employer, [including] all the time the

employee is suffered or permitted to work, whether or not required to do so . . . .” The plaintiffs in Brinker alleged employees actually worked during meal periods, despite having “punched out,” and that managers adjusted time records to show employees were punched out when they in fact were working.

Rest Periods

The court rejected the argument (based on the Division of Labor Standard Enforcement’s prior enforcement position) that an employer owes a rest period whenever an employee works over two hours of each four-hour work period. The court held that the number of rest periods due is determined based on how many four-hour periods an employee works. So, although rest periods must be “scheduled” in the middle of each four hour work period to the extent practicable, employees who work fewer than seven and one-half hours are entitled to just one rest period after the court’s ruling. The first rest period is due when an employee works “a major fraction” of the period between three and one-half and four hours.

The court also held that employers need not schedule a rest period to occur before the first meal period. The court confirmed, too, that rest periods need only be offered and employees may decide to forgo them. But employers cannot prevent or impede their employees from taking rest periods, or the one-hour premium is due.

The court reversed the trial court’s order granting certification of the class on this point. Whether employees were forced to forego rest periods, or whether it was “practicable” to schedule rest periods closer to the middle of a four-hour work period, required resolution of individual issues that could not be adjudicated on a classwide basis.

Meal Periods

The court also made several significant rulings regarding meal periods. The court’s most important ruling is that employers are not required to ensure employees actually take meal periods on time and for the correct duration. Employers are responsible only for allowing employees to take meal periods. Like rest periods, class treatment is all but impossible, unless employees can prove the employer had a consistent policy or practice of preventing or denying meal breaks. The court distinguished Cicairos v. Summit Logistics, Inc. , 133 Cal.App.4th 949 (2005), in which the court upheld certification of a class of truck drivers claiming they were denied meal periods, on the basis that management there allegedly discouraged employees from taking their required meal periods.

The court also held that a meal period may be scheduled to start at any time before the fifth hour of work ends. There is no such thing as an impermissibly “early” meal period, so employees may come to work and take their meal period right away. Along the same lines, the court held that a second meal period need not occur within five hours of the end of the first meal period. Rather, the second meal period is due only after 10 hours of total work, even if the first meal period occurs very early in the shift.

Off the Clock Work

The court confirmed that employers must compensate employees for “off the clock” work only when they “knew or should have known” employees were working. Additionally, Brinker had an express policy against off the clock work, and the plaintiffs did not prove the company had a consistent practice to the contrary. Therefore, the court refused to permit class certification because each employee would have to individually prove he or she worked off the clock.

Conclusion

Employers and their lawyers doubtless will cheer the Brinker decision. Until this decision is final though, employers should keep the champagne on ice. If the Supreme Court grants review, the decision likely will not be citable while the high court considers the case. Additionally, the legislature could decide to overturn Brinker, although Governor Schwarzenegger’s favorable comments about the case appear to guarantee a veto, at least while he remains in office.

Even if Brinker remains good law, employers must ensure their policies comply with meal and rest period laws. The court might well have reached a contrary result if Brinker did not have legally sound policies in place. Once the decision is final, employers should consider revising their meal and rest period policies to conform to court’s analysis, particularly with respect to rest periods.