The Court Of Appeal Holds That Employers Are Required To Provide Meal And Rest Periods To Their Employees, But Are Not Required To Ensure Them

In Brinker Restaurant Corp. v. Superior Court, (—Cal.Rptr.3d —, 2008 WL 2806613, Cal.App. 4 Dist., July 22, 2008), a California Court of Appeal concluded that meal and rest periods need only be “made available” and not “ensured” to employees.

Brinker Restaurant Corp. (“Brinker”) operates 137 California restaurants. Brinker has a written policy that states employees are entitled to a 30-minute meal period when employees work a 5 hour shift or greater. In addition, the policy provides employees who work more than a 3.5 hour shift a ten minute break for each four hours they work. Brinker requires its employee’s to clock in and out for every shift, and that an employee may not start work until clocked in. The employee handbook states working off-the-clock for any reason violates company policy and the employee must immediately notify his or her manager if the employee’s timecard is inaccurate.

Prior to this suit, the California Division of Labor Standards Enforcement (“DLSE”) investigated Brinker. The investigation focused on Brinker’s alleged failure to provide meal and rest periods. Based upon its findings, the DLSE filed suit against Brinker. The DLSE and Brinker reached a settlement that provided Brinker pay $10 million and agree to an injunction ensuring its compliance until September 2006.

In the present case, Brinker employees filed suit alleging Brinker failed to provide paid rest periods for every four hours worked. In addition, the employees alleged that meal periods were not provided to employees who worked in excess of a five hour shift, and nor were employees compensated accordingly for missed meal periods. Lastly, the complaint alleged Brinker unlawfully required its employees to work off-the-clock when meal periods were provided.

In July 2005, the trial court issued an advisory opinion and eventually an order finding that a meal period must be given before an employee works in excess of five hours, towards the middle of any employee’s shift so as to break up the shift.

The employees then moved for class certification. The proposed class included approximately 59,000 Brinker employees. The trial court found “common questions regarding the meal and rest period breaks.” The court granted the employees’ motion for class certification and Brinker petitioned to vacate the trial court’s ruling.

The Court of Appeal noted the decision to “certify a class rests squarely within the discretion of the trial court.” Reversal of the trial court’s decision to certify a class will not be disturbed unless “(1) it is unsupported by substantial evidence, (2) it rests on  improper criteria, or (3) it rests on erroneous legal assumptions.” Class certification is granted when “the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court.” The moving party must establish “(1) . . . a sufficiently numerous, ascertainable class, (2) . . . a well-defined community of interest, and (3) that certification will provide substantial benefits to litigants and the courts.”

Brinker challenged class certification by claiming there was no “well-defined community of interest” because there were no “predominate common questions of law or fact.” Brinker alleged the trial court erred in granting certification because the trial court failed to determine the elements of the employees’ claims.

The Court of Appeal first considered the rest break claims. The Court concluded the trial court did not make the necessary findings for the employees’ claims based on Title 8 of the California Code of Regulations, section 11050, subdivision 12(A) (“Regulation 11050(12)(A). Specifically, the trial court did not determine that (1) employees need to only be afforded one ten minute rest break for every four hours of work, (2) that rest breaks only need to be in the middle of the four hour period when practicable, and (3) employers are not required to ensure that employees actually take rest breaks. Though the evidence put forth by the employees demonstrated the employees were not taking rest breaks, the evidence did not show why rest breaks were not taken. As a result, the Court reasoned that determining why employees were not taking rest breaks would require an individual inquiry into each case, and therefore class certification was improper.

Next, the Court of Appeal considered the meal period claims. The Court concluded the trial court erroneously found Brinker violated Regulation 11050(12)(A) and Labor Code Section 512 in connection with the employees’ meal period claims. The Court found the trial court misinterpreted Regulation 11050(12)(A) and Labor Code Section 512 and thus applied a legally flawed standard to the employees’ claims. As a result, the trial court did not properly identify the elements of the employees’ claims. The trial court also failed to conclude that Brinker was only required to make meal breaks available to employees, but was not required to ensure that employees take meal breaks. Because the evidence put forth by the employees only showed that employees were not taking meal breaks, and not why employees were not taking meal breaks, the issue could only be resolved by an examination of the individual facts. Therefore, the Court concluded class certification was improper.

Finally, the Court of Appeal considered the off-the-clock claims. The Court began by noting that “employers can only be held liable for off-the-clock claims if the employer knows or should have known the employee was working off the clock.” Notably, the Court pointed out that Brinker had a written corporate policy prohibiting off-the-clock work. The Court concluded that the evidence provided by the employees failed to show the reason why employees worked off-the-clock. While certain employees provided declarations stating that they were required to work off-the-clock, all of the employee declarations did not. The Court pointed to this discrepancy, as well as the corporate policy of Brinker prohibiting off-the-clock work, as evidence that members of the proposed class did not have a “common question of law or fact” necessary for the certification.

Therefore, the Court of Appeal concluded the trial court erred in certifying a class action for the employees’ rest break, meal break and off-the-clock claims. In addition to statutory interpretation and reviews of the employees’ declarations, the Court relied on the employer’s written policies regarding meal and rest periods and off-the-clock work. The Court of Appeal vacated the trial court’s order and denied class certification on all three claims.

Based on this decision, the appropriate inquiry in missed rest break and meal period cases appears to be whether the employer’s actions caused the employees’ failure to take breaks. If the employer’s actions were not the cause of the missed breaks, employers may not be held liable under Regulation 11050(12)(A) and Labor Code Section 512. Nevertheless, it is important to note that until the appeal process is completed, employers should exercise caution in relying on the Court of Appeal’s decision.