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 considered whether the trial court erred when it certified a class of employees who claim that their employer did not ensure employees took rest and meal breaks, and as a result required employees to work off-the-clock during meal periods. The Court of Appeal concluded that rest and meal breaks need only be “made available” and not “ensured” to employees, therefore individual issues predominate the employees’ claims and certification of the class for class action was in error.
Brinker Restaurant Corp. ("Brinker") operates 137 restaurants in California including Chili's Grill & Bar, Romano's Macaroni Grill, and Maggiano's Little Italy. Brinker has a written policy, in a form to be signed by all California employees, which states that employees are entitled to a 30-minute meal period when employees work a shift that is over five hours. In addition, the written policy provides that employees who work more than 3.5 hours during a shift are eligible for a ten minute break for each four hours that they work.
Brinker also has an "Hourly Employee Handbook" which states in part that it is each employee's responsibility to clock in and out for every shift, and that an employee may not start work until they have clocked in. The handbook also specifically states that working off-the-clock for any reason is a violation of company policy. If any employee believes that his or her time was not recorded accurately, he or she must notify a manager so that the time can be recorded accurately.
From October 1, 1999 to December 31, 2001, Brinker was investigated by the California Division of Labor Standards Enforcement ("DLSE") regarding its hourly restaurant employees in California. The investigation focused on Brinker's alleged failure to provide unpaid meal periods, and provide paid ten minute rest periods as required by law. Based upon its investigation, the DLSE filed a lawsuit against Brinker. The DLSE and Brinker reached a settlement before the conclusion of the lawsuit which provided that Brinker pay $10 million and that Brinker agree to a court-ordered injunction to ensure its compliance with California meal period and rest break laws until September 2006.
In the present case, a group of employees working for restaurants owned by Brinker filed a complaint alleging that Brinker failed to provide rest periods for every four hours worked and did not provide compensation for unprovided rest periods. In addition, the employees alleged that meal periods were not provided to employees that worked in excess of five hours during a shift, and that compensation was not provided for missed meal periods. Finally, the complaint alleged Brinker unlawfully required 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. Specifically, the meal period should be made available toward the middle of any employee's work period so as to break up an employee's shift.
Finally, in April of 2006, the employees moved to certify a class of all current and former hourly employees of Brinker who had not been provided meal and rest breaks, and were not compensated for those missed meal and rest breaks, from August 16, 2000 forward. This motion was estimated to include some 59,000 Brinker employees. The trial court found that "common questions regarding the meal and rest period breaks are sufficiently pervasive to permit adjudication in this one class action." Consequently, in July, 2006, the court granted the employees' motion for class certification and Brinker petitioned the Court of Appeal to vacate the trial court's ruling.
The Court of Appeal began by noting that 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 to be 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 party wishing to certify the class 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 the class certification by claiming there was no “well-defined community of interest” because there were no “predominate common questions of law or fact.” Specifically, Brinker alleged that the trial court erred in granting the class certification because the trial court did not determine the specific elements of the employees’ claims, which is required to satisfy the “common questions of law or fact” element. Subsequently, the Court of Appeal examined each of the claims made by the employees to see if the trial court did determine the specific elements of the employees’ claims.
The first issue considered by the Court of Appeal were the rest break claims. The Court of Appeal concluded that 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)”), which governs rest breaks for employees similar to those employed by Brinker. 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 of Appeal reasoned that determining why employees were not taking their rest breaks would require an individual inquiry into each specific case, and therefore class certification was improper on the employees’ rest break claims.
Next, the Court of Appeal considered the meal period claims. The Court of Appeal concluded that the trial court erroneously found Brinker violated Regulation 11050(12)(A) and Labor Code Section 512 in connection with the employees’ meal period claims. Specifically, the court found that 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, but not why employees were not taking meal breaks, the issue could only be resolved by an examination of the facts on an individual basis. Therefore, the Court of Appeal concluded that class certification was improper on the employees’ meal break claims because there was not a “common question of law or fact” for the members of the class.
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.” The court also 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 the members of the proposed class did not have a “common question of law or fact” necessary for the certification of a class.
Therefore, the Court of Appeal concluded that the trial court erred in certifying a class action for the employees’ rest break, meal break and off-the-clock claims. The Court of Appeal vacated the trial court’s order granting the class certification and entered a new order denying certification of the employees’ proposed class.
*The court defined a “community of interest” as “(1) predominate common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.”