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It is easy to say, as Café Gratitude owners Matthew and Terces Engelhart did, that a civil lawsuit is “legalized extortion” when you are being sued. Café Gratitude, a popular California eatery with a half dozen or so locations in the state, is being sued for various wage and hour violations, and claims to be closing its doors permanently due to these “aggressive” lawsuits.
At issue are Café Gratitude’s compliance with laws governing workers’ meal and rest breaks, overtime pay, and its tip-pooling policy. In addition, there are allegations that Café Gratitude impermissibly required or pressured employees to attend, and pay for, Landmark Forum self-transformation seminars.
As an employment law attorney who has represented and advised both employers and employees, I see things differently than Café Gratitude’s owners.
First, it should be a “no-brainer” not to give even the slightest appearance of pressuring employees to adhere to your particular spiritual philosophy, as Café Gratitude owners apparently did. Among other things, this could lead to claims of discrimination based on religion. Furthermore, it is illegal, with very few exceptions, to require employees to pay out of pocket for anything required by the employer. (See California Labor Code section 2802.) Café Gratitude’s scheme of paying half of the Landmark seminar tuition and having the employee pay the other half should have set off alarm bells to Café Gratitude’s legal advisor, if it had one.
Second, the topic of meal and rest periods is one I have addressed previously and at length. Go to the Legal Information page at www.djolawoffice.com to read my article Basics of California Meal and Rest Period Law. As I point out in that article, the California Supreme Court is considering the appeal in Brinker v. Superior Court, which will clarify what, if any, active steps an employer must take to “provide” meal and rest periods. In fact, the Court heard oral arguments in this case just a few weeks ago on November 8, 2011. In the meanwhile, however, employers would do well to take active, documented steps to ensure that all hourly employees receive proper breaks; this will limit their exposure to wage and hour lawsuits. Employers and employees alike should be grateful when the California Supreme Court finally issues its decision in Brinker.
The upshot here is that with a little more attention to the law, and less zeal about creating a “community,” Café Gratitude may have been able to avoid some of the litigation about which it is currently complaining.
Stay tuned for additional posts regarding tip-pooling, another issue that can plague restaurateurs who implement policies without an understanding of - or in Cafe Gratitude’s case perhaps, caring about - the law.
Meal and Rest Breaks Update: The Brinker Case
The long-awaited ‘meal and rest period’ case, Brinker, has finally been decided by the California Supreme Court after seven years of litigation and over two years pending on the Supreme Court docket.
Dramatic headlines such as this one have been typical in the news: “Managers Don’t Have to Ensure Lunch Breaks.” But, the truth embodied in the 55-page court opinion is much less sweeping. Still, this case is of immense importance to employers and employees alike, because it clarifies certain ambiguities present in California meal/rest period codes.
Here are the essential points that Brinker has made law:
- The 10-minute rest period does not need to be given prior to the 30-minute meal period.
- The 10-minute rest period does not need to be given for work shifts of less than 3 1/2 hours.
- Meal periods must commence before the start of a worker’s sixth hour of work (i.e. the break does not need to be completed during the fifth hour).
- Employers fulfill their obligation to “provide” meal periods so long as the employer has a clear policy that is actually implemented to allow employees to take a completely work-free meal break. After that, the employer is not required to “police” work areas to “ensure” that each worker is actually not working during his or her break. As the court stated: “the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer’s obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay…”]
The last point was the most contentious of the issues in Brinker. The court found that the plaintiff-worker had not “presented substantial evidence of a systematic company policy to pressure or require employees to work off the clock,” but the court did note that an employer’s liability is contingent on proof that the employer “knew or should have known off-the-clock work was occurring.” Thus, it is still important for employers to have a clear and implemented policy for meal and rest periods, and to record each worker’s breaks.
The Brinker case was a class action. So, much of the court’s opinion - and its legal impact - deals with the technical aspects of class action “certification” (i.e. whether a case may proceed as a class action or not). Employers see the decision as favorable to them because it may make class action certification harder for workers to obtain. However, I don’t think Brinker will necessarily impact on a case brought by an individual worker on behalf of him or herself alone (i.e. not as a class action), especially when there is evidence that an employer has actively thwarted an employee’s ability to take breaks or knew that work was being performed off-the-clock.
For more information about meal and rest period law, click here to read my article Basics of Meal and Rest Period Law.
Click here to read the full text of the Brinker case.
There's No Such Thing As A Free Lunch: California Supreme Court Determines that Employers Can't Force Employees to Eat Lunch
SIGNIFICANT CALIFORNIA SUPREME COURT DECISION EFFECTING EMPLOYEE RIGHTS AND EMPLOYERS’ OBLIGATIONS FINALLY DECIDED
Are You Providing Your Employees The Rest And Meal Periods Required By Law?
Employers Finally Given Some Guidance on Meal and Rest Breaks
Brinker Restaurant Corp. v. Superior Court
Twelve years ago, in 2000, the State Legislature and the Industrial Welfare Commission (“IWC”) adopted monetary remedies for a denial of meal and rest breaks including the imposition of a “premium” wage.
Unfortunately, for many employers, the IWC did not give clear guidance to employers regarding the implementation of the meal break and rest breaks periods. Notwithstanding the terrible economy and “anti-business” environment in California, the remaining employers in California were hit with a substantial amount of class action litigation and “wage and hour” litigation regarding the implementation of the IWC rules. Many employers were faced with the dilemma that if you provide the employee with break time, can you force that employee to take the break, or can you force him/her to take a lunch if it is their free time?
Last Thursday, April 12, 2012, the Supreme Court of California handed down the highly anticipated decision in Brinker Restaurant Corp. v. Superior Court wherein the Supreme Court interpreted wage and hour laws regarding rest and meal periods. In Brinker, the Supreme Court held that the employer is required to provide the rest and meal breaks but the employer is not required to ensure the employee takes the break or ceases all work.
To assist you, as an employer or employee, to ensure that the law is being followed, the Court’s ruling is broken down below, with the link to the full case provided below:
REST BREAKS (Paid)
- Employees are entitled to rest breaks as follows:
- 10 minutes for a shift lasting between 3.5 hours and 6 hours
- 20 minutes for a shift lasting over 6 hours up to 10 hours
- 30 minutes for a shift lasting over 10 hours up to 14 hours
- “Insofar as practicable” the rest breaks should occur in the middle of work periods
- The Court held, “In the context of an eight-hour shift, “as a general matter,” one rest break should fall on either side of the meal break.
- The Court further held, “An employer is required to authorize and permit the amount of rest break time called for under the wage order for its industry.”
MEAL BREAKS (Unpaid)
- “An employer must relieve the employee of all duty for the designated period, but need not ensure that the employee does no work.”
- An “off-duty” meal period must include:
- An uninterrupted 30 minute period;
- The employee being relieved of all duty; and
- The employee being permitted to leave the premises.
- An employer satisfies its obligation if it:
- Relieves its employees of all duty;
- Relinquishes control over all activity;
- Permits them a reasonable opportunity to take an uninterrupted 30-minute break;
- And does not impede or discourage the employee from doing so.
- The Court stated, “Employers must afford employees uninterrupted half-hour periods in which they are relieved of any duty or employer control and are free to come and go as they please.”
- If the employer has provided the designated meal break but the employee continues work, the employer is not liable for “premium” pay but it is liable for straight pay, including overtime. This is true if the employer knew or reasonably should have known that the employee was working through the authorized meal period.
- Timing of the meal break:
- First 30-minute meal break must be provided no later than the end of the 5th hour of work, unless the total shift is 6 hours or less and then the employer and employee can mutually waive the meal period.
- Second 30-minutes meal break must be provided no later than the end of the 10th hour of work.
- The Court held that IWC Wage Order No. 5 does not impose any additional timing requirements.
As an employer, it is your responsibility to provide the rest period and meal breaks for your employees. To make your employees aware of your company’s policy regarding breaks you may remind them to take their break and/or state in your employee handbook when breaks are allowed. If, however, the rest and meal breaks are provided to the employees, it is their responsibility to take them.
For the full text of Brinker Restaurant Corp. v. Superior Court please click here.
If you have any questions regarding your company’s policy, please do not hesitate to contact the Hartnett Law Group. You may wish to update your employee /personnel manuals to provide for the clarification of the IWC orders provided by the Supreme Court in Brinker.
THE HARTNETT LAW GROUP
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