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Monday, August 4, 2008

Relief to Employers – Meal & Rest Decision Makes It Tougher For Employees To Prevail


Recently, one of California’s Appellate Courts came to a decision that might possibly swing the lawsuit pendulum back in favor of employers. Until recently, California’s courts have held the position that employers were responsible to take steps to ensure their employees take meal and rest breaks. However after Brinker Restaurant Corporation v. Superior Court, the burden now shifts to employees to prove that they were prevented from taking breaks.

Prior to this decision, many plaintiff’s attorneys brought class action lawsuits on behalf of an entire class of employees if employers did not take remedial measures to ensure their employees took a meal period for every 5 hours worked and a rest break for every 4 hours worked. Without much guidance as to the intention of the labor code, employers were at risk if they could not prove that they had policies in place and took action to require employees to take those breaks. Employees will no longer enjoy success in bringing meal and rest break lawsuits unless they can prove they were coerced or prevented from taking breaks. Plaintiffs' attorneys may also be discouraged from taking these lawsuits since they might also be barred from litigating meal and rest break violations through representative class actions.

Brinker Restaurant Corporation owns and operates a number of restaurants including Chili’s Grill & Bar, Romano’s Macaroni Grill, and Maggiano’s Little Italy. Brinker’s restaurants had written policies in place that mandated 30 minute meal periods for shifts over 5 hours and 10 minute rest breaks for shifts over 3 ½ hours. Brinker’s policies stated that failure to adhere to these policies may result in disciplinary action, including termination. Brinker came under fire based on many of its restaurants mandating the timing of their meal and rest breaks. The main argument brought by Brinker’s employees was that on many occasions, Brinker required its employees to take a meal break after the first hour of work. Employees would then work anywhere between 5 and 9 additional hours without a break. Another related issue concerned allegations that Brinker’s employees were working off-the-clock for compensation, and that Brinker was engaged in time shaving practices.



The Court’s Decision

Employers Are Not Required To Enforce Meal And Rest Breaks
In reviewing the Labor Code, the Court found that there was never a requirement for employers to police their workforce and require them to take meal and rest breaks. Instead, employers are only required to allow for such breaks and are prohibited from discouraging or dissuading employees from taking breaks. This would place the burden back on employees to prove that they were prohibited from taking breaks.

Meal Periods Not Necessarily Required At The Middle Of The Shift
The Court also held that there is no requirement that employers provide breaks every 4-5 consecutive hours worked. The Court made the determination that the Labor Code did not intend to mandate the timing of the breaks, but instead dictated the number of breaks available depending upon the total shift time.

Employees May Not Be Able To Litigate Meal & Rest Break Violations Through Class Actions
The most significant point to the Brinker decision may be that employees are no longer able to bring class action lawsuits alleging meal and rest break violations any longer unless the employer had a company-wide policy in place that prevented taking breaks. The Court recognized that without some type of adverse policy in place, violations by employers would be on a case by case basis, and too individualized to be decided on behalf of an entire class.

Employers Are Not Liable For Employees Working Off The Clock Unless They Knew Or Should Have Known
Another allegation brought through the Brinker decision concerned off-the-clock and time shaving practices. The Court determined that in order for an employee to prevail for back wages for time worked off the clock, it must be proven that the employer knew or should have known that the practice was taking place. In any event, the Court also determined that outside of a company policy, such practices were also on a case by case basis, and could not be brought through a class action lawsuit.

Future Implications

For the time being, employment law attorneys are taking a wait and see approach to determine whether this decision will stick. Another California Appellate Court will be deciding a related case in Savaglio v. Wal-Mart Stores, Inc. Regardless of the decision made in Wal-Mart, both decisions will almost certainly be appealed to California Supreme Court.

The Division of Labor Standards Enforcement (DLSE) has paid attention to the Brinker decision and recently updated its Enforcement Policies and Procedures manual to reflect the Court’s most recent decision. However, its decision may have been a bit premature since the California Supreme Court may have the final say here.

Employers are encouraged to consult with an attorney prior to taking any action to update their employment policies and procedures.

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Tuesday, April 15, 2008

Important Change in Paystub Laws


On January 1, 2008, California Labor Code § 226(a)(7) was changed and prohibits employers from having an employee’s full social security number from being placed on the employee’s itemized statement of income (paystub). The change requires that only the last four digits of the social security number, or an employee identification number other than a social security number may be shown on the itemized statement. Employers have commonly used a social security number as the employee ID number within their pay-records, and all paychecks. However, this practice may need to be changed to ensure that the full social security number does not appear on the paystubs.

 

Monday, April 14, 2008

Subjective Criteria for Hiring or Termination


A recent case has ruled that subjective criteria for termination is permissible as long as it is not a pretext for an unlawful discriminatory reason. The case is called Hicks v. KNTV Television, (6th App Dist.) H030607, 3/5/08). In that case, a white news anchor was terminated and replaced by an African-American man. The Plaintiff claimed that he was terminated for his race, however KNTV Television demonstrated that the reasons were a more subjective criteria concerning the reporter’s on-camera style and job performance. The court held that subjective criteria such as “style or personality… common sense, good judgment, originality, ambition, loyalty, and tact” were entirely permissible reasons for hiring or termination decisions, and did not allow the court to second guess the employer’s business judgment. The court further held that plaintiff would have needed to establish a consistent pattern of discrimination in order to maintain the case – which they did not meet.

 

Friday, February 22, 2008

2008 Labor Law Poster Update


Changes to the Family Medical Leave Act (FMLA) have been signed into law. The Department of Labor has no issued a FMLA poster insert – effective February 11, 2008. If you are covered by the Federal FMLA (if your business has 50 or more employees), you need to post this insert along with your existing labor law posters. The insert can be downloaded from the Department of Labor website and printed on your office printer. The link to download the poster is

http://www.dol.gov/esa/whd/fmla/NDAAAmndmnts.pdf

 

Tuesday, January 15, 2008

Federal Earned Income Tax Credit Notification


As of January 1, 2008 California employers are required to notify their employees about the availability of the federal Earned Income Tax Credit (EITC). Written notification must be provided to employees in person or by mail. Notification must be provided within one week before or after, or at the same time, that you provide an annual wage summary, including, a Form W-2 or a Form 1099. Many W-2 forms contained the proper notification, so check your forms. However, if you haven’t provided one to your employees yet, you must do so now to avoid possible citations or penalties.

A printable copy of the notice is available at http://www.irs.gov/pub/irs-pdf/n797.pdf. For additional information on this requirement visit EDD’s Web site at www.edd.ca.gov/eddeitc.htm. For additional information about EITC go to www.irs.gov

 

 

 

 

 

 

 

 


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