California's high court to decide break rules
Decision on how much businesses must monitor employees seen as pivotal
by D. Ashley Furness
Business Journal Staff Reporter
CALIFORNIA - The California Supreme Court will review an appeals court decision late last month that could drastically change how wage and hour disputes are decided, particularly whether the cases can be lumped into costly class action suits.

The question of how and to what degree employers are responsible for policing meal and rest breaks has been disputed through the courts in recent years with increasing intensity as settlements escalated into the many millions.

"If the Supreme Court upholds this decision" limiting employers' liability, "it would be a really revolutionary interpretation of the law," said Doug Dexter, an attorney for Farella Braun & Martel and former president for the Northern California Human Resources Association.

"Meal break disputes have been a huge legal problem for employers for the last five years with the class action boom. If one employee says they were denied a break, it's not a backbreaker for the employer, but if it's a few thousand, that can be devastating," he said.

The recent California decision first tried in 2004 involves a dispute between Dallas-based restaurant company Brinker Restaurant Corp. and 100,000 employees seeking damages of more than $100 million for missed meal periods.

Mr. Dexter said that historically, federal courts have upheld decisions that require employers not only to provide meal and rest periods but also to ensure and verify that the breaks were taken. Employees with similar claims easily garnered class action status to try them on behalf of thousands with only a few exceptions.

But in July of this year, a San Diego appeals court overturned a previous decision in Brinker that alleged the restaurant pressured employees not to take breaks by inadequately staffing and cutting hours. The court refused class action status for the 100,000 plaintiffs, saying the reasoning for not taking breaks would have to be questioned on an individual basis.

After the decision, the California labor commissioner issued a memo telling employers the agency would enforce wage and hour disputes according to the Brinker appeals court opinion. But on Oct. 22, the commissioner withdrew the notice after the California Supreme Court granted further review.

Experts said the Supreme Court review will likely lead to more pressure to settle current plaintiff disputes and could possibly spur a rush of class action suits.

"In the next year or so, attorneys that are handling these cases will start to have to make some gambles with timing. Can they file before the decision comes out? Or, should we wait to file until after?" said Dawn Ross, an attorney for Santa Rosa-based Carle, Mackie, Power & Ross. "There is the worry out there by the plaintiffs' attorneys that if the court does go the way of the employer, there will never be another time to file a huge class action suit like this."

For now, however, Ms. Ross said employers should act as though nothing has changed.

"Right now most employment law attorneys will tell employers not to rely on the Brinker case and engage in businesses as usual," she said.

The Brinker case is not the only recent decision on the matter.

Last year a federal district court dismissed a suit against Starbucks, saying similarly that the law says breaks must be offered but that the employer is not necessarily liable in cases where the plaintiff voluntarily skipped their break.

Other similar California district court decisions include Brown v. Federal Express Corp., Kenny v. Supercuts Inc., Perez v. Safety-Kleen Systems Inc., Salazar v. Avis Budget Group and others. The Supreme Court is not expected to make a final decision on the case until late 2009.