Monday, April 30, 2012

California Supreme Court Splits the Baby on Fee Issue: Kirby v. Immoos Fire Protection, Inc

On April 30, 2012, the California Supreme Court issued its ruling in Kirby v. Immoos Fire Protection, Inc, __ Cal. 4th __ (2012), concluding that neither section 1194 nor section 218.5 authorizes an award of attorney’s fees to a party that prevails on a section 226.7 claim:
We granted review to consider when, if ever, a party who prevails on a section 226.7 action for an alleged failure to provide rest breaks may be awarded attorney’s fees. We conclude, in light of the relevant statutory language and legislative history, that neither section 1194 nor section 218.5 authorizes an award of attorney’s fees to a party that prevails on a section 226.7 claim. We accordingly reverse the judgment of the Court of Appeal on this claim and affirm the judgment on plaintiffs‟ other claims.
Slip Opinion, at 2.

As held by the Court, “the most plausible inference to be drawn from [the relevant legislative] history is that the Legislature intended section 226.7 claims to be governed by the default American rule that each side must cover its own attorney’s fees.”  See id., at 17. 

IMPORTANT NOTE: It is important to highlight that the Court’s ruling will not preclude the recovery of attorneys fees by plaintiff’s counsel pursuing break claims on a class-wide basis.  Although “[t]he general rule is that a party is entitled to an award of attorney fees if there is specific authorization therefor by statute or private agreement…[,][t]here are… three well-established equitable exceptions to the general rule, known as the common fund, substantial benefit, and private attorney general theories.”  See Consumers Lobby Against Monopolies v. Public Utilities Com., 25 Cal. 3d 891, 906 (1979) (citing Serrano v. Priest, 20 Cal. 3d 25 (1977)).  Any of these doctrines may be asserted by a prevailing plaintiff in the class context to justify an award of fees. 

Thus, as the Court of Appeal's opinion (which upheld an award of attorney's fees to the employer)  stood to forclose employees from even attempting to bring a break claim in the first instance (due to the chilling impact of having to pay the employer's attorneys fees), the Kirby decision is unquestionably a positive ruling for employees.

Friday, April 27, 2012

California Supreme Court to Issue Ruling in Kirby v. Immoos Fire Protection, Inc. on Monday (April 30, 2012)

The statement on the California Supreme Court Website is as follows:

04/27/2012 Notice of forthcoming opinion posted To be filed on Monday, April 30, 2012 at 10 a.m.

As previously discussed here, the issue on review in Kirby pertains to whether meal and rest period claims are governed by Labor Code 218.5’s two-way fee shifting provisions, rather than the one way fee shifting of Section 1194.

Second District (Division 3) Declines to Weigh-in on Gentry Issue: Kinecta Alternative Financial Solutions, Inc. v. Superior Court

On April 25, 2012, the Second District (Division 3) issued an opinion concluding that a trial court erred by denying a motion to dismiss class allegations from the plaintiff’s complaint (filed concurrently with a motion to compel arbitration) when the  at issue arbitration provision neither authorized nor prohibited class arbitration.  See Kinecta Alternative Financial Solutions, Inc. v. Superior Court, 2012 Cal. App. LEXIS 487 (2012).  In making this ruling, however, the Court left open the possibility that the Gentry framework continued to survive the U.S. Supreme Court’s ruling in Concepcion [as was concluded by its sister Division in Brown v. Ralphs Grocery Co., 197 Cal.App.4th 489, 498 (2011) previously discussed in posts here and here].  As was explained by the Court, satisfaction of the Gentry factors could potentially render an arbitration agreement unenforceable in the employment context, but such a determination could not be made here because the plaintiffs had not submitted any supporting evidence:
A question exists about whether Gentry survived the overruling of Discover Bank in Concepcion, but it is not one we need to decide. (Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489, 498 [128 Cal. Rptr. 3d 854].) Gentry decided a different issue from Discover Bank. In contrast to the unconscionability analysis in Discover Bank, the rule in Gentry concerns “the effect of a class action waiver on unwaivable statutory rights regardless of unconscionability.” (Arguelles-Romero v. Superior Court (2010) 184 Cal.App.4th 825, 836 [109 Cal. Rptr. 3d 289] (Arguelles-Romero).) Specifically, Gentry addresses whether a class arbitration “is a significantly more effective practical means of vindicating unwaivable statutory rights[.]” (Arguelles-Romero, at p. 841.) Discover Bank and Gentry established two different tests of whether to enforce a class arbitration waiver, which should be considered separately. (Arguelles-Romero, at pp. 836–837.) Since it has not been expressly abrogated or overruled, Gentry appears to remain the binding law in California. (Brown v. Ralphs Grocery Co., at pp. 498, 505.) 
*******
Even if Gentry has not been overruled, in opposing Kinecta's motion to compel arbitration and to dismiss class claims, Malone had to provide evidence of the four Gentry factors. Plaintiff has the burden of establishing that the arbitration provision (here, limiting arbitration to bilateral arbitration) is invalid by making a factual showing of the four Gentry factors. (Brown v. Ralphs Grocery Co., supra, 197 Cal.App.4th at p. 497.) The record shows that Malone provided no evidence as to any of the four Gentry factors required to support a trial court's determination that the arbitration should proceed as a class action arbitration. Thus there is no evidence, and no substantial evidence, that plaintiff had established a factual basis that would require a declaration that the arbitration agreement was unenforceable. (Ibid.)
Because there are no grounds to declare the arbitration agreement unenforceable and because the arbitration provision contained no agreement to classwide arbitration, Kinecta  argues that Concepcion and Stolt-Nielsen require reversal of the order denying its request to dismiss class claims from Malone's complaint. We agree.
See Kinecta, 2012 Cal. App. LEXIS 487, at 17-20

Friday, April 20, 2012

Unpacking The Brinker Court’s Analysis Of Certification Issues Particular to Meal and Rest Period Claims: Brinker Restaurant Corp. v. Superior Court

As promised, this final post will examine the Brinker Court’s meal and rest break certification analysis (previous posts are located here and here).  As demonstrated below, the common thread running throughout the Court’s opinion centered largely on the Court of Appeal’s finding that individualized issues relating to waiver rendered certification of meal and rest period claims inappropriate.
With regard to rest periods, the Court’s analysis was fairly straight forward.  The Court held that because the plaintiffs’ theory of liability was predicated on breaks not being authorized or permitted in the first instance, reversal of the trial court’s certification order based on issues relating to class members having waived their breaks was an abuse of discretion:
In reversing class certification, the Court of Appeal concluded that because rest breaks can be waived—as all parties agree—“any showing on a class basis that plaintiffs or other members of the proposed class missed rest breaks or took shortened rest breaks would not necessarily establish, without further individualized proof, that Brinker violated” the Labor Code and Wage Order No. 5. This was error. An employer is required to authorize and permit the amount of rest break time called for under the wage order for its industry. If it does not—if, for example, it adopts a uniform policy authorizing and permitting only one rest break for employees working a seven-hour shift when two are required—it has violated the wage order and is liable. No issue of waiver ever arises for a rest break that was required by law but never authorized; if a break is not authorized, an employee has no opportunity to decline to take it. As Hohnbaum pleaded and presented substantial evidence of a uniform rest break policy authorizing breaks only for each full four hours worked, the trial court’s certification of a rest break subclass should not have been disturbed.
Slip Opinion, at 25-26 (emphasis added).

Thus, the Brinker opinion confirms that the issue of waiver is irrelevant to theories of liability alleging that employees were deprived access to a legally compliant break in the first instance (this would seem to be a matter of common sense, as you cannot waive what you never had).

With regard to meal periods, the Brinker Court went one step further.  Although the Court rendered no formal opinion as to whether the trial court erred in certifying a class [id., at 51 (“we need not decide whether or not the trial court erred…. we consider it the prudent course to remand the question of meal subclass certification to the trial court for reconsideration in light of the clarification of the law we have provided.”)], Justice Werdegar’s concurring opinion makes clear that the Court did not accept the premise that individualized issues relating to waiver render a claim uncertifiable, per se:
In returning the case for reconsideration, the opinion of the court does not endorse Brinker’s argument, accepted by the Court of Appeal, that the question why a meal period was missed renders meal period claims categorically uncertifiable. Nor could it, for such a per se bar would be inconsistent with the law governing reporting obligations and our historic endorsement of a variety of methods that render collective actions judicially manageable.
Concurring Opinion (Werdegar, J.), at 1 (emphasis in original).

Here, significant emphasis was placed on the employer’s obligation to record meal breaks relative to an employer asserting the defense of waiver.  Specifically, Justice Werdegar highlighted that when an employer fails to record a meal break, a “presumption arises that the employee was not relieved of duty and no meal period was provided” [id., at 1], and thereafter, “[a]n employer’s assertion that it did relieve the employee of duty, but the employee waived the opportunity to have a work-free break, … is an affirmative defense, and thus the burden is on the employer, as the party asserting waiver, to plead and prove it.”  See id., at 2.

This statement of presumption and burden is material to certification, as it precludes the automatic categorization of all missed meal periods as implicating an individualized issue of waiver.  To establish the presence of individualized issues, an employer seemingly must now affirmatively introduce evidence for each individual employee to place the presumption in dispute as to that employee.  In turn, this forecloses a court from making a generalized, freewheeling assumption from a handful of employee declarations that individualized issues relating to waiver will predominate as to the entire class.  Such an interpretation is consistent with Justice Werdegar’s discussion, which noted that the employer cannot be permitted to reap a reward for failing to record breaks.  See id., at 2 fn. 1 (“[t]o place the burden elsewhere would offer an employer an incentive to avoid its recording duty and a potential windfall from the failure to record meal periods.”).

In addition – as discussed in the final paragraph of my previous post – an employer’s invocation of a generalized waiver defense in the break context is properly construed as a damages issue.  See Concurring Opinion (Werdegar, J.), at 3 (“For purposes of class action manageability, a defense that hinges liability vel non on consideration of numerous intricately detailed factual questions, … is different from a defense that raises only one or a few questions and that operates not to extinguish the defendant’s liability but only to diminish the amount of a given plaintiff’s recovery.”) (emphasis added).

Finally, it is important to highlight that the elements of waiver – which requires an employer evidence that the right to breaks was both known and voluntarily released [Waller v. Truck Ins. Exchange, Inc., 11 Cal. 4th 1, 31 (1995) (“waiver is the intentional relinquishment of a known right after knowledge of the facts”)] – in many cases may lend themselves to issues that are common to the class.  By way of example, an employer that fails to communicate any break policies to its employees will necessarily be legally foreclosed from subsequently seeking to invoke a waiver defense.  See e.g. Concurring Opinion, at 2 fn. 1 (“the burden is on the employer to show that the agricultural employee had been advised of his or her legal right to take a meal period and has knowingly and voluntarily decided not to take the meal period.”); See also Bufil v. Dollar Financial Corp., 162 Cal. App. 4th 1193, 1199 (2008) (“Dollar does not notify its employees that they are authorized and permitted to take a 10-consecutive-minute off-duty rest break …. The onus is on the employer to clearly communicate the authorization and permission to its employees.”).

Saturday, April 14, 2012

Unpacking The Brinker Court’s Class Certification Analysis: Brinker Restaurant Corp. v. Superior Court

As I indicated in my prior post (located here), the real value of the Brinker opinion, at least from the plaintiff’s perspective, lays in the Court’s certification analysis.  The Court’s analysis in this regard has two components which track the two separate grounds on which the Court of Appeal reversed the trial court’s certification order: “First, the Court of Appeal held the trial court committed error per se by ruling on certification without first resolving legal disputes over the scope of Brinker’s duties to provide meal and rest periods.”  See Slip Opinion, at 10.  “Second, it held that any court, upon resolving those disputes, could only have concluded certification was inappropriate.”  See id.  This Blog Post will examine the first of these issues, which is focused on aspects of the element of predominance in general.  I will explore the second issue set – which involves certification issues particular to meal and rest period claims – in a subsequent post (contained here).

With regard to this first issue, “[t]he trial court [had] concluded it could certify a class without resolving disputes over the scope of Brinker’s duty to provide breaks because common questions would predominate even if Brinker’s legal positions were correct.” See Slip Opinion, at 10.  The Court of Appeal deemed this an abuse of discretion, concluding that “the trial court ‘was required to determine the elements of plaintiffs’ claims’ because the court ‘could not determine whether individual or common issues predominate in this case, and thus whether a class action was proper, without first determining this threshold issue.’” See id.

On this issue, the Brinker Court found the Court of Appeal’s absolute position to itself be an abuse of discretion, concluding that “[w]hile … trial courts must resolve any legal or factual issues that are necessary to a determination whether class certification is proper, the Court of Appeal went too far by intimating that a trial court must as a threshold matter always resolve any party disputes over the elements of a claim.”  See id. (emphasis in original).  As explained by the Court, “[a] class certification motion is not a license for a free-floating inquiry into the validity of the complaint’s allegations” [Id., at 11], and in fact, “[s]uch inquiries are closely circumscribed.”  See Id., at 12.  Such inquiry, according to the Court, “must ‘be limited to those aspects of the merits that affect the decisions essential ’ to class certification” [See Id., at 12-13 (emphasis added)], and even then, “a court generally should eschew resolution of such issues unless necessary.”  See id., at 13 (emphasis added).

At this point, it is important to again highlight (as discussed in my prior post) that the Brinker Court deemed a threshold legal determination of the elements of plaintiffs’ break claims unnecessary to the predominance analysis in the Brinker case, and that it was engaging in review of such issues only because the parties had requested the Court to address the substantive merits.  See id., at 2, 15 and 26. Thus, the Brinker opinion not only serves to establish that a trial court is not per se obligated to make threshold merits based determinations at the certification stage when the proper interpretation of the legal elements are in dispute, it also serves as an important instructive tool in delineating the boundaries of when such threshold resolution of the legal merits is permissible.

Although the Brinker Court recognized that the issue of “whether common or individual questions predominate will often depend upon resolution of issues closely tied to the merits” [Slip Opinion, at 12], the Court also reiterated that a court’s analysis in this regard must “hinge[] on ‘whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.’”  See id., at 8 (emphasis added).  This is a critical component of the Brinker Court’s opinion, as the Court of Appeal was deemed to have gone astray by failing to acknowledge the theory of liability put forward by plaintiffs (which significantly was substantiated by a uniform company policy and turned on resolution of a common issue of law):
We observe in closing that, contrary to the Court of Appeal’s conclusion, the certifiability of a rest break subclass in this case is not dependent upon resolution of threshold legal disputes over the scope of the employer’s rest break duties. The theory of liability—that Brinker has a uniform policy, and that that policy, measured against wage order requirements, allegedly violates the law—is by its nature a common question eminently suited for class treatment.  
Slip Opinion, at 26.

It is important to underscore that disregard of the plaintiff’s theory of liability is a common certification error in the wage and hour context, spurred in many instances by an employer’s strategic practice of using employee declaration testimony to distract the court’s focus away from the uniform employment policies on which the theory of liability is based:
  • United Steel, Paper & Forestry, Rubber, Mfg. Energy v. ConocoPhillips Co., 593 F.3d 802, 808 (9th Cir. Cal. 2010) (“the district court treated plaintiffs' actual legal theory as all but beside the point, holding that because ‘there can be no assurances that [plaintiffs] w[ould] prevail on this theory,’ [] the … predominance inquiry would instead focus on the question whether plaintiffs ‘actually missed meal breaks,’ an admittedly individualized inquiry.”)
  • Bufil v. Dollar Financial Group, Inc., 162 Cal. App. 4th 1193, 1203-04 (2008) (“The court made an erroneous assumption that each class member would need to testify as to his or her understanding of the meal period waiver.  This … issue ... is irrelevant to Bufil's lawsuit.  Bufil’s theory is that the two circumstances – single employee on duty or providing training – do not come within the ‘nature of the work’ exception set forth in Wage Order No. 4-2001, so as to permit an ‘on-duty’ meal period.  This is a legal question concerning the liability of Dollar to each putative class member.”)
  • Jaimez v. Daiohs USA, Inc., 181 Cal. App. 4th 1286, 1303-1304 (Cal. App. 2d Dist. 2010) (“The First Choice declarations do not constitute substantial evidence that individual inquiries predominate the meal breaks claim” as “First Choice's practices are the predominant common factual issues on the meal and rest break claims.”)
  • Ghazaryan v. Diva Limousine, Ltd., 169 Cal. App. 4th 1524, 1531, 1536-37 (2008)  (“Although individual testimony may be relevant to determine whether these policies unduly restrict the ability of drivers as a whole to utilize their on-call time for personal purposes, the legal question to be resolved is not an individual one.  To the contrary, the common legal question remains the overall impact of Diva’s policies on its drivers, not whether any one driver, through the incidental convenience of having a home or gym nearby to spend his or her gap time, successfully finds a way to utilize that time for his or her own purposes.”)
The Brinker opinion confronts this issue by prescribing an analytical framework which expressly confines the court’s predominance analysis to issues presented by the plaintiff’s theory of liability:
We summarize the governing principles.  Presented with a class certification motion, a trial court must examine the plaintiff’s theory of recovery, assess the nature of the legal and factual disputes likely to be presented, and decide whether individual or common issues predominate. To the extent the propriety of certification depends upon disputed threshold legal or factual questions, a court may, and indeed must, resolve them. Out of respect for the problems arising from one-way intervention, however, a court generally should eschew resolution of such issues unless necessary. (See Fireside Bank v. Superior Court, supra, 40 Cal.4th at p. 1074; Schleicher v. Wendt, supra, 618 F.3d at p. 685.)
Slip Opinion, at 12 (emphasis added).

Thus, the Court’s decision provides important guidance on the element of predominance by not only limiting when a merits based determination can occur, it expressly confines that inquiry to the issues raised by the plaintiff’s theory of liability put forward for certification.

In addition to the forgoing, the Brinker opinion also contains a second significant component – bolstered by Justice Werdegar’s concurring opinion – which draws into question the reach of the First District’s recent opinion in Duran v. United States Bank National Assn., 203 Cal. App. 4th 212 (2012) disapproving the use of representative/sampling evidence in establishing class-wide liability (an opinion which I discussed previously, here).  This component is found within the clause of the Court’s rule analysis stating that a court “must determine whether the elements necessary to establish liability are susceptible of common proof or, if not, whether there are ways to manage effectively proof of any elements that may require individualized evidence.”  See Slip Opinion, at 12 (citing Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal. 4th 319, 334 (2004)).  This statement plainly communicates that an inability to establish liability entirely by way of common proof is not the end of a court’s predominance inquiry.  Indeed, closer examination of the portion of the Sav-On opinion cited states that “[i]ndividual issues do not render class certification inappropriate so long as such issues may effectively be managed.”  See Sav-On, 34 Cal. 4th at 334.

While the Brinker opinion itself does not expand upon this issue further, Justice Werdegar’s concurring opinion does, giving specific instruction to the lower courts (1) reiterating that small value claims are generally dependent on the class action mechanism to secure vindication of substantive rights, and (2) advising that representative testimony, surveys, and statistical analysis all are available as tools to render manageable determinations of the extent of liability:
[W]e have encouraged the use of a variety of methods to enable individual claims that might otherwise go unpursued to be vindicated, and to avoid windfalls to defendants that harm many in small amounts rather than a few in large amounts. (See Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at pp. 339-340; Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 714-715.) Representative testimony, surveys, and statistical analysis all are available as tools to render manageable determinations of the extent of liability. (See, e.g., Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 749-755 [upholding as consistent with due process the use of surveys and statistical analysis to measure a defendant’s aggregate liability under the IWC’s wage orders]; Dilts v. Penske Logistics, LLC (S.D.Cal. 2010) 267 F.R.D. 625, 638 [certifying a meal break subclass because liability could be established through employer records and representative testimony, and class damages could be established through statistical sampling and selective direct evidence]; see generally Sav-On, at p. 333 & fn. 6).) “[S]tatistical inference offers a means of vindicating the policy underlying the Industrial Welfare Commission’s wage orders without clogging the courts or deterring small claimants with the cost of litigation.” (Bell, at p. 751.)
Given these settled principles, Brinker has not shown the defense it raises, waiver, would render a certified class categorically unmanageable.
Concurring Opinion (Werdegar, J.), at 4.

While Justice Werdegar’s discussion does not necessarily sanction unbridled use of representative/sampling evidence, it unquestionably does sanction such use as a means of managing “defenses” to a plaintiff’s theory of liability.  More importantly, however, Justice Werdegar highlights that a court must distinguish between defenses that “operate[] not to extinguish the defendant’s liability but only to diminish the amount of a given plaintiff’s recovery” (i.e. a distinction encompassing individualized instances of waiver, which employers typically assert in the meal/rest break context to fragment the issues and defeat certification):
While individual issues arising from an affirmative defense can in some cases support denial of certification, they pose no per se bar (see, e.g., Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 334-338; Weinstat v. Dentsply Internat., Inc. (2010) 180 Cal.App.4th 1213, 1235). Instead, whether in a given case affirmative defenses should lead a court to approve or reject certification will hinge on the manageability of any individual issues. (See Sav-On, at p. 334.)
For purposes of class action manageability, a defense that hinges liability vel non on consideration of numerous intricately detailed factual questions, as is sometimes the case in misclassification suits, is different from a defense that raises only one or a few questions and that operates not to extinguish the defendant’s liability but only to diminish the amount of a given plaintiff’s recovery.
Concurring Opinion (Werdegar, J.), at 3.

Thursday, April 12, 2012

Unpacking The Brinker Court’s Construction Of California’s Meal and Rest Break Provisions

Having had some time to digest the Court’s opinion, the most surprising aspect (at least in my mind), is that the Court’s opinion is largely non-surprising.  Rather than engaging in a broad analysis of the meaning of the Wage Order’s various meal and rest break provisions, the Court has strictly limited its analysis to only those issues necessary to resolve the certification questions in the case at hand. In this regard, the real value of the Brinker opinion, at least from the plaintiff’s perspective, appears to lay in the Court’s certification analysis, which unquestionably disposes of the common belief held by many in the defense bar that meal and rest period claims are “hopelessly uncertifiable.”  Due to the number of issues in play, today’s post will be limited to the Court’s analysis relating to the construction of the meal and rest break provisions, with subsequent posts addressing the Court’s analysis regarding certification.

Meal Period Requirements: With regard to meal periods, the Court concluded that “[a]n employer’s duty ... under both section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees” [Slip Opinion, at 36 (emphasis added)], which the Court concluded “is satisfied if the employee (1) has at least 30 minutes uninterrupted, (2) is free to leave the premises, and (3) is relieved of all duty for the entire period.”  See Slip Opinion, at 30; id., at 36 (“The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.”).

Importantly, the Court’s finding in this regard has a direct correlation to the fact the Wage Order’s definition of “hours worked” provides for two independent standards: one based on “control” and the other on being “suffered or permitted to work...” See 8 CCR 11050(2)(K) (“‘Hours worked’ means the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work….”); see also Morillion v. Royal Packing Co., 22 Cal. 4th 575, 582 (2000) (“While cases interpreting the phrase ‘hours worked’ have not thoroughly examined the definition's scope or defined the relationship between the two clauses, they nonetheless support the view that the ‘suffered or permitted to work’ clause in Wage Order No. 14-80 does not limit the ‘control’ clause under the definition of ‘hours worked.’”).  Ironically, the Court reasoned that this dual standard is what precluded a construction saddling an employer with an obligation to “ensure” employees in fact have ceased all duties, as doing so would require an employer to assert control over the employee:
Indeed, the obligation to ensure employees do no work may in some instances be inconsistent with the fundamental employer obligations associated with a meal break: to relieve the employee of all duty and relinquish any employer control over the employee and how he or she spends the time. (See Morillion v. Royal Packing Co., supra, 22 Cal.4th at pp. 584-585 [explaining that voluntary work may occur while not subject to an employer’s control, and its cessation may require the reassertion of employer control].)
Slip Opinion, at 33-34.

In addition, the Court also makes clear that an employer’s obligation cannot be met by merely enacting a lawful meal break policy, as the employee must also be free of barriers which impede or discourage the taking of breaks:
[A]n employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks. (Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 962-963; see also Jaimez v. Daiohs USA, Inc., supra, 181 Cal.App.4th at pp. 1304-1305 [proof of common scheduling policy that made taking breaks extremely difficult would show violation]; Dilts v. Penske Logistics, LLC (S.D.Cal. 2010) 267 F.R.D. 625, 638 [indicating informal anti-meal-break policy “enforced through ‘ridicule’ or ‘reprimand’ ” would be illegal].) The wage orders and governing statute do not countenance an employer’s exerting coercion against the taking of, creating incentives to forego, or otherwise encouraging the skipping of legally protected breaks.
Slip Opinion, at 36.

Finally, with regard to the issue of timing, the Court rejected a “rolling” 5 hour construction, concluding “that, absent waiver, section 512 requires a first meal period no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s 10th hour of work.”  See Slip Opinion, at 37; id., at 50 (“we conclude that Wage Order No. 5 imposes no meal timing requirements beyond those in section 512.”).

Thus, as for meal periods, the Court’s decision appears to essentially track the status quo in terms of an employer’s meal break obligations.

Rest Period Obligations: With regard to rest periods, it is important to highlight that the Court’s analysis regarding the scope of an employer’s duty did not examine the issue of what constituted a legally compliant rest break, but rather, was expressly confined to two limited issues: (1) the amount of rest period time required, and (2) when rest periods must be provided.  See Slip Opinion, at 17-18 (“Preliminary to its assessment of the trial court’s certification of a rest period subclass, the Court of Appeal addressed two threshold legal questions: the amount of rest time that must be authorized, and the timing of any rest periods. We consider these same two questions.”).

[Note: The Court’s refusal to venture beyond these two very limited questions appears to derive from the fact that the Court viewed the Court of Appeal’s foray into these issues in the context of a certification motion to itself be an abuse of discretion.  See Slip Opinion, at 26 (“contrary to the Court of Appeal’s conclusion, the certifiability of a rest break subclass in this case is not dependent upon resolution of threshold legal disputes over the scope of the employer’s rest break duties.”).  As such, the Court did not resolve the looming question of whether, and to what extent, a rest period must permit employees to be relieved of duty and/or control.  From a logical perspective, one would think that an employee must, at a minimum, be relieved of all duty, not only because that is the very concept of a break, but also because the premise that an employee has received a rest break while continuing to be subjected to duty would render the Wage Order’s rest period requirements completely meaningless.  Indeed, if that were the law, an employee’s entire shift would constitute one continuous rest break.]

With regard the amount of rest period time required, the Court harmonized the three sentences comprising Section 12(A) of the Wage Order to conclude that “[e]mployees are entitled to 10 minutes’ rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on.”  See Slip Opinion, at 20.

As for when rest periods must be provided, the Court rejected a construction that would impose on employers “a legal duty to permit their employees a rest period before any meal period.” See Slip Opinion, at 22.  As reasoned by the Court, “[n]either text nor logic dictates an order for these, nor does anything in the policies underlying the wage and hour laws compel the conclusion that a rest break at the two-hour mark and a meal break at the four-hour mark of such a shift is lawful, while the reverse, a meal break at the two-hour mark and a rest break at the four-hour mark, is per se illegal.”  See Slip Opinion, at 23.  According to the Court, “[t]he only constraint on timing is that rest breaks must fall in the middle of work periods ‘insofar as practicable’” and thereon, “[e]mployers are thus subject to a duty to make a good faith effort to authorize and permit rest breaks in the middle of each work period, but may deviate from that preferred course where practical considerations render it infeasible.”  See Slip Opinion, at 22.  Yet, the Court left open the question that an employer may nonetheless violate the Wage Order by failing to make a good faith effort to authorize and permit rest breaks in the middle of each work period, concluding that “[a]t the certification stage, we have no occasion to decide, and express no opinion on, what considerations might be legally sufficient to justify such a departure.”  See id.

Thus, as for rest periods, the Court’s decision appears to leave many important questions unresolved.  As these questions, in the Court’s view, are not necessarily pertinent to the certification question, such issues will live on to debate for the immediate future.

California Supreme Court Reverses Court of Appeal, in Part: Brinker Restaurant Corp. v. Superior Court

The California Supreme Court has finally ruled, issuing a 63 page opinion that addresses questions pertaining to both certification and the construction of California meal/rest break laws.  The Court’s overarching ruling, as set forth in the introduction of the opinion, is as follows:
On the ultimate question of class certification, we review the trial court’s ruling for abuse of discretion. In light of the substantial evidence submitted by plaintiffs of defendants’ uniform policy, we conclude the trial court properly certified a rest break subclass. On the question of meal break subclass certification, we remand to the trial court for reconsideration. With respect to the third contested subclass, covering allegations that employees were required to work “off-the-clock,” no evidence of common policies or means of proof was supplied, and the trial court therefore erred in certifying a subclass. Accordingly, because the Court of Appeal rejected certification of all three subclasses, we will affirm in part, reverse in part, and remand for further proceedings.
See Slip Opinion, at 2. 

I am working on reviewing and unpacking the Court’s analysis, and will have a more detailed review shortly.

Wednesday, April 11, 2012

California Supreme Court to Issue Ruling in Brinker Restaurant v. Superior Court Tomorrow (April 12, 2012):

Just posted on the California Supreme Court website (here):

04/11/2012 Notice of forthcoming opinion posted To be filed on Thursday, April 12, 2012 at 10 a.m.