How Will the Brinker Decision Impact your Business? 37 Offices in 18 Countries
What is Brinker? • Brinker Restaurant Corp. and Brinker International, Inc. operate several well-known chain restaurants including Chili’s throughout California. • Chain sued by hourly employees seeking compensation as class for Failure to provide meal periods or premium pay Failure to provide rest periods or premium pay Requiring employees to “work-off-the-clock” during meal periods “time shaving” or unlawfully altering employee time records • The Cal. Supreme Court granted review of the case to “resolve uncertainties in the handling of wage and hour class certification motions.” 2
What will we cover? • Rest period obligations • Meal period obligations For Position Only • The decision’s impact on class actions • Future implications • Best practices 3
Rest Period Obligations • The law: “Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest time shall be based on the Client Service and Feedback total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. However, a rest period need not be authorized for employees whose total daily work time Process and Resource Value-based is less than three and one-half (3 1/2 ) hours.” IWC Wage Order No. Optimization Pricing 5, subd. 12. Training and Staffing Development Models Project and Knowledge Management 4
Rest Period Obligations • Employers are not obligated to ensure that employees take rest breaks. Client Service • Employers must “provide” employees a reasonable opportunity and Feedback to take their rest breaks. • If employees voluntarily choose to work through rest periods, no Process and Resource Value-based premium is due. Optimization Pricing Training and Staffing Development Models Project and Knowledge Management 5
Rest Period Obligations (cont’d) • Rest breaks are required as follows: Zero to less than 3.5 hours worked = No rest periods owed Client Service and Feedback 3.5 hours to 6 hours worked = One rest period 6 hours to less than 10 hours worked = Two rest periods Process and 10 hours to less than 14 hours worked = Three rest periods Resource Value-based Optimization Pricing • What is a “major faction? anything more than two hours in the prior four-hour work period Training and Staffing Development Models 6
Rest Period Obligations (cont’d) • Rest break timing requirements: Ideally rest break should occur in the middle of the work period Does not have to occur before a meal period Client Service and Feedback • Review your rest break policy. Process and Resource Value-based Optimization Pricing Update to address number of breaks available based on hours worked Include “major fraction” language Training and Staffing Development Models 7
Meal Period Obligations The law: “An employer may not employ an employee for a work period of Client Service more than five hours per day without providing the employee with a and Feedback meal period of not less than 30 minutes, except that if the total work period of the employee is no more than six hours, the meal Process and period may be waived by mutual consent of both the employer and Resource Value-based Optimization Pricing employee.” Labor Code sec. 512(a) Training and Staffing Development Models 8
Meal Period Obligations (cont’d) • Employers are not obligated to ensure that employees take meal periods. Client Service • Employers must “provide” employees a reasonable opportunity and Feedback to take their meal periods. relieve employees of all duty Process and Resource Value-based relinquish control over activities Optimization Pricing do not impede or discourage employees from taking meal periods Training and Staffing Development Models 9
Meal Period Obligations (cont’d) • If employer met obligation and employee voluntarily chooses to work through a meal period, no premium is due. Client Service • Employers are required to pay employees for the time spent and Feedback working during meal periods if employer knows or has reason to know employee worked for all or part of the time. Process and Resource Value-based Optimization Pricing Training and Staffing Development Models 10
Meal Period Obligations (cont’d) Timing of Meal Periods • Court rejected “rolling 5 hour meal periods” Client Service and Feedback • First meal period must be provided no later than the fifth hour of Process and work . Resource Value-based Optimization May be waived by mutual consent if employee works no more than six Pricing hours. “Early lunching” • Second meal period must be provided no later than the tenth Training and Staffing hour of work unless: Development Models Waived by mutual consent and First meal period not waived. 11
Meal Period Obligations (cont’d) On Duty Meal Periods • On Duty Meal Periods permitted in limited circumstances: Client Service The nature of the work prevents an employee from being and Feedback relieved of all duty; On duty meal period treated as hours worked Process and Resource Value-based Optimization Employee agrees in writing to the on duty meal period Pricing Must be revocable No premium pay obligation If you don’t meet the test, then duty free meal breaks must be provided or premium pay is due. Training and Staffing Development Models 12
Class Certification Basics • Basic elements: Existence of an ascertainable and sufficiently numerous class; Well-defined community of interest within the class; Substantial benefits from certification render proceeding as a class superior to other alternatives. • Brinker involved whether the issues that may be jointly tried, when compared to those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants. • If the defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages. 13
Certification Lessons • Whether common or individual questions predominate will often depend upon resolution of issues closely tied to its merits. • Trial court must determine whether the elements necessary to establish liability are susceptible of common proof or whether there are ways to manage effectively proof of any elements that may require individualized evidence. ( Duran v. US Bank Corp. ) • Any “peek” the court takes at the merits must be limited to those aspects that effect the decision essential to class certification. 14
Employers Should Wait on the Merits 15
Certification of Rest Break Claims • Brinker held the rest break claims could be certified for class action. • The employer policy did not comply with the statement of the law therefore there was a common illegal policy applicable to all members of the Rest Break subclass. • Court declined to comment on whether a rest break claim could be certified so long as the employer had a compliant policy. • Court also left open the kind of circumstances that would excuse providing break mid-way through a working period so possibilities for class claims remain based on when breaks are scheduled and whether the employer complied with the policy. 16
Certification of Meal Period Claims • Supreme Court remanded the case – the trial court has to reconsider certification in light of the correct statement of the law. • Trial court decision was faulty because of a mistake of law. • Court’s majority opinion did not address whether claims under the “relieved of all duty” standard are susceptible to class treatment. • Two justice concurrence went out of its way to reject defendant’s argument that meal period claims cannot be certified because individual issues will predominate. 17
What Have We Been Waiting For? • Supreme Court asked for briefs in January 2012 regarding whether it could issue the decision prospectively. • What did they say about that? • NOTHING! • That means the rules apply retrospectively which is good news for many employers, but the time to change break policies to match new interpretation is NOW. 18
What Plaintiffs’ Lawyers Are Saying • Look for cases based on practices and policies. • Certification is still possible but it has to be backed up by evidence. • Next battle is how far Duran condemns statistical evidence to prove liability. 19
Best Practices Post- Brinker • Review your meal and rest break policies • Train your employees, supervisors and managers • Keep your ear to the ground • Pay for all time worked during rest or meal periods. Client Service and Feedback • Pay premiums when business requirements do not permit employees to have a duty free meal and/or rest period. Consider creating a form for this purpose. Process and Resource Value-based • Do not allow employees to work “off the clock” and put it in Optimization Pricing writing. • If you have employees taking on duty meal periods, review the basis and need for doing so. • Prepare forms and document meal period waivers as Training and Staffing appropriate. Development Models 20
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