I was in court last week for a status conference in a wage-and-hour class action, and was talking to my opposing counsel, an active litigator in this arena.  I asked him if the new California Supreme Court case rejecting the de minimis standard was going to be big business for him.

His candid response surprised me, so I thought I’d share it.  He opined that it really isn’t hard to prevent class action lawsuits in California and the de minimis argument really isn’t necessary.  All an employer has to do is:

  • Pay per actual time punches; don’t round at all.
  • Require a 45 minute or one hour meal break; don’t bother with 30 minutes.
  • Provide meal breaks at the 4th hour (always way before the end of the 5th hour worked).
  • Have a fully compliant rest break policy and a strict policy against working off the clock.

To his list I would add:

  • Don’t schedule 6-hour shifts with a 6-hour or less meal wavier; schedule 5 hour shifts or just schedule the meal break.
  • Don’t rely on-duty meal waivers.
  • Update your handbooks every year, it really is cost effective in the long run.
  • Train your managers not to mess things up (even inadvertently), and keep records of that training.

He said that an employer who consistently does all of these things makes taking a class action case very un-interesting for plaintiff’s attorneys like him.

58097900 – class action, 3d rendering, rough street sign collection

Easy enough, right?  Well, it sounds a little bit expensive to me, and it also might create some employee relations issues.  But then again, it might  be worth a try….

Let’s pick up where we left off. In our last post of 2016, I was complaining about the California Supreme Court’s decision in Augustus v. ABM Security Services, Inc. The majority opinion in that case said that employees who were required to carry phones or pagers on their rest breaks, even if they didn’t get called or paged, were deprived of their statutory breaks and were therefore owed a one-hour penalty. While I found plenty to complain about in that decision (I’m good that way), there’s another issue I want to address.

Copyright: bruno135 / 123RF Stock Photo
Copyright: bruno135 / 123RF Stock Photo

The third sentence of the decisions says: “During required rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time.” The language comes from Brinker Restaurant Corp. v. Superior Court, which dealt with meal periods. But what does it mean? Are employees exempt from substance abuse, dress code, firearm possession, and harassment prevention policies during breaks? Stated differently, is the employer powerless if workers use their break time to get drunk, strip off their clothes, and chase co-workers around the workplace with guns demanding sexual favors? I’d like to think that the answer is “no,” but Augustus, in interpreting the wage orders, urges us to give language its “plain and commonsense meaning,” If that’s what we’re supposed to do, it would be nice if the courts chose their words with a little more care. The penalties for not complying with wage and hour laws are draconian enough without the laws being too vague for employers to know what’s expected.

The worst aspect of California employment law is the way it combines unclear requirements with exorbitant penalties for noncompliance. So employers can’t necessarily tell what the law requires and, if they get it wrong, face crippling financial penalties. The latest illustration of that principle comes from the California Supreme Court’s December 22, 2016 opinion in Augustus v. ABM Security Services, Inc.

The plaintiffs in this consolidated class action worked as security guards and were required to keep their pagers and radio phones on during their 10-minute rest periods and to respond when needs arose. ABM argued that it was providing a sufficient rest period. But the trial court disagreed and decided on plaintiffs summary judgment motions that they were not relieved of all duty and that they were therefore entitled to $90 million in damages, interest, and penalties (the penalty for missing a 10-minute rest period being an hour of pay).

ABM appealed and the Court of Appeal reversed, holding that being on call does not constitute performing work. Then the California Supreme Court granted review and reversed the Court of Appeal, reinstating the $90 million judgment.

The Industrial Welfare Commission Wage Orders clearly state that employees must be “relieved of all duty” during meal periods. But there is no corresponding language in the rest period requirement. Instead, the majority opinion intuited that employees must be relieved of all duties during rest periods from analyzing the definition of “rest.” The court also looked at Labor Code §226.7, which prohibits employers from requiring employees to work during rest periods. Finally, the court focused on the fact that the Wage Orders make provisions for on-duty meal periods, but not for on-duty rest periods. That being the case, it reasoned, on-duty rest periods must not be allowed.

Copyright: twinsterphoto / 123RF Stock Photo
Copyright: twinsterphoto / 123RF Stock Photo

All of this begs the question whether being required to carry a radio or pager constitutes work. The majority opinion states that employees are not relieved of all duties if they’re required to be on call. This conclusion, it notes, is the most consistent with its interpretation of the Wage Orders and Labor Code and with the axiom that those sources should be construed in a manner to protect employees.

A two-justice dissenting opinion explained that the “the bare requirement to carry a radio, phone, pager, or other communication device in case of emergency does not constitute ‘work’ in any relevant sense of the term.” This was especially true, the dissent noted, given the lack of any evidence that any guards’ rest breaks ever were, in fact, interrupted. The dissent also explained that the majority opinion creates further ambiguity by saying that the employees in question were deprived of their rest periods where they were required to “remain on call, vigilant, and at the ready during their rest periods.” If requiring employees to be “vigilant” and “at the ready” is part of what made these rest periods inadequate, the dissent asked, shouldn’t the court explain what that means? Or do we need another decade’s worth of class-action litigation to sort that out, too?

Here are steps employers should take now to comply with this decision:

  • Prohibit employees from carrying employer-provided pagers, radio phones, or similar communication devices at work.
  • In most situations, you should not prohibit employees from using their personal mobile phones on rest breaks, since the time is their own and they must be free from employer control. But you should not require them to monitor their phones.
  • If an employee’s rest period is interrupted with work requirements, either provide a different uninterrupted 10-minute rest period (you could start the 10 minutes running again after the interruption) or pay the penalty.
  • If, as the employer, you exercise any control over what employees can do during their rest periods, consult counsel as to whether that practice is still defensible.