Brinker: The Long and Winding Road Finally Comes to an End

On April 12, the California Supreme Court issued its unanimous opinion in Brinker Restaurant Corp. v. Superior Court (2012) Case No. S166350, holding that employers need only provide meal and rest periods, not ensure they are taken, and that employers are not required to provide a meal period every five hours. However, the Supreme Court also held that the Court of Appeal went too far in requiring the trial court to resolve all factual and legal disputes before certifying a class. Consequently, the Court found that the trial court's certification of the rest period and meal period subclasses was appropriate (but remanded the case for reconsideration of the meal period subclass definition). The Supreme Court also affirmed the Court of Appeal's decision vacating certification of an off-the-clock subclass.

The claims against Brinker Restaurant Corp. (which operates Chili's Bar & Grill, Romano's Macaroni Grill, and Maggiano's Little Italy) have their genesis in an investigation conducted by the California Division of Labor Standards Enforcement. Starting in 2002, the DLSE investigated Brinker's alleged failure to provide meal and rest periods and filed suit against Brinker in 2002 in Los Angeles County Superior Court. The case was settled for $10 million and a court-ordered injunction ensuring compliance with meal and rest period laws until September 2006.

Plaintiff Adam Hohnbaum then sued Brinker in San Diego Superior Court alleging that Brinker failed to provide meal and rest periods, and required its employees to work off-the-clock. Hohnbaum later moved for class certification, alleging subclasses for rest period, meal period, and off-the-clock violations. The trial court granted his motion but the Court of Appeal reversed, holding that the class certification order was erroneous. Brinker Rest. Corp. v. Superior Court (2008) 165 Cal.App.4th 25. The Court of Appeal held that the trial court failed to properly consider the elements of plaintiff's claims and, in undertaking this task itself, held that employers need only provide — not ensure — meal and rest periods, and were not required to provide a meal period for every five-hour period worked — the so-called "rolling" meal period. The Court of Appeal also held that employers could be held liable for employees working off-the-clock only if they knew or should have known their employees were doing so. The Supreme Court granted Petition for Review on Oct. 22, 2008.

In addressing the meal period issues, the Supreme Court performed an in-depth analysis of Section 11(A) of the applicable wage order (Wage Order No. 5), noting that it simply states "[n]o employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes." While there is no verb between "without" and "a meal period" (plaintiff argued this sentence should be read as "[n]o employer shall employ any person for a work period of more than five (5) hours without [requiring] a meal period of not less than 30 minutes"), Labor Code Section 512(a) uses the verb "provide" in describing the employer's duty regarding meal periods. "An employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes ..." (emphasis added). In rejecting plaintiff's argument that an employer must [ensure] that employees perform no work during their meal periods, the Court held that plaintiff's argument "lacks any textual basis in the wage order or statute."

The Court summarized this issue by holding "[t]he 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 period, and does not impede or discourage them from doing so. ... On the other hand, an employer is not obligated to police meal periods and ensure no work thereafter is performed."

Turning to the issue of the timing of meal periods, the Court held that Labor Code Section 512(a) requires that a meal period be provided before the end of the fifth hour worked and a second meal period be provided before the end of the tenth hour worked. The Court rejected plaintiff's argument that an employer is required to provide a meal period after every five-hour period worked, holding that neither the statute nor Wage Order No. 5 can be read to so require. An employee is entitled to a second meal period only if he works ten hours.

The Court also addressed an employer's obligation to provide rest periods, finding that the text of Wage Order No. 5, subdivision 12(A) was dispositive: "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 period time shall be based on the 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 is less than three and one-half (3½) hours." Interpreting "major fraction thereof" to mean a fraction greater than one-half, the Court held that an employee is entitled to 10 minutes of rest for working more than three-and-a-half but less than six hours, 20 minutes of rest for working more than six but less than 10 hours, and 30 minutes of rest for working more than 10 hours but less than 14.

Finding no textual support in the Wage Order, the Court also rejected plaintiff's argument that employers have a legal duty to permit their employees a rest period before any meal period. According to the Court, employers are "subject to a duty to make a good faith effort to authorize and permit rest periods in the middle of each work period, but may deviate from that preferred course where practical considerations render it infeasible. At 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."

In addressing the question of class certification, the Court focused on one element of the "community of interest" requirement: "predominant common questions of law or fact" must exist. Citing frequently to its 2004 decision in Save-on Drug Stores, the Court held that the trial court (to which the appellate courts must give "great deference" on this issue) must decide only those factual or legal disputes that are necessary to its determination of whether class certification is appropriate. The trial court's determination of whether an element can be established collectively or only individually must be a "closely circumscribed" inquiry. "[T]he 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." Notably, Justice Kathryn Wedegar, in her concurring opinion, emphasized that the question of why a meal period was missed does not render such a claim categorically uncertifiable and remanded to the trial court to determine whether sufficient methods exist to render class treatment manageable.

The Supreme Court's decision in Brinker provides much-needed clarification of employers' obligations regarding meal and rest periods. Given the Court's reliance on Brinker's meal and rest period policies in deciding the class certification issues, Brinker is a reminder that it is incumbent upon employers to both draft clear, concise policies and to ensure that these policies are uniformly implemented and applied. It is also important for employers to internally audit the workplace to ensure compliance with policies. Finally, well-written policies that are properly implemented can be an asset in defeating wage and hour class certification. Notwithstanding, although Brinker is a employer favorable decision, it is not the death knell for wage and hour class actions and clearly left the door open for appropriate ones to be litigated.