The following is a reminder about a wake-up call to employers. The California Fair Employment & Housing Commission (“FEHC”) issued a decision which held that an employer can be liable for failing to take all reasonable steps to prevent discrimination and harassment even if there is no underlying discrimination or harassment. Department of Fair Employment and Housing (DFEH) v. Lyddan Law Group, LLP.

In this case, a paralegal alleged that her supervisor sexually and racially harassed her. The FEHC found that alleged conduct did not constitute sexual or racial harassment. However, the employer was found liable in failing to take all reasonable steps to prevent discrimination and harassment from occurring. The employer: (1) did not have a written anti-harassment policy; (2) did not conduct trainings for its managers or employees in harassment or discrimination prevention; and, (3) failed to investigate after the paralegal complained of the harassment.

The FEHC is a quasi-judicial administrative agency which enforces California civil rights and other laws regarding discrimination in employment, housing, and public accommodations. The FEHC conducts hearings and issues administrative decisions in cases prosecuted before it by the California DFEH. If it finds an unlawful practice occurred, it can order a range of remedies including back pay, compensatory damages, administrative fines and civil penalties, injunctive relief, and reinstatement. The FEHC’s decision can be appealed to California Superior Court for review.

What does this mean to employers? Employers may be liable for failing to take all reasonable steps to prevent discrimination and harassment, even if there is no underlying discrimination or harassment according to the FEHC. The administrative case further reinforces the importance of employers to maintain written anti-harassment policies, conduct trainings for managers and employees in harassment and discrimination prevention, and timely investigate claims of such conduct.

By: David Wang

The long awaited oral argument in the seminal meal and rest break decision involving Brinker Restaurant finally occurred today. Before a packed courtroom, lawyers for a hopeful class of waiters and waitresses and the representatives of California employers battled it out before the seven justices of the California Supreme Court.

At issue are critical issues of interpretation that plague California businesses daily, and have sparked literally thousands of lawsuits, most brought as class actions seeking to recover the one hour “premium pay” owed for every missed meal or rest period.

• What does it mean to “provide” an uninterrupted 30 minute off-duty meal period—is it sufficient to make that meal period “available” to the employees and allow the employee to decide whether to take that time off, or must the employer “ensure” that the employee in fact did no work for 30 minutes?


• When must that meal period be taken to be legally compliant—could Brinker require employees to take that meal period within the first two hours of their shifts so they would be available to service customers during busy periods?


• “Must a meal period be provided every five hours? If an employee takes an early meal period after the second hour, would the employee be entitled to two meal periods in one eight-hour shift?”


• Must a rest period be offered within the first four hours of a shift, or could Brinker delay the rest period until after 4 hours had been worked?


• Must that rest period be offered before the meal period is made available?

What Does It Mean to “Provide” a Meal Period?

Counsel for the employees, Kimberly Kralowec, argued that California law protects employees by requiring affirmative steps to be taken by the employers to ensure that work stops for the required 30 minutes for meal periods. She was immediately pummeled with questions by most of the justices regarding this position, particularly the practical effect on both employees and employers. A majority of the court seemed inclined to interpret the statutes and wage orders to give employees the flexibility to decide whether to work through meal periods.

Justice Goodwin Liu asked plaintiffs’ counsel, “isn’t the hallmark of a meal period that the employer suspends control? Shouldn’t the employee be allowed to work if he wants?” When plaintiffs’ counsel responded, “no, the employee can’t work; the employer exercises control over the employee to prevent the employee from working,” Justice Liu followed up by asking “isn’t this coercive? Isn’t the most worker-friendly interpretation that the employee can do what he or she wants?” Plaintiffs’ attorney disagreed.

Justice Kennard similarly inquired “how does the employer enforce that standard? Isn’t that tantamount to an “ensure” standard? Why not give the employee the flexibility?” Justice Baxter asked how it could be “protective” of the employee to require the employer to discipline or terminate the employee if that employee disregards the employer’s instructions and works during a meal period? Justice Werdegar skeptically asked plaintiffs’ counsel, “you’re saying in order to protect the employee, if the employee freely chooses to work he should be disciplined?” Plaintiffs’ counsel responded, “yes,” because the off-duty meal period is mandatory, the employer is in control and therefore should discipline the employee if he or she works during the meal. This standard, Ms. Kralowec contended, is the same as with overtime, where an employee can be fired for working without authorization but still must be paid.

Defense counsel Rex Heinke argued that an employer has an affirmative duty to provide an opportunity to take a 30-minute meal period relieved of all duty, but agreed with Justice Kennard that the statutory language provides some flexibility because the employee decides whether to take that time as an off-duty period.

When Must a Meal Period Be Provided?

Another issue raised by this appeal is?when?the employer must provide a meal period—in the middle of the shift or anytime within the shift? Brinker employees did not necessarily wait until the middle of their shifts to take a meal period and thus might work more than five hours before receiving a second meal period or ending their shifts. Plaintiffs contended that Labor Code section 512 requires employees to be provided a meal before the end of the fifth hour and at least once every five hour “work period.”

Justice Kennard interpreted the plaintiffs’ argument as providing no flexibility on this issue, summarizing that “after five hours you stop work.” She read a long passage from a Labor Commissioner’s hearing in which restaurant workers, truck drivers, nurses and other employees objected to being forced to take meal breaks by the end of the fifth hour. She thus seemed sympathetic to Brinker’s position that meal periods can be offered anytime within the shift.

Brinker’s attorney argued that the wage order does not say that an employee earns a meal period for each consecutive five hours of work. The statute says only that those employees working “more than 10 hours per day” are entitled to two meal periods, and that plaintiffs’ interpretation renders the language requiring a second meal after ten hours a day “mere surplusage.” The Industrial Welfare Commission, moreover, specifies that rest periods shall, insofar as practicable, be offered in the middle of the work period, but makes no similar requirement for meal periods, except in the wage order governing the entertainment industry. To the extent the Wage Orders require meal periods for every five hours of consecutive work, even if the Wage Order would give employees “greater protections”—that interpretation conflicts with the Labor Code and should be disregarded, according to Brinker’s attorneys.

Justice Liu, however, differed with that interpretation, contending that the language of the Wage Order instead means that after any work period of five hours—including one taken after a 30-minute meal—gives the employee the right to a meal period, even a second meal period in an 8- or 9-hour day. For instance, if the employee started work at 8 a.m., took a meal period from noon to 12:30 p.m., and then worked until 6 p.m., he would be entitled to a second meal because he worked more than 5 hours after lunch. Mr. Heinke responded that the commission that issued the wage orders specifically deleted language that would have so required, and adopted the words “per day” to specify the obligation as to provide one meal period per day unless the employee worked 10 or more hours in that day. Since the other justices did not offer an opinion, it is unclear which way the court will go on this issue.

Rest Periods

The parties’ positions were just as much at war with respect to the interpretation of the employer’s obligation to authorize and permit rest periods. Plaintiffs in their briefs characterized the court of appeal’s ruling as entitling an employee working an eight hour shift to only one rest break because the first rest break would be granted only “after” the first four hours of work. Brinker retorted that the appellate court found that such an employee would be entitled to two rest breaks in one eight-hour period.

In oral argument before the California Supreme Court plaintiffs focused on their contention that Brinker’s policies discouraged or impeded employees from taking rest breaks. Brinker never paid the one hour’s wage to any employees, never conducted a compliance audit, and did nothing to determine or monitor compliance, they argued. Plaintiffs claimed that Brinker’s policies impeded, frustrated or dissuaded employees from taking rest breaks because their tips were not pooled, so they would lose tips when they took rest breaks. Justice Corrigan inquired whether plaintiffs were arguing that the employer “must” use a tip-pooling policy, and plaintiffs’ counsel responded, no, but the court erred in not allowing plaintiffs as a class to challenge the practice of penalizing employees who took rest breaks. Justice Liu seemed incredulous, asking why can’t the employer structure tips as it chooses, and how is this unlawful? Plaintiffs responded that Brinker’s practice of denying tip pooling created a “coercive atmosphere” that in their view violated the Labor Code and the Wage Orders.

Class Certification

Equally important given the flood of class actions being brought, the California Supreme Court has been asked to decide some difficult and important issues involving the standards for certifying classes alleging missed meal and rest periods, particularly what evidence can establish liability on a class-wide basis:

• Did individual issues predominate over common issues, thereby precluding class certification?


• Could Brinker’s meal policy coupled with records of workers’ shift lengths establish violations of Labor Code section 226.7, supplemented with representative employee evidence and survey/expert testimony—even assuming that meal periods only had to be “made available” to employees?


• Could plaintiffs establish liability for rest period violations through common corporate policies, corporate time records, representative employee testimony and/or survey evidence?


• Did plaintiffs’ expert survey and statistical evidence prove common issues sufficient to support class certification?


• Did the appellate court reweigh the evidence in overturning class certification?

The trial court certified a class back in 2006, finding that a common legal question of whether Brinker must force employees to take meal breaks predominated despite the individualized questions Brinker raised to defend against a finding of liability. The appellate court reversed, and plaintiffs now seek to reinstate that class.

Unfortunately, the parties did not have sufficient time to address these issues in oral argument. Plaintiffs’ counsel did argue that class certification was appropriate based on what he characterized as common issues regarding Brinker’s asserted policies or practices to dissuade, impede or discourage taking rest breaks. Justice Liu asked how rest periods could be susceptible to class treatment when the employer is not required to keep records showing that they were in fact taken, particularly without a written policy that proved that rest periods were denied or impeded. Justice Werdegar followed with her own question that suggested that she agreed that at least this issue was amenable to class certification. Justice Liu returned to this issue by challenging plaintiffs’ counsel as having no basis to show that Brinker acted unlawfully if it allowed each waiter to keep his/her own tips rather than pooling them.

We now will await the court’s decision, due out by early February 2012.

By: Alison Hightower

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