9th Circuit Taketh Away in an Amended Opinion

We posted about the Ninth Circuit's post-Wal-Mart v. Dukes decision in Wang v. Chinese Daily News here.   This was an overtime class action involving newspaper employees. The Court of Appeals in the earlier opinion remanded the case to the district court for reconsideration of its class certification decision after Wal-Mart v. Dukes.

The plaintiffs apparently sought a rehearing. The Court issued an amended opinion instead.  The Court softened some of its language in the first opinion.  For example, it removed this line, quoted from its own precedent, addressing the plaintiffs' burden of proof on a motion for class certification:

Plaintiffs must show “significant proof that [CDN] operated under a general policy of [violating California labor laws].” Ellis, 657 F.3d at 983 (quoting Wal-Mart, 131 S. Ct. at 2553 (alteration omitted)).

The Court in the first opinion foreclosed class certification for injunctive relief Fed. R. Civ. Pro. 23(b)(2)

Further, it appears that none of the named plaintiffs has standing to pursue injunctive relief on behalf of the class, as none of them is a current CDN employee. See Wang, 623 F.3d at 756. We therefore reverse the district court’s class certification under Rule 23(b)(2).

In the new opinion, the Court opened the door to injunctive relief:

It appears that none of the named  plaintiffs has standing to pursue injunctive relief on behalf of the class, as none of them is a current CDN employee. See Wang, 623 F.3d at 756. However, because the Rule 23(b)(2) class was certified by the district court while they were current employees, the class certification with respect to injunctive relief may survive if there are identifiable class members who are still employed by CDN.

The Court's new opinion also deletes the section of the prior opinion called "Damages."  In the first opinion the Court wrote this, which could have been helpful to defense lawyers in class action cases:

in Wal-Mart, the Supreme Court disapproved what it called “Trial by Formula,” wherein damages are determined for a sample set of class members and then applied by extrapolation to the rest of the class “without further individualized proceedings.” Wal-Mart, 131 S. Ct. at 2561. Employers are “entitled to individualized determinations of each employee’s eligibility” for monetary relief. Id. at 2560. Employers are also entitled to litigate any individual affirmative defenses they may have to class members’ claims. Id. at 2561. 

Poof. That language is gone from the amended opinion. The Court mentions in the new opinion that it expresses no opinion regarding damages.
The case is Wang v. Chinese Daily News and the amended opinion is here. 

Court of Appeal: Some Wage Claims Tolled; Some Time Barred and More

This case is the poster child for needless litigation over a pretty simple issue, which was a loser for the employer from the jump. (And I say that in the most respectful way).

Harold Bain worked for Tax Reducers, Inc. (TRI) and its predecessor as a tax preparation consultant. He also performed other duties.  It's pretty clear from the facts that he was an employee, not an independent contractor. So, that part of the case is not breaking new ground.  However, the court of appeal allowed the trial court to consider a "presumption" of employee status, because the trial court also underwent the normal analysis of independent contractor. The evidence was overwhelmingly in favor of employee status, presumption or no.

After TRI bought the predecessor, Bain got into a dispute with the new owner of TRI about his compensation.  He worked for TRI for just seven weeks or so, but with the predecessor for several years.  However, because of the dispute, TRI didn't pay Bain at all for his seven weeks of work.

Bain filed a claim with the Labor Commissioner at the DLSE.  TRI argued that Bain was an independent contractor, but even if he wasn't, there was no agreed upon rate. As a result, TRI argued, Bain should recover only minimum wage.  Bain sought the $1100 per week he was earning before the take-over.  And that's what the DLSE awarded him, plus waiting time and interest, for about $15K.

When in a hole, stop digging?  Nah. TRI appealed the DLSE's ruling.  The parties then reached a settlement for the wages and interest, plus some attorney's fees, but no waiting time penalties.  The deal fell through when the parties could not agree on the scope of the release.

The court then re-set the case for trial.  The parties then settled again for $17,700, higher than the DLSE's award.  The settlement was supposed to include releases, but the parties again could not agree on the language, or even who was to prepare them.

Massive amounts of litigation ensued over the breached settlement agreement, including discovery motions, demurrers, summary judgment motions, anti-SLAPP motions, an appeal, too.  Bain even named TRI's president, Griffin, as an individual defendant, which typically is a no-go in a wage claim.
Guess who ended up getting rich here?  (Not Bain's lawyer; stay tuned).

The trial court conducted a four-day bench trial, after which it awarded Bain just over $25,000 plus attorney's fees on the wage claims.  (Bain had a choice of electing recovery on the breach of settlement agreement or recovery on the wage claims. He chose wisely, because the latter includes an award of attorney's fees).  How much attorney's fees did Bain seek?  Bain sought over $400,000 in fees, including a 1.5 multiplier.

Unfortunately for Bain's lawyer, he filed the motion for attorney's fees late and received nothing from the trial court, and nothing from the court of appeal, either.  I believe this clip from Willie Wonka captures the court's holding well.

TRI President Griffin, though, successfully obtained an award of fees for his individual claim, but only for $4225 (the fees for his summary judgment motion).  Continuing his losing streak, the court of appeal reversed Griffin's award, because he sought fees under the wrong statute (Lab. Code Section 218.5).  Because Bain won under the unpaid minimum wage law, the right statute is a one-way law that awards fees to employees only.  See, supra, Willie Wonka clip.  218.5 is becoming a one-way statute next year, so no one will make that mistake again.  Sigh.

Annnywayyyyyy, now that the discussion of litigation excess is over, here's the wage-hour issue that the court decided.

First, the Court set out the relevant statutes of limitations in wage claims:

1. Final pay - 3 years per Labor Code Section 201 and Code of Civil Procedure 338(a).
2. Waiting time - runs with the limitations period of the underlying wages sought - here 3 years, per Labor Code Section 203.
3. Liquidated damages for failing to pay minimum wage per Labor Code 1194.2 - one year per  Code of Civil Procedure 340(a).

Second, the Court had to decide whether Bain's claims were untimely.  He left on February 18, 2005, but did not sue until May of 2008.  That's more than three years and could have time-barred all his claims.

But the Court held that Bain's filing his DLSE claim "tolled" or suspended the statute of limitations. during the period is pursued his DLSE claim until the first DLSE proceeding was final. Once that time was added to the Bain's claims were timely, except for the 1194.2 liquidated damages penalty.  The court held the "equitable tolling" doctrine applied even though Bain was not required to go to the DLSE in the first place.  This decision, therefore, could extend limitations period in wage cases that involve administrative proceedings followed by litigation.

Even the tolled claims did not save the liquidated damages penalty, which was subject to the one-year statute. The court held that claim was barred and deduced those penalties.

So, Bain won about $18,000 bucks plus more interest... his lawyer lost out on at least $200K in fees.  And who knows how much TRI spent to obtain its lousy result.  Just sayin'.

This case is Bain v. Tax Reducers, Inc. and the decision is here.

New California Law re Attorney's Fees in Wage Cases

Governor Jerry Brown signed SB 462 (here). This law amends Labor Code Section 218.5, which allows attorney's fees to be awarded to the prevailing party in lawsuits over unpaid wages, fringe benefits, or pension fund contributions.  The law previously permitted either the employee or employer to seek attorney's fees as the prevailing party. The revised statute authorizes attorney's fees to employers (or any other party that is not the "employee") only if the court determines the lawsuit was brought in "bad faith."   So, employers, say goodbye to attorney's fees in wage cases.

Court of Appeal: On-Call and Sleep Time

CPS guards construction sites.  Some of the security guard employees sleep in on-site trailers.  CPS compensated them for the time they were required to investigate potential problems at the sites, such as break ins.  Otherwise, the employees were considered "on call," but were uncompensated.

On weekday shifts, employees actively worked 8 hours and were "on-call" for eight hours.  On weekends, employees worked 16 hours and were "on call" for eight.  During weekday periods when the construction crews were working, the live-in employees were free to do as they pleased, leave the facility, etc.

The employees who lived in trailers could keep personal items and could have visitors as the client permitted. But families were not permitted to live within the trailers. The trailers were basically small, self-contained, mobile apartments with cleaning facilities, etc.

The live-in employees signed on-call agreements, which provided for circumstances under which the employees could leave the trailers during on-call time:

if a trailer guard wished to leave the jobsite during on-call hours, he or she was required to (1) notify a dispatcher, (2) provide information as to where the guard would be and for how long, and (3) wait for the reliever to arrive.6 After leaving the jobsite, the guard was required to remain within a 30-minute radius and carry a pager or radio telephone. If called during that time, the guard was required to respond immediately. The trailer guards were not allowed to leave a jobsite before a reliever arrived. If no reliever was available, CPS had the right to order a trailer guard to remain at the jobsite, even if the trailer guard had an emergency.

The company did not consider on-call time to be hours worked, but paid employees for time they waited for a reliever or were denied a reliever, as well as when they have to investigate alarms or noises.

Employees sued, claiming they should have been paid for all on-call time, not just the time actually working. The parties agreed that Wage Order 4-2001 applied.

The trial court issued a preliminary injunction, ordering CPS to pay for on-call time pending the resolution of the lawsuit. CPS appealed.  Interestingly, one of the class reps lost a DLSE hearing on the same issue.  Additionally, CPS had sought guidance from the DLSE and U.S. DOL, and conformed its practices based on the opinions received.  Nevertheless, the lawsuits continued and the trial court granted summary adjudication in favor of the plaintiff, holding that the employees should be paid for all on-call time.

So, the issue on review was whether the time employees spent in their trailers should count as "hours worked" under Wage Order 4.  "Hours worked" are “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, whether or not required to do so.” 

The court thoroughly reviewed what it means to be subject to the employer's control, and cited this seven-factor test for on-call situations:

In resolving the degree to which employees are able to engage in private pursuits during on-call time, courts generally apply seven factors: “„(1) whether there was an on-premises living requirement; (2) whether there were excessive geographical restrictions on [the] employee‟s movements; (3) whether the frequency of calls was unduly restrictive; (4) whether a fixed time limit for response was unduly restrictive; (5) whether the on-call employee could easily trade on-call responsibilities; (6) whether use of a pager could ease restrictions; and (7) whether the employee had actually engaged in personal activities during call-in time.‟”

Applying this and other legal principles discussed in the opinion, the court concluded that the weekday on call time should have been paid as hours worked:

By their presence on site during the on-call hours, the guards perform an important function for their employer and its clients: they deter theft and vandalism. CPS promises its clients security services throughout the night and for 24 hours on Saturday and Sunday, and would be in breach if no security guards were present between 9:00 p.m. and 5:00 a.m. The parties‟ On-Call Agreements designate that period as “free time,” but it is clear from the Agreements and the stipulated facts that trailer guards are not free to leave at will. A guard may leave only when and if a reliever is available. From this, it can reasonably be said that the restrictions on the on-call time are “primarily directed toward the fulfillment of the employer‟s requirements,” and the guards are “substantially restricted” in their ability to engage in private pursuits.



* * *


They are required to live on the jobsite. They are expected to respond immediately, in uniform, when an alarm sounds or they hear suspicious noise or activity. During the relevant hours, they are geographically limited to the trailer and/or the jobsite unless a reliever arrives; even then, they are required to take a pager or radio telephone so they may be called back; and they are required to remain within 30 minutes of the site unless other arrangements have been made. They may not easily trade their responsibilities, but can only call for a reliever and hope one will be found.24

Most important, the trailer guards do not enjoy the normal freedoms of a typical off-duty worker, as they are forbidden to have children, pets or alcohol in the trailers and cannot entertain or visit with adult friends or family without special permission. On this record, we conclude the degree of control exercised by the employer compels the conclusion that the trailer guards‟ on-call time falls under the definition of “hours worked” under California law.

However, the court then decided that the on-call time during the weekend, 24-hour shifts was not hours worked. The court relied on decisions holding that employers may deduct 8 hours of sleep time from employees' work time when they are engaged in 24-hour shifts.  The ruled the following standard would apply to 24-hour shifts:

There are sound reasons for permitting an employer who engages an employee to work a 24-hour shift and compensates him or her for 16 of those hours to exclude the remaining eight hours for sleep time, as long as the time is uninterrupted, a comfortable place is provided, and the parties enter into an agreement covering the period. Most employees would be sleeping for a similar period every day, whether on duty or not, and the compensation provided for the other 16 hours, which should generally include considerable overtime, ensures that the employees receive an adequate wage

So, employers seeking to avoid payment for 24-hour "live in" shifts under Wage Order 4 should ensure: there is an agreement to exclude sleep time, there is a comfortable place to sleep, and the sleep time generally is interrupted.  If the sleep period is interrupted, the agreement should provide for compensation for time worked, and for the entire period if there are frequent or considerable interruptions.


The case is Mendiola v. CPS Security Solutions, Inc. and the opinion is here.

9th Circuit: California Wage Hour Class Action Should Be Certified

Employees of Medline Industries brought a wage and hour class actions, which Medline removed to federal court.  The claims included "rounding," improper calculation of the "regular rate" for overtime purposes, waiting time penalties, and inadequate wage statements. 

The district court refused to certify the class because, although there were common questions, the individualized assessments of which employees were entitled to damages, and how much, outweighed the common issues.

The Ninth Circuit held the district court abused its discretion.  The court explained that individual damage assessments do not defeat class certification if liability can be determined via common proof.

Of note, the court distinguished the U.S. Supreme Court's recent decision in Comcast Corp. v.Behrend, 133 S. Ct. 1426, 1435 (2013):

In Comcast, the Supreme Court reversed an order granting class certification because the plaintiffs relied on a regression model that “did not isolate damages resulting from any one theory of antitrust impact.” Id. at 1431. The Court concluded that “a model purporting to serve as evidence of damages in this class action must measure only those damages attributable to that theory.” Id. at 1433.

Here, unlike in Comcast, if putative class members prove Medline’s liability, damages will be calculated based on the wages each employee lost due to Medline’s unlawful testimony of Medline’s director of payroll operations, andMedline’s Notice of Removal. Those documents show that

Medline’s computerized payroll and time-keeping database would enable the court to accurately calculate damages and related penalties for each claim.

So, this case will proceed as a class action, and the Comcast decision does not preclude class certification when there are individual damages issues, when there is a reliable way of establishing each class member's damages.

This case is Leyva v. Medline Industries, Inc. and the opinion is here.

Court of Appeal - Hourly Pay X Busy Employee = Non-Exempt Compensation

The plaintiff was an insurance adjuster.  He was paid $29 / hour for every hour worked, including overtime.  He always worked more than 40 hours per week.  In a wage-hour lawsuit, he claimed he was not properly classified as exempt because he was not paid on a salary basis.  (He challenged the duties test as well it appears).  The employer argued that he was never paid less than 40 X $29 because he always worked overtime. Therefore, he earned the equivalent of a salary.  The trial court bought that argument.

But the Court of Appeal reversed.

The question presented in this case is whether a compensation scheme based solely upon the number of hours worked, with no guaranteed minimum, can be considered a “salary” within the meaning of the pertinent wage and hour laws. We conclude that such a payment schedule is not a salary and, therefore, does not qualify the employee as exempt.

The employer argued "no harm, no foul," in that the employee always received more than 40 hours x $29 per hour, in that he was always working more than 40 hours.  But, said the court,

The problem here is that defendant stipulated to the fact that it “never paid [plaintiff] a guaranteed salary”; if he worked fewer claims “he made less money than if he worked more claims.” That is the same thing as saying that plaintiff was not paid “a predetermined amount” that “was not subject to reduction based upon the quantity of work performed.” He was not paid a salary. For that reason, defendant did not prove that the administrative exemption of Wage Order 4 applies in this case.

The court did not address whether the employee was properly classified as exempt based on his duties, because the salary issue destroyed his claim.

So, a salary is a predetermined sum, that is not reduced because of the quantity or quality of work performed.  To qualify for exempt status, the fixed salary must be at least 2 X minimum wage (currently $8.00 in California) X 40 hours.  Certain deductions from salary are authorized, as detailed in the federal FLSA regulations, 29 CFR 541.602 (here).

This case is Negri v. Koning & Associates and the opinion is here.

9th Circuit Allows Wage Claim Based on End of Day Security Screen

Integrity Staffing Solutions employed temp warehouse workers in Nevada.  At the end of the workers' day, they had to pass through security screenings to minimize theft. They had to remove metal from pockets and pass through a metal detector.  Sometimes, they had to wait up to 25 minutes for the security check.

The plaintiffs brought a claim for off-the-clock work, claiming the screenings were part of the compensable work day in violation of the Fair Labor Standards Act. They also brought state law claims under Nevada law.  They claimed that they had to walk to the lunch room to punch out for meals, and had to undergo security screenings after lunch before returning to work. These took only 5 minutes.

The court of appeals held that (based on the plaintiffs' allegations in the complaint) waiting for security could be compensable time under the Fair Labor Standards Act:

Here, Busk and Castro have alleged that Integrity requires the security screenings, which must be conducted at work. They also allege that the screenings are intended to prevent employee theft – a plausible allegation since the employees apparently pass through the clearances only on their way out of work, not when they enter. As alleged, the security clearances are necessary to employees’ primary work as warehouse employees and done for Integrity’s benefit. Assuming, as we must, that these allegations are true, the plaintiffs have stated a plausible claim for relief.
***
Integrity allegedly requires the screening to prevent employee theft, a concern that stems from the nature of the employees’ work (specifically, their access to merchandise).

As for the claims that the plaintiffs were delayed from enjoying their unpaid meal period, the court of appeals was not convinced:

Busk and Castro alleged they were not “completely relieved from duty” because by placing the time clocks far from the lunchroom, Integrity forced upon them the “duty to walk to the lunch room in order to eat lunch.” But the district court correctly held that walking to the lunchroom is not a work duty. Walking to the lunchroom is not necessary to the plaintiffs’ principal work as warehouse employees. Moreover, though the Portal-to-Portal Act does not clearly preclude compensation for walking to the lunchroom, as it only expressly applies to walking before the workday starts

* * *

Finally, the first amended complaint alleges that employees had to pass through a security clearance on their way to the lunchroom. Assuming that the time passing through the security clearance on the way to lunch constitutes compensable work, the time alleged in this case is de minimis. See Lindow v. United States, 738 F.2d 1057, 1062–64 (9th Cir. 1984) (discussing de minimis exception). As alleged in the first amended complaint, the walk to and from the cafeteria takes “approximately five minutes” each way, though employees pass through security only on their way to the cafeteria, not on the return trip. The relatively minimal time expended on the clearance in this context differs from the 25-minute delay alleged for employees passing through security at day’s end. Therefore, the district court correctlydismissed this claim under Rule 12(b)(6).

Based on this case, employers should consider whether "bag checks" and other security screening at the end of the shift should paid time (at least in the Ninth Circuit), unless it happens quickly enough to be "de minimis."

Of interest to litigators, the Court of Appeals decided that a federal "opt in" class action under the Fair Labor Standards Act could proceed simultaneously with a state-law based "opt out" class action.

This case is Busk v. Integrity Staffing Solutions and the opinion is here.

Court of Appeal: CA Employer Violates Minimum Wage By Averaging Total Compensation Over Hours Worked

An auto dealership compensated its mechanics based on a "piece rate" system. For repairs, the company would pay the employees based on a standard period of time allowed for a repair (flag hours).  The pay rate was significantly higher than minimum wage.  So, if the job took longer than standard hours, there was enough wages to ensure the mechanic earned more than minimum wage.

But the mechanics spent significant time at work NOT performing repairs, such as in training, cleaning, etc.  The dealership would calculate the total hours worked vs. the compensation it would pay for flag hours.  If the pay rate fell below minimum wage, the dealership would make up the difference.  The dealership did not pay a separate hourly rate for non-repair time that would not have been covered under the piece rate.

Illegal, said the court of appeal. The main issue is whether the applicable Wage Order (Wage Order 4-2001), requires payment of at least minimum wage for each hour worked, or an average of minimum wage for all hours worked in the work week.  The trial court and Court of Appeal, relying on an earlier case, Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314 agreed with the plaintiffs that the former interpretation was correct.

The bottom line is that piece-rate employees must be paid separately for work that does not fall within the scope of the work that is the subject of the piece rate.  The non-related hours must be paid at least at minimum wage.  Employers concerned about increased payroll costs may choose to reduce piece rates prospectively, and upon reasonable notice.  They should check with their lawyers first regarding how to do this.

While you have your lawyer on the phone, another wrinkle may be determining where the piece rate work ends and the non-related work begins.  What, exactly, goes into the calculation of the piece rate repair time?  If the employer over-includes non-related work into the piece rate, it risks liability if the work should have been classified as non-related.

This case is Gonzalez v. Downtown LA Motors and the opinion is here.

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Ninth Circuit: Class Action Erroneously Certified Given Wal-Mart v. Dukes

Back in 2004, employees of the Chinese Daily News started a class action, claiming mis-classification, unpaid overtime and denied meals and breaks.  The trial court eventually certified a class, and the employees won summary judgment on whether reporters for the newspaper qualified under the professional exemption.  The employees won millions of dollars after trial, which the Ninth Circuit affirmed.

Not so fast, said the Supreme Court.  Following the Supreme Court's Wal-Mart Stores v. Dukes decision (discussed here), the Supreme Court vacated the Ninth Circuit's decision in this case.  The Ninth Circuit decided that Wal-Mart requires reconsideration of the decision and sent it back to the district court.

Why? The trial court did not apply the proper analysis (after Wal-Mart) to determine whether there is sufficient commonality to certify the class.  As explained by the Court:

On remand, the district court must determine whether the  claims of the proposed class “depend upon a common contention . . . of such a nature that it is capable of classwide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Wal-Mart, 131 S. Ct. at 2551.

So, it's not enough that there are "common questions" in the abstract, because, as the Ninth Circuit stated (quoting Wal-Mart and its own later decision in Ellis v. Costco):

"any competently crafted class complaint literally raises common questions.” Wang [sic], 131 S. Ct. at 2551 (alteration and internal quotation marks omitted). “What matters to class certification is not the raising of common questions — even in droves — but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation.” Id. (alteration and internal quotation marks omitted). Dissimilarities within the proposed class may “impede the generation of common answers.” Id. “If there is no evidence that the entire class was subject to the same allegedly
discriminatory practice, there is no question common to the class.” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 983 (9th Cir. 2011).

The Ninth Circuit also decided that the district court would have to reconsider whether certification is appropriate under Federal Rule of Civil Procedure 23(b)(3).  That rule permits monetary recovery in class action cases when

the court finds that the questions of law or fact  common to class members predominate over any questions affecting only individual  members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.

First, the district court over-relied on the employer's policies applicable to all employees, but without considering whether issues pertaining to individual claims and defenses would "predominate" over the common policy.  Second, the district court did not have the California Supreme Court's Brinker decision (you've heard of it, right?) to assess whether certification of a meal / rest claim was appropriate. 

Of note, the Ninth Circuit also wrote this, which will likely be of interest to class action litigators:

In Wal-Mart, the Supreme Court disapproved what it called “Trial by Formula,” wherein damages are determined for a sample set of class members and then applied by extrapolation to the rest of the class “without further individualized proceedings.” Wal-Mart, 131 S. Ct. at 2561. Employers are “entitled to individualized determinations of each employee’s eligibility” for monetary relief. Id. at 2560.
Employers are also entitled to litigate any individual affirmative defenses they may have to class members’ claims. Id. at 2561. 

The case is Wang v. Chinese Daily News and the opinion is here.

Do You Know Minimum Pay in San Jose?

"LA is a great big freeway. Put a hundr"...oh, is this on?  Oops.

San Jose's voters approved a $10.00 minimum wage, indexed to inflation beginning in 2014. (The California state minimum wage is $8.00.)  San Jose joins San Francisco as the second city to pass its own city wide minimum wage.

The new, 6-page ordinance has a bunch of additional provisions in it.  Payroll records must be kept for four years.  There is a new poster required.  Every employer must provide new employees with the employer's name and address in writing.  The anti-retaliation provision says that any adverse action taken within 90 days of an employee's protected activity related to the minimum wage is presumed to be retaliation.  Oh, and there is a penalty of $50 per employee per pay period for non-compliance.  The ordinance allows for government enforcement, and also creates a private right of action for violations as well.

The new wage is effective 90 days from when its November election is certified.  Our friends at the Cal Chamber say that the new wage will take effect in March 2013 or so.

Here is the ordinance.

Thanks for the tip, Cal Chamber. Happy Thanksgiving everyone.  If you know the owner of a small business in San Jose, you may wish to let him or her know about the new ordinance before he or she is litigated, fined, etc. out of business.

DGV

Court of Appeal: No Dress Code Class Action

Wet Seal is a retailer.   Here are various dress code policies the Company maintained for store employees:

“**Store Employees:

“The Wet Seal, Inc. store employees represent our Company and are required to dress in accordance with the current Company Dress Code guidelines. All employees are required to dress in a manner that is both respectful of our Customers and consistent with the current fashion attire that is reflected in the stores.

“The current Field Dress Code Guidelines can be found in the Store Operations Policies & Procedures Manual. Inappropriate dress will not be tolerated. Any violations of this policy may result in a disciplinary action up to and including termination. . . .”
***

“Wet Seal Employees represent Wet Seal to our Customers. Our Employees must exemplify the fashionable image we want to portray to our Customer. The Employee discount is a benefit that is offered to Employees to purchase and wear current store fashion merchandise. Employees are encouraged to wear Wet Seal merchandise at all times. It is essential that the Employees reflect Wet Seal style during working hours.*

“. . .

“*If an Employee does not have Wet Seal merchandise the Employee should wear clothing consistent with Wet Seal’s brand.”

***

“The Wet Seal and Arden B store Employees represent our Company and are required to dress in accordance with the current Company Dress Code Guidelines. All Employees are required to dress in a manner that is both respectful of our Customers and consistent with the current fashion style that is reflected in the stores. Employees are not required to wear the Company’s clothing.

“Those employees interested in purchasing company merchandise are eligible for an employee discount. . . . Employees are invited to wear Wet Seal or Arden B clothing during work hours, but are not required to do so.”

***

***“Wet Seal team members represent Wet Seal to ‘OUR GIRL.’ Our team members must exemplify the fashionable image we want to portray to ‘OUR GIRL.’ The employee discount is a benefit offered to employees to encourage them to purchase and wear current store fashion. Team members are required to dress in a manner that is both respectful of ‘OUR GIRL’ and consistent with the current fashion trends that are reflected in our stores.”


***

“As a Fashionista on the sales floor, you must represent the Arden B brand, current fashion trends and current color stories presented on the sales floor. [¶] Team members are required to dress in a manner that is both respectful to our customer, professional and consistent with the current fashion trends that are reflected in our stores.” ***

The plaintiffs claimed that the above policies constituted a "uniform," or that the company was mandating that employees buy the company's product, such that the employees should be reimbursed for dressing in the Company's clothing. 

None of this sounds like a uniform / mandatory purchase policy to me.  But what do I  know, I'm just a defense lawyer.   That said,  the plaintiffs in a class action lawsuit alleged "they were told by their managers that the 'Company' required employees to dress in Wet Seal merchandise 'at all times.'" And, "when she was hired her manager told her that the Company required all store employees to dress in Arden B clothing and that the dress code was 'all Wet Seal clothing and accessories.'"

The trial court, though, denied class certification, in part because the above policies did not create a blanket requirement to buy the company's product, or a "uniform," i.e., clothes of a distinctive design or color, and did not mandate purchase of the company's product.

The court of appeal agreed:

First, the written policies do not state that employees were “required” to purchase Wet Seal clothing as a condition of employment. Thus, answering the “central” liability question whether Wet Seal employees were required to wear Wet Seal clothing as a condition of employment or otherwise compelled to purchase Wet Seal merchandise would require several individualized inquiries including “(1) what, if anything, the employee was told by his or her store manager regarding purchasing Wet Seal clothing or wearing Wet Seal clothing to work; (2) if such a discussion occurred, when and with whom the employee had that discussion; (3) how the employee interpreted that discussion; (4) whether the employee’s interpretation was reasonable; and (5) whether the employee then purchased Wet Seal clothing to wear to work pursuant to that discussion.”

Second, the written policies do not “explain with any specificity” what employees are required to wear, but instead use broad and vague standards like requiring employees to dress in a manner “ ‘consistent with the current fashion style that is reflected in the stores’ . . . .” Thus, for example, determining whether the attire allegedly required by Wet Seal constitutes a uniform within the meaning of Wage Order 7 would require several individualized inquiries, including “(1) what was the current fashion style reflected in each store at a given period of time; (2) whether that style was of a distinctive color or design; (3) how each store manager interpreted the phrase ‘Wet Seal style’ or ‘consistent with the current fashion style that is reflected in the stores’; (3) whether each manager required the employees to wear clothing of a distinctive design or color; and (4) whether each manager required the employees to wear clothing that is usual or generally usable in the occupation.”

Third, because the written policy does not describe what an employee is supposedly required to wear, the court found that individualized inquiries would be necessary in order to determine whether any given purchase by an employee constituted a “necessary expenditure” within the meaning of section 2802. For example, individualized inquiries would be necessary to address “(1) what, if anything, the manager told the employee regarding the required wardrobe; (2) assuming the employee purchased certain wardrobe items to wear to work, where the employee purchased those items; and (3) the particular wardrobe items actually purchased.”

The trial court also found that the evidence submitted by both sides demonstrates that the plaintiffs’ theory of liability regarding its dress code claim is not “reasonably susceptible to common proof but rather would require individualized inquiries into a myriad of circumstances depending on the particular direction of individual store managers and supervisors at numerous stores in widely varying locations and over the course of many years.” In reaching this conclusion, the court expressly found that the plaintiffs’ evidence, particularly the 55 employee declarations, demonstrate that “the common written dress code policy did not lead to common dress code practices.”

So, two things - a mushy dress code policy that suggests purchasing company clothing, but does not require it, and that does not mandate a particular color or article of clothing, will not support a uniform / mandatory purchase lawsuit on a class wide basis.  Second, local managers' local policies can still result in significant liability on an individual employee basis, even if class certification is not approved.  So, as always, the devil is in the details.

The case is Morgan v. Wet Seal and the opinion is here. 

San Francisco Minimum Wage to $10.55 effective January 1, 2013

The San Francisco Office of Labor Standards Enforcement announced that the San Francisco minimum wage will increase to $10.55 per hour, effective January 1, 2013.  The statewide minimum is $8.00 per hour.

This hourly rate, up from $10.24 in 2012, is indexed to inflation.  There will be a new minimum wage poster too, natch.  Find it, along with other information about the SF Minimum Wage Ordinance, here.

California Supreme Court De-Publishes Administrative Exemption Case

I posted about the Court of Appeal's opinion in Harris v. Superior Court here.  That decision, on remand from the California Supreme Court, would have severely limited the administrative exemption.  Fortunately, the California Supreme Court has now de-published the decision (here), so it is no longer good law.  The bad news is that the Supreme Court's guidance on the administrative exemption is rather vague and remains open to lower courts' interpretations.

Rounding Hours Worked Is OK if Done Correctly

This post is brought to you by.... See's Candies.  Mmmmm nuts and chews.And their workers still give out those free samples. 

It turns out that See's also can deliver a tasty precedent! From the Court of Appeal.

See's Candy uses a timekeeping software system, known as Kronos, to record its employee work hours. Employees are required to "punch" into the system (located in the back room of each See's Candy store) at the beginning and end of their shifts, as well as for lunch breaks. A Kronos punch shows the actual time (to the minute) when the employee punched into the system. During the relevant times, See's Candy calculated an employee's pay based on his or her Kronos punch times, subject to adjustment under two policies: (1) the nearest-tenth rounding policy; and (2) the grace period policy.

Under the nearest-tenth rounding policy, in and out punches are rounded (up or down) to the nearest tenth of an hour (every six minutes beginning with the hour mark). The Kronos time punches are thus rounded to the nearest three-minute mark. For example, if an employee clocks in at 7:58 a.m., the system rounds up the time to 8:00 a.m. If the employee clocks in at 8:02 a.m., the system rounds down the entry to 8:00 a.m.

So, those are the relevant facts. The trial court held that rounding is not allowed in California, given that California requires payment for all hours worked.  See's argued that the federal rules on rounding should apply, and that they were adopted by the California DLSE.

The Court of Appeal agreed with See's:

In the absence of controlling or conflicting California law, California courts generally look to federal regulations under the FLSA for guidance. (Huntington Memorial Hospital v. Superior Court (2005) 131 Cal.App.4th 893, 903.) The policies underlying the federal regulation — recognizing that time-rounding is a practical method for calculating work time and can be a neutral calculation tool for providing full payment to employees — apply equally to the employee-protective policies embodied in California labor law. Assuming a rounding-over-time policy is neutral, both facially and as applied, the practice is proper under California law because its net effect is to permit employers to efficiently calculate hours worked without imposing any burden on employees. (See Gillings v. Time Warner Cable, LLC, supra, 2012 WL 1656937, at *5.

* * *

Relying on the DOL rounding standard, we have concluded that the rule in California is that an employer is entitled to use the nearest-tenth rounding policy if the rounding policy is fair and neutral on its face and "it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked." (29 C.F.R. § 785.48; see DLSE Manual, supra, §§ 47.1, 47.2.)

To emphasize - the employer will be responsible for ensuring the rounding policy does not unfairly favor the employer.  Over time, "rounding" should come out about even.  If not, the court left open the possibility that the payment system will be found to be illegal.

The case is See's v. Superior Court (Silva) and the opinion is here.
 

Court of Appeal on Reporting Time (Redux)

We first blogged about Aleman v. Airtouch Cellular here.  I was pretty excited because I'm a dork. Oh, and because the Court of Appeal addressed two issues that come up all the time for clients, but never in court:  "reporting time" and the "split shift" premium. You remember.  

Anyway, as I predicted, the Supreme Court granted review and held the case, which meant it had no precedential value and pretty much disappeared.  But it's back.  And if it stays on the books this time, it may result in a big change to advice that employment lawyers give their employer clients.

Here are the facts as explained by the Court:

Krofta was required to attend occasional work-related meetings. Most of these were ―store meetings, which would be held once or twice a month on Saturday or Sunday morning, before the store opened, and which would last an hour to an hour and a half. The meetings were scheduled in advance and listed on employees‘ work schedules, and they were recorded in AirTouch‘s electronic timekeeping system.

Krofta‘s timesheets from AirTouch showed that there were five occasions on which he was scheduled to work, and did work, less than four hours (possibly to attend meetings). Separately, the AirTouch timesheets showed there were five times when Krofta worked a split shift—described by the parties for purposes of this litigation as a short shift (generally a meeting) in the morning followed by a longer shift later the same day.

*** Krofta contended, however, that he was owed additional compensation as reporting time pay for the five instances he worked less than four hours, and split shift premiums for the five times he worked a split shift.

REPORTING TIME PAY

Here's how the court analyzed the reporting time pay provision contained in the Wage Orders.  This will result in a big change to advice employment lawyers give to employers:

To simplify, the issue may be framed by the following question: If an employee‘s only scheduled work for the day is a mandatory meeting of one and a half hours, and the employee works a total of one hour because the meeting ends a half hour early, is the employer required to pay reporting time pay pursuant to subdivision 5(A) of Wage Order 4 in addition to the one hour of wages? The answer to this question is no, because the employee was furnished work for more than half the scheduled time. The employee would be entitled to receive one hour of wages for the actual time worked, but would not be entitled to receive additional compensation as reporting time pay. . . . [W]hen an employee is scheduled to work, the minimum two-hour pay requirement applies only if the employee is furnished work for less than half the scheduled time

SPLIT SHIFTS

The court's treatment of split shift pay clarified ambiguity in the law regarding whether split shift premiums are due for workers who make a certain amount more than minimum wage:

Krofta contends that he was owed additional compensation for working split shifts under subdivision 4(C) of Wage Order 4. Subdivision 4(C) is located under the section \4. Minimum Wages. heading of the wage order. It states: \When an employee works a split shift, one (1) houres pay at the minimum wage shall be paid in addition to the minimum wage for that workday, except when the employee resides at the place of employment.. (Cal. Code Regs., tit. 8, ˜ 11040, subd. 4(C).) * * *

*** While subdivision 4(C) applied to Krofta, the provision did not provide him with any tangible benefit, since the total amount of his regular pay was significantly higher than the minimum amount required by subdivision 4(C).

No published California case has previously addressed this direct issue. However, although obviously not binding, a well-respected treatise (Chin et al., Cal. Practice Guide: Employment Litigation (The Rutter Group 2011)) has embraced the same interpretation of subdivision 4(C). The Rutter guide explains the provision thusly: ―[A]n employee earning the minimum wage who works eight hours on a split shift is entitled to receive nine times the minimum hourly wage.‖ (Id. at ¶ 11:682, p. 11-68.) ―This provision also applies to employees paid more than the minimum wage. However, such employees are only entitled to the difference between what they actually earned and what they would have earned had they been paid the minimum wage for their entire shift plus an extra hour.‖ (Id. at ¶ 11:683, p. 11-69.) ***

So, this means that an employee is not required to earn a split shift premium of one hour at minimum wage, unless he or she earns < (minimum wage * hours worked + (minimum wage * 1 hour)).

OTHER ISSUES

If the above weren't enough, this case keeps on giving. The Court held that a release of claims will lawfully include disputed claims for unpaid wages, despite Labor Code Section 206.5, a California statute prohibiting releases of wage claims.

The Court also clarified that on the reporting time claim, either party may seek attorney's fees under Section 218.5, which means that the employer won its fees against the plaintiffs.

So, happy Friday!  Monday won't be so bad either.

The case is Aleman v. Airtouch Cellular and the opinion is here.

Court of Appeal: Advanced Commissions May Be Recovered

Verizon paid certain employees on commission. The commissions were paid on wireless subscriptions.  However, if customers canceled their service, Verizon would charge back the commissions that were advanced to employees under the assumption that the customer would pay for the entire subscription. Here is the court of appeal's description of the commission plan:

The compensation plans explain that commissions on the sale of cell phone service plans are paid in advance, but not earned until the expiration of a chargeback period during which the customer may cancel the service. The 2004 compensation plan stated: "Customer retention is an important element of earning any commission; therefore your commission for sales of service is not earned until after the expiration of the applicable chargeback period. However, as a benefit to employees so that they will have use of the money before it is actually earned, Verizon Wireless has a policy of advancing commission dollars, if certain requirements are met, for the sale of commission-eligible services." The 2005 compensation plan stated: "Your commission . . . is not earned and the sale does not „vest‟ until . . . your customer satisfies his [or her] contract during the applicable chargeback period."

The compensation plans include a section entitled, "Chargeback of Commission Advance." The 2004 compensation plan stated: "In the event a customer disconnects service during the commission chargeback period, your commission is subject to adjustment by the original amount advanced for the sale. Your commission advance will be adjusted to account for disconnects within the chargeback period . . . ." The 2005 compensation plan stated if a customer disconnects service during the chargeback period, "the sale is not considered vested[.]"

Deleon, a Verizon employee, brought a class action agianst Verizon, challening Verizon's right to recover advanced commissions. Deleon's point apparently is that he sold the plan to the customer. If the customer makes a return or cancels, Verizon must pay him the commission anyway and absorb the loss.  That's why there's little chance there will be a company called "Deleon Wireless" any time soon.

There is no allegation that Verizon failed to honor its plan, or that Deleon was underpaid. The entire focus was that he should be paid more, on sales that did not bear fruit.

Nice try. The trial court granted summary judgment, and the court of appeal affirmed. The courts decided that Verizon's plan was clear, Deleon had notice of it, and Verizon followed the plan correctly. The plan defined when commissions were "earned" and paid money in advance, but reconciled the advances against future earned commissions. Therefore, the courts held, Verizon's plan was lawful.

The court of appeal also made a refreshing observation.  If the plaintiff's argument prevailed, Verizon most likely would have dispensed with making advances. Employees would then have to wait up to a year to "earn" commissions when the subscriptions were fully paid. 

The case is Deleon v. Verizon Wireless, LLC, and the opinion is here.

U.S. Supreme Court: Pharmaceutical Sales Reps are FLSA Exempt

The Supreme Court resolved a split between circuit courts and held that pharmaceutical sales representatives engage in "sales" and therefore are exempt under the Fair Labor Standards Act.

Under the FLSA and California law (and other states' laws), "outside salespersons" are exempt from minimum wage and over time law.

The issue for the Supreme Court was that pharmaceutical reps do not really "sell" drugs to doctors. They "sell" to the doctor that the doctor should promise to prescribe the pharma company's medicine.  Plaintiffs argued that because the rep makes no "sale" he or she should not be considered a salesperson.  Rather, they are non-exempt "promoters."

The Department of Labor took the position that Pharmaceutical reps were non-exempt beginning in 2009.  But the DOL's reasoning apparently evolved as to "why."  According to the Court, the Agency argued:

“[a]n employee does not make a ‘sale’ for purposes of the ‘outside salesman’ exemption unless he actually transfers title to the property at issue.” Brief for United States as Amicus Curiae 1213 (hereinafter U. S. Brief).13 .

That would seem to remove from the exempt a whole lot of sales persons who previously were exempt, and it was much narrower than regulations and prior case law.  So, the Court refused to defer to the DOL interpretation.

The decision was 5-4.  The dissent agreed that the government's own interpretation was not worth much.  But the dissent's opinion was that the duties performed do not amount to "sales" but rather were promotion activities and non-exempt.

This decision may not directly affect California's outside sales exemption. But it should, because California law does not go into any level of detail regarding what is an "outside salesman."  Therefore, the courts and agencies may will follow the Supreme Court's opinion regarding what counts as a sale.

The case is Christopher v. Smithkline Beecham and the opinion is here.

The California Labor Commissioner Updates Its Wage Theft Forms

Effective 4/12/12, the DLSE updated its templates and FAQs to help employers comply with the Wage Theft Prevention Act.  You can find the page of forms here.   I guess they couldn't wait until the Brinker hoopla died down a little?

There are clarifications such as related to who is responsible for the notice when an employer hires a temp from a staffing agency (the agency), etc.  Fortunately, the DLSE also says that employers don't have to distribute new notices every time the DLSE issues an update.  Whew!

DGV

Random Post-Brinker Thoughts

I have taken more time to read Brinker.  Here are some thoughts to add on to yesterday's post.

1.  The Supreme Court tried to clarify when class actions should be certified.  The trial court will have a  lot of latitude to decide certification, as it has been since 2004's Sav-on decision.  But this opinion will give trial courts more encouragement to certify class actions. The Court limited the trial court's examinations of whether a case has legal merit at the class action stage to resolving a legal issue that affects common issues so much that class certification would be improper. The trial courts will still wrestle with this issue and class action practice is likely safe under this analysis.  As explained below, the Court's application of class action rules means that class actions based on common policies (such as rest periods) may be authorized more freely than courts have been allowing up to now.

1.5 The summary judgment motion will be a very important part of class action defense and should be considered early in the process to avoid class certification of claims that are based on a common policy, but have no merit.

2.  Rest period law:  The Court precisely explained to employers the rest period rules.  Policies must be drafted in accordance with this formula:  "the rest time that must be permitted as the number of hours worked divided by four, rounded down if the fractional part is half or less than half and up if it is more (a “major fraction”), times 10 minutes."

You don't like math?  Well they explain it even better here, because they incorporate the fact that employees with shifts of fewer than 3.5 hours in length are not entitled to any rest period: "Employees 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.... an employee would receive no rest break time for shifts of two hours or less, 10 minutes for shifts lasting more than two hours up to six hours, 20 minutes for shifts lasting more than six hours up to 10 hours, and so on." 

Caveat re scheduling:  although the court added up the rest-period minutes above, the law requires paid, 10-minute rest periods during each four hour work period.  So, the employer should draft its policies such that the rest periods fall somewhere in the middle of each four-hour work period.  Here is the rule regarding timing:

Employers 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. ....

in the context of an eight-hour shift, “[a]s a general matter,” one rest break should fall on either side of the meal break. (Ibid.)

3. The Court then held that the trial court properly certified a rest-period class because Brinker's rest-period policy was uniformly applied and was vague enough to permit the argument that it violated the law because it did not specifically authorize rest periods when employees work "major fractions" of four-hour periods.  Here is the policy:

Under the written policy, employees receive one 10-minute rest break per four hours worked: “If I work over 3.5 hours during my shift, I understand that I am eligible for one ten minute rest break for each four hours that I work.”

As you can see, this policy permits the argument that employees who worked 6.5 hours were not given a second rest period, even under the policy.  So, the Court's holding re class certification re-opens the door for rest period class actions. Therefore, employers must have a more detailed rest-period policy that spells out rest periods are authorized and permitted in accordance with the formula above, or a class action lawyer can argue that the vague, common policy is applied contrary to law.  Additionally, management must be educated to enforce rest period policies in accordance with their terms when they schedule. Make with the drafting!

4.  Meal periods.   I pulled the quotes in my post yesterday.  Here are some more thoughts.
- Meal period policies should emphasize they are "duty free," meaning the employee can come and go and leave the premises as desired.

the wage order’s meal period requirement 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.

Under the class action rule the Court developed, a vague policy is subject to an argument that the common policy violates the law.  So, policies should be explicit.

- Employers will be liable for regular straight time or overtime pay when the know or should have known that employees work through meal periods.  That's normal, because you have to pay employees when you "suffer or permit" them to work.  So, if employees don't punch out for meals, you cannot "auto-deduct" meal period time. As we have said before, the remedy for employees who do not comply with policies is discipline, not docking pay.

- Managers who prevent employees from taking meal periods per policy (such as discouraging meal periods) may expose the company to liability for meal period premiums.  When there is a "corporate culture" of discouraging the meal period, look for class actions based on a "common de facto policy."

- The legally compliant policy must provide that a meal period must start before the sixth hour of work begins.  That means, an employee who starts at 9 must be given a meal break by 2 pm.  Again, employers do not have to police the requirement, but the policy should be explicit to avoid the argument that the policy allows for illegal lunches.

- The legally compliant policy also should provide for a second meal period that starts before the eleventh hour of work begins.  There is a waiver of the second meal period allowed upon certain conditions, and that can be included as well.

- Caveat:  Know your business's wage order!  I am going over the general rules here (Wage Order 4, 5, 7 - the biggies).  There are different meal period provisions in some of the lesser used wage orders, such as Wage Order 12, applicable in the film industry. That Wage Order requires meals at six-hour intervals, not before the sixth hour and before the eleventh hour.

5.  Off the clock.  The Supreme Court decided that no "off the clock" work class would be allowed because (1) Brinker had an express and specific policy prohibiting off the clock work and (2) the only evidence in support of class certification was anecdotes about specific instances.  The Court noted the absence of a "de facto" policy requiring workers to work off the clock.  So, it pays to have a policy barring off the clock work.  We also like sign offs on time cards / time sheets certifying that employees reported all time worked, and verifying they know not to work off the clock.

Well, that's it for now.  I'm sure we'll have more down the road.  I hope this has been helpful.

Greg

Brinker: Employers Need Not Force Meal Periods

I will digest the Court's unanimous Brinker opinion a bit later. Those of you waiting to read it, it is here.

There is a long discussion of class certification in wage hour cases, which I will analyze later.  But
here are the money quotes on rest periods / meal periods.  At first read, this is total victory for the employer's position:

Rest periods:

Employees 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.* * * 

Hohnbaum asserts employers have a legal duty to permit their employees a rest period before any meal period. Construing the plain language of the operative wage order, we find no such requirement and agree with the Court of Appeal, which likewise rejected this contention.

* * *

in the context of an eight-hour shift, “[a]s a general matter,” one rest break should fall on either side of the meal break. (Ibid.) Shorter or longer shifts and other factors that render such scheduling impracticable may alter this general rule.

Meal Periods:

Hohnbaum contends that an employer has one additional obligation: to ensure that employees do no work during meal periods. . . . We are not persuaded. The difficulty with the view that an employer must ensure no work is done—i.e., prohibit work—is that it lacks any textual basis in the wage order or statute.

* * *

If work does continue, the employer will not be liable for premium pay. At most, it will be liable for straight pay, and then only when it “knew or reasonably should have known that the worker was working through the authorized meal period.”

Proof an employer had knowledge of employees working through meal periods will not alone subject the employer to liability for premium pay; employees cannot manipulate the flexibility granted them by employers to use their breaks as they see fit to generate such liability. On the other hand, an employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks.

* * *

To summarize: An employer’s duty with respect to meal breaks under both section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees. 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. What will suffice may vary from industry to industry, and we cannot in the context of this class certification proceeding delineate the full range of approaches that in each instance might be sufficient to satisfy the law.

On the other hand, the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer’s obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay under Wage Order No. 5, subdivision 11(B) and Labor Code section 226.7, subdivision (b).

And finally - no "rolling 5 hour" meal periods.

We conclude 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. We conclude further that, contrary to Hohnbaum’s argument, Wage Order No. 5 does not impose additional timing requirements.