Federal Court Rules that California Employers are Liable for Double Premium Pay for Missed Meal and Rest Breaks

Posted on May 26, 2009 by Wage and Hour Practice Group

In a blow to UPS, and other employers in California, a California federal court recently ruled that employers are liable for up to two hours of additional pay when an employee misses both a meal and rest break. California law provides for a one hour premium of regular pay for each day that a non-exempt employee is not provided meal or rest breaks as required by the various California Wage Orders. (California Labor Code sec. 226.7).

Employers have argued that under California law, an employer is only obligated to pay a one hour premium for missed meal and lunch breaks per day, whether there was one or multiple violations in the same day. In the first direct ruling on this issue, the court in Marlo v. United Parcel Service, Case No. CV 03-04336 DDP, held that the employee may recover up to two additional hours of pay on a single work day for meal period and rest break violations: one if any meal period violations occur in a work day and one if any rest break violations occur in a work day. However, if more than one rest period violation occurs in a single work day but no meal period violations occur, the employee may only recover one additional hour of pay for all of the rest period violations combined; likewise, if more than one meal period violation occurs in a single work day but no rest period violations occur on that day, the employee may only recover one additional hour of pay for all of the meal period violations combined.

While the ruling will likely be appealed, employers should evaluate their pay practices with respect to missed meal and rest periods to comply with the ruling until further authority is established. On a positive note, the Court agreed with other recent rulings and held that an employer's obligation with respect to meal breaks is to make a meal period available to employees, but places them under no further obligations to ensure that a meal break is taken. This issue is currently pending a decision by the California Supreme Court in Brinker Restaurant Corp. v. Superior Court (Hohnbaum).

This blog entry was authored by Gregory G. Iskander.
 

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California Court of Appeal Holds No Punitive Damages Available for Wide Variety of Labor Code Violations

Posted on December 18, 2008 by Wage and Hour Practice Group

For the past several years, plaintiffs have routinely sought punitive damages in their wage and hour actions under the California Labor Code. A December 3, 2008 decision by the California Court of Appeals for the Fourth Appellate District may put a stop to that practice.

The plaintiff in Brewer v. Premier Golf Properties sued her former employer for denying her meal and rest breaks, failing to pay her minimum wage for all hours worked, and not providing her with accurate itemized wage statements. The jury awarded the plaintiff $26,300 in unpaid wages and penalties and, after finding that the defendant employer had engaged in malice, awarded the plaintiff an additional $195,000 in punitive damages.

The court of appeal reversed the punitive damages award on two grounds. First, the court held that the Labor Code statutes regulating pay stubs (§ 226), minimum wages (§ 1197.1), meal breaks (§ 512) and rest breaks all create new rights and obligations not previously existing in the common law. Those statutes also established detailed remedial schemes for the rights they created. Accordingly, the court concluded that those Labor Code provisions fell within the long-standing “new right-exclusive remedy” doctrine, which provides that “where a statute creates new rights and obligations not previously existing in the common law, the express statutory remedy is deemed to be the exclusive remedy available for statutory violations, unless it is inadequate.” The plaintiff did not raise, and the court did not address, the question of under what circumstances a statutory remedy would be deemed inadequate. 

The court also noted that punitive damages are ordinarily limited to actions “for the breach of an obligation not arising from contract.” Although the plaintiff’s claims for unpaid wages, failure to provide meal/rest breaks and improper wage statements were all based upon statutory provisions, the statutory provisions apply only when the parties have entered into an employment contract and are therefore obligations “arising from the employment contract.” Accordingly, the court viewed the defendant’s violation of the Labor Code provisions as a breach of obligations arising from its employment contract with the plaintiff for which punitive damages were not available.

The good news for employers is that the court’s reasoning can be applied to a wide variety of Labor Code provisions, many of which apply only in the context of the employment relationship. 

Marlene Muraco authored this blog entry.
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