(March 15, 2007) The California Chamber of Commerce and other employer groups recently presented oral arguments before the California Supreme Court to protect employers from lengthy litigation over meal/rest period violations.

The court is examining Murphy v. Kenneth Cole Productions, Inc., the leading case on the issue of whether the statutory payment required under Labor Code Section 226.7 for failure to provide a rest or meal break is a penalty or a wage.

The court's decision is expected to affect the volume of litigation involving claims of meal/rest period violations because it in effect will determine how long an aggrieved employee has to file a claim after the alleged violation of the requirement.

CalChamber arguments, presented by attorney Steve Drapkin cited 100 years of California case law as clearly pointing to the payment requirement as being a penalty and not a wage. In addition, legislative discussions leading to the adoption of the payment requirement identified it as a penalty, as did later proposals to amend that section of the law.

Impact
The court’s ruling will determine whether the limitation period for failing to provide a meal and/or rest period is one year (if a penalty) or three (if a wage). Accordingly, the impact of this case is enormous due to the number of lawsuits pending in California seeking payment under Section 226.7. Similarly, class action claims for meal and rest period violations also have been on the rise because of the potential for substantial monetary payouts arising from per-day, per-employee penalties.

The court has 90 days to issue an opinion in the case, which Drapkin said gives the justices a chance to resolve "the most prevalent undecided issue" affecting these types of lawsuits.

Staff Contact: Erika Frank