A court of appeal once again dismissed a class action lawsuit alleging an employer’s violation of wage-and-hour laws in California.
Three fairly short-term employees who worked at the same Lamps Plus store filed the class action lawsuit, and claimed that Lamps Plus denied meal and rest breaks to employees, did not provide itemized wage statements and did not pay employees within the timeframe specified by state law after termination of employment. – Flores v. Lamps Plus, Inc., 2011 Daily Journal D.A.R. 6615
The case was heard on appeal after the lower court ruled that employers must provide employees with breaks, but are not required to ensure that the breaks are taken. The lower court also ruled that the employees were not suitable representatives for a class action lawsuit.
Note: Just because the court ruled in this case that the employer did not have to ensure meal and rest periods are taken, this court decision should not be taken as the final word on the subject. The California Supreme Court has yet to issue a decision in the case of Brinker Restaurant Corp. v. Superior Court.
Employers are strongly cautioned to consult with legal counsel before permitting any flexibility with regard to meal and rest periods. This includes any requests by employees to forego their rest or meal period, take it later in the day, or combine meal and rest periods.
Company Policies and Practices
Lamps Plus’ employee handbook included a policy on meal and rest breaks requiring:
- That nonexempt employees "must" take an uninterrupted meal period of at least 45 minutes after not more than five hours of work.
- Written waivers for employees working less than six hours who wanted to waive their meal period.
- Written waivers for employees working 10-12 hour shifts who wished to waive a second meal period.
Employees were required to sign an acknowledgment agreeing to abide by the policy. The employees also had to contact their HR department if they missed a meal or rest period. Supervisors were responsible for scheduling the meal periods, which were logged into the timekeeping system. Employees who violated the meal and rest period policy were subject to the company’s progressive discipline system.
Testimony from the plaintiffs, and from other employees, varied on the issues of whether they worked off the clock, missed meal and rest periods, and received their final paycheck in a timely manner.
The trial court found that the class of employees had too many individual, and therefore different, issues to be subject to class treatment. The trial court also ruled that there was no evidence of an illegal companywide policy. The trial court and the court of appeal reviewed state and federal cases and concluded that employers do not have to ensure meal and rest periods are taken, only to make them available. The court noted that a final decision on the issue of "ensure" versus "provide" for meal periods is still pending in the Brinker case. However, the lack of suitability for a class action claim was sufficient for the court to dismiss the suit.
As for the failure to provide wage statements that comply with California law, the court referred to Jaimez v. Daiohs USA, Inc., ruling, which stated that for an employee to be awarded financial damages, the employee must actually suffer harm from the failure to provide the required information. 181 Cal.App.4th 1286 (2010).
In Flores, the court of appeal ruled that the three plaintiffs who claimed to represent the class were not adequate representatives: One lied under oath about prior felony convictions, thereby damaging his credibility; another worked at Lamps Plus for only 12 shifts and had little memory of his employment; and the third testified that he consistently took meal breaks and that Lamps Plus did not deny him rest breaks.
The court also ruled that the three employees received their final checks in accordance with California law. The company issued final checks based on a termination report by the managers. Payroll would then send the final check to the employee via mail or to the store by courier, depending on the circumstances.
No law requires employers to keep a record of the date an employee terminates or gives notice of the intent to do so, and because of this, the evidence did not exist to indicate when other employees gave notice and when they received their final check. The court ruled that the issue was not suitable for a class action because such claims would require information about each individual’s situation. Therefore, the court of appeal dismissed the class action lawsuit.
- Document the date that notice is given of an employee’s intent to quit, as well as the date you terminate an employee.
- Comply with the requirements on which information must appear with an employee’s paycheck. Labor Code section 226 requires that when the employee is paid, the following information must be provided in writing:
- Gross wages earned.
- Total hours worked by the employee (unless the employee is salaried and exempt.)
- The number of piece rate units earned and the rate of pay if the employee is paid by piece rate.
- All deductions; If the deductions are made on the written authorization of the employee, they may be combined and shown as one amount.
- Net wages earned.
- The inclusive dates of the pay period for which the wages are paid.
- The name of the employee.
- The name and address of the employer.
- All applicable hourly rates in effect during the pay period, and the corresponding number of hours worked at each hourly rate by the employee. (Note that the deductions from wages must be dated and kept on file for at least three years at the place of employment or a central location within California.
- Provide employees with their final pay in accordance with California law:
- If the employer terminates an employee or if the employee gives notice of intent to quit more than 72 hours in advance, the employee must be paid on their last day, for all hours worked through the last day as well as any accrued an unused vacation or paid time off.
- If an employee quits with less than 72 hours’ notice, the employer has 72 hours (calendar hours, not business hours) to prepare the final check. If the employee quits without providing the 72 hours’ notice, the employee may request payment by mail of his/her final wages. The employee must designate a mailing address. The date the final check is mailed is evidence that the check was provided within the 72 hours of the notice of quitting.
- Employees who are terminated must be paid at the place of termination, and employees who quit must be paid at the office of the employer in the county where the employee has been working.
- Use the Final Paycheck Worksheet to guide you through the process.
Consult with legal counsel before permitting any flexibility with regard to meal and rest periods. This includes any requests by employees to forego their rest or meal period, take it later in the day, or combine meal and rest periods.