May 22, 2013

Brinker Made Me Do It: Class Certification Required Where Issue is Facial Validity of Break Policy

When the California Supreme Court issued its landmark decision in Brinker Restaurants a year ago, it was greeted with predictions that it would stem the flow of meal and rest period class action claims.  For the most part, that prediction has proved accurate:  in a majority of cases, the courts have ruled that class treatment of meal and rest claims is inappropriate because individual issues predominate when determining liability.  But Brinker also was careful to note that class treatment is appropriate where the claim challenges the facial validity of a policy applicable to the class as a whole.  Thus, the rest period policy in Brinker that provided a rest period only for work periods of 3.5 hours or more – rather than those exceeding two hours – was amenable to class treatment.

On the first anniversary of Brinker, a California appellate court has echoed that principle, holding that class certification is required where the issue is the facial legality of a meal period policy.  Faulkinbury v. Boyd & Assocs., Inc., No. G041702 (Cal. Ct. App. 4th Dist. May 10, 2013) (“Faulkinbury II”).  The members of the putative class in Faulkinbury II worked as security guards at various customer sites.  The employer required all security guards to sign an on-duty meal period agreement when they were hired.  In addition, none were ever provided a duty-free off-duty meal period.  The plaintiffs claimed that the on-duty meal period agreements were invalid because they were not voluntary and because the nature of security guard work did not qualify for the on-duty meal period exception.  The trial court had denied class certification in early 2009, finding that individual issues predominated in determining whether the employer had acted unlawfully toward class members for missed off-duty meal periods.  On appeal in 2010, prior to Brinker, the appellate court affirmed that denial (Faulkinbury I).  The California Supreme Court granted review in 2010 pending its decision in Brinker.  After it issued Brinker, the Supreme Court sent the case back to the appellate court with directions to reconsider its prior decision in light of Brinker.

This time, in Falkinbury II, the court appeal changed course, reversing the trial court’s denial of class certification.  It first concluded that the plaintiffs’ claim was that the employer’s meal period policy was facially unlawful.  It further reasoned that there were at least two common questions that could be determined on a class-wide basis relevant to its legality:  (i) whether to be valid, an on-duty meal period agreement must be voluntary, that is, the employee given a choice whether to sign it or not; and (ii)  whether the nature of security guards’ work prevented them from being relieved of all duty. Because Brinker teaches that certification is required where the issue is the lawfulness of a common policy, the Falkinbury II court reversed and held that the trial court should have granted class certification.  The court brushed aside concerns that individual issues would be required to determine whether the agreements were valid as to each class member – such as determining whether the nature of a particular class member’s work at a particular site precluded an off-duty meal period – by noting that the employer required everyone to sign the agreements and thus should be forced to defend them on a class-wide basis.  Notably, this last rationale has been debunked as a basis for certification by both state and federal courts in California in the context of misclassification cases where all employees in a particular job category are classified as exempt.  E.g., Vinole v. Countrywide, 571 F.3d 935 (9th Cir. 2009); Walsh v. IKON, 148 Cal.App. 4th 1440, 1461-62 (2007).

There were two other claims in the case on which class certification was required as well.  First, the plaintiffs’ claim for denial of rest periods, the court held, was based on the legality of the employer’s admitted class-wide practices of (i) having no formal written rest period policy and (ii) having an explicit policy that required employees to stay at their posts unless relieved by a supervisor or other security guard.  The court held that the common question arising from these facts was whether company policies (or lack thereof) effectively forbade off-duty rest periods.  It reached this conclusion despite the employer’s evidence that some security guards had indeed been authorized and permitted to leave their stations for rest breaks, calling the existence of a class-wide practice into question.

Second, the plaintiffs claimed that the employer had unlawfully failed to include certain payments when calculating the “regular rate of pay” for overtime purposes.  The excluded payments included expense reimbursements for uniform cleaning and gas, as well as an annual bonus the company contended was discretionary but which the plaintiffs contended was not.  Since the practice of excluding these items from overtime calculations was a class-wide practice, the court held that legality of the practice could be decided on a class-wide basis and certification should have been granted.

Take-Away Lessons

It is not news that the legality of a written policy is an issue that calls out for class treatment.  What is noteworthy about this decision is the lengths to which the appellate court went to fit the meal and rest period claims into the that box.  The Falkinbury II decision stands as a reminder for employers to examine their meal and rest period policies to ensure that what they say is identical to what the law allows and requires.  It also teaches that employers who utilize on-duty meal period agreements should do so with great caution.  These agreements should be entered into on an individual basis, rather than requiring all employees in a specific job classification to execute them, and only after a specific determination that the nature of the individual’s work really does as a practical matter preclude an off-duty break.




Category: Class Actions, Wage-Hour,