Authored by

Seyfarth Synopsis: In what many employers will see as a “break” from workplace reality, the Supreme Court, in Augustus v. ABM Security Services, Inc., announced that certain “on call” rest periods do not comply with the California Labor Code and Wage Orders. As previously reported on our California Peculiarities Employment Law Blog, this decision presents significant practical challenges for employers in industries where employees must respond to exigent circumstances.


On December 23, 2016, the California Supreme Court issued its long-anticipated decision in Augustus v. ABM Security Services, Inc., affirming a $90 million judgment for the plaintiff class of security guards on their rest break claim. The Supreme Court found that the security guards’ rest breaks did not comply with the California Labor Code and Wage Orders, because the guards had to carry radios or pagers during their rest breaks and had to respond if required.

The Supreme Court took a very restrictive view of California’s rest break requirements, concluding that “one cannot square the practice of compelling employees to remain at the ready, tethered by time and policy to particular locations or communications devices, with the requirement to relieve employees of all work duties and employer control during 10-minute rest breaks.” Thus, in the Supreme Court’s view, an employers may not require employees to remain on call—“at the ready and capable of being summoned to action”—during rest breaks.

See our One Minute Memo for more details on the decision and thoughts on the implications of this case for California employers. The Augustus decision presents significant practical challenges for employers, especially in industries in which employees must be able to respond to exigent circumstances.

Workplace Solution:

The holding that “on call” rest periods are not legally permissible should prompt employers to evaluate their rest-break practices. In industries where employees must remain on call during rest periods, employers should consider seeking an exemption from the Division of Labor Standards Enforcement. Lawyers in the Seyfarth California Workplace Solutions group can assist with other suggestions for responding to this decision.

Authored by Alex Passantino

‘Twas the week before Christmas, 2-0-1-5
When the poetry elves on the blog came alive.
Crafting their rhymes with a purpose so clear:
Presenting the wage-hour gems of the year.

In January, for new regs in this year our breath bated.
Then for six painful months, we speculated and waited.
And just as we geared up to celebrate Independence,
Out came a proposal that will create more defendants.

With a salary level that for 10 years has been flat,
They looked at New York’s and said “higher than that.”
More than double the old; and then they got clever …
The proposed sal’ry level will increase for forever.

Anticipated changes to duties caused quite a fuss
When DOL said “If you’ve got some ideas, just tell us.”
Of the Department’s proposal, employers were understandably wary,
So we wrote down some ideas on how to make it less scary.

Nearly 300 thousand comments they have to review,
It will be late into next year before they are through.

Next up on the list of your wage-hour joy,
Are the efforts to change what it means to employ:
ContractorsJoint employment. Fissured industry.
Interns. The “third way” and gig economy.

Economic realityRight to control.
They’re integral to your business? Now you’re in a deep hole.
So many angles, it can drive you berserk.
As agencies and courts figure out what is “work.”

And if divergent decisions bring you a sense of elation,
Then please focus attention on class certification.
Approvals, denials, and some decerts, too.
No matter the side, there’s a case for you.

But as summer approached, there arose quite a stir,
A case that’d explain what the class cert rules were.
A Supreme explanation, o my-o, o me-o
We’d learn about class via Bouaphakeo.

They’ve argued, but there’s no decision, not yet,
And a limited ruling on records might be all that we get.
But the cases keep coming. Their numbers broke the charts.
Whether giant class actions or cases broken in parts.

And the response to those filings? The employers’ retort?
A wide range of ways to get them out of court.

Some cases get mooted. Some cases do not.
At Genesis’s open question, SCOTUS might take a shot.
Does an offer of judgment that’s not been accepted
Mean the plaintiff cannot proceed with his class as expected?

Increasingly used as a litigation life saver
Arbitration agreements with a class action waiver;
And when asked if state laws could class waivers prevent, yo,
The Supremes laid the smack-down to dear Sacramento.

With all of these options, it comes as a surprise then,
That one resolution keeps on getting the Heisman.
For reasons that many cannot understand,
To settle wage claims courts think they must hold your hand.

That’s our year in review, we whipped you right through it.
Next year? The new regs and a mad dash to review it.
But before 2015 joins the past’s ranks,
You keep on reading our blog, and for that we give thanks!

THANKS TO ALL OF OUR READERS. BEST WISHES FOR A HAPPY, HEALTHY, AND PROSPEROUS NEW YEAR!

Co-authored by Howard M. Wexler and Louisa J. Johnson

Although the turkey (and leftover turkey sandwiches) are all gone, employers within the Third Circuit have reason to extend the Thanksgiving celebration given a recent decision affirming the dismissal of a collective action complaint alleging unpaid meal breaks. Just two days before Thanksgiving, in Babcock et al. v. Butler County, the majority of a divided panel of the Third Circuit Court of Appeals announced its decision to join many of its sister Circuit Courts of Appeals in adopting the “predominant benefit” test in deciding the compensability of a meal break.

Plaintiffs in Babcock are corrections officers whose terms and conditions of employment are governed by a collective bargaining agreement. Under the terms of the CBA, employees receive an hour-long meal period, of which 45-minutes are paid and 15 minutes are unpaid.

Plaintiffs filed suit under the FLSA, alleging that they are entitled to overtime compensation for the 15 unpaid minutes of their meal break because, during this time, they are prohibited from leaving the prison without permission, must remain in uniform and near emergency response equipment, and must respond immediately to emergencies. The employees argued that, because of these meal-break restrictions, they “cannot run personal errands, sleep, breathe fresh air, or smoke cigarettes,” and, thus, should be paid for the full one-hour break.

The County moved to dismiss Plaintiffs’ claims, arguing that the restrictions on Plaintiffs’ meal periods did not change the fact that the officers still received the “predominant benefit” of the break time. The District Court agreed and dismissed the lawsuit.

On appeal, the Third Circuit announced its decision to follow the majority of Circuits in adopting the “predominant benefit” test, rather than the alternative “completely relieved from duty” test. In so holding the Third Circuit acknowledged that, like the majority of other Circuits, it was departing from the Department of Labor’s so-called “regulation” on the issue: “Courts have generally eschewed a literal reading of a Department of Labor regulation that provides that during a ‘bona fide meal period’ ‘[t]he employee must be completely relieved from duty ….’” The Third Circuit explained in a footnote that it is entitled to depart from the DOL’s “regulation” because it “do[es] not have the force of law” and serves as mere guidance to courts and litigants.

Applying the predominant benefit test, the Third Circuit agreed with the District Court’s finding that, even accepting all of Plaintiffs’ allegations as true, the meal-time restrictions did not predominantly benefit the employer. Based on the parties’ characterization of the 15-minute unpaid meal break and the fact that the CBA promised pay for the time if an employee’s break were interrupted, the parties’ agreed-upon 15 minutes of uninterrupted break time remained predominantly for the benefit of the employees and need not be compensated.

As proponents of the “predominant benefit” test have long argued, it defies logic to think the opposite—that a mere minute or two for the employer’s benefit or a few restrictions on an employee’s break time should turn an entire meal break into paid time. The Third Circuit’s decision to employ the “predominate benefit” test broadens for employers the geographic scope in which logic and the practicalities of the modern workplace prevail. Such a step in the right direction is a development for which all employers can be thankful.

Authored by Michael W. Kopp

Ordonez v. RadioShack, Part II is the end-of-summer sequel you do not want to miss. It features our protagonist, the “uniform rest break policy,” a sinister cast of declarations of similar treatment, a harrowing finding of unlawfulness, a dramatic second run by plaintiff at class certification, and the court’s emphatic second opinion denying plaintiff’s certification gambit. Sequels can be more satisfying than the original. Ordonez, Part II delivers the welcome message that identifying a uniform employer policy, even one that is likely unlawful, is not the end of the story. Where there are difficulties in proof as to the application and impact of a uniform policy on the class, Ordonez serves notice that certification should be denied.

Ordonez claimed that RadioShack’s rest break policy shorted sales associates their rest breaks when they worked between six to eight hours. In taking a second run at class certification, plaintiff offered more evidence of the uniformity of the rest break policy at issue, which provided “one paid 15-minute break for every four hours.” Nineteen employee declarations uniformly (no surprise) attested to missing second breaks for work performed between 6-8 hours.  In response, the court found that plaintiff had established that RadioShack maintained “a uniform stated policy . . . that is likely inconsistent with California law.” But plaintiff could not take that finding to the bank, because issues of individualized proof and manageability made class certification the wrong choice. The takeaway from Ordonez is so important, that we dare not dilute it with a paraphrase: “[I]n spite of the evidence that RadioShack had a uniform rest break policy that may have violated California law, substantial manageability concerns remain regarding proof of whether and how this policy was actually implemented.”

What were the manageability concerns? Chief among them was plaintiff’s inability to identify any way to prove whether any class member took or failed to take a break. There were no reliable electronic records logging actual breaks taken, and RadioShack was not required to keep such records. Not even the plaintiff’s supplemental submission of RadioShack’s electronic scheduling records could do the trick because, “at most, they reflect when RadioShack scheduled rest breaks for its employees”, and not when employees actually took rest breaks. That would require testimony from each RadioShack employee. Another key takeaway was the court’s rejection of the “this is a damages issue” argument. “Here the issue is whether classwide methods of proof exist to show that California law was actually violated.”

Ordonez also discusses recent California Appellate Court decisions certifying wage and hour classes where the underlying claims challenged uniform employer policies. Benton v. Telecom Network Specialists, Inc.; Faulkinbury v. Boyd & Assocs., Inc.; Bradley v. Networkers Int’l, LLC. But these decisions were all cases where the employer had never implemented a rest break policy. In other words, the uniform rest break policy applicable to the class was the absence of any such policy. These courts were not faced with claims that required a more individualized inquiry as to each class member’s rest break usage.

Ordonez rejects the argument that class certification is required whenever the claim challenges a uniform policy. Rather, the court noted “[i]t is an abuse of discretion for the district court to rely on uniform policies to the near exclusion of other relevant factors touching on predominance.” The court also helpfully pointed to a recent rising tide of decisions denying class certification in actions alleging rest break violations based on a stated uniform policy, with Cummings v. Starbucks Corp., and In re Taco Bell Wage and Hour Actions serving as examples.

Ordonez underscores that manageability and predominance issues do not simply vanish whenever the plaintiff takes a run at an employer’s uniform policy. These concerns must still be satisfied, particularly as to whether a method exists for establishing common proof on a classwide basis that the policy was implemented unlawfully.

Co-authored by Jacob Oslick and Timothy Rusche

California requires written waivers if an employee misses a second meal break, right? Not exactly, clarified the California Court of Appeal in Fayerweather v. Comcast Corp. Instead, a waiver only is needed if the employer makes an employee miss a second meal break and not if the break is voluntarily skipped. The court also reaffirmed that off-the-clock class actions require proof of a uniform, companywide policy that violates the law.

The Fayerweahter plaintiffs were Comcast service technicians. They installed cable, internet, and phone service in homes and businesses. Much like customers whom Comcast hoped would take a break from the grind to watch TV and surf the web, Comcast policies directed technicians to take breaks, required them to fill out waivers if they skipped a second meal break, and obligated them to accurately record their hours worked. However, because technicians spent their days in the field, Comcast couldn’t know which of them actually took their TV timeouts.

The plaintiffs seized on this. Like the do-it-yourselfer who ignores direction and hangs a flat screen with the wrong screws, they alleged that their failure to follow policy and complete meal break waivers proved they were denied breaks. They argued that a device the company provided to communicate their status in the field more accurately reflected their hours than time records they had completed themselves.

The court panned the show and affirmed the decision to cancel the series. In brief:

  • The plaintiffs admitted that, under Comcast policy, they were supposed to sign written waivers every time they chose to skip a second meal break. They claimed that they neglected to, and insisted that this failure violated Labor Code § 512. The Court held that the law, unlike Comcast policy, didn’t require written waivers, and that “[i]f an employee voluntarily chooses to continue working through a provided meal break, no waiver is required.”  And, because figuring out whether they chose or were forced to miss a break would “require individual analysis of every instance,” this theory wasn’t appropriate for class treatment.
  • The plaintiffs also sought class certification on the grounds that Comcast didn’t maintain a formal policy to provide premium pay for denied breaks. However, as the Court noted, Labor Code § 226.7 only requires that premium pay get paid; it does not require a written policy to pay it. Whether the plaintiffs were actually denied breaks , or voluntarily skipped them, remained an individualized issue.
  • The plaintiffs further alleged that they widely underreported their hours and that entries from a communication device called TechNet showed that Comcast should have known about this underreporting. The Court found that TechNet was used to communicate about availability, not to track time, and that there was no evidence that the plaintiffs’ self-reported time records were less reliable than their TechNet entries. Nor did it find “substantial evidence point[ing] to a uniform, companywide policy” of encouraging technicians to underreport their time. Accordingly, the Court found that TechNet’s data could not be used to impute knowledge to Comcast, or to justify findings on a class-wide basis.

Employer Take-Aways

Though Fayerweather currently is an unreported decision, which limits its precedential value, it establishes that meal break waivers are different than voluntary decisions to skip breaks, and reiterates that class certification requires evidence of uniformly applied, unlawful company policy. Now that’s a show worth tuning into.