Labor Employment Law Blog

In a decision of great interest to California employers, the California Supreme Court yesterday agreed to settle the dispute among California's Courts of Appeal regarding whether the "payment" of one hour's pay at the employee's usual rate for a missed meal and/or break period mandated by California Labor Code §226.7 is a "wage" subject to a three- or four- year statute of limitations or a "penalty" subject to a shorter one-year statute of limitations.

In December of 2004, the California Division of Labor Standards Enforcement ("DLSE") proposed significant regulations regarding the state meal period requirements. The regulations were designed to interpret the rules contained in the Labor Code and to provide guidance to employees and employers. They were also designed to offer employees greater flexibility with respect to meal periods. Following public comment and hearings, the DLSE revised its proposed regulations several times.

On Thursday, a California jury awarded $172 million to 116,000 current and former employees of Wal-Mart based on violations of California's meal period rules. The verdict included $57 million in general damages and $115 million in punitive damages. Although the award may be vulnerable and is likely to be appealed, it will undoubtedly lead to even more wage-hour litigation and challenges. All California employers should understand the message the verdict is intended to send.

In the recently decided case of Valles v. Ivy Hill Corporation, two union employees sued their employer for not providing meal and rest periods in accordance with California law. The collective bargaining agreement between the union and the employer provided that employees would be provided off-duty meal periods; and, that if they were required to work during their meal period they would be paid time and one half. The employer often required the employees to work through their meal periods, but paid them only regular time.