On May 23, 2022, in Naranjo v. Spectrum Security Services, Inc., P.3d (2022), the California Supreme Court issued an important wage-and-hour decision. In Naranjo, the Court held that meal break premiums that an employer pays to an employee for missed, late, or short meal breaks constitute wages. Consequently, an employer must report those premium payments on an employee’s wage statement pursuant to Labor Code section 226 and must promptly pay any owed premiums when an employee terminates employment or face waiting time penalties under Labor Code section 203. Naranjo also concluded that the California Constitution’s default prejudgment interest rate of seven percent applies to calculating the prejudgment interest on claims for meal and rest break premiums.
On July 15, 2021, the California Supreme Court issued a decision in Ferra v. Loews Hollywood Hotel, LLC which was long-awaited but was ultimately highly disappointing to employers.
Continue Reading California Supreme Court Announces New Standard That Meal and Rest Period Premiums Must Be Paid at Same “Regular Rate of Pay” Used to Calculate Overtime Payments
After a decade of ups and downs on the question of federal preemption, the Ninth Circuit Court of Appeals has upheld the Federal Motor Carrier Safety Administration’s (“FMSCA”) decision to preempt California’s meal and rest break rules. The long-awaited decision in IBT v. FMCSA upholds the FMSCA’s December 2018 determination that drivers, who are involved in interstate commerce and subject to federal hours-of-service regulations, are exempt from California’s stringent meal and rest break rules because they are “incompatible” with federal regulations. “The FMCSA reached this conclusion because California required more breaks, more often and with less flexibility as to timing,” the Court’s three-judge panel said in its January 15 opinion.
Continue Reading The Ninth Circuit Puts the Brakes on Truckers’ California Meal and Rest Break Claims
In Alfredo Sanchez v. Miguel Martinez, the Court of Appeal, Third Appellate District, held that although an employee who is not authorized and permitted to take a paid 10-minute rest break in compliance with California law may assert a claim for either unpaid wages or seek one additional hour of pay (i.e., a rest break premium) under Labor Code Section 226.7, the employee cannot recover damages under both theories. All California employers will find this case instructive, as it may also provide a basis to argue against similar “double recovery” and/or “stacking” of penalties predicated on other Labor Code violations.
Continue Reading Employees Cannot Obtain “Double Recovery” of Unpaid Wages and Premiums for Non-Compliant Rest Breaks
The COVID-19 pandemic has highlighted the central role local and long haul trucking companies and drivers play in the overall U.S. economy and specifically our public health infrastructure. Now, as states and businesses around the country gradually reopen and truck deliveries begin to ramp up, employers in the commercial trucking industry should be aware of recent changes to Hours of Service regulations as well as COVID-19-related guidance on keeping employees and the general public healthy and safe. By updating their policies and procedures and enacting responsible safety measures, motor carriers will be in the best position to weather the storm of this pandemic and avoid the risks associated with employment litigation and compliance pitfalls.
Continue Reading Overview of Recent Updates for Employers in the Commercial Trucking Industry
On October 9, 2019, the Second Appellate District of the California Court of Appeal issued a decision clarifying the rate of pay at which an employer must pay meal period, rest break, and recovery period premiums. More specifically, the appellate court answered the question: what does the “regular rate of compensation” in Labor Code Section 226.7(c) actually mean? In Ferra v. Loews Hollywood Hotel, LLC, a 2-1 majority of the Court of Appeal affirmed the trial court’s holding that in paying meal period and rest break premiums, the regular rate of compensation is equal to one hour of the employee’s base hourly wage and is not synonymous with the “regular rate of pay” used to calculate overtime payments. This clarification is important to every employer in California.
Continue Reading California Appellate Court Clarifies the Monetary Amount for Meal Period, Rest Break, and Recovery Period Premiums, and Affirms an Employer’s Neutral Rounding Policy
Signaling another positive development for interstate motor carriers operating in California, the United States District Court for the Central District of California (the “Central District”) recently dismissed a truck driver’s claims that motor carrier U.S. Xpress failed to provide a class of drivers with legally required meal and rest periods compliant with California law. See, Ayala v. U.S. Express Enters., Inc. et al. Case No. 5:16-cv-00137-GW-(KKx) (Order Granting Partial Summary Judgment). The Court, in granting U.S. Xpress’s motion for partial summary judgment, stated that it did not possess the authority to review the merits of the case since the Federal Motor Carrier Safety Administration (“FMCSA”) determined, in December 2018, that Federal law preempts California state law. The Central District applied the FMCSA’s order retroactively to the Ayala case, filed in 2016, stating that it was bound by the FMCSA order and would apply the order in similar cases unless and until the order was invalidated by the Ninth Circuit.
Continue Reading California’s Meal and Rest Break Rules for Commercial Motor Vehicle Drivers Remain Preempted by Federal Law . . . For Now
The ability of hospitals to use meal period waivers was called into question by a 2015 Court of Appeal decision in Gerard v. Orange Coast Memorial Medical Center (Gerard I), which held that the provision in Wage Order 5 allowing waivers even when employees work over 12 hours was invalid. Following two more years of litigation, we can now inform you that the three-member panel that reached the 2015 decision in Gerard I, reversed itself on March 1, 2017 in Gerard II. In its new opinion, the Court of Appeal adopted Sheppard Mullin’s argument and confirmed that the special meal period rules for health care employees in Wage Order 5 are, in fact, valid.
Continue Reading California Court of Appeal Affirms Validity of Hospital Meal Period Waivers
On November 13, 2014, the Second District Court of Appeal, Division One, issued a decision in Walgreen Co. Overtime Cases. The opinion explains the meaning of Brinker Restaurant Corp. v. Superior Court as it applies to the duty to “provide” a meal period in a style that is so simple that a child could understand it. Unfortunately, it is so clear in its conclusions that we fear that it will be depublished.
Continue Reading Brinker for Dummies
On March 4, 2013 the Ninth Circuit issued a second opinion in the action, Wang v. Chinese Daily News (Wang II), in which it reversed the class certification it had previously affirmed and remanded the matter for further consideration of Rule 23(a) commonality and Rule 23(b)(3) predominance. The Wang II decision follows a remand from the United States Supreme Court which had reversed the original Wang judgment in light of the inconsistencies between the lower courts’ rulings and the certification standards the Supreme Court announced in Dukes v. Wal-Mart (“Dukes”). As explained below, except for the last paragraph of the case, this mostly just restates holdings of other cases But there is one highly significant holding at the end of the case concerning the application of “Trial by Formula” to wage/hour class actions that defense lawyers should be expected to cite in almost every class action they defend.…
A First Appellate District decision from May 31, 2012, Sotelo v. Medianews Group, Inc.; was published yesterday. The opinion contains an in-depth discussion on class action concepts arising out of a case alleging misclassification of newspaper carriers as independent contractors. The opinion cuts back on some pro-certification precedents, sets forth some anti-certification law for independent contractor cases, and contains some interesting observations about class certification in general.…