The California Supreme Court delivered a blow to California employers in a unanimous opinion requiring strict compliance with employee meal break rules. In Donohue v. AMN Services, LLC, the plaintiff filed a class action lawsuit against her employer alleging that the company’s policy of rounding employee time punches to the nearest 10-minute increment violated California’s meal break requirements.[1]
Lower courts have found the practice of rounding employee time punches (e.g., to the nearest 5-minute increment or to the nearest one-tenth of an hour) acceptable so long as it is neutral on its face and as applied.[2] Put another way, a rounding policy that consistently rounds down employees’ time punches would be facially improper and a practice that, over time, results in underpayment would be unacceptable as applied.[3]
In a one-two punch, the Donohue Court held that rounding employee time punches for meal breaks was “incompatible” with California law.[4] Perhaps more importantly, the Supreme Court also held that a rebuttable presumption arises where “time records show missed, short, or delayed meal periods.”[5] The Court went as far as suggesting that even “incomplete or inaccurate” time records could trigger this presumption.[6]
This article will provide an overview of the Court’s holding in Donohue and some key takeaways for California employers to consider going forward.
Rounding for Meal Breaks Prohibited
Donohue is the first Supreme Court case about meal breaks since Brinker Restaurant Corp., a 2012 case holding that employers must provide employees an uninterrupted 30-minute meal break no later than the end of the fifth hour of work.[7] Any failure to provide a full and timely meal break (even by a minute) results in a premium payment—by the employer to the employee—of one hour of pay at the employee’s regular rate of compensation.[8] For example, assuming the employee did not waive his or her break, a 27-minute meal break would trigger a full hour of premium pay even though it was only three minutes shy of the required half hour.
Without passing judgment on rounding policies in general, the Donohue Court held that the practice was incompatible with California’s meal break requirements.[9] First, the Court reasoned that the practice of rounding is at odds with the premium scheme for meal break violations, which “is concerned with small amounts of time.”[10] Thus, the Court held that “a policy that counts [a few] minutes as negligible rounding errors” cannot be reconciled with the purpose of premium payments for meal break violations.[11]
The Court also relied on legislative history indicating that meal breaks were implemented as “safeguards for workers’ health, safety, and well-being.”[12] Accordingly, noncompliant meal breaks result in increased employee stress and fatigue, and a greater likelihood of workplace accidents.[13] In comparison, clocking in and out at the beginning and end of a shift determines workers’ pay and “counting slightly fewer minutes one day can be made up by counting a few more minutes another day.”[14]
The Donohue Court ends its discussion of rounding with a cautionary word: “As technology continues to evolve, the practical advantages of rounding policies may diminish further.”[15] Given the Court’s avoidance of endorsing rounding policies as developed in the lower courts and criticism of the practical benefits, it seems that employers may want to reevaluate their rounding practices.
Rebuttable Presumption of Meal Break Violation
Although second, the potentially more impactful aspect of Donohue is its adoption of the rebuttable presumption first enunciated in Brinker.[16] In Brinker, Justice Werdegar penned a minority concurrence that reasoned an employer’s obligation to record meal breaks gave rise to a rebuttable presumption that a meal break violation occurred “[i]f an employer’s records show no meal period for a given shift over five hours.[17]
As rebuttable presumption is an assumption made by the court unless one party presents evidence to the contrary. Donohue not only adopts but expands the rebuttable presumption in Brinker. First, the Court clarifies that the presumption applies at the motion for summary judgment stage, and not just class certification.[18] This means the presumption benefits plaintiffs alleging meal break violations both procedurally (at the class certification stage) as well as substantively in establishing liability.[19]
Second, the Court appears to expand the presumption, explaining that it is triggered by both records showing no meal periods and records showing “short and delayed meal periods.”[20] The Court even suggests that the presumption is triggered if the records “do not clearly indicate whether the employee chose to work during the meal periods despite bona fide relief from duty.”[21]
The Court rejects the argument that the presumption results in “automatic liability,” because employers may rebut it with evidence that employees were paid premiums for noncompliant meal periods or that employees voluntarily chose to work during their meal break.[22] However, the Court rejected this evidence offered by the defendant because it was based on the rounded time entries.[23] Representative testimony or surveys of employees demonstrating compliance with meal break rules can also be used to rebut the presumption.[24]
Ultimately, Donohue seems to suggest that any ambiguity in meal break records—even if sporadic—could trigger the rebuttable presumption. While the exact effects are still to be seen, it goes without saying that employers should be prepared for the potential of future litigation.
Practical Effects of the Donohue Holding
In its practical application, Donohue may be devastating to defendants in future wage and hour class actions. Taken as a whole, the opinion seems to suggest that anything other than perfect meal break records will trigger a presumption of a meal break violation. The opinion may give courts pause in granting summary judgment motions in defendants’ favor and will likely make affirmatively establishing compliant meal breaks unattainable for employers with a rounding policy.
There are a few takeaways for employers:
Eliminate Rounding for Meal Breaks. First, eliminate rounding practices for meal breaks. The Court held in no uncertain terms that rounding was “inconsistent” and “incompatible” with the purpose and requirements of meal breaks under California law.[25]
Minimize Rounding Generally. In addition to the skepticism about the practical benefits of rounding expressed in Donohue, courts have voiced similar concerns about rounding in other contexts such as overtime pay.[26] In an effort to avoid future litigation, employers may want to trend away from rounding policies, or at least avoid rounding where premium or penalty payments are involved.
Maintain Proper Documentation. Based on Donohue, proper recorded keeping will be key for employers going forward. Employees should be given the option to affirmatively waive their meal break based on unrounded time punches and employers should clearly document when meal break premium payments are made. Employers may also ask employees to sign biweekly certifications of their unrounded time entries to affirm that they were, at least, offered full and timely meal breaks.
If you have any questions about meal break requirements and the impacts of the Donohue decision, please contact the attorneys at Wood Litigation for an initial consultation.
[1] Donohue v. AMN Services, LLC, No. S253677 Slip. Op. at pp. 4-5 (Cal. Sup. Ct. Feb. 25, 2021) (“Donohue”), available at: https://www.courts.ca.gov/opinions/documents/S253677.PDF.
[2] Donohue, at pp. 16-17 (citing See’s Candy Shops Inc. v. Superior Court (2012) 210 Cal.App.4th 889).
[3] See’s Candy Shops, Inc., supra, 210 Cal.App.4th at pp. 901-02.
[4] Donohue, at p. 1 (“The meal period provisions are designed to prevent even minor infringements on meal period requirements, and rounding is incompatible with that objective.”).
[5] Donohue, at p. 26.
[6] Donohue, at p. 25 (“If the records are incomplete or inaccurate – for example, the records do not clearly indicate whether the employees chose to work during meal periods despite bona fide relief from duty – then the employer can offer evidence to rebut the presumption.”).
[7] Brinker Rest. Corp. (2012) 53 Cal.4th 1004, 1038 (“[A]n employer’s obligation when providing a meal period is to relieve its employee of all duty for an uninterrupted 30-minute period.”); id., at p. 1041 (“We conclude that, absent waiver, section 512 requires a first meal period no later than the end of an employee’s fifth hour of work…”).
[8] Donohue, at pp. 11-12 (“Under this provision, even a minor infringement of the meal period triggers the premium pay obligation.”); see also id., at p. 14 (“A premium pay scheme that discourages employers from infringing on meal periods by even a few minutes cannot be reconciled with a policy that counts those minutes as negligible rounding errors.”).
[9] Donohue, at p. 19 (“This court has never decided the validity of the rounding standard articulated in See’s Candy I, and we are not asked to do so here.”).
[10] Donohue, at pp. 12, 14 (“The premise of this approach is that even relatively minor infringements on meal periods can cause substantial burdens to the employee.”).
[11] Donohue, at p. 14.
[12] Donohue, at p. 16 (“As we have explained, rounding is incompatible with promoting strict adherence to the safeguards for workers’ health, safety, and well-being that meal periods are intended to provide.”).
[13] Donohue, at p. 14.
[14] Donohue, at p. 15 (“For purposes of calculating wages, counting slightly fewer minutes one day can be made up by counting a few more minutes another day. But the same is not true for meal periods.”).
[15] Donohue, at p. 21.
[16] Donohue, at p. 24 (adopting in full Justice Werdegar’s concurrence in Brinker Restaurant Corp.).
[17] Brinker Rest. Corp., supra, 53 Cal.4th at p. 1052 (“If an employer's records show no meal period for a given shift over five hours, a rebuttable presumption arises that the employee was not relieved of duty and no meal period was provided.”); Donohue, at p. 23 (“The presumption derives from an employer’s duty to maintain accurate records for meal periods. [Citations].”).
[18] Donohue, at p. 24 (“[T]he presumption goes to the question of liability and applies at the summary judgment stage, not just at the class certification stage.”).
[19] Donohue, at p. 28 (“If the time records show noncompliant meal periods, then a rebuttable presumption of liability arises.”).
[20] Donohue, at p. 24 (“Moreover, AMN is incorrect that the presumption applies only to records showing missed meal periods; the presumption applies to records showing short and delayed meal periods as well.”).
[21] Donohue, at p. 25 (“If the records are incomplete or inaccurate — for example, the records do not clearly indicate whether the employee chose to work during meal periods despite bona fide relief from duty — then the employer can offer evidence to rebut the presumption.”).
[22] Donohue, at pp. 26-27.
[23] Donohue, at p. 31 (“But because the dropdown menu was triggered by rounded time punches…AMN cannot rely on this evidence to prove that there were no meal period violations.”).
[24] Donohue, at p. 27 (“‘Representative testimony, surveys, and other statistical analysis,’ along with other types of evidence, “are available tools to render manageable determination of the extent of liability.’”).
[25] Donohue, at pp. 12, 16.
[26] See’s Candy Shops Inc., supra, 210 Cal.App.4th at p. 912 (“We agree that California’s overtime rules may mean that under a nearest-tenth rounding policy, an employee will not be fully compensated for the premium time if an employee works more than eight hours in one day.”).