See results of a survey on the rise of wage and hour litigation here.

Brinker Restaurant Corp. was in deep trouble. In 2005, five employees of the restaurant chain that owns Chili’s, Maggiano’s, Macaroni Grill and On the Border, and operates more than 100 eateries in California, filed a class action suit alleging the company failed to provide workers required meal and rest periods. The five sought to represent a potential class of 59,000 employees.

It was a situation not at all unfamiliar to California businesses. Class action suits regarding alleged violations of the state’s stringent meal and rest period regulations–contained in sections 226 and 512 of the state’s labor code–are a thriving industry for the California plaintiffs’ bar. By some estimates, the average cost to settle such a suit is a whopping $24.4 million.

But Brinker Restaurant Corp. v. Superior Court of San Diego County didn’t turn out to be a typical case. In a groundbreaking decision rejecting class certification, the Fourth Appellate District of California ruled–among other holdings favorable to corporate defendants–that employers need only “make available” meal and rest periods rather than “ensure” employees take those breaks. Therefore, the court ruled, the determination of whether Brinker violated the law would turn on an individualized analysis of why each employee missed meal breaks and could not be resolved on a class basis.

“The court struck the right balance,” says Felix Shafir, an attorney at Horvitz & Levy who has closely followed the
issue. “That balance has been hard to find in recent decisions from the California courts.”

Taking a Break
The most significant aspect of the July 22 decision in Brinker is the reinterpretation of the break requirements. In the past, courts required employers to “ensure” employees take 10-minute rest breaks and half-hour meal breaks at specified times.

That left managers with the difficult task of policing whether employees were actually clocking out at required times in their shifts. Further, employers were forced to assume that employees were entitled to a penalty payment, which the law sets at one hour’s wages, whenever they miss a meal or rest break.

“Many employers were automatically paying the penalty whenever someone missed a break, even if the employee decided voluntarily to work through the break,” says Maureen O’Neill, a partner at Paul Hastings in Palo Alto, Calif. “There’s no need to be that extreme anymore.”

In addition to being difficult to monitor and costly to enforce, the rest break requirements were also frustratingly inflexible.

“Some employees would prefer to work through a meal and go home a little earlier,” Shafir says. “But the way the law was being interpreted, neither employers nor employees had that flexibility.”

Brinker also offers a welcome second look at other aspects of the rest-break law, which has been fertile ground for class action litigation. For instance, the court ruled that employers need not provide a rest break in the middle of the shift–scheduling it within the first hour of work is permissible if it is impractical to schedule it later.

The court said the portion of the law that requires rest breaks be provided for every four hours worked or “major fraction thereof” should be interpreted to require a rest break only when the employee’s shift exceeds three and half hours–earlier decisions had interpreted “major fraction” to mean any shift longer than two hours.

Not So Fast
Precisely because Brinker is so groundbreaking, many litigators in California believe it is ripe for review by the California Supreme Court. Indeed, some of the central holdings of Brinker seem to be in direct conflict with earlier decisions from appellate courts in the state. For instance, in 2005 the Third District Appellate Court found in Cicairos v. Summit Logistics Inc. that class adjudication of meal period violations was appropriate because the issue was not why employees missed breaks, but merely if they missed them–a matter that could be easily determined from time records employers are required to maintain. In addition, several other cases concerning the same issues are still being litigated.

The conflicting decisions call into question the usefulness of Brinker for employers operating outside the
San Diego-based Fourth Appellate District. Until the state supreme court resolves some of these conflicts, the word of the day is caution.

“You should assume the onus is still on you to ensure employees take rest breaks. Period,” says H. Scott Leviant, an attorney at Khorrami Pollard & Abir. Leviant litigates wage and hour class actions on behalf of plaintiffs. “The excitement among employers over Brinker is understandable but misguided. It could be setting them up to be even more restricted by the Supreme Court.”

Even those who herald Brinker as a breakthrough are not confident that some of its more controversial aspects will stand up to the California Supreme Court’s scrutiny.

“The holding about making meal periods available [rather than ensuring employees take them] seems to be in line with the trends,” O’Neill says. “But the portion about what constitutes a ‘major fraction’ might be overturned. It’s been interpreted as two hours for as long as the law has been in place.”