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Los Angeles-A potential California Supreme Court decision on the state’s employment laws could threaten plaintiffs’ lawyers’ financial incentive to file lawsuits on behalf of employees who were denied breaks for meals and rest. Such lawsuits have become the second wave of employment-related class actions targeting businesses across the state. A state jury recently awarded $172 million to 116,000 current and former employees of Wal-Mart who were denied meal breaks and rest periods between 2001 to 2005. Savaglio v. Wal-Mart Inc., No. C-835687 (Alameda Co., Calif., Super. Ct.). But recent court decisions by several intermediate appellate panels have been split in their interpretations of what statute of limitations to apply in such cases, prompting a possible review by the state Supreme Court. A case where review is being sought is Murphy v. Kenneth Cole Productions Inc., No. A107219 (Calif. Ct. App. 1st Dist.). “Class actions are difficult and expensive to prosecute,” said Michael Singer of San Diego-based Cohelan & Khoury, who represents the California Employment Lawyers Association, which has filed amicus briefs on behalf of the plaintiffs’ bar in recent appellate cases. “If you truncate liability, it will act as a disincentive.” A ‘cottage industry’ Employers fear that the pending lawsuits over meal and rest periods will become the next generation of high-cost employment settlements in California. “When you add up the kinds of claims that are made on a classwide basis, you get to huge amounts of money,” said Steven Drapkin, a Los Angeles solo practitioner who represents various employer groups that filed amicus briefs in recent appellate cases. “It’s a cottage industry to bring these lawsuits.” Recent decisions in the state’s appellate courts have differed widely on how employers get penalized if they deny their workers meal or rest periods. Plaintiffs’ lawyers have said that the California Labor Code statute governing meal and rest periods falls under the state’s “wage” laws, which allow them to sue under a three-year statute of limitations and add another state claim that extends the limit to four years. Businesses have said that the statute falls under the state’s definition of a “penalty,” which limits suits to a one-year statute of limitations. A state Supreme Court ruling favoring businesses would discourage plaintiffs’ lawyers from filing such suits unless the company is large or the violations egregious, said Allen Graves, a partner at Pasadena, Calif.-based Graves & Associates. Graves represents a former employee of Bed Bath & Beyond who lost a Jan. 27 ruling on the issue.

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