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Source: LauriPatterson / E+ / Getty Background California law requires employers to provide meal and rest breaks to all nonexempt employees after a certain number of hours worked. Meal breaks can be unpaid so long as they are at least 30 minutes and the employer relinquishes all control over the employees during that time. If the employer retains control, the meal period is on-duty time and must be treated as time worked. In addition, California law imposes a penalty of one hour of pay for each missed meal and rest break.
Taco Bell provides compliant meal and rest breaks for its California employees. In addition, it offers reduced-price meals employees can purchase. However, if employees choose to purchase a reduced-price meal, Taco Bell requires that they eat it on the premises (to prevent them from purchasing food at a reduced price and giving it to someone else). One Taco Bell employee filed a class action lawsuit against the company claiming, among other things, that by requiring employees to eat the reduced-price meal in the restaurant, Taco Bell had exercised control over the workers and therefore was required to pay them for that time and pay a penalty for the “missed” meal break. The trial court tossed the lawsuit, and the employee appealed to the 9th Circuit, which affirmed that the claim was properly dismissed. Court’s Reasoning The 9th Circuit began by pointing out that it was undisputed that except for the condition on eating reduced-price meals, Taco Bell’s meal and rest break policy complied with California law.
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Taco Bell had relieved the employees of all duties during their meal breaks and exercised no control over their activities. The employees were free to use the 30 minutes for whatever they wanted, they could go wherever they wanted, and they could buy a full-price meal and eat it anywhere they wanted. The only restriction Taco Bell imposed was that employees had to eat on the premises if they opted for a reduced-price meal. And the restaurant didn’t urge or encourage employees to use that benefit, much less pressure or coerce them to do so. Thus, the Taco Bell circumstances weren’t remotely similar to the cases the employee relied on in which employees were “on call” during their breaks and subject to being called back to duty. In one of those cases, employees had to carry a device during the break so the employer could reach them. In another case, employees were forbidden from conducting any personal business while being on call.
By contrast, the 9th Circuit pointed to other California cases that distinguished between situations in which the employer required employees to ride to work in a company vehicle (in which case the travel time must be considered work time) and situations in which the employer simply made transportation available but the employees weren’t required to use it. In the latter situation, even if the employees accepted the employer’s offer to ride to work in the company’s vehicle, the travel time didn’t need to be treated as work time. In closing, the 9th Circuit noted the perverse result of ruling in the employee’s favor: Taco Bell’s offer of a reduced meal, intended as a benefit to the employees, could simply be discontinued.
Taco Bell Corp., Case No. 16-15465 (9th Circuit, July 18, 2019). Takeaway for all Employers Although Taco Bell prevailed—as well it should have—this decision is a reminder that California’s law on meal and rest breaks is very demanding. Other states have their own meal and rest break requirements that are also frequently the subject of employee class action lawsuits. In all those states, employers are wise to have clearly stated meal and rest break policies that make it clear that employees are required to take the breaks and ensure they are completely relieved of work duties and can use their break time as they wish. In addition, employers should take steps to be sure those policies are followed. Bruce Cross practices in the labor practice group at.
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