he ramifications aren’t fully clear, but the California Supreme Court’s ruling in a recent wage and hour case is a setback for business.
As part of a unanimous decision in Murphy v. Kenneth Cole Productions, the court ruled that employees can sue their companies for up to three years of lost wages in meal and rest period cases. Previously no standard existed, though many courts limited wage awards to one year.
“It clarifies a big argument between employers and employees,” said John Quisenberry of the Quisenberry Law Firm, which specializes in wage and hour cases. “The decision triples the amount of damages compared to what the employers were insisting was the rule.”
Lawyers on the other side are less than pleased with the ruling.
“It’s an anti-business, anti-employer decision,” said labor lawyer Robert Naeve of Morrison & Foerster LLP. “If we needed another way to make it difficult to conduct business in California, the Supreme Court just provided it.”
Employers are required to give employees a 30-minute break after five hours worked, and more breaks as the shift wears on. California Labor Code section 512 and California’s Industrial Welfare Commission require employers to provide meal and rest periods during the workday.
Labor Code section 226.7 requires employers to pay one additional hour to employees who have not taken these meal or rest periods.
The Supreme Court case hinged on whether the time in question constituted a wage for the worker, or a penalty for the employer, in addition to how far back employees could sue their employers for lost time.
Following the court’s decision, if disputed time is determined to be a wage, employees can sue their bosses for up to three years of back pay. If the court determines the time is a penalty for the employer, the statute of limitation will be one year.
Quisenberry said he doesn’t see a flood of lawsuits resulting from the decision,because there’s already at least one filed every day in California.
“I have a hard time imagining there being any more than this,” he said.
Employers should post applicable wage orders in the workplace, consider preparing written policies relating to rest periods, train supervisors to enforce them, maintain records of these breaks and consider voluntarily paying workers who haven’t taken breaks, according to Naeve.
Emily Bryson York is a staff writer with the Los Angeles Business Journal.
