In California, employers must provide employees a net thirty-minute meal period—exclusive of preparatory and conclusory activities such as travel time and changing time. The first meal period must commence no later than the end of the fifth hour worked, and where employees work more than 10 hours, a second meal period must commence no later than the end of the tenth hour worked. Employers must keep records of the start and end of each meal period.

In November 2018, California’s Fourth District Court of Appeal issued a decision (Carrington v. Starbucks Corporation) that demonstrates the importance of adopting meal period policies and practices that strictly comply with California law. The plaintiff, a barista, worked for Starbucks for approximately five months and alleged that she had not received duty-free meal periods before working more than five hours on at least two occasions. She filed a claim for civil penalties under the Labor Code Private Attorneys General Act (PAGA), on behalf of herself and all other similarly aggrieved employees of Starbucks in California.

Starbucks’s “Slightly More” Policy

Starbucks provided each of its newly-hired employees, known as “partners”, with a policy that stated “[a]ll partners in nonexempt jobs receive an uninterrupted, 30-minute meal break if scheduled to work a shift of a minimum duration.” Shifts “of a minimum duration” were those scheduled to exceed five hours. Accordingly, for all shifts of exactly five hours or less, Starbuck’s employee scheduling software did not allot time for a meal period to be taken. However, if an employee was scheduled to work more than five hours, the program would automatically schedule a meal period during the employee’s shift.

Problems arose when employees who were scheduled to work exactly five hours or less ended up actually working a shift that exceeded five hours. In a typical case, these prolonged shifts went less than 15 minutes beyond the fifth hour. When this happened, Starbucks’s policy required supervisors to determine why the shift went beyond five hours. In brief, if the shift was prolonged at the direction of management, a meal period penalty was to be paid. However, if the shift was prolonged (i.e., “slightly more than five hours”) not due to any decision of management, but simply because the employee clocked in early or clocked out late, no meal period penalty was to be paid.

This policy was known as the “slightly more policy.” Starbucks’s written policies emphasized that payment of the meal period penalty was not automatic; the manager had to act to pay premiums due. Thus, the managers were delegated the task of deciding whether a meal period was provided and whether a penalty needed to be paid.

Employee payroll records demonstrated that, in the vast majority of instances where an employee who was scheduled to work less than five hours, but worked an initial or total shift in excess of five hours but shorter than five and a quarter hours (such that they were not provided a timely meal period under Starbucks’s policy), they were not paid the meal period premium. Altogether, the court found this was substantial evidence to support the conclusion that Starbucks’s policies and practices resulted in numerous instances in which employees working “slightly more” than five hours were neither provided meal breaks nor paid meal period premiums, in violation of the law.

One of the arguments advanced by Starbucks was that employees actually skipped or delayed breaks for personal reasons (i.e., to make themselves a drink before going on break). However, the court found that due to lack of documentation, this testimony was more conjecture than evidence and was insufficient to rebut the violations established by the plaintiff.

De Minimis Exception

Starbucks attempted to argue that any time worked by employees beyond their scheduled five hour shift was de minimis and should be disregarded. Citing the California Supreme Court’s decision in Troester v. Starbucks Corporation, the Court of Appeal rejected the argument and pointed out that because the employees’ work time was not administratively impossible or impractical to record, it was not de minimis.

For more information on the Troester case, read our blog post here.

PAGA Penalties and Good Faith Compliance

In Carrington, the plaintiff requested penalties in excess of $70 million, which was based on a $25 to $75 penalty per violation. The trial court instead awarded $5 per penalty and stated this reduction was warranted because imposing the maximum penalty would be unjust, arbitrary, and oppressive based on Starbucks’s “good faith attempts” to comply with meal period obligations and because the court found the violations were minimal. The Court of Appeal affirmed the lower court’s reduced award of a $150,000 penalty under PAGA.

To read the opinion in Carrington v. Starbucks, click here.

Recommendations

• Remember that even a few minutes can make a big difference under California law. It is not advisable for employers to have a policy or practice that allows for even “slight” violations of California wage and hour law.
• It is the best practice for employers to document any reasons why employees do not take timely and/or fully compliant meal periods.
• Retain qualified employment counsel to review and update your company’s wage and hour policies, procedures, and practices on an annual basis. An employment attorney may recommend substantial or minimal changes based on new case decisions and recent legislation. California wage and hour law changes frequently.
• Follow Sutton Hague Law Corporation’s Events page and register for live or online wage and hour seminars.

Brett Sutton will discuss this case, along with other important legal developments, in more detail during the South Tahoe Chamber-sponsored live seminar in Stateline, NV on January 16, 2019, entitled “Tahoe Chamber Annual Employment Law Update Workshop.” To register, call 775-588-1728 or email Emily@tahoechamber.org. He will also be at the Visalia Chamber of Commerce’s live seminar on January 31, 2019, entitled “2019 Legal Update Workshop” in Visalia, California.  To register visit Visaliachamber-dev.chambermaster.com or call 559-734-5876.