Dive Brief:
- Taco Bell did not violate California law by requiring that workers remain on site during breaks if they purchased the restaurant's food at a discount, the 9th U.S. Circuit Court of Appeals has held (Rodriguez et al. v. Taco Bell Corp., No. 16-15465 (9th Cir., July 18, 2018)).
- In a putative class action, Bernardina Rodriguez alleged that Taco Bell’s on-premises discount policy subjected the employees to sufficient employer control to make the time employees spent eating the meals working time under California law. Taco Bell offered 30-minute meal breaks in compliance with California’s requirements; it also allowed employees to purchase a meal from the restaurant at a discount, provided they ate the meal in the restaurant, according to court documents. Taco Bell said the policy is intended to prevent workers from buying discounted food for family and friends. Employees were free to leave the premises and eat elsewhere, or to purchase food at full price for off-site consumption. A federal district court agreed with the eatery that the policy did not violate California law because the employees were free to use their breaks in any way they wished.
- On appeal, the 9th Circuit affirmed. A three-judge panel found no violation because Taco Bell relieved employees of all duties during the break and exercised no control over the break within the meaning of California law.
Dive Insight:
The applicable regulation governing meal periods, rest breaks, and overtime pay in the restaurant industry is California Wage Order 5–2001, the 9th Circuit noted in its opinion. It requires that employees be relieved of “all duty” during a meal period. In addition, non-exempt employees must be given rest breaks and meal periods after working a certain number of hours. Employees who work more than five hours in a day must be given a meal period of “not less than 30 minutes.” Employees who work more than 10 hours in a day must be provided a second meal period of the same duration. The state law also requires that if an employer mandates that employees eat on the premises, then employers must set aside a suitable place for that purpose.
The remedy for failure to provide mandatory breaks is premium wages: “one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided,” the court said.
In Rodriguez, the plaintiff contended that she was entitled to that premium rate for the time spent on the employer’s premises eating the discounted meals during her meal breaks because she was under sufficient employer control to render the time compensable. Neither the trial court nor the appeals court agreed — a particularly notable development in California and the 9th Circuit where legislation and case law tends to favor employees.
Employers not subject to such state and local laws generally need not provide breaks, according to the U.S. Department of Labor (DOL). When they do, however, they must be paid if they're only short rest breaks. DOL says this means less than 20 minutes, but the courts don't necessarily agree. In fact, the U.S. Supreme Court just last month declined to address the compensability of rest breaks, failing to resolve alleged disagreement between the federal appellate courts and DOL.