Dive Brief:
- Ikea U.S. Retail has agreed to pay $7.5 million to settle a class action lawsuit alleging the retailer violated California law by failing to provide proper paid rest breaks, among other claims. A federal judge gave the settlement preliminary approval June 17 (Cahilig et al v. Ikea U.S. Retail, LLC, No. 19-cv-01182 (C.D. Cali. June 17, 2020)).
- The plaintiffs contended that Ikea's written rest period policy violated California law because it required employees "to stay on the premises during paid rest breaks" and to take breaks "in either the Staff Café or other designated non-work areas." The California Supreme Court has held that employers must "relinquish control over how employees spend their time" during rest periods, the court said in the order. Ikea also failed to pay wages owed in a timely manner and provide accurate wage statements, the plaintiffs alleged.
- The 6,400 class members will get about 75% of the total amount of the award with the rest going toward attorneys' fees and costs. The $7.5 million settlement represents 44% of the realistic potential exposure in this case, the court said, adding that "in light of the significant hurdles to recovery if litigation were to continue, it appears that the settlement agreement reflects a fair result."
Dive Insight:
This case dealt with California law, which is typically more generous to workers than federal law. In general, California's non-exempt employees must be given rest breaks and meal periods after working a certain number of hours. Employers in the state must allow employees to take a 10-minute break for every four hours worked. The breaks should be provided during the middle of the work period and employees must be relieved of all duties.
Employers not subject to such state and local laws generally need not provide breaks because the requirements of federal law are different. "Federal law does not require lunch or coffee breaks," according to the U.S. Department of Labor (DOL), but when employers offer short breaks, usually lasting from five to 20 minutes, federal law considers the breaks compensable.
The U.S. Supreme Court has declined to address the compensability of rest breaks, failing to resolve alleged disagreement between the federal appellate courts and DOL.
