Donohue v. AMN Servs., LLC, 2021 WL 728871 (Cal. S. Ct. 2021)

A unanimous California Supreme Court issued its long-awaited decision in this case, answering two important questions about meal periods:  (1) Employers cannot engage in the practice of rounding time punches in the meal period context; and (2) time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage.

The timekeeping system used by the employer rounded all employee punch times to the nearest 10-minute increment—including those reflecting meal periods.  As a result, for example, if an employee punched out for lunch at 11:02 a.m. (rounded back to 11:00 a.m.) and punched back in at 11:25 a.m. (rounded forward to 11:30 a.m.), the system recorded a 30-minute meal period (even though only 23 minutes had actually elapsed).  When an employee’s rounded meal punches indicated that a meal was missed, shorter than 30 minutes, or late (e.g., commencing after more than five hours), the system provided a drop-down menu by which an employee was asked to indicate either that the missed, late, or short meal period was the result of:  (1) the employee’s own choice; or (2) the press of work.  Only if the employee selected the latter (press of work) would the employer credit the employee with a meal premium of one additional hour of pay at the regular rate of compensation.

While the Supreme Court recognized that time rounding was, in general, permitted under federal law and prior California decisions, it decided not to follow that authority in the case of meal periods.  Instead, citing “health and safety concerns” that underlie meal period requirements, the Court distinguished “the meal period context from the wage calculation context, in which the practice of rounding time punches was developed” and noted that “even relatively minor infringements on meal periods can cause substantial burdens to the employee.”  In dicta, the Court took a swipe at prior decisions that had endorsed rounding, in general, noting that, “[a]s technology continues to evolve, the practical advantages of rounding policies may diminish further.”

The Court went on to endorse a concurrence by Justice Werdegar in Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012), oft-cited by plaintiffs’ lawyers, in which she suggested that if an employer’s records did not reflect a compliant meal period, it would raise a rebuttable presumption that none was provided.  However, the Court did provide helpful clarification about how employers could overcome such a presumption:  “by presenting evidence that employees were compensated for noncompliant meal[s] … or that they had in fact been provided compliant meal periods during which they chose to work.”  And the Court reiterated its prior holding from Brinker that an “employer is not liable if … [an] employee chooses to take a short or delayed meal period or no meal period at all” and affirmed there is no need “to police meals to make sure no work is performed.”