California Overtime Claims to include Meals and Rest Time Pay

Sacramento, CACalifornia employers facing lawsuits for unpaid overtime have been handed a new billion-dollar headache. The California Supreme Court has overturned an appeals court decision, and has ruled unanimously that claims for unpaid meal and rest times are the same as claims for unpaid wages, and that such claims can go back as far as three years, not just one year.

Murphy's law
In a decision issued April 16, in the case of John Paul Murphy vs. Kenneth Cole Productions, the Supreme Court of California ruled that certain employees were due payment for meals and rest time not taken, and that there was a three-year statute of limitations on filing such lawsuits.

Justice Carlos R. Moreno, writing the opinion for the court, stated that the relevant statute's "plain language, the administrative and legislative history, and the compensatory purpose of the remedy" qualify the "additional hour" as a "premium wage".

The ruling is expected to have a big impact on future cases of labor law violations. The impact could be felt within days as unpaid meal and rest time claims are added to wage compensation cases already before the courts.

Murphy, who was employed as manager for a retail clothing store, regularly worked nine and 10 hour days, rarely taking a rest break. Only about once in two weeks did he get to enjoy his lunch break without interruption. After working at the store for two years, he quit on June 19, 2002, and filed a wage claim seeking payment of unpaid overtime. He later added a claim for payment for missed meals and rest periods.

When the going gets tough...
The case was an uphill battle for Murphy. He had to go before four tribunals. The state Labor Commissioner ruled in his favor, but the ruling was appealed by the employer to the San Francisco Superior Court. That court again upheld Murphy's claim, awarding him both unpaid overtime and payment for missed meal and rest periods.

Again the company appealed, this time to the State Court of Appeal, which sided with the employer, and reduced Murphy's meal and rest period claim to one year's worth only. This was the decision which has just been overturned by the Supreme Court of California.

The case attracted a great deal of interest, with big guns lined up on both sides of the issue.

Filing briefs on behalf of Murphy were a number of labor organizations including area affiliates of the AFL-CIO, Teamsters and other employee rights organizations. On the employer side were the U.S. Chamber of Commerce, California Chamber of Commerce, California Restaurant Association, National Retail Federation and others.

"The impact of this case is momentous because billions of dollars are at stake in the innumerable class-action suits pending in California..."said the U.S. Chamber's National Chamber Litigation Center in its court brief.

It's not just California bosses who will have to come to grips with the new interpretation of state labor law. Multi-state companies with operations in California will be forced to redefine their policies business-wide, and it is possible that labor law in other states will ultimately be affected by the California decision.

Score one for the little guy
Employer reaction to the ruling is understandably negative. But, for the little guy or gal at work, California's Supreme Court has just brought the right to fair compensation a step closer.