No matter how careful employers are, it is all but certain that at some point disputes will arise between employer and employee. When such situations occur, it is usually in the best interest of the employer to have these disputes resolved in arbitration, rather than in open court.
Arbitration brings numerous advantages to employers. First, arbitration awards are generally confidential. Also, arbitration can resolve disputes quicker than litigation. Arbitration decisions also tend to have more finality than a judge or jury’s decision, as appeals following an arbitrator’s decision rarely occur. Given these benefits, employers often want to require employees to submit employment disputes to arbitration. To do this, employers need an arbitration agreement. Yet to be enforceable, an arbitration agreement must satisfy numerous requirements.
First, an arbitration agreement must provide a mechanism for the selection of a neutral arbitrator. Some arbitration agreements include language that permits the parties to attempt to agree on a neutral arbitrator. Instead of such provisions, the arbitration agreement may provide for an established arbitration service to select the arbitrator, with each party entitled to a veto on disclosure of the arbitrator's past decisions.
Second, the agreement must allow the employee to conduct adequate discovery. At the very least, employees are entitled access to “essential documents and witnesses, as determined by the arbitrator.”
Third, the agreement must allow the employee to recover as much as would be available in a civil trial, such as punitive damages and attorney fees.
Fourth, the agreement must call for a written decision by the arbitrator, which permits a limited form of judicial review.
Fifth, the agreement must limit the share of arbitration costs borne by the employee. If arbitration is offered as a condition of employment, the employer must be prepared to pay all costs "unique" to arbitration, including the arbitrators' fees, meeting room charges, and any other costs that would not have been involved if the case were in court.
Finally, an arbitration agreement must provide “mutuality” between the parties. An arbitration agreement must not be one-sided. For example, an agreement is unfairly one-sided where an employer requires an employee to submit any claims to arbitration, yet the employer is not required to arbitrate when it seeks to prosecute a claim against the employee.
As the previous paragraphs illustrate, arbitration agreements cannot be drafted without some attention to detail. If the above-described requirements are not followed, an employee can have the arbitration agreement invalidated – and the resulting benefits of arbitration are lost. As such, to ensure that employers reap the benefits of their arbitration agreements, it is in their best interest to review them and make sure they comply with the requirements above.
Tuesday, March 10, 2009
Friday, February 13, 2009
The importance of Employee Handbooks
It is not easy being an employer in California. Employment law is always changing. New employees come and go. It is a challenge keeping employees informed of relevant laws and a company’s culture, policies, and procedures. However, a good employee handbook can be invaluable in helping to resolve these problems.
What is an employee handbook?
An employee handbook is a written compilation of a company's policies, procedures, and other important information that is distributed to employees. An employee handbook is different from a personnel policy manual, which is usually addressed to managers and supervisors and provides a more detailed statement of policies and procedures. Typically, smaller companies use only employee handbooks, while larger companies use both employee handbooks and personnel policy manuals.
Companies often find that handbooks become helpful as the number of employees approaches 20. Many companies first implement “informal” handbooks (collections of policies) before publishing an “official handbook.”
Advantages of using an employee handbook
There are numerous benefits to using an employee handbook. Handbooks commit employers to deal with situations in specific ways. They provide for consistency of treatment and reduce the risk of unlawful discrimination claims. Employee handbooks reduce confusion about unstated policies and benefits – less confusion results in fewer lawsuits and morale problems. Handbooks can help eliminate arguments of “arbitrary termination” and can assist in resolving complaints. Perhaps most importantly, employee handbooks aid new employees in understanding a company’s policies and culture.
Concerns regarding the use of employee handbooks
Despite the numerous benefits of implementing an employee handbook, there are some concerns for employers. If an employer fails to abide by its handbook, it may be more likely to be found liable to an aggrieved employee. Employee handbooks are fodder for employee rights attorneys who look for progressive discipline policies that have not been followed or for other deviations from the handbook. There can also be some significant time and expense involved in creating an accurate, thorough employee handbook. Handbooks also require updating as employment laws and the company change.
Preserving the at-will relationship
The biggest concern with employee handbooks is that the handbook will alter the “at-will” nature of employment. California courts have held that policies contained in employee handbooks can create contractual obligations (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 681).
To avoid this unwanted change in the “at-will” status of employees, many employers include disclaimers stating that the handbook does not create a legally enforceable agreement. At-will disclaimers should be prominent – on the cover or first page of the handbook. The language should state clearly that the handbook is not a contract with employees and it expresses only “guidelines” regarding the company's “policies.” Any disclaimer should also expressly state that, with the exception of the at-will policy, all other the policies in the handbook can be modified by the employer at any time without a written revision of the handbook.
Conclusion
This article is not meant to provide an exhaustive analysis of employee handbooks. Rather, the goal of this article is to illustrate the benefits, and potential dangers, associated with them. While a thorough, accurate employee handbook does take time to create and modify, employers will find the benefits far exceed the effort involved.
What is an employee handbook?
An employee handbook is a written compilation of a company's policies, procedures, and other important information that is distributed to employees. An employee handbook is different from a personnel policy manual, which is usually addressed to managers and supervisors and provides a more detailed statement of policies and procedures. Typically, smaller companies use only employee handbooks, while larger companies use both employee handbooks and personnel policy manuals.
Companies often find that handbooks become helpful as the number of employees approaches 20. Many companies first implement “informal” handbooks (collections of policies) before publishing an “official handbook.”
Advantages of using an employee handbook
There are numerous benefits to using an employee handbook. Handbooks commit employers to deal with situations in specific ways. They provide for consistency of treatment and reduce the risk of unlawful discrimination claims. Employee handbooks reduce confusion about unstated policies and benefits – less confusion results in fewer lawsuits and morale problems. Handbooks can help eliminate arguments of “arbitrary termination” and can assist in resolving complaints. Perhaps most importantly, employee handbooks aid new employees in understanding a company’s policies and culture.
Concerns regarding the use of employee handbooks
Despite the numerous benefits of implementing an employee handbook, there are some concerns for employers. If an employer fails to abide by its handbook, it may be more likely to be found liable to an aggrieved employee. Employee handbooks are fodder for employee rights attorneys who look for progressive discipline policies that have not been followed or for other deviations from the handbook. There can also be some significant time and expense involved in creating an accurate, thorough employee handbook. Handbooks also require updating as employment laws and the company change.
Preserving the at-will relationship
The biggest concern with employee handbooks is that the handbook will alter the “at-will” nature of employment. California courts have held that policies contained in employee handbooks can create contractual obligations (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 681).
To avoid this unwanted change in the “at-will” status of employees, many employers include disclaimers stating that the handbook does not create a legally enforceable agreement. At-will disclaimers should be prominent – on the cover or first page of the handbook. The language should state clearly that the handbook is not a contract with employees and it expresses only “guidelines” regarding the company's “policies.” Any disclaimer should also expressly state that, with the exception of the at-will policy, all other the policies in the handbook can be modified by the employer at any time without a written revision of the handbook.
Conclusion
This article is not meant to provide an exhaustive analysis of employee handbooks. Rather, the goal of this article is to illustrate the benefits, and potential dangers, associated with them. While a thorough, accurate employee handbook does take time to create and modify, employers will find the benefits far exceed the effort involved.
Thursday, January 8, 2009
Protecting “trade secrets”
In my previous article, I discussed the unenforceability of non-compete agreements as applied to employees. This article relates to a similar issue – trade secrets.
A trade secret is information, which includes formulas, patterns, programs, customer lists in certain situations, devices, techniques or processes that “(1) Derives independent economic value...from not being generally known to the public or to persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy” (Civil Code section 3426.1)
It is not enough to simply show that the information has value. In order for information to be classified as a trade secret, other businesses must be unaware of the information and must be able to put that information, if it were known to them, to beneficial use (Abba Rubber Co. v. Sequist (1991) 235 Cal.App.3d 1). Courts have outlined additional requirements for information to be considered a trade secret. The information must be (1) closely guarded, (2) an investment of a considerable amount of time and expense by the employer, and (3) not readily available to the public (State Farm v. Dempster (1959) 174 Cal.App.2d 418).
The following are some examples of valid trade secrets:
• Customer lists that have been compiled with significant time and/or money. Such a list would be a trade secret if the employer has refined a general customer list by noting particular products or other preferences for each customer
• Methods or sequences of manufacturing
• A product formula that is closely guarded (i.e. Coca-Cola recipe)
• The identity of a source of raw material not generally known in the industry
• Compensation and other financial data
• Marketing strategies
• Labor relations strategies
• Research into new materials or processes, and
• Pending projects
Trade secrets are of course different from general knowledge and skills. As long as an employee does not use any of the previous employer’s trade secrets, the employee is free to use the general knowledge, skill, and experience acquired from prior employment, and even solicit some of the same clients, in order to better succeed when working for later employers (American Alloy Steel Corp. v. Ross (1957) 149 Cal.App.2d 215). As outlined in last month’s article, non-compete agreements are only enforceable if they relate to the sale of a business or partnership.
As outlined above, the legal standard for properly classifying information as a trade secret is high. Not every “secret” is legally a “trade secret.” Yet given the importance of protecting valuable company information, becoming conversant with the rules regarding trade secrets can reap large rewards.
A trade secret is information, which includes formulas, patterns, programs, customer lists in certain situations, devices, techniques or processes that “(1) Derives independent economic value...from not being generally known to the public or to persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy” (Civil Code section 3426.1)
It is not enough to simply show that the information has value. In order for information to be classified as a trade secret, other businesses must be unaware of the information and must be able to put that information, if it were known to them, to beneficial use (Abba Rubber Co. v. Sequist (1991) 235 Cal.App.3d 1). Courts have outlined additional requirements for information to be considered a trade secret. The information must be (1) closely guarded, (2) an investment of a considerable amount of time and expense by the employer, and (3) not readily available to the public (State Farm v. Dempster (1959) 174 Cal.App.2d 418).
The following are some examples of valid trade secrets:
• Customer lists that have been compiled with significant time and/or money. Such a list would be a trade secret if the employer has refined a general customer list by noting particular products or other preferences for each customer
• Methods or sequences of manufacturing
• A product formula that is closely guarded (i.e. Coca-Cola recipe)
• The identity of a source of raw material not generally known in the industry
• Compensation and other financial data
• Marketing strategies
• Labor relations strategies
• Research into new materials or processes, and
• Pending projects
Trade secrets are of course different from general knowledge and skills. As long as an employee does not use any of the previous employer’s trade secrets, the employee is free to use the general knowledge, skill, and experience acquired from prior employment, and even solicit some of the same clients, in order to better succeed when working for later employers (American Alloy Steel Corp. v. Ross (1957) 149 Cal.App.2d 215). As outlined in last month’s article, non-compete agreements are only enforceable if they relate to the sale of a business or partnership.
As outlined above, the legal standard for properly classifying information as a trade secret is high. Not every “secret” is legally a “trade secret.” Yet given the importance of protecting valuable company information, becoming conversant with the rules regarding trade secrets can reap large rewards.
Wednesday, November 5, 2008
California Supreme Court confirms that non-compete agreements are illegal when applied to employees
Loyal customers are the lifeblood of any business. As such, a business’s customer list may be its most valuable asset. Business owners need to ensure that their customers stay their customers. To do so, many businesses use non-compete agreements. While these agreements can provide very real benefits relating to the sale and purchase of a business, the California Supreme Court recently confirmed that such agreements are unlawful when applied to employees.
Business and Professions Code section 16600 is only thirty words long: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Despite this simple, recent cases have battled for years in an effort to clarify the legal effect of non-compete agreements.
The key case in this arena is Edwards v. Arthur Andersen LLP. In this case, Raymond Edwards worked for Arthur Andersen as an accountant. The company sold part of its business, including the division where Edwards worked. Edwards had previously entered into a non-compete agreement which prohibited him from performing certain professional services for Arthur Andersen clients for 12 months and from soliciting Arthur Andersen personnel for 18 months.
The trial court held that the non-compete agreement was valid under the “narrow restraint” exception followed by some federal courts. This “narrow restraint” exception provides that a non-compete agreement does not violate Section 16600 if it imposes a limited restriction and “leaves a substantial portion of the market available to the employee.” The Court of Appeal disagreed, finding that the “narrow restraint” exception is invalid as applied to non-compete agreements.
The California Supreme Court agreed with the Court of Appeal and rejected the “narrow restraint” doctrine. The court reasoned that “Section 16600 is unambiguous, and if the Legislature intended the statute to apply only to restraints that were unreasonable or overbroad, it could have included language to that effect” (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 950).
Employers are now bound by the Edwards decision. This means that non-compete agreements are unenforceable unless they relate to the sale of a business. Employers should review personnel documentation to make sure that their employees are not subjected to unlawful non-compete agreements. Also, businesses must not attempt to enforce illegal agreements, even if an employee has previously agreed.
Next month’s article will discuss the topic of trade secrets, and the steps employers can take to ensure that their trade secrets are protected.
Business and Professions Code section 16600 is only thirty words long: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Despite this simple, recent cases have battled for years in an effort to clarify the legal effect of non-compete agreements.
The key case in this arena is Edwards v. Arthur Andersen LLP. In this case, Raymond Edwards worked for Arthur Andersen as an accountant. The company sold part of its business, including the division where Edwards worked. Edwards had previously entered into a non-compete agreement which prohibited him from performing certain professional services for Arthur Andersen clients for 12 months and from soliciting Arthur Andersen personnel for 18 months.
The trial court held that the non-compete agreement was valid under the “narrow restraint” exception followed by some federal courts. This “narrow restraint” exception provides that a non-compete agreement does not violate Section 16600 if it imposes a limited restriction and “leaves a substantial portion of the market available to the employee.” The Court of Appeal disagreed, finding that the “narrow restraint” exception is invalid as applied to non-compete agreements.
The California Supreme Court agreed with the Court of Appeal and rejected the “narrow restraint” doctrine. The court reasoned that “Section 16600 is unambiguous, and if the Legislature intended the statute to apply only to restraints that were unreasonable or overbroad, it could have included language to that effect” (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 950).
Employers are now bound by the Edwards decision. This means that non-compete agreements are unenforceable unless they relate to the sale of a business. Employers should review personnel documentation to make sure that their employees are not subjected to unlawful non-compete agreements. Also, businesses must not attempt to enforce illegal agreements, even if an employee has previously agreed.
Next month’s article will discuss the topic of trade secrets, and the steps employers can take to ensure that their trade secrets are protected.
Tuesday, October 7, 2008
California’s Work Sharing Program: An Option for Employers in Trying Economic Times
It is no secret that many employers in California are experiencing trying times. As the economy dips further downward, many employers will contemplate layoffs as a way to stay afloat. While layoffs have a devastating effect on the employees let go, as well as on morale at a company, often a layoff is the only option to minimize financial hardship. Yet California employers should be aware that there is an alternative to layoffs – namely California’s Work Sharing or “Partial Unemployment” Program.
The goal of the Work Sharing program is to help both employee and employer. The employee is spared the difficult period of total unemployment. The employer can avoid the high costs of hiring and retraining new employees once the economy improves. Here is how the program works, according to the Employment Development Department (EDD):
In many other states if a business with 100 employees faces a temporary setback and must reduce its work force by 20%, the employer has no choice but to layoff 20 employees. Under California’s Work Sharing program, an employer facing the same situation could file a Work Sharing plan with EDD reducing the work week of all employees from five days to four days (a 20% reduction). The employees would be eligible to receive 20% of their weekly unemployment insurance benefits. Under this plan everyone benefits. The employer is able to keep a trained work force intact during a temporary setback and no employees lose their jobs.
In essence, the program gives an employer the option to, instead of firing the employees, allow employees to work a reduced schedule and collect the percentage of their weekly unemployment insurance benefit amount equal to the percentage of their wage reduction for that week.
To be eligible, an employer must show that: (1) a minimum of 10% of the regular permanent workforce requires a reduction in wages and hours worked, and (2) at least two employees, but not less than 10% of the regular permanent workforce, will participate in the program. Employers with employees subject to collective bargaining agreements must obtain written approval from the bargaining agent. Finally, employers are required to submit their plan for approval to the EDD using form DE 8686 (available at http://www.edd.ca.gov/pdf_pub_ctr/de8686.pdf).
It is becoming more apparent that the economy will not turn around in the near future. Thus, many employers will be placed in the difficult situation of having to avoid financial adversity on the one hand, while wanting to protect their employees on the other. California’s Work Sharing Program gives employers the opportunity to do both.
The goal of the Work Sharing program is to help both employee and employer. The employee is spared the difficult period of total unemployment. The employer can avoid the high costs of hiring and retraining new employees once the economy improves. Here is how the program works, according to the Employment Development Department (EDD):
In many other states if a business with 100 employees faces a temporary setback and must reduce its work force by 20%, the employer has no choice but to layoff 20 employees. Under California’s Work Sharing program, an employer facing the same situation could file a Work Sharing plan with EDD reducing the work week of all employees from five days to four days (a 20% reduction). The employees would be eligible to receive 20% of their weekly unemployment insurance benefits. Under this plan everyone benefits. The employer is able to keep a trained work force intact during a temporary setback and no employees lose their jobs.
In essence, the program gives an employer the option to, instead of firing the employees, allow employees to work a reduced schedule and collect the percentage of their weekly unemployment insurance benefit amount equal to the percentage of their wage reduction for that week.
To be eligible, an employer must show that: (1) a minimum of 10% of the regular permanent workforce requires a reduction in wages and hours worked, and (2) at least two employees, but not less than 10% of the regular permanent workforce, will participate in the program. Employers with employees subject to collective bargaining agreements must obtain written approval from the bargaining agent. Finally, employers are required to submit their plan for approval to the EDD using form DE 8686 (available at http://www.edd.ca.gov/pdf_pub_ctr/de8686.pdf).
It is becoming more apparent that the economy will not turn around in the near future. Thus, many employers will be placed in the difficult situation of having to avoid financial adversity on the one hand, while wanting to protect their employees on the other. California’s Work Sharing Program gives employers the opportunity to do both.
Thursday, September 4, 2008
California employers avoid sick leave bombshell
California employers may not be aware of it, but they have all dodged a bullet. A controversial new law, Assembly Bill 2716, that would have required all California employers to provide paid sick leave to all employees will not be adopted during this legislative session. The California Senate Appropriations Committee recently decided to hold up consideration of AB 2716.
Overview of AB 2716
AB 2716 was modeled after San Francisco’s sick leave regulation - which was that paid sick days had to be provided to employees for the employee’s personal illness, to care for sick family members, or to recover from domestic violence or a sexual assault. The bill covers all employees, including government employees. However, it does not cover employees covered by a collective bargaining agreement that provides paid sick days.
Under the new bill, after working for seven calendar days, full and part-time employees accrue paid sick days at a rate of one hour per 30 hours worked. Employees can then use this accrued, paid sick time beginning on the 90th calendar day of employment, after which the paid sick days can be used as they are accrued. Employees would be allowed to carry over unused, accrued sick time from year to year.
Employers would be allowed, however, to limit the number of paid sick days accrued each year. “Small business employers” (10 or fewer employees) could limit employees to 40 hours or five sick days each year. All other employers could set limits of 72 hours or nine sick days per year.
Under the new bill, employers would not be required to pay employees for their accrued, unused sick time at termination or resignation. However, if an employee leaves an employer and is rehired by the same employer within one year, the employer would have to reinstate any previously accrued, unused paid sick days.
A marked change from current sick leave laws
Under current California law, employers are not required to offer sick leave to employees – although many do. Also, currently in California, if sick days are offered, they do not accrue nor vest, meaning that any unused sick leave may be forfeited at the end of a designated period of time.
Assembly Bill 2716 would change all this. And the change may be coming. The California Labor Federation (AFL-CIO) has promised to work to reintroduce the bill in the 2009 legislative session.
Employers, if you want input on this potential legislation, contact your local Chamber’s governmental committee.
Overview of AB 2716
AB 2716 was modeled after San Francisco’s sick leave regulation - which was that paid sick days had to be provided to employees for the employee’s personal illness, to care for sick family members, or to recover from domestic violence or a sexual assault. The bill covers all employees, including government employees. However, it does not cover employees covered by a collective bargaining agreement that provides paid sick days.
Under the new bill, after working for seven calendar days, full and part-time employees accrue paid sick days at a rate of one hour per 30 hours worked. Employees can then use this accrued, paid sick time beginning on the 90th calendar day of employment, after which the paid sick days can be used as they are accrued. Employees would be allowed to carry over unused, accrued sick time from year to year.
Employers would be allowed, however, to limit the number of paid sick days accrued each year. “Small business employers” (10 or fewer employees) could limit employees to 40 hours or five sick days each year. All other employers could set limits of 72 hours or nine sick days per year.
Under the new bill, employers would not be required to pay employees for their accrued, unused sick time at termination or resignation. However, if an employee leaves an employer and is rehired by the same employer within one year, the employer would have to reinstate any previously accrued, unused paid sick days.
A marked change from current sick leave laws
Under current California law, employers are not required to offer sick leave to employees – although many do. Also, currently in California, if sick days are offered, they do not accrue nor vest, meaning that any unused sick leave may be forfeited at the end of a designated period of time.
Assembly Bill 2716 would change all this. And the change may be coming. The California Labor Federation (AFL-CIO) has promised to work to reintroduce the bill in the 2009 legislative session.
Employers, if you want input on this potential legislation, contact your local Chamber’s governmental committee.
Monday, August 4, 2008
Employers finally get a break when it comes to meal breaks
At first glance, California’s law regarding meal and rest breaks seems fairly simple. Employees who work more than five hours are entitled to a meal break of 30 minutes or more. Employers must also provide rest breaks of at least ten minutes for each four hours worked by an employee. Yet these deceptively simple rules have been anything but in the hands of the courts.
In 2007, in a landmark decision, the California Supreme Court held that missed breaks are a form of “wages,” and not a “penalty” meaning that employees can go back three years to recover missed breaks.
Last month, the Fourth District Court of Appeals, in the case of Brinker Restaurant Corporation v. Superior Court of San Diego, handed down another important decision relating to meal breaks. Prior to this ruling, meal breaks and rest breaks were treated differently in one very key aspect: it was the employer’s duty to allow employees to take rest breaks, and to ensure that employees take meal breaks. Not so anymore.
The Court of Appeals ruled that meal breaks “need only be available, not ensured.” The court’s reasoning was practical in nature:
“[P]ublic policy does not support the notion that meal breaks must be ensured. If this were the case, employers would be forced to police their employees and force them to take meal breaks. With thousands of employees working multiple shifts, this would be an impossible task. If they were unable to do so, employers would have to pay an extra hour of pay any time an employee voluntarily chose not to take a meal period, or to take a shortened one."
Governor Schwarzenegger expressed his pleasure with the ruling as well: "The confusing and conflicting interpretations of the meal and rest period requirements have harmed both employees and employers. Today's decision promotes the public interest by providing employers, employees, the courts and the labor commissioner the clarity and precedent needed to apply meal and rest period requirements consistently.”
The ruling constitutes a major victory for employers, a rarity in California’s largely pro-employee law system. Yet employers are not completely off the hook when it comes to meal breaks. The ruling forbids employers from impeding, discouraging or dissuading employees from taking meal breaks. This means that employers must actually provide a work environment where an employee is free to take meal breaks that are real breaks, i.e. where they are relieved of all duty and free to leave the premises. A “meal break” that consists of an employee being required to answer phones or plow through a stack of paperwork while eating at their desk is insufficient.
In 2007, in a landmark decision, the California Supreme Court held that missed breaks are a form of “wages,” and not a “penalty” meaning that employees can go back three years to recover missed breaks.
Last month, the Fourth District Court of Appeals, in the case of Brinker Restaurant Corporation v. Superior Court of San Diego, handed down another important decision relating to meal breaks. Prior to this ruling, meal breaks and rest breaks were treated differently in one very key aspect: it was the employer’s duty to allow employees to take rest breaks, and to ensure that employees take meal breaks. Not so anymore.
The Court of Appeals ruled that meal breaks “need only be available, not ensured.” The court’s reasoning was practical in nature:
“[P]ublic policy does not support the notion that meal breaks must be ensured. If this were the case, employers would be forced to police their employees and force them to take meal breaks. With thousands of employees working multiple shifts, this would be an impossible task. If they were unable to do so, employers would have to pay an extra hour of pay any time an employee voluntarily chose not to take a meal period, or to take a shortened one."
Governor Schwarzenegger expressed his pleasure with the ruling as well: "The confusing and conflicting interpretations of the meal and rest period requirements have harmed both employees and employers. Today's decision promotes the public interest by providing employers, employees, the courts and the labor commissioner the clarity and precedent needed to apply meal and rest period requirements consistently.”
The ruling constitutes a major victory for employers, a rarity in California’s largely pro-employee law system. Yet employers are not completely off the hook when it comes to meal breaks. The ruling forbids employers from impeding, discouraging or dissuading employees from taking meal breaks. This means that employers must actually provide a work environment where an employee is free to take meal breaks that are real breaks, i.e. where they are relieved of all duty and free to leave the premises. A “meal break” that consists of an employee being required to answer phones or plow through a stack of paperwork while eating at their desk is insufficient.
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