Donohue v. AMN Services, LLC
481 P.3d 661, 11 Cal. 5th 58, 275 Cal. Rptr. 3d 422 (2021)
Rule of Law:
California law prohibits employers from using time rounding practices for employee meal periods, as the precision required by meal period provisions is incompatible with rounding and its health and safety objectives. Furthermore, employer time records showing noncompliant meal periods (missed, short, or delayed) raise a rebuttable presumption of meal period violations, applicable at the summary judgment stage.
Facts:
- AMN Services, LLC (AMN) is a healthcare services and staffing company that recruits nurses for temporary contract assignments.
- Kennedy Donohue worked as a nurse recruiter for AMN from September 2012 to February 2014, expected to work eight hours per day and receive a 30-minute meal period by the end of the fifth hour.
- AMN's company policy and trainings specified that meal periods were to be uninterrupted 30-minute breaks where employees were relieved of all duties and free to leave the office.
- Until April 2015, AMN used an electronic timekeeping system called Team Time, which rounded employee time punches (including for meal periods) to the nearest 10-minute increment for calculating work time and compensation.
- This rounding meant a 23-minute lunch from 11:02 a.m. to 11:25 a.m. could be recorded as a 30-minute lunch from 11:00 a.m. to 11:30 a.m., and a meal period starting after 5 hours and 5 minutes could be rounded to start after exactly 5 hours.
- Before September 2012, if Team Time records (after rounding) showed a missed, short, or delayed meal period, AMN assumed a violation and paid premium wages.
- After September 2012, Team Time featured a dropdown menu that appeared only when rounded time records indicated a missed, short, or delayed meal period, prompting employees to explain if they voluntarily chose a noncompliant break or if one was not provided.
- On April 26, 2015, AMN discontinued the rounding policy in Team Time and switched to a new timekeeping system that did not round time entries.
Procedural Posture:
- In April 2014, Kennedy Donohue filed a class action lawsuit against AMN Services, LLC in San Diego County Superior Court (trial court/court of first instance), alleging various wage and hour violations, including meal period claims.
- In October 2015, the trial court certified a class for the meal period claim, encompassing nonexempt California nurse recruiters employed by AMN from April 23, 2010, to April 26, 2015.
- In November 2016, Donohue filed a motion for summary adjudication on the meal period claim, asserting that AMN improperly rounded time records and failed to pay premium wages for noncompliant meal periods.
- AMN filed a cross-motion for summary judgment or, in the alternative, summary adjudication, contending it lacked a uniform policy of denying compliant meal periods and that its rounding policy was proper.
- The trial court granted AMN's motion for summary judgment and denied Donohue's motion for summary adjudication, concluding that AMN's rounding practice for meal periods was proper and that there was insufficient evidence of a policy denying compliant meal periods.
- Donohue appealed the trial court's decision to the California Court of Appeal, Fourth Appellate District, Division One.
- The Court of Appeal affirmed the trial court's judgment, agreeing that rounding time punches for meal periods was permissible and that the rebuttable presumption of meal period violations only applied at the class certification stage, not at summary judgment.
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Issue:
1. Does California law permit employers to use the practice of rounding time punches when recording employee meal periods? 2. Do employer time records showing noncompliant meal periods (missed, short, or delayed) raise a rebuttable presumption of meal period violations at the summary judgment stage?
Opinions:
Majority - Liu, J.
No, California law does not permit employers to use rounding time punches for employee meal periods. The precision mandated by Labor Code section 512 and Wage Order No. 4, requiring meal periods to be "not less than 30 minutes" and taken before specific work hour thresholds (e.g., "more than five hours per day"), is fundamentally incompatible with the imprecise calculations inherent in rounding. The regulatory scheme, which is concerned with small amounts of time and is designed to prevent even minor infringements, emphasizes strict adherence to these precise time requirements to protect employee health and safety. The premium pay structure, where one additional hour of pay is due for any meal period violation regardless of its extent, reinforces that minor infringements are significant and cannot be deemed negligible rounding errors. Unlike wage calculations, where rounding errors might average out over time, the health and safety purposes of meal periods mean that a shorter or delayed meal period on one day cannot be offset by a longer one on another. The Court distinguished See's Candy Shops, Inc. v. Superior Court, which allowed rounding for wage calculations, by highlighting the unique health and safety concerns and the asymmetrical effect of rounding on meal period premium pay (it never triggers premium pay when not owed, but fails to trigger it when owed). The Court also noted that modern technology reduces the administrative burden of precise time tracking. Yes, employer time records showing noncompliant meal periods (missed, short, or delayed) raise a rebuttable presumption of meal period violations at the summary judgment stage. The Court formally adopted Justice Werdegar's concurring opinion in Brinker Restaurant Corp. v. Superior Court, establishing this presumption. This presumption arises from the employer's duty to maintain accurate records of meal periods (Wage Order No. 4, § 7(A)(3)) and applies to all forms of noncompliance (missed, short, or delayed meal periods). The presumption goes to the question of liability and is therefore applicable at summary judgment, not solely at the class certification stage. Placing the burden on the employer to rebut this presumption — by presenting evidence that employees were genuinely relieved of duty during compliant meal periods but voluntarily chose to work, or that they were properly compensated — incentivizes accurate record-keeping and prevents employers from benefiting from inaccurate or incomplete records. The Court clarified that this does not require employers to "police" meal breaks but rather to ensure bona fide relief from duty is provided and accurately recorded. The Court disapproved of Silva v. See’s Candy Shops, Inc. and Serrano v. Aerotek, Inc. to the extent they held this presumption was inapplicable at summary judgment.
Analysis:
This landmark decision by the California Supreme Court significantly strengthens employee protections under state wage and hour laws, particularly for meal periods. By eliminating time rounding for meal periods, the Court underscores the strict adherence required to statutory and wage order provisions, prioritizing employee health and safety over employer administrative convenience. The formal adoption of a rebuttable presumption of liability for noncompliant meal period records, applicable at summary judgment, substantially shifts the burden of proof to employers. This will necessitate more rigorous and precise timekeeping practices and places a higher evidentiary standard on employers defending against meal period claims, making it more challenging for them to obtain summary judgment without demonstrating clear compliance or proper compensation. The ruling is expected to lead to greater enforcement of meal period laws and potentially increase employer liability for past violations.
