California Supreme Court to Hear Case Regarding Missed Meal and Rest Periods

On Wednesday, February 22, 2006, the California Supreme Court agreed to hear a case involving firm client Kenneth Cole in Murphy v. Kenneth Cole Productions, which involves compensation for missed meals and breaks, an issue which has divided the state’s appeals courts in two other matters.  The state Supreme Court will decide whether payments for missed meal and rest periods constitutes penalties or wages.  The decision will affect the statute of limitations applied to offending employers.  If payments for missed breaks are ruled to be wages, then complaining employees would have four years to seek restitution.  If the payments are ruled to be penalties, employees would have only one year.

The February 24 issue of The Recorder (“Calif.’s High Court Takes Up Issue Plaguing DLSE”) and the February 23 issues of the San Francisco Daily Journal and the Los Angeles Daily Journal (“State High Court to Resolve Rest Break Issue”) all published articles detailing the Court’s decision to hear the case and the issues involved.  The article in The Recorder quoted Robert Tollen’s answer and cross-petition on behalf of Kenneth Cole which argues that any back pay employees receive from employers in meal break cases qualifies as a “penalty.”

“The additional hour of pay imposed by Labor Code Section 226.7 is in addition to and apart from actual losses incurred,”  Robert wrote.  “It does not pay for time worked, which must be separately paid.  It does not compensate for injuries on the job or for other potential consequences of being denied a meal or rest period.  It punishes an employer for violating its meal and rest period obligations.”