A Multi-Million Dollar Question: Do Your Employees Receive Legally Sufficient Meal and Rest Breaks?

A Washington appellate court recently affirmed a trial court’s award of at least $5.3 million in damages, attorneys’ fees, and other relief to a class of nearly 500 employees who contended they did not receive legally compliant meal and rest breaks over a period of nine years. See Hill v. Garda CL NorthwestInc., No. 74617-1-1 (Wash. Ct. App. Div. I, March 27, 2017).

This ruling well illustrates how liability for seemingly small wage-hour violations can quickly escalate when the issue impacts a large group of employees for a significant period of time. It also reinforces the practical importance of meal and rest period compliance, and it extends Washington law by three new rulings: (1) meal period violations are “wage” violations subject to monetary remedies; (2) prejudgment interest may not be awarded in addition to double damages; and (3) private sector employees outside the construction trades cannot waive their meal periods through a union agreement.

Sobering Wage-Hour Math. The trial court awarded $4,209,596.61 in back wages for meal and rest period violations, as well as $1,127,734.50 in attorneys’ fees to the employees’ counsel. The employer disputed the attorney fees award, but the court of appeals affirmed it and ruled that additional fees should be awarded for work on appeal.

However, the appellate court reduced the employer’s liability in two ways:

1. The court ruled it was improper to award both prejudgment interest and double damages for the same violations, because prejudgment interest is not available when the plaintiff receives punitive (double) damages. The trial court had awarded $2,350,255.62 in prejudgment interest, but this award was reversed to the extent it related to the rest period violations, as to which double damages were properly awarded.

2. The court held that the $1,668,235.62 double damages award must be reduced, because the meal period violations were not “willful” under Washington law. Instead, the employer had a “bona fide dispute” about whether the employees had waived their meal periods through collective bargaining agreement (CBA) provisions calling for on-duty meal periods, given that Washington law on this topic previously was unclear.

The opinion doesn’t indicate how much these rulings will reduce the employer’s liability. If meal period damages are 60% of the liability, then the prejudgment interest would be about $1.4 million, and the double damages would be about $667,000, for a total judgment of about $7.4 million (plus further attorneys’ fees).

The Importance of Rest and Meal Period Compliance. A decades-old Washington state regulation requires that non-exempt employees be allowed at least one 10-minute paid rest period for each four-hour work period, as well as at least 30 minutes of paid or unpaid meal period time during any shifts that last at least five hours. See WAC 296-126-092 (adopted in 1976).

Initially, there was little controversy over these break requirements. However, about 15 years ago, the Washington Supreme Court ruled that violations of the state’s rest period regulation qualified as “wage” violations that entitled employees to be paid a second time for this already-paid time. See Wingert v. Yellow Freight SystemsInc., 146 Wn.2d 841 (2002). Wingert further held that employees would recover their attorneys’ fees and costs, as well as double damages, if their employer’s conduct was “willful.” Thereafter, Washington break litigation has snowballed.

What Makes a Rest Break Legally Sufficient?  In Hill, the trial court ruled that the defendant armored truck employer violated employees’ rest period rights “because its official policies do not promote opportunities for meaningful breaks.” Instead, employees “had to remain vigilant and were not free to conduct personal business” during the course of their shifts. A corporate witness reportedly “conceded that [the employer] could not provide vigilance-free breaks due to the nature of the job performed” by the armored car employees.

For legal procedural reasons, the court of appeals refused to consider written testimony from some employees that they received adequate rest breaks, during which they were able to stop their work duties and make personal choices about how they spent this time. Moreover, the court reasoned, “It is not enough for employers to allow employees to take breaks, rather ‘employers must affirmatively promote meaningful break time’” (quoting Demetrio v. Sakuma Brothers Farms, Inc., 183 Wn.2d 649, 658 (2015)). Under the Washington Supreme Court’s opinion in Demetrio, “[i]f a workplace culture ‘encourages employees to skip breaks’ it violates the regulation.”

The Hill court contrasted the vigilance required in the armored car industry with an earlier ruling that on-site domestic violence shelter employees who were “on call” during their rest breaks still received lawful rest periods. See White v. Salvation Army, 118 Wn. App. 272, 284 (2003). Unlike the Hill employees, the court noted that the employees in White were able to “‘eat, rest, make personal telephone calls, attend to personal business that would not take them away from the facility, and close the door to the office in order to make themselves unavailable’”(quoting White, 118 Wn. App. at 283-284). In other words, the flexibility (or lack thereof) to briefly stop work and engage in personal activities appears critical to the analysis of whether employees have received lawful breaks.

CBA Meal Period Waivers Held Ineffective. The employer in Hill defended against the meal period claims by relying on CBA provisions stating that employees were waiving “‘any meal period(s) to which they would otherwise be entitled,’” or would have no “‘designated lunch break’” or “‘an on-duty meal period.’” The court disagreed, stating “Washington does not allow most private employees to waive their right to a meal period through a CBA” (except in the construction trades). Ultimately, the court held the waiver defense was properly dismissed because it saw no evidence of individual employee waivers, independent of their CBAs.

Beyond Washington’s Borders. The break issues examined in Hill are by no means unique to Washington State. According to the U.S. Department of Labor's website, Washington is one of only eight states with generally applicable requirements for employee rest periods, but many more jurisdictions impose general meal period requirements. Although these other jurisdictions are free to develop their own approaches to break issues, they may choose to look to the “sister” state rulings by Washington (or California) courts on these frequently-litigated topics.

Attorney Karen Kruse, based in Seattle and licensed in Washington State, has extensive experience assisting employers with issues involving Washington's meal and rest period regulation.