In Rodriguez v. Taco Bell Corp., 896 F.3d 952 (9th Cir. 2018), an employee brought a putative class action alleging that Taco Bell’s discounted meal policy effectively denied employees the ability to take a duty free meal break. At issue in this case was Taco Bell’s policy of offering a discounted meal from the restaurant during the employees’ meal breaks as long as the employees ate the meal on the company’s premises. The ability to purchase discounted meals was voluntary. The policy was implemented to prevent theft. The employees argued that because they were required to remain on the company’s property in order to obtain the discounted meal they employees were not provided a duty free meal break. The court rejected Plaintiff’s argument and held that Taco Bell’s policy complied with California law. Here are five issues California employers should understand about the decision:
1. Meal and rest break requirements
The court in Rodriguez v. Taco Bell explained that California requires non-exempt employees be afforded rest breaks and meal periods after working a certain number of hours. See Cal. Labor Code §§ 226.7, 512. At issue in this case is the Labor Code’s requirement that employees who work more than five hours in a day be afforded a meal period of “not less than 30 minutes” and employees who work more than ten hours in a day must be provided a second meal period of the same duration. Labor Code 512(a). The court also noted that California Industrial Welfare Commission (“IWC”) Wage Order 5-2001 “requires employees be relieved of ‘all duty’ during the meal period. Cal. Code Regs., tit. 8, § 11050, subd. 11(A).”
The court also explained that if a meal or rest break is not provided according to California law, employees are entitled to the remedy of premium wages of “one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided.” Cal. Labor Code § 226.7(c).
2. Discounted meal policy did not establish control over employees
The court found that Taco Bell’s meal policy was compliant under California law because the company relieved the employees of all duty and relinquished control over their activities. Taco Bell did not require its employees to purchase the discounted meal, there was no evidence that Taco Bell pressured its employees to purchase the discounted meals, employees were free to purchase meals and full price and leave the company premises. In addition...
