Employees Cannot Obtain “Double Recovery” of Unpaid Wages and Premiums for Non-Compliant Rest Breaks

In Alfredo Sanchez v. Miguel Martinez, the Court of Appeal, Third Appellate District, held that although an employee who is not authorized and permitted to take a paid 10-minute rest break in compliance with California law may assert a claim for either unpaid wages or seek one additional hour of pay (i.e., a rest break premium) under Labor Code Section 226.7, the employee cannot recover damages under both theories. All California employers will find this case instructive, as it may also provide a basis to argue against similar “double recovery” and/or “stacking” of penalties predicated on other Labor Code violations.

In Sanchez v. Martinez, a group of farm laborers who pruned grapes and were compensated on a piece-rate for each grape vine pruned, filed a wage-hour lawsuit alleging various claims including an alleged failure to have been permitted paid rest breaks. The laborers contended they were not paid their piece-rate — or any wage rate — during their rest breaks. In the lawsuit, they pursued a theory of double-recovery, seeking both minimum wage damages for the actual unpaid break time and an additional rest break premium under Section 226.7. Following a trial on the merits and an initial judgment in favor of the employer, an appeal and a partial reversal by the Court of Appeal as to the rest break claim, and then on remand a finding in the laborers’ favor, the trial court awarded the laborers $416 in damages and $17,775 in civil penalties. The trial court awarded these damages solely based upon Section 226.7 and reasoned that the additional hour of pay was the only permissible compensatory remedy for the allegedly non-compliant rest breaks. Both parties appealed.

In a nuanced opinion, the Court of Appeal first pronounced that both theories of recovery were independently viable. More specifically, the laborers sought compensatory damages under both California’s minimum wage law for the actual time they were allegedly unpaid during rest breaks, and also sought a premium for each allegedly non-compliant rest break under Section 226.7. In reaching its holding, the Court synthesized two precedential cases (Bluford v. Safeway Inc., 216 Cal. App. 4th 864 (2013) (employees paid on a piece-rate basis must still be compensated for time spent on rest breaks) and Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4th 1094 (2007)), and relied on the revised piece-rate statute, Section 226.2...