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Give 'Em a Break ... or Get Sued

September 16, 2008
Related Topics: Wages and Hours, Policies and Procedures, Featured Article, Legal
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At the Tyson Foods meatpacking plant in Logansport, Indiana, workers wear helmets, protective pads on their arms and abdomens and steel-toed boots to avoid injury as they perform the grueling task of dismembering the hogs that eventually become hams and pork roasts.

Meanwhile, thousands of miles away in Hollywood, California, casually clad reality TV show production assistants rush around performing the never-ending assortment of errands—from dealing with caterers and arranging transportation for contestants to picking up the boss’s dry cleaning—that help make possible an evening of entertainment for millions.

What do these two seemingly disparate types of workers have in common? Both are pursuing litigation against their employers, charging that they’ve been shortchanged by having to work through their lunch breaks.

They’re hardly alone these days in having a bone to pick over the midday meal. The lunch break, a custom dating to the repast of bread and ale enjoyed by harvest workers in medieval Europe, is mandated by law in 17 states plus Guam and Puerto Rico. All require that wage earners get a specific amount of time off—most often 30 minutes—to eat and rest from their labors. In states that don’t require lunch breaks, the federal Fair Labor Standards Act compels employers that provide unpaid time off for meals to allow employees to eat without interruption, or pay them for the time. But in recent years, productivity pressures and the nonstop pace of the information economy have put the squeeze on the once-sacrosanct tradition, bringing employers and their workforces into increasing conflict.

One result has been a flood of class-
action lawsuits alleging lunch-break-related wage and hour violations, including a 2005 case in which a Northern California jury hit Wal-Mart with an astonishing $172 million in damages. Similar litigation has cost at least 10 other employers $1 million or more, according to Littler Mendelson, a San Francisco-based national labor and employment law firm.

Some on the corporate side see the lunch-break litigation problem as primarily one of antiquated, overly complex wage and hour statutes and plaintiff attorneys’ ava­rice, while labor advocates say the suits are a symptom of deteriorating corporate ethics and a drive for higher profits at the expense of workers’ well-being.

But employment law and human resources experts agree there is much that companies can do to avoid such trouble. They say that employers need to create policies that take into account the nuances of the laws in each of the states in which they operate and carefully train line supervisors and employees in each location about compliance regulations.

Additionally, experts urge employers to invest in software systems that integrate policy content and training efforts with accounting and payroll data to document compliance. Beyond that, corporate ethicists say companies must change their workplace culture. Instead of viewing lunch as a regulatory nuisance or a distraction from work, companies should appreciate the positive impact that such rest breaks have on worker satisfaction and, by extension, the employment brand.

Problem growing, but who's the blame?
California, which has some of the strictest wage and hour regulations in the nation, has seen some of the biggest lunch-break-related litigation in terms of the number of plaintiffs and the damages sought. But according to news accounts, wage and hour lawsuits involving possible violations have been filed in at least 11 other states.

No type of employer seems to be immune from such lawsuits. In Florida, low-cost airline AirTran was sued by customer service agents who said they were compelled to sell tickets during their breaks. Drivers for a Georgia bus company accused their employer of docking their pay for 30 minutes to cover lunch even though they didn’t actually get the time off. In Pennsylvania, a muffler shop employee demanded overtime pay for lunch breaks he spent working at his desk. County jail employees in Kentucky and hospital workers in Tennessee wanted compensation for having to stay on duty instead of stopping to eat.

Having to compensate an employee for an extra half-hour each day over several years’ time can add up to a sizable sum. But often that’s just the beginning. If plaintiff attorneys can establish a pattern of alleged violations involving multiple employees, they can expand the suit into a class action that covers anyone who might have been shortchanged, multiplying the potential payout by hundreds or even thousands of times.

"In terms of the liability that faces employers today, it’s the equivalent of a thermonuclear blast," says Garry Mathiason, vice chairman of Littler Mendelson. "The number of lawsuits is horrific, and the amount it costs to defend them is incredible."

Why are so many employers getting stuck with seven- and eight-figure tabs for lunch? Some say that outdated wage and hour laws, going back as far as the 1930s, are partly to blame.

"Back then, you had really horrible problems with long workdays and terrible conditions in factories, and people had a problem getting time to eat," Mathiason says. "Today, it’s totally different. We have a digital world where people are used to multitasking. It seems ridiculous that an hourly employee has to stop at a certain point and take lunch, whether they want to or not, while exempt employees can eat whenever they feel like it. "

It doesn’t help that state laws vary tremendously and are laden with arcane nuances. In Illinois, only hotel maids in counties with a population greater than 3 million are entitled to meal breaks, while Massachusetts specifically excludes iron and glass workers and West Virginia mandates breaks only for employees who aren’t allowed to eat while they work. (The Department of Labor provides a chart summarizing state-by-state provisions at www.dol.gov/esa/
programs/whd/state/rest.htm.)

The penalties for noncompliance can be hefty. Massachusetts, which has a mandatory 30-minute lunch after six hours of work, recently amended its wage and hour laws to award triple damages for such violations—even unintentional, seemingly minor ones.

"I call it the criminalizing of HR," says James Bucking, an employment law attorney with Boston-based firm Foley Hoag. "If you trip up even in a small way, you can end up paying big."

Of course, the workers who think they’re being cheated out of their lunch breaks—and the attorneys who represent them—take a very different view. Justin Buckles, a former TV production assistant who has filed a complaint against Fremantle Media, the company that produces American Idol, says he seldom had a chance even to buy a sandwich and eat it at his desk because of the incessant demands of his high-pressure job.

"If you were to keep going 15 hours a day and not get adequate meal periods, imagine what it would do to you physically," he says. "You get worn down and weak. It takes a huge toll on your body."

Reuben Guttman, a Washington-based attorney with law firm Grant & Eisenhofer, says that for the meatpacking workers he represents, the rest that a lunch break provides is a vital part of safety. "This is a job where they wield knives," he explains. "You want them to have a clear mind. You can’t just run them like an extension of the machine."

Representatives for Fremantle Media and Tyson Foods, the company that Guttman’s clients are suing, did not respond to e-mail requests for comment on the litigation.

Although corporate critics of lunch-break litigation portray employers as vulnerable to nitpicking claims, Guttman sees a business world in which management often deliberately whittles away at legally mandated breaks to squeeze more productivity out of workers.

"Basically they’re making a calculation that by the time somebody figures this out and sues them, it may be five years down the road," he says. "By then, the people who made the decision are likely to have moved on. There’s no personal liability—nobody ever goes to jail for violating wage and hour laws."

IMPROVING COMPLIANCE

Regardless of who’s at fault in the lunch-break problem, experts in employment law and human resources say there’s plenty that companies can do to avoid breaking the law and inviting costly lawsuits. The answer, they say, is a comprehensive compliance effort that includes break policies carefully tailored to fit legal requirements, a concerted effort to train both managers and employees in how to stay within the law, and a reliable system of documentation tied to payroll data to ensure that employees actually are taking required unpaid meal breaks and are being compensated for every minute of time they work.

Littler Mendelson’s Mathiason says the first step a company should take is to conduct a candid assessment of its policies and system for wage and hour compliance.

"A lot of people in human resources and legal departments just assume the process in the field is working perfectly fine," he says. "But how do you know? You need to do spot checks to see if it’s really working. That way, if there’s a problem, you can fix it before it blows up."

The next step, he and other experts say, is to review meal-break policies and procedures to make sure they’re compliant with the latest judicial interpretations of wage and hour laws in all the states in which a company operates. If they’re not compliant, organizations should rewrite their rules.

Explicit meal-break policies are a must, says Robin Bond, an employment law attorney based in Wayne, Pennsylvania.

"To minimize compliance problems, employers can institute policies that reduce the risk of working lunches," she says. "They can prohibit employees from eating lunch at their desks and require them to take their lunch hours off-site or at locations inside the corporate offices but away from the work area, such as a kitchen or dining hall." She also urges companies to require hourly employees to clock in and out for their lunch break, which not only documents compliance but also reinforces the idea that lunch is time off from work.

Once sound policies and procedures are created, it’s crucial to disseminate them throughout the enterprise—and to make sure that both managers and employees have the right information for their particular locale, and understand it.

"Wage and hour laws tend to be counterintuitive," explains Shanti Atkins, an employment law attorney and president of ELT, a San Francisco-based company that provides online training and compliance solutions. "Say you’re my manager, and 20 minutes into my half-hour break, you come into the lunch room and ask me a question that a customer has raised about an invoice. It only takes me a minute to answer it, but under the law, you’ve interrupted my break and I’m entitled to be paid for the entire 30 minutes—potentially as overtime. That’s what happens in these cases."

It’s also necessary to develop a reliable system for documenting that employees are actually taking unpaid lunch breaks or are being compensated for their time. Conversely, experts say, companies shouldn’t configure payroll programs to automatically deduct an unpaid lunch break from the working day.

The best answer may be to use technology to combine all these elements, says Carole Switzer, president of the Open Compliance and Ethics Group, a nonprofit organization funded by the accounting and insurance industries that aids companies in meeting regulatory standards.

Switzer says national and regional companies can help protect themselves from lunch-break violations by investing in compliance software systems that can pull up the regulations and policies that apply to an employee in a particular location and provide training on those policies. The systems should be interfaced with accounting and payroll systems to make sure that person isn’t being undercompensated for time actually worked. Additionally, an ideal system will aggregate the data, which can help management spot developing problems and correct them before they turn into fodder for a costly lawsuit.

"A lot of compliance failures are really failures in handling and understanding information," Switzer says. "You don’t want the information isolated in someone’s spreadsheet or on an individual desktop. You need an enterprise-wide solution that enables people to see what is going on. You also want to have them speaking to each other in the same language. You don’t want the term ‘employee’ to mean a different thing in different parts of the organization, for example."

Several dozen software vendors, including Axentis, Integrity Interactive and ELT, offer such wage and hour compliance platforms, says Michael Rasmussen, a Milwaukee-based corporate governance, risk and compliance consult- ant. He says that a good system will not only provide adequate content management and integration, but also will have a user-friendly interface that doesn’t require specialized knowledge of wage and hour law jargon to operate.

"Some of the programs out there are fine for the compliance officer, but if a wide range of people throughout the organization are going to depend upon it, it should be easy for them to navigate," Rasmussen says.

For a lunch-break compliance program to work, how­ever, experts say a company also has to make a cultural commitment to taking wage and hour regulations seriously, rather than viewing them as a nuisance that requires only lip service. Labor law specialist Robin Bond notes that lunch breaks have an importance beyond mere compliance with the law, in terms of maintaining employee morale.

"Everyone needs a break during the workday, whether they realize it or not," she says. "Lunch hour is often the only time workers can get a breather."

Attorney Guttman agrees. "You can’t neglect the human side of these laws that try to impart some kind of dignity to the workplace," he says. "It goes to the kind of product Americans produce, and how we feel about our jobs. At the end of the day, if you’re shortchanging the workers, it’s going to rub off on the customers. And that’s something you don’t want."

Workforce Management, September 8, 2008, p. 43-47 -- Subscribe Now!

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