From SF Gate:
(04-16) 15:32 PDT SAN FRANCISCO — California employees who are forced to work through their lunch breaks scored a major legal victory today when the state Supreme Court ruled that they are entitled to back wages of an hour a day for as long as three years.
The unanimous ruling in a San Francisco case resolved a technical question of labor law — whether damages for unpaid meal breaks are “compensation” or a “penalty” — with multimillion-dollar consequences.
The statute of limitations under state law is three years for compensation and one year for a penalty. That determines the deadline for filing a complaint and the period of damages for violations.
The court’s determination that the payments are a form of compensation means that workers have as long as three years to file their cases — and that companies can be required to pay for three years’ worth of violations.
Under state labor rules and a law in effect since October 2000, an employer who fails to provide employees with an unpaid 30-minute meal period after five hours of work must pay damages equal to one hour’s salary to each employee for every day the law was broken. Employees are also entitled to damages if they are denied a 10-minute rest break after four hours of work.
“The Legislature intended (the law) first and foremost to compensate employees for their injuries,” Justice Carlos Moreno said in the court’s decision, which reversed a lower-court ruling. He noted that past rulings have required laws on working conditions to be “construed broadly in favor of protecting employees.”
The case before the court involved a judge’s $64,000 damage award to John Paul Murphy, a retail clothing store manager for Kenneth Cole Productions in San Francisco who was required to work through lunch and rest breaks and without overtime from 2000 to 2002.
Lawyers for employers and employees said the ruling would affect several class-action suits on behalf of workers in other companies who were denied meal breaks for extended periods, often because companies wrongly classified them as management.
“It will expand, many-fold, the realistic and appropriate claims for these cases,” said Steven Drapkin, lawyer for the California Employment Law Council and other business groups that sided with Murphy’s employer.
Labor union attorney Patricia Gates said the court recognized that workers are entitled to get the benefits of their labor. “If they weren’t given proper breaks, they now have the same amount of time (to sue) as if they weren’t paid the minimum wage or overtime,” she said.
One case in which the parties have been awaiting today’s ruling was Wal-Mart’s appeal of an Alameda County jury’s $172 million damage award in 2005 to 116,000 present and past employees in California who said they were denied lunch breaks.
Jessica Grant, a lawyer for the Wal-Mart employees, said the ruling should lead to an affirming of the jury’s award of punitive damages — $115 million of the total — and opens the door to additional claims of at least $200 million for withheld rest breaks.
The case also caused a political stir when Gov. Arnold Schwarzenegger tried to issue emergency regulations in December 2004 that would limit employees’ damage period to a year and allow employers to deny lunch breaks if workers failed to request them. Schwarzenegger proposed several sets of rules and also issued a “video news release,” resembling broadcast news reports, that purported to show an employee praising his plan. A judge ruled the video illegal, and the governor dropped his proposed regulations in January 2006.