Make sure handbook includes rules on off-the-clock work, missed break time
Your handbook can be your first line of defense against class-action lawsuits. Be sure yours carefully outlines that you don’t want employees to work off-the-clock, put in unauthorized overtime or miss their state-mandated meal and break periods.
Then include management policies that help ensure supervisors follow the rules.
With strong policies, employees (and their lawyers) will find it much harder to mount class-action wage-and-hour lawsuits. That’s because employees have to show that a common policy or practice was responsible for wage-and-hour violations.
For example, a worker seeking class certification has to show not only that she wasn’t paid for work she performed, but that all or most of her fellow workers were also underpaid. That becomes very difficult when company policy prohibits such practices and most managers follow the policy.
Recent case: A small group of current and former California Pizza Kitchen workers filed a class-action wage-and-hour lawsuit alleging unpaid hours worked and missed meal and other breaks. They sought to represent over 20,000 other allegedly similarly situated workers.
Had they been successful and gone on to prove wage-and-hour violations, the amount the restaurant chain might have owed would have been staggering.
Fortunately for California Pizza Kitchen, it was able to persuade the court that a class-action approach was wrong. It successfully argued that the 20,000 potential class members didn’t share enough common characteristics to make handling their case as one lawsuit was the right way to go.
How did they persuade the court? In part by demonstrating that the company had a very specific rule against off-the-clock work and missed breaks. In fact, the policy was in the handbook. It included the following language:
“We realize CPK employees have a real team spirit—a willingness to help out in a pinch. Sometimes employees volunteer to stay and work if things get busy. Under law, we are required to account for all hours/time that you work as ‘hours worked’ even if you didn’t intend it as such. While we appreciate the offer, we say, ‘No, thank you . . . clock-in please!’ Please do not perform any work—even if you intend to do it voluntarily—unless you’re scheduled for the shift or you get prior approval.”
When questioned, some of the employees who had joined the lawsuit said their supervisors ignored the policy. But many others said they weren’t forced to work off-the-clock.
The same was true for other elements of the lawsuit like missing meals and breaks. Some employees skipped breaks, but others did not.
Therefore, the court concluded that their cases should be considered in individual lawsuits rather than as a broad class action. That means they don’t represent any other employees other them themselves, effectively cutting the restaurant chain’s potential liability. (Johnson, et al., v. California Pizza Kitchen, No. B234542, Court of Appeal of California, 2nd Appellate District, 2014)
Final note: Having a policy in the handbook isn’t enough. You also have to make real efforts to enforce it. Do this by making sure supervisors aren’t rewarded for encouraging off-the-clock work, for example, with bonuses for keeping labor costs below an unreasonable target.