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As many readers of this Blog know, we’ve been awaiting the California Supreme Court to issue its decision in the Brinker case. This morning it did so. As our attorneys continue to analyze the decision involving issues of employee rest periods and meal breaks, we will be publishing several blog updates in the coming days discussing the impact of the decision on California employers.

In the meantime, we wanted to give you three brief takeaways from today’s decision:

• Meal Period: The Court held that when an employee is entitled to a meal break, an employer’s obligation is to relieve the employee of all work duties during that time but that the employer does not have an obligation to ensure that the employee does no work during the meal period. However, as Justice Werdegar points out in her concurring opinion, the burden remains on the employer to prove that an employee was provided with a meal break. Practically speaking employers will want to have documents and practices in place that demonstrate: (1) a policy of relieving employees of all duty obligations during the meal period; (2) a policy prohibiting any supervisor from encouraging or coercing an employee from working during or through a meal period; and (3) to train supervisors on this standard. Employers may also wish to adopt a policy by which employees should report any meal period denial.

• Rest Period Timing: The Brinker plaintiffs argued that an employer was required to provide at least one rest period before any meal period. Plaintiffs wanted to prevent employers from requiring employees to take an “early lunch”, i.e. requiring a meal break at the beginning of an employee’s shift. The Court rejected plaintiffs’ argument and held that there was no requirement regarding the timing of meal periods vs. rest periods.

• Uniform Policies and Class Actions: The Brinker employee-plaintiffs were subgrouped into three classes for certification: (1) those alleging rest break violations; (2) those alleging meal break violations; and (3) those alleging “off the clock work” violations. The Court held that the first group (rest breaks) should be class certified; the third group (“off the clock”) should not be class certified and that the lower court should reanalyze whether to certify the second group (meal breaks) in light of the Court’s meal break ruling described above. The Court’s ruling suggests that when employees are covered by a uniform policy of the employer, it is more likely that class certification will be granted. Given that there was no uniform policy regarding “off the clock work,” the Court held that it was improper to certify this class of employees since each case of “off the clock work” would have to be decided on a case-by-case basis.

Please follow this Blog for further updates regarding this landmark decision.

As you know, documentation is essential to performing even routine HR functions. You have potential employees fill out numerous pre-hire documents. You have employees sign employment agreements and other documents when hired. During the course of employment, you have employees sign additional documents, such as acknowledgments regarding your employee handbook, change in employment status documents, etc. But have you sat down recently to review whether all of the documents you are having employees sign are consistent? The recent case of Grey v. American Management Services demonstrates why you should.

In the Grey case, the employer, AMS, had Grey complete a pre-hire application packet that included an Issue Resolution Agreement (“IRA”). The IRA provided that all disputes related to Grey’s future employment with AMS would be subject to arbitration. However, when Grey was actually hired by AMS, he was asked to sign an employment contract that stated that only disputes arising out of a breach of the employment contract would be subject to arbitration. That employment contract also contained what’s called an “integration” clause that provided: “This agreement is the entire agreement between the parties in connection with employee’s employment with [AMS] and supersedes all prior and contemporaneous discussions and understandings.”

Grey later sued AMS for a variety of claims and claimed that he was subject to harassment based on his sexual orientation. AMS moved the Court to compel arbitration pursuant to the IRA he signed. The Court ordered the case to arbitration. At arbitration, AMS successfully defended against Grey’s claims and not only had the trial court confirm the arbitration award, but also award costs to AMS for having to defend against Grey’s claims.

Grey appealed the decision and argued that the trial court erred in ordering the case to arbitration. The appellate court agreed. Why? Because of the inconsistency in the arbitration provisions in the employment contract that Grey signed at the time of hire and the IRA he signed during the pre-hire application process.

The Court ruled that, under California law, “the terms of a final integrated contract `may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement’.” The Court found that the employment agreement that Grey signed at the time of hire contained an “integration” clause that meant it was intended to be the “final” contract regarding Grey’s employment and superseded all prior agreements, including the IRA. While the IRA contained an arbitration provision that was broader (requiring the arbitration of any dispute relating to Grey’s employment); the employment contract was much narrower requiring arbitration only of breach of the agreement itself (and not statutory claims such as unlawful harassment). Because the employment agreement superseded the IRA, the Court held that it was improper to rule to order Grey to arbitrate his harassment claims. Therefore, the appellate court vacated the arbitration award and ordered that Grey be allowed to present his claims in state court.

Had the employer in the Grey case simply reviewed the various employment documents it had employees sign to ensure consistency, it may well have avoided the outcome of having won at arbitration but later losing on appeal.

To avoid this potential outcome, all employers should periodically review any documents they have employees sign, such as employment agreements, employee handbook acknowledgments, dispute resolution agreements and other policies. Not only should they ensure that these documents are updated to address any new laws, they should also be reviewed to ensure that they remain consistent with one another over time.

Making national headlines today is the news of a physician’s assistant who obtained an astronomical $167 million jury verdict against her employer in a Sacramento federal court. Going largely unreported, however, is information about the case (Ani Chopourian v. Catholic Healthcare West) that should be noted by employers in the healthcare industry.

While media outlets accurately have depicted the case as a sexual-harassment lawsuit, the plaintiff also alleged violations of section 1278.5 of California’s Health and Safety Code. The legislature enacted the strong medicine in that anti-retaliation statute to “encourage patients, nurses, members of the medical staff, and other health care workers to notify government entities of suspected unsafe patient care and conditions.”

The colossal award in the Sacramento case most likely was spurred by the jury’s belief that the employer violated this healthcare law. Indeed, while many jurors could be offended by an employer who does not take steps to prevent or stop sexual harassment against healthy employees, such jurors assuredly would be outraged by the idea that an employer punished a healthcare worker for reporting flaws in the delivery of medical care to sick and suffering patients. Either way, employers in the healthcare field should be aware that this law has a lot more teeth – some might say, “more fangs” – than other employment laws.

The statute protects patients and healthcare workers (including members of the medical staff) who present “a grievance, complaint, or report to the facility, to an entity or agency responsible for accrediting or evaluating the facility, or the medical staff of the facility, or to any other governmental entity.” The law also protects such persons who have “initiated, participated, or cooperated in an investigation or administrative proceeding related to, the quality of care, services, or conditions at the facility that is carried out by an entity or agency responsible for accrediting or evaluating the facility or its medical staff, or governmental entity.” Such complaints or participation/cooperation presumably would concern perceived violations of the myriad of regulations that pertain to the healthcare industry.

In forbidding such reprisals, section 1278.5 creates very stern presumptions against healthcare employers. For example, it imposes a “rebuttable presumption” that the employer unlawfully retaliated “against an employee . . . if responsible staff at the facility” knew that the employee filed a grievance or complaint about healthcare flaws and the employer then executed an adverse employment action against the employee “within 120 days of the filing of the grievance or complaint.”

The law also contains a clause that could diminish the protections of the peer-review privilege. In other types of employment cases, this privilege oftentimes may shield an employer’s evaluations of and deliberations about a healthcare professional’s skills and abilities and the reasons for the adverse action.

Finally, as demonstrated by the jury verdict in the Sacramento case, the law provides very generous remedies to prevailing plaintiffs while dosing unsuccessful defendants with severe punishment. For instance, any individual “who willfully violates this section is guilty of a misdemeanor punishable by a fine of not more than twenty thousand dollars ($20,000).” Moreover, a prevailing employee could be “entitled to reinstatement, reimbursement for lost wages and work benefits . . ., and the legal costs associated with pursuing the case,” as well as “any remedy deemed warranted by the court.”

Given the plaintiff’s success in this case and the notoriety of her verdict, healthcare employers in California should brace themselves for many more similar suits to follow. The cost of trying such actions and the size of the jury’s award underscore the need for healthcare employers to consult with employment attorneys who are knowledgeable about the industry (and the many laws and regulations pertaining to it) when making important personnel decisions.