California Supreme Court Clarifies Law Regarding “Rest Breaks”

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A recent California Supreme Court decision, Augustus v. ABM Security Services, Inc., has concluded that state law prohibits on-duty and on-call rest periods.  The decision will require California employers to re-examine their rest-break policies and practices.

ABM Security Services required its guard employees to keep their radios and pagers on and respond to needs such as escorting a tenant to the parking lot during their rest period.  The Court concluded the policy violates state law.

Current state law requires employers to offer all employees a rest period that is within the middle of any work period that amounts three and one-half hours or more. Employees must be paid for rest breaks (unlike meal breaks), which must last at least ten minutes per four-hour work period.  Bathroom breaks do not count as rest breaks.

Since employees are paid for their rest breaks, an employer can mandate that employees remain on premises during the breaks. However, the Augustus decision is clear that employers may not require employees to remain on call during their rest break periods. Employers may not require employees to answer calls or respond to customers or vendors during a paid rest break.  Penalties can be significant for failure to comply.

The Court concluded, “During rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time.”  The 10-minute rest break must be uninterrupted.  “The rest period, in short, must be a period of rest.”

We are available to discuss with you whether your current “rest break” policies and practices comply with current California law.

 

An Ounce of Prevention

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ounce-of-prevention-1As Benjamin Franklin famously said, “an ounce of prevention is worth a pound of cure.”  As we continually emphasize to our clients, the best time to establish written agreements and procedures is before disputes arise. Given the fact that many business owners embark on new business ventures with family members, close friends, and other familiar business associates, it is not surprising that they frequently operate with the attitude of getting the business off the ground while “figuring everything else out later.”

Of course, we understand this perspective, and can appreciate that time and resources may be limited. Yet, succumbing to this trap often leads to significant unintended, negative consequences.  The results frequently include loss of valuable time and money, and the uncertainty of unwanted litigation. The cost of cleaning up mistakes is exponentially higher than hiring a good transactional lawyer from the beginning. Sadly, we have seen the closest of friends and family members end up in court, something that could easily have been avoided through thoughtful, proactive planning.

The following are some common pitfalls that could cause issues or disputes later on: operating without written agreements among business owners; failing to document key business transactions; inadequate corporate governance; disorganized management structure; tardiness in state or federal filings resulting in fines and penalties; and commingling of business and personal funds. To be sure, these are just a sampling: there are an endless array of traps for the unwary, uninformed business owner.

Having appropriate agreements and business structure in place is crucial for many situations:  the onset of catastrophic events; preparation for a business acquisition or merger; or the smooth transition of a business triggered by a founder’s disability, death or retirement.

As experienced business lawyers, we strategize with our clients on how to best resolve issues and disputes when they arise. However, we much prefer working closely with our clients to proactively plan and prevent these types of issues from ever arising. And frankly, it’s easier, less costly, and more effective. Our clients are grateful in either scenario – coming to us before or after a dispute – but the before has much less headache.  

We look forward to speaking with any business owners who feel that they could benefit from this type of proactive approach.