STATE SUPREME COURT DEALS MAJOR SETBACK TO EMPLOYERS, APPLIES THREE-YEAR STATUTE OF LIMITATIONS TO CLAIMS FOR MEAL AND REST BREAK VIOLATIONS.

 In a stunning defeat for employers, the California Supreme Court today issued its long-awaited decision on the statute of limitations for meal and rest break claims.  In Murphy v. Kenneth Cole Productions, Inc., the court unanimously held that claims for one additional hour of pay for each work day in which a required meal or rest break is not provided (Cal. Labor Code § 226.7) must be treated as “wages,” and are subject to the longer three-year statute of limitations for wage claims under state law.  The court rejected the employer’s argument that the one additional hour of pay is a “penalty” which is subject to a one-year statute of limitations.  The majority of lower appellate courts to rule on this issue had applied the shorter one-year limitations period, and employers were optimistic after oral argument in Murphy that the Supreme Court would rule likewise.

Murphy does not discuss whether claims for one additional hour of pay may be brought under Business and Professions Code section 17200, which has an even longer four-year statute of limitations.  But the Supreme Court previously held in Cortez v. Purolator Air Filtration Products Co. that wage claims may be brought under Section 17200 with its four-year statute of limitations. 

The Supreme Court’s decision in Murphy that the one additional hour of pay constitutes “wages” also opens up the door to claims for waiting time penalties under Labor Code section 203 (30 days of wages) and attorney’s fees if the penalties for missed meal or rest breaks are not paid at the time of termination.  Such an extension of the Murphy decision potentially could have a devastating financial impact on employers, including those who unknowingly violate the laws on meal and rest breaks.

Please call your BRG&S contact for more information about this latest development, and steps you should take to ensure compliance with the meal and rest break rules.

The Supreme Court’s decision in Murphy can be found at:

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