On July 18, 2018, the Ninth Circuit issued a published opinion in Rodriguez v. Taco Bell Corp., approving Taco Bell’s on-premises meal periods for employees who choose to purchase discounted food.

Like many food services employers, Taco Bell offers discounts on its food to its employees. And it requires that employees consume such food on premises.

In Rodriguez, employees contended that requiring employees to consume discounted meals on premises results in a meal period or unpaid wage violation, arguing that employees must be relieved of all duty and must be permitted to leave the premises during a statutory meal period. The Ninth Circuit rejected those arguments.

As the Court explained, Taco Bell employees were not required to purchase meals – “[t]he purchase of the meal is entirely voluntary.” And the “requirement that [a discounted] meal be eaten on the premises was to ensure that the benefit was utilized only by employees and that the food did not leave the premises to be given to friends and family.” That is, “employees had to consume the discounted food in the restaurant to prevent theft.” As the Court noted, Taco Bell “employees are free to purchase meals at full price and eat them wherever the employees wish.”

The Ninth Circuit concluded that Taco Bell satisfied its meal period and wage obligations by relieving employees of all duties during their meal periods and exercising no control over how or where they spent their meal periods. That is, “employees were free to use the meal break time as they wished, and that a requirement to remain on the premises was imposed only if an employee voluntarily chose to purchase a discounted meal.” And there was no evidence that Taco Bell “required or pressured [employees] to conduct work activities while on premises during the meal period.” The policy actually prohibited that, requiring employees who purchased discounted meals to eat them away from the food production and cash register area.

The Ninth Circuit’s Rodriguez opinion confirms that employers that relieve employees of all duty during meal periods do not violate California law merely by imposing certain requirements to benefits (e.g., discounted food) that an employee may voluntarily accept.

By Kara Maciel and Aaron Olsen

After five years of litigation, a Los Angeles Superior Court has denied class certification of a class action against Joe’s Crab Shack Restaurants on claims that it managers were misclassified as exempt and denied meal and rest periods in violation of California law.  The court found that the plaintiffs had not established adequacy of class representatives, typicality, commonality or superiority, and emphasized a defendant’s due process right to provide individualized defenses to class members’ claims.

Because the case was handled by our colleagues in our Los Angeles office, we think it best not to comment on the decision other than to say that it highlights the need for creative strategies in defending against wage-hour class actions.