Recent Decision Opens Door for Employees to Sue for Wages for Rest Periods Worked

EMPLOYMENT ALERT
Recent Decision Opens Door for Employees to Sue for Wages for Rest Periods Worked

On June 13, 2007, the Oregon Court of Appeals issued a decision that opens the door
for employees and former employees to sue for missed break periods. In Gafur v.
Legacy Good Samaritan Hospital and Medical Center, Plaintiffs Elizabeth Gafur and
Linda Wing filed a complaint on their own behalf and on behalf of similarly situated
employees alleging in part that their employers paid them “less than the wages to which
[they were] entitled” under ORS 653.261 and ORS 653.055. Their complaint was
dismissed at the trial court level. The Court of Appeals, however, held that although
violation of the meal break rule may be enforced only through administrative sanctions
by BOLI, violation of the rest break rule is enforceable in a lawsuit by employees who
may sue employers for unpaid wages for each missed break. This decision will in all
probability lead to an increase in claims for failure to pay wages for missed rest break
periods.

Discussion
To understand the Court’s reasoning, we must first look to ORS 653.261 which
authorizes BOLI to regulate meal and rest breaks. That statute provides:

“(1) The Commissioner of the Bureau of Labor and
Industries may issue rules prescribing such minimum
conditions of employment, * * * as may be necessary for the
preservation of the health of the employees. Such rules may
include, but are not limited to, minimum meal periods and
rest periods, * * *”

Pursuant to this statute, BOLI issued OAR 839-020-0050, which specifies that
employers “shall provide” appropriate meal and rest periods. Under that rule, rest
periods are described as periods:

“of rest of not less than ten minutes for every segment of
four hours or major part thereof worked in one work period
without deduction from the employee’s pay. The period
of rest must be in addition to and taken separately from the
time allowed for the usual meal period. Insofar as feasible,
considering the nature and circumstances of the work, such
period of rest is to be taken by an employee approximately in
the middle of each four hour (or major part thereof) segment.
The rest period is not to be added to the usual meal period
or deducted from the beginning or end of the work period to
reduce the overall length of the total work period.” [Emphasis
added.]”

Plaintiffs in the Gafur case alleged that when they missed their breaks, they provided
ten minutes of services for which they were entitled to be compensated but did not
receive. Their argument was based on OR 653.010 which defines “wages” as
“compensation due to an employee by reason of employment”. Plaintiffs also alleged
that under ORS 653.055, an employee has a private right of action against an employer
that does not pay wages to which the employee is entitled under ORS 653.010.

The Court of Appeals agreed with the plaintiffs that the defendants had paid them “less
than the wages to which [they were] entitled.” In other words, based on OAR 839-020-
005, employees are entitled to four hours’ pay for every three hours and fifty minutes
they work. For each rest period the employee misses, the employer owes the employee
an additional ten minutes’ pay.

BOLI has always had (and continues to have) administrative enforcement authority to
enforce its rules on meal periods and rest breaks. Prior to the Gafur decision, however,
it was undetermined whether an employee had a private right of action to sue for
missed rest breaks. Now it is clear that employees can sue an employer directly for
“unpaid wages” if rest breaks are not provided. Further, not only will the employer need
to pay wages for each missed break, it is potentially liable for additional penalties under
ORS 652.150 if the employee’s employment has ended and the employer has failed to
pay all wages owing upon termination of employment.

The Gafur case did not create a private right of action for employees to sue for missed
meal periods. Violations of BOLI’s meal periods’ rule are still only subject to
administrative enforcement by BOLI.

Action Plan
Require employees to take rest breaks as required by law. Inform supervisors that
under the law, employers have an affirmative obligation to ensure that employees
actually receive rest breaks as required by law.

If you do not already have a written break and meal periods policy, develop one and
communicate it to employees.

If your operations prevent you from maintaining regularly scheduled meal or rest break
periods, contact counsel for advice.

Use a Final Paycheck Acknowledgment form when feasible. The form should provide a
breakdown of the components of the final paycheck (wages, vacation pay, other),
contain an acknowledgment of receipt of the final paycheck and contain an
acknowledgment by the employee that, to the best of his/her knowledge, there is no
additional money owed to the employee by the employer at that time.

Our firm’s Employment Alerts are intended to provide general information regarding
recent changes and developments in the labor and employment area. These
publications do not constitute legal advice, and the reader should consult legal counsel
to determine how this information may apply to any specific situation.

If you have any questions or you would like more information please contact one of our
labor and employment attorneys.

Christine S. Cusick Nesbit
541-485-0220
[email protected]

Mark P. Amberg
541-485-0220
[email protected]

Sharon A. Rudnick
541-485-0220
[email protected]

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