Meal Break Auto-Deduct Policy Results in Class Action

​A recent case in Ohio highlights the risks companies may face related to auto-deduction policies.

The Fair Labor Standards Act (FLSA) allows employers to automatically deduct 30 minutes from compensable time for meal breaks for hourly employees, provided those employees are permitted a meal break that is free from all job duties and, alternatively, a procedure exists to reverse the automatic deduction. Employers should take care to ensure that their policies and practices do not run afoul of these requirements given the potential for costly class-action litigation.

Marietta Memorial Hospital established internal policies outlining meal breaks and how to cancel the auto-deduction when the employee is unable to take a meal break. The hospital's policy included a provision that allowed supervisors to release the employee 30 minutes early if the employee chose not to take a meal break.

The hospital's employees brought a class-action lawsuit alleging that the 30-minute deduction occurred regardless of whether the meal break was taken and that employees were routinely prohibited from either taking an uninterrupted meal break or canceling the automatic deduction. The employees also argued that:

• The hospital's policy placed the responsibility on the employee to maintain time-keeping records without proper training.
  
• The ability to release the employee early was used to avoid overtime.
  
• Supervisors were permitted to alter payroll records without providing notice to employees. Employees argued that damages included compensation for hours worked during meal periods and lost overtime compensation resulting from the early release policy.
  

In opposing the class certification, the hospital maintained that the class members knew that they could cancel the automatic lunch deduction and did so regularly. Their failure to follow company policy disqualified them from meeting class certification requirements, the hospital asserted. Only a few employees were potentially injured by one rogue supervisor, it said.

[SHRM members-only HR Q&A: What are the meal and rest break requirements for California employees?]

The district court determined there was sufficient evidence supporting the existence of a class injured by the hospital's common policies and pay practices, including that the employees were not scheduled for lunch breaks, managers were aware that employees were working through their lunch breaks and managers were discouraging employees from cancelling the automatic deduction. For these reasons, the district court granted class certification.

Myers v. Marietta Mem. Hosp., S.D. Ohio, No. 2:15-CV-2956 (Sept. 11, 2017).

Professional Pointer: To avoid violations of the FLSA and costly class actions, employers should ensure that their auto-deduct policies provide ways for employees to cancel or adjust an automatic deduction if they work during some or all of their meal breaks. Businesses also should regularly train new hires, employees and supervisors on how to properly comply with these policies.

Kate S.M. Pitzak is an attorney with Foster Employment Law, the Worklaw® Network member firm in Oakland, Calif.

 

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