This Restaurant Doesn't Serve Punitive Damages

Friday, 05 December 2008 08:32

Wage & Hour

On December 3, 2008, the Court of Appeal reversed the punitive damages award since the Labor Code’s regulation of pay stubs, minimum wages, meal breaks and rest breaks established a new and comprehensive set of rights and remedies for employees that are exclusive “unless the statutory remedy is inadequate.”

 The Court was also convinced that, punitive damages would not be available since “Brewer’s claims for unpaid wages and unprovided meal/rest breaks arise from rights based on her employment contract” and punitive damages are not ordinarily available for breach of contract.

COUNSEL TO MANAGEMENT:

Management can rest easy knowing that at least one Court has found that punitive damages are not available for paystub, minimum wage or meal and rest period violations. However, another Court may not be so forgiving.

   In December 2005, Wal-Mart got stuck with a $172 million lunch tab for similar labor code violations including meal and rest period violations. The case is still on appeal. Courts tend to be less forgiving of Wal-Mart so it will be interesting to see what the Court does with the $115 million punitive damage award levied against Wal-Mart.

Of course, the best way to avoid large punitive damages for rest and meal period violations is by not having any such violations. Employers should ensure their employees are provided with adequate rest and meal periods and, as always “Document…Document…Document!”

The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with The Saqui Law Group at (831) 443-7100 in Salinas.