The Ninth Circuit Court of Appeals upheld summary judgment in favor of Taco Bell on class claims that employees should be paid under California law for time spent on company premises eating employer-discounted meals during meal breaks.

California law requires employers to relieve nonexempt employees of all duties during required meal periods or pay the employee a meal premium. Taco Bell’s meal break policy let employees, on a voluntary basis, buy discounted meals, but the meals had to be eaten in the restaurant. Taco Bell’s requirement sought to prevent employees from giving the food to friends or family, which Taco Bell considered to be theft.

The plaintiff, a former Taco Bell employee, brought a class action against Taco Bell claiming she was entitled to be paid for time spent on Taco Bell's premises eating discounted meals during her meal breaks. The former employee argued that because Taco Bell required the discounted meal to be eaten in the restaurant, she was under Taco Bell’s control, making the time compensable.

A lower court disagreed, finding that Taco Bell’s meal policy satisfied California law. This was because Taco Bell relieved employees of all duties and relinquished control over their activities during meal breaks. In upholding this ruling, the Ninth Circuit noted that under the discounted meal policy, employees were free to use meal break time as they wished, and an employee had to stay on premises only if the employee voluntarily chose to buy a discounted meal. The Ninth Circuit found the requirement to eat the discounted meal on premises did not amount to control over the employees’ working conditions.

In California, an employer must relinquish control over nonexempt employees during meal breaks. Franchisors and franchisees that employ nonexempt employees should have their meal break policies, and any changes to the policies, reviewed by counsel before implementation.

Rodriguez v. Taco Bell Corporation, No. 16-15465 (9th Cir. July 18, 2018)