AMN moved for summary judgment, relying on long-standing case law holding that rounding time entries can be permissible when the practice more often inures to the employees’ benefit. In granting summary judgment, the lower court found that these same principles should apply to rounding in the context of nonworking break periods, particularly in the absence of evidence the employer prevented employees from taking compliant meal periods. The appeals court affirmed summary judgment, further focusing on the fact that AMN’s rounding policy was facially neutral and that the employer had procedures in place for employees to confirm the accuracy of their timesheets and to report meal period violations, though the named plaintiff did neither.

In reviewing the lower courts’ holdings, the U.S. Court of Appeals for the Ninth Circuit found that the focus on whether the employees’ compensable time was “shorted” by the rounding practice was not the right inquiry. Rather, the question was whether AMN’s rounding practice resulted in a failure to pay meal period premiums that would otherwise have been due. Even a minor infringement would trigger a penalty, so the rounding practice obscured instances where penalties would otherwise have been payable and denied employees of timely and complete meal periods. Moreover, while the rounding practice led to some additional minutes of regular pay, it also denied employees a full hour of premium pay for short breaks that were misrepresented as compliant in the time records—a balance that did not, in fact, level out over time.

The Donahue case is the first time the Ninth Circuit has considered rounding practices in the context of break penalties. If a business currently uses a time system that applies rounding, it would be a good time to consider the advisability of continuing to do so.