Oregon Court of Appeals Holds Pay for Shortened Meal Periods Is a Wage Under Oregon Law

Quick Hits

• In Athena v. Pelican Brewing Co.,the Court of Appeals of the State of Oregon held that the pay required under Oregon law for meal periods lasting less than thirty minutes is considered a wage, as opposed to a penalty.
• Because the court considered the pay for a shortened meal period to be a wage under Oregon law, the court also found that employees have a private right of action to recover wages based on shortened meal periods, subject to a six-year statute of limitations, and employers may be liable for civil penalties for willful violations.

Background

Oregon employers are required to provide unpaid, uninterrupted meal periods of at least thirty minutes to nonexempt employees who work six or more hours in one work period. Employees must be relieved of all duties during the meal period, otherwise, the employer must pay the employee for the entire thirty-minute meal period.

In this case, former hourly employees of Pelican Brewing Co. and Kiwanda Hospitality Group, Ltd., brought a class action wage and hour case seeking compensation for meal periods lasting less than thirty minutes. The former employees alleged they received meal breaks lasting less than thirty minutes and that they were not paid for those meal breaks as required by Oregon law. The court addressed whether such “pay” for shortened meal periods constitutes a wage or penalty under Oregon law, and some legal implications of that distinction.

The Court’s Decision

The court considered the text and context of the relevant Oregon administrative rule, OAR 839-020-0050(2)(b), which provides “if an employee is not relieved of all duties for 30 continuous minutes during the meal period, the employer must pay the employee for the entire 30-minute meal period,” and held that the “pay” required under this regulation was intended to refer to a wage rather than a penalty because the employee has not stopped working for purposes of wage and hour laws.

The court’s classification of the pay required for shortened meal periods as a wage rather than a penalty has several consequences:

• Private right of action: Because the court concluded that the relevant administrative rule requires employers to pay a wage for a shortened meal period, the court further held that employees have a private right of action to recover those wages under the state’s wage law.
• Six-year statute of limitations: Actions for unpaid wages must be commenced within six years, although shorter time frames may apply to actions for certain penalties.
• Penalty wages for willful nonpayment: In addition, because the pay for shortened meal periods is a wage, employers may be liable for penalty wages based on willful violations of the meal break rule.
• No additional wages: The court also held that nothing in the rule entitles an employee to an additional wage, beyond being paid for thirty minutes, for a shortened meal period. For example, an employee who takes a fifteen-minute meal break is not entitled to pay for both the remaining fifteen minutes of that break and thirty additional minutes.

The court further found that in enacting the meal period rule, the Oregon Bureau of Labor and Industries acted within the scope of its delegated authority to define work periods during which an employee is owed a wage.

Key Takeaways for Employers

In light of this case, employers may want to continue to ensure that their policies and practices comply with meal and rest break requirements under Oregon law and that supervisors and employees are trained on these requirements. In particular, employers may want to continue to monitor meal periods to ensure nonexempt employees take their full meal periods and are completely relieved of all duties.

Ogletree Deakins’ Portland (OR) office will continue to monitor developments and will post updates on the Hospitality, Oregon, and Wage and Hour blogs as additional information becomes available.

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