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​Wisconsin Supreme Court Denies Unpaid Meal Period Claims – Court Defers To DWD Ruling That “Technical” Violation Did Not Justify Relief

Labor & Employment Law Alert Jeffrey Morris, David B. Kern

On April 1, 2015, the Wisconsin Supreme Court dismissed a class action pending for nearly 7 years, finding that a Department of Workforce Development (“DWD”) regulation did not entitle union employees at HUSCO International to be paid for their 20 minute meal breaks. Mauricio Aguilar, et al. vs. HUSCO International, Inc., 2015 WI 36 (2015). The Court relied on DWD’s own prior determination that while there had been a “technical” violation of its regulation, the purpose for the regulation — protecting worker health and safety — had not been jeopardized by the 20 minute breaks and that it would be now be “unjust” for the workers to receive pay for the 20 minute breaks which they had specifically agreed would be unpaid and which had afforded them the benefit of a shorter work day.

For over 25 years, HUSCO and the employees’ union, International Association of Machinists and Aerospace Workers, had bargained a provision in their collective bargaining agreement specifically calling for a 20 minute meal break — which was unpaid. Unbeknownst to HUSCO and the union, there was a DWD regulation which provided that any break of less than 30 minutes had to “be counted as work time” and considered in determining compliance with state wage and hour laws. The DWD regulation had been promulgated pursuant to its statutory authority to investigate and establish work rules “necessary to protect the life, health, safety and welfare” of workers. Recognizing the role of unions in looking out for worker health and safety, DWD’s regulation permits employers and unions to agree to unpaid meal breaks of less than 30 minutes and to then apply, jointly, for a waiver of the otherwise applicable rule.

Because neither HUSCO nor the union was even aware of the DWD regulation, they had never sought a waiver of the requirement that an unpaid meal break be at least 30 minutes in duration. But then shortly after the parties entered into their 2006-2010 collective bargaining agreement, the union asserted that the 20 minute unpaid meal break did not comply with state law, and that the Company was required to pay employees for their entire break. At that point, the Company proposed that the union join it in applying to DWD for a waiver. The union refused to do so — unless the Company first agreed to provide its members with some additional benefits beyond the shorter work day and the offsetting financial benefits the employees had received in exchange for agreeing to the 20 minute meal breaks.

When HUSCO declined, the union filed a complaint with the DWD in February of 2007, seeking back pay for its members. Although the DWD investigator found a technical violation of the regulation, he held that it would be "unjust" to grant back pay because the breaks had posed no health or safety concerns, DWD’s regulation permits waivers in circumstances such as these, and the employees had enjoyed the benefit of having a shorter work day. The union sought review of the investigator’s decision, and it was upheld by the Agency.

At the union’s urging, the plaintiff employees then pursued a class action in State Circuit Court under Chapter 109 seeking back pay for all bargaining unit employees. The matter was initially removed to federal court, later remanded to state court, and summary judgment was ultimately entered in favor of the employees at the Court of Appeals level. The Court of Appeals held that without a formal waiver from the DWD, the Company could not avoid its statutory obligation to compensate employees for breaks under 30 minutes.

The Supreme Court granted HUSCO's Petition for Review, and directly addressed the question whether this technical violation of the DWD regulation justified an award of back pay for the 20 minute unpaid meal breaks. In ruling in favor of HUSCO, the Wisconsin Supreme Court focused carefully on the DWD's earlier determinations that the 20 minute breaks had not jeopardized worker health or safety, that the union employees had benefitted from agreeing to the shorter meal breaks, that DWD would approve a joint waiver request if the union would join HUSCO in requesting one, that the failure to apply for a waiver was a mere “technical” violation of the regulation and that, under these circumstances, it would be “unjust” for the employees to now receive additional compensation for the 20 minute breaks.

The Supreme Court found this DWD interpretation and application of its own regulation was reasonable and consistent with the purpose of the regulation and therefore was entitled to "controlling weight deference." The Court therefore reversed the Court of Appeals' decision, and remanded the case back to the trial court with directions to grant HUSCO summary judgment and dismiss the complaint against HUSCO.

HUSCO was represented by Jeffrey Morris, (414) 277-5659 / jeffrey.morris@quarles.com, and David Kern, (414) 277-5653 / david.kern@quarles.com, and they were assisted by other members of the firm's Labor & Employment group. Please contact Mr. Morris, Mr. Kern, or your Quarles & Brady attorney, if you have questions regarding the decision.