Donohue v. AMN Services, LLC


In Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58, the California Supreme Court ruled that an employer cannot round time clock punches to satisfy its obligations under the Labor Code to provide employees with 30-minute meal periods. In this case, the employer used a typical 7-minute rounding rule that rounded time punches to the nearest quarter hour. Under this policy, if an employee was punched out for a meal break between 23 and 37 minutes, only 30 minutes were deducted for the meal break. In addition, a meal break that was at least 23 minutes was rounded up to 30 minutes, and no meal break premiums were paid for a short meal break. The Supreme Court concluded that employees must be provided with a full 30 minutes for meal breaks, and a policy which rounds meal breaks up to 30 minutes does not comply with the Labor Code. The Court also ruled that the employer’s time records which show a meal break less than 30 minutes raises a rebuttable presumption that the meal break was non-compliant, and a one-hour premium is owed.

In another blow to time clock rounding, in Camp v. Home Depot, USA, Inc. (2022) _ Cal.App.5th _, the Sixth District Court of Appeal reversed a summary judgment in favor of the employer in a time clock rounding case. Home Depot had a typical 7-minute rounding policy that rounds time clock punches to the nearest quarter hour. Home Depot presented evidence in the trial court that on over 56 % of the shifts worked, employees were paid the same or more due to rounding. Although one of the named plaintiffs was “underpaid” due to rounding, overall employees were overpaid by applying rounding. Based on these facts, the trial court entered summary judgment in favor of Home Depot.

The Court of Appeal reversed. The Court held that a triable issue of fact exists that precludes summary judgment because the Plaintiff personally experienced an underpayment due to rounding, even though the rounding policy was neutral and overall resulted in a net overpayment of employees. Relying on the recent California Supreme Court decisions in Troester v. Starbucks Corp. (2018) 5 Cal.5th 829 (de minimis rule does not apply under CA law) and Donohue, the Court concluded that rounding should only be allowed in circumstances where the employers cannot record the employee’s precise work hours, and not in cases where the employer can capture the exact times employees were clocked in. The concurring opinion would invalidate rounding altogether under California law.

This Camp case is a significant departure from a long line of federal and California Court of Appeal cases which upheld neutral time clock rounding policies, including See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889 and AHMC Healthcare, Inc. v. Superior Court (2018) 24 Cal.App.5th 1014. Given the split in authorities, it is expected that the California Supreme Court will once again weigh in on the viability of time clock rounding policies generally.

Jeff Fuchsman