Date: 03-22-2017

Case Style: JAZMINA GERARD et al. v. ORANGE COAST MEMORIAL MEDICAL CENTER

Case Number: G048039

Judge: Thompson, David A.

Court: California Court of Appeals Fourth Appellate District Division Three on appeal from the Orange County Superior Court - Central

Plaintiff's Attorney: Glenn A. Danas and Robert K. Friedl

Defendant's Attorney: Richard J. Simmons, Derek R. Havel, Daniel J. McQueen, Robert J. Stumpf, Jr., and Karin Dougan Vogel

Description: INTRODUCTION
Three health care workers sued their hospital employer in this putative class
and private attorney general enforcement action for alleged Labor Code violations and
related claims. In this appeal, their primary complaint is the hospital illegally allowed its
health care employees to waive their second meal periods on shifts longer than 12 hours.
A statute requires two meal periods for shifts longer than 12 hours. But an
order of the Industrial Welfare Commission (IWC) authorizes employees in the health
care industry to waive one of those two required meal periods on shifts longer than 8
hours. The principal issue before us concerns the validity of the IWC order.
This is our second opinion in this case. Our first opinion concluded the
IWC order is partially invalid to the extent it authorizes second meal break waivers on
shifts over 12 hours and we reversed. (Gerard v. Orange Coast Memorial Medical
Center (2015) 234 Cal.App.4th 285, review granted May 20, 2015, S225205 (Gerard I))
After the California Supreme Court granted the hospital’s petition for
review in Gerard I, that court transferred the case back to this court with directions to
vacate our decision and to reconsider the cause in light of the enactment of Statutes 2015,
chapter 506 (Sen. Bill No. 327 (2015-2016 Reg. Sess.); SB 327).
Upon reconsideration we conclude the IWC order is valid and affirm.
PLEADINGS AND PROCEDURAL HISTORY
Plaintiffs and appellants Jazmina Gerard, Kristiane McElroy, and Jeffery
Carl (plaintiffs) are health care workers who were formerly employed by defendant and
respondent Orange Coast Memorial Medical Center (hospital). Gerard, McElroy, and
Carl alleged they usually worked 12-hour shifts, but from time to time worked shifts
longer than 12 hours.
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A hospital policy allowed health care employees who worked shifts longer
than 10 hours caring for patients to voluntarily waive one of their two meal periods, even
if their shifts lasted more than 12 hours. Plaintiffs alleged they signed second meal
period waivers, and they occasionally worked shifts longer than 12 hours without being
provided a second meal period.
Plaintiffs’ complaint alleged second meal period waiver and other Labor
Code violations, and sought penalties, unpaid wages, and injunctive relief. Gerard
alleged claims on her own behalf, and on behalf of others as a private attorney general
action (Lab. Code, § 2698, et seq.; PAGA). McElroy and Carl also alleged claims on
their own behalf, and on behalf of others as a class action (Code Civ. Proc., § 382).
As relevant here, the meal period cause of action alleged: “51.
. . . Plaintiffs and other class members who were scheduled to work for a period of time
in excess of twelve (12) hours were required to work for periods longer than ten (10)
hours, without a second uninterrupted meal period of not less than thirty (30) minutes.
[¶] . . . [¶] 54. Defendant’s conduct violates the applicable IWC Wage Orders and
California Labor Code sections 226.7 and 512[, subdivision] (a).”
Hospital answered and asserted as an affirmative defense, “Plaintiffs’ claim
for an alleged failure to provide meal periods fails because Defendant utilized valid meal
period waivers.” Hospital then moved for summary judgment against Gerard on all of
her individual and PAGA claims. The motion asserted in relevant part, “There is no
disputed issue of material fact as to Plaintiff’s first cause of action for meal period
violations because Plaintiff was provided meal periods as required by law.”
The court granted summary judgment finding, “There is no disputed issue
of material fact as to Plaintiff’s first cause of action for meal period violations because
Plaintiff was provided meal periods as required by law.” The court found Gerard’s
illegal meal period waiver argument was “incorrect per Brinker Restaurant Corp. v.
Superior Court (2012) 53 Cal.4th 1004 (Brinker).” Gerard appealed the judgment.
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Hospital next moved to deny class certification and to strike the class
allegations. The court granted the motion and stated: “One of the most basic
requirements for class certification is . . . a prima facie claim. . . . Here, the proposed
Representative Plaintiffs have failed to show that they have any claim against
Defendant. . . .” McElroy and Carl appealed the order.
LABOR CODE PROVISIONS, IWC ORDERS AND SB 327
Labor Code section 512 (all statutory references are to this code unless
otherwise indicated) and IWC wage order No. 5-2001 (Cal. Code Regs., tit. 8, § 11050;
Wage Order No. 5) prescribe meal periods. Employers who fail to provide these meal
periods must pay premium wages. (§ 226.7, subd. (c); Wage Order No. 5, § 11(B).)
Section 512 was adopted in 1999 and became effective on January 1, 2000.
(Assem. Bill No. 60 (1999-2000 Reg. Sess.) § 6; AB 60.) Subdivision (a) of section 512
(section 512(a)) states in relevant part: “An employer may not employ an employee for a
work period of more than 10 hours per day without providing the employee with a second
meal period of not less than 30 minutes, except that if the total hours worked is no more
than 12 hours, the second meal period may be waived by mutual consent of the employer
and the employee only if the first meal period was not waived.” (Italics added.)
Wage Order No. 5 was adopted on June 30, 2000 and became effective on
October 1, 2000. Section 11(D) of Wage Order No. 5 (section 11(D)) states:
“Notwithstanding any other provision of this order, employees in the health care industry
who work shifts in excess of eight (8) total hours in a workday may voluntarily waive
their right to one of their two meal periods.” (Italics added.)
On the date section 11(D) was adopted as part of Wage Order No. 5,
section 516 stated: “Notwithstanding any other provision of law, the [IWC] may adopt or
amend working condition orders with respect to break periods, meal periods, and days of
rest for any workers in California consistent with the health and welfare of those
workers.” (AB 60, § 10; italics added.)
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After section 11(D) was adopted, but before it became effective, section 516
was amended to say: “Except as provided in Section 512, the [IWC] may adopt or amend
working condition orders with respect to break periods, [and] meal periods . . . . ” (Sen.
Bill No. 88 (1999-2000 Reg. Sess.) § 4, eff. Sept. 19, 2000; italics added; SB 88.)
After we decided Gerard I, section 516 was further amended by SB 327.
The language quoted in the preceding paragraph was unchanged but labeled separately as
subdivision (a), and a new subdivision (b) was added which stated: “Notwithstanding
subdivision (a), or any other law, including Section 512, the health care employee meal
period waiver provisions in Section 11(D) of [IWC] Wage Orders 4 and 5 were valid and
enforceable on and after October 1, 2000, and continue to be valid and enforceable. This
subdivision is declarative of, and clarifies, existing law.”
1 (SB 327, § 2.)
SB 327 also contained legislative findings and declarations which stated:
“SECTION 1. The Legislature finds and declares the following:
“(a) From 1993 through 2000, [IWC] Wage Orders 4 and 5 contained
special meal period waiver rules for employees in the health care industry. Employees
were allowed to waive voluntarily one of the two meal periods on shifts exceeding 12
hours. On June 30, 2000, the [IWC] adopted regulations allowing those rules to continue
in place. Since that time, employees in the health care industry and their employers have
relied on those rules to allow employees to waive voluntarily one of their two meal
periods on shifts exceeding 12 hours.
“(b) Given the uncertainty caused by a recent appellate court decision,
Gerard v. Orange Coast Memorial Medical Center (2015) 234 Cal.App.4th 285, without
immediate clarification, hospitals will alter scheduling practices.
“[¶] . . . [¶]

1 For clarity all subsequent references to section 516 will include the new
subdivision designations, and subdivision (a) will be referred to as section 516(a).
6
“SEC. 3. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the meaning of Article IV of the
Constitution and shall go into immediate effect. The facts constituting the necessity are:
“In order to confirm and clarify the law applicable to meal period waivers
for employees in the health care industry throughout the state, it is necessary that this act
take effect immediately.” (SB 327, §§ 1, 3.)
DISCUSSION
In Gerard I we held section 11(D) invalid to the extent it sanctions second
meal period waivers for health care employees who work shifts of more than 12 hours,
because it conflicts with section 512(a) which allows such waivers only if the total hours
worked is no more than 12 hours. Moreover, we held the IWC exceeded its authority by
enacting section 11(D), because it created an additional exception for health care
workers, beyond the second meal period waiver exception in section 512(a), all in
violation of section 516(a). For these reasons, we concluded hospital’s second meal
period waiver policy violates sections 512(a) and 516(a) and is invalid.
Upon reconsideration, it appears we erred in Gerard I. The lynchpin of our
analysis was the conclusion that section 11(D) conflicts with section 512(a). However, in
reaching this conclusion we failed to account for a subtle but critical distinction in
administrative law—the date an agency regulation or order is adopted is not the same as
the date it becomes effective. (Compare Gov. Code, § 11346, et seq. [“Procedure for
Adoption of Regulations”] with Gov. Code, § 11343.4, subd. (a) [adopted regulations
filed with Secretary of State “become effective” in accordance with prescribed schedule]
(italics added); also compare § 1173 [authorizing the IWC to “adopt an order”] with
§ 1184 [adopted order “shall be effective . . . not less than 60 days from the date of
publication”] italics added.) Long-settled case law validates the distinction between the
adoption date and the effective date. (See, e.g., Ross v. Bd. of Retirement of Alameda
County Employees’ Retirement Assn. (1949) 92 Cal.App.2d 188, 193.)
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In this case, as the supplemental amicus curiae brief points out, the SB 88
amendment to section 516(a) took away the IWC’s authority to adopt wage orders
inconsistent with the second meal period requirements of section 512(a) as of September
19, 2000. But the IWC had already adopted section 11(D) on June 30, 2000, under the
AB 60 version of section 516(a) which authorized the IWC to do so “notwithstanding”
section 512(a). Thus, the SB 88 amended version of section 516(a) should have been
irrelevant to our analysis in Gerard I. Instead, it became dispositive. We concluded
section 11(D) is subject to the SB 88 amended version of section 516(a). It isn’t.
In short, section 11(D) is valid—not invalid. It was specifically authorized
by the AB 60 version of section 516(a) in effect on the date it was adopted, even though
it conflicts with section 512(a) to the extent it sanctions second meal period waivers for
health care employees on shifts of more than 12 hours. (See also § 517, subd. (a) [IWC
shall adopt by July 1, 2000, “wage, hours, and working conditions orders consistent with
this chapter . . . .”) Therefore, the IWC did not exceed its authority by adopting section
11(D), and hospital’s second meal period waiver policy does not violate section 512(a).
SB 327 reinforces our conclusion section 11(D) is valid. When the
Legislature clarifies a statute in response to an appellate court opinion construing it, we
must consider whether the clarification applies in the pending case. (Western Security
Bank v. Superior Court (1997) 15 Cal.4th 232, 243 (Western Security).) As our Supreme
Court explained: “A basic canon of statutory interpretation is that statutes do not operate
retrospectively unless the Legislature plainly intended them to do so. . . . [¶] A corollary
to [this rule] is that a statute that merely clarifies, rather than changes, existing law does
not operate retrospectively even if applied to transactions predating its enactment. We
assume the Legislature amends a statute for a purpose, but that purpose need not
necessarily be to change the law. [Citation.] Our consideration of the surrounding
circumstances can indicate that the Legislature made material changes in statutory
language in an effort only to clarify a statute’s true meaning.” (Ibid.)
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“One such circumstance is when the Legislature promptly reacts to the
emergence of a novel question of statutory interpretation: “‘An amendment which in
effect construes and clarifies a prior statute must be accepted as the legislative declaration
of the meaning of the original act, where the amendment was adopted soon after the
controversy arose concerning the proper interpretation of the statute. . . . [¶] If the
amendment was enacted soon after controversies arose as to the interpretation of the
original act, it is logical to regard the amendment as a legislative interpretation of the
original act—a formal change—rebutting the presumption of substantial change.”
[Citation.]’ [Citation.]” (Western Security, supra, 15 Cal.4th at pp. 243-244.)
“Even so, a legislative declaration of an existing statute’s meaning is
neither binding nor conclusive in construing the statute. Ultimately, the interpretation of
a statute is an exercise of the judicial power the Constitution assigns to the
courts. . . . Nevertheless, the Legislature’s expressed views on the prior import of its
statutes are entitled to due consideration, and we cannot disregard them.” (Western
Security, supra, 15 Cal.4th at p. 244.)
Applying these principles here, it is apparent SB 327 merely clarified rather
than changed the meaning of sections 512(a) and 516(a). Our opinion in Gerard I
concerned a novel question of statutory interpretation. No prior published opinion had
considered the validity of section 11(D) in relation to sections 512(a) and 516(a). SB 327
was enacted soon after Gerard I, and in direct response to the controversy our opinion
created regarding the validity of section 11(D).
In addition, the Legislature made plain its intent in enacting SB 327. Again
section 2 of SB 327 added section 516(b) which states: “Notwithstanding subdivision
(a), or any other law, including Section 512, the health care employee meal period waiver
provisions in Section 11(D) of [IWC] Wage Orders 4 and 5 were valid and enforceable
on and after October 1, 2000, and continue to be valid and enforceable. This subdivision
is declarative of, and clarifies, existing law.” (Italics added.)
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The Legislature similarly expressed its intent in section 1 of SB 327 which
states, in part: “(b) Given the uncertainty caused by a recent appellate court decision,
Gerard v. Orange Coast Memorial Medical Center (2015) 234 Cal.App.4th 285, without
immediate clarification, hospitals will alter scheduling practices.” (Italics added.)
Finally, the Legislature’s intent was evident in its statement of the facts
justifying enactment of SB 327 as an urgency measure: “The facts constituting the
necessity are: In order to confirm and clarify the law applicable to meal period waivers
for employees in the health care industry throughout the state, it is necessary that this act
take effect immediately.” (SB 327, § 3; italics added.)
In sum, the Legislature’s unmistakable focus in SB 327 was the disruptive
effect of our opinion in Gerard I on the longstanding and widespread use of second meal
period waivers by employees and employers in the health care industry. “By abrogating
[our] decision, the Legislature intended to protect those parties’ expectations and restore
certainty and stability to those transactions.” (Western Security, supra, 15 Cal.4th at pp.
245-246.) And the obvious import of SB 327 is the Legislature intended its provisions to
apply immediately to existing second meal period waivers, including those at issue here.
Plaintiffs argue SB 327 changed the law, rather than clarified it, because:
“The expressed intent of the Legislature in enacting [SB 88], which amended section
516[(a)] in 2000, was to clarify that under section 516[(a)] the IWC never had the
authority to adopt wage orders inconsistent with section 512[(a)]. Thus, [SB 88] did not
change the law; it stated what the law had always been.” We are not persuaded.
SB 88 definitely changed the law. Before SB 88, the IWC had unlimited
authority under section 516(a) to adopt wage orders like section 11(D), notwithstanding
any other provision of law, including section 512(a). (AB 60, § 10.) After SB 88, the
IWC had no authority under section 516(a) to adopt wage orders like section 11(D) which
are inconsistent with section 512(a). (SB 88, § 4.) And again, section 11(D) is subject to
the AB 60 version of section 516(a), not the SB 88 amended version of section 516(a).
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Further, nothing in the legislative history of SB 88 suggests the Legislature
intended to invalidate wage orders like section 11(D), which were adopted under the AB
60 version of section 516(a) before July 1, 2000 as required by section 517. But even if
the Legislature had that intent when it enacted SB 88, as plaintiffs argue against SB 327:
“The Legislature is powerless to change [the] history [of section 516(a)]. More to the
point, its declaration in SB [88] and section 516[(a)] as amended by SB [88], is
ineffective to legislate what the effect of section 516[(a)] was prior to the amendment.”
Lastly, the cases cited by plaintiffs do not support their contention SB 88
merely clarified the law. Bearden v. U.S. Borax, Inc. (2006) 138 Cal.App.4th 429 and
Lazarin v. Superior Court (2010) 188 Cal.App.4th 1560 both analyzed wage orders the
IWC adopted after SB 88 became effective, not before. Brinker did say SB 88 was,
“intended to prohibit the IWC from amending its wage orders in ways that ‘conflict[]
with [the] 30-minute meal period requirements’ in section 512[(a)]. [Citations.]”
(Brinker, supra, 53 Cal.4th at p. 1043.) Brinker did not say SB 88 was intended to
prohibit the IWC from adopting such wage orders before SB 88 became effective.
For all of these reasons, we hold SB 327 represents a clarification of the
law before our decision in Gerard I, consistent with our reconsidered view above, rather
than a change in the law. Consequently, we accept SB 327 as the “‘“legislative
declaration of the meaning”’” of sections 512(a) and 516(a), and “give the Legislature’s
action its intended effect.” (Western Security, supra, 15 Cal.4th at pp. 243, 246)
As a result, the second meal period waivers signed by plaintiffs in this case,
“were valid and enforceable on and after October 1, 2000, and continue to be valid and
enforceable.” (§ 516, subd. (b).) Accordingly, we conclude the court did not err by
granting summary judgment, denying class certification and striking the class allegations.
This conclusion moots plaintiffs’ contention the court erroneously sustained
hospital’s “‘failure to authenticate’” objection to the timecards and wage statements
Gerard offered in opposition to the motion for summary judgment.
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DISPOSITION
The summary judgment and the order denying class certification and
striking the class allegations are affirmed. The requests for judicial notice are granted in
part.
2 In the interests of justice each party shall bear their own costs on appeal.
THOMPSON, J.

Outcome: Reversed & Remanded to trial court w/directions

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