Date: 12-10-2018

Case Style: Jazmina Gerard v. Orange Coast Memorial Medical Center

Case Number: S241655

Judge: Liu

Court: In The Supreme Court of California

Plaintiff's Attorney: Robert K. Friedl, Mark Yablonovich, Arlene Marie Turinchak and Ryan H. Wu

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

Description: The Labor Code generally provides that employees who
work more than five hours must be provided with a 30-minute
meal period and that employees who work more than 10 hours
must be provided with an additional 30-minute meal period.
(Lab. Code, § 512, subd. (a); all undesignated statutory
references are to this code.) An employee who works no more
than six hours may waive the meal period, and an employee
who works no more than 12 hours may waive the second meal
period. (Ibid.) A wage order of the Industrial Welfare
Commission (IWC) permits health care employees to waive the
second meal period even if they have worked more than 12
hours. The hospital that is the defendant in this case allowed
employees working shifts longer than 12 hours to waive the
second meal period, and the employees who are the plaintiffs
here waived their second meal periods. Plaintiffs now claim
that the IWC order permitting them to waive second meal
periods for shifts greater than 12 hours violates the Labor
Code and that the hospital must pay back wages and penalties
for unlawfully permitting waiver of the second meal period.
Considering the relevant statutory and regulatory provisions
in light of their history, we agree with the Court of Appeal that
the IWC order does not violate the Labor Code.
1
I.
Plaintiffs Jazmina Gerard, Kristiane McElroy, and
Jeffrey Carl are health care workers who were formerly
employed by defendant Orange Coast Memorial Medical
Center (Hospital). According to their complaint, plaintiffs
usually worked 12-hour shifts and sometimes worked shifts
longer than 12 hours. 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
occasionally worked shifts longer than 12 hours without being
provided a second meal period. Plaintiffs contended that these
second meal period waivers violated the Labor Code, and they
sought penalties, unpaid wages, and injunctive relief for those
and other violations. Gerard alleged claims on her own behalf
and on behalf of others in the form of a private attorney
general action. (Lab. Code, § 2698, et seq. (Labor Code Private
Attorneys General Act of 2004 or PAGA).) McElroy and Carl
also alleged claims on their own behalf and on behalf of others
in the form of a class action. (Code Civ. Proc., § 382.)
The Hospital asserted as an affirmative defense that the
meal period waivers had conformed to the applicable IWC
wage order. The Hospital moved for summary judgment
against Gerard on all of her individual and PAGA claims,
asserting that there was no disputed issue of material fact as
to the cause of action for meal period violations because the
plaintiffs were provided meal periods as required by law. The
trial court granted the Hospital’s motion for summary
judgment and its subsequent motion to deny class certification.
Plaintiffs appealed.
2
As explained in greater detail below, the Court of Appeal
initially reversed the trial court, holding that although the
meal period waivers were obtained in conformity with the
applicable wage order, that wage order violated a provision of
the Labor Code generally prohibiting second meal period
waivers for employees working shifts longer than 12 hours.
We granted the Hospital’s petition for review and transferred
the case to the Court of Appeal with directions to consider
recently enacted legislation that was potentially pertinent to
the case. The Court of Appeal subsequently reversed course
and affirmed the trial court’s rulings in favor of the Hospital.
We then granted plaintiffs’ petition for review.
II
Wage and hour claims, including claims regarding the
availability and timing of meal breaks, are “governed by two
complementary and occasionally overlapping sources of
authority: the provisions of the Labor Code, enacted by the
Legislature, and a series of 18 wage orders, adopted by the
IWC.” (Brinker Restaurant Corp. v. Superior Court (2012) 53
Cal.4th 1004, 1026 (Brinker).) “To the extent a wage order and
a statute overlap, we will seek to harmonize them, as we would
with any two statutes.” (Id. at p. 1027.) But because the
Legislature is the source of the IWC’s authority, a provision of
the Labor Code will prevail over a wage order if there is a
conflict. (See id. at p. 1026; California Hotel & Motel Assn. v.
Industrial Welfare Com. (1979) 25 Cal.3d 200, 207–209.)
In June 1993, at the urging of the health care industry,
the IWC amended Wage Order 5–1989 to add subdivision
11(C), which permitted health care employees who worked
shifts longer than eight hours to waive a second meal period.
3
(Official Notice, Amends. to §§ 2, 3, & 11 of IWC Order No. 5–
89 (June 30, 1993).) As the IWC’s Statement as to the Basis of
Amendments explained: “The petitioner requested the IWC to
allow employees in the health care industry who work shifts in
excess of eight (8) total hours in a workday to waive their right
to ‘any’ meal period . . . as long as certain protective conditions
were met. The vast majority of employees testifying at public
hearings supported the IWC’s proposal with respect to such a
waiver, but only insofar as waiving ‘a’ meal period or ‘one’ meal
period, not ‘any’ meal period. Since the waiver of one meal
period allows employees freedom of choice combined with the
protection of at least one meal period on a long shift, on June
29, 1993, the IWC adopted language which permits employees
to waive a second meal period provided the waiver is
documented in a written agreement voluntarily signed by both
the employee and the employer, and the waiver is revocable by
the employee at any time by providing the employer at least
one day’s notice.” (Ibid.)
In 1999, the Legislature enacted Assembly Bill No. 60
(AB 60), known as the Eight-Hour-Day Restoration and
Workplace Flexibility Act of 1999. This bill was passed in
response to IWC wage orders that had eliminated overtime for
employees working more than eight hours per day. The
legislation repealed five wage orders, including Wage Order
No. 5 covering the health care industry, and required the IWC
to review its wage orders and readopt orders restoring daily
overtime. (See Brinker, supra, 53 Cal.4th at p. 1045.) The
Legislature amended Labor Code section 510 to explicitly
provide that “[a]ny work in excess of eight hours in one
workday . . . shall be compensated at the rate of no less than
one and one-half times the regular rate of pay for an
4
employee.” (Stats. 1999, ch. 134, § 4; compare stats. 1982,
ch. 185, § 1 [earlier version of section 510 without that
provision].) Section 511 was added to allow employers and
employees to agree on an alternative workweek that permitted
employees to work up to 10 hours per day within a 40-hour
week without the obligation to pay overtime. AB 60 also added
section 512, which for the first time set out statutory meal
period requirements. (Brinker, at p. 1045.) 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.)
Further, AB 60 added section 516, which 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.” (Stats. 1999, ch. 134, § 10, italics added.) And AB
60 added section 517, which states in pertinent part in
subdivision (a): “The Industrial Welfare Commission shall, at
a public hearing to be concluded by July 1, 2000, adopt wage,
hours, and working conditions orders consistent with this
chapter without convening wage boards, which orders shall be
final and conclusive for all purposes.”
Consistent with that mandate, the IWC adopted a new
version of Wage Order No. 5 on June 30, 2000, and it became
effective on October 1, 2000. Section 11(D) of Wage Order No.
5
5 essentially readopted former section 11(C) discussed above:
“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.”
After section 11(D) was adopted, but before it became
effective, the Legislature enacted Senate Bill No. 88 (SB 88),
which among other things expanded the class of employees
exempt from overtime to include certain computer software
and nursing professionals. (See §§ 515, subd. (f), 515.5; Stats.
2000, ch. 492, §§ 2–3.) SB 88 also amended section 516 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 . . . .” (Stats. 2000, ch. 492, § 4, italics
added.)
The present litigation challenged the validity of section
11(D), and the Court of Appeal invalidated the provision in
Gerard v. Orange Coast Memorial Medical Center (2015) 234
Cal.App.4th 285, review granted May 20, 2015, S225205
(Gerard I). As the Court of Appeal here explained: “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.” (Gerard v. Orange
6
Coast Memorial Medical Center (2017) 9 Cal.App.5th 1204,
1210 (Gerard II).)
After Gerard I, the Legislature further amended section
516 with Senate Bill No. 327 (SB 327). The previous language
requiring the IWC to conform to section 512 was retained but
labeled as subdivision (a), and a new subdivision (b) was
added, stating: “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.”
(Stats. 2015, ch. 506, § 2.)
SB 327 also stated as legislative findings: “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.” (Stats. 2015, ch. 506, § 1.)
SB 327 also contained an urgency provision: “This act is
an urgency statute necessary for the immediate preservation of
7
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.” (Stats.
2015, ch. 506, § 3.)
SB 327 was supported not only by hospitals and
healthcare organizations but also by health care employee
unions. The United Nurses Association of California/Union of
Health Care Professionals (UNAC) stated: “Under this wage
order provision, UNAC members have for years enjoyed the
flexibility of alternate work schedules, which allows for greater
staffing flexibility and better patient care. Patient outcomes
are dramatically improved in environments where the nurses
and other health care professionals can place priority on the
needs of their patients without interruption by an arbitrary
meal period when the shift runs long. (RNs are generally able
to eat during work time in break rooms.)” (Assem. Com. on
Labor & Employment, Bill Analysis of Sen. Bill No. 327 (2015–
2016 Reg.Sess.) Sept. 8, 2015, p. 8.) UNAC commented that
“[Gerard I] will result in a severe disruption of the lives of our
members, many of whom have built a schedule of work, child
care, and other obligations around the ability to waive a second
meal period.” (Ibid.)
At the same time as the Legislature was acting, the
Hospital petitioned this court to review Gerard I, supported by
amici letters from UNAC and Service Employees International
Union Local 121RN. We granted the petition and transferred
the cause to the Court of Appeal with directions to vacate the
8
decision and to reconsider the cause in light of the enactment
of SB 327.
On remand, the Court of Appeal concluded it had 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]
. . . ; 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’] . . . .) 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.)
“In this case, . . . 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.” (Gerard II, supra, 9
Cal.App.5th at pp. 1210–1211.) The court therefore concluded
9
that “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).” (Id. at p. 1211.)
To summarize this chronology: The IWC in 1993
amended Wage Order 5 with section 11(C), allowing health
care employees who work more than eight hours in a shift to
waive a second meal period. In 1999, AB 60 provided in Labor
Code section 512 that employees could only waive the second
meal period if they worked 12 hours or less, but also provided
in former section 516 that the IWC could adopt or amend wage
orders with respect to meal periods “notwithstanding any other
provision of law” as long as the order was consistent with the
health and welfare of the employees. In 2000, the IWC
adopted section 11(D), which, like 11(C), permitted health care
workers who work more than eight hours to waive a second
meal period. Also in 2000, after section 11(D) was adopted but
before it went into effect, the Legislature enacted SB 88, which
required IWC wage orders to be consistent with section 512.
Eight years later, this litigation challenged the validity of the
second meal period waivers of health care employees working
shifts greater than 12 hours. In Gerard I, the Court of Appeal
held that such waivers are invalid because section 11(D)
violated sections 512 and 516. In response, the Legislature
enacted SB 327, declaring the meal waiver provisions for
health care employees in Wage Order No. 5 valid and
enforceable. We granted the Hospital’s petition for review and
transferred the case to the Court of Appeal. The Court of
Appeal in Gerard II reversed itself, and we granted Gerard’s
petition for review.
10
III.
Plaintiffs do not dispute the distinction between the
adoption of a wage order and its effective date, or that the
amended version of section 516 does not apply to wage orders
that had already been adopted. Indeed, the text of amended
section 516 qualifies the IWC’s authority to adopt wage orders
going forward, but it contains no terms invalidating wage
orders already adopted: “Except as provided in Section 512,
the [IWC] may adopt or amend working condition orders with
respect to break periods [and] meal periods . . . .” (Stats. 2000,
ch. 492, § 4, italics added.) But plaintiffs contend that the IWC
lacked authority to adopt section 11(D) because even under the
version of section 516 in effect at the time the wage order was
adopted, section 512(a) limited the IWC’s authority to permit
meal period waivers.
Plaintiffs’ argument is based principally on section 517’s
language that IWC wage orders adopted by July 1, 2000, must
be “consistent with this chapter,” that is, consistent with the
provisions of AB 60. (Stats. 1999, ch. 134, § 11.) “ ‘[C]onsistent
with this chapter,’ ” plaintiffs contend, “included a requirement
that the IWC wage order be consistent with section 512 from
the moment the Eight-Hour-Day Restoration and Workplace
Flexibility Act of 1999 was enacted. Section 516 specifically
granted the IWC authority to adopt wage orders related to
meal periods, but did not grant authority to disregard the
minimum standards established in the Act in section 512.”
Plaintiffs construe the phrase “notwithstanding any other
provision of law” in former section 516 narrowly: “The correct
reading is that the IWC was authorized to adopt orders as to
break periods and meal periods even if another law limited
11
IWC’s authority to adopt such orders, not that the IWC could
disregard all existing law in exercising its authority.”
This reading of the statutory language is unpersuasive.
It ignores the broad sweep of the phrase “notwithstanding any
other provision of law.” (Arias v. Superior Court (2009) 46
Cal.4th 969, 983, italics omitted [describing “notwithstanding
any other provision of law” as a “ ‘ “term of art” ’ [citation] that
declares the legislative intent to override all contrary law”].)
We need not define the outermost parameters of the phrase in
order to conclude that there is no reason to read it in former
section 516 to exclude from its scope the law regarding meal
periods found in section 512(a). The two provisions were
adopted simultaneously as part of the same legislation and in
order to further a common purpose. Moreover, at the time the
IWC adopted the disputed wage order, the phrase “consistent
with this chapter” in section 517 meant consistency not only
with section 512(a) but also with former section 516, which by
its terms authorized the IWC to make rules about meal periods
“notwithstanding any other provision of law.”
The more natural way to reconcile the phrases
“notwithstanding any other provision of law” of former section
516 and “consistent with this chapter” in section 517 is to give
them their literal meaning. The main purpose of AB 60, the
Eight Hour Day Restoration Workplace Flexibility Act of 1999,
was to restore overtime for a nonexempt employee working
more than eight hours a day. “[C]onsistent with this chapter”
means that IWC orders going forward can no longer disregard
daily overtime. But even as AB 60 limited the discretion of the
IWC in that and other respects, it explicitly retained in former
section 516 the IWC’s rulemaking prerogative,
“notwithstanding any other provision of law,” with respect to
12
“break periods, meal periods and days of rest,” limited only by
a requirement that any rules be “consistent with the health
and welfare” of affected workers. (Stats. 1999, ch. 134, § 10.)
Read literally, the “notwithstanding” phrase undoubtedly
gives broad powers to the IWC. That literal reading makes
sense in this context. The Legislature’s broad delegation to the
IWC is consistent with its recognition that the IWC is
constitutionally authorized (Cal. Const., art. XIV, § 1), and has
been long understood to have the power, to adopt rules nearly
co-equal to legislative enactments. (See Brinker, supra, 53
Cal.4th at pp. 1026–1027.) Only after section 11(D) was
adopted did the Legislature, through SB 88, further limit the
IWC’s discretion by requiring any rules about meal periods to
be consistent with section 512. Accordingly, we reject Gerard’s
statutory argument and the related argument that section
11(D) was beyond the scope of the authority that the
Legislature conferred on the IWC. (See Agnew v. State Bd. of
Equalization (1999) 21 Cal.4th 310, 321.)
Plaintiffs cite Brinker and a Court of Appeal case for the
proposition that the IWC may not exercise its authority under
section 516 in ways that contravene section 512. (Brinker,
supra, 53 Cal.4th at p. 1043; Bearden v. U.S. Borax, Inc. (2006)
138 Cal.App.4th 429, 438.) But those cases concern the
meaning of section 516 after SB 88 went into effect, not the
meaning of former section 516.
Plaintiffs also cite the legislative history of SB 88. The
Senate Third Reading analysis of SB 88 states: “This bill
clarifies two provisions of the Labor Code enacted in Chapter
134. Labor Code Section 512 codifies the duty of an employer
to provide employees with meal periods. Labor Code section
13
516 establishes the authority of IWC to adopt or amend
working condition orders with respect to break periods, meal
periods, and days of rest. This bill provides that IWC’s
authority to adopt or amend orders under Section 516 must be
consistent with the specific provisions of Labor Code Section
512.” (Sen. Com. on Lab. & Employment, Sen. 3d Reading of
Sen. Bill 88 (1999–2000 Reg. Sess.) as amended Aug. 10, 2000,
p. 5.) According to plaintiffs, the word “clarifies” means that
amended section 516 merely declared existing law and that it
was never the Legislature’s intent to authorize the IWC to
permit meal period waivers other than as provided in section
512.
Whether an amendment represents a change in the law
or merely a declaration of existing law is a question of
interpreting existing law, a task that ultimately belongs to the
judiciary. (McClung v. Employment Dev. Dept. (2004) 34
Cal.4th 467, 472–474.) A legislative statement that a statute
declares or amends existing law is not binding on courts, which
must make their own determination. (Id. at pp. 473–476; see
Coker v. JPMorgan Chase Bank, N.A. (2016) 62 Cal.4th 667,
690.) In this case, it is clear that SB 88’s amendment of former
section 516 worked a change in the law. Before the
amendment, the IWC had the authority to adopt orders
concerning meal periods “notwithstanding any other provision
of law,” including section 512. After the amendment, the IWC
could no longer deviate from the meal period requirements of
section 512. (See Brinker, supra, 53 Cal.4th at pp. 1042–1043.)
Moreover, although SB 88 was an urgency statute, there
is no indication that the reason for the urgency was to prevent
section 11(D) from going into effect. The restriction on the
IWC’s authority with respect to meal period waivers was only
14
one part of SB 88; the bill also addressed, among other things,
the exemption of certain computer software professionals and a
certain class of certified nurse midwives, nurse anesthetists,
and nurse practitioners from overtime pay. (Stats. 2000,
ch. 492, §§ 2–3.) The stated reason for the urgency legislation
was to enact these exemptions: “In order, at the earliest
possible time, to protect businesses that rely on the computer
industry as well as certain vital health care professions, it is
necessary for this act to take effect immediately.” (Id., § 5.)
Plaintiffs also invoke the principle that wage orders and
statutes should be harmonized where possible. (See Brinker,
supra, 53 Cal.4th at p. 1027.) They propose to harmonize the
wage order and statute as follows: Section 512 authorizes
second meal period waivers for shifts up to 12 hours, whereas
wage order No. 5 authorizes waivers of second meal periods for
shifts over 8 hours but says nothing explicitly about shifts over
12 hours. The way to harmonize these two provisions, they
say, is to read the wage order as only authorizing waivers for
shifts of 8 to 12 hours. We find this interpretation
unpersuasive. The language of former section 516
(“Notwithstanding any other provision of law, the Industrial
Welfare Commission may adopt . . . .”) already dictates the
relationship between the wage order and the statutory scheme,
directing that the order take precedence. We decline to insert
limitations into the wage order where none appear.
The parties argue at length about the significance of SB
327. Plaintiffs point to SB 327’s declaration that SB 88’s
amendment of former section 516 did not intend to
countermand the IWC’s already adopted wage order. This
legislative declaration is not binding on the courts. (See
McClung, supra, 34 Cal.4th at pp. 472–473.) Nevertheless, for
15
reasons discussed above, we independently conclude that SB
88 did not undo section 11(D) of Wage Order No. 5 permitting
health care workers who work more than eight hours to waive
a second meal period. The Legislature, when it enacted SB 88,
did not second-guess the IWC’s determination that allowing
health care employees to waive a second meal period is
consistent with promoting their health and welfare.
Since 2000, the Legislature has amended section 512
several times to exempt various classes of employees covered
by collective bargaining agreements from the prohibition
against the waiver of second meal periods for employees
working more than 12 hours. These include certain classes of
bakery workers (Stats. 2003, ch. 207 (A.B.330), § 1), motion
picture or broadcast employees (Stats. 2005, ch. 414
(A.B.1734), § 1), and certain construction employees,
commercial drivers, security officers, and utility employees
(Stats. 2010, ch. 662 (A.B.569), § 1). Thus, although the
Legislature has determined that waiver of a second meal
period for employees working more than eight hours is
generally contrary to public policy, it has not applied that rule
inflexibly to all categories of employees. This is consistent
with our conclusion that the Legislature, in prospectively
requiring IWC wage orders to be consistent with section
512(a), did not intend to disturb the extant exemption for
health care workers based on the IWC’s determination that the
exemption promoted the health and welfare of those workers.

Outcome: We affirm the judgment of the Court of Appeal.

Plaintiff's Experts:

Defendant's Experts:

Comments: