Jazmina Gerard v. Orange Coast Memorial Medical Center

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.

We affirm the judgment of the Court of Appeal.