Gafur v. Legacy Good Samaritan Hospital

• Decision Date: 15 May 2008
• Docket Number: (CC 0407-07139; CA A130070; SC S055175).
• Parties: Elizabeth GAFUR and Linda Wing, on their own behalf and on behalf of all similarly situated, Respondents on Review, v. LEGACY GOOD SAMARITAN HOSPITAL AND MEDICAL CENTER; Legacy Health System; Legacy Meridian Park Hospital; Legacy Emanuel Hospital & Health Center and Does 1 Through 10, Petitioners on Review, and Legacy Mount Hood Health Center, Defendant.
• Court: Oregon Supreme Court

185 P.3d 446

344 Or. 525

Elizabeth GAFUR and Linda Wing, on their own behalf and on behalf of all similarly situated, Respondents on Review, v. LEGACY GOOD SAMARITAN HOSPITAL AND MEDICAL CENTER; Legacy Health System; Legacy Meridian Park Hospital; Legacy Emanuel Hospital & Health Center and Does 1 Through 10, Petitioners on Review, and Legacy Mount Hood Health Center, Defendant.

(CC 0407-07139; CA A130070; SC S055175).

Supreme Court of Oregon, En Banc.

Argued and Submitted March 3, 2008.

Decided May 15, 2008.

On review from the Court of Appeals.^*

Timothy R. Volpert, of Davis Wright Tremaine LLP, Portland, argued the cause and filed the brief for petitioners on review. With him on the brief were Carol J. Bernick and Kevin H. Kono, Portland.

Jacqueline L. Koch, of Bailey, Pinney & Associates LLC, Vancouver, Washington, argued the cause and filed the brief for respondents on review. With her on the brief was J. Dana Pinney, Vancouver, Washington.

Brian R. Talcott, of Dunn Carney Allen Higgins & Tongue LLP, Portland, filed a brief for amicus curiae Oregon Restaurant Association.

David H. Wilson, Francis T. Barnwell, and Kathryn M. Hindman, of Bullard Smith Jernstedt Wilson, Portland, filed a brief for amici curiae Oregon Association of Hospitals and Health Systems, Portland Business Alliance, Oregon Business Association, Oregon Association Chiefs of Police, Oregon State Sheriffs Association, Special Districts Association of Oregon, Association of Oregon Counties, and League of Oregon Cities.

David F. Rees and Joshua L. Ross, of Stoll Stoll Berne Lokting & Shlachter P.C., Portland, filed a brief for amicus curiae Oregon Trial Lawyers Association.

Stacie F. Beckerman, Assistant Attorney General, Hardy Myers, Attorney General, and Mary H. Williams, Solicitor General, Salem, filed a brief for amicus curiae Bureau of Labor and Industries.

GILLETTE, J.

This is a class action wage and hour case in which plaintiffs, employees of hospitals owned by Legacy Health Systems, seek, among other things, compensation for required meal and rest breaks that they contend defendants did not provide them during work periods. Defendants¹ filed an ORCP 21 motion to dismiss various of plaintiffs' claims for relief on the ground that, although employees have a private right of action for unpaid wages, the applicable statute does not make that private right of action available for meal or rest period violations of the kind asserted by plaintiffs. The trial court agreed that the statute does not provide a private right of action for either type of violation; it granted defendants' motion to dismiss and denied plaintiffs leave to replead.² Plaintiffs appealed to the Court of Appeals, which affirmed the trial court's ruling as to the alleged meal period violations, but reversed the trial court's ruling as to the alleged rest period violations. Gafur v. Legacy Good Samaritan Hospital, 213 Or.App. 343, 347-49, 161 P.3d 319 (2007). Defendants sought review of that decision to the extent that it reinstates petitioners' claims for compensation for rest period violations.³ We allowed review and now reverse that part of the decision of the Court of Appeals.

Because this case comes to us on a motion to dismiss for failure to state a claim under ORCP 21 A(8),⁴ we accept as true all well-pleaded allegations of fact in the complaint and give plaintiffs the benefit of all favorable inferences that may be drawn from the facts alleged. Babick v. Oregon Arena Corp., 333 Or. 401, 407, 40 P.3d 1059 (2002). However, we disregard any allegations that state conclusions of law. See Nadeau v. Power Plant Engr. Co., 216 Or. 12, 15, 337 P.2d 313 (1959) (court disregards conclusions of law because they are nullities that do not present any issue). Respecting the rest period, plaintiffs alleged as follows:

"34. ORS 653.261 provides for minimum employment conditions to be established by the Commissioner of the Oregon Bureau of Labor and Industries. Defendants were required [to] provide [their] employees with a paid rest period of not less than ten * * * minutes for each period of four hours in which the employee worked, or worked the major part of the four hour period. OAR 839-020-0050.

"35. Defendants failed to provide Plaintiffs and all other similarly situated employees (Rest Period Class) members uninterrupted rest periods of not less than 10 minutes when and as required, in violation of ORS 653.261 and OAR 839-020-0050 and failed to pay Plaintiffs and similarly situated class members for those breaks not provided.

"36. As a result of Defendants' failure to provide uninterrupted rest periods as required, Plaintiffs and similarly affected class members are due wages for those rest periods which defendants failed to provide within the six year statute of limitations period."

The only factual allegations in the quoted portion of the complaint are (1) that defendant failed to provide plaintiffs with 10-minute rest breaks for every four hours that they worked, and (2) that defendant "failed to pay [p]laintiffs * * * for those breaks not provided." All of the remaining allegations are legal conclusions. In addition to the pleadings, the parties agree that plaintiffs were paid at the appropriate rate for four hours of work for each four-hour work period in which defendant did not provide them a rest break.

As noted, defendants moved to dismiss the rest period claims in the original complaint and the trial court granted the motion. Plaintiffs appealed that ruling to the Court of Appeals, arguing that (1) the applicable rule, OAR 839-020-0050(1)(b),⁵ entitles them to four hours pay for every three hours and 50 minutes worked and (2) because defendants failed to provide them the required 10-minute rest period, plaintiffs actually worked ten minutes in each four hour period for which they were not compensated. Plaintiffs argued, further, that, because compensation for work provided is "wages," as that word is defined in ORS 653.010(10), defendants necessarily paid plaintiffs less wages than they were owed. The Court of Appeals agreed, and reversed the contrary ruling of the trial court.

We turn first to an examination of the relevant statutes. As noted, this is a wage claim under ORS 653.055. That statute authorizes an employee who is not paid all the wages to which he is entitled to bring an action to recover those unpaid wages, plus penalties:

"(1) An employer who pays an employee less than the wages to which the employee is entitled under ORS 653.010 to 653.261 is liable to the employee affected:

"(a) For the full amount of the wages, less the amount actually paid to the employee by the employer; and

"(b) For civil penalties provided in ORS 652.150."

"Wages" are defined elsewhere in the statutes as "compensation due to an employee by reason of employment." ORS 653.010(10). The word "employment" is not defined in the statutes, but the word "employ" means "to suffer or permit to work" (excluding voluntary or donated services). ORS 653.010(2). Under ORS 653.055, then, the extent to which an employee is "entitled" to wages depends on whether and for how long he or she was suffered or permitted to "work."

The inclusion of the reference to ORS 653.261 in section (1) of ORS 653.055 in connection with the phrase "the wages to which an employee is entitled" suggests that the legislature intended ORS 653.261 to confer on employees some kind of an entitlement to wages. ORS 653.261 provides:

"(1) The Commissioner of the Bureau of Labor and Industries may adopt rules prescribing such minimum conditions of employment, excluding minimum wages, in any occupation as may be necessary for the preservation of the health of employees. The rules may include, but are not limited to, minimum meal periods and rest periods, and maximum hours of work, but not less than eight hours per day or 40 hours per week; however, after 40 hours of work in one week overtime may be paid, but in no case at a rate higher than one and one-half times the regular rate of pay of the employees when computed without benefit of commissions, overrides, spiffs and similar benefits.

"(2) Nothing contained in ORS 653.010 to 653.261 shall be construed to confer authority upon the commissioner to regulate the hours of employment of employees engaged in production, harvesting, packing, curing, canning, freezing or drying any variety of agricultural crops, livestock, poultry or fish.

"(3) Rules adopted by the commissioner pursuant to subsection (1) of this section do not apply to individuals employed by this state or a political subdivision or quasi-municipal corporation thereof if other provisions of law or collective bargaining agreements prescribe rules pertaining to conditions of employment referred to in subsection (1) of this section, including meal periods, rest periods, maximum hours of work and overtime.

"(4) Rules adopted by the commissioner pursuant to subsection (1) of this section regarding meal periods and rest periods do not apply to nurses who provide acute care in hospital settings if provisions of collective bargaining agreements entered into by the nurses prescribe rules concerning meal periods and rest periods."

The statute does not, by its terms, directly entitle employees to anything, much less wages. Rather, it authorizes the commissioner of the Bureau of Labor and Industries (BOLI) to promulgate rules "prescribing such minimum conditions of employment, excluding minimum wages, in any occupation as may be necessary for the preservation of the health of employees," including, but not limited to, "minimum meal periods and rest periods, and maximum hours of work."

At the same time, section (1) of the statute contains two direct references to wages. The first reference is a prohibition: BOLI is forbidden to promulgate rules concerning minimum wages.⁶ The second reference concerns overtime pay: "[A]fter 40 hours of work in one week overtime may be paid, but in no case at a...