Gerard v. Orange Coast Mem'l Med. Ctr.

• Decision Date: 01 March 2017
• Docket Number: G048039
• Citation: 9 Cal.App.5th 1204,215 Cal.Rptr.3d 778
• Court: California Court of Appeals Court of Appeals
• Parties: Jazmina GERARD et al., Plaintiffs and Appellants, v. ORANGE COAST MEMORIAL MEDICAL CENTER, Defendant and Respondent.

9 Cal.App.5th 1204

215 Cal.Rptr.3d 778

Jazmina GERARD et al., Plaintiffs and Appellants,

v.ORANGE COAST MEMORIAL MEDICAL CENTER, Defendant and Respondent.

G048039

Court of Appeal, Fourth District, Division 3, California.

Filed March 1, 2017

Law Offices of Mark Yablonovich and Mark Yablonovich, Los Angeles; Capstone Law, Glenn A. Danas, Los Angeles and Robert K. Friedl, EI Segundo, for Plaintiffs and Appellants.

Sheppard, Mullin, Richter & Hampton, Richard J. Simmons, Derek R. Havel, Daniel J. McQueen, Los Angeles, Robert J. Stumpf, Jr., San Francisco, and Karin Dougan Vogel, San Diego, for Defendant and Respondent.

Seyfarth Shaw, Jeffrey A. Berman, James M. Harris, and Kiran A. Seldon, Los Angeles, for California Hospital Association as Amicus Curiae on behalf of Defendant and Respondent.

OPINION

THOMPSON, J.

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.

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, 139 Cal.Rptr.3d 315, 273 P.3d 513 (Brinker )." Gerard appealed the judgment.

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.)

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.

"[¶] ... [¶]

"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...