Stoetzl v. Dep't of Human Res., S244751

• Court: United States State Supreme Court (California)
• Writing for the Court: Opinion of the Court by Chin, J.
• Citation: 7 Cal.5th 718,443 P.3d 924,248 Cal.Rptr.3d 891
• Parties: Kurt STOETZL et al., Plaintiffs and Appellants, v. DEPARTMENT OF HUMAN RESOURCES et al., Defendants and Respondents.
• Decision Date: 01 July 2019
• Docket Number: S244751

7 Cal.5th 718
443 P.3d 924
248 Cal.Rptr.3d 891

Kurt STOETZL et al., Plaintiffs and Appellants,
v.
DEPARTMENT OF HUMAN RESOURCES et al., Defendants and Respondents.

S244751

Supreme Court of California.

July 1, 2019

Carroll, Burdick & McDonough, Laurie J. Helper; Squire Patton Boggs (US), David M. Rice, San Francisco; Messing Adam & Jasmine, Jack T. Friedman, Gary M. Messing, Gregg McLean Adam, Yonatan L. Moskowitz, Monique Alonso, San Francisco; Goyette and Associates, Inc., and Gary G. Goyette, Gold River, for Plaintiffs and Appellants.

Kronick, Moskovitz, Tiedemann & Girard, David W. Tyra, Sacramento, Kristianne T. Seargeant ; Joan A. Markoff, Frolan R. Aguiling, Christopher E. Thomas and David D. King for Defendants and Respondents.

Opinion of the Court by Chin, J.

In this case, we decide whether a certified class of state correctional employees is entitled to additional compensation for time spent on pre- and postwork activities, including traveling from the outermost gate of the prison facility to their work posts within the facility, traveling back from their work posts to the outermost gate, being briefed before the start of a shift, briefing relief staff at the end of a shift, checking out and checking back in mandated safety equipment, putting on and removing such equipment, and submitting to searches at various security checkpoints within the facility. For convenience, we will refer to the time spent doing these pre- and postwork activities as "walk time" although we recognize that walk time includes many activities besides merely walking to and from a work post. There are two types of walk time that are relevant here. The first is the time a correctional employee spends after arriving at a prison’s outermost gate but before beginning the first activity the employee is employed to perform (plus analogous time at the end of the employee’s work shift). We will call this type of walk time "entry-exit walk time." The second is

443 P.3d 928

the time a correctional employee spends after beginning the first activity the employee is employed

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to perform but before the employee arrives at his or her assigned work post (plus analogous time at the end of the employee’s work shift). We will call this type of walk time "duty-integrated walk time."¹

The trial court divided the plaintiff class into two subclasses, one for supervisory employees who were not represented by a union during the time period set forth in the class certification and the other for represented employees. We conclude that the subclass of represented plaintiffs expressly agreed, by way of the collective bargaining process, to a specific amount of compensation for duty-integrated walk time, and there is no allegation that the state failed to pay the agreed-upon amount. Moreover, the collective bargaining agreements that memorialized this agreement all provided that they constituted the entire understanding of the parties concerning matters contained therein, and thus they precluded other forms of compensation, such as compensation for entry-exit walk time. These agreements were approved by the Legislature, and each approval was signed by the Governor and chaptered into law, thus becoming specific legislation applicable to the represented plaintiffs and superseding more general laws to the extent of any conflict. Therefore, the represented plaintiffs' claims fail insofar as they seek additional compensation for either duty-integrated walk time or entry-exit walk time.

As to the subclass of unrepresented plaintiffs, we conclude that they may be entitled to additional compensation for duty-integrated walk time. The terms and conditions that govern the employment of the unrepresented plaintiffs are determined by the Department of Human Resources (CalHR) and set forth in a manual known as the Pay Scale Manual and also in CalHR’s regulations. The Pay Scale Manual defines compensable work time for purposes of calculating an employee’s right to regular and overtime compensation, and duty-integrated walk time falls squarely within that definition. If, as is alleged, the state did not take duty-integrated walk time into consideration when calculating the compensation owed to the unrepresented plaintiffs, then those plaintiffs may be entitled to additional pay.

Entry-exit walk time, by contrast, does not fall within the Pay Scale Manual’s definition of compensable work time. Moreover, because the Pay Scale Manual comprehensively addresses the question of compensation for the unrepresented plaintiffs, it precludes compensation for any work time that falls outside the scope of its definition. Therefore, insofar as the unrepresented plaintiffs are seeking compensation for entry-exit walk time, their claims must be rejected.

The Court of Appeal reached somewhat different conclusions, and therefore we reverse its judgment.

I. FACTS AND PROCEDURAL BACKGROUND

A. Pretrial Proceedings

This matter arises from the coordination (see Code Civ. Proc., § 404 et seq. ; Cal. Rules of Court, rule 3.501 et seq. ) and joint disposition of three class-action complaints. The named defendants are the State of California and various departments of the state government. In each of the operative complaints, plaintiffs allege causes of action for (1) failure to pay contractual overtime

248 Cal.Rptr.3d 896

in violation of Labor Code sections 222 and 223 ; (2) failure to pay the minimum wage in violation of Labor Code sections 1182.11, 1182.12, and 1194, and in violation of the applicable wage orders ( Cal. Code Regs., tit. 8, § 11000 et seq. ); (3) failure to keep accurate records of hours worked in violation of Labor Code section 1174 ; and (4) failure to pay contractual overtime in breach of common law contractual obligations. The gist of all these claims is that the state did not adequately compensate plaintiffs for walk time. Plaintiffs seek relief in the form of unpaid overtime compensation, unpaid California minimum-wage compensation,

443 P.3d 929

liquidated damages, injunctive relief, and attorneys' fees.

The trial court granted class certification in all three actions, and it certified two plaintiff subclasses, one comprising unrepresented supervisory employees and the other comprising represented employees. Defendants then moved for judgment on the pleadings, which the trial court granted as to the causes of action for failure to pay contractual overtime in violation of Labor Code sections 222 and 223, and for failure to keep accurate records of hours worked in violation of Labor Code section 1174. The trial court ruled that Labor Code sections 222, 223, and 1174 are inapplicable to the state government. As to plaintiffs' other two causes of action, the trial court denied defendants' motion.

The matter then proceeded to trial, but the parties stipulated that the trial could proceed in multiple phases. In the first phase, several threshold questions were tried to the court. A brief overview of two regulatory schemes is helpful to understand the threshold questions tried at the first phase.

B. Regulatory Background

1. Wage Order No. 4

The Industrial Welfare Commission (IWC) was created in 1913 with express authority to adopt regulations — called wage orders — governing wages, hours, and working conditions in the state of California. (Stats. 1913, ch. 324, § 6, pp. 634–635; see Martinez v. Combs (2010) 49 Cal.4th 35, 52–57, 109 Cal.Rptr.3d 514, 231 P.3d 259 ( Martinez ) [describing the creation and role of the IWC].)² These wage orders, being the product of quasi-legislative rulemaking under a broad delegation of legislative power, are entitled to great deference, and they have the dignity and force of statutory law. ( Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1027, 139 Cal.Rptr.3d 315, 273 P.3d 513 ( Brinker ); see Martinez , at p. 61, 109 Cal.Rptr.3d 514, 231 P.3d 259.) Our past cases have used the term "extraordinary" to describe this deference ( Martinez , at p. 61, 109 Cal.Rptr.3d 514, 231 P.3d 259 ), noting in this context that the Legislature’s authority to delegate its legislative power to the IWC is expressly recognized in the state’s Constitution ( Martinez , at pp. 60–61, 109 Cal.Rptr.3d 514, 231 P.3d 259 ). It remains true, of course, that the Legislature can enact statutes that supersede the wage orders — as occurred in the case of the Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999 (Stats. 1999, ch. 134, pp. 1820–1830) — but courts must seek to harmonize IWC wage orders with statutes to the extent possible ( Brinker , at p. 1027, 139 Cal.Rptr.3d 315, 273 P.3d 513 ).

248 Cal.Rptr.3d 897

IWC wage order No. 4-2001, which is at issue here, governs wages, hours, and working conditions in professional, technical, clerical, mechanical, and similar occupations. (IWC wage order No. 4-2001 (Wage Order No. 4); see Cal. Code Regs., tit. 8, § 11040.) Wage Order No. 4 includes a minimum wage section, which requires employers to pay their employees at not less than a designated hourly...