For nearly 22 years, IWC Wage Order No. 4 and IWC Wage Order No. 5 have permitted employees in the “health care industry” who work shifts in excess of eight total hours in a workday to “voluntarily waive their right to one of their two meal periods. . . . in a written agreement that is voluntarily signed by both the employee and the employer.” In apparent reliance on the IWC Wage Orders, Orange Coast Memorial Medical Center maintained a policy that allowed health care employees who worked shifts longer than 10 hours to waive one of their two meal periods.

Three of the Medical Center’s former employees brought a putative class action against the Medical Center on the grounds that its meal break policy was unlawful because California Labor Code Section 512(a) states that a second meal period may be by mutual consent “if the total hours worked [by the employee] is no more than 12 hours” and because the Medical Center’s policy permitted employees to “waive” their second meal period even if they worked a shift longer than 12 hours.

Reversing a grant of summary judgment in favor of the Medical Center, the California Court of Appeal for the Fourth Appellate District unanimously held in Gerard v. Orange Coast Mem’l Med. Ctr. that IWC Wage Order Nos. 4 and 5 are partially invalid to the extent they create an  “unauthorized additional exception . . . beyond the express exception for waivers on shifts of no more than 12 hours.”

More significantly (and more concerning for employers), the Court also held that its decision had at least some retroactive effect in that the authorization for waiver of a second meal period in the current IWC Wage Orders was partially invalid from the moment it was promulgated because California Labor Code Section 516 states that the IWC’s authority to issue wage orders is limited by the specific terms of California Labor Code Section 512. Accordingly, the Court of Appeal held that the Medical Center’s former employees were entitled to seek premium pay under California Labor Code Section 226.7 for any failure by the Medical Center to provide mandatory second meal periods predating the Court’s decision and within the three-year statute of limitations period.

In light of Gerard, California employers in the health care industry should immediately review and revise their meal period policies to ensure that employees who work shifts in excess of 12 hours in length retain their right to unpaid, off-duty meal period of at least 30 minutes. And since Gerard authorizes the recovery of meal period premiums predating its decision, employers should be prepared for a flood of new litigation.