Why it matters

The California Supreme Court has again taken up the issue of meal periods for workers in the healthcare industry, in a battle between the state’s Labor Code and wage orders, now complicated by a new state law. Although Section 512(a) of the California Labor Code establishes the requisite number of meal periods required for workers in the state, Wage Order 5 permits healthcare employees to voluntarily waive their right to one of their meal periods when they work a certain amount of hours. Three former hospital workers filed a putative class action claiming that the two provisions were in conflict and that the Labor Code trumped, mandating pay for their missed meal breaks. A trial court sided with the hospital but an appellate panel reversed, holding that the more permissive wage order was partially invalid and finding that retroactive application on the issue was appropriate. While the dispute was pending before the state’s highest court, the legislature enacted a law affirming the validity of meal period waivers. Now the California Supreme Court has agreed to hear the case again, this time to decide whether the subsequent legislation constituted a change or clarification in the law, whether the wage order is partially invalid, and how the language of the Labor Code affects the analysis.

Detailed discussion

The dispute began when three healthcare employees filed suit against Orange Coast Memorial Medical Center, seeking to represent a class of workers who waived their rights to a second meal period on days they worked shifts of more than 12 hours.

California Labor Code Section 512(a) provides: “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.”

Section 516 adds: “Except as provided in Section 512, the Industrial Welfare Commission 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.”

The plaintiffs argued that Section 11(D) of the Industrial Welfare Commission’s (IWC) Wage Order 5—which states that “[n]otwithstanding any other provision of this order, employees in the healthcare 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”—operates in conflict with the Labor Code. The wage order sanctions second-meal-period waivers for healthcare employees who work shifts of more than 12 hours, the workers said, but the Labor Code permits such waivers only if the total hours worked is no more than 12 hours.

Alternatively, the hospital told the court that it used valid meal period waivers in compliance with state law. A trial court agreed with the hospital, but an appellate panel reversed in 2015.

The two provisions were clearly in conflict, the court said, and the IWC lacked the power to create additional exemptions from the meal period requirement beyond those provided by the legislature. Finding that the IWC exceeded its authority, the panel declared Wage Order 5 partially invalid to the extent it authorizes healthcare workers to waive their second meal periods on shifts longer than 12 hours.

Further, the court said its decision should have retroactive effect, allowing the plaintiffs to seek premium pay for any failure by the hospital to provide mandatory second meal periods within the three-year statute of limitations period.

After the employer appealed to the California Supreme Court, the legislature stepped in, enacting Senate Bill 327 to affirm the validity of meal period waivers in the healthcare industry. The new law took immediate effect upon Governor Jerry Brown’s signature on October 6, 2015.

The state’s highest court then directed the appellate court to vacate its decision and reconsider the action in light of SB 327. In March, the appellate panel affirmed summary judgment for the hospital. The court determined that the wage order is in fact valid and that the new law should apply retroactively, meaning second-meal-period waivers signed by the plaintiffs were valid and enforceable.

This time, the plaintiffs appealed to the California Supreme Court, which agreed to answer three questions: “(1) Did Senate Bill 327 constitute a change in the law or a clarification in the law? (2) Is the Industrial Wage Commission Wage Order No. 5, section 11(D) partially invalid to the extent it authorizes health care workers to waive their second meal periods on shifts exceeding 12 hours? (3) To what extent, if any, does the language of Labor Code section 516 regarding the ‘health and welfare of those workers’ affect the analysis?”

To read the California Supreme Court’s docket for Gerard v. Orange Coast Memorial Medical Center, click here.