Why it matters

Can healthcare workers in California waive a second lunch period? The state’s highest court has agreed to decide what happens when Section 11(D) of Wage Order 5 collides with Sections 512(a) and 516 of the Labor Code. In February, an appellate panel ruled that in a conflict between the state meal period statute and the healthcare industry-specific wage order, the statute trumped, with workers unable to waive their statutory right to a second meal period when they work more than 12 hours per day. While state labor law requires that employees who work more than 10 hours in a workday receive two 30-minute meal periods, Section 11(D) permits employees to waive the second break if the workday is not longer than 12 hours and the first period was not waived. In the case before the California Supreme Court, three former hospital employees filed a putative class action claiming that the two provisions were in conflict and that the Labor Code won the day, mandating pay for their missed meal breaks. A trial court sided with the hospital but the appellate panel reversed, holding that the more permissive Wage Order was partially invalid and that retroactive application on the issue was appropriate. Healthcare employers should pay close attention to the case. If the California Supreme Court affirms the appellate panel’s ruling—including the finding that the ruling should be applied retroactively—employers in the industry could be facing significant liability.

Detailed discussion

Three healthcare employees filed suit against Orange Coast Memorial Medical Center, seeking to represent a class of workers that 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 conditions 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.”

According to the plaintiffs, these provisions ran counter to Section 11(D) of the Industrial Welfare Commission’s (IWC) Wage Order 5, which 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.”

Specifically, 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 no more than 12 hours total were worked.

The hospital countered that it utilized valid meal period waivers signed by the relevant employees in compliance with state law. A trial court judge granted summary judgment for the employer.

But the appellate panel disagreed.

When the validity of an IWC Wage Order is conceded, courts will provide extraordinary deference. However, when the validity of a wage order is challenged, no such deference is due, the court said.

By creating an additional exception for healthcare workers to waive a second meal period even in shifts of more than 12 hours, the IWC exceeded its authority with Wage Order 5, the panel said, citing language from the California Supreme Court’s 2012 decision in Brinker Restaurant Corp. v. Superior Court that “as to the majority of its 2001 wage orders, the IWC did not intend to impose a different meal period requirement than that spelled out in section 512.”

“We see nothing in this legislative history to support the hospital’s argument the additional regulatory exception embodied in section 11(D) for shifts longer than 12 hours is consistent with the Legislature’s intent,” the panel wrote. “To the contrary, everything in this legislative history evidences the intent to prohibit the IWC from amending its wage orders in ways that conflict with meal period requirements in Section 512, including the proviso second meal periods may be waived only if the total hours worked is less than 12 hours.”

The court rejected the hospital’s contention that Section 512 and Wage Order 5 were not in conflict. Brinker itself did not confirm the validity of second meal period waivers, the court added, as that decision did not address the issue in the case at bar.

As the broad powers of the IWC do not extend to the creation of additional exemptions from the meal period requirement beyond those provided by the legislature, the IWC exceeded its authority and Wage Order 5 is partially invalid to the extent it authorizes healthcare workers to waive their second meal periods on shifts longer than 12 hours, the court declared.

Further, the panel said its conclusion should have retroactive effect. “[E]mployers in this state have been on clear notice, pursuant to sections 512(a) and 516, they were required to provide health care workers with a second meal period when they worked more than 12 hours in a day,” the court wrote.

Despite noting a reluctance to punish employers for conduct “apparently authorized by the IWC,” the panel said employers have received the benefit of employees working without the statutorily mandated second meal periods and “there is nothing unfair about requiring hospitals to compensate them for that time.”

Therefore, the plaintiffs were entitled to seek premium pay pursuant to Section 226.7 of the Labor Code for any failure by the hospital to provide mandatory second meal periods within the three-year statute of limitation period.

Orange Coast Memorial Medical Center appealed.

On May 20, the California Supreme Court granted the hospital’s petition for review. The state’s highest court said the case presented two issues: “(1) Is the health care industry meal period waiver provision in section 11(D) of the Industrial Wage Commission Order No. 5-2001 invalid under Labor Code section 512, subdivision (a)?” and “(2) Should the decision of the Court of Appeal partially invalidating the Wage Order be applied retroactively?”

To read the appellate court’s opinion in Gerard v. Orange Coast Memorial Medical Center, click here.

To read the California Supreme Court’s grant of review, click here.