On December 10, 2018, the California Supreme Court unanimously held in Gerard v. Orange Coast Memorial Medical Hospital that section 11(D) of Industrial Welfare Commission (“IWC”) Wage Order No. 5, which permits health care works to waive second meal periods for shifts of more than 12 hours, does not conflict with the California Labor Code.

Background

The Labor Code generally provides that employees who work more than five hours must be provided a 30-minute meal period, and employees who work more than 10 hours must be provided a second 30-minute meal period. An employee who works six hours or less may waive the first meal period, and an employee who works 12 hours or less may waive the second meal period. Notwithstanding the Labor Code’s 12-hour limit, section 11(D) of IWC Wage Order No. 5 creates a specific exception for health care employees, and provides that such employees may voluntarily waive one of their two meal periods if they work a shift of more than 8 hours.

In Gerard, plaintiffs, health care workers formerly employed by Orange Coast Memorial Medical Hospital, argued that section 11(D) violated the Labor Code’s general prohibition against second meal period waivers for shifts longer than 12 hours, and thus the hospital’s policy—which relied on section 11(D)—also violated the Labor Code. Plaintiffs sought penalties, unpaid wages, and injunctive relief. The hospital moved for summary judgment, arguing that the meal period waivers conformed with IWC Wage Order No. 5. The trial court agreed, and granted the hospital’s motion. The plaintiffs appealed.

The California Court of Appeal reversed, finding that although the hospital’s policy conformed with section 11(D), it violated Labor Code sections 512 and 516. See Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004, 1026 (2012) (explaining that a provision of the Labor Code will prevail over a conflicting wage order because the Legislature is the source of the IWC’s authority). In response, the Legislature passed S.B. 327, which amended Labor Code section 516 as follows: “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.” The hospital petitioned the California Supreme Court for review.

Court’s Decision

The California Supreme Court granted the hospital’s petition, sending the case back to the Court of Appeal with instructions to consider its ruling in light of S.B. 327. Upon reconsideration, the Court of Appeal then sided with the Hospital, and affirmed the trial court’s ruling, holding that section 11(D) does not conflict with the Labor Code. In this case, the Supreme Court affirmed the Court of Appeal’s decision.

What Employers Should Know

In addition to the direct impact this case has on healthcare employers, Gerard confirms the authority of wage orders over the Labor Code when the Legislature delegates such authority.