Choate v. Celite Corporation: Waiver of Vacation Pay in CBA Must Be "Clear and Unmistakable"

In Choate v. Celite Corporation (5/2/13) --- Cal.App.4th ---, the Court of Appeal held that a collective bargaining agreement abrogates an employee's statutory right under Labor Code section 227.3 to immediate payment for vested vacation time "only if the agreement clearly and unmistakably waives that right."  

I will not go through the facts at any length.  The plaintiffs worked for Celite under a collective bargaining agreement.  They alleged that Celite failed to pay them all earned vacation time promptly on termination.  Celite paid the vacation pay at issue, the plaintiffs dismissed their unfair competition claim to expedite appellate review, and the parties stipulated to class certification on the plaintiffs' claim for waiting time penalties.  

The Court of Appeal held: 

• A waiver of an employee's right to vacation pay under Labor Code section 227.3 must be "clearly and unmistakably" stated in the CBA itself.  It may not be inferred from parole evidence of mutual understanding or past practices. Slip op. at 4-7. 
• The CBA at issue did not "clearly and unmistakably" waive the employees' section 227.3 rights.  Slip op. at 7. 
• Substantial evidence did not support the trial court's finding that Celite acted "willfully" in failing to pay the employees their vacation pay and was not liable for Labor Code section 203 waiting time penalties.  Slip op. at 8-9. 
• Determining the plaintiffs' Labor Code claims did not require the court to interpret the CBA, and Section 301 of the Labor Management Relations Act (LMRA) did not preempt those claims.  Slip op. at 9-10. 

The opinion is available here.