Vranish v. Exxon Mobil Corp.: Parties to Qualifying CBA May Alter Labor Code Definition of "Overtime Hours"

In Vranish v. Exxon Mobil Corporation, --- Cal.App.4th --- (1/27/14), the plaintiffs were Exxon employees covered by a collective bargaining agreement (CBA) who alleged that Exxon owed them overtime compensation. 

Under the CBA, Exxon paid the plaintiffs an overtime premium rate of one and one-half times their regular rate of pay for hours worked over 40 hours in a workweek or over 12 hours in a workday. The CBA provided that overtime would not be paid for hours worked between eight and 12 in a workday, as normally required by Labor Code section 510.

At issue was whether section 510’s definition of “overtime” applies to employees covered by a valid CBA under Labor Code section 514. More specifically, the question was whether the CBA at issue satisfied the fourth requirement of section 514, in that it provided “premium wage rates for all overtime hours worked.”

The Court held that section 510's definition of "overtime" did not apply, and the CBA provided premium wage rates for overtime hours worked, thus satisfying section 514.

Section 514 does not incorporate expressly the definition of "overtime" provided in section 510. "When there is a valid collective bargaining agreement, employees and employers are free to bargain over not only the rate of overtime pay, but also when overtime pay will begin." Slip op. at 8. Parties subject to a qualifying CBA may consider all hours over eight in a day to be overtime, or they may agree to a different model, such as considering only hours over 40 in a week. 

The opinion is available here.