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. 

Mendez v. Mid-Wilshire Health Care Center: Court Denies Petition to Compel Arbitration Where Provision in Collective Bargaining Agreement Does Not "Clearly and Unmistakably" Waive Right to Proceed in Court

Last week I mentioned Volpei v. County of Ventura (11/7/13) --- Cal.App.4th --- (discussed here), which affirmed a trial court order denying a petition to compel arbitration of statutory discrimination claims on grounds that the collective bargaining agreement did not "clearly and unmistakably" waive the employee's right to pursue those claims in court.

Mendez v. Mid-Wilshire Health Care Center (9/23/13, pub. 10/15/13), follows along the same lines:

Under Wright [v. Universal Maritime Service Corp. (1998) 525 U.S. 70], 14 Penn Plaza LLC [v. Pyett (2009) 556 U.S. 247], and Vasquez [v. Superior Court (2000) 80 Cal.App.4th 430], the collective bargaining agreement in this case does not contain a clear and unmistakable agreement to arbitrate statutory discrimination claims. The arbitration provision in the collective bargaining agreement between Mid-Wilshire and the union contains very general language regarding grievances. It does not mention FEHA, it does not explicitly incorporate by reference any statutory anti-discrimination laws, and it does not contain an explicit waiver of the right to seek judicial redress for statutory discrimination causes of action. Nothing in the agreement makes noncompliance with FEHA subject to the arbitration provision. 

Slip op. at 11. The Court rejected the argument that AT&T Mobility LLC v. Concepcion (2011) 563 U.S. ___ (discussed here) has changed this legal landscape. Slip op. at 14-15.

For the time being, arbitration agreements in collective bargaining agreements appear to represent an eddy in the post-Concepcion river of mandatory arbitration jurisprudence. It will be interesting to see whether the California Supreme Court addresses this by granting review in Volpei or Mendez.

In the mean time, Mendez v. Mid-Wilshire Health Care Center is available here.

Volpei v. County of Ventura: Public Employer May Not Compel Arbitration of FEHA Claims Unless Collective Bargaining Agreement "Clearly and Unmistakably" Waives Employee's Right To Proceed in Court

A quick word on Volpei v. County of Ventura (11/7/13) --- Cal.App.4th ---.

Mark Volpei worked as an investigator for the Ventura County District Attorney's office (County). Volpei was a member of the Ventura County Deputy Sheriffs' Association (Association), which had a memorandum of agreement (MOA) with the County.

In 2011, Volpei sued the County for retaliation, harassment, disability discrimination, and other claims under the Fair Employment and Housing Act (FEHA). In 2012, the County petitioned to compel arbitration under the MOA, which provided that a grievance, including a claim of disability discrimination, "may be submitted to arbitration by the Association...."

The trial court denied the petition, and the Court of Appeal affirmed, holding that the MOA did not "clearly and unmistakably" waive Volpei's right to proceed in court:

We conclude that the provision that an unresolved grievance "may be submitted to arbitration by the Association" is not a clear and unmistakable agreement to arbitrate Volpei's statutory claims against the County. 

Slip op. at 3. 

The opinion is available here. 

Wade v. Ports America: Labor Arbitration That Encompasses an Employee's FEHA-Related Common Law Claims Will Preclude the Employee from Later Litigating Those Claims in Court

Wade v. Ports America Management Corporation (8/2/13) --- Cal.App.4th ---, is an interesting case on the preclusive effect of a labor arbitration on common law claims that often arise in an action under the Fair Employment and Housing Act, such as a claim for wrongful termination in violation of public policy. The decision's summary does a good job of describing the holding: 

Camargo v. California Portland Cement Co. (2001) 86 Cal.App.4th 995 (Camargo), held that a labor arbitration pursuant to a collective bargaining agreement (CBA) has no preclusive effect on a claim pursuant to the Fair Employment and Housing Act (FEHA), Government Code section 12940 et seq., unless the parties expressly agreed to arbitrate FEHA claims. (Camargo, at p. 1008.) On appeal, Calvin Wade contends this holding should be extended to common law claims related to the FEHA, such as a claim for wrongful termination in violation of public policy. We disagree, as there is no comprehensive statutory scheme applicable to FEHA-related common law claims comparable to the FEHA. In the alternative, appellant contends the arbitration had no preclusive effect, as it did not address his racial discrimination claim. We conclude the arbitration encompassed that claim. Accordingly, we affirm the grant of a summary judgment in favor of respondents Marine Terminals Corporation and Ports America Management Corporation (collectively MTC) on appellant's cause of action for wrongful termination in violation of public policy. 

Slip  op. at 2. In other words, a labor arbitration that encompasses an employee's FEHA-related common law claims will preclude the employee from later litigating those claims in court.  

The opinion is available here. 

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.  

Hoover v. American Income Life: Court of Appeal Affirms Order Denying Arbitration Based on Waiver and Labor Code Section 229 -- Supreme Court Denies Review

Hoover v. American Income Life Insurance Company (6/13/12) --- Cal.App.4th --- is yet another battle in the Arbitration Wars.

Plaintiff Martha Hoover worked as a sales agent for defendant American Income Life Insurance Company ("AIL"). She filed a putative class action alleging that AIL misclassified her as an independent contractor and violated California's wage laws and the Unfair Competition Law ("UCL"). Cal. Bus & Prof. Code 17200. The trial court (San Bernardino County Superior, Judge Richard Oberholzer) denied AIL's petition to compel arbitration of Hoover's individual claims, and the Court affirmed:

If Hoover was an employee with viable statutory labor claims, her claims are not subject to arbitration. If Hoover was an independent contractor she cannot assert statutory labor claims as an employee and therefore the question of arbitration seems irrelevant. In either instance, the trial court correctly denied AIL's petition to compel arbitration. Additionally, AIL's 15-month delay in petitioning for arbitration constituted a waiver of the right to compel arbitration.

Slip op. at 2-3. 

Huh? Someone has to decide whether Hoover was an independent contractor or employee. The issue is whether that should be a jury or an arbitrator. This is the hottest issue in employment law right now, and I do not understand how the court could call it irrelevant. Regardless, here is the Court's analysis:

First, it found substantial evidence to support the trial court's decision that AIL waived its right to compel arbitration by litigating the case for over a year, removing it to federal court twice, and conducting discovery in court. Slip op. at 10-15.

Second, the Court held:

As a general rule, state statutory wage and hour claims are not subject to arbitration, whether the arbitration clause is contained in the CBA or an individual agreement.... An individual arbitration agreement also does not apply to an action to enforce statutes governing collection of unpaid wages, which "may be maintained without regard to the existence of any private agreement to arbitrate...." An exception to the general rule occurs when there is federal preemption by [the Federal Arbitration Act or] FAA, as applied to contracts evidencing interstate commerce. 

Slip op. at 15-17, citing Labor Code section 229 and Perry v. Thomas (1987) 482 U.S. 483, 490. Because AIL failed to show that the contract at issue involved interstate commerce, the FAA did not apply, 229 was not preempted, and AIL could not compel arbitration. Slip op. at 17-18. Further, the arbitration agreement did not mention the arbitration of statutory wage claims or identify any statutes. Slip op. at 19. Finally, AIL could not compel arbitration of the UCL injunctive relief claim. Ibid., citing Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 315-316; Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489, 500-501.

The opinion is available here.  

Thank you to Michael Singer for pointing out that the California Supreme Court denied petitions for review and depublication on September 12, 2012.  

Sciborski v. Pacific Bell: Court of Appeal Rejects LMRA Preemption Defense in Wage Deduction Action

In Sciborski v. Pacific Bell Direct. (5/8/12) --- Cal.App.4th ----, the plaintiff sued her former employer, Pacific Bell Directory ("Pac. Bell"), challenging Pacific Bell's actions in deducting approximately $19,000 from her wages to recover a $36,000 sales commission paid to her. A jury found Pac. Bell's wage deductions violated Labor Code section 221 and resulted in Sciborski's constructive discharge in violation of public policy. It awarded her $36,000 in lost earnings, but found she did not prove her claimed future economic loss and emotional distress damages. The court awarded her attorney fees based on her prevailing on the section 221 claim.

Pac. Bell appealed, arguing that Sciborski's claims were preempted by section 301 of the Labor Management Relations Act ("LMRA") because she was a union member governed by a collective bargaining agreement and her claims required the court to interpret the CBA.  The Court rejected this argument and held that Sciborski's claims were not preempted because they arose from independent state law and did not require the interpretation of the CBA.  

I am not going to discuss LMRA preemption at any length, but here is the basic law, as stated by the Court: 

Under section 301 preemption analysis, it is helpful to apply a two-part test to determine whether a claim is preempted.  First, the court should evaluate whether the claim arises from independent state law or from the collective bargaining agreement.  If the claim arises from the collective bargaining agreement, the claim is preempted as a matter of law.  However, if the claim arises from independent state law, the court must then proceed to the second step.  In this step, the court determines whether the claim requires "interpretation or construction of a labor agreement," or whether a collective bargaining agreement will merely be "reference[d]" in the litigation.  A state law claim is preempted if a court must interpret a disputed provision of the collective bargaining agreement to determine whether the plaintiff's state law claim has merit.  

The term "interpret" in this context "is defined narrowly — it means something more than 'consider,' 'refer to,' or 'apply.'"  Although the plaintiff cannot avoid preemption by "artfully pleading" the claim , the claim must "require interpretation" of the collective bargaining agreement.  Preemption does not arise when interpretation is required only by a defense.  Preemption occurs when a claim cannot be resolved on the merits without choosing among competing interpretations of a collective bargaining agreement and its application to the claim.  The determination of whether a claim is preempted depends on the particular facts of each case.  

Slip op. at 14-15.  The Court rejected Pac. Bell's argument that Sciborski's section 221 claim required interpretation of the CBA: 

We agree that the CBA (and incorporated documents) contain detailed and complicated rules for assigning employees to particular customer accounts, and that disputes regarding the meaning of these provisions require interpretation of the CBA.  However, the fundamental issue for the jury's determination in this case was not the nature of these assignment rules, i.e., whether Sciborski was a "loaner" representative or whether the new-connect account was properly assigned to her....  Instead, she argued that the misassignment based on Pacific Bell's admitted clerical error was not a proper basis for concluding that she did not earn the commission.  

No interpretation of the CBA was necessary to resolve this claim.  There were provisions in the CBA and the incorporated Market Selection document supporting Pacific Bell's position that the assignment of the new-connect account to Sciborski was inconsistent with her status as a "loaner" representative in the Metro account area.  However, there was nothing in these documents stating this inconsistency was a basis for finding a commission was not earned if the employee performed all of the other work to earn the commission.  And there was nothing in these documents providing that Pacific Bell was permitted to deduct amounts from an employee's wages based on the employer's clerical error in the account assignment process.  

Absent an express provision to this effect, Pacific Bell was not entitled to unilaterally declare that the commission was not earned and use self-help measures to deduct funds from Sciborski's wages that had already been paid to her.  Under California law, employers and employees may agree that an employee must satisfy certain conditions before earning a sales commission and an employer may recoup an advance if these conditions are not satisfied.  However, to rely on those conditions as a basis for recouping an advance paid for a commission, the condition must be clearly expressed and generally must be set forth in writing.  Additionally, the conditions must relate to the sale and cannot merely serve as a basis to shift the employer's cost of doing business to the employee.   

Under these principles, Pacific Bell's argument that the jury was required to interpret implied provisions in the CBA to determine whether Pacific Bell had a legal right to recoup Sciborski's commission is unsupported by California law.  Because the claimed disputed provisions of the CBA were irrelevant to Sciborski's right to recover on her state law claim, they did not support section 301 preemption.  

Slip op. at 23-25. The Court held that Sciborski's wrongful discharge claims were not preempted for the same reasons.

The trial court (San Diego County, Judge Frederic L. Link) awarded Sciborski $291,155 in attorney fees based on her prevailing on the Labor Code section 221 claim. The Court rejected Pac. Bell's argument that the award was excessive, holding that the award fell within the trial court's discretion, even though it seemed large in comparison to the $36,000 damage award. Slip op. at 34-35. The Court also rejected Sciborski's argument that the trial court abused its discretion in rejecting her request for a multiplier. Slip op. at 36.

The full opinion is here.  Sorry for the long block quotes on this one.  I promise to do better next time.  

Arzate v. Bridge Terminal: Court Reverses Order Finding that Truck Drivers Are Independent Contractors

Arzate v. Bridge Terminal Transport, Inc. (1/31/11) --- Cal.App.4th ----, 2011 WL 285856, is a trucking industry independent contractor misclassification case.

The plaintiffs brought a wage and hour class action on behalf of truck drivers who were paid by defendant to transport cargo between ports and the facilities of defendant's customers. Plaintiffs alleged they were defendant's employees and asserted Labor Code wage claims and a claim for violation of the Unfair Competition Law. The trial court (LASC, Judge O'Donnell) granted the defendant's motion for summary judgment, holding that the plaintiffs were independent contractors, and the plaintiffs appealed.

The Court of Appeal reversed, holding that the defendant failed to establish, as a matter of law, that the drivers were independent contractors:

Here, the trial court erred in finding no triable issue of material fact. At its heart, this case involves competing, if not necessarily conflicting, evidence that must be weighed by a trier of fact. (Cf. S.G. Borello, supra, 48 Cal.3d at p. 351, 256 Cal.Rptr. 543, 769 P.2d 399 [factors "'are intertwined and their weight depends often on particular combinations'"].) Defendant repeatedly emphasizes that it did not “control[ ] the manner and means by which [plaintiff] hauled loads,” and if there were no evidence other than the evidence on “manner and means,” defendant might carry the day. (As we have seen, plaintiffs drove their own trucks and paid the related expenses, could have leased more than one truck to defendant and hired other drivers, could decline a dispatch, decided when and where to take meal and rest breaks, and so on.)

But there are multiple other factors that must be considered and that do not weigh in favor of independent contractor status. Defendant executed the CBA with plaintiffs' union, which represented the owner-operators of trucks in the role of “employees” of the company. Defendant issued W-2 forms to plaintiffs, withheld taxes, and offered health plan benefits that included paying 70 percent of the cost. Defendant also paid hourly rates for some parts of plaintiffs' work day, such as waiting time, drivers' meetings, and so on. Defendant could terminate the lease agreements on 24 hours' notice. (See S.G. Borello, supra, 48 Cal.3d at p. 350, 256 Cal.Rptr. 543, 769 P.2d 399 [“ ‘the right to discharge at will, without cause,’ “ is “ ‘[s]trong evidence in support of an employment relationship’ “].) And, while defendant asserts that its business is to “mak[e] arrangements between customers and the owner-operators of trucks for the movement of containers” and that plaintiffs “did not perform work that was part of [defendant's] regular business,” that claim is belied by defendant's own documentation, which states, correctly, that defendant is a “common carrier by motor vehicle, engaged in the business of transportation of property....” Thus, the work plaintiffs do “is a part of the regular business of the principal” (S.G. Borello, supra, 48 Cal.3d at p. 351, 256 Cal.Rptr. 543, 769 P.2d 399), a factor suggesting employee status.

In short, a reasonable trier of fact, considering the totality of the evidence, might reasonably conclude that plaintiffs were employees of defendant. We make no such finding, of course, concluding only that the trial court erred when it ruled, as a matter of law, that plaintiffs were independent contractors.

Slip op. at 5 (citations omitted).

The opinion is available here.

Parth v. Pomona Valley Revisited: Ninth Circuit Modifies FLSA Alternate Workweek Decision

On December 13, 2010, the Ninth Circuit amended its decision in Parth v. Pomona Valley Hospital Medical Center, --- F.3d ----, 2010 WL 5064380 (9th Cir. December 13, 2010). The amendment did not affect the outcome. Our discussion of the case, which holds that the Fair Labor Standards Act (FLSA) allows an employer to lower its employees' regular of pay to accommodate their desire to work an alternate workweek schedule, is here.

The amended decision is available here.

Gordon v. City of Oakland: City May Require Police Officer to Repay Training Costs Under FLSA

In Gordon v. City of Oakland, --- F.3d ----, 2010 WL 4673695 (9th Cir. November 19, 2010), the Ninth Circuit Court of Appeals held that a city did not violate the minimum wage provisions of the Fair Labor Standards Act (FLSA) by requiring the plaintiff, a former police officer subject to a collective bargaining agreement, to repay a portion of her training costs when she voluntarily left the City's employment before completing five years of service. The Court quoted 29 C.F.R. § 535.31, which provides in pertinent part:

Whether in cash or other facilities, ‘wages' cannot be considered to have been paid by the employer and received by the employee unless they are paid finally and unconditionally or ‘free and clear.’ The wage requirements of the Act will not be met where the employee ‘kicks-back’ directly or indirectly to the employer or to another person for the employer's benefit the whole or part of the wage delivered to the employee. This is true whether the “kick-back” is made in cash or in other than cash.

It then held:

Because Gordon did not allege she was paid below the federal minimum wage for any given week, the only way Gordon has stated a cognizable claim is if her payment to the City for a portion of her training costs is a “kick-back” payment as described in section 535.31.

Slip op. at 3.

Finally, the Court held that the costs of training were similar to a loan to the plaintiff, not a kickback to the employer, and the City paid the plaintiff at least minimum wage for her final work week before deducting the training costs. Slip op. at 4.

The opinion is here.

Parth v. Pomona Valley Hospital: FLSA Allows Employer to Change Regular Rate of Pay to Accommodate Alternative Workweek Schedule

In Parth v. Pomona Valley Hospital Medical Center, --- F.3d ----, 2010 WL 4643846 (9th Cir. November 18, 2010), the Ninth Circuit held:

When an employer changes its shift schedule to accommodate its employees' scheduling desires, the employer may reduce the employee pay rate to pay its employees the same wages they received under the former schedule, so long as the rate reduction was not designed to circumvent the provisions (including overtime) of the Fair Labor Standards Act (“FLSA”).

Slip op. at 1. Defendant hospital offered its nurse employees the option of working 8-hour or 12-hour days. Defendant paid those who worked 12-hour days a lower regular rate and daily overtime compensation, so that their weekly pay approximated the pay of those who worked 8-hour days.

In 2003, defendant's nurse employees unionized. The CBA incorporated defendant's shift pay differentials. In 2004, plaintiff filed a collective action, alleging that the shift differentials violated the FLSA. The Court (Morrow, C.D.Cal.) conditionally certified a class, then granted summary judgment in favor of the employer. The Ninth Circuit affirmed.

Parth argues that PVHMC violated the FLSA by creating a pay plan that pays nurses working 12-hour shifts a lower base hourly rate than nurses who work 8-hour shifts. In support of her argument, Parth contends that: (A) PVHMC cannot reduce the base pay for nurses working the 12-hour shift, (B) the 12-hour base pay rate is an “artifice” designed to avoid the FLSA's overtime and maximum hours requirements, and (C) PVHMC cannot justify the base hourly pay rate differences between the 8-hour and 12-hour shifts, because nurses working both shifts perform the same job duties.

Slip op. at 3. The Court disagreed. It held that FLSA does not prevent an employer from lowering its employees' regular rate of pay so that their weekly pay when they work an alternative workweek schedule -- including overtime compensation -- approximates their weekly pay when working a regular schedule. See, e.g., Walling v. A.H. Belo Corp., 316 U.S. 624, 628-30 (1942).

Next, the plaintiff argued that the the 12-hour shift pay plan was "essentially an artifice to avoid paying overtime." Again, the Court disagreed. It held:

First, the reduced rate was agreed to by the employees through the collective bargaining agreement, in which there appears no evidence of improper influence or inequality of bargaining position. The plan provides employees more scheduling flexibility, allows them to spend less time commuting to work (because they spend fewer days at work), and ensures that PVHMC does not retain an incentive to ask the nurses to work longer hours. Second, the rate has been in place since 1989 or 1990 (and applied to Parth since 1993). Third, the rate paid nurses working the 12-hour shift far exceeds the Act's minimum wage.

Slip op. at 7.

Finally, plaintiff argued that defendant's pay plan was unlawful "because nurses working both the 8-hour and 12-hour shifts perform the same work, but are paid at different rates." Slip op. at 8. Again, the Court disagreed.

We find no authority that suggests employees cannot be paid different rates for different shifts, and Parth fails to present any authority to the contrary. We do, however, find ample authority from other circuits that supports PVHMC's argument that workers working different shifts may be paid different rates. As the Supreme Court has noted, employers and employees are generally free to set the pay rates if minimum wages and overtime payments are paid when due.

Ibid.

The opinion is available here.

No Overtime for Public Employees Absent CBA, Court of Appeal Holds

It's been a bad few weeks for California's correctional peace officers.

In California Correctional Peace Officers’ Association v. State of California (August 18, 2010, publ. September 17, 2010) 188 Cal.App.4th 646 ("CCPOA I"), the Court of Appeal held that Labor Code Sec. 512 and 226.7, which require employers to provide employees with meal periods or pay them for their missed peal periods, and Industrial Welfare Commission (IWC) Wage Order No. 17-2001, which sets wage and hour standards for "miscellaneous employees," do not apply to employees who work for public entities. Our post on CCPOA I is here.

In California Correctional Peace Officers’ Association v. State of California (October 29, 2010) --- Cal.App.4th ----, 2010 WL 4262046 ("CCPOA II"), the Court of Appeal held that, in the absence of a collective bargaining agreement, Government Code section 19851 does not mandate the payment of overtime compensation to correctional peace officers who work more than eight hours per day or 40 hours per week. Slip op. at 1.

For those who are interested in public employment issues, the opinion is available here.

Court of Appeal Confirms That Portion of Wage Order Is Invalid, Clears the Way for Action on Second Meal Periods

In Lazarin v. Superior Court (Total Western, Inc.) (October 7, 2010) --- Cal.App.4th ---, the Court of Appeal invalidated IWC Wage Order No. 16-2001, section 10(E), which allows employees to waive their second meal period if they are covered by a collective bargaining agreement (CBA) that meets certain minimum standards. The Court held that the IWC exceeded its authority in promulgating section 10(E) because it conflicts with Labor Code section 512. The Court summarized the opinion as follows:

Three union-represented construction workers ... sued their former employer ... TWI, on behalf of themselves and a putative class of former and current nonexempt hourly employees of TWI providing on-site construction services at oil refineries, power plants or other industrial facilities, alleging in part TWI had failed to provide second meal periods in the manner required by Labor Code section 512, subdivision (a), and section 10(B) of Industrial Welfare Commission (IWC) wage order No. 16-2001 (Cal.Code Regs. tit. 8, § 11160) (wage order 16). In their fifth cause of action the workers seek damages for TWI's failure to pay premium wages required by section 226.7 to compensate its employees for the missed second meal periods. In their second cause of action the workers allege TWI's practice of failing to provide the required second meal periods constitutes an unfair and unlawful business practice in violation of Business and Professions Code section 17200 et seq.

Based on its understanding of the decision by Division Four of this court in Bearden v. U.S. Borax, Inc. (2006) 138 Cal.App.4th 429 (Bearden), respondent Los Angeles Superior Court granted TWI's motion for summary adjudication as to the fifth cause of action, ruling the exemption from the second-meal-period provision for employees covered by certain collective bargaining agreements contained in wage order 16, section 10(E), was invalid but, because that exemption remains part of the wage order, TWI could not be liable for damages under section 226.7. The court denied TWI's motion for summary adjudication as to the second cause of action, concluding the workers had asserted a viable claim for unfair business practices based on the alleged violations of section 512, subdivision (a).

The superior court erred in applying Bearden, ... which held the IWC had exceeded its statutory authority in adopting the exemption for union-represented employees contained in wage order 16, section 10(E), but gave its decision prospective effect only. The failure of an employer to provide second meal periods as required by section 512, subdivision (a), and wage order 16, section 10(B), is subject to an award of premium pay as specified in section 226.7. Accordingly, we grant the petition for writ of mandate filed by [plaintiffs] and direct the court to vacate its order of February 11, 2010 granting TWI's motion for summary adjudication as to the fifth cause of action and to enter a new and different order denying that motion.

Slip op. at 1.

The full text of the opinion is available here.