California Court of Appeal Reverses Previous Decision and Affirms the Use of Second Meal Period Waivers for Healthcare Employers

• Publication year: 2017
• Author: Kevin D. Sullivan

California Court of Appeal Reverses Previous Decision and Affirms the Use of Second Meal Period Waivers for Healthcare Employers

Kevin D. Sullivan

Kevin Sullivan is an associate in the Los Angeles office of Epstein Becker Green. He litigates all forms of employment cases, with a concentration on wage and hour class and collective actions. He also counsels clients throughout a number of industries.

Employers in California—and healthcare employers in particular—have been besieged by wage-hour class actions for more than a decade. They have been sued repeatedly on claims that they failed to comply with the terms of California's Labor Code and Industrial Welfare Commission ("IWC") wage orders. The IWC issues industry-specific wage orders with which employers are expected to comply. The California Supreme Court has confirmed that "wage and hour claims are today governed by two complementary and occasionally overlapping sources of authority: the provisions of the Labor Code, enacted by the Legislature, and a series of eighteen wage orders, adopted by the IWC."¹ Consequently, the failure to comply with the Labor Code or an IWC wage order may lead not only to agency investigations, but to class action lawsuits seeking damages, a variety of penalties, interest, and attorney's fees.

In 2012, the California Supreme Court held that Labor Code section 512 generally requires employers to provide an uninterrupted meal period of at least thirty minutes when an employee works more than five hours in a single workday.² An employee may waive that meal period if no more than six hours are worked in that day.³And when an employee works more than ten hours in a single workday, California law generally requires employers to provide a second uninterrupted meal period of at least thirty 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."⁴(Moreover, "absent waiver, section 512 requires a first meal period no later than the end of an employee's fifth hour of work, and a second meal period no later than the end of an employee's 10th hour of work."⁵)

However, employers in the "healthcare industry"⁶ have long relied on a provision in IWC Wage Order No. 5⁷ that permitted "employees in the healthcare industry"⁸ to waive their second meal periods even if they worked longer than twelve hours in a single workday. But in February 2015, the California court of appeal issued a decision that exposed healthcare employers to litigation if they relied upon that very provision in using second meal period waivers.

That decision was Gerard v. Orange Coast Memorial Medical Center ("Gerard I"),⁹ where three employees had sued their hospital employer in a putative class and representative action under California's Private Attorneys General Act ("PAGA"),¹⁰ alleging that the "hospital policy illegally let health care employees waive their second meal periods on shifts longer than 12 hours."¹¹ Relying on Wage Order No. 5's provision permitting employees in the healthcare industry to waive second meal periods when working more than twelve hours in a day, the trial court granted summary judgment to the employer. But the Fourth District Court of Appeal reversed, concluding that it was improper for an employer to rely upon the language of Wage Order No. 5's second meal period waiver provision. The court of appeal further concluded that the IWC had "exceeded its authority," and declared that "Wage Order No.5, section II(D) is partially invalid tothe extent it authorizes health care workers to waive their second meal periods on shifts longer than 12 hours."¹²

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In reaching that conclusion, the Gerard I court determined that the IWC had no authority to adopt a regulation that conflicts with...