In Bearden v. U.S. Borax, Inc., a California Court of Appeal was asked to decide the validity of a provision in the Industrial Welfare Commission’s Wage Orders that exempts employees covered by a collective bargaining agreement from California’s meal period rules. The court held the provision conflicted with the meal period statute and was therefore invalid.
The plaintiffs were employees of U.S. Borax at its open pit mine operations in Boron, California. The plaintiffs were also members of a union that had a collective bargaining agreement with U.S. Borax. The plaintiffs alleged that they worked 12.5 hours per shift, yet they only received a single 30-minute meal period. The plaintiffs filed suit claiming they should have received a second 30-minute meal period for each shift and that U.S. Borax’s failure to provide such second meal periods constituted a violation of Labor Code sections 512(a) and 226.7.
IWC Wage Order 16 governs on-site occupations in the construction, drilling, logging, and mining industries. Wage Order 16 contains an express exemption to the meal period rules where a collective bargaining agreement exists that covers meal periods. The collective bargaining agreement applicable to the plaintiffs and U.S. Borax authorized one meal period for each 12.5 hour shift. Based on the parties’ collective bargaining agreement and the Wage Order 16 exemption, the trial court sustained U.S. Borax’s demurrer to the complaint.
The plaintiffs appealed. The court held that the IWC exceeded its authority when it adopted the collective bargaining agreement exception. The court explained that Labor Code section 512 sets forth the general requirement that where employees work ten or more hours in a shift, the employees are entitled to two 30-minute meal periods. Section 512 further provides two exceptions to this rule. First, certain workers in the wholesale baking industry are exempted, and second, an employee may waive the second meal period so long as the employee works no more than 12 hours in a shift. Since the plaintiffs were not in the wholesale baking industry and they worked more than 12 hour shifts, neither exception applied.
Because section 512 contains express exceptions to the general rule requiring two meal periods where 10 or more hours are worked, the court held that the IWC’s attempt to add a third exception was both beyond the authority given to the IWC by the Legislature and in conflict with section 512. The court therefore concluded that the IWC’s exemption for employees covered by collective bargaining agreements was invalid and unenforceable.
Of particular importance to the court’s decision was its analysis of an amendment to Labor Code section 516, which took place less than two months before the adoption of Wage Order 16. Labor Code section 516 provides authority to the IWC to adopt working condition orders with respect to break periods, meal periods, and days of rest. Labor Code section 516 previously began: "Notwithstanding any other provision of law . . . ." Senate Bill 88 amended Labor Code section 516 by replacing that introductory phrase with "Except as provided in Section 512 . . . ." The court reasoned that this change in phrasing specifically excepted the requirements of section 512 from the authority given to the IWC to adopt wage orders. The court therefore concluded that the IWC did not have the authority to adopt the collective bargaining agreement safe harbor provision, since it conflicted with Labor Code section 512.
Despite finding that the safe harbor provision in the Wage Order for collective bargaining agreements was invalid, the court held that U.S. Borax was not liable for penalties under Labor Code section 226.7. The court reasoned that Labor Code section 226.7 expressly requires a violation of a Wage Order and that no such violation had occurred because of the invalid safe harbor provision. The court, however, declined to rule on the issue of liability for missed meal periods under Labor Code section 512, which, unlike Labor Code section 226.7, does not premise liability on a violation of a Wage Order.
Bearden is an important decision for two reasons. First, Bearden serves as a useful reminder that blind reliance on agency rules and regulations will not insulate an employer from potential liability where the rules or regulations are in conflict with the underlying statute. Instead, companies should review both the statute and its regulations when implementing or enforcing work place rules. Second, Bearden provides a framework for challenging the enumerable rules and regulations adopted by California agencies, many of which are less than friendly to employers.