In a recent decision, Judge Philip S. Gutierrez of the United States District Court for the Central District of California clarified an available avenue for employers with collective bargaining agreements (“CBAs”) to combat the growing trend of wage and hour lawsuits in California. In granting defendant Kiewit Infrastructure West Co.’s (“Kiewit”) motion for summary judgment (by way of a motion for reconsideration), Judge Gutierrez dismissed various Labor Code claims, including claims for meal and rest break violations, because the claims were exempted by (rather than pre-empted by) Kiewit’s existing CBA. See Peter Zayerz v. Kiewit Infrastructure West Co., 16-CV-6405-PSC (PJW)(January 18, 2018).
The California Labor Code and Industrial Welfare Commission Wage Orders provide for mandatory uninterrupted meal and rest breaks for hourly, non-exempt employees. See Cal. Lab. Code §512(a). Generally, California employers must provide their hourly employees uninterrupted meal periods of not less than thirty minutes for every five hours worked and uninterrupted rest periods of not less than ten minutes for every four hours worked (or major portion thereof). Id. If an employer fails to provide such meal periods and rest breaks, employers may be vulnerable to lawsuits or enforcement actions to seek unpaid wages and costly penalties.
However, pursuant to Labor Code §§ 512(e) and (f), certain unionized employees working in construction, commercial driving, security services, electrical, gas or local publically owned electric utility jobs may be exempt from the Labor Code’s meal and rest break requirements where a valid CBA is in place.
Labor Code §§ 512(e)(1)-(2) provides that, if an employee in the aforementioned industries is covered by a CBA that “expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for meal periods for those employees, final and binding arbitration of disputes concerning application of its meal period provisions, premium wage rates for all overtime hours worked, and a regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate,” then § 512(e) does not apply to the employer. Cal. Lab. Code §§ 512(e), (f). Instead, the CBA governs and any disputes arising between an employer and employee must be resolved according to the terms of the CBA.
When reconsidering Kiewit’s motion, the Court evaluated the exemptions under Labor Code § 512, and determined that the parties were obligated to resolve their disputes according to the arbitration terms of the CBA. Therefore, the plaintiff’s claims for meal and rest break violations, as well as claims for derivative penalties under the Private Attorneys General Act (“PAGA”) were dismissed.
In industries outside those listed in Labor Code § 512(f), unionized employers may still be able to avoid state law claims for meal and rest break violations, by arguing that the claims are pre-empted by the Labor Management Relations Act (“LMRA”). Such an argument is available where the terms of the CBA relating to the meal and rest breaks are disputed and require interpretation by the court. However, in Kiewit’s case, the Court determined the meal and rest break claims were not pre-empted by the LMRA because there was no dispute as to the interpretation of the CBA. Instead, the claims were statutorily exempted by the Labor Code, thus requiring the parties to resolve their disputes as per their CBA.
California wage and hour lawsuits continue to dominate the legal landscape for California companies. Jackson Lewis is equipped to handle all aspects of labor and employment disputes, including defense against wage and hour class and representative actions and preventative advice and counsel. Please contact our California attorneys if you have further questions.