ORIGINAL PROCEEDINGS in mandate. Jane L. Johnson, Judge. Petition granted. (Los Angeles County Super. Ct. No. BC398153).
The opinion of the court was delivered by: Perluss, P. J.
CERTIFIED FOR PUBLICATION
Three union-represented construction workers, Richard Lazarin, Gervis Quamina and Otis Skinner, sued their former employer, Total Western, Inc. (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),*fn1 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, supra, 138 Cal.App.4th 429, 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 Lazarin, Quamina and Skinner 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.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Wage and Hour Complaint
On September 16, 2008 petitioners Lazarin, Quamina and Skinner filed an action for unfair business practices and Labor Code violations on behalf of themselves and a putative class of former and current nonexempt California employees of TWI. The complaint alleges TWI employs skilled pipefitters, electricians, welders, ironworkers and other nonexempt employees to perform services under the management and control of TWI at sites throughout California. Those skilled employees are covered by wage order 16, which applies to certain on-site occupations in the construction, drilling, logging and mining industries. Petitioners allege they typically worked five to seven days per week and at least 10 and up to 16 or more hours per day.
The complaint further alleges TWI failed to pay its employees double-time wages when they worked more than 12 hours in a day or more than eight hours on the seventh day in a work week, failed to provide employees with a second uninterrupted 30-minute meal period when they worked more than 10 hours in a day, failed to provide its employees a third rest period when they worked more than 12 hours in a day and violated other provisions of California labor laws, including failing to provide complete and accurate itemized wage statements and failing to pay all wages due when an employee was discharged or quit. The complaint defined the proposed plaintiff class (which included five subclasses) as "[a]ll persons who are, have been, or were employed in California by [TWI] as non-exempt employees providing on-site construction services at a refinery, power plant, or other facility at any time from September 16, 2004 to the time of judgment in this action."
2. TWI's Motions for Summary Adjudication
a. The Initial Motion Concerning Claims for Unpaid Overtime and the Existence of a Qualifying Collective Bargaining Agreement
Section 514 provides that section 510, concerning overtime pay, and section 511, regarding alternative workweek schedules, do not apply to an employee covered by a valid collective bargaining agreement if that agreement provides certain minimum protections for the employee. Wage order 16, section 3(H), contains the same exclusion from the wage order's overtime provisions for on-site construction employees.
On October 5, 2009 the superior court granted TWI's motion for summary adjudication as to Lazarin, Quamina and Skinner's claims for unpaid overtime compensation (the first cause of action for unfair competition and fourth cause of action under section 1194), finding at all relevant times TWI's employees, including petitioners, were covered by valid collective bargaining agreements that contained the required elements for the exemption specified in section 514 and wage order 16, section 3(H). Specifically, the court found as undisputed fact that beginning in January 1, 2001 TWI was a signatory to valid collective bargaining agreements with the International Union of Petroleum and Industrial Workers that expressly provided for the wages, hours and working conditions of TWI's employees; provided a regular hourly rate of pay not less than 30 percent more than the state minimum wage; specified a premium wage rate of time and one-half for all overtime hours worked (defined as hours worked in excess of 40 per payroll week or hours worked in excess of a regularly scheduled shift); and authorized TWI to establish daily work schedules of eight, nine, 10 or 12 hours without incurring overtime except when the hours worked were in excess of the regularly scheduled shift.
b. The Motion Directed to the Claims for Missed Second Meal Periods
Immediately after the court granted TWI's motion for summary adjudication regarding the claims for unpaid overtime compensation based on the exemption for employees covered by a qualifying collective bargaining agreement, TWI moved for summary adjudication as to the two claims based on missed second meal periods, noting wage order 16, section 10(E), provided the wage order's requirements regarding meal periods were likewise inapplicable to employees covered by qualifying collective bargaining agreement. Although TWI acknowledged the exemption contained in section 10(E) had been invalidated several years earlier in Bearden, supra, 138 Cal.App.4th 429, TWI argued the Bearden court had also held, notwithstanding its invalidity, the exemption "is part of the IWC order." (Id. at p. 443.) Accordingly, because section 226.7's premium pay provision applies only if an employee fails to afford a meal period "in accordance with an applicable order of the Industrial Welfare Commission," just as the employer in Bearden, U.S. Borax, was held not to have violated an IWC order and not to be liable for section 226.7 damages, it too could not be liable for such damages: "[E]ven though the exemption is invalid, it is still contained in Wage Order 16-2001. TWI is in compliance with the Wage Order as written."
In their opposition to the motion for summary adjudication, Lazarin, Quamina and Skinner emphasized wage order 16, section 10(E), had been invalidated in Bearden, supra, 138 Cal.App.4th 429 and insisted an invalid exemption cannot be the basis for excusing TWI from liability for its unlawful meal period practices. (Lazarin, Quamina and Skinner noted TWI did not contend the Bearden court had erred in invalidating the exemption and had not presented any evidence regarding the factual bases for the claim TWI had failed to provide petitioners or other members of the putative class with a second, 30-minute uninterrupted meal period when they worked more than 10 hours in a day.) They also argued, even if their section 226.7 claim for damages was precluded, the unfair business practice cause of action, predicated on a violation of section 512, subdivision (a), and not wage order 16, section 10, survived.
c. The Superior Court's Order Granting the Motion as to the Fifth Cause of Action
Following oral argument and supplemental briefing, on February 11, 2010 the court granted TWI's motion as to the fifth cause of action, based on alleged violations of wage order 16, section 10(B), and section 226.7, and denied the motion as to the second cause of action for unfair business practices. After quoting the applicable Labor Code sections and portions of wage order 16, including the exemption in section 10(E) for employees covered by a valid, qualifying collective bargaining agreement--and reiterating that it had previously determined TWI and its unionized employees had in place qualifying collective bargaining agreements--the court explained, "[t]he Bearden court found that Section 10(E) improperly creates an additional exception to the requirements of Labor Code § 512 beyond the specific exceptions the Legislature expressly included in the statute. . . . However, the Bearden court also held that the defendant could not be liable, as a matter of law for the penalties provided in Labor Code § 226.7 because the exemption is part of the Wage Order. . . . The invalid provision remains part of the Wage Order today. . . . [W]hile it can be said that this defendant is not in the same position as U.S. Borax because this defendant has the benefit of notice that Section 10(E) is invalid, it cannot be ignored that this defendant also has notice that employers will not be held liable for violation of the Wage Order because Section 10(E) remains part of the Wage Order. The employer is not in a position to predict which part of a decision will apply to it and which will not. Therefore, the problem for the plaintiffs here is the same problem the Bearden plaintiffs faced: '. . . there was no violation of an IWC order.'"
With respect to the unfair business practice claim, however, the court ruled, even if TWI has no liability under wage order 16, section 10(E), Lazarin, Quamina and Skinner have alleged a violation of section 512 itself as a predicate for their claim. "Nothing about the court's holding in Bearden prevents a UCL claim based on violations of Labor Code § 512."
Acknowledging "the paradox inherent in the ruling" that wage order 16, section 10(E), is invalid but nonetheless protects employers from liability for failing to provide required meal periods, the court indicated its belief that immediate appellate review of its ruling on the fifth cause of action would materially advance the conclusion of the litigation. (Code Civ. Proc., § 166.1.)
On March 8, 2010 Lazarin, Quamina and Skinner petitioned this court for a writ of mandate compelling respondent superior court to vacate its order granting real party in interest TWI's motion for summary adjudication as to their fifth cause of action and to enter a new order denying the motion. In their petition Lazarin, Quamina and Skinner argue the invalid exemption contained in wage order 16, section 10(E), should have been severed from the valid portions of the wage order and, in any event, not allowing workers covered by collective bargain agreements to recover premium pay as compensation ...