Filed 11/25/15; pub. order 12/17/15 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
NATHAN FLOWERS, B256744
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC515136)
v.
LOS ANGELES COUNTY
METROPOLITAN TRANSPORTATION
AUTHORITY,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County. Elihu
M. Berle, Judge. Affirmed in part and reversed in part.
The Tidrick Law Firm, Steven G. Tidrick and Joel B. Young for Plaintiff and
Appellant.
Jones Day, Erica L. Reilley, Cindi Ritchey, and Charlotte Wasserstein; Mark J.
Saladino, County Counsel, Charles M. Safer, Assistant County Counsel, and Ronald W.
Stamm, Deputy County Counsel for Defendant and Respondent.
This appeal concerns overlapping provisions of the Labor Code, the Public
Utilities Code (PUC), and an Industrial Welfare Commission (IWC) wage order
governing the wages, hours, and working conditions of transit operators employed by the
Los Angeles Metropolitan Transportation Authority (MTA). The issues presented are (1)
whether PUC sections 30257 and 30750 exempt the MTA from minimum wage and rest
period requirements imposed by the Labor Code and by IWC Order No. 9-2001 (Cal.
Code Regs., tit. 8, § 11090) (wage order 9), and (2) if the MTA is subject to the
provisions of wage order 9, whether the terms of the wage order itself exempt MTA
transit operators from the rest period requirements.
We hold that PUC sections 30257 and 30750 do not exempt the MTA from rest
period and minimum wage requirements, but that the rest period requirements do not
apply to the MTA operators who are the putative plaintiffs in this action.
BACKGROUND
The MTA is a public entity created pursuant to the County Transportation
Commissions Act. (Pub. Util. Code, §§ 130000, 130050.2.) Among other services, the
MTA operates a public transportation system, including bus and rail transit systems.
Plaintiff Nathan Flowers (plaintiff) is a former MTA employee who worked as a
bus driver. Plaintiff’s employment with the MTA was governed by a collective
bargaining agreement (CBA).
After plaintiff’s employment with the MTA ended, he filed a class action
complaint against the MTA on behalf of a putative class of current and former bus and
train operators employed by the MTA since July 15, 2010. The operative amended
complaint alleges four causes of action: (1) failure to pay minimum wage and overtime
compensation in violation of the federal Fair Labor Standards Act (29 U.S.C. § 201)
(FLSA); (2) failure to pay minimum wage in violation of Labor Code section 1194 and
wage order 9; (3) civil penalties pursuant to the California Labor Code Private Attorney
General Act (PAGA); and (4) failure to provide rest periods or to pay premiums for
missed rest periods under Labor Code section 226.7 and wage order 9.
2
The MTA demurred to all causes of action and filed a petition to compel
arbitration of certain of the claims. The trial court sustained the demurrer, without leave
to amend, as to the second cause of action for violation of state minimum wage
requirements, the third cause of action for violation of PAGA, and the fourth cause of
action for violation of rest period requirements. The court overruled the demurrer with
respect to the FLSA claim and denied the petition to compel arbitration.
Plaintiff voluntarily dismissed the FLSA claim without prejudice, and a judgment
of dismissal was entered in favor of the MTA. This appeal followed.
THE PARTIES’ CONTENTIONS
Plaintiff contends his amended complaint states a claim for violation of minimum
wage and rest period requirements imposed by the Labor Code and wage order 9 and for
civil penalties under PAGA. The MTA argues that two provisions of the Southern
California Rapid Transit District Law1 -- PUC sections 30257 and 30750 -- immunize it
from the wage and rest period requirements, and that plaintiff’s derivative PAGA claim
fails for the same reason.
DISCUSSION
I. General legal principles and standard of review
The parties’ contentions raise issues concerning interpretation of the Labor Code,
the PUC, and wage order 9. The ordinary principles of statutory interpretation apply.
(Gonzalez v. Downtown LA Motors, LP (2013) 215 Cal.App.4th 36, 43 [wage orders are
construed in accordance with the principles of statutory interpretation].) Under those
principles, our analysis begins by ascertaining the legislative intent underlying the statute
“so that we may adopt the construction that best effectuates the purpose of the law.
[Citation.]” (Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, 715.) To
do so, we first examine the words of the statute as the best indication of legislative intent.
1 The Southern California Rapid Transit District Law governs the MTA as the
successor agency to the Southern California Rapid Transit District and sets forth the
powers and functions of the MTA. (See Pub. Util. Code, §§ 30001, 30500-30756.)
3
(Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1026 (Brinker).)
Those words are given their ordinary and usual meaning and are construed in their
statutory context. (Hassan, supra, at p. 715.) Judicial construction that renders any part
of the statute meaningless or inoperative should be avoided. (Ibid.)
If the language of the statute is clear, it is applied without further inquiry.
(Aleman v. Airtouch Cellular (2012) 209 Cal.App.4th 556, 568.) If the language can be
interpreted to have more than one reasonable meaning, a court may consider “‘a variety
of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied,
the legislative history, public policy, contemporaneous administrative construction, and
the statutory scheme of which the statute is a part.’ [Citation.]” (Id. at pp. 568-569.)
An appellate court reviews a trial court’s sustaining of a demurrer de novo,
exercising its independent judgment as to whether a cause of action has been stated as a
matter of law. (Montclair Parkowners Assn. v. City of Montclair (1999) 76 Cal.App.4th
784, 790.) “The reviewing court gives the complaint a reasonable interpretation, and
treats the demurrer as admitting all material facts properly pleaded. [Citations.] The
court does not, however, assume the truth of contentions, deductions or conclusions of
law. [Citation.] The judgment must be affirmed ‘if any one of the several grounds of
demurrer is well taken. [Citations.]’ [Citation.] However, it is error for a trial court to
sustain a demurrer when the plaintiff has stated a cause of action under any possible legal
theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to
amend if the plaintiff shows there is a reasonable possibility any defect identified by the
defendant can be cured by amendment. [Citation.]” (Aubry v. Tri-City Hospital Dist.
(1992) 2 Cal.4th 962, 966-967.)
II. Legal framework
A. Labor Code provisions
1. Labor Code section 1194 minimum wage requirements
Labor Code section 1194 accords an employee a statutory right to recover unpaid
wages from an employer who fails to pay the minimum wage. (Road Sprinkler Fitters
Local Union No. 669 v. G & G Fire Sprinklers, Inc. (2002) 102 Cal.App.4th 765, 778.)
4
The statute provides in relevant part: “Notwithstanding any agreement to work for a
lesser wage, any employee receiving less than the legal minimum wage or the legal
overtime compensation applicable to the employee is entitled to recover in a civil action
the unpaid balance of the full amount of this minimum wage or overtime compensation,
including interest thereon, reasonable attorney’s fees, and costs of suit.” (Lab. Code,
§ 1194, subd. (a).)
Labor Code section 1194 does not define the employment relationship nor does it
specify who may be liable for unpaid wages. Specific employers and employees become
subject to the minimum wage requirements only through and under the terms of wage
orders promulgated by the IWC, the agency formerly authorized to regulate working
conditions in California.2 (Martinez v. Combs (2010) 49 Cal.4th 35, 54-55.)
Accordingly, “an employee who sues to recover unpaid minimum wages actually and
necessarily sues to enforce the wage order.” (Id. at pp. 56-57.)
2. Labor Code section 226.7 rest period requirements and exemption
Labor Code section 226.7 prohibits an employer from requiring an employee to
work during a rest period that is required by an applicable statute, regulation, or IWC
wage order, unless the employer pays the employee one additional hour of regular pay for
each workday on which a rest period is missed. (Lab. Code, § 226.7, subds. (b), (c).)3
2 Although the IWC was defunded in 2004, its wage orders remain in effect.
(Soderstedt v. CBIZ Southern California, LLC (2011) 197 Cal.App.4th 133, 145, fn. 1.)
3 Labor Code section 226.7, subdivisions (b) and (c) state: “(b) An employer shall
not require an employee to work during a meal or rest or recovery period mandated
pursuant to an applicable statute, or applicable regulation, standard, or order of the
Industrial Welfare Commission, the Occupational Safety and Health Standards Board, or
the Division of Occupational Safety and Health. [¶] (c) If an employer fails to provide
an employee a meal or rest or recovery period in accordance with a state law, including,
but not limited to, an applicable statute or applicable regulation, standard, or order of the
Industrial Welfare Commission, the Occupational Safety and Health Standards Board, or
the Division of Occupational Safety and Health, the employer shall pay the employee one
additional hour of pay at the employee's regular rate of compensation for each workday
that the meal or rest or recovery period is not provided.”
5
Section 226.7, subdivision (e) states that the rest period requirements do not apply,
however, “to an employee who is exempt from meal or rest or recovery period
requirements pursuant to other state laws, including, but not limited to, a statute or
regulation, standard, or order of the Industrial Welfare Commission.” (Lab. Code,
§ 226.7, subd. (e).)
3. Labor Code section 512.5 rest period exemption
Labor Code section 512.5 authorizes the IWC to exempt from rest period
requirements public transit operators who are covered by a collective bargaining
agreement. Subdivision (a) of section 512.5 provides in relevant part: “[I]f the Industrial
Welfare Commission adopts or amends an order that applies to an employee of a public
agency who operates a commercial motor vehicle, it may exempt that employee from the
application of the provisions of that order which relate to meal periods or rest periods,
consistent with the health and welfare of that employee, if he or she is covered by a valid
collective bargaining agreement.” (Lab. Code, § 512.5, subd. (a).)
B. Wage order 9
“Nearly a century ago, the Legislature responded to the problem of inadequate
wages and poor working conditions by establishing the IWC and delegating to it the
authority to investigate various industries and promulgate wage orders fixing for each
industry minimum wages, maximum hours of work, and conditions of labor. [Citations.]
Pursuant to its ‘broad statutory authority’ [citation], the IWC in 1916 began issuing
industry- and occupation-wide wage orders specifying minimum requirements with
respect to wages, hours, and working conditions [citation].” (Brinker, supra, 53 Cal.4th
at p. 1026.)
6
The wage order applicable in this case, wage order 9, effective July 1, 2004, as
amended, governs employers and employees in the transportation industry. Section 4 of
wage order 9 imposes minimum wage requirements4 and section 12 imposes rest period
requirements.5
4 Section 4 of wage order 9, effective July 1, 2004, provides as follows:
“4. MINIMUM WAGES
“(A) Every employer shall pay to each employee wages not less than seven
dollars and fifty cents ($7.50) per hour for all hours worked, effective January 1, 2007,
and not less than eight dollars ($8.00) per hour for all hours worked, effective January 1,
2008, except:
“LEARNERS: Employees during their first 160 hours of employment in
occupations in which they have no previous similar or related experience, may be paid
not less than 85 percent of the minimum wage rounded to the nearest nickel.
“(B) Every employer shall pay to each employee, on the established payday for
the period involved, not less than the applicable minimum wage for all hours worked in
the payroll period, whether the remuneration is measured by time, piece, commission, or
otherwise.
“(C) When an employee works a split shift, one (1) hour’s pay at the minimum
wage shall be paid in addition to the minimum wage for that workday, except when the
employee resides at the place of employment.
“(D) The provisions of this section shall not apply to apprentices regularly
indentured under the State Division of Apprenticeship Standards.”
5 Section 12 of wage order 9 states:
“12. REST PERIODS
“(A) Every employer shall authorize and permit all employees to take rest
periods, which insofar as practicable shall be in the middle of each work period. The
authorized rest period time shall be based on the total hours worked daily at the rate of
ten (10) minutes net rest time per four (4) hours or major faction thereof. However, a rest
period need not be authorized for employees whose total daily work time is less than
three and one-half (3 ½) hours. Authorized rest period time shall be counted as hours
worked for which there shall be no deduction from wages.
“(B) If an employer fails to provide an employee a rest period in accordance with
the applicable provisions of this order, the employer shall pay the employee one (1) hour
of pay at the employee’s regular rate of compensation for each workday that the rest
period is not provided.
“(C) This section shall not apply to any public transit bus driver covered by a
valid collective bargaining agreement if the agreement expressly provides for rest periods
for those employees, final and binding arbitration of disputes concerning application of
7
Prior to January 1, 2001, wage order 9 did not apply to public employees. A 2001
amendment changed this by making certain enumerated sections of the wage order
applicable to government employees. Among the enumerated sections now applicable to
public employees is section 4, the minimum wage provision. A further amendment in
2004 made meal period and rest period requirements in sections 11 and 12 of the wage
order applicable to public transit drivers, except for those covered by a collective
bargaining agreement containing certain specified terms. The 2001 and 2004
amendments revised sections 1(B) and 12(C) of wage order 9.
Section 1(B) states in relevant part:
“1. APPLICABILITY OF ORDER
“This order shall apply to all persons employed in the transportation
industry whether paid on a time, piece rate, commission, or other basis,
except that:
“[¶] . . . [¶]
“(B) Except as provided in Sections 1, 2, 4, 10, and 20, and with
regard to commercial drivers, Sections 11, and 12, the provisions of this
order shall not apply to any employees directly employed by the State or
any political subdivision thereof, including any city, county, or special
district. The applications of Sections 11 and 12 for commercial drivers
employed by governmental entities shall become effective July 1, 2004 or
following the expiration date of any valid collective bargaining agreement
applicable to such commercial drivers then in effect but, in any event, no
later than August 1, 2005. Notwithstanding Section 21, the application of
Sections 11 and 12 to public transit bus drivers shall be null and void in the
event the IWC or any court of competent jurisdiction invalidates the
collective bargaining exemption established by Sections 11 or 12 for those
drivers.”
Section 12(C) of wage order 9 states:
“This section [governing rest periods] shall not apply to any public
transit bus driver covered by a valid collective bargaining agreement if the
its rest period provisions, premium wage rates for all overtime hours worked, and regular
hourly rate of pay of not less than 30 percent more than the State minimum wage rate.”
8
agreement expressly provides for rest periods for those employees, final
and binding arbitration of disputes concerning application of its rest period
provisions, premium wage rates for overtime hours worked, and regular
hourly rate of pay of not less than 30 percent more than the State minimum
wage rate.”
C. PUC sections 30257 and 30750
Besides delegating to the IWC the authority to regulate wages, hours, and working
conditions of transit workers, the Legislature has delegated to the MTA, in PUC section
30257, the authority to “adopt a personnel system for the purpose of recruiting and
maintaining an effective working force with good morale,” to create job positions, and to
establish salaries and benefits for those positions. (Pub. Util. Code, § 30257.) The
MTA’s authority to do so is circumscribed, however, by the collective bargaining rights
of its employees. PUC section 30257 states that the MTA may “determine and create
such number and character of positions as are necessary properly to carry on the
functions of the district” and “establish an appropriate salary, salary range, or wage for
each position so created, except for positions in a bargaining unit represented by a labor
organization.” (Pub. Util. Code, § 30257, italics added.)
The Legislature has accorded MTA employees extensive collective bargaining
rights. PUC section 30750, subdivision (a) provides that if a majority of employees
indicates a desire to be represented by a labor organization, the MTA and the
representative organization must “bargain in good faith and make all reasonable efforts to
reach agreement on the terms of a written contract governing wages, hours, and working
conditions.” (Pub. Util. Code, § 30257, subd. (a).) Subdivision (c) of PUC section 30750
states that the MTA’s duty to bargain in good faith, and to enter into and comply with the
terms of a collective bargaining agreement, shall not be restricted by other laws: “The
obligation of the [MTA] to bargain in good faith with a duly designated or certified labor
organization and to execute a written collective bargaining agreement with that labor
organization covering the wages, hours, and working conditions of the employees . . . and
9
to comply with the terms of that collective bargaining agreement, shall not be limited or
restricted by any other provision of law.” (Pub. Util. Code, § 30750, subd. (c).)6
III. Minimum wage requirements
A. The minimum wage requirements of wage order 9 apply to the MTA
The plain language of wage order 9 imposes minimum wage requirements on the
MTA. Section 1 of the wage order states that its provisions “shall apply to all persons
employed in the transportation industry.” Section 1(B) of wage order 9 makes employees
of “the State or any political subdivision thereof, including any city, county or special
district” expressly subject to the minimum wage requirements set forth in section 4.
Section 4 of the wage order requires “[e]very employer” to pay a specified minimum
wage to its employees. Wage order 9 contains no exception from the minimum wage
requirements for public entity employers such as the MTA. The minimum wage
requirements accordingly apply to the MTA and its employees, unless another statutory
exemption applies.
B. PUC sections 30257 and 30750 do not exempt the MTA from minimum wage
and rest period requirements
The MTA contends that PUC sections 30257 and 30750 exempt it from the
minimum wage and rest period requirements imposed by the Labor Code and by wage
6 Subdivision (c) of PUC section 30750 in its entirety states: “The obligation of the
district to bargain in good faith with a duly designated or certified labor organization and
to execute a written collective bargaining agreement with that labor organization
covering the wages, hours, and working conditions of the employees represented by that
labor organization in an appropriate unit, and to comply with the terms of that collective
bargaining agreement, shall not be limited or restricted by any other provision of law.
The obligation of the district to bargain collectively shall extend to all subjects of
collective bargaining, including, but not limited to, retroactive pay increases.
Notwithstanding any other provision of law, the district shall make deductions from the
wages and salaries of its employees, upon receipt of authorization to make those
deductions, for the payment of union dues, fees, or assessments, for the payment of
contributions pursuant to any health and welfare plan or pension plan, or for any other
purpose for which deductions may be authorized by employees where the deductions are
pursuant to a collective bargaining agreement with a duly designated or certified labor
organization.”
10
order 9. The MTA argues that those statutes accord it and a duly designated labor
organization the sole and exclusive authority to determine the wages and working
conditions of MTA employees through the collective bargaining process and preclude
challenges to this authority based on “any other provision of law.”
1. The plain language of the statutes provides no exemption
The plain language of PUC section 30257 does not support the MTA’s position.
Section 30257 simply states that the MTA “shall establish an appropriate salary, salary
range, or wage” for positions it creates “except for positions in a bargaining unit
represented by a labor organization.” (Pub. Util. Code, § 30257.) The statute does not
exempt the MTA from state minimum wage requirements, nor does it accord the MTA
sole and exclusive authority or discretion to determine what constitutes an “appropriate”
wage for positions established by its board. Rather, it circumscribes the MTA’s authority
by precluding it from establishing salaries or wages for “positions in a bargaining unit
represented by a labor organization.”
PUC section 30750 also contains no exception from state minimum wage
requirements. The plain language of that statute states that the MTA’s obligation to
bargain in good faith with a duly designated labor organization, to execute a collective
bargaining agreement, and to comply with the terms of such an agreement shall not be
limited or restricted by any other provision of law. The MTA fails to explain how
complying with the state minimum wage law would limit or restrict its obligation to
perform any of the tasks specified in PUC section 30750, subdivision (c).
The MTA argues, without explanation, that complying with state minimum wage
requirements would restrict its ability to execute a collective bargaining agreement
covering the wages, hours, and working conditions of its employees and to comply with
the terms of such an agreement. That argument is presumably based on the assumption
that a collective bargaining agreement could provide for employee compensation at a rate
less than the applicable minimum wage. But Labor Code section 1194 prohibits such an
agreement by according employees the right to recover the unpaid balance of the
11
applicable legal minimum wage “[n]otwithstanding any agreement to work for a lesser
wage.” (Lab. Code, § 1194.)
The absence of an express exemption from the applicable minimum wage
requirements in the PUC sections on which the MTA relies may be contrasted with
express exemptions accorded to public employees in other statutes. Labor Code section
512.5, subdivision (a) creates such an exemption for public transit operators:
“Notwithstanding any provision of this chapter, if the Industrial Welfare Commission
adopts or amends an order that applies to an employee of a public agency who operates a
commercial motor vehicle, it may exempt that employee from the application of the
provisions of that order which relate to meal periods or rest periods, consistent with the
health and welfare of that employee, if he or she is covered by a valid collective
bargaining agreement.” The Legislature has demonstrated that it knows how to create an
exemption from the provisions of an IWC wage order when it intends to do so. There is
no exemption from the minimum wage provisions of wage order 9 in PUC section 30750,
subdivision (c), and the MTA has presented no valid basis for inferring such an
exemption. (See, e.g., Plastic Pipe & Fittings Assn. v. California Building Standards
Com. (2004) 124 Cal.App.4th 1390, 1413 [absent an express statutory exemption, court
cannot infer exemption from statutory requirements unless it discerns a clear legislative
intent to provide an exemption].)
2. Grier v. Alameda-Contra Costa Transit Dist. does not compel a
different result
The MTA cites Grier v. Alameda-Contra Costa Transit Dist. (1976) 55
Cal.App.3d 325 (Grier) as support for its argument that PUC section 30750 evidences the
Legislature’s intent that labor relations between the MTA and its employees be governed
exclusively by the PUC, thereby exempting the MTA from minimum wage and rest
period requirements imposed by the Labor Code and wage order 9.
The plaintiffs in Grier were bus drivers employed by the Alameda-Contra Costa
Transit District (Alameda District) who sued the Alameda District for violating Labor
Code section 2928, which limits an employer’s ability to deduct wages as a penalty for
12
employee tardiness. (Grier, supra, 55 Cal.App.3d at p. 328.) The plaintiffs’ employment
was governed by a collective bargaining agreement that contained provisions governing
tardiness for work. (Id. at p. 329.)
The Alameda District argued that it was exempt from Labor Code section 2928
because its labor relations were governed exclusively by the PUC and by applicable rules
and regulations adopted by its board. (Grier, supra, 55 Cal.App.3d at p. 331.) The court
in Grier rejected that argument, noting that “[t]he most salient point” against the
Alameda District’s position was the fact that the PUC section applicable to the Alameda
District did not contain exclusionary language similar to that contained in section 30750,
subdivision (c). That statute as then in effect stated that “‘[t]he obligation of the district
to bargain in good faith with a duly designated or certified labor organization and to
execute a written collective bargaining agreement with such labor organization covering
the wages, hours, and working conditions of the employees represented by such labor
organization in an appropriate unit, and to comply with the terms thereof shall not be
limited or restricted by the provisions of the Government Code or other laws or
statutes. . . .’”7 (Id. at p. 332.) Noting that “[t]he Legislature plainly thought it necessary
to include the express language negating other statutory restrictions” in the provisions
governing the Southern California transit districts, the court in Grier determined that the
absence of such express language in the provisions governing the Alameda District
“indicates that a different meaning was intended.” (Ibid.) The court then concluded:
“[I]t does not appear that the Legislature intended Alameda-Contra Costa County Transit
District labor relations to be governed only by the Public Utility Code provisions relating
thereto. Rather, the rules and regulations adopted by the board of directors . . . including
those adopted by a resolution approving a collective bargaining agreement, must
7 Subdivision (c) of PUC section 30750 was amended in 2004 to state that the
district’s obligation to bargain in good faith with a duly designated or certified labor
organization, to execute a written collective bargaining agreement, and to comply with
the terms of the collective bargaining agreement “shall not be limited or restricted by any
other provision of law.” (Stats. 2004, ch. 788, § 20.)
13
themselves be promulgated subject to the limitations and restrictions of other applicable
laws.” (Id. at p. 333.)
We note at the outset that Grier concerned the interpretation of the PUC
provisions applicable to the Alameda-Contra Costa County Transit District, and not
section 30750. The court in Grier considered PUC section 30750, subdivision (c) only in
comparison to the Alameda Transit District statutes at issue in that case. We disagree
with any suggestion by the court in Grier that PUC section 30750, subdivision (c),
evidences an intent by the Legislature that labor relations between the MTA and its
employees be governed exclusively by the PUC, or that the MTA and its employees are
not subject to state minimum wage requirements.
3. Statutory interpretation principles and public policy support
application of the minimum wage
The MTA’s interpretation of PUC section 30750, subdivision (c) is not only
unsupported by the plain language of that statute, it conflicts with the express terms of
wage order 9, which, subject to exceptions not applicable here, applies to “all persons
employed in the transportation industry,” including “employees directly employed by the
State or any political subdivision thereof, including any city, county, or special district”
and “commercial drivers employed by governmental entities.” Under the applicable
principles of statutory interpretation, potentially conflicting statutory provisions should
be interpreted to harmonize and reconcile their respective elements so as to carry out the
overriding legislative purpose of the statutory scheme as a whole. (Russell v. Stanford
University Hospital (1997) 15 Cal.4th 783, 789.) Applying this principle here, it is
possible for the MTA to comply with the minimum wage law and to meet its obligations
to bargain in good faith with a duly designated labor organization and to execute a
collective bargaining agreement and comply with its terms.
Our interpretation of the relevant statutory provisions is consistent with federal
and California labor law, and with the public policy underpinnings of those laws. Under
both federal and California law, employees may not agree to waive their entitlement to
the minimum wage (Lab. Code, §§ 1194, 219; Barrentine v. Arkansas-Best Freight Sys.
14
(1981) 450 U.S. 728, 740-741), nor may a collective bargaining agreement waive that
right. (Gordon v. City of Oakland (9th Cir. 2010) 627 F.3d 1092, 1095.) “State wage
and hour laws ‘reflect the strong public policy favoring protection of workers’ general
welfare and “society’s interest in a stable job market.” [Citations.]’ [Citations.]” (Cash
v. Winn (2012) 205 Cal.App.4th 1285, 1297.) They are therefore liberally construed in
favor of protecting workers. Our Supreme Court has stated that, “‘[I]n light of the
remedial nature of the legislative enactments authorizing the regulation of wages, hours
and working conditions for the protection and benefit of employees, the statutory
provisions are to be liberally construed with an eye to promoting such protection.’
[Citations.]” (Brinker, supra, 53 Cal.4th at pp. 1026-1027.) Both the statutory
framework and its underlying public policy support application of the minimum wage in
this case.
PUC sections 30257 and 30750, subdivision (c) do not exempt the MTA as a
matter of law from minimum wage requirements imposed by the Labor Code and wage
order 9. The trial court erred by sustaining the demurrer to plaintiff’s second cause of
action for violation of the state minimum wage law on that basis.
IV. Rest period requirements
A. Rest period exemption under section 12(C) of wage order 9
Section 12(C) of wage order 9 states that rest period requirements do not apply to
public transit bus drivers covered by a valid collective bargaining agreement if the
agreement provides for (1) rest periods for those employees, (2) final and binding
arbitration of disputes concerning application of its rest period provisions, (3) “premium
wage rates for all overtime hours worked,” and (4) “regular hourly rate of pay of not less
than 30 percent more than the State minimum wage.”
Plaintiff concedes that the MTA and its employees have entered into a valid
collective bargaining agreement that satisfies all but the third required element for the
rest break exemption accorded by section 12(C) of wage order 9 -- premium wage rates
for all overtime hours worked. Plaintiff contends that the rest period exemption does not
apply because the collective bargaining agreement does not provide premium wage rates
15
for “all overtime hours worked” by MTA bus and train operators. Whether the
exemption accorded by section 12(C) of wage order 9 applies requires an examination of
overtime compensation requirements in the collective bargaining agreement and under
applicable law.
B. Overtime compensation under federal and California law
Both federal and California law govern the payment of overtime compensation.
(See 29 U.S.C. § 207; Lab. Code, § 510 et seq.) The FLSA requires overtime pay only if
an employee works more than 40 hours per week, regardless of the number of hours
worked during any one day. (29 U.S.C. § 207(a)(1).) California law, codified at Labor
Code section 510, is more stringent and requires overtime compensation for “[a]ny work
in excess of eight hours in one workday and any work in excess of 40 hours in any one
workweek.” (Lab. Code, § 510, subd. (a), italics added.)
Labor Code section 514 exempts from the overtime pay requirements of section
510 any employee covered by a valid collective bargaining agreement that provides
“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. (Lab. Code, § 514.)8
C. Overtime provisions in the collective bargaining agreement
The MTA’s collective bargaining agreement defines overtime as work performed
by operators “in excess of eight (8) hours per day, except as provided elsewhere in this
Contract.” The collective bargaining agreement further states that “[a]ll hours worked in
excess of forty (40) hours in a work week shall be subject to the provisions of the Fair
Labor Standards Act (FLSA).”
The collective bargaining agreement excepts from the definition of overtime
certain tasks that are compensated at a regular pay rate, even if performance of those
tasks causes an operator’s hours to exceed eight hours in one day or 40 hours in one
8 The conditions for the overtime exemption accorded by Labor Code section 514
are identical to two of the required elements for the rest period exemption accorded by
section 12(C) of wage order 9.
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week. These tasks include “making out accident reports,” “making a required
miscellaneous report,” “completing a required Operators’ Daily Log,” “tak[ing] physical
re-examinations on off days or off hours,” and attending “Verification of Transit
Training.”
Plaintiff contends the foregoing tasks constitute compensable work time under
wage order 9, which defines “hours worked” as “the time during which an employee is
subject to the control of an employer, and includes all the time the employee is suffered
or permitted to work, whether or not required to do so,” and must be compensated at the
premium wage rate if their performance causes an operator’s hours worked to exceed
eight hours in one day or 40 hours in one week. Plaintiff further contends that because
the collective bargaining agreement fails to do so, it does not meet the requirements for
the rest period exemption accorded by section 12(C) of wage order 9.
The MTA argues that the parties may contractually agree, through the collective
bargaining process, to exclude the specified tasks from the definition of “overtime hours
worked.” The MTA maintains that the definition set forth in the collective bargaining
agreement, and not the statutory definition, should be applied in the instant case.
We previously considered this issue in Vranish v. Exxon Mobil Corp. (2014) 223
Cal.App.4th 103 (Vranish).
D. Vranish
The plaintiffs in Vranish were employees whose employment was governed by a
valid collective bargaining agreement. Consistent with the terms of that agreement, the
plaintiffs worked a regularly scheduled workweek that required them to work more than
eight hours in a 24-hour period. The collective bargaining agreement provided for
overtime pay for hours worked in excess of 40 hours in a workweek or 12 hours in a
workday, and plaintiffs were compensated for all overtime worked in accordance with the
terms of the agreement. The plaintiffs sued the employer, arguing that their collective
bargaining agreement did not satisfy the Labor Code section 514 requirement of
providing premium wages for all overtime hours worked because they were not paid
overtime compensation until they worked more than 12 hours in a single workday rather
17
than the eight hours prescribed by Labor Code section 510. (Vranish, supra, 223
Cal.App.4th at pp. 106-107.)
We concluded that the plain language of Labor Code section 514 did not support
the plaintiffs’ argument that the phrase “all overtime hours worked” as used in that statute
necessarily incorporated the definition of overtime in Labor Code section 510,
subdivision (a), i.e., “[a]ny work in excess of eight hours in workday and any work in
excess of 40 hours in any one workweek,” and that section 514 only required the
employer to pay a premium wage for overtime worked as defined in the parties’
collective bargaining agreement. (Vranish, supra, 223 Cal.App.4th at p. 110.) We found
support for that conclusion in the legislative history of Labor Code section 514, in an
opinion from the Department of Industrial Relations, Division of Labor Standards
Enforcement, and in the public policy underlying the statute. (Id. at pp. 110-112.)
Vranish is controlling authority with regard to the issue presented here. The MTA
is only required to pay a premium for overtime worked as defined in the parties’
collective bargaining agreement. Plaintiff does not dispute that the collective bargaining
agreement provides for premium wages for “all overtime hours worked,” as that term is
defined in the collective bargaining agreement. The exemption accorded by Labor Code
section 514 accordingly applies, as does the exemption set forth in section 12(C) of wage
order 9. The rest period requirements set forth in section 12 of wage order 9 do not apply
to plaintiff and the MTA employees he purportedly represents. The trial court did not err
by sustaining the demurrer to plaintiff’s fourth cause of action for violation of the rest
period requirements.
V. PAGA claim
“Under the Labor Code, the Labor and Workforce Development Agency (LWDA)
and its constituent departments and divisions are authorized to collect civil penalties for
specified labor law violations by employers. [Citation.] To enhance the enforcement of
the labor laws, the Legislature enacted [the Labor Code Private Attorneys General Act
(Lab. Code, § 2698 et seq.)] PAGA in 2003.” (Home Depot U.S.A., Inc. v. Superior
Court (2010) 191 Cal.App.4th 210, 216.) Section 2699, subdivision (a) of PAGA
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“permits aggrieved employees to recover civil penalties that previously could be
collected only by LWDA. [Citation.] In addition, to address violations for which no
such penalty had been established, subdivision (f) of the statute created ‘a default penalty
and a private right of action’ for aggrieved employees.” (Ibid.)
Although PAGA does not create a private right of action to directly enforce a
wage order promulgated by the IWC, a PAGA action “can serve to indirectly enforce
certain wage order provisions by enforcing statutes that require compliance with wage
orders.” (Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112,
1132.) The minimum wage requirements of Labor Code section 1194 is one of those
statutes. (Lab. Code, §§ 2699.3, subd. (a), 2699.5.)
The MTA’s sole basis for demurring to plaintiff’s PAGA cause of action was that
plaintiff’s claims under the Labor Code are precluded, as a matter of law, by PUC
sections 30257 and 30750. As discussed, those PUC sections do not bar plaintiff’s
statutory minimum wage claim. We accordingly reverse the order sustaining the
demurrer to plaintiff’s PAGA claim for the same reason we reverse the order sustaining
the demurrer to plaintiff’s state minimum wage claim.
DISPOSITION
The order sustaining the demurrer to the second cause of action for violation of the
minimum wage requirements under Labor Code section 1194 and wage order 9 and to the
third cause of action for civil penalties under PAGA for violation of the minimum wage
requirements is reversed. The judgment is otherwise affirmed. The parties will bear their
respective costs on appeal.
____________________________, J.
CHAVEZ
We concur:
__________________________, Acting P. J. ____________________________, J.
ASHMANN-GERST HOFFSTADT
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Filed 12/17/15
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
NATHAN FLOWERS, B256744
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC515136)
v.
ORDER FOR PUBLICATION
LOS ANGELES COUNTY
METROPOLITAN TRANSPORTATION
AUTHORITY,
Defendant and Respondent.
THE COURT:*
The opinion in the above entitled matter filed on November 25, 2015, was not
certified for publication.
For good cause it now appears that the opinion should be published in the Official
Reports and it is so ordered.
*ASHMANN-GERST, Acting P. J., CHAVEZ, J., HOFFSTADT, J.