CHAVEZ, J.—
This appeal concerns overlapping provisions of the Labor Code, the Public Utilities Code, and an Industrial Welfare Commission (IWC) wage order governing the wages, hours, and working conditions of transit operators employed by the Los Angeles County Metropolitan Transportation Authority (MTA). The issues presented are (1) whether Public Utilities Code sections 30257 and 30750 exempt the MTA from minimum wage and rest
We hold that Public Utilities Code 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.
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 of 1938 (29 U.S.C. § 201 et seq.) (FLSA); (2) failure to pay minimum wage in violation of Labor Code section 1194 and wage order 9; (3) civil penalties pursuant to the Labor Code Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.); 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.
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.
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 Law
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 [146 Cal.Rptr.3d 849].) 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
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 [125 Cal.Rptr.2d 804].) 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.
"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
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 requirements
Section 1(B) states in relevant part:
"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 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 all overtime hours worked, and regular hourly rate of pay of not less than 30 percent more than the State minimum wage rate."
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 Public Utilities Code 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
The Legislature has accorded MTA employees extensive collective bargaining rights. Public Utilities Code 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, § 30750, subd. (a).) Subdivision (c) of Public Utilites Code 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 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).)
The MTA contends that Public Utilities Code sections 30257 and 30750 exempt it from the minimum wage and rest period requirements imposed by the Labor Code and by wage 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."
Public Utilities Code 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 Public Utilities Code section 30750, subdivision (c).
The MTA cites Grier v. Alameda-Contra Costa Transit Dist. (1976) 55 Cal.App.3d 325 [127 Cal.Rptr. 525] (Grier) as support for its argument that Public Utilities Code section 30750 evidences the Legislature's intent that labor relations between the MTA and its employees be governed exclusively by the Public Utilities Code, 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
The Alameda District argued that it was exempt from Labor Code section 2928 because its labor relations were governed exclusively by the Public Utilities Code 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 Public Utilities Code 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. . . .'"
We note at the outset that Grier concerned the interpretation of the Public Utilities Code provisions applicable to the Alameda District, and not section 30750. The court in Grier considered Public Utilites Code section 30750, subdivision (c) only in comparison to the Alameda District statutes at issue in that case. We disagree with any suggestion by the court in Grier that Public Utilities section 30750, subdivision (c), evidences an intent by the Legislature
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 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.
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
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 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 section 2(H) 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 [166 Cal.Rptr.3d 845] (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 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 one 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. (Vranish, 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.
"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 PAGA [the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.)] in 2003." (Home Depot U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, 216 [120 Cal.Rptr.3d 166].) Labor Code section 2699, subdivision (a), part of PAGA, "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." (Home Depot, at p. 216.)
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 [138 Cal.Rptr.3d 130].) The minimum wage requirement 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 Public Utilities Code sections 30257 and 30750. As discussed, those Public Utilities Code 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.
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
Ashmann-Gerst, P. J., and Hoffstadt, J., concurred.
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"(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."
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"(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 (3½) 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 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."