While we were off trying cases last month, the Second District published an opinion in an interesting case involving arbitration of rest period cases. In Zavala v. Scott Brothers Dairy, Inc., the plaintiffs filed a class action for unfair business practices, failure to provide accurate itemized wage-statements and failure to provide rest periods. The trial court denied the employer’s petition to compel arbitration, and the employer appealed.
Plaintiffs were union members represented by the Chino Valley Products Dairy and Teamsters Local Number 63. It entered into a collective-bargaining agreement (CBA) which defined grievances as “all disputes or controversies arising under this Agreement” and set out a grievance procedure that culminated in a binding arbitration. The CBA required wage-stub itemization and coffee breaks in similar, but not identical, language to the Labor Code and IWC wage orders. Based upon those provisions, the dairy argued that plaintiffs' claims arose under the CBA and were subject to arbitration. The plaintiffs argued that the claims arose from statutes and regulations, not the CBA, and thus were not subject to the CBA's arbitration requirements.
The Court of Appeal agreed and affirmed the trial court's order. "The requirement that every employee have a net 10-minute rest period every four hours or major fraction thereof is a state-mandated minimum labor standard.’ ” Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 954. Labor Code § 226(a), specifies the form and content of paycheck stubs. "[T]he obligation to list the total hours worked during the pay period can only be satisfied by listing the precise, actual number of hours worked." If it is left to the employee to add up the daily hours shown on the time cards or other records so that the employee must perform arithmetic computations to determine the total hours worked during the pay period, the requirements of section 226 would not be met. Labor Code § 219(a) provides that “no provision of this article [including sections 226 and 226.7] can in any way be contravened or set aside by a private agreement, whether written, oral, or implied.” Thus, a CBA cannot prohibit resolution of plaintiffs’ claims in a judicial forum.
The holding is also consistent with a 2005 Ninth Circuit decision providing that California’s statutorily guaranteed meal periods are not subject to waiver by a collective-bargaining agreement. Valles v. Ivy Hill Corp. (9th Cir. 2005) 410 F.3d 1071, 1082. Meal periods are “designed to protect individual employees,” “address some of ‘the most basic demands of an employee’s health and welfare’ [citation],” and Labor Code § 219(a) makes them “plainly nonnegotiable.” And "certainly, plaintiffs’ injunctive relief claim under the unfair business practices act (Bus. & Prof. Code, § 17200) is not arbitrable." Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 316.
The Court of Appeal further held that the plaintiffs were not precluded from bringing their statutory claims to state court by the fact that the Union had already grieved the rest-break issue under the CBA. "[C]ourts have repeatedly held that the prior submission of certain statutory claims to final and binding arbitration does not bar a subsequent lawsuit where the employees have not waived their statutorily protected rights to a judicial resolution. Barrentine v. Arkansas-Best Freight System, 450 U.S. at p. 740 [statutory wage claim]" [other citations omitted]. "When enacting these minimum labor standards, the Legislature granted to individual employees the right to vindicate them in court, separate from the enforcement tools it gave to the Labor Commissioner. (Lab. Code, § 218; see also, Lab. Code, §§ 218.5 – 218.6 & 217.) These are “minimum substantive guarantees” (Barrentine v. Arkansas-Best Freight System, supra, 450 U.S. at p. 737), because the Legislature has categorically forbidden the modification of any provision of these laws. (Lab. Code, § 219, subd. (a).) Consequently, the rights plaintiffs seek to assert in this civil action stand independent of the collective-bargaining process."