Agencies love their power.  They grow like a cancer, absorbing more and more of it from the body politic.  But every now and then a court reminds an agency that its power is limited by the terms of its statutory authority.  For instance, in Gerard v. Orange Coast Memorial Medical Center (Feb. 10, 2015), the Court of Appeal (Fourth Appellate District, Division Three) did just that with regard to a provision of an IWC Wage Order.

Health care workers sued their hospital employer in a putative class and private attorney general enforcement action for alleged Labor Code violations and related claims.  Plaintiffs alleged, among other things, that the hospital illegally let health care employees waive their second meal periods on shifts longer than 12 hours.  Under the Labor Code, employers are required to provide two meal periods for shifts longer than 12 hours. But an order of the Industrial Welfare Commission (IWC) authorizes employees in the health care industry to waive one of those two required meal periods on shifts longer than 8 hours.  The trial court, finding the IWC Wage Order valid, and granted summary judgment and denied class certification on that basis.

The Court examined Labor Code section 512 and Wage Order 5 to determine whether the Wage Order exemption was authorized.  The Court first observed that section 512 says: “An employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.” (Italics added.)  And section 516 says: “Except as provided in Section 512, the [IWC] may adopt or amend working condition orders with respect to break periods, meal periods, and days of rest for any workers in California consistent with the health and welfare of those workers.” (Italics added.)

Next, the Court noted that the authority of an administrative agency is limited by enabling legislation, holding that the IWC is constrained where the Labor Code expressly sets forth requirements:

“The IWC has long been understood to have the power to adopt requirements beyond those codified in statute. [Citations.] Section 516 creates an exception; it bars the use of this power to diminish section 512’s protections. . . . While the Legislature in section 516 generally preserved the IWC’s authority to regulate break periods, it intended to prohibit the IWC from amending its wage orders in ways that ‘conflict[ ] with [the] 30-minute meal period requirements’ in section 512. [Citations.]” ( Brinker, supra, 53 Cal.4th at pp. 1042-1043.)

Slip op., at 8.  In its discussion, the Court cited frequently to Bearden v. U.S. Borax, Inc., 138 Cal. App. 4th 429 (2006), which held that another provision of a Wage Order issued by the IWC was invalid as an act inconsistent with statutory provisions.

The Court then directed the trial court to determine the retroactive application of portions of the Court’s holding, since the issue of invalidity was not evaluated by the trial court, holding that “with the exception of plaintiffs’ premium wage claims based on section 226.7, the retroactive application of our decision must be litigated on remand.”  The Court concluded that “there is no compelling reason of fairness or public policy that warrants an exception to the general rule of retroactivity for our decision partially invalidating section 11(D).”  Slip op., at 17.

The Court then turned to the grant of summary judgment in the matter.  The discussion detoured into evidentiary disputes.  The defendant objected to the introduction of time cards attached to counsel’s declaration, saying that they were merely purported to be authentic.  The Court disagreed:

Evidence Code section 1414 provides: “A writing may be authenticated by evidence that: [¶] (a) The party against whom it is offered has at any time admitted its authenticity; or [¶] (b) The writing has been acted upon as authentic by the party against whom it is offered.” The Coats declaration satisfies both subdivisions.

Further, while Claudio v. Regents of University of California (2005) 134 Cal.App.4th 224, 244 did say the declaration of the plaintiff’s attorney was not proper authentication for the disputed letter, the critical problem was that, “Plaintiff’s [own] declaration did not mention the letter.” The same is not true in this case.

Here, Gerard’s own declaration (an exhibit to the Coats declaration) states: “Attached as Exhibit B are true and correct copies of a portion of my time records from August of 2004 through March of 2008, which were produced by Defendant in this litigation. Also attached as Exhibit B are true and correct copies [of] a portion of my wage records from August of 2004 through March of 2008, which were produced by Defendant in this litigation.” A comparison of the bates numbers in Exhibit B reveals they are the same as the relevant documents in Exhibits 7 and 8.

Slip op., at 18.  The Court concluded its analysis of the summary judgment motion by finding that triable issues of fact were shown by the plaintiffs.

Finally, the Court held that the trial court abused its discretion when it denied class certification, relying on incorrect criteria:

McElroy and Carl argue the court improperly denied class certification for several reasons. Among other things they cite as an abuse of discretion the court’s community interest analysis based on its erroneous “legal assumption that ‘liability is not established by an illegal policy.’” Plaintiffs contend that assumption is contrary to the holding of Brinker, supra, 53 Cal.4th at page 1033, and Faulkinbury v. Boyd & Associates, Inc. (2013) 216 Cal.App.4th 220, 232. We conclude this argument has merit.

Slip op., at 20.  The Court remanded the matter for further consideration of the other aspects of certification that were not fully considered by the trial court.