California’s employment laws have consistently caused headaches for employers because even minor technical violations of these laws can fuel class action litigation and prove costly.
However, a recent decision by the California Supreme Court, Mendoza v. Nordstrom, Inc. (SC S224611), provides some clarity by tackling three burning questions regarding California’s day of rest statutes – Labor Code sections 552 and 556. Section 552 prohibits an employer from “caus[ing] his employees to work more than six days in seven.” Section 556 provides an exception to this rule “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.”
In Mendoza, former employees of Nordstrom filed a class action against the retail chain in California state court for, among other things, failing to provide statutorily guaranteed days of rest. Nordstrom removed the action to federal court, which granted summary judgment on all claims other than the day of rest claims. The district court ruled in favor of Nordstrom after a trial on the merits. The case was then appealed to the Ninth Circuit, which filed an order requesting that the California Supreme Court resolve three unsettled questions of California law.
The questions before the California Supreme Court were:
(1) Is the day of rest required by Sections 551 and 552 calculated by the workweek, or does it apply on a rolling basis to any seven-consecutive-day period?
(2) What does it mean for an employer to “cause” an employee to go without a day of rest: force, coerce, pressure, schedule, encourage, reward, permit or something else?
(3) Does the Section 556 exemption for workers employed six hours or less per day apply so long as an employee works six hours or less on at least one day of the applicable week, or does it apply only when an employee works no more than six hours on each and every day of the week?
Takeaways for California Employers From the Court’s Decision
(1) The day of rest that is required under the Labor Code is calculated by the workweek rather than on a rolling basis for any seven-consecutive-day period. A workweek, as defined by the Legislature, is “any seven consecutive days, starting with the same calendar day each week.”
In addressing this issue, the Court found early wage orders issued by the Industrial Welfare Commission (“IWC”) were particularly insightful because they clarified that the day of rest guarantee applied on a weekly, rather than a rolling, basis. It also found this reading of the statute to be consistent within a larger statutory context when read with relevant portions of the Labor Code’s overtime rule under Section 510 and the part-time employee exception under Section 556.
Therefore, in calculating days of rest by the workweek, the Court found it was possible that an employee could work for periods of more than six consecutive days that overlap across more than one workweek. Such a situation would not be “per se prohibited” as long as the employer was compliant with Labor Code § 554, which allows rest days to be spaced out in a calendar month, so long as the number of rest days received “amounts to the number of calendar days divided by seven.”
(2) As to an employer’s obligation related to the day of rest, the Court found that an employer “causes” an employee to go without a day of rest when it “induces the employee to forego rest to which he or she is entitled.” An employer’s obligation lies in its duty to inform employees of their entitlement to a day of rest and to thereafter remain neutral as to whether or not the employee exercises that right. This means an employer may not, among other things, discipline or threaten employees who refuse to work the seventh day, or promise preferential treatment to employees who “elect” to work the seventh day. The Court, however, emphasized that the employer has no duty to make sure the employee actually takes a day of rest. The employer is not forbidden from permitting or allowing the employee to choose not to take a day of rest.
(3) The Court interpreted the Section 556 exemption to apply only to employees who worked shifts of six hours or less on every day of the workweek. Worded another way, if on any of the days during the workweek an employee works in excess of six hours, a day of rest must be provided during that workweek.
As noted above, Section 556 provides an exception to the day of rest requirement “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.” In Mendoza, Nordstrom argued that this language meant “so long as an employee is given at least one day with no more than six hours’ work during a one-week period, he or she may be required to work all seven days, without a day of rest.” The court struck down this reading after finding that this interpretation would render parts of the statute as surplusage, whether the exception is read disjunctively or conjunctively. In reaching this conclusion, the court also relied on wage orders issued by the Industrial Welfare Commission and an opinion letter issued by the Division of Labor Standards Enforcement which interpreted the exception as requiring that each day during the workweek, rather than only one, last six hours or less.
The Bottom Line: The California Supreme Court has provided clarity on the state’s “day of rest” requirements that should make it easier for employers to arrange their policies to assist in limiting class claims under those provisions.