A CA Court of Appeal issued its opinion in Vasserman v. Henry Mayo Newhall Memorial Hospital, rejecting the hospital’s appeal of a trial court order denying its motion to compel the plaintiff to arbitrate wage and hour claims she brought against the hospital.  The court acknowledged the applicable collective bargaining agreement (CBA) included a provision requiring arbitration of claims arising under the agreement, but held that it was not “clear and unmistakable” from this provision that the parties intended to waive a judicial forum for claims based on statute (meal and rest breaks, overtime).  As such, the plaintiff could not be required to arbitrate her wage and hour claims.

The CBA at issue provided a mandatory grievance process for resolving employment-related disputes.  The CBA defined a grievance as “any complaint or dispute arising out of the interpretation or application of a specific Article and Section of this Agreement during the term of this Agreement or extensions thereof as to events or incidents arising only at the Hospital.”  The CBA had various provisions relating to wages, hours, and working conditions, including an Article outlining the circumstances under which covered employees would be paid overtime, and another Article setting forth the hospital’s agreement to provide meal and rest breaks in accordance with the applicable Industrial Welfare Commission Wage Order and to pay penalties provided for under the Labor Code in the event meal or rest breaks were denied.  This Article stated that if an employee was denied penalty pay owed under the terms of the Article, Wage Order, or Labor Code, the employee could file a grievance under the CBA.

The court’s conclusion allowed a nurse who worked at the hospital for only 3 weeks to pursue class and representative claims against the hospital in court for alleged unpaid overtime and failure to provide meal and rest breaks. She also alleged that the hospital had an unlawful rounding policy, failed to pay for pre-hire “work” time completing paperwork and having a physical exam, and provided inaccurate wage statements, based on allegations derivative of the other wage and hour claims.

The court held where statutory claims are involved, any intention to waive a judicial forum must be “clear and unmistakable” in order to be enforced.  In determining whether there is a sufficiently clear waiver, courts look to the generality of the arbitration clause, explicit incorporation of statutory requirements, and the inclusion of specific contractual provisions.   The test is whether the CBA makes compliance with the statute, a contractual commitment subject to the arbitration clause, and whether the CBA makes it clear that covered employees agree to submit statutory employment claims to arbitration.  The court held that the CBA’s provisions did not clearly waive employees’ rights to bring statutory wage and hour claims in court.

The grievance arbitration provision itself did not reference any specific wage and hour statutes, much less expressly state that any claims alleging violations of such statutes would be subject to the grievance arbitration procedure.  The court acknowledged that other provisions of the CBA referenced overtime and meal and rest break requirements but held that the mere reference to wage and hour requirements and statutes was not enough to bring claims for violations of those statutes within the scope of the grievance arbitration procedure.  In other words, in order for such claims to be covered by the arbitration provision of a CBA, the CBA must expressly state, preferably in the grievance arbitration provision itself, that the dispute resolution procedure applies to wage and hour claims, including claims alleging violation of the Labor Code, Wage Orders, or the FLSA.

Employers with questions regarding Grievance Clauses in CBA’s can contact the Browning Law Group at 949-234-6266 or [email protected]. For more information, visit Browning Law Group’s website www.BrowningLawGroup.com.