BILL ANALYSIS                                                                                                                                                                                                    




                                                                  AB 569
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          Date of Hearing:   April 22, 2009

                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
                              William W. Monning, Chair
            AB 569 (Emmerson) - As Proposed to be Amended:  April 22, 2009
           
          SUBJECT  :   Meal periods.

           SUMMARY  :  Establishes specified collective bargaining agreement  
          exemptions related to requirements of existing law concerning  
          meal periods.   Specifically,  this bill  :
           
          1)Provides that specified provisions of current law related to  
            meal periods do not apply to an employee employed in the  
            construction industry who is covered by a valid collective  
            bargaining agreement that meets certain conditions.

          2)Provides that specified provisions of current law related to  
            meal periods do not apply to an employee employed as a  
            commercial driver in the transportation industry who is  
            covered by a valid collective bargaining agreement that meets  
            certain conditions.

          3)Adds uncodified language to specify that these provisions of  
            the bill shall not be construed to affect the interpretation  
            of the nature or scope of the law related to meal periods  
            other than for employees or employers specifically covered by  
            these provisions.

           EXISTING LAW  : 

          1)Prohibits an employer from employing any person for a work  
            period of more than five hours without providing the employee  
            with a meal period of not less than 30 minutes [Labor Code  
            section 512 (a)].

          2)Provides that if the total work period per day of the employee  
            is no more than six hours, the meal period may be waived by  
            mutual consent of both the employer and employee [Labor Code  
            section 512 (a)].

          3)Authorizes paid on-duty meal periods when the nature of the  
            work prevents an employee from being relieved of all duty, the  
            parties have agreed to the paid on-duty meal period in  
            writing, and the written agreement authorizes the employee to  









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            revoke the agreement at any time [See, for example, Industrial  
            Welfare Commission Wage Order 9 Section 11(C)].

          4)Provides that if an employer fails to provide an employee a  
            meal period or rest period, the employer shall pay the  
            employee one additional hour of pay at the employee's regular  
            rate of compensation for each work day that the meal or rest  
            period is not provided (Labor Code Section 226.7).

           FISCAL EFFECT  :  Unknown 



           COMMENTS  :  California law currently regulates meal periods of  
          employees via statute and regulation.  The Industrial Welfare  
          Commission (IWC) is the state agency generally empowered to  
          formulate regulations (known as Wage Orders) governing  
          employment.

          The meal period provisions of the IWC's Wage Orders have  
          remained largely unchanged since 1947.  Under those provisions,  
          non-exempt employees are entitled to 30-minute unpaid meal  
          periods depending on the number of hours worked.  In 1999, the  
          Legislature enacted Labor Code Section 512 to codify the  
          language regarding meal periods that had previously been  
          contained in most of the IWC wage orders<1>.
           
           Labor Code Section 512 provides in relevant part as follows:

               "(a) An employer may not employ an employee for a work  
          period of
               more than five hours per day without providing the employee  
          with a meal
               period of not less than 30 minutes, except that if the  
          total work period per
               day of the employee is no more than six hours, the meal  
          period may be
               waived by mutual consent of both the employer and employee.  
           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  

               -------------------------
          <1> Labor Code Section 512 was enacted by Assembly Bill 60,  
          Chapter # 134, Statutes of 1999, the "Eight-Hour-Day Restoration  
          and Workplace Flexibility Act of 1999." 








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          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.

               (b) Notwithstanding subdivision (a), the Industrial Welfare  
          Commission
               may adopt a working condition order permitting a meal  
          period to commence
               after six hour of work if the commission determines that  
          the order is
               consistent with the health and welfare of the affected  
          employees."

          In 2000, the IWC conducted a legislatively mandated review of  
          the remedy available to employees against an employer that  
          failed to provide a meal or rest period mandated by applicable  
          law.  At the time, the only remedy available to an employee was  
          to obtain an injunction against the employer ordering the  
          employer to provide the meal and rest periods.  In an effort to  
          provide employers with an incentive to comply with the meal and  
          rest period provisions, the IWC adopted a proposal which  
          required employers to pay employees one hour's pay for each day  
          on which an employee did not receive a meal or rest period.

          In 2000, the Legislature adopted Labor Code Section 226.7  
          codifying the new remedy:

               "(a) No employer shall require any employee to work during  
          any meal
               or rest period mandated by an applicable order of the  
          Industrial Welfare
               Commission.

               (b) If an employer fails to provide an employee a meal  
          period or rest period
               in accordance with an applicable order of the Industrial  
          Welfare Commission,
               the employer shall pay the employee one additional hour of  
          pay at the
               employee's regular rate of compensation for each work day  
          that the meal or









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               rest period is not provided."

           THE MAJOR POINTS OF CONTENTION IN RECENT YEARS
           
          The debate in recent years over California's meal period law has  
          largely focused on the following main issues:

           Obligation to "Provide" Meal Periods
           
          As discussed above, Labor Code Section 512 provides that "an  
          employer may not employ an employee for a work period of more  
          than five hours per day without providing the employee with a  
          meal period of not less than 30 minutes."

          There has been much dispute over the precise meaning of this  
          term.  Representatives of workers and organized labor have  
          generally argued that the use of the term "provide" means that  
          an employer must actually provide the meal period and ensure  
          that employees are able to actually take it.  On the other hand,  
          the business community has generally argued such an  
          interpretation is unreasonable and too restrictive and that  
          therefore the term "provide" means simply that an employer must  
          make the meal period available to the employee (but not  
          necessarily ensure that the employee does in fact take the meal  
          period).

          As discussed below, the courts have been grappling with this  
          issue as well in recent years, and the issue is currently before  
          the California Supreme Court.

           Time Parameters in Which Meal Periods Must Be Provided
           
          Another controversial issue has involved when an employer must  
          provide meal periods.  As discussed above, Labor Code Section  
          512 and the IWC wage orders specify that employers cannot allow  
          employees to work more than five hours without taking a  
          30-minute meal period.

          Some of the litigation in recent years has focused on whether  
          the meal period must be completed before the end of the fifth  
          hour of work.  Some employers claim that they have been sued  
          over issues such as whether the meal period extended into the  
          sixth hour of work, even if only by a few minutes.

           On-Duty Meal Periods









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          The IWC Wage Orders provide: "Unless the employee is relieved of  
          all duty during a 30 minute meal period, the meal period shall  
          be considered an 'on-duty' meal period an counted as time  
          worked.  An 'on-duty' meal period shall be permitted only when  
          the nature of the work prevents an employee from being relieved  
          of all duty and when by written agreement between the parties an  
          on-the-job paid meal period is agreed to.  The written agreement  
          shall state that the employee may, in writing, revoke the  
          agreement at any time."

          There has been some dispute about when the "nature of the work"  
          supports the provision of an on-duty (as opposed to an unpaid  
          off-duty) meal period.

          In 2002, the DLSE issued an opinion letter that stated the  
          following:

               "In determining whether the 'nature of the work' prevents  
               an employee from being relieved of all duty, the Division  
               of Labor Standards Enforcement starts with the premise that  
               the general requirement for an off-duty meal period is  
               remedial in nature, and any exceptions to that general  
               requirement must be narrowly construed, so as to avoid  
               frustrating the remedial purpose of the regulation.  The  
               Division has always followed an enforcement policy that  
               this determination must be made on the basis of a  
               multi-factor objective test.  The factors that should be  
               considered include the type of work, the availability of  
               other employees to provide relief to an employee during a  
               meal period, the potential consequences to the employer if  
               the employee is relieved of all duty, the ability of the  
               employer to anticipate and mitigate these consequences such  
               as by scheduling the work in a manner that would allow the  
               employee to take an off-duty meal break, and whether the  
               work product or process will be destroyed or damaged by  
               relieving the employee of all duty.  The Division will  
               conclude that an off-duty meal period must be provided  
               unless these factors, taken as a whole, decisively point to  
               the conclusion that the nature of the work makes it  
               virtually impossible for the employer to provide the  
               employee with an off-duty meal period.  Finally, the burden  
               rests on the employer for establishing the facts that would  
               justify an on-duty meal period.










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          Some in the employer community have argued that this is an  
          overly-restrictive interpretation that makes it impossible for  
          an employer to ever be able to lawfully provide an on-duty meal  
          period.  There have been some efforts in recent years  
          (legislative and otherwise) to expand this interpretation and  
          the circumstances under which an on-duty meal period may be  
          provided.

           Collective Bargaining Agreement Carve-Outs
           
          Unlike California's overtime laws, the laws governing meal  
          periods do not provide a blanket collective bargaining agreement  
          carve-out that allows the parties to an agreement to negotiate  
          the provision of meal periods by contract.

          However, there are a few industry-specific situations in which  
          such authority has been extended to collective bargaining  
          situations.

          For example, Labor Code Section 512(c) provides that the meal  
          period requirements of current law do not apply to employees in  
          the wholesale baking industry who are covered by a valid  
          collective bargaining agreement that meets certain specified  
          criteria.  Labor Code Section 512(d) provides a similar  
          exception to employees in the motion picture industry or  
          broadcasting industry covered by a valid collective bargaining  
          agreement.

          In addition, in 2003, the IWC amended Wage Order 9 to apply the  
          meal and rest period provisions of that order to commercial  
          drivers employed by governmental entities.  In addition,  
          legislation was enacted to specifically authorize the IWC to  
          provide for a collective bargaining exemption when it extended  
          the meal and rest period requirements to public sector  
          commercial drivers.

          In recent years, other industries have sought legislative  
          authority to allow them to negotiate the terms of their  
          provision of meal periods to their employees via the collective  
          bargaining process.  Most notable among these has been the  
          transportation industry, which has sponsored several such bills  
          in recent years.  However, each of these bills has been vetoed  
          by Governor Schwarzenegger.  The following portion of the veto  
          message for AB 2593 (Keene) from 2006 is representative of the  
          Governor's sentiment:









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               "This bill seeks to provide relief for unionized  
               employers and employees in the transportation industry  
               from California's confusing meal period laws and  
               regulations.  This confusion has resulted in costly  
               litigation against employers and even termination of  
               employees that do not comply with the law's burdensome  
               requirements.  While well-intentioned, I cannot  
               support this bill because it singles out a specific  
               group of employers and employees for relief from a  
               problem that plagues almost every industry in this  
               state."
           
          Additional Hour of Pay Under Labor Code Section 226.7
           
          One of the most controversial points of contention over  
          California's meal period law has involved whether the remedy  
          provided in Labor Code Section 226.7 constituted a "penalty" or  
          "wages."  However, as discussed below, this issue largely was  
          resolved in 2007 by the California Supreme Court.
           
          THE 2004 PROPOSED DLSE REGULATION
           
          On December 10, 2004, the Division of Labor Standards  
          Enforcement (DLSE) of the Department of Industrial Relations  
          (DIR) submitted a proposed emergency regulation to the Office of  
          Administrative Law (OAL) regarding the provision of meal and  
          rest periods in the workplace.  As a proposed emergency  
          regulation, there was a five (5) calendar day public comment  
          period, which ended on December 15, 2004.  OAL had until  
          December 20, 2004 to act on the proposed regulation.

          On December 20, 2004, DLSE withdrew the proposed emergency  
          regulation and resubmitted a revised proposed regulation under  
          the regular rulemaking process on January 4, 2005.

          DLSE proposed to adopt section 13700, Meal and Rest Periods, in  
          Title 8 of the California Code of Regulations.  According to  
          DLSE's notice of proposed rulemaking:

               "DLSE proposes to adopt section 13700 to clarify that the  
          one hour of
               pay an employer must pay an employee for each workday in  
          which a
               meal or rest period is not provided in accordance with the  









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          applicable
               Industrial Welfare Commission Order is considered a penalty  
          as well
               as to clarify the time parameters and criteria under which  
          meal periods
               can be provided to employees."

          The proposed meal period regulation contained three distinct  
          provisions:

           Obligation to "Provide" Meal Periods
           
          The first provision of the regulation attempted to define when  
          an employer has met the statutory requirement of "providing" a  
          meal period.  Under the proposed regulation, an employer would  
          have been deemed to have provided a meal period if the employer:  
          (1) makes the meal period available and affords the employee an  
          opportunity to take it; (2) posts the applicable IWC wage order;  
          and (3) maintains accurate time records.

          The first provision also provided that "as a further precaution"  
          an employer may inform an employee in writing of the  
          circumstances under which he or she is entitled to a meal period  
          and the employee acknowledges in writing that he or she  
          understands those rights.

           Time Parameters in Which Meal Periods Must Be Provided
          
          The second provision of the proposed regulation related to the  
          time parameters in which meal periods must be provided.  Labor  
          Code Section 512 and the IWC wage orders specify that employers  
          cannot allow employees to work more than five hours without  
          taking a 30-minute meal period. 

          The proposed regulation provided that a meal period may begin  
          before the end of the sixth hour of the work period.   
          Furthermore, an employee may request and commence their meal  
          period after the end of the sixth hour of work, so long as they  
          were provided the opportunity to take a meal period before the  
          end of the sixth hour of work.

          The proposed regulation contained four examples to illustrate  
          this provision.

           Additional Hour of Pay Under Labor Code Section 226.7









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          The final provision of the proposed regulation provided that any  
          amount paid or owed by an employer under Labor Code Section  
          226.7 is a "penalty" and not a "wage."

           FINAL OUTCOME OF THE 2004 PROPOSED REGULATIONS
           
          After questions emerged about the legal authority of DLSE to  
          promulgate the proposed regulation, this committee conducted an  
          oversight hearing on the subject on January 26, 2005.

          Subsequently, the Legislature passed ACR 43 (J. Horton) which,  
          among other things, made a legislative declaration that the DLSE  
          did not have the authority to promulgate the proposed regulation  
          concerning meal and rest periods, and that the proposal was  
          inconsistent with existing law. 

          On January 13, 2006, DLSE announced that it would not file the  
          proposed regulation with the OAL by the applicable deadline.
           
          THE MURPHY V. KENNETH COLE DECISION
           
          One of the most controversial points of contention over  
          California's meal period law has involved whether the remedy  
          provided in Labor Code Section 226.7 constituted a "penalty" or  
          "wages."

          Following the enactment of Labor Code Section 226.7, employers  
          defending class action lawsuits for such compensation generally  
          raised this issue in two contexts, arguing that such payments  
          constitute "penalties."  First, they argued that, as penalties,  
          employees had no private right of action to recover such  
          compensation.  Second, employers argued that as "penalties," the  
          payments under Labor Code Section 226.7(b) were limited by the  
          one-year statute of limitations set forth in Code of Civil  
          Procedure Section 340(a) rather than the longer statute of  
          limitations provided for wage claims under the Labor Code.

          As discussed above, the proposed 2004 DLSE regulation attempted  
          to specify that such amounts paid or owed by employers were  
          "penalties" and not "wages."

          However, in 2007, the California Supreme Court resolved the  
          issue when it held that the "additional hour of pay" due to an  
          employee is a wage, not a penalty.  Murphy v. Kenneth Cole  









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          Productions, Inc., (2007) 40 Cal. 4th 1094.  Specifically, the  
          Court stated: 

               "We hold that section 226.7's plain language, the  
               administrative and legislative history, and the  
               compensatory purpose of the remedy compel the conclusion  
               that the 'additional hour of pay' is a premium wage, not a  
               penalty."
          
          RECENT CALIFORNIA APPELLATE CASES REGARDING THE MEANING OF AN  
          EMPLOYER'S OBLIGATION TO "PROVIDE" MEAL PERIODS
           
          Most recently, much of the case law in this area has focused on  
          the meaning of an employer's obligation to "provide" meal  
          periods under Labor Code Section 512 and the IWC Wage Orders.
          In Cicairos v. Summit Logistics, Inc. (2005) 133 Cal. App. 4th  
          949, the California Court of Appeal for the First District  
          stated that employers have "an affirmative obligation to ensure  
          that workers are actually relieved of all duty."  Many legal  
          observers have concluded that this means that employers have an  
          affirmative obligation to make employees take their meal periods  
          and that employees cannot refrain or refuse to take their meal  
          periods.  However, others have argued that the language in  
          Cicairos does not go that far.

          For example, in Brinker Restaurant Corporation v. Superior Court  
          of San Diego (Hohnbaum) (2008) 165 Cal. App. 4th 25, the  
          California Court of Appeal for the Fourth District interpreted  
          the applicable law to mean that employers must provide meal  
          periods by making them available, but need not ensure that they  
          are taken.  Employers, however, cannot impede, discourage or  
          dissuade employees from taking meal periods.

          In October 2008, the California Court of Appeal for the Second  
          District reached a similar holding in Brinkley v. Public Storage  
          (2008) 167 Cal. App. 4th 1278.  In that case, the court  
          similarly held that employers only have to make meal periods  
          available, essentially equating the "provide" language in the  
          law with language covering rest periods, which only require  
          employers to "authorize and permit" employee to take them.

          Both the Brinker and the Brinkley courts attempted to  
          distinguish and provide a more narrow reading to the First  
          District Court of Appeal's decision in Cicairos.










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          However, on October 22, 2008, the California Supreme Court  
          granted review of the California Court of Appeal decision in  
          Brinker Restaurant Corp. v. Superior Court of San Diego County  
          (Hohnbaum).  Similarly, on January 13, 2009, the California  
          Supreme Court granted review in Brinkley v. Public Storage.  The  
          Brinker and Brinkley decisions are now companion cases under  
          review by the California Supreme Court.

          The California Supreme Court's grant of review supersedes the  
          Brinker and Brinkley decisions, and they may not be cited or  
          relied on by a court or a party in any other action.   
          (California Rules of Court 8.1105(e) and 8.1115(a)).  In its  
          review of these cases, the California Supreme Court is expected  
          to confirm whether the law imposes upon employers an affirmative  
                                                                               duty to ensure that employees actually take meal periods or  
          rather, that the employer must merely make that meal period  
          available to the employee and afford the employee the  
          opportunity to take the meal period.

           IWC WAGE ORDER 16 AND THE BEARDEN v. U.S. BORAX, INC. CASE  

          Industrial Welfare Commission Wage Order 16 governs on-site  
          occupations in the construction, drilling, logging and mining  
          industries.

          Wage Order 16 contains an express exemption to the meal period  
          rules where a collective bargaining agreement exists.   
          Specifically, Section 10(E) of Wage Order 16 provides that the  
          meal period requirements:

               "shall not apply to any employee covered by a valid  
               collective bargaining agreement if the agreement expressly  
               provides for the wages, hours of work, and working  
               conditions of the employees, and if the agreement provides  
               premium wage rates for all overtime hours worked and a  
               regular hourly rate of pay for those employees of not less  
               than 30 percent more than the state minimum wage."

          However, in 2006 a California Court of Appeal held that this  
          collective bargaining exemption contained in Wage Order 16  
          conflicted with the Labor Code and was therefore invalid.   
          Bearden v. U.S. Borax, Inc.  The court specifically held that  
          because the statute contained express exceptions to the general  
          rule requiring employers to provide meal periods, the IWC's  
          addition of an additional exemption (for collective bargaining  









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          agreements in the construction industry) was beyond the  
          authority of the IWC and in conflict with the statute.   
          Therefore, the court held that this provision was invalid and  
          unenforceable.

           MOST RECENT EFFORT AT COMPROMISE: AB 1711 (LEVINE) OF 2007-08
          
           Last year, the California Labor Federation, AFL-CIO sponsored  
          legislation that sought to address several of the more  
          controversial issues involving meal periods in an effort to  
          provide more employer flexibility.  Specifically, Assembly Bill  
          1711 (Levine) sought to make a number of changes to the current  
          law surrounding meal periods.

          First, the bill would have specified that meal periods may not  
          commence before the third hour of work and must be completed  
          before the sixth hour of work.  In essence, this would have  
          provided employers a three-hour window during which to provide  
          the meal period.

          Second, the bill would have permitted on-duty meal periods when  
          mutually agreed to in writing between employer and the employee,  
          and when the nature of the work prevents the employee from being  
          relieved of work due to one of the following conditions:

               1)     The employee is the only employee at the worksite  
                 and the essential functions of the job cannot be  
                 performed unless the employee remains on-duty.

               2)     State and federal law impose a requirement that the  
                 employee not be relieved of all duties.

          Third, the bill would have provided an exemption for all  
          employees in all industries covered by a valid collective  
          bargaining agreement that met specified criteria.

          However, the bill was opposed by some members of the employer  
          community, largely because they expressed concern that it did  
          not go far enough to address the issues of all employers and did  
          not deal with the issues surrounding the nature of the meaning  
          of an employer's obligation to "provide" meal periods.  The  
          sponsor and the author decided not to move the bill.
           
          RECENT BUDGET DISCUSSIONS
          









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           Over the last few years, Governor Schwarzenegger and Members of  
          the Senate and Assembly Republican Caucuses have proposed  
          amendments to California's meal period laws as part of the  
          larger budget discussion.  Most recently, those proposals have  
          been included in the "economic stimulus" proposals set forth by  
          both the Governor and the Republican Caucuses.

          For example, one of the most recent proposals set forth by the  
          Governor states that an employer must "make available to the  
          employee an opportunity to take" a meal period.  In addition,  
          the Governor's proposal would authorize the Department of  
          Industrial Relations (DIR) to adopt regulations defining the  
          circumstances in which the nature of the work prevents an  
          employee from being relieved of all duty (and therefore subject  
          to an on-duty meal period).

           ARGUMENTS IN SUPPORT  :

          This bill is sponsored by the United Parcel Service (UPS), who  
          argues that it would allow unionized transportation companies  
          with a valid collective bargaining agreement to negotiate  
          flexible terms for the timing of meal periods because current  
          law significantly restricts the freedom of drivers to decide for  
          themselves when they can take their meal periods.  They contend  
          that existing law penalizes drivers who require some flexibility  
          for personal safety or other reasons as it relates to taking a  
          meal period, including being stuck in traffic or seeking to take  
          a break in a safe neighborhood.  This measure will allow  
          flexibility through collective bargaining in the transportation  
          industry and relieve UPS from disciplining employees who require  
          some flexibility for their meal period. 

          In addition, UPS points out that in 2007 the Assembly passed a  
          similar measure, AB 1034 (Keene) on a 71-0 vote.  They state  
          that, although opponents of this measure have complained that  
          they are not included, they have clearly not shown an ability to  
          seek similar flexibility on their own.  UPS states that it  
          continues to support broader solutions, but cannot continue to  
          unfairly discipline their drivers where a collectively bargained  
          solution is readily available with a flexible solution agreed to  
          by management and labor.

          In addition, the Associated General Contractors argue that many  
          construction companies operate under a collective bargaining  
          agreement.  However, as a result of recent case law [discussed  









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          above in the analysis], without this legislation a collective  
          bargaining agreement does not supersede the statute.  Therefore,  
          this bill will provide some needed clarity in the current meal  
          period rules for the construction industry.
            
           ARGUMENTS IN OPPOSITION  :

          Opponents object to this measure unless amended to provide  
          clarity to all industries.  They state that currently all  
          industries, business, and occupations are subject to a  
          restrictive statute which has resulted in costly litigation.   
          They believe that a comprehensive solution must be reached in  
          order to provide all businesses regardless of size, type or  
          union status with appropriate clarity and guidance for the  
          compliance and enforcement of meal period laws. 

          They contend that this bill would carve out a collective  
          bargaining exemption for the transportation and construction  
          industry from abiding to the current statute and instead allow  
          them to negotiate meal and rest period provisions within their  
          collective bargaining agreement. Opponents argue that all union  
          companies should be allowed to collectively bargain these  
          provisions and that non-union company should receive the same  
          flexibility by clarifying the current statute.

          In addition, opponents state that employees need meal and rest  
          breaks.  Companies want their employees to have a safe,  
          productive and respectful working environment. But California  
          law (since 2000) is too rigid and confusing. It is now spawning  
          hundreds of class action lawsuits and dozens of employee  
          terminations.  Bills to "carve-out" specific industries pass the  
          legislature each year, which reflect a widespread agreement  
          between labor and employers that a fix is needed.  
           
          PRIOR LEGISLATION :

          This provisions of this bill related to the transportation  
          industry are similar to the introduced version of AB 1034  
          (Keene) from last session.  AB 1034 was subsequently amended to  
          be broader in scope and not limited to the transportation  
          industry.  The bill was held in the Senate Rules Committee.

          These provisions are also similar to AB 2593 (Keene) from 2006,  
          which was vetoed by Governor Schwarzenegger.  In his veto  
          message, the Governor stated the following:









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               "This bill seeks to provide relief for unionized  
               employers and employees in the transportation industry  
               from California's confusing meal period laws and  
               regulations.  This confusion has resulted in costly  
               litigation against employers and even termination of  
               employees that do not comply with the law's burdensome  
               requirements.  While well-intentioned, I cannot  
               support this bill because it singles out a specific  
               group of employers and employees for relief from a  
               problem that plagues almost every industry in this  
               state.

               In addition, this legislation could inadvertently  
               impact pending litigation as well as potential  
               rulemaking.  A number of recent court cases have  
               significantly impacted meal period law.  One recent  
               appellate decision could effectively invalidate large  
               portions of the Industrial Welfare Commission's Wage  
               Orders.  Such an action would have a significant  
               effect on employers and employees throughout  
               California.  While I appreciate that the sponsors and  
               supporters of the bill need the relief sought, I  
               cannot support legislation that addresses this issue  
               in such a narrow manner.

               The Labor and Workforce Development Agency is closely  
               monitoring these cases to determine what actions it can  
               take to provide better guidance to employers and employees  
               on how to comply with the law.  It is premature to take any  
               legislative action until these pending court cases and  
               regulatory matters have been resolved."

          In addition, provisions of this bill are similar to language  
          contained in AB 3018 (Koretz) from 2003, which was also vetoed  
          by Governor Schwarzenegger.  

          AMENDMENTS REQUESTED BY LABOR REPRESENTATIVES  :

          Representatives of organized labor have not expressed concerns  
          with the general concept of collective bargaining agreement  
          carve-out for the construction industry or for commercial  
          drivers in the transportation industry.  However, they have  
          requested that the language in this bill be amended to be  
          consistent with the approach taken in AB 1711 (Levine) and SB  









                                                                  AB 569
                                                                  Page P
          529 (Cedillo) from last session.  This language is also more  
          consistent with the general collective bargaining agreement  
          exemption provided under existing law related to the payment of  
          overtime.

          Therefore, the representatives of labor suggested that the  
          substantive language in the bill be replaced with the following:

            "Sections 512 (a) and (b) do not apply to an employee employed  
            in the construction industry who is covered by a valid  
            collective bargaining agreement if the agreement expressly  
            provides for the wages, hours of work, and working conditions  
            of employees, and expressly provides for meal periods for  
            those employees, final and binding arbitration of disputes  
            concerning application of its meal 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.

            "Sections 512 (a) and (b) do not apply to an employee employed  
            as a commercial driver in the transportation industry who is  
            covered by a valid collective bargaining agreement if the  
            agreement expressly provides for the wages, hours of work, and  
            working conditions of employees, and expressly provides for  
            meal periods for those employees, final and binding  
            arbitration of disputes concerning application of its meal  
            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."
           
           The author and the sponsor have indicated that they are willing  
          to take these amendment to the bill and the amendments will be  
          taken in Committee.
           
          REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Associated General Contractors
          United Parcel Service (sponsor)




           Opposition 









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                                                                  Page Q
           
          Associated Builders and Contractors of California
          California Construction & Industrial Materials Association 
          California Hospital Association
          California Manufacturers & Technology Association
          California Retailers Association 
          Lumber Association of California and Nevada
          National Federation of Independent Business
          Western Growers

           
          Analysis Prepared by  :    Ben Ebbink / L. & E. / (916) 319-2091