Stoetzl v. Dept. of Human Resources

IN THE SUPREME COURT OF

CALIFORNIA

KURT STOETZL et al.,

Plaintiffs and Appellants,

v.

DEPARTMENT OF HUMAN RESOURCES et al.,

Defendants and Respondents.

S244751

First Appellate District, Division Four

A142832

San Francisco City and County Superior Court

CJC11004661

July 1, 2019

Justice Chin authored the opinion of the Court, in which Chief

Justice Cantil-Sakauye and Justices Corrigan, Kruger, and

Groban concurred.

Justice Liu filed a concurring and dissenting opinion in which

Justice Cuéllar concurred.

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

S244751

Opinion of the Court by Chin, J.

In this case, we decide whether a certified class of state

correctional employees is entitled to additional compensation for

time spent on pre- and postwork activities, including traveling

from the outermost gate of the prison facility to their work posts

within the facility, traveling back from their work posts to the

outermost gate, being briefed before the start of a shift, briefing

relief staff at the end of a shift, checking out and checking back

in mandated safety equipment, putting on and removing such

equipment, and submitting to searches at various security

checkpoints within the facility. For convenience, we will refer

to the time spent doing these pre- and postwork activities as

“walk time” although we recognize that walk time includes

many activities besides merely walking to and from a work post.

There are two types of walk time that are relevant here. The

first is the time a correctional employee spends after arriving at

a prison’s outermost gate but before beginning the first activity

the employee is employed to perform (plus analogous time at the

end of the employee’s work shift). We will call this type of walk

time “entry-exit walk time.” The second is the time a

correctional employee spends after beginning the first activity

the employee is employed to perform but before the employee

arrives at his or her assigned work post (plus analogous time at

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Opinion of the Court by Chin, J.

the end of the employee’s work shift). We will call this type of

walk time “duty-integrated walk time.”1

The trial court divided the plaintiff class into two

subclasses, one for supervisory employees who were not

represented by a union during the time period set forth in the

class certification and the other for represented employees. We

conclude that the subclass of represented plaintiffs expressly

agreed, by way of the collective bargaining process, to a specific

amount of compensation for duty-integrated walk time, and

there is no allegation that the state failed to pay the agreed-

upon amount. Moreover, the collective bargaining agreements

that memorialized this agreement all provided that they

constituted the entire understanding of the parties concerning

matters contained therein, and thus they precluded other forms

of compensation, such as compensation for entry-exit walk time.

These agreements were approved by the Legislature, and each

approval was signed by the Governor and chaptered into law,

thus becoming specific legislation applicable to the represented

plaintiffs and superseding more general laws to the extent of

any conflict. Therefore, the represented plaintiffs’ claims fail

insofar as they seek additional compensation for either duty-

integrated walk time or entry-exit walk time.

As to the subclass of unrepresented plaintiffs, we conclude

that they may be entitled to additional compensation for duty-

1

As will be seen, the relevance of these two types of walk

time turns on the definition of compensable work that applies

under the federal Fair Labor Standards Act of 1938 (FLSA) (29

U.S.C. § 201 et seq.) as amended by the Portal-to-Portal Act of

1947 (Portal-to-Portal Act) (29 U.S.C. § 252 et seq.). Our

definitions are designed to reflect the distinction drawn by the

Portal-to-Portal Act.

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Opinion of the Court by Chin, J.

integrated walk time. The terms and conditions that govern the

employment of the unrepresented plaintiffs are determined by

the Department of Human Resources (CalHR) and set forth in a

manual known as the Pay Scale Manual and also in CalHR’s

regulations. The Pay Scale Manual defines compensable work

time for purposes of calculating an employee’s right to regular

and overtime compensation, and duty-integrated walk time falls

squarely within that definition. If, as is alleged, the state did

not take duty-integrated walk time into consideration when

calculating the compensation owed to the unrepresented

plaintiffs, then those plaintiffs may be entitled to additional pay.

Entry-exit walk time, by contrast, does not fall within the

Pay Scale Manual’s definition of compensable work time.

Moreover, because the Pay Scale Manual comprehensively

addresses the question of compensation for the unrepresented

plaintiffs, it precludes compensation for any work time that falls

outside the scope of its definition. Therefore, insofar as the

unrepresented plaintiffs are seeking compensation for entry-

exit walk time, their claims must be rejected.

The Court of Appeal reached somewhat different

conclusions, and therefore we reverse its judgment.

I. FACTS AND PROCEDURAL BACKGROUND

A. Pretrial Proceedings

This matter arises from the coordination (see Code Civ.

Proc., § 404 et seq.; Cal. Rules of Court, rule 3.501 et seq.) and

joint disposition of three class-action complaints. The named

defendants are the State of California and various departments

of the state government. In each of the operative complaints,

plaintiffs allege causes of action for (1) failure to pay contractual

overtime in violation of Labor Code sections 222 and 223; (2)

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STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

failure to pay the minimum wage in violation of Labor Code

sections 1182.11, 1182.12, and 1194, and in violation of the

applicable wage orders (Cal. Code Regs., tit. 8, § 11000 et seq.);

(3) failure to keep accurate records of hours worked in violation

of Labor Code section 1174; and (4) failure to pay contractual

overtime in breach of common law contractual obligations. The

gist of all these claims is that the state did not adequately

compensate plaintiffs for walk time. Plaintiffs seek relief in the

form of unpaid overtime compensation, unpaid California

minimum-wage compensation, liquidated damages, injunctive

relief, and attorneys’ fees.

The trial court granted class certification in all three

actions, and it certified two plaintiff subclasses, one comprising

unrepresented supervisory employees and the other comprising

represented employees. Defendants then moved for judgment

on the pleadings, which the trial court granted as to the causes

of action for failure to pay contractual overtime in violation of

Labor Code sections 222 and 223, and for failure to keep

accurate records of hours worked in violation of Labor Code

section 1174. The trial court ruled that Labor Code sections 222,

223, and 1174 are inapplicable to the state government. As to

plaintiffs’ other two causes of action, the trial court denied

defendants’ motion.

The matter then proceeded to trial, but the parties

stipulated that the trial could proceed in multiple phases. In

the first phase, several threshold questions were tried to the

court. A brief overview of two regulatory schemes is helpful to

understand the threshold questions tried at the first phase.

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Opinion of the Court by Chin, J.

B. Regulatory Background

1. Wage Order No. 4

The Industrial Welfare Commission (IWC) was created in

1913 with express authority to adopt regulations — called wage

orders — governing wages, hours, and working conditions in the

state of California. (Stats. 1913, ch. 324, § 6, pp. 634–635; see

Martinez v. Combs (2010) 49 Cal.4th 35, 52–57 (Martinez)

[describing the creation and role of the IWC].)2 These wage

orders, being the product of quasi-legislative rulemaking under

a broad delegation of legislative power, are entitled to great

deference, and they have the dignity and force of statutory law.

(Brinker Restaurant Corp. v. Supreme Court (2012) 53 Cal.4th

1004, 1027 (Brinker); see Martinez, at p. 61.) Our past cases

have used the term “extraordinary” to describe this deference

(Martinez, at p. 61), noting in this context that the Legislature’s

authority to delegate its legislative power to the IWC is

expressly recognized in the state’s Constitution (Martinez, at pp.

60–61). It remains true, of course, that the Legislature can

enact statutes that supersede the wage orders — as occurred in

the case of the Eight-Hour-Day Restoration and Workplace

Flexibility Act of 1999 (Stats. 1999, ch. 134, pp. 1820–1830) —

but courts must seek to harmonize IWC wage orders with

statutes to the extent possible (Brinker, at p. 1027).

IWC wage order No. 4-2001, which is at issue here,

governs wages, hours, and working conditions in professional,

2

The IWC’s wage orders originally protected only women

and children, but since the 1970’s, they have applied to all

California employees. (See Stats. 1973, ch. 1007, § 8, p. 2004;

Stats. 1972, ch. 1122, § 13, p. 2156; see generally Industrial

Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 700–701.)

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Opinion of the Court by Chin, J.

technical, clerical, mechanical, and similar occupations. (IWC

wage order No. 4-2001 (Wage Order No. 4); see Cal. Code Regs.,

tit. 8, § 11040.) Wage Order No. 4 includes a minimum wage

section, which requires employers to pay their employees at not

less than a designated hourly rate “for all hours worked” (Wage

Order No. 4, § 4(A)(1)), and an overtime section, which defines

regular hours and requires employers to pay their employees at

an appropriate multiplier of their regular rate “for all hours

worked” in excess of those regular hours (Wage Order No. 4,

§ 3(A)(1)).

Both the minimum wage and the overtime sections of

Wage Order No. 4 refer to “all hours worked,” which the wage

order defines as “the time during which an employee is subject

to the control of an employer, and includes all the time the

employee is suffered or permitted to work, whether or not

required to do so.” (Wage Order No. 4, § 2(K), italics added.)

The parties refer to this definition of compensable work time as

the “control standard.” Under applicable case law, an argument

can be made that both types of walk time at issue in this case

fall within this definition. (See Morillion v. Royal Packing Co.

(2000) 22 Cal.4th 575, 587–588 [holding that compulsory travel

time on an employer’s buses, to and from agricultural fields, is

compensable under the wage order “hours worked” definition,

because the employees are subject to employer “control”]

(Morillion).)

By reason of a 2001 amendment, Wage Order No. 4 applies

to employees of the state government, but only in part. Before

the 2001 amendment, former section 1(B) of the wage order

stated: “The provisions of this Order shall not apply to

employees directly employed by the State . . . .” (IWC wage

order No. 4-2000, § 1(B).) As a result of the 2001 amendment,

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Opinion of the Court by Chin, J.

section 1(B) now states: “Except as provided in Sections 1, 2, 4,

10, and 20, the provisions of this order shall not apply to any

employees directly employed by the State . . . .” (Wage Order

No. 4, § 1(B), italics added.) Thus, only sections 1, 2, 4, 10, and

20 of Wage Order No. 4 govern state employment.3 (See

Sheppard v. North Orange County Regional Occupational

Program (2010) 191 Cal.App.4th 289, 300–301 (Sheppard).) The

sections that are most relevant here are section 2, which is the

“Definitions” section (and which includes the definition of

“[h]ours worked”), and section 4, which is the “Minimum Wages”

section. Significantly, section 3 — which is the section of Wage

Order No. 4 that guarantees overtime pay — is not among the

excepted sections listed in the opening clause of section 1(B) of

the wage order, and therefore section 3’s overtime guarantee is

not applicable to state government employees.

In summary, Wage Order No. 4’s “Definitions” and

“Minimum Wages” sections expressly apply to rank-and-file

employees of the state government, and Morillion, supra, 22

Cal.4th 575, supports an argument that both types of walk time

at issue in this case fall within Wage Order No. 4’s definition of

“[h]ours worked,” a definition that focuses on “control.”

2. The Pay Scale Manual

“Under the California Constitution it is the Legislature,

rather than the Governor, that generally possesses the ultimate

authority to establish or revise the terms and conditions of state

employment through legislative enactments, and . . . any

authority that the Governor or an executive branch entity . . . is

3

Sections 4 and 10 do not apply to administrative,

executive, or professional employees of the state government.

(Wage Order No. 4, § 1(A).)

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STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

entitled to exercise in this area emanates from the Legislature’s

delegation of a portion of its legislative authority to such

executive officials or entities through statutory enactments.”

(Professional Engineers in California Government v.

Schwarzenegger (2010) 50 Cal.4th 989, 1015 (Professional

Engineers), second italics added; see Pacific Legal Foundation v.

Brown (1981) 29 Cal.3d 168, 188.) The Legislature has

delegated to CalHR express authority to adopt regulations

governing the terms and conditions of state employment,

including setting the salaries of state workers (Gov. Code,

§ 19826) and defining their overtime (id., §§ 19843, 19844,

19845, 19849). Under this delegated legislative authority,

CalHR has adopted the Pay Scale Manual, setting forth salary

ranges for thousands of job classifications and establishing

“work week groups” for purposes of regulating overtime. (See

CalHR, California State Civil Service Pay Scales — Online

Manual (54th Edition) (2019) <http://www.calhr.ca.gov/state-hr-

professionals/pages/pay-scales.aspx> [as of June 27, 2019] (the

Pay Scale Manual, or the Manual).)4

The wages and hours of workers in California, including

state government workers, are also governed by federal law,

4

Section 10 of the Manual, entitled “Work Week Groups,”

is the section most relevant to this opinion. Section 10 is located

at

<http://www.calhr.ca.gov/Pay%20Scales%20Library/PS_Sec_10

.pdf> [as of June 27, 2019] (Section 10). All Internet citations in

this opinion are archived by year, docket number, and case name

at <http://www.courts.ca.gov/38324.htm>.

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STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

specifically, the FLSA (29 U.S.C. § 201 et seq.).5 The FLSA

imposes a federal minimum wage (id., § 206) and overtime

compensation requirement (id., § 207). It generally defines

overtime as “a workweek longer than forty hours,” and it

requires payment “at a rate not less than one and one-half times

the regular rate” for such work. (Id., § 207(a)(1).) But the FLSA

includes several exemptions from its overtime requirement,

including one for the employment, by a public agency, of fire

suppression or law enforcement personnel (id., § 207(k) (section

7(k))).

The latter exemption is sometimes referred to as the

“section 7(k) exemption” because it appears in section 7(k) of the

FLSA, a provision that is codified as section 207(k) of title 29 of

the United States Code. In the case of law enforcement

personnel (a category that includes correctional employees), the

section 7(k) exemption requires that the employee receive

overtime compensation “at a rate not less than one and one-half

times the regular rate” for any work in excess of 171 hours in a

work period of 28 consecutive days (or a proportionately lesser

number of hours in a shorter work period). (29 U.S.C.

§ 207(k)(1)(B); 29 C.F.R. § 553.230(b) (2018); see Fire Protection

and Law Enforcement Employees of Public Agencies; Study of

Average Number of Hours Worked, 48 Fed. Reg. 40518–40519

(Sept. 8, 1983) [describing how the 171-hour limit was

determined].)

5

Federal law does not preempt state law in this area, and

therefore state law is controlling to the extent its protections

exceed those of federal law. (Alvarado v. Dart Container Corp.

of California (2018) 4 Cal.5th 542, 554; Morillion, supra, 22

Cal.4th at p. 592; Tidewater Marine Western, Inc. v. Bradshaw

(1996) 14 Cal.4th 557, 566–568.)

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Opinion of the Court by Chin, J.

As already noted, employees of the state government are

not subject to Wage Order No. 4’s overtime compensation

section. (Wage Order No. 4, § 1(B).) Instead, CalHR has

authority to define overtime compensation for state government

employees (Gov. Code, §§ 19843, 19844, 19845, 19849), and

more particularly, CalHR “is authorized to provide for overtime

payments as prescribed by the [FLSA]” (id., § 19845, subd. (a),

italics added). Pursuant to that authority, Section 10 of the Pay

Scale Manual refers to “WORK WEEK GROUPS

ESTABLISHED UNDER FAIR LABOR STANDARDS ACT

(FLSA),” and directly under that heading, the Manual

establishes Work Week Group 2. Under the subheading

“Determination of Coverage under FLSA,” the Manual provides

that “[t]he provisions of Work Week Group 2 are made

applicable to all [employment] classes which are determined by

the Director of [CalHR] to include positions subject to the FLSA.”

(Italics added.) All the job classifications that are at issue in

this litigation — both those of the represented plaintiffs and

those of the unrepresented plaintiffs — are assigned to Work

Week Group 2.6

These same provisions of Section 10 of the Pay Scale

Manual also incorporate the FLSA’s definition of compensable

6

As originally certified, the plaintiff class included

employees whose job classification was “Correctional Counselor

II (Supervisor).” That job classification comes within Work

Week Group E, meaning “white-collar” employees who are not

eligible for overtime compensation and whose salary constitutes

full compensation for all hours worked. By order dated May 29,

2014, the trial court excluded “Correctional Counselor II

(Supervisor)” from the subclass of unrepresented plaintiffs, and

the plaintiffs with that job classification were dismissed from

this action.

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Opinion of the Court by Chin, J.

work time, stating that “[f]or the purpose of identifying hours

worked under the provisions of the FLSA, only the time spent

which is controlled or required by the State and pursued for the

benefit of the State need be counted.” (Italics added.) This

definition, which expressly references the FLSA, is drawn

nearly verbatim from the high court’s decision in Tennessee Coal

Co. v. Muscoda Local. (1944) 321 U.S. 590 (Tennessee Coal),

which defines FLSA-regulated work as “physical or mental

exertion (whether burdensome or not) controlled or required by

the employer and pursued necessarily and primarily for the

benefit of the employer and his business.” (Tennessee Coal, at p.

598, italics added.) Thus, it is clear that the Pay Scale Manual

intends the FLSA’s definition of compensable work time to

apply.7

7

The text of the FLSA does not, itself, define compensable

work time. Instead, the high court has done so in several

decisions interpreting the FLSA, and the high court’s definition

has since been summarized in an interpretive bulletin issued by

the United States Department of Labor. That bulletin provides

in full: “The United States Supreme Court originally stated that

employees subject to the act must be paid for all time spent in

‘physical or mental exertion (whether burdensome or not)

controlled or required by the employer and pursued necessarily

and primarily for the benefit of the employer and his business.’

(Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123,

321 U.S. 590 (1944)) Subsequently, the Court ruled that there

need be no exertion at all and that all hours are hours worked

which the employee is required to give his employer, that ‘an

employer, if he chooses, may hire a man to do nothing, or to do

nothing but wait for something to happen. Refraining from

other activity often is a factor of instant readiness to serve, and

idleness plays a part in all employments in a stand-by capacity.

Readiness to serve may be hired, quite as much as service itself,

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Opinion of the Court by Chin, J.

The Pay Scale Manual’s definition of compensable work

time — like that of Wage Order No. 4 — uses the word

“control[].” Nonetheless, the two definitions differ on a point

that is critical to the parties’ dispute. The Pay Scale Manual’s

definition is expressly based on the FLSA definition, and the

FLSA, by its terms, excludes entry-exit walk time from coverage.

That exclusion is a result of Congress’s enactment, in 1947, of

the Portal-to-Portal Act (29 U.S.C. § 252 et seq.). The Portal-to-

Portal Act states that, except when a contract or custom

provides otherwise, “no employer shall be subject to any liability

or punishment under the Fair Labor Standards Act of 1938 . . .

on account of the failure of such employer to pay an employee

minimum wages, or to pay an employee overtime compensation,

for or on account of any of the following activities of such

employee . . . [¶] (1) walking, riding, or traveling to and from

the actual place of performance of the principal activity or

activities which such employee is employed to perform, and [¶]

(2) activities which are preliminary to or postliminary to said

principal activity or activities, which occur either prior to the

time on any particular workday at which such employee

commences, or subsequent to the time on any particular

and time spent lying in wait for threats to the safety of the

employer’s property may be treated by the parties as a benefit

to the employer.’ (Armour & Co. v. Wantock, 323 U.S. 126

(1944); Skidmore v. Swift, 323 U.S. 134 (1944)) The workweek

ordinarily includes ‘all the time during which an employee is

necessarily required to be on the employer’s premises, on duty

or at a prescribed work place’. (Anderson v. Mt. Clemens Pottery

Co., 328 U.S. 680 (1946)) The Portal-to-Portal Act did not

change the rule except to provide an exception for preliminary

and postliminary activities. See [29 C.F.R.] § 785.34 [(2018)].”

(29 C.F.R. § 785.7 (2018).)

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Opinion of the Court by Chin, J.

workday at which he ceases, such principal activity or

activities. . . .” (Id., § 254(a), italics added.) The parties refer to

this FLSA definition of compensable work time as the “first

principal activity standard.”

Plaintiffs’ petition for review does not argue that entry-

exit walk time is compensable under the constraints the Portal-

to-Portal Act placed on the FLSA; rather, it argues that the

FLSA definition of compensable work time does not apply.

Therefore, we proceed under the assumption that under federal

law, entry-exit walk time is not compensable. (See Integrity

Staffing Solutions, Inc. v. Busk (2014) 574 U.S. ___, ___ [135

S.Ct. 513, 519] [“We hold that an activity is integral and

indispensable to the principal activities that an employee is

employed to perform — and thus compensable under the

FLSA — if it is an intrinsic element of those activities and one

with which the employee cannot dispense if he is to perform his

principal activities. Because the employees’ time spent waiting

to undergo and undergoing [the employer’s] security screenings

[when leaving work each day] does not meet these criteria, we

reverse the judgment of the Court of Appeals.” (italics added)].)

In summary, this case involves a conflict between two

regulatory schemes. Wage Order No. 4 regulates the minimum

wage the state government must pay its rank-and-file

employees, and it defines compensable work time in a broad way

that arguably includes both types of walk time at issue in this

litigation. (See Morillion, supra, 22 Cal.4th at pp. 587–588.) At

the same time, the Pay Scale Manual sets forth the regular and

overtime compensation that the state government must pay to

certain classes of its employees (including plaintiffs’ classes),

and in so doing, it expressly adopts the FLSA’s narrower

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Opinion of the Court by Chin, J.

definition of compensable work time, a definition that, by its

terms, excludes entry-exit walk time.

C. The Trial

As noted, the parties stipulated that the trial could

proceed in multiple phases. In the first phase, several threshold

questions that were potentially dispositive of plaintiffs’ claims

were tried to the court. These questions included: (1) whether

plaintiffs’ compensable work time was properly determined

according to the “control standard” (i.e., the standard that

applies under the state’s wage orders) or according to the “first

principal activity . . . standard” (i.e., the standard that applies

under the constraints the Portal-to-Portal Act placed on the

FLSA), and also whether the represented plaintiffs agreed to

application of the narrower federal standard; (2) whether the

duty to pay plaintiffs the minimum wage was properly

determined by California minimum wage law (including Wage

Order No. 4’s broad definition of compensable work time) or by

federal minimum wage law (including the FLSA’s narrower

definition of compensable work time), and also whether the

represented plaintiffs agreed to the application of federal

minimum wage law and whether any such agreement is

enforceable; and (3) whether an employee of the state can bring

a common law breach of contract claim against the state for

failure to pay overtime compensation that has been earned, and

if so, what contractually enforceable overtime policies existed.

The evidence at the first phase of the trial established the

following facts.

1. The Represented Plaintiffs

The represented plaintiffs are members of State

Bargaining Unit 6, which covers state correctional employees,

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and they are represented by the California Correctional Peace

Officers Association (CCPOA). The CCPOA and the state have

negotiated several memoranda of understanding (MOUs), but

the MOU in effect from July 1, 1998 to June 30, 1999 (the 1998–

1999 MOU) was the first to include a section 7(k) schedule.

Specifically, the 1998–1999 MOU contained a section entitled

“7k Exemption,” which provided for a work schedule of 168

hours in a recurring 28-day work period.

The “7k Exemption” section of the 1998–1999 MOU began

with an express reference to the FLSA: “CCPOA and the State

agree that the [represented plaintiffs] are working under the

provisions of Section []7k of the Fair Labor Standards Act

(FLSA) and the parties acknowledge that the employer is

declaring a specific exemption for these employees under the

provisions specified herein.” The 1998–1999 MOU then set forth

the 168-hour work schedule, and it defined overtime as time

worked in excess of that schedule. The 168 hours consisted of

160 hours of “on post” duty, four hours of “pre and post work

activities,” and four hours of “training.” Regarding the four

hours of “pre and post work activities,” the 1998–1999 MOU

stated: “CCPOA agrees that generally this is sufficient time for

all pre and post work activities during each work period, and

that the compensation allotted for these activities under this

provision is full compensation for all of these activities.”8 The

8

The trial court made a factual finding that the word

“generally” was included in this provision because the state

wanted to allow employees to apply for additional compensation

when such compensation was needed due to the “dynamic

environment” of the prison.

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1998–1999 MOU further stated: “The State and CCPOA agree

that they have made a good faith attempt to comply with all

requirements of the FLSA in negotiating this provision.”

Significantly, the phrase “pre and post work activities” as

used in the 1998–1999 MOU referred to duty-integrated walk

time, not entry-exit walk time. According to testimony from

David Gilb, the state’s chief negotiator, the state took the

position during negotiations that the phrase encompassed

activities that occurred before correctional employees arrived at

their assigned work posts and after they left those posts, but the

phrase only encompassed activities that began when an

employee first picked up his or her equipment in the central

control area of the prison facility and that ended when an

employee dropped off the same equipment at the end of his or

her shift. According to Gilb, the phrase “pre and post work

activities” did not include time spent between entering the

outermost gate of a prison facility and first picking up

equipment, or time spent leaving a facility after dropping off

equipment. The union initially sought compensation for such

time, but the state argued that entry-exit walk time was not

compensable because the parties were negotiating under the

FLSA’s section 7(k) exemption, and the FLSA — as amended by

the Portal-to-Portal Act — did not require such compensation.

As regards employees in two job classifications

(“Correctional Counselors I” and “Correctional Counselors II”),

the 1998–1999 MOU (and subsequent MOUs between the

parties) did not allocate any time for “pre and post work

activities.” The trial court made a factual finding, with respect

to those employees, that “neither the State nor [the union]

believed that these individuals engaged in any compensable

[pre- and postwork activities].”

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Rather, asserted the state, compensable work time under the

FLSA begins with the “first principal activity” that an employee

is employed to perform. The testimony of CCPOA’s chief

negotiator, Stephen Weiss, confirmed that the parties did not

consider entry-exit walk time to be compensable. He testified

that the phrase “pre and post work activities” was not

specifically defined in the MOU, “[b]ut in the conversations at

the [bargaining] table, it was picking up your keys, picking up

your tools, Mace, whatever was appropriate for the particular

post that they were working.”

During the discussions that led to the 1998–1999 MOU

there was no suggestion that state wage-and-hour protections

applied. The reason CCPOA did not make that argument was

that, at the time of the negotiations, the state statutes setting

the minimum wage and permitting private actions to enforce the

minimum wage (Lab. Code, §§ 1182.11, 1182.12, 1194, 1197)

only applied to the extent a wage order applied (see Martinez,

supra, 49 Cal.4th at pp. 56–57), and the wage order that might

apply to correctional employees — Wage Order No. 4 —

expressly exempted employees of the state government from all

its provisions. As mentioned, Wage Order No. 4 was revised in

2001, making a few of its sections, including its “Definitions”

and “Minimum Wages” sections (but not its overtime section),

applicable to state employees. (See Wage Order No. 4, § 1(B);

see also Sheppard, supra, 191 Cal.App.4th at pp. 300–301.)

The Legislature approved the 1998–1999 MOU, and this

approval was signed by the Governor and chaptered into law.

(Stats. 1998, ch. 820, § 2, p. 5135.) The next MOU, which was

in effect between the parties from July 1, 1999 to July 2, 2001,

continued the relevant provisions of the 1998–1999 MOU, and

like its predecessor, it too was approved by the Legislature by

17

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

way of a regularly enacted law. (Stats. 1999, ch. 778, § 6, subd.

(b), p. 5613.) The MOU in effect from July 1, 2001 to July 2,

2006 (the 2001–2006 MOU) provided for a schedule of only 164

hours in a 28-day work period, with this shorter schedule going

into effect on July 1, 2004. The shorter schedule was achieved

by eliminating the four hours allocated to training in the

previous MOUs. As with the previous MOUs, four hours

remained allocated to “pre and post work activities,” and the

2001–2006 MOU included the language from the previous

MOUs, stating that those four hours were “sufficient time for all

pre and post work activities during each work period” and “that

the compensation allotted for these activities under this

provision is full compensation for all of these activities.” The

2001–2006 MOU also included the language from the previous

MOUs, stating that the parties had made a good faith attempt

to comply with the FLSA. Like its predecessors, the 2001–2006

MOU was approved by the Legislature, and this approval was

signed by the Governor and chaptered into law. (Stats. 2002,

ch. 1, § 2, p. 3.)

From July 2, 2006 to September 18, 2007, the parties

negotiated unsuccessfully for a new MOU, and during that time,

CCPOA and the state continued to give effect to the provisions

of the 2001–2006 MOU. (See Gov. Code, § 3517.8, subd. (a)

[authorizing employment under the terms of an expired MOU

while negotiations are ongoing].) On September 18, 2007, the

parties reached an impasse in their negotiations, and the state

implemented the terms of its “last, best, and final offer.” (See

id., § 3517.8, subd. (b).) Except by way of budget acts

authorizing the expenditure of state funds, the terms of the

state’s “last, best, and final offer” were not approved by the

Legislature. As regards the section 7(k) schedule, however, the

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Opinion of the Court by Chin, J.

“last best, and final offer” was not different from the 2001–2006

MOU.

In late 2007, the national economy went into recession,

and a steep drop in state revenues seriously impacted the state’s

budget. (See Professional Engineers, supra, 50 Cal.4th at pp.

1000–1008 [describing state’s fiscal crisis, which began in late

2007 and continued for several years thereafter].) The state and

CCPOA next entered into an MOU on May 16, 2011 (the 2011–

2013 MOU). This new MOU, like its predecessors, invoked

section 7(k) of the FLSA, and it continued the schedule of 164

hours in a recurring 28-day work period, a schedule that

expressly included four hours for “pre and post work activities.”

But, by the time of the 2011–2013 MOU, the present litigation

had begun. Therefore, the 2011–2013 MOU did not include the

language found in the earlier MOUs, stating that four hours

constituted sufficient compensation for pre- and postwork

activities. The MOU stated in a side letter that “nothing in this

MOU shall have prejudicial effect to either side’s arguments in

Stoetzl v. State of California” (referring to the present

litigation). The 2011–2013 MOU, like its predecessors, was

approved by the Legislature, and this approval was signed by

the Governor and chaptered into law. (Stats. 2011, ch. 25, § 2,

p. 684.)

2. The Unrepresented Plaintiffs

Labor relations between the state and the unrepresented

plaintiffs are governed by, among other things, the Bill of Rights

for State Excluded Employees (Gov. Code, § 3525 et seq.), which

imposes “meet and confer” obligations on the state (id., § 3533),

but which does not provide for collective bargaining through an

exclusive employee representative (id., §§ 3530, 3531).

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Opinion of the Court by Chin, J.

Therefore, no MOU governs the wages and hours of the

unrepresented plaintiffs. Instead, CalHR, pursuant to its

delegated legislative authority to set wages and hours for state

workers (id., §§ 19826, 19843, 19844, 19845, 19849), has

adopted the Pay Scale Manual. As discussed, state law

expressly permits CalHR “to provide for overtime payments as

prescribed by the [FLSA]” (Gov. Code, § 19845, subd. (a)), and

Section 10 of the Pay Scale Manual does so for specified job

classifications — including all the job classifications that are the

subject of this litigation — by creating “Work Week Group 2”

under the heading “WORK WEEK GROUPS ESTABLISHED

UNDER FAIR LABOR STANDARDS ACT (FLSA).”

Section 10 of the Pay Scale Manual divides Work Week

Group 2 into three categories: (1) “employees in classes not

eligible for exemption under Section 7K of the FLSA”; (2)

“employees in law enforcement classes, for which exemption

under Section 7K of the FLSA is claimed”; and (3) “employees in

fire suppression classes, for which exemption under Section 7K

of the FLSA is claimed.” As to each of these categories, the Pay

Scale Manual adopts work schedules that derive directly from

the FLSA (see 29 U.S.C. § 207(a)(1); 29 C.F.R. § 553.230 (2018)),

thus confirming the intent of CalHR to adopt FLSA standards

for Work Week Group 2. The job classifications of the

unrepresented plaintiffs all fall within the first of the three

Work Week Group 2 categories. Therefore, although their job

classifications are included in Work Week Group 2, the

unrepresented plaintiffs are not eligible for the FLSA’s section

7(k) exemption. Rather, for them, the Pay Scale Manual defines

overtime “as all hours worked in excess of 40 hours in a period

of 168 hours or seven consecutive 24-hour periods,” which, of

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STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

course, is how the FLSA defines overtime when no special

exemption is invoked (see 29 U.S.C. § 207(a)(1)).

D. The Trial Court’s Ruling

The gist of plaintiffs’ claims is that the state did not

adequately compensate them for walk time. The trial court

rejected that assertion, ruling in favor of the defendants on all

issues.

As to the represented plaintiffs, the trial court concluded

that the “first principal activity” standard that defines

compensable work time for purposes of the FLSA governs

plaintiffs’ claims. The trial court based its conclusion on the

language of the MOUs (which incorporated the FLSA’s section

7(k) schedule), testimonial evidence that the parties agreed,

during negotiations, to adopt the FLSA’s “first principal

activity” standard, and the fact that the MOUs were approved

by the Legislature, thus superseding conflicting laws of more

general application.

As to the unrepresented plaintiffs, the trial court

concluded that, by assigning various job classifications to Work

Week Group 2, CalHR had determined that those job

classifications should be governed by the FLSA, and more

specifically by the “first principal activity” standard that defines

compensable work time for purposes of the FLSA. The trial

court further concluded that, in doing so, CalHR acted within its

express delegated authority under Government Code section

19845, subdivision (a). The trial court rejected plaintiff’s

argument that, by using the word “control[]” in the Pay Scale

Manual’s definition of compensable work time applicable to

Work Week Group 2, CalHR had indicated its intent to

incorporate the “control” standard that is used to define

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Opinion of the Court by Chin, J.

compensable work time under the state’s wage orders. On the

contrary, concluded the trial court, CalHR took the word

“control[]” directly from the definition of compensable work time

that applies under the FLSA (see Tennessee Coal, supra, 321

U.S. at p. 598), and therefore the word must be read in light of,

and consistent with, the “first principal activity” standard.

In the trial court’s view, the foregoing conclusions

disposed of plaintiffs’ minimum wage cause of action, which was

based on the assertion that the “control” standard of the state’s

wage orders, not the “first principal activity” standard of the

FLSA, defined compensable work time for purposes of the duty

to pay the minimum wage. The trial court reasoned that by

approving the MOUs (in the case of the represented plaintiffs)

and by authorizing CalHR to establish work week groups that

were subject to the FLSA’s overtime standards (in the case of

the unrepresented plaintiffs), the Legislature enacted specific

laws that superseded the state’s more general minimum wage

laws.

As to plaintiffs’ overtime claims based on common law

breach of contract, the trial court ruled that plaintiffs’ claims

were subject to the rule that the terms and conditions of public

employment are controlled by statute and ordinance, not by

contract, and that plaintiffs had not established the existence of

a contractual agreement to pay overtime compensation other

than as provided in the MOUs.

Based on the foregoing conclusions, which disposed of all

of plaintiffs’ remaining claims, the trial court declined to reach

defendants’ contentions that plaintiffs had failed to exhaust

administrative remedies and had failed to comply with the

government claims statutes (Gov. Code, § 900 et seq.).

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Opinion of the Court by Chin, J.

E. The Court of Appeal Decision

The Court of Appeal affirmed the trial court as to the

represented plaintiffs, but it reversed the trial court as to the

unrepresented plaintiffs.

As to the represented plaintiffs, the Court of Appeal

reasoned that the Legislature’s approval of the MOUs, and the

Governor’s signature, effectively made those agreements into

laws that, because of their specificity, superseded any

conflicting general laws that might otherwise apply. (Stoetzl v.

State of California (2017) 14 Cal.App.5th 1256, 1272, review

granted Nov. 29, 2017, S244751 (Stoetzl).) The MOUs expressly

stated that the represented plaintiffs were working under the

“7K Exemption” of the FLSA, and they also made express

provision for duty-integrated walk time, allotting an aggregate

of four compensable hours to such walk time in each recurring

28-day work period. (Stoetzl, at p. 1273.) In addition, in

negotiating the 1998–1999 MOU, both the parties understood

that they were proceeding under the FLSA (Stoetzl, at p. 1273),

and they further understood that the state did not consider

entry-exit walk time to be compensable under the FLSA (Stoetzl,

at p. 1273). The text of all the MOUs reflected those

understandings, thus carrying forward the negotiating history

of the 1998–1999 MOU, and the Legislature’s approval of the

MOUs gave those understandings the status of law. Therefore,

in the Court of Appeal’s view, the trial court had properly

concluded that the FLSA governed the represented plaintiffs’

right to compensation. (Stoetzl, at p. 1273.) That conclusion

disposed of the represented plaintiffs’ minimum wage cause of

action (ibid.), their overtime compensation cause of action based

on breach of contract (id. at p. 1278–1279), and their overtime

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Opinion of the Court by Chin, J.

compensation cause of action based on Labor Code sections 222

and 223 (Stoetzl, at p. 1279).

As to the unrepresented plaintiffs, the Court of Appeal

concluded that their minimum wage claims should be allowed to

proceed. (Stoetzl, supra, 14 Cal.App.5th at p. 1276, review

granted.) The court reasoned that it needed to harmonize the

requirements of Wage Order No. 4, whose definition of

compensable work time expressly applies to rank-and-file

employees of the state government, with CalHR’s Pay Scale

Manual, which likewise defines compensable work time for

specified classes of state government employees, including

plaintiffs’ classes. (Stoetzl, at p. 1275.) The Court of Appeal

noted, in this regard, that the Pay Scale Manual is not a

legislative enactment, whereas the wage orders “have ‘the same

dignity as statutes.’ ” (Ibid.) The Court of Appeal further noted

that the Manual’s definition of compensable work time uses the

word “control[],” which, in the Court’s view, suggested a parallel

to the “control” standard that applies under the state’s wage

orders. (Id. at pp. 1275–1276.) Moreover, the Court of Appeal

noted that the Manual’s definition of compensable work time,

although drawn nearly verbatim from FLSA definition, does not

expressly exclude entry-exit walk time. (Id. at p. 1276.) Finally,

the Court of Appeal noted that the Pay Scale Manual does not

contain an express provision stating that Wage Order No. 4 does

not apply, whereas Wage Order No. 4 expressly states that its

“Definitions” and “Minimum Wages” sections apply to state

government employees. (Stoetzl, at p. 1276.)

Therefore, the Court of Appeal concluded that Wage Order

No. 4’s broad definition of compensable work time governed the

state’s obligation to pay the minimum wage to the

unrepresented plaintiffs. The Court said: “We may reasonably

24

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Opinion of the Court by Chin, J.

construe the regulatory schemes to mean that entitlement to

overtime compensation is controlled by the FLSA but that the

meaning of ‘hours worked’ is governed by Wage Order 4. Such

a construction does violence to neither regulatory scheme. [¶]

Accordingly, we conclude the unrepresented employees are

entitled to [minimum wage] pay for all hours worked under the

applicable California standard rather than the FLSA’s

standard.” (Stoetzl, supra, 14 Cal.App.5th at p. 1276, review

granted.)

As to the breach of contract claims of the unrepresented

plaintiffs — claims that sought overtime compensation for walk

time — the Court of Appeal concluded that those claims, too,

should be allowed to proceed because the unrepresented

plaintiffs “are entitled to compensation for all hours worked

under California’s broader standard.” (Stoetzl, supra, 14

Cal.App.5th at p. 1279, review granted.) The Court of Appeal

held, however, that the trial court properly rejected the

unrepresented plaintiffs’ Labor Code section 222 cause of action,

because that statute only applies where there is a collective

bargaining agreement in force between the parties. (Stoetzl, at

pp. 1279–1280.) Likewise, it properly rejected their Labor Code

section 223 cause of action, because that statute is concerned

with secret deductions and kick-backs, an issue not presented

by the allegations of plaintiffs’ operative complaints. (Stoetzl, at

pp. 1280–1281.)

Both sides petitioned for review, and we granted both

petitions.

II. DISCUSSION

Plaintiffs seek additional compensation for walk time,

basing their claims on three legal theories set forth in three

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Opinion of the Court by Chin, J.

causes of action: (1) failure to pay the minimum wage in

violation of state minimum wage laws; (2) failure to pay

overtime compensation in breach of common law contractual

obligations; and (3) failure to pay overtime compensation in

violation of Labor Code sections 222 and 223.9 We address each

of these causes of action in turn.

A. The Minimum Wage Cause of Action

1. The Represented Plaintiffs

We agree with the trial court and the Court of Appeal that

the represented plaintiffs agreed, through the collective

bargaining process, to receive a specific amount of compensation

for walk time, and the state’s minimum wage laws do not entitle

them to additional compensation.

Since enactment of the Ralph C. Dills Act in 1977 (the

Dills Act) (Gov. Code, § 3512 et seq.), state government

employees have had the right to be represented by a union and

to bargain collectively over the wages, hours, and terms of

employment. (Gov. Code, §§ 3512, 3515, 3515.5, 3516, 3517.)10

The Director of CalHR represents the Governor in these

negotiations (id., §§ 19815, subd. (b), 19815.4, subd. (g)), and

once a union and the Director have reached agreement, they are

9

Each of the operative complaints also alleges a cause of

action for failure to keep accurate records of hours worked in

violation of Labor Code section 1174, but the trial court granted

judgment in favor of defendants on that cause of action, the

Court of Appeal did not address it, and it was not mentioned in

plaintiffs’ petition for review in this court. Therefore, only the

three causes of action for unpaid compensation are before us.

10

Managerial, confidential, and supervisory employees as

defined in subdivisions (e), (f), and (g) of Government Code

section 3513 are excluded from this right. (Id., § 3513, subd. (c).)

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Opinion of the Court by Chin, J.

required to prepare an MOU memorializing the terms of that

agreement (id., § 3517.5). Significantly, “the Dills Act is a

‘ “supersession statute” ’ [citation], meaning that when a

provision of an MOU conflicts with an otherwise applicable

statutory provision governing the terms and conditions of

employment, the provision of the MOU generally ‘supersedes’ or

prevails over the terms of the otherwise applicable statute,

without any need for further legislative approval of the

conflicting MOU provision. [Citation.]” (Professional Engineers,

supra, 50 Cal.4th at p. 1018.) Statutory provisions that are

automatically superseded by an MOU are listed in Government

Code sections 3517.6 and 3517.61. If, however, an MOU

requires the expenditure of state funds or if its implementation

requires amendment of statutory provisions that are not among

those listed in Government Code sections 3517.6 and 3517.61, it

must be approved by the Legislature. (Gov. Code, §§ 3517.5,

3517.6, subd. (b), 3517.61.)

The represented plaintiffs agreed through the foregoing

collective bargaining process to a specific amount of

compensation for duty-integrated walk time. Specifically, they

agreed to four hours’ pay for “pre and post work activities” in a

recurring 28-day work period, and the record supports the trial

court’s finding that the phrase “pre and post work activities” was

used by the parties to refer to duty-integrated walk time.11

11

The trial court’s order stated: “During bargaining, the

parties understood that [pre- and postwork activities] included

(1) the time at the beginning of the work shift from the point

when an employee picked up his/her keys and tools to the time

when the employee reported to his/her post and, (2) the time at

the end of the work shift, from the point the employee departs

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Moreover, CCPOA expressly conceded in the text of three

of the four MOUs at issue here “that generally [four hours] is

sufficient time for all pre and post work activities during each

work period, and that the compensation allotted for these

activities under this provision is full compensation for all of

these activities.” Significantly, the trial court made a finding

that the word “generally” was included in the foregoing

stipulation because the state wanted to allow employees to apply

for additional compensation when such compensation was

necessary due to the dynamic environment of the prison. This

factual finding, too, is amply supported by testimony at trial,12

and therefore it is not subject to being reconsidered by us on

review. (See People ex rel. Dept. of Corporations v. SpeeDee Oil

Change Systems, Inc. (1999) 20 Cal.4th 1135, 1143 [“If the trial

his/her post to the time when the employee drops off his/her keys

and tools. [Pre- and postwork activities] did not include time

spent by an employee traveling from the initial security gate or

‘sallyport’ to the point where the employee picked up his/her

keys and tools. Similarly, it did not include time spent by an

employee after he or she dropped off his/her keys and tools.”

12

David Gilb testified: “In the normal course of business,

once an employee picked up their equipment at what’s called

control, picked up their tools, and then started for their post,

that we agreed that, in the normal course of business, four hours

was sufficient compensation — four hours every 28-day work

period was sufficient compensation for that. The word

‘generally’ is in there because a prison is a very dynamic

environment, and issues come up where from the point you

picked up your equipment until the time you actually report to

your post, you may be waylaid. You may be diverted. Somebody

may ask you to do an additional errand. Under those

circumstances, we wanted some language in the contract that

allowed basically the employees to apply and the employer to

approve additional compensation when it met the requirements

of the FLSA.”

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Opinion of the Court by Chin, J.

court resolved disputed factual issues, the reviewing court

should not substitute its judgment for the trial court’s express

or implied findings supported by substantial evidence.”]; see

also Gaines v. Fidelity National Title Ins. Co. (2016) 62 Cal.4th

1081, 1100; Haraguchi v. Superior Court (2008) 43 Cal.4th 706,

711; Professional Engineers in California Government v.

Kempton (2007) 40 Cal.4th 1016, 1032.) Accordingly, the word

“generally” cannot be read to suggest that in some work periods

duty-integrated walk time consumed more than four hours and

the represented plaintiffs worked without compensation.

Rather, the parties expressly agreed that four hours in 28 days

was ordinarily enough time to complete the activities associated

with duty-integrated walk time and that when more time was

necessary, an employee could apply for it.

Although CCPOA did not make this same concession in

the 2011–2013 MOU, the parties agreed in a side letter that

“nothing in this [2011–2013] MOU shall have prejudicial effect

to either side’s arguments in Stoetzl v. State of California,”

referring to the present litigation. Therefore, the omission of

language that had been included in all the previous MOUs,

stating that four hours was generally sufficient for pre- and

postwork activities, cannot be construed as an indication that

four hours had somehow ceased to be sufficient, at least under

ordinary circumstances. In addition, there is no allegation that

the represented plaintiffs were barred from applying for

additional compensation if such compensation became

necessary due to the “dynamic environment” of the prison. As

noted, the trial court found that the state permitted employees

to apply for such additional compensation. Therefore, the

represented plaintiffs cannot, as a factual matter, show that

duty-integrated walk time ever went uncompensated.

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Opinion of the Court by Chin, J.

The represented plaintiffs also agreed through the

collective bargaining process to forgo compensation for entry-

exit walk time. Each of the MOUs included a heading that read

“Entire Agreement,” followed by a provision that stated: “This

[MOU] sets forth the full and entire understanding of the parties

regarding the matters contained herein . . . .” Compensation

was certainly one of the “matters contained” (i.e., provided for)

in each of the MOUs. In fact, the preamble of each of the MOUs

stated: “This AGREEMENT . . . has as its purpose . . . the

establishment of rates of pay, hours of work, and other terms

and conditions of employment.” (Italics added.) Therefore,

pursuant to the integration clauses, the MOUs “set[] forth the

full and entire understanding of the parties regarding”

compensation, precluding any forms of compensation not

addressed in the MOUs. More to the point, each of the MOUs

made specific provision for compensating pre- and postwork

activities, providing four hours’ pay for such activities in a

recurring 28-day work period. Because the MOUs “set[] forth

the full and entire understanding of the parties regarding the

matters contained [t]herein,” and because compensation for pre-

and postwork activities was one of the “matters contained” in

each of the MOUs, the MOUs precluded compensation for entry-

exit walk time by not making any provision for it.13

13

Significantly, the parties expressly bargained over entry-

exit walk time. As the trial court explained, the CCPOA

suggested during negotiations over the 1998–1999 MOU that

the state should compensate entry-exit walk time, and the state

rejected the idea, pointing out that the parties were negotiating

under the FLSA, which excludes entry-exit walk time from

compensable work time. It is true that the legal landscape

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Opinion of the Court by Chin, J.

Moreover, the MOUs were all approved by the Legislature,

with this approval signed by the Governor and chaptered into

law. Thus, the MOUs became legislative enactments that

because of their specificity, supersede the more general state

laws on which the represented plaintiffs base their claims. (See,

e.g., Lopez v. Sony Electronics, Inc. (2018) 5 Cal.5th 627, 634 [in

the event of a conflict, specific provisions ordinarily prevail over

general ones].) It would be unfair to allow the represented

plaintiffs, who negotiated a favorable deal at the bargaining

table and who agreed to certain concessions as part of that deal,

including concessions concerning compensation for walk time, to

avoid those concessions after the Legislature passed a series of

special laws approving their agreement.

This is not a case in which a party to a labor agreement

agreed to waive state law protections that are not subject to

waiver. (Cf. Gentry v. Superior Court (2007) 42 Cal.4th 443, 455

[“By its terms, the rights to the legal minimum wage and legal

overtime compensation conferred by the statute are

unwaivable.”]; Hoover v. American Income Life Ins. Co. (2012)

206 Cal.App.4th 1193, 1208 [“[T]he rights accorded by [Labor

Code] section[] . . . 1194 . . . may not be subject to negotiation or

waiver.”]; Grier v. Alameda–Contra Costa Transit Dist. (1976)

55 Cal.App.3d 325, 335 [“[F]ull payment of accrued wages is an

changed after the IWC amended Wage Order No. 4, causing the

“Entire Agreement” provision of the MOUs to take on a new

significance (see conc. & dis. opn. of Liu, J., post, pp. 4–7), but

given the prevailing agreement, these facts mean only that the

represented employees needed to negotiate a change in the

language of the MOUs if, based on the amended wage order,

they wanted minimum wage compensation for entry-exit walk

time.

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Opinion of the Court by Chin, J.

important state policy, enacted for protection of employees

generally. As such, it is not to be avoided by the terms of a

private agreement.”].) Rather, this is a case in which a party to

a labor agreement agreed, subject to legislative approval, to

certain specified terms of employment, and the Legislature then

enacted a special law approving the agreed-upon terms. Having

expressly agreed to specific terms of compensation for pre- and

postwork activities, and having declared those terms to be the

“entire agreement” of the parties concerning compensation for

such activities, and, most important, having received legislative

approval of the agreement, the represented plaintiffs cannot

credibly argue that they should now be released from the terms

of the agreement and granted additional compensation based on

the general laws of the state.

Of course, there was no special law approving the terms of

defendants’ “last, best, and final offer” (see Gov. Code, § 3517.8,

subd. (b)), which was in effect between the parties from

September 18, 2007 until May 16, 2011. During that time

period, the Legislature fully funded the state’s obligation under

the last, best, and final offer, but it did not otherwise approve

that offer, as it did the MOUs. The represented plaintiffs argue,

on that account, that their claims for additional minimum wage

compensation should prevail at least as to the 44-month period

from September 18, 2007 until May 16, 2011.

Plaintiffs, however, misread the law that applies to a last,

best, and final offer. As noted, the Dills Act requires that an

MOU be presented to the Legislature for approval if it requires

the expenditure of state funds or if its implementation requires

the amendment of statutory provisions that are not among those

provisions that the MOU automatically supersedes. In

Department of Personnel Administration v. Superior Court

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Opinion of the Court by Chin, J.

(Greene) (1992) 5 Cal.App.4th 155 (Greene), the Court of Appeal

considered whether, in the context of the state’s 1991–1992

fiscal crisis, CalHR’s predecessor could, after bargaining to an

impasse, unilaterally impose its last, best, and final offer

regarding wages and health care contributions. (Id. at pp. 162–

164.) The court held that when an MOU expires, its

supersession of conflicting state laws comes to an end, and

therefore those state laws come back into full effect. (Id. at p.

176.) Accordingly, the court concluded that the state was not

permitted to implement its last, best, and final offer insofar as

that offer included terms that conflicted with formerly

superseded state laws. (Id. at pp. 172, 174, 185.)

The holding of Greene, supra, 5 Cal.App.4th 155, created

problems for state employees because the expired MOU often

offered greater employee protections than the general state laws

that came back into full effect upon the MOU’s expiration. Of

particular concern to state employee unions was the continuing

ability to collect fair share fees14 and to rely on arbitration to

resolve disputes. The CCPOA therefore sponsored legislation to

set aside the holding of Greene. (See, e.g., Sen. Rules Com., Off.

of Sen. Floor Analyses, Analysis of Sen. Bill No. 683 (1999–2000

Reg. Sess.) as amended Aug. 30, 2000, pp. 2–4; Assem. Com. on

Appropriations, Analysis of Sen. Bill No. 683 (1999–2000 Reg.

Sess.) as amended Aug. 19, 1999, pp. 1–2; Sen. Rules Com., Off.

of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 683

(1999–2000 Reg. Sess.) as amended April 19, 1999, pp. 2–5.)

That legislation added section 3517.8 to the Government

14

Fair share fees are fees imposed on nonunion employees

to ensure that they pay a portion of the cost of collective

bargaining.

33

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Opinion of the Court by Chin, J.

Code — sometimes referred to as the “evergreen” law —

addressing the situation where an MOU expires with no new

MOU in place.

If, upon expiration of the MOU, negotiations over a new

MOU are ongoing, subdivision (a) of Government Code section

3517.8 requires the parties to give effect to the terms of the

expired MOU, including terms that supersede existing law, with

no need for additional legislative action. Next, if the parties

reach an impasse in their negotiations, subdivision (b) of

Government Code section 3517.8 authorizes the state to

implement the terms of its last, best, and final offer. In the

latter case, however, “[a]ny proposal in the state employer’s last,

best, and final offer that, if implemented, would conflict with

existing statutes or require the expenditure of funds shall be

presented to the Legislature for approval and, if approved, shall

be controlling without further legislative action . . . .” (Gov.

Code, § 3517.8, subd. (b), italics added.)

The represented plaintiffs argue that here, because the

state’s last, best, and final offer was not approved by the

Legislature, there was no supersession of conflicting state laws,

and therefore their claims for additional minimum wage

compensation should prevail at least as to the 44-month impasse

period in which no MOU was in place. What plaintiffs overlook

is that the legislative approval required by Government Code

sections 3517.6, subdivision (b), 3517.61, and 3517.8,

subdivision (b) can, at least in some circumstances, be satisfied

by a budget act authorizing the expenditure of state funds. As

we explained in Professional Engineers, “[u]nder the Dills Act,

it is clear that an MOU, once approved by the Legislature (either

directly — see [Gov. Code], § 3517.5 — or through the

appropriation of sufficient funds to pay the agreed-upon

34

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

employee compensation), governs the wages and hours of the

state employees covered by the MOU.” (Professional Engineers,

supra, 50 Cal.4th at p. 1040, italics added; see id. at p. 1043 [“the

Legislature retain[s] its ultimate control (through the budget

process) over expenditures of state funds required by the

provisions of an MOU” (italics added)]; ibid. [“by enacting

appropriations for employee compensation in the [budget

act] . . . , the Legislature approved that level of compensation”].)

In fact, our opinion in Professional Engineers went even

further, stating that the Legislature can use appropriations bills

to modify the terms of state employment even while an MOU is

in effect. Our decision in Professional Engineers arose in the

context of the state fiscal crisis that began in late 2007 and

continued for several years thereafter. (Professional Engineers,

supra, 50 Cal.4th at pp. 1000–1008.) In December 2008, the

Governor issued an executive order instructing the Department

of Personnel Administration (now CalHR) to implement a

mandatory two-day-a-month unpaid furlough of most executive

branch employees. (Id. at p. 999.) In reviewing the legality of

that mandatory furlough, we noted that when the Legislature

revised the Budget Act of 2008, it reduced the relevant

appropriation to a level that reflected the Governor’s furlough

plan. (Id. at 1043.) We said: “By reducing the appropriation for

employee compensation, the Legislature no longer had ‘fully

funded’ the provisions of the MOU’s supporting the higher level

of pay that previously had been approved, and thus . . . the

provisions of the applicable MOU’s . . . no longer were effective.”

(Ibid., italics added; see Service Employees Internat. Union,

Local 1000 v. Brown (2011) 197 Cal.App.4th 252, 263

[“Professional Engineers made it clear that it is the

Legislature . . . which has . . . the final say [] in fixing the

35

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

compensation paid to represented state employees, with that

final say often being expressed in the budget process.”].)

The holdings of Professional Engineers suffice to answer

the represented plaintiffs’ argument that there was no

legislative approval here. (See also Brown v. Superior Court

(2011) 199 Cal.App.4th 971, 998 [appropriations bills satisfy

legislative approval required by § 3517.8, subd. (b)].)15 Because

the last, best, and final offer that governed the represented

plaintiffs’ employment during the 44 months from September

18, 2007, until May 16, 2011, was funded by the Legislature, it

was legislatively approved, and it therefore superseded

conflicting state laws.

Accordingly, we agree with the trial court and the Court of

Appeal that the represented plaintiffs are not entitled to

additional minimum wage compensation for either duty-

integrated walk time or entry-exit walk time. The MOUs made

specific provision for duty-integrated walk time, and the trial

court’s findings of fact, which are supported by trial testimony,

do not suggest that duty-integrated walk time ever went

uncompensated. Although the MOUs did not specifically refer

to entry-exit walk time, they expressly stated that they

constituted the entire understanding of the parties regarding

15

This conclusion — allowing the state to implement its last,

best, and final offer in the case of an impasse in negotiations —

does not unfairly tilt the balance in favor of the state in labor

negotiations. Government Code section 3517.8, subdivision (b)

also provides in relevant part: “Implementation of the last, best,

and final offer does not relieve the parties of the obligation to

bargain in good faith and reach an agreement on a

memorandum of understanding if circumstances change, and

does not waive rights that the recognized employee organization

has under this chapter.”

36

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

the matters they addressed, and compensation for pre- and

postwork activities was one of those matters. Moreover, the

Legislature’s enactment of special laws approving the MOUs

(and its decision to fund the state’s last, best, and final offer)

precludes the represented plaintiffs’ reliance on more general

state laws to support their minimum wage claims.

2. The Unrepresented Plaintiffs

As noted, the trial court concluded, as to the

unrepresented plaintiffs, that the specific statutes authorizing

CalHR to set the wages and hours of employees of the state

government (see Gov. Code, §§ 19826, 19843, 19844, 19845,

19849) — and, in particular, to provide for overtime

compensation as prescribed by the FLSA (see id., § 19845, subd.

(a)) — superseded the more general statutes authorizing the

IWC to regulate the wages and hours of public and private

employees working in the state. The Court of Appeal rejected

that conclusion, reasoning that CalHR intended to incorporate

into its Pay Scale Manual the definition of compensable work

time that appears in Wage Order No. 4 and, therefore, that the

wage order definition applied not only to plaintiffs’ minimum

wage claims but also to their overtime compensation claims

based on breach of contract. We agree with the conclusion of the

trial court and disagree with the conclusion of the Court of

Appeal.

The Court of Appeal suggested that this case pitted an

IWC wage order that has the “dignity” of statutory law against

a provision of CalHR’s Pay Scale Manual that does not. (See

Stoetzl, supra, 14 Cal.App.5th at p. 1275, review granted.) That

characterization is not completely accurate, however. Rather,

we are confronted here with two competing statutory schemes,

37

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

each broadly authorizing administrative action. It is true that

the IWC’s wage orders are entitled to extraordinary deference

and that they must be harmonized, to the extent possible, with

conflicting laws and regulations, but that harmonization does

not mean that the wage orders must invariably prevail over the

regulations of other agencies.

On the one hand, the Legislature empowered the IWC to

regulate the wages and hours of employees generally. (Stats.

1913, ch. 324, § 6, pp. 634–635; Stats. 1972, ch. 1122, § 13, p.

2156; Stats. 1973, ch. 1007, § 8, p. 2004; see Martinez, supra, 49

Cal.4th at pp. 52–57 [describing the history of the IWC];

Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690,

700–701 [describing the expansion of the IWC’s jurisdiction to

cover all employees].) Pursuant to that authority, the IWC

issued wage orders that, as relevant here, (1) define

compensable work time, (2) establish a minimum wage, (3)

mandate overtime compensation, and (4) expressly apply the

minimum wage section (but not the overtime section) to rank-

and-file employees of the state government.

On the other hand, the Legislature empowered CalHR to

set the wages and hours of employees of the state government

(Gov. Code, §§ 19826, 19843, 19844, 19845, and 19849),

including assigning various job classifications to work week

groups for purposes of defining compensable work time and

regulating overtime compensation (id., § 19843, subd. (a)).

Moreover, the Legislature expressly authorized CalHR to

provide for overtime payments as prescribed by the FLSA. (Id.,

§ 19845, subd. (a).) In California, the Legislature has ultimate

responsibility for setting the terms and conditions of state

employment, and therefore CalHR’s authority in this area is

unquestionably legislative, “emanat[ing] from the Legislature’s

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STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

delegation of . . . its legislative authority.” (Professional

Engineers, supra, 50 Cal.4th at p. 1015.)

Given these two broad delegations of quasi-legislative

authority, it is not obvious that, in the case of a direct conflict,

the decisions of the IWC should invariably prevail over those of

CalHR. The Court of Appeal reasoned that the IWC’s wage

orders “have ‘the same dignity as statutes,’ ” whereas “the Pay

Scale Manual is not a legislative enactment” (Stoetzl, supra, 14

Cal.App.5th at p. 1275, review granted), but the underlying

basis for treating the wage orders like statutes is the

Legislature’s broad delegation of legislative power to the IWC

(see Martinez, supra, at p. 61), and the Legislature’s delegation

of legislative power to CalHR is likewise very broad. We are not

dealing here with an ambiguous statutory phrase or standard

that CalHR must clarify, nor has the Legislature given CalHR

much specific guidance as to what terms of employment it

should adopt. Rather, we are dealing with a broad legislative

gap — the terms of employment, including specific salary

ranges, for thousands of state job classifications — and CalHR

has filled that legislative gap, exercising its delegated legislative

authority. Therefore, the provisions of the Pay Scale Manual at

issue here are best characterized as quasi-legislative rules. (See

Yamaha Corp. of America v. State Bd. of Equalization (1998) 19

Cal.4th 1, 10–11 [defining quasi-legislative rules as those that

result from a delegation of legislative power, not those that

merely represent the agency’s view of a statute’s meaning]; id.

at p. 6 fn. 3 [noting that “the terms ‘quasi-legislative’ and

‘interpretive’ . . . designate opposite ends of an administrative

continuum, depending on the breadth of the authority delegated

by the Legislature” (italics added)]; accord, Ramirez v. Yosemite

Water Co. (1999) 20 Cal.4th 785, 798–799; see also American

39

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

Mining Congress v. Mine Safety & Health Administration

(D.C.Cir.1993) 995 F.2d 1106, 1110 [“[T]he dividing line

[between interpretive and quasi-legislative regulations] is the

necessity for agency legislative action . . . [.] [A] rule supplying

that action will be legislative . . . , and an interpretation that

spells out the scope of an agency’s or regulated entity’s pre-

existing duty . . . will be interpretive . . . .”].) As such, the

provisions of the Pay Scale Manual, like the IWC’s wage orders,

“have the dignity of statutes.” (Yamaha, at p. 10.)16

It is true that IWC wage orders must, when possible, be

harmonized with statutes. (Brinker, supra, 53 Cal.4th at p.

1027.) It is also true that the Legislature’s authority to delegate

its legislative power to the IWC is expressly recognized in the

state’s Constitution. (Cal. Const., art. XIV, § 1.) But contrary

to the conclusion of the Court of Appeal (Stoetzl, supra, 14

Cal.App.5th at p. 1275, review granted), neither of these points

establishes that IWC wage orders prevail over the Pay Scale

Manual. Despite the constitutional authorization, the IWC, in

adopting and amending the wage orders, still only exercised

authority delegated to it from the Legislature, as did CalHR in

this area, so the IWC’s wage orders and the Pay Scale Manual

must be harmonized with statutes and with each other to the

extent possible.

We also reject the Court of Appeal’s suggestion that, by

using the word “control[],” the Pay Scale Manual intended to

16

The broad deference owed to all properly adopted quasi-

legislative regulations, including the obligation to afford them

the dignity of statutes, is a point that the author of the

concurring and dissenting opinion has noted in the past. (See

Western States Petroleum Assn. v. Board of Equalization (2013)

57 Cal.4th 401, 415.)

40

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

incorporate Wage Order No. 4’s broad definition of compensable

work time, a definition that also happens to use the word

“control.” (See Stoetzl, supra, 14 Cal.App.5th at pp. 1275–1276,

review granted.) Rather, the Pay Scale Manual’s definition of

compensable work time expressly incorporates the FLSA’s

definition. Government Code section 19845, subdivision (a)

authorizes CalHR “to provide for overtime payments as

prescribed by the [FLSA].” (Italics added.) CalHR exercised that

authority in Section 10 of the Pay Scale Manual, which includes

the heading “WORK WEEK GROUPS ESTABLISHED UNDER

FAIR LABOR STANDARDS ACT (FLSA),” and which creates

“Work Week Group 2” directly under that heading. Likewise,

the provision of the Manual bearing the subheading

“Determination of Coverage Under FLSA” states that “[t]he

provisions of Work Week Group 2 are made applicable to all

classes which are determined by the Director of [CalHR] to

include positions subject to the FLSA” (italics added), and the

three definitions of overtime that apply to job classifications in

Work Week Group 2 precisely track the FLSA.17 We are

therefore confident about the intent of CalHR to adopt FLSA

17

The FLSA includes a general provision requiring overtime

compensation for any work in excess of 40 hours in a workweek

(29 U.S.C. § 207(a)(1)), and it includes a special provision, for

law enforcement employees, requiring overtime compensation

for work in excess of 171 hours in a 28-day period, and another

special provision, for fire suppression employees, requiring

overtime compensation for work in excess of 212 hours in a 28-

day period. (29 U.S.C. § 207(k)(1)(B); 29 C.F.R. § 553.230

(2018).) CalHR’s Pay Scale Manual defines overtime for Work

Week Group 2 using the same three categories and the same

hourly limits for each category.

41

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

overtime standards for job classifications falling within Work

Week Group 2.

More to the point, the definition of compensable work time

that appears in Section 10 of the Pay Scale Manual not only

expressly references the FLSA, but it also tracks the language

of the definition that applies under the FLSA. Specifically, the

Pay Scale Manual states in relevant part: “For the purpose of

identifying hours worked under the provisions of the FLSA, only

the time spent which is controlled or required by the State and

pursued for the benefit of the State need be counted.” (Italics

added.) By way of comparison, the interpretive bulletin of the

United States Department of Labor, defining compensable work

time for purposes of the FLSA, states in relevant part:

“[E]mployees subject to the act must be paid for all time . . .

‘controlled or required by the employer and pursued necessarily

and primarily for the benefit of the employer and his

business.’ [Citation.]” (29 C.F.R. § 785.7 (2018), quoting

Tennessee Coal, supra, 321 U.S. at p. 598, italics added.) Thus,

contrary to the Court of Appeal’s suggestion, the Pay Scale

Manual clearly adopts the FLSA definition of compensable work

time; it does not adopt Wage Order No. 4’s definition.

It is true that the Pay Scale Manual’s definition, like that

of Wage Order No. 4, uses the word “control[].” It is also true

that, in Morillion, we focused on the word “control” in the wage

order’s definition of compensable work time, making that word

the basis of our decision. (See Morillion, supra, 22 Cal.4th at

pp. 587–588 [holding that travel time is compensable under the

wage orders because it was under the “control” of the employer].)

But because the Pay Scale Manual’s definition of compensable

work time expressly refers to the FLSA, and because its

language tracks that of the FLSA definition almost verbatim

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STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

(including the word “ ‘control[]’ ” that appears in that definition)

(29 C.F.R. § 785.7 (2018), quoting Tennessee Coal, supra, 321

U.S. at p. 598), there is no possibility that the Pay Scale Manual

intended to incorporate the wage order definition and not the

FLSA definition.

Moreover, the Pay Scale Manual’s definition of

compensable work time includes, by implication, the limitation

that the Portal-to-Portal Act placed on the FLSA. It is simply

not credible that the Manual — which (1) uses the heading

“WORK WEEK GROUPS ESTABLISHED UNDER FAIR

LABOR STANDARDS ACT (FLSA)”, (2) consistently and

repeatedly incorporates FLSA standards in the provisions that

fall under that heading, and (3) defines compensable work time

using language drawn almost verbatim from the FLSA

definition — was intended by CalHR to exclude an important

aspect of the FLSA definition and that it did so without

mentioning that fact expressly. If CalHR had wanted to exclude

the Portal-to-Portal Act’s limiting provisions from the Pay Scale

Manual’s FLSA-based definition of compensable work time, it

certainly could have done so (see Morillion, supra, 22 Cal.4th at

pp. 588–594; see also In Re: Amazon.com, Inc., Fulfillment

Center Fair Labor Standards Act (FLSA) and Wage and Hour

Litigation (6th Cir. 2018) 905 F.3d 387), but it would have

needed to make that intention clear.

The Court of Appeal, however, strained the plain meaning

of both the wage order and the Pay Scale Manual to hold that

the latter incorporated the former’s definition of compensable

work time. The court did so because it correctly saw the need to

harmonize the two administrative schemes to the extent

possible. We conclude, however, that Wage Order No. 4 and the

Pay Scale Manual cannot be harmonized and that the Pay Scale

43

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Opinion of the Court by Chin, J.

Manual must be treated as a statutorily authorized exception to

Wage Order No. 4.

As discussed, the IWC was given authority to adopt

regulations governing wages, hours, and working conditions for

“all employees” — private and public — in the state of

California. (Lab. Code, § 1173; see id., § 1182; Martinez, supra,

49 Cal.4th at pp. 52–57.) Pursuant to that authority, the IWC

amended Wage Order No. 4 in 2001 to apply that order’s

minimum wage provision to the state government’s rank-and-

file employees, and in so doing, it also applied the wage order’s

broad definition of compensable work time to those employees.

But at the time of that amendment (as now), Government Code

section 19845, subdivision (a) already included an overlapping

and much more specific authorization of administrative action.

It provided: “Notwithstanding any other provision of this

chapter, [CalHR] is authorized to provide for overtime payments

as prescribed by the [FLSA] to state employees.” Pursuant to

the latter authority, CalHR had already, as of the time that the

IWC amended Wage Order No. 4, included Work Week Group 2

in its Pay Scale Manual, and it had already provided that FLSA

overtime standards — including the FLSA’s narrow definition

of compensable work time — applied to state employees in that

work week group. Therefore, the IWC’s action in 2001 must be

viewed as being taken subject to CalHR’s more specific

authority, and the latter must prevail to the extent of a conflict.

(See State Dept. of Public Health v. Superior Court (2015) 60

Cal.4th 940, 960 [“[T]he rule that specific provisions take

precedence over more general ones trumps the rule that later-

enacted statutes have precedence [over earlier ones].”]; People v.

Gilbert (1969) 1 Cal.3d 475, 479 [“ ‘[W]here the general statute

standing alone would include the same matter as the special act,

44

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

and thus conflict with it, the special act will be considered as an

exception to the general statute whether it was passed before or

after such general enactment.’ ” (italics added)]; Code Civ. Proc.,

§ 1859 [“[W]hen a general and particular provision are

inconsistent, the latter is paramount to the former.”].)18

In summary, the IWC was authorized to adopt general

background rules governing employee wages and hours, but

CalHR was the recipient of a more specific delegation, to

establish salary ranges for state workers and to adopt, as

appropriate, FLSA overtime standards for such workers.

Regardless of which agency most recently exercised its

delegated authority, to the extent CalHR’s standards conflict

with the more generally applicable wage order standards, they

supersede them. It follows, therefore, that the Pay Scale

Manual, including its narrow FLSA-based definition of

compensable work time, governs the right of the unrepresented

plaintiffs to compensation and that they are not entitled to

18

Noting our conclusion that Wage Order No. 4 does not

govern the unrepresented employees’ claims, the concurring and

dissenting opinion argues that we need not decide the relative

degree of deference owed to Wage Order No. 4 and the Pay Scale

Manual and that our discussion of that question (see ante, p. 40)

is dictum regarding a matter that was not briefed by the parties.

(Conc. & dis. opn. of Liu, J., post, pp. 10–11.) That argument

misreads our opinion. Wage Order No. 4 and the Pay Scale

Manual are in direct conflict, which forces us, in this case, to

apply the rule that the specific prevails over the general.

Moreover, the deference owed to IWC wage orders was a matter

that the Court of Appeal noted and that plaintiffs relied on

extensively in their briefs in this court.

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Opinion of the Court by Chin, J.

minimum wage compensation based on Wage Order No. 4’s

broader definition of compensable work time.19

We conclude that the trial court was correct to reject the

minimum wage claims of the unrepresented plaintiffs and that

the Court of Appeal erred in reversing that portion of the trial

court’s judgment.

B. The Breach of Contract Cause of Action

Plaintiffs argue on a breach of contract theory that they

are entitled to overtime compensation for walk time that the

state did not properly accredit to them as compensable work

time. Plaintiffs rely on White v. Davis (2003) 30 Cal.4th 528 and

Madera Police Officers Assn. v. City of Madera (1984) 36 Cal.3d

403. In White and Madera, we recognized an exception to the

general principle that public employment is a creature of statute

or ordinance, not contract. Specifically, we held that although

19

It is no answer to argue that Wage Order No. 4 governs

the right of the unrepresented plaintiffs to receive the minimum

wage, while the Pay Scale Manual governs their right to receive

compensation at their regular rate of pay. (Cf. conc. & dis. opn.

of Liu, J., post, pp. 8–10.) That is so because the Pay Scale

Manual occupies the field with respect to the compensation

rates of state employees. CalHR’s regulations provide in

relevant part: “Unless otherwise indicated in the pay plan, the

rates of pay set forth represent the total compensation in every

form except for overtime compensation.” (Cal. Code Regs, tit. 2,

§ 599.671, italics added.) Here, the term “pay plan” refers,

among other things, to the Pay Scale Manual. (See Cal. Code

Regs, tit. 2, § 599.666.1.) The concurring and dissenting opinion

argues that the phrase “every form” in section 599.671 does not

actually mean every form and that it does not cover work falling

outside the pay plan’s definition of hours worked. (See conc. &

dis. opn. of Liu, J., post, p. 10.) We see no reason to read this

limitation into the broad phrase “every form.”

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Opinion of the Court by Chin, J.

the terms of public employment are legislatively determined,

when a public agency employee has completed his or her work

in accordance with those legislative terms, the employee’s right

to receive compensation for the completed work ripens into a

contractual right that is protected by the contract clause of the

state Constitution. Thus, in Madera, the court said: “ ‘[T]o the

extent services are rendered under statutes or ordinances then

providing mandatory compensation for authorized overtime, the

right to compensation vests upon performance of the overtime

work, ripens into a contractual obligation of the employer and

cannot thereafter be destroyed or withdrawn without impairing

the employee’s contractual right.’ ” (Madera, at p. 413, quoting

Longshore v. County of Ventura (1979) 25 Cal.3d 14, 23, italics

added.) Likewise, in White, we said: “[P]ast California cases

clearly establish that although the conditions of public

employment generally are established by statute rather than by

the terms of an ordinary contract, once a public employee has

accepted employment and performed work for a public employer,

the employee obtains certain rights arising from the legislative

provisions that establish the terms of the employment

relationship — rights that are protected by the contract clause of

the state Constitution from elimination or repudiation by the

state. . . . [A] number of cases have stated broadly that among

the rights protected by the contract clause is ‘the right to the

payment of salary which has been earned.’ ” (White, at p. 566,

quoting Kern v. City of Long Beach (1947) 29 Cal.2d 848, 853,

italics added.) We recently reaffirmed these conclusions in Cal

Fire Local 2881 v. California Public Employees’ Retirement

System (2019) 6 Cal.5th 965.

These cases do not help plaintiffs except insofar as the

legislatively created terms of their employment included walk

47

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

time that these employees actually worked and that the state

failed to compensate. As to the represented plaintiffs, the

Legislature approved the MOUs governing their employment,

and it also approved the last, best, and final offer that applied

during the 44-month impasse period in which no MOU was in

place. We have already determined that in light of those

legislative approvals, the represented plaintiffs’ claims for

additional compensation fail. Under White and Madera,

plaintiffs’ contractual rights are derivative of and limited by the

legislatively created terms of their employment. Accordingly,

we agree with the Court of Appeal that the trial court properly

rejected the represented plaintiffs’ claims for overtime

compensation on a breach of contract theory.

As to the unrepresented plaintiffs, the Legislature

delegated its power to set the terms of their employment to two

administrative agencies, the IWC and CalHR, and we have

already determined that CalHR’s Pay Scale Manual, which

adopts the FLSA definition of compensable work time, controls

the unrepresented plaintiffs’ right to compensation. To the

extent the breach of contract claims of these plaintiffs are based

on the failure to pay overtime for entry-exit walk time, such time

is not compensable under the Pay Scale Manual’s narrow

definition of compensable work time, and therefore their claims

lack merit. To the extent, however, that their claims are based

on the failure to pay overtime for duty-integrated walk time,

such time is compensable under the Pay Scale Manual’s narrow

definition of compensable work time. The unrepresented

plaintiffs, having alleged that they performed such work and did

not receive overtime compensation for it, may have a contractual

interest in receiving that compensation. Whether they do

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Opinion of the Court by Chin, J.

depends, of course, on whether they can prove their allegations

in future phases of the trial.

Accordingly, we agree with the Court of Appeal that the

trial court erred in rejecting the breach of contract claims of the

unrepresented plaintiffs, although we do not agree with the

Court of Appeal that the unrepresented plaintiffs can seek

overtime compensation based on the broad definition of

compensable work time that appears in Wage Order No. 4.

Rather, they can only do so based on the FLSA’s narrower

definition of compensable work time, a definition that excludes

entry-exit walk time.

C. Labor Code sections 222 and 223 Cause of

Action

We agree with the Court of Appeal that the trial court

properly rejected the plaintiffs’ claims for overtime

compensation under Labor Code sections 222 and 223.

Labor Code section 222 states: “It shall be unlawful, in

case of any wage agreement arrived at through collective

bargaining, either wilfully or unlawfully or with intent to

defraud an employee, a competitor, or any other person, to

withhold from said employee any part of the wage agreed upon.”

Labor Code section 223 states: “Where any statute or

contract requires an employer to maintain the designated wage

scale, it shall be unlawful to secretly pay a lower wage while

purporting to pay the wage designated by statute or by

contract.”

It is not at all clear that there is a private right of action

for violation of Labor Code sections 222 and 223 (see Lab. Code,

§ 225.5 [specifying civil penalties that the Labor Commissioner

may recover]), nor is it clear that these Labor Code provisions

49

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

apply against the state government (see Campbell v. Regents of

University of California (2005) 35 Cal.4th 311, 330

[“ ‘Generally, . . . provisions of the Labor Code apply only to

employees in the private sector unless they are specifically made

applicable to public employees.’ ”]). In any case, Labor Code

section 222, by its terms, applies only when an employer

withholds “the wage agreed upon” in “any wage agreement.”

Thus, it does not apply to the unrepresented plaintiffs, whose

employment was not governed by an agreement. As to the

represented plaintiffs, we have already concluded that they

cannot show, as a factual matter, that duty-integrated walk

time ever went uncompensated, and we have further concluded

that the MOUs expressly precluded compensation for entry-exit

walk time. Accordingly, defendants did not withhold “the wage

agreed upon” in a “wage agreement,” and plaintiffs’ Labor Code

section 222 claims are without merit.

Plaintiffs’ claims for overtime compensation under Labor

Code section 223 fare no better. Section 223 is concerned with

“secret deductions or ‘kick-backs’ ” that are not the subject

matter of plaintiffs’ allegations. (Kerr’s Catering Service v.

Department of Industrial Relations (1962) 57 Cal.2d 319, 328.)

Plaintiffs allege, rather, that defendants applied too narrow a

definition of compensable work time and, therefore, that

plaintiffs were not paid overtime compensation for some of the

work they performed. We conclude that defendants did not

apply the wrong definition of compensable work time, but even

if they had done so, that error would not amount to “secretly

pay[ing] a lower wage while purporting to pay the wage

designated by statute” (Lab. Code, § 223), because there was

nothing hidden or deceptive about defendants’ payment

practice. (See Prachasaisoradej v. Ralphs Grocery Co., Inc.

50

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Opinion of the Court by Chin, J.

(2007) 42 Cal.4th 217, 236.) Rather, defendants were forthright

from the outset that they believed the narrow FLSA definition

of compensable work time applied.

III. CONCLUSION

We affirm the judgment of the Court of Appeal insofar as

it rejected the claims of the represented plaintiffs.

We reverse the judgment of the Court of Appeal insofar as

it allowed the unrepresented plaintiffs’ minimum wage claims

to proceed.

We affirm the judgment of the Court of Appeal insofar as

it allowed the unrepresented plaintiffs’ breach of contract claims

to proceed, but we conclude that those claims should be limited

to seeking unpaid overtime compensation based on the FLSA’s

definition of compensable work time, not based on the broader

definition that appears in Wage Order No. 4.

We affirm the judgment of the Court of Appeal insofar as

it rejected the unrepresented plaintiffs’ claims under Labor

Code sections 222 and 223.

We remand the case to the Court of Appeal with

instructions to remand to the trial court for further proceedings

consistent with this opinion. During such proceedings,

defendants can raise any defenses that the trial court did not

reach in its previous consideration of the case.

CHIN, J.

We Concur:

CANTIL-SAKAUYE, C. J.

CORRIGAN, J.

KRUGER, J.

GROBAN, J.

51

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

S244751

Concurring and Dissenting Opinion by Justice Liu

I agree with today’s opinion that the represented plaintiffs

cannot pursue claims for duty-integrated walk time for the

period when a memorandum of understanding (MOU) was in

effect. The represented plaintiffs appear to have explicitly

bargained for a specific amount of compensation for duty-

integrated time, and they do not allege that the state failed to

pay the agreed-upon amount. (Maj. opn., ante, at pp. 27–28.)

With regard to the unrepresented employees, I agree that the

Department of Human Resources (CalHR) Pay Scale Manual’s

definition of compensable work does not expressly include entry-

exit walk time and that the state therefore has no obligation to

pay regular or overtime compensation for that time. (Id. at

pp. 10–12.) I also agree that plaintiffs’ Labor Code section 222

and section 223 claims are without merit; the record contains no

evidence that the state unlawfully withheld wages or paid the

employees a lower rate in violation of an agreed-upon

contract. (Maj. opn., ante, at pp. 48–49.)

I disagree, however, with the court’s rejection of the

represented plaintiffs’ and unrepresented plaintiffs’ minimum

wage claims for entry-exit walk time. (Maj. opn., ante, at pp. 2–

3, 26–45.) The 2001 revisions to the Industrial Welfare

Commission’s (IWC) wage order No. 4-2001 (Wage Order No. 4)

extended minimum wage protections to rank-and-file employees

of the state government. (Wage Order No. 4, § 1(B); see Cal.

Code Regs., tit. 8, § 11040.) Because Wage Order No. 4 extended

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

the state’s broad definition of compensable work to the

represented employees, and because there is no clear indication

that the represented employees agreed to forgo that right in the

relevant MOUs, I would allow their minimum wage claims to

proceed. In addition, because the CalHR Pay Scale Manual can

be harmonized with the requirements of Wage Order No. 4, I see

no obstacle to giving effect to both schemes in a manner that

allows the unrepresented employees to pursue minimum wage

compensation for entry-exit walk time under the wage order.

Our longstanding rule that we interpret state wage and hour

laws to “promote employee protection” (Mendiola v. CPS

Security Solutions, Inc. (2015) 60 Cal.4th 833, 840) compels me

to dissent from those portions of today’s opinion.

I.

Today’s opinion concludes that the represented plaintiffs

“agreed through the collective bargaining process to forgo

compensation for entry-exit walk time.” (Maj. opn., ante, at

p. 30.) But nothing in the text of the MOUs or the record of the

bargaining history indicates that the California Correctional

Peace Officers Association (CCPOA) intended to forgo any

entitlement that its members may have to minimum wage

compensation for entry-exit walk time under Wage Order No. 4.

Through the MOUs, the represented plaintiffs “agreed to

four hours’ pay for ‘pre and post work activities’ in a recurring

28-day work period, and the record supports the trial court’s

finding that the phrase ‘pre and post work activities’ was used

by the parties to refer to duty-integrated walk time.” (Maj. opn.,

ante, at p. 27.) In concluding that the represented plaintiffs

agreed to forgo compensation for entry-exit walk time, the court

explains that each MOU “included a heading that read ‘Entire

2

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

Agreement,’ followed by a provision that stated: ‘This [MOU]

sets forth the full and entire understanding of the parties

regarding the matters contained herein . . . .’ . . . Because the

MOUs ‘set[] forth the full and entire understanding of the

parties regarding the matters contained [t]herein,’ and because

compensation for pre- and postwork activities was one of the

‘matters contained’ in each of the MOUs, the MOUs precluded

compensation for entry-exit walk time by not making any

provision for it.” (Id. at pp. 30–31.)

Although it may be plausible to adopt such a reading of

the MOUs, it is equally plausible to understand “the matters

contained herein” as referring only to matters addressed by the

specific provisions of the MOUs — i.e., duty-integrated walk

time, and not “compensation” generally or “pre- and postwork

activities” generally. On this view, the parties reached an

agreement on compensation for duty-integrated walk time and

simply did not reach an agreement on entry-exit walk time.

But even if we assume the represented plaintiffs agreed to

forgo compensation for entry-exit walk time in the 1998–1999

MOU, it is clear from the bargaining history that they did not

agree to forgo any current or future protections to which they

may be entitled under state wage and hour law. At no point

during negotiations over the 1998–1999 MOU was there any

indication that the contract provisions addressing “pre- and

postwork activities” were meant to displace state wage and hour

law. When questioned at trial, the state’s chief negotiator,

David Gilb, testified that there was no discussion about CCPOA

waiving any of its members’ state wage and hour law rights.

According to Gilb, “The issue never came up in bargaining”:

3

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

“Q: Do you recall there any being [sic] discussion

whatsoever during the 1998 negotiations with

respect to whether CCPOA was offering to or

attempting on behalf of its members to waive any

state wage and hour laws?

“A: They were not.

“Q: Do you recall any discussions during the 1998–

1999 negotiations in which any representative of

CCPOA made any concession or statement that

you interpreted as a concession that state

minimum wage law was either waived or

otherwise agreed to not be utilized in determining

the rights of CCPOA members?

“A: They made no statements. The issue never came

up in bargaining.

“Q: So [sic] the extent that you do not recall any

discussion of state wage and hour law, you would

agree nobody at CCPOA made a statement or

comment that was communicated to the State that

you interpreted as an intent to waive any such

wage and hour rights of the employees.

“A: It did not.”

It is not surprising that the parties did not discuss any

waiver by CCPOA of its members’ right to minimum wage

compensation at the time of the 1998–1999 MOU negotiation.

In 1998, the IWC wage orders did not require state employers to

provide minimum wage compensation. (Maj. opn., ante, at

pp. 5–6.) In 2001, however, Wage Order No. 4 was amended to

extend minimum wage compensation to state employees, and

this guarantee, which has the same dignity and force as

statutory law (Brinker Restaurant Corp. v. Supreme Court

(2012) 53 Cal.4th 1004, 1027 (Brinker)), arguably extends to

entry-exit walk time. (Maj. opn., ante, at pp. 6–7; see Morillion

v. Royal Packing Co. (2000) 22 Cal.4th 575, 587–588.) Nothing

4

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

in the bargaining history of the 1998–1999 or later MOUs

suggests that the represented plaintiffs ever agreed to forgo the

benefits of this change in the law. Even if the represented

plaintiffs agreed to forgo minimum wage compensation for

entry-exit walk time at a time when they had no right to such

compensation under state law, that agreement cannot plausibly

be understood to include agreement to forgo such compensation

at a time when they did have a right to such compensation

under state law. As the quotations from Gilb’s testimony show,

CCPOA never agreed to waive any of its members’ rights to

current or future wage and hour protections under state law.

The 2001 revision to Wage Order No. 4 changed the

default law governing the relationship between state employers

and their employees. From 2001 onward, the burden was on the

employer to seek a concession from its employees that entry-exit

walk time would not be compensable in future MOUs. Yet

nothing in the bargaining history of the subsequent MOUs

indicates that the parties revisited this issue or that CCPOA

later agreed to waive any right its members may have to

minimum wage compensation under the amended wage order in

exchange for some other benefit. Thus, there is no basis in the

text or bargaining history of any of the MOUs, either before or

after 2001, for concluding that the represented plaintiffs agreed

to forgo minimum wage compensation for entry-exit walk time

under Wage Order No. 4 as revised in 2001.

Today’s decision awards the employer an exemption from

Wage Order No. 4’s potential applicability to entry-exit walk

time, even though the parties never negotiated over this issue

after the IWC extended the wage order’s minimum wage

requirement to state employees in 2001. On its face, the court’s

opinion seems to suggest that any state employee union seeking

5

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

to preserve state law rights not addressed in an MOU’s specific

provisions must incorporate into the MOU an express

reservation of all state law provisions conferring such rights,

present or future. This is in substantial tension with extensive

case law holding that waiver of statutory rights in collective

bargaining occurs only when such waiver is “clear and

unmistakable.” (Choate v. Celite Corp. (2013) 215 Cal.App.4th

1460, 1465; see Vasserman v. Henry Mayo Newhall Memorial

Hospital (2017) 8 Cal.App.5th 236, 245; Mendez v. Mid-Wilshire

Health Care Center (2013) 220 Cal.App.4th 534, 543; Vasquez v.

Superior Court (2000) 80 Cal.App.4th 430, 432; 14 Penn Plaza

v. Pyett (2009) 556 U.S. 247, 272 [same rule for federal statutory

rights]; Metropolitan Edison Co. v. NLRB (1983) 460 U.S. 693,

708.) “[S]ilence in a bargaining agreement with respect to an

issue previously in dispute does not meet the test of ‘clear and

unmistakable’ language of relinquishment of that issue.”

(Oakland Unified School Dist. v. Public Employment Relations

Bd. (1981) 120 Cal.App.3d 1007, 1011.)

The court’s reliance on the Legislature’s approval of the

post-2001 MOUs is also unavailing. Although the Ralph C. Dills

Act (the Dills Act) (Gov. Code, § 3512 et seq.), allows for an MOU

to supersede other state law, such supersession requires

legislative approval (Gov. Code, § 3517.5) if an MOU would

amend any statutory provision not specifically designated in the

Dills Act itself. The Dills Act enumerates the statutory

provisions over which “the memorandum of understanding shall

be controlling without further legislative action” when a

provision is “in conflict with the provisions of a memorandum of

understanding.” (Gov. Code, §§ 3517.6, 3517.61.) Wage Order

No. 4 is not one of the enumerated provisions; thus, in order to

supersede it, an MOU must be presented to and approved by the

6

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

Legislature. Senate Bill No. 65, which authorized the 2001–

2006 MOU at issue here, listed several statutory provisions that

the MOU superseded, but it made no mention of Wage Order

No. 4 or minimum wage compensation. (Sen. Bill No. 65 (2001–

2002 Reg. Sess.) § 5.) And the parties have not pointed to

anything in the bill’s legislative history indicating that the MOU

was intended to supersede the minimum wage provisions of

Wage Order No. 4. Thus, the very legislation authorizing the

2001–2006 MOU confirms that the parties made no agreement

displacing the represented plaintiffs’ right to compensation for

entry-exit walk time under Wage Order No. 4.

In sum, the 2001 revision to Wage Order No. 4 changed

the baseline expectations with respect to minimum wage

compensation for entry-exit walk time. Because there is no

indication, much less a clear and unmistakable indication, that

the represented plaintiffs agreed to waive any right they may

have to such compensation in the post-2001 MOUs, I would

allow their claim for such compensation to proceed.

II.

As for the unrepresented plaintiffs, today’s opinion

concludes that Wage Order No. 4 and CalHR’s Pay Scale

Manual are in “direct conflict” (maj. opn., ante, at p. 39) and

“cannot be harmonized” (id. at pp. 43–44) with respect to their

definitions of compensable work time, and that the Pay Scale

Manual’s definition must prevail because of “CalHR’s more

specific authority” (id. at p. 44). But I see no direct conflict here.

Nor do I think it necessary or wise to opine on whether the Pay

Scale Manual is entitled to the same degree of judicial deference

as IWC wage orders. As the court acknowledges, we must accord

great deference to IWC wage orders, and we must “harmonize[]”

7

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

those orders with other statutory directives whenever possible.

(Id. at p. 38.) Such harmony is achievable here because the Pay

Scale Manual can be readily construed in a manner that poses

no obstacle to the unrepresented plaintiffs’ minimum wage

claim for entry-exit walk time under Wage Order No. 4.

In interpreting wage orders, we have long observed the

“remedial nature” of the legislative enactments empowering the

IWC to regulate “wages, hours and working conditions for the

protection and benefit of employees.” (Industrial Welfare Com.

v. Superior Court (1980) 27 Cal.3d 690, 702; see id. at pp. 697–

698 [IWC’s authority also derives from article XIV, section 1 of

the California Constitution].) Wage orders are to be “liberally

construed with an eye to promoting [employee] protection[s]”

(Industrial Welfare, at p. 702), and “courts have shown the

IWC’s wage orders extraordinary deference, both in upholding

their validity and in enforcing their specific terms” (Martinez v.

Combs (2010) 49 Cal.4th 35, 61 (Martinez)). Because wage

orders have “the same dignity as statutes,” they “must be given

‘independent effect’ separate and apart from any statutory

enactments.” (Brinker, supra, 53 Cal.4th at p. 1027.) Thus,

insofar as we are able, we are required to give “independent

effect” to Wage Order No. 4’s minimum wage protections

“separate and apart from” the Pay Scale Manual. Even if the

Pay Scale Manual is the product of “CalHR’s more specific

authority” (maj. opn., ante, at p. 44), we must still give effect to

the terms of the IWC’s wage order if possible. Only in the case

of a direct and irreconcilable conflict may we consider declining

to give effect to the wage order.

The text of the Pay Scale Manual contains nothing that

expressly excludes the unrepresented employees from the wage

order’s coverage. Nor does it specifically address the availability

8

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

of minimum wage compensation for entry-exit activities. By

contrast, the 2001 revision to Wage Order No. 4 expressly

extended the “Definitions” and “Minimum Wage” sections to

apply to state employees (Cal. Code Regs., tit. 8, § 11040,

subd. 1(B)), even as the provisions addressing “Daily Overtime”

and “Alternative Workweek Schedules” were not extended to

apply to state employees (id., subds. (1)(B) & (3)). There is no

conflict between the Pay Scale Manual and Wage Order No. 4:

The Pay Scale Manual governs the regular and overtime pay of

the unrepresented employees as members of “Work Week Group

2,” and Wage Order No. 4 governs their entitlement to minimum

wage compensation for other time worked.

Thus, Wage Order No. 4 and the Pay Scale Manual are

overlapping administrative schemes that can both be enforced.

Wage Order No. 4 defines compensable work time broadly, using

a definition that arguably includes entry-exit walk time. But

Wage Order No. 4 applies only in part to state employees.

Specifically, its minimum wage provision applies, but not its

overtime provision (Wage Order No. 4, § 1(B)), and its minimum

wage provision does not apply to administrative, executive, or

professional employees (id., § 1(A)). Meanwhile, the Pay Scale

Manual defines compensable work time narrowly, incorporating

the definition established by the federal Fair Labor Standards

Act of 1938 (FLSA) (29 U.S.C. § 201 et seq.). But the Pay Scale

Manual governs only the regular and overtime compensation of

employees falling within Work Week Group 2; it says nothing

about the minimum wage compensation of such employees for

hours worked outside of its definition of compensable work time.

In short, Wage Order No. 4 and the Pay Scale Manual govern

distinct forms of compensation, and there is no obstacle to

9

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

enforcing both schemes simultaneously, each within its own

sphere of application.

The court concludes that “the Pay Scale Manual occupies

the field with respect to the compensation rates of state

employees” (maj. opn., ante, at p. 45, fn. 18) because CalHR’s

regulations say: “Unless otherwise indicated in the pay plan,

the rates of pay set forth represent the total compensation in

every form except for overtime compensation.” (Cal. Code Regs.,

tit. 2, § 599.671.) Although the court’s reading of this regulatory

language is reasonable, I do not think it is the only reasonable

reading. The language also may be construed to mean that “the

rates of pay set forth represent the total compensation in every

form” for all hours worked that qualify as compensable work

time under the pay plan. In other words, within the sphere of

application of the pay plan (here, the Pay Scale Manual), the pay

plan exclusively sets forth “the rates of pay” comprising “total

compensation in every form except for overtime compensation.”

Notably, the regulation does not use a “comprehensive” phrase

such as “ ‘notwithstanding any other provision of law,’ ” which

“signals a broad application overriding all other code sections

unless it is specifically modified by use of a term applying it only

to a particular code section or phrase.” (In re Marriage of Cutler

(2000) 79 Cal.App.4th 460, 475; see Arias v. Superior Court

(2009) 46 Cal.4th 969, 983.) Because the regulation can be

reasonably construed in a manner that does not displace the

minimum wage requirement of Wage Order No. 4, that is the

construction we must adopt in light of our obligation to give

“ ‘independent effect’ ” to the wage order if reasonably possible.

(Brinker, supra, 53 Cal.4th at p. 1027.)

Today’s opinion takes insufficient account of our long

history of deference to IWC wage orders and unnecessarily

10

STOETZL v. DEPARTMENT OF HUMAN RESOURCES

Liu, J., concurring and dissenting

suggests that the Legislature’s delegation of authority to CalHR

is enough to afford its manual the same dignity as IWC wage

orders. (Maj. opn., ante, at pp. 40–41.) There is no reason here

to address whether an ordinary statutory delegation of

authority is equivalent to a constitutionally authorized

delegation of legislative, judicial, and executive authority, let

alone a delegation of authority that has been affirmed

repeatedly, over nearly a century, by “formal expressions of

legislative and voter intent” construed to insulate the IWC’s

work from judicial interference. (See Martinez, supra, 49

Cal.4th at p. 61; see Cal. Const., art. XIV, § 1.) The issue has

not been briefed by the parties, and the court’s discussion of this

point is dictum in light of its conclusion that the wage order does

not govern the unrepresented plaintiffs’ claims.

In sum, I agree with the trial court that CalHR intended

the FLSA standard to define compensable work time for

purposes of calculating the unrepresented plaintiffs’ regular and

overtime compensation. But this conclusion does not foreclose

those plaintiffs’ minimum wage claims. Although compensable

work time for the purpose of calculating regular and overtime

compensation is governed by the narrow FLSA definition,

compensable work time for the purpose of paying the minimum

wage is governed by the broader Wage Order No. 4 definition.

I respectfully dissent from the court’s rejection of the

represented plaintiffs’ and the unrepresented plaintiffs’

minimum wage claims.

LIU, J.

I Concur:

CUÉLLAR, J.

11

See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Stoetzl v. State of California

__________________________________________________________________________________

Unpublished Opinion

Original Appeal

Original Proceeding

Review Granted XXX 14 Cal.App.5th 1256

Rehearing Granted

__________________________________________________________________________________

Opinion No. S244751

Date Filed: July 1, 2019

__________________________________________________________________________________

Court: Superior

County: San Francisco

Judge: John E. Munter

__________________________________________________________________________________

Counsel:

Carroll, Burdick & McDonough, Laurie J. Helper; Squire Patton Boggs (US), David M. Rice; Messing

Adam & Jasmine, Jack T. Friedman, Gary M. Messing, Gregg McLean Adam, Yonatan L. Moskowitz,

Monique Alonso; Goyette and Associates, Inc., and Gary G. Goyette for Plaintiffs and Appellants.

Kronick, Moskovitz, Tiedemann & Girard, David W. Tyra, Kristianne T. Seargeant; Joan A. Markoff,

Frolan R. Aguiling, Christopher E. Thomas and David D. King for Defendants and Respondents.

Counsel who argued in Supreme Court (not intended for publication with opinion):

Gregg McLean Adam

Messing Adam & Jasmine

235 Montgomery Street, Suite 828

San Francisco, CA 94104

(415) 266-1800

David W. Tyra

Kronick, Moskovitz, Tiedemann & Girard

400 Capitol Mall, 27th Floor

Sacramento, CA 95814

(916) 321-4500