California Supreme Court Watch

#23-94 Stone v. Alameda Health System, S279137. (A164021; 88 Cal.App.5th 84; Alameda County Superior Court; RG21092734.) Petition for review after the Court of Appeal affirmed in part and reversed in part an order in a civil action. This case presents the following issues: (1) Are all public entities exempt from the obligations in the Labor Code regarding meal and rest breaks, overtime, and payroll records, or only those public entities that satisfy the “hallmarks of sovereignty” standard adopted by the Court of Appeal in this case? (2) Does the exemption from the prompt payment statutes in Labor Code section 220, subdivision (b), for “employees directly employed by any county, incorporated city, or town or other municipal corporation” include all public entities that exercise governmental functions? (3) Do the civil penalties available under the Private Attorneys General Act of 2004, codified at Labor Code section 2698 et seq., apply to public entities?

Petition for review granted: 5/17/2023

Case fully briefed: 11/06/2023

Cause argued and submitted: 6/04/2024

Opinion filed: Judgment reversed: 8/15/2024

See the Court of Appeal Opinion.

See the Petition for Review.

See the Oral Argument.

See the California Supreme Court Opinion.  (Stone v. Alameda Health System (2024) 16 Cal.5th 1040.)

“This case concerns whether a hospital authority created by a county Board of Supervisors and authorized by the Legislature to manage the county’s public health facilities may be held liable for wage and hour violations and civil penalties under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA).1 We conclude the Legislature intended to exempt public employers such as the hospital authority from Labor Code provisions governing meal and rest breaks (§§ 226.7, 512) and related statutes governing the full and timely payment of wages (see § 220, subd. (b)). We further conclude public entities are not subject to PAGA penalties for the violations alleged here. Because the Court of Appeal reached different conclusions, we reverse its judgment.”

(fn. omitted.)

Justice Corrigan authored the opinion of the Court, in which Chief Justice Guerrero and Justices Liu, Kruger, Groban, Jenkins, and Segal* concurred.

In the news: Dumbacher & Pearlson, Calif. Ruling May Shield Public Employers From Labor Claims, Law360 (Nov. 27, 2024).