Public Meeting

July 11, 2003

State Capitol

Senate Room 2040

Sacramento, California



Industrial Welfare Commission









CYNTHIA JUDY, Hearing Reporter



Proceedings 4

Report by Legal Council - IWC Authority to Act on 5

Proposed Amendments to Wage Order 9

Proposed Amendments to Wage Order 9 8

BARRY BROAD, Law Offices of Barry Broad 8

DOUGLAS BARTON, Hanson, Bridgett, Marcus, Vlahos 11 & Rudy, LLP

JOSHUA SHAW, California Transit Association

PETER COOPER, California Labor Federation J. P. JONES, United Transportation Union

ALLEN DAVENPORT, Service Employees International Union

CHRISTOPHER W. KAHN, Sloat, Higgins, Jensen and Associates

P. SUE ZUHLKE, Orange County Transportation Authority

SUZANNE FOX, Los Angeles County Metropolitan Transit Authority

New Business


Certificate of Reporter/Transcriber



(Time noted: 10:04 a.m.)

COMMISSIONER DOMBROWSKI: Okay. I'm going to call the meeting to order.

Let the record show we have Commissioners Cremins, Rose, Dombrowski, and Guardino, formerly known as Coleman.

Congratulations on your marriage.


COMMISSIONER DOMBROWSKI: Just so all the commissioners understand what we're at, today's proposal for Wage Order 9, which concerns the transportation industry applying meal and rest period requirements, certain public transit drivers --

Oh, Commissioner Bosco has just arrived.


COMMISSIONER DOMBROWSKI: Just briefly, to recap, we've had a wage board meet on the issue. The wage board adopted recommendations by a two-thirds vote. Subsequently there's been questions raised about the legality of the IWC's authority in this area. You see on the agenda Item Number 2. I've asked for a report from legal counsel concerning that issue.

I want to jump to that first, for, I think, obvious reasons, so we can get that clarified.

I would like to take -- just have Marguerite give us a brief report, and then take public comment on Item Number 2 at this point, if that's okay with everyone.


MS. STRICKLIN: Well, you all received my letter to Bridget Bane which basically sets forth my legal opinion. I won't go into that. But basically, I do believe that the IWC has the authority to proceed.

At this stage, what you're -- what you would be doing, based on the two-thirds vote of the wage board, is merely putting out proposed regulations for public hearing. Those regulations have to include those items that were voted on by two thirds of the wage board.

After the hearings is when you would consider adopting those proposed regulations. But we're not at that stage yet.

Unless you have any other questions --

COMMISSIONER DOMBROWSKI: Anyone wish to make public comment?

(No response)

COMMISSIONER BOSCO: May I? I actually have one question.

As I understand it, the way this works is that if the wage board, either unanimously or by a two-thirds vote, agrees on a proposal, that we're obligated to enact that proposal unless it was illegal or some other impediment. Is that true?

MS. STRICKLIN: The two Labor Code provisions that you would look at are Labor Code 1178.5(c), which basically talks about what you've said, the setting of proposed regulations for public comment. And the language specifically says:

"The proposed regulations shall include any recommendation of the wage board which received the support of at least two thirds of the members of the wage board."

After those public hearings, you'll have to have a meeting to decide whether to adopt the proposed regulations.

And if you look at 1182(a), it says:

"However, with respect to proposed regulations based on recommendations supported by at least two thirds of the wage board, the Commission shall adopt such proposed regulations unless it finds that there is no substantial evidence to support such recommendation."

And whether it's illegal would certainly be not substantial evidence to support it.

COMMISSIONER BOSCO: But that's a fairly high bar, isn't it, to have "no substantial" --


COMMISSIONER DOMBROWSKI: -- backup, in effect? I mean --

MS. STRICKLIN: Yes. And that -- that involves just looking at not just the hearings that you're about to have, but also all the proceedings up to this point. So that would be the entire record that you'll be looking at in making your decision.

COMMISSIONER BOSCO: So we would have to enact the wage board's recommendation unless it were illegal or there was no substantial --

MS. STRICKLIN: Evidence.

COMMISSIONER BOSCO: -- evidence to support it.

MS. STRICKLIN: That's correct.

COMMISSIONER BOSCO: No substantial evidence.


COMMISSIONER BOSCO: So, it seems like, when it goes from here, the people opposed to it would have a pretty heavy burden to prove.

MS. STRICKLIN: Right. But they'll certainly have the opportunity to present whatever they'd like to present during the proposed hearings.

COMMISSIONER BOSCO: But would -- in effect, wouldn't they be limited to there being no substantial evidence?

MS. STRICKLIN: Showing you that there's no substantial evidence, yes.



Seeing no one who wants to give comment on Item Number 2, let's go to Item Number 1, then, consider the possible action.

I have a number of cards here. I don't know how to divvy them up, and so I'm just going to ask that the parties who -- let's put it -- are in favor of the adoption, come up first. And then, after they're done, I'll have parties opposed to it.

MR. BROAD: Mr. Chairman and members, Barry Broad. I represent a number of unions who are concerned with this issue, but I was a member of the wage board.

To my right is Mr. Barton.

We're here together -- Mr. Barton represents the employers -- because after the meeting in January when the matter was referred to the wage board with the admonition from Commissioner Bosco that it seemed to him that, on this issue, these parties should be able to sit down and work something out, Mr. Barton and I, as kind of somewhat appointed designees of each side, sat down and had a very fruitful discussion, which largely involved me making enormous concessions to Mr. Barton's -- Mr. Barton's reasonable demands. And --

COMMISSIONER DOMBROWSKI: Mr. Broad, could you just get to the point?


MR. BROAD: And --

COMMISSIONER BOSCO: Do you think we're believing all of that?


COMMISSIONER DOMBROWSKI: I've always just wanted to say that to you.


MR. BROAD: I will have my opportunity, Mr. Dombrowski, to say it back, I'm sure, at some point.

Anyway --


MR. BROAD: -- we went to the wage board with a joint proposal that was adopted by the wage board. And it gave enormous flexibility to the public transit employers on how to work out this process.

Basically, through the collective bargaining process, essentially the parties need to explicitly provide in the collective bargaining agreement some means for achieving meals and rest breaks. We suggested and adopted, by more than a two-thirds vote, language in addition that we suggest would go in the "Statement of Basis" to make it clear that we mean maximum flexibility, that is to say that it's up to the parties to determine the duration and the timing, the schedule, however they want to work it out, in the same way that there is maximum flexibility in the overtime rules under collective bargaining to figure out what constitutes overtime and when to have it and how to pay it. But it does have to be provided for. It's similar in that regard.

We, on the labor side, agreed in that process to waive the penalties that would apply, provided the parties have a way of adjudicating this through the collective bargaining agreement. That, from our perspective, was an enormous concession because, in effect, a dispute over this matter is borne financially in equal measure by the employer and the union on one of these issues. And that's quite unique, and it's a significant issue.

It is, however, a reflection of the maturity of collective bargaining in this industry. It's an almost entirely unionized industry with a long history of collective bargaining.

In the end, ultimately we feel that this will get worked out at the bargaining table. It's not rocket science. It's not going to be very difficult. Most of the agencies have systems for dealing with this now. They just have to make them workable and functioning.

So, with that, I would urge that you move to accept the wage board report and adopt this proposal.

Thank you.

MR. BARTON: I'll just add, briefly, my assent to that. You probably recall -- I'm sure Mr. Bosco, in particular recalls -- that I was extremely pessimistic when you directed a wage board be established that we'd be able to come up with something that would suit the needs of the industry, which has such highly variable means to serve the public and meet its other responsibilities. And my pessimism proved not to be warranted, because I think there was exactly the sort of give-and-take that you anticipated. And I was personally quite appreciative to see that, and I think most other transit entities that I'm familiar with were as well.

And what's key to this is that it does permit, through the collective bargaining process, for -- for these issues to be accommodated to the needs and preferences both of the agency and the public it serves, on one hand, and employees, on the other.

And the "Statement of Basis," which was part of the recommendation, that we would urge be included in that, I think, is a key interpretive provision, you know, that has made clear that what the parties intend, in terms of the wage board resolution that Barry Broad and I had to put together, is that there be maximum flexibility, provided that some provision is made about these topics. And that seemed to be an appropriate formula, given how mature collective bargaining is in this industry.

So I have no reservations at all in recommending this, and I, in turn, did support it at the wage board.


COMMISSIONER BOSCO: Maybe we could get those two to resolve the budget.


MR. SHAW: Good morning, Mr. Chairman, members. Joshua Shaw. I'm the executive director of the California Transit Association. Our trade organization represents the state's public transit operators, specifically the management and governing boards of your local community public transit operators.

Our leadership has directed us to be in support of the proposed wage order amendments, particularly with emphasis on if you include the "Statement as to the Basis" in your official record, because, as explained, it does go a little bit further in explaining the terms.

And I just want to clarify that this issue for us has been difficult, and I want to clarify for members of the Commission where we have been versus where we are now. You'll recall, probably, that we were resolutely and strongly in opposition to an earlier proposal by our labor partners which would have simply eliminated the exemption currently enjoyed by public transit agencies in Wage Order Number 8, and therefore applied, in our view, the very strict, very costly rest and meal breaks that are contained otherwise in Wage Order Number 9 for the private sector. We were opposed to that, and we would still be opposed to that, and we will always be opposed to that.

In the meantime, in the face of our partners' strong desire to obtain some kind of treatment of rest and meal breaks for public transit agencies, we recognize that they would probably go to the ends of the earth to obtain some sort of relief, so we did work out a solution with them that provides some of what they want, but some protections for us. It's not, we hope, as costly or as burdensome as the strict rest and meal breaks, but it is clearly different than the current status, which is something new for us that we're going to have to bear. Therefore, there are absolutely members of our organization who are opposed, and I think you'll hear from them shortly, and maybe others not in the room.

But for the most part, we felt that doing an agreement, a compromise with our labor partners today would save us the possibility of, frankly, suffering a more costly, more burdensome imposition of something that we are opposed to, either tomorrow or sometime in the future. So we're here today to urge you really to move forward with the wage board report.

Thank you.


MR. COOPER: Peter Cooper, California Labor Federation.

We're asking for your support for this measure. We feel that it's a reasonable solution that will benefit a significant number of workers in the state. And it does, as -- to echo Mr. Broad's comments -- it does include the requirement that meal and rest periods are expressly considered. And we ask for your support.

MR. JONES: Mr. Chairman, members, James Jones, with the United Transportation Union, representing many thousands of transit drivers in the state, including the largest, in Los Angeles, the MTA.

I, being a member of the board, strongly urge your support of this issue. I embrace and incorporate in my testimony everything that's been said. In the interests of brevity, I'd just ask for your support when you go to vote.

Thank you.

MR. DAVENPORT: Mr. Chairman and members, Allen Davenport. I'm with the Service Employees International Union. We represent non-driving employees in many of these transit districts.

And we are pleased here to be in support of the efforts of our brothers and sisters who drive the buses in this effort and urge your support.

COMMISSIONER DOMBROWSKI: Any other witnesses in support?

(No response)

COMMISSIONER DOMBROWSKI: Witnesses in opposition?

MR. KAHN: Good morning. I'm Chris Kahn, with Sloat, Higgins, Jensen and Associates. We represent the Orange County Transportation Authority. We are in opposition to the proposed Wage Order Number 9.

With all due respect to the agreement that was put in place, we just wanted to clarify that there are eleven public transit entities throughout the state that are in opposition to the proposed wage order.

I'd like to introduce Sue Zuhlke, from the Orange County Transportation Authority, to give some further testimony.

MS. ZUHLKE: Good morning, and thank you for allowing me to come before you and testify.

Ken Smart, our legal counsel, has provided a written opinion as to whether or not the IWC can go ahead and adopt these amendments without statutory authority to allow the exception. And that legal opinion has been distributed to the Commission.

AB 60, the 8-hour day restoration and Workplace Flexibility Act of 1999, among many of its provisions, codified the requirement for the 30-minute meal periods and authorized the IWC to retain any exemption that was contained in any valid wage order in effect in 1997. AB 60 also exempted from the entire chapter employees covered by valid collective bargaining agreements, if the agreement expressly provides for the wages, hours of work, and working conditions of the employees, and if those agreements also provided minimum wage rates for all overtime worked and regular hourly rates of pay of not less than 30 percent more than minimum wage. The IWC retained the public agency exemptions, and in doing so, exempted public agency employees from the 8-hour daily overtime rule, reporting time pay, meal and rest periods, along with many other provisions.

In 2000, Senate Bill 88 amended Labor Code Section 516 limiting the IWC's authority to amend working conditions with respect to meal periods.

In 2001, Senate Bill 1208 limited the collective bargaining exemption to overtime pay and alternative workweek provisions of the Labor Code.

Absent amendments to the Labor Code Section 515(b)(2) to alter the IWC's authority to retain exemptions contained in valid wage orders in effect in 1997, it is our belief, as demonstrated in the current wage orders, that the changes in law enacted by SB 88 were not intended to affect public agencies' exemptions from meal period requirements. However, if the public agency exemption from meal periods is removed, we would be subject to the 30-minute meal period requirement, and the IWC would not have the authority to carve out the collective bargaining exemption that has been recommended by the wage board.

Until such time that the IWC may receive statutory authority to provide the exemption to the meal period provision, the Orange County Transportation Authority respectfully requests that the IWC table any action on the wage board's recommendation.

At this time, I did not want to argue the points, you know, the pluses or minuses --


MS. ZUHLKE: -- since this meeting does not deal with that. I would, however, like to address a couple of the comments that were made.

By accepting the wage board's recommendation, immediately public transit agencies are put under the requirements for the 30-minute meal periods based on the time specified or the date specified within that wage order. We would have to collectively bargain with our operators to provide and expressly provide for meal periods in our collective bargaining agreements. I don't know about you, but I don't know too many employees that will bargain away what is already provided for them in law, which would be penalty pay if they do not receive their rest meal breaks, which could equal two hours per day, as well as their paid rest breaks and unpaid meal breaks.

Also, in the transit industry, a lot of times the operators are not allowed to leave their buses unattended. Therefore, that would constitute an on-duty meal break. And we have concerns that that would automatically mean pay for those breaks as well.

Thank you.

MS. FOX: Good morning. I'm Suzanne Fox, for LACMTA. We concur with what OCTA just said and wanted to make a couple of more points.

We're also in opposition. We don't feel that this wage order is justified at this current time. And it would be an intrusion to the collective bargaining process. We also feel that wages, benefits, and working conditions of publicly employed commercial drivers should be left to the collective bargaining process.

And we also feel that the expansion of the wage order has no justification and would result in exorbitant costs to public transit agencies, upwards of $11 million annually for MTA.

And at this time, we would just urge the WIC (sic) to let the wage order stand as it is.


Any other witnesses?

(No response)

COMMISSIONER DOMBROWSKI: Doug, could you outline timelines? Assuming we go to public hearings, what would be -- what's the schedule for this?

MR. McCONKIE: Well, since the enactment date will not be until July 1 of 2004, we would have to have everything completed -- the public hearing process, coming back to the Commission for acceptance of those regulations or alteration, depending upon the testimony provided -- that would have to be completed no later than May 1st, 2004.

So we could go out for our three public hearings any time between now and probably January or February, come back to the Commission and go through that process, do the publication process, have the final vote by no later than May 1st for an enactment date of July 1, 2004.

COMMISSIONER DOMBROWSKI: I ask that question because we don't have a budget.


COMMISSIONER DOMBROWSKI: Marguerite, what's our next steps or options?

MS. STRICKLIN: You can vote to put the proposed regulations out for public hearing. That would require at least a 30-day notice, but as Doug was saying, you have a lot of time to hold those hearings, if it's not going to be effective until 2004.

COMMISSIONER DOMBROWSKI: So we haven't -- we don't have any choice but to go to public hearing, do we?

MS. STRICKLIN: That's correct.

COMMISSIONER DOMBROWSKI: Okay. I just wanted to make that clear.

MS. STRICKLIN: But I'd like you to take the -- make the vote to do that so it will be on the record.


Doug, do you want to --

MR. McCONKIE: Call the roll?


MR. McCONKIE: Commissioner Cremins.


MR. McCONKIE: Commissioner Rose.


MR. McCONKIE: Commissioner Dombrowski.


MR. McCONKIE: Commissioner Bosco.


MR. McCONKIE: Commissioner Guardino.


COMMISSIONER DOMBROWSKI: All right. That measure is adopted. We will send the recommendations out for public hearing. However, I guess the date -- the dates of those hearings will be dependent upon the Legislature satisfying the budget and restoring some funding for us to be able to conduct those hearings, unless there's any objections to that.

I don't know what else to do.

COMMISSIONER CREMINS: We don't have a choice.

COMMISSIONER DOMBROWSKI: Right, yeah. You could pay for it on your own.



COMMISSIONER BOSCO: Well, hearings shouldn't cost too much.


MS. STRICKLIN: They just have to be recorded. And it doesn't require everyone's presence. It could also

-- but it has to be in three separate cities, so --


COMMISSIONER CREMINS: Does notification on the Internet satisfy public notice, or do you have to do a full mailing?

MS. STRICKLIN: I believe you have to do a full mailing.

MR. McCONKIE: We have to publish in the newspaper, seven newspapers -- newspapers throughout the state.

COMMISSIONER BOSCO: Well, Harold and I both come from Santa Rosa, so maybe it would be cheaper if you guys came over there.

COMMISSIONER GUARDINO: Sure. We can do that.


COMMISSIONER BOSCO: Yeah. We have a few nice rooms there.

COMMISSIONER DOMBROWSKI: All right. We'll go ahead. I think that closes out Item Number 1.

Item Number 3. Any new business?

(No response)

COMMISSIONER DOMBROWSKI: Seeing none, I'd ask for a motion to adjourn.








(Chorus of ayes)


(Thereupon, at 10:28 a.m., the public

meeting was adjourned.)




I, Cynthia M. Judy, a duly designated reporter and transcriber, do hereby declare and certify under penalty of perjury under the laws of the State of California that I transcribed the tape recorded at the Public Meeting of the Industrial Welfare Commission, held on July 11, 2003, in Sacramento, California, and that the foregoing pages constitute a true, accurate, and complete transcription of the aforementioned tape, to the best of my ability.

Dated: July 11, 2003