Opinion ID: 1312025
Heading Depth: 3
Heading Rank: 1

Heading: Background and General Principles of Review

Text: To describe the historical background of the IWC's jurisdiction and explain the applicable principles of review, we shall begin by quoting from our summary in the Industrial Welfare Commission case. The IWC is a five-member appointive board initially established by the Legislature in 1913. For the first 60 years of its existence, the IWC's mission was to regulate the wages, hours and conditions of employment of women and children employed in this state, in furtherance of such employees' `health and welfare.' To this end, the commission  beginning in 1916  promulgated a series of industry- and occupation-wide `wage orders,' prescribing various minimum requirements with respect to wages, hours, and working conditions to protect the health and welfare of women and child laborers.... In the early 1970s, a number of federal judicial decisions invalidated a substantial portion of the then-prevailing IWC wage orders on the ground that the limited application of such orders to women workers (and children) violated the prohibition on sex discrimination embodied in title VII of the federal Civil Rights Act of 1964. [Citations.] In response to these federal decisions, the California Legislature in 1972 and 1973 amended the applicable provisions of the Labor Code to authorize the IWC to establish minimum wages, maximum hours and standard conditions of employment for all employees in the state, men as well as women. [Citations.] The constitutionality of this legislative expansion of the IWC's jurisdiction to all California workers is explicitly confirmed by article XIV[,] section 1 of the California Constitution which declares: `The Legislature may provide for minimum wages and for the general welfare of employees and for those purposes may confer on a commission legislative, executive and judicial powers.' Although the 1973 modification of the IWC's jurisdiction to encompass men as well as women and minors clearly worked a substantial expansion in the number of workers affected by the commission's orders, ... the 1973 legislation did not alter the basic nature of the IWC's decision-making authority or the basic principles governing judicial review of the commission's exercise of that authority. From its inception in 1913 to the present, the commission has been vested with broad statutory authority to investigate `the comfort, health, safety, and welfare' of the California employees under its aegis [citation] and to establish (1) `[a] minimum wage ... which shall not be less than a wage adequate to supply ... the necessary cost of proper living and to maintain the health and welfare of such [employees],' (2) `[t]he maximum hours of work consistent with the health and welfare of [such employees]' and (3) `[t]he standard conditions of labor demanded by the health and welfare of [such employees] ... [.]' [Citation.] Indeed, the 1973 act  while retaining the authorizing language ... quoted above  restated the commission's responsibility in even broader terms, directing the commission continually to review and to update its `rules, regulations and policies to the extent found by the commission to be necessary to provide adequate and reasonable wages, hours, and working conditions appropriate for all employees in the modern society.' (Italics added.) [Citation.] (1) Judicial authorities have repeatedly emphasized that in fulfilling its broad statutory mandate, the IWC engages in a quasi-legislative endeavor, a task which necessarily and properly requires the commission's exercise of a considerable degree of policy-making judgment and discretion. [Citations.] Because of the quasi-legislative nature of the IWC's authority, the judiciary has recognized that its review of the commission's wage orders is properly circumscribed.... `A reviewing court does not superimpose its own policy judgment upon a quasi-legislative agency in the absence of an arbitrary decision; rather, the review is limited to an examination of the proceedings to determine whether the action is arbitrary or entirely lacking in evidentiary support or whether the agency has violated the procedure required by law; in these technical matters requiring the assistance of experts and the collection and study of statistical data, courts let administrative boards and officers work out their problems with as little judicial interference as possible.' ... (2) Moreover, past decisions additionally teach that in light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection.... `Remedial statutes such as those under consideration [i.e., the statutes governing the adoption of wage orders] are to be liberally construed. [Citation.] They are not construed within narrow limits of the letter of the law, but rather are to be given liberal effect to promote the general object sought to be accomplished.... [¶] Regulations and orders of the Industrial Welfare Commission are presumed to be reasonable and lawful.' (Italics in original.) ( Industrial Welfare Com. v. Superior Court, supra, 27 Cal.3d at pp. 700-703, fn. omitted.) (3) Further, it must be emphasized that `the construction of a statute by officials charged with its administration ... is entitled to great weight'.... ( Industrial Welfare Com. v. Superior Court, supra, 27 Cal.3d at p. 724.) Indeed, if a court concludes that the administrative construction is reasonable, it will generally defer to the agency's judgment and uphold its interpretation against challenge. (See id. at pp. 729-730; Merrill v. Department of Motor Vehicles (1969) 71 Cal.2d 907, 917, fn. 15 [80 Cal. Rptr. 89, 458 P.2d 33]; Bodinson Mfg. Co. v. California E. Com. (1941) 17 Cal.2d 321, 325 [109 P.2d 935].) (4) In the general case, of course, an administrative agency may change its interpretation of a statute, rejecting an old construction and adopting a new. ( NLRB v. Iron Workers (1978) 434 U.S. 335, 351 [54 L.Ed.2d 586, 599, 98 S.Ct. 651]; Placentia-Linda Community Hosp., Inc. v. Zaretsky (1980) 107 Cal. App.3d 850, 854 [166 Cal. Rptr. 7].) Put simply, An administrative agency is not disqualified from changing its mind.... ( NLRB v. Iron Workers, supra, 434 U.S. at p. 351 [54 L.Ed.2d at p. 599].) Even when an agency adopts a new interpretation of a statute and rejects an old, a court must continue to apply a deferential standard of review: When [the agency] does [change its mind], the courts still sit in review of the administrative decision and should not approach the statutory construction issue de novo and without regard to the administrative understanding of the statutes. ( NLRB v. Iron Workers, supra, 434 U.S. at p. 351 [54 L.Ed.2d at p. 599].) To the rule stated above, however, there is an exception: an administrative agency is precluded from changing its mind when the construction that it would reject has been definitively adopted by a court as its own. (See Crounse Corp. v. I.C.C. (6th Cir.1986) 781 F.2d 1176, 1186 [implying that an administrative agency is bound by its prior construction if that construction has been endorsed by the courts]; Royal Development Co., Ltd. v. N.L.R.B. (9th Cir.1983) 703 F.2d 363, 369 [to similar effect].) The reason for the exception seems clear: The ultimate interpretation of a statute is an exercise of the judicial power. ( Bodinson Mfg. Co. v. California E. Com., supra, 17 Cal.2d at p. 326; accord, Merrill v. Department of Motor Vehicles, supra, 71 Cal.2d at p. 917, fn. 15.)