Court Opinion

ID: 2817764
Source: CourtListenerOpinion
Date Created: 2015-07-16 16:19:00.547436+00
Date Added: 2024-06-11T08:34:24.291424
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

CERTIFICATION FROM THE                    )
UNITED STATES DISTRICT                    )     No. 90932-6
COURT FOR THE WESTERN                     )
DISTRICT OF WASHINGTON                    )
          IN                              )     ENBANC
                                          )
ANA LOPEZ DEMETRIO and                    )
FRANCISCO EUGNIO PAZ,                     )
                                          )
                    Plaintiffs,           )
                                          )
             v.                           )
                                          )
SAKUMA BROTHERS FARMS,                    )      Filed      JUL 1 6 2015
INC.,                                     )
                                          )
                    Defendant.            )
     _____________________ )
      Yu, J.- We have been asked to answer two certified questions arising from

a class action employment lawsuit pending in federal district court. Washington

labor regulations allow employees to take short rest breaks "on the employer's time."

When applied to employees paid by the hour, that means employers must pay

employees their regular hourly rate during these brief periods of inactivity. Hourly
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

employees, in other words, remain "on the clock" during breaks under undisputed

Washington law.

      To answer the certified questions here, we must interpret "on the employer's

time" and apply the language to agricultural employees who are not paid by the hour

but rather by the piece. A piece rate is tied to the employee's output (for example,

per pound of fruit harvested) and is earned only when the employee is actively

producing. Thus for employees paid a piece rate, the clock stops during periods of

inactivity however brief. The central issue is whether employers can fold payment

for rest breaks, when the clock is stopped, into the piece rate consistently with the

mandate that breaks be paid "on the employer's time." This phrase appears in the

regulation applicable to agricultural employees:

             Every employee shall be allowed a rest period of at least
             ten minutes, on the employer's time, in each four-hour
             period of employment. For purposes of computing the
             minimum wage on a piecework basis, the time allotted an
             employee for rest periods shall be included in the number
             of hours for which the minimum wage must be paid.
WAC 296-131-020(2) (emphasis added).

      We rely on the plain language of that regulation to conclude that employers

must pay employees for rest breaks separate and apart from the piece rate. An all-

inclusive piece rate compensates employees for rest breaks by deducting pay from

the wages the employee has accumulated that day. Hourly employees do not finance

their own rest breaks in this way, and requiring pieceworkers to do so strips the

                                          2
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

phrase "on the employer's time" of any practical meaning. That same language

requires that rest breaks for pieceworkers be paid at least at the applicable minimum

wage or the employee's regular rate, whichever is greater.

                                  BACKGROUND

      This case began in 2013 when two workers sued Sakuma Brothers Farms Inc.

in federal district court on behalf of all seasonal and migrant agricultural workers

Sakuma employs (Workers). Sakuma operates a berry farm in Skagit County and

hires hundreds of migrant and seasonal workers to harvest its crop each year. These

Workers, many of whom speak little English, travel to the Skagit Valley to handpick

Sakuma's strawberries, blackberries, and blueberries. For that work, Sakuma pays

a "piece rate" wage based on the Workers' productivity-e.g., an amount per pound

or per box of fruit harvested. The piece rate is the only compensation the Workers

receive. As a Sakuma representative testified, "[I]f the picker is not picking ... , the

picker is not earning money." Doc. 33, at 7 (Decl. of Marc C. Cote in Supp. of Mot.

To Certify Legal Questions to Wash. Supreme Ct.).

      The Workers' class action lawsuit asserted several state and federal claims

arising from Sakuma's use of piece rate wages. In the only claim relevant here, the

Workers allege that Sakuma deprived them of paid rest breaks required by WAC

296-131-020(2), which provides that "[e]very employee shall be allowed a rest

period of at least ten minutes, on the employer's time, in each four-hour period of

                                           3
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

employment." (Emphasis added.) The Workers contend "on the employer's time"

means that Sakuma must pay a wage separate from the piece rate for the 10-minute

period they are on break, since no piece rate wages accumulate during that time.

Sakuma responds that it sets the piece rate with rest periods in mind and that breaks

are therefore "on the employer's time" as regulated.

      While the case was pending in federal court and after some discovery, Sakuma

agreed to settle each of the Workers' retroactive claims. But Sakuma denied liability

and expressly preserved its challenge to the Workers' prospective claim that

"Sakuma must pay for the time piece rate workers spend in rest breaks under WAC

296-131-020(2)." Doc. 27, at 17 (Stipulation of Settlement & Release between

P1s. & Def.). Thus the settlement does not affect the Workers' claim for declaratory

relief requiring pay separate and apart from the piece rate for these brief rest periods

going forward. The federal district court granted the Workers' motion to certify to

us two questions related to that claim.

                             CERTIFIED QUESTIONS

             1.   Does a Washington agricultural employer have an
      obligation under WAC 296-131-020(2) and/or the Washington
      Minimum Wage Act [(MWA), ch. 49.46 RCW,] to separately pay
      piece-rate workers for the rest breaks to which they are entitled?
            2.    If the answer is "yes," how must Washington agricultural
      employers calculate the rate of pay for the rest break time to which
      piece-rate workers are entitled?

                                           4
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

Doc. 44, at 1-2 (Order Granting in Part Stipulated Mot. regarding Certified

Questions to Wash. Supreme Ct.).

                                    ANALYSIS

      We answer certified questions de novo and in light of the federal court record.

Frias v. Asset Foreclosure Servs., Inc., 181 Wash. 2d 412, 420, 334 P.3d 529 (2014).

                              First Certified Question

      Though Sakuma and the Workers dispute the resolution of the first certified

question-whether pay separate from the piece rate is owed to pieceworkers for rest

breaks-they agree on several points. They agree that employers must provide rest

breaks to agricultural employees. They agree that agricultural employees are entitled

to some form of payment for those breaks. And, guiding the analysis here, they

agree that to answer the question we must interpret WAC 296-131-020.              The

Department of Labor and Industries adopted that regulation in 1990, yet in 25 years

no Washington court has defined its scope or applied it to workers paid by piece rate.

      We interpret regulations using the same rules we use to interpret statutes.

First, we examine the plain language of the regulation; if that language is

unambiguous it controls. Silverstreak, Inc. v. Dep 't of Labor & Indus., 159 Wash. 2d
868, 881, 154 P.3d 891 (2007).       Language is unambiguous if it has only one

reasonable interpretation. Cerrillo v. Esparza, 158 Wash. 2d 194, 201, 142 P.3d 155

                                          5
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

(2006). The regulation at issue, WAC 296-131-020(2), applies only to agricultural

employees and provides:

            Every employee shall be allowed a rest period of at least
            ten minutes, on the employer's time, in each four-hour
            period of employment. For purposes of computing the
            minimum wage on a piecework basis, the time allotted an
            employee for rest periods shall be included in the number
            of hours for which the minimum wage must be paid.
      The focus of most of the parties' and amici's attention is on the meaning of

"on the employer's time." The plain and ordinary meaning of this phrase is clear:

employers must pay agricultural employees during their 10-minute breaks. And

when applied to pieceworkers, the only reasonable interpretation is that "on the

employer's time" requires pay separate from the piece rate. Since the piece rate is

earned only while the employee is working (i.e., no pay accrues during rest breaks)

the Workers' rest breaks cannot reasonably be said to be "on the employer's time"

if paid by the piece. The only way to give meaning to the phrase in this context is

to require compensation separate from the piece rate for rest breaks.        While

Sakuma's suggestion that WAC 296-131-020(2) allows an all-inclusive piece rate is

perhaps a conceivable interpretation of the regulation, it is not a reasonable one.

Cerrillo, 158 Wash. 2d at 201 (holding, "'a statute is not ambiguous merely because

different interpretations are conceivable"' (internal quotation marks omitted)

(quoting Agrilink Foods, Inc. v. Dep't of Revenue, 153 Wash. 2d 392, 396, 103 P.3d
1226 (2005))).

                                         6
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

      Yet even if WAC 296-131-020(2) were ambiguous, we resolve ambiguities in

ways that "further, not frustrate, the[] intended purpose" of the regulation. Bostain

v. Food Express, Inc., 159 Wash. 2d 700, 712, 153 P.3d 846 (2007) (quoting Burnside

v. Simpson Paper Co., 123 Wash. 2d 93, 99, 864 P.3d 937 (1994)).              Sakuma's

interpretation permitting an all-inclusive piece rate conflicts with over a decade of

case law interpreting a similar rest break regulation.

      We have previously considered the phrase "on the employer's time" as it

appears in a different regulation. Rest breaks for nonagricultural employees are

governed by WAC 296-126-092, which also "allow[ s] a rest period of not less than

ten minutes, on the employer's time, for each four hours of working time." WAC

296-126-092( 4). The Department expressly patterned WAC 296-131-020(2)' s rest

break provision for agricultural employees on WAC 296-126-092(4).

      Since WAC 296-131-020(2) was patterned on WAC 296-126-092(4), our

previous interpretations of the latter regulation are useful. We first interpreted WAC

296-126-092(4) and "on the employer's time" in Wingert v. Yellow Freight Systems,

Inc., 146 Wash. 2d 841, 50 P.3d 256 (2002). There we applied the regulation to a

collective bargaining agreement that provided a 15-minute break after two hours of

overtime work. If employees worked less than two hours of overtime, they received

no break. At issue was the employer's practice of excusing employees just before

                                           7
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

two hours of overtime, requiring those employees to work continuously nearly four

hours between their afternoon break and the end of their workday. Id. at 845-46.

      We held WAC 296-126-092 prohibited employees from working three hours

uninterrupted without a break, 1 even if the employee was receiving overtime pay and

notwithstanding a conflicting break provision in the employees' collective

bargaining agreement. The employer's alternate accommodation-overtime pay

and a different break schedule-was not a substitute for the policy advanced by the

rest break regulation, namely that "employees [are] afforded healthy working

conditions and adequate wages." Id. at 852. Any practice that "decrease[s] the

frequency of worker's rest periods ... thwart[s] that fundamental purpose." Id.

      Ten years after Wingert, we again interpreted WAC 296-126-092(4) in a way

that protected workers' rights. Wash. State Nurses Ass 'n v. Sacred Heart Med.

Center, 175 Wash. 2d 822, 287 P.3d 516 (2012). The employer in that case often

required employees to work through rest breaks during their eight-hour shifts.

Although the employer would pay employees for missed rest breaks, it did not pay

overtime, since the employees were never on the employer's premises for more than

eight hours.    Citing WAC 296-126-092( 4), the MWA and "considerations of

employee health," we required the employer to compensate missed rest breaks at the

       1
          WAC 296-126-092(4) provides, "Employees shall be allowed a rest period of not less
than ten minutes, on the employer's time, for each four hours of working time .... No employee
shall be required to work more than three hours without a rest period."

                                              8
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

overtime rate. Id. at 832. We reasoned that any other interpretation created an

economic incentive for employers to encourage employees to skip breaks, a result

contrary to the intent of WAC 296-126-092 and the MWA.Id.

      The Court of Appeals has similarly interpreted WAC 296-126-092(4) to

protect the effectiveness of rest breaks. Specifically, Division One held that the

regulation "imposes a mandatory obligation on the employer" to provide a paid rest

break "'on the employer's time."' Pellino v. Brink's Inc., 164 Wash. App. 668, 688,

267 P.3d 383 (2011) (quoting WAC 296-126-092(4)). It is not enough for an

employer to simply schedule time throughout the day during which an employee can

take a break if he or she chooses. Instead, employers must affirmatively promote

meaningful break time.Id. at 691 (quoting White v. Salvation Army, 118 Wash. App.
272, 283, 75 P.3d 990 (2003)). A workplace culture that encourages employees to

skip breaks violates WAC 296-126-092 because it deprives employees of the benefit

of a rest break "on the employer's time." Id. at 679.

      Although these three cases-Wingert, Sacred Heart, and Pellino-applied

rest breaks paid "on the employer's time" to hourly workers, they guide our analysis.

More than establishing blanket rules, each of those courts looked to the purpose rest

breaks serve in light of how rest breaks were used (or not) by the employees in

context. Both parties here agree that rest breaks are critical to the health and

effectiveness of employees, especially those working long hours outside. Amicus

                                          9
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

reports that agriculture is one of the most dangerous industries in America, inflicting

its workers with high rates of repetitive and environmental injuries. Rest breaks

mitigate these dangers by allowing employees to sit, cool down, and rehydrate, and

we interpret rest break regulations to further that recuperative purpose. Wingert, for

example, held that employees cannot bargain away time for rest, even in exchange

for additional pay. And Sacred Heart and Pellino reject payment schemes that

incentivize missed rest breaks at the expense of the employee's health.

      Those principles support interpreting "on the employer's time" in WAC 296-

131-020(2) to require rest break pay separate from the piece rate. Sakuma argues

WAC 296-131-020(2) permits an all-inclusive piece rate because "the system

incentivizes employees by awarding harder-working and more productiye workers

with greater earnings." Sakuma Bros. Farms, Inc.'s Resp. Br. on Certified Questions

at 25-26.    This appears a tacit admission that the current piece rate scheme

encourages employees to "work harder" by skipping breaks. That result conflicts

with all three of the cases discussed above: it effectively decreases the frequency of

employees' rest periods; it incentivizes Sakuma to employ fewer employees; and it

fosters a culture of working through breaks. See Wingert, 146 Wash. 2d at 852; Sacred

Heart, 175 Wash. 2d at 832; Pellino, 164 Wash. App. at 679. Sakuma's interpretation is

not only inconsistent with the plain language of WAC 296-131-020(2), it is contrary

to the regulation's basic purpose.

                                           10
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

      In sum, we answer the first certified question yes. Following from the plain

language of WAC 296-131-020(2), and consistent with case law interpreting

Washington's long-standing labor policy, employers must pay a wage separate from

the piece rate for time spent on rest breaks. Given the posture of this case and the

settlement agreement releasing the Workers' claims for retrospective relief, we take

no position on the retroactivity of this rule. See Ruiz-Guzman v. Amvac Chern. Corp.,

141 Wash. 2d 493, 508, 7 P.3d 795 (2000) ("In answering federal certified questions,

we do not seek to make broad statements outside of the narrow questions and record

before us.").

                             Second Certified Question

      Next the federal district court asks us how "Washington agricultural

employers calculate the rate of pay for the rest break time" for pieceworkers. Doc.

44, at 2 (Order Granting in Part Stipulated Mot. regarding Certified Questions to

Wash. Supreme Ct.). The parties differ in their proposed answers to this question.

The Workers argue for the employee's average piece rate earnings. They would

have employers convert the piece rate by dividing the employee's weekly piece rate

earnings by the number of hours the employee worked, exclusive of rest break time,

and pay rest breaks at that de facto hourly rate (the employee's "regular rate").

Sakuma argues Washington law requires only the minimum wage per hour for

pieceworkers, though it admits paying rest breaks for its hourly employees at the

                                          11
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

employees' hourly rate.

       WAC 296-131-020(2) is silent about the rate of pay required for employee

rest breaks, whether paid by the piece or otherwise. Of course the starting point for

the calculation is the applicable minimum wage. The MWA "sets the floor below

which the agreed rate cannot fall without violating the statute." Seattle Prof'l Eng 'g

Emps. Ass 'n v. Boeing Co., 139 Wash. 2d 824, 835, 991 P.2d 1126, 1 P.3d 578 (2000)

(SPEEA) (citing ch. 49.46 RCW). 2 The second sentence of WAC 296-131-020(2)

references the MWA's floor by ensuring the quotient of an employee's piece rate

earnings by the number of hours he or she worked, inclusive of the time spent on

rest breaks, is at least the minimum wage. 3 If this de facto hourly rate falls below

       2
           Sakuma cites SPEEA to argue that separate pay for rest breaks is capped at the minimum
wage. But SPEEA is a case about contracts, not regulatory interpretation, and it has little
application here. There an employer required new employees to attend unpaid preemployment
orientation sessions. This practice was embodied in written employment contracts in which
employees agreed (1) that their attendance at orientation would be unpaid, and (2) that the terms
of employment, including salary, would begin after orientation. The employees sued, arguing they
were owed wages for attending these orientations, paid as a pro rata portion of their contractual
salary. SPEEA, 139 Wash. 2d at 833-34.
         We agreed wages were due but limited the employees' recovery to the minimum wage
based on the employment contracts they signed. Those contracts "contain[ed] fixed starting dates
for employment that excluded the mandatory preemployment orientation sessions," and under their
terms the employees were owed their salaries only after orientation. Id. at 833. Since we lack
authority to rewrite contracts, we held the contracts expressly prohibited the remedy the employees
sought. Id. at 833-34. We therefore fell back to the MWA as the measure of damages.
         There are no contradictory written contracts in the record before us. Thus SPEEA applies
in this instance only for the uncontested proposition that employers must pay at least the minimum
wage. The minimum wage is a floor, not a ceiling. That is why the minimum wage is only a
starting point when construing what WAC 296-131-020(2) requires.
         3
            An example demonstrates this calculation in practice. Suppose an employee is paid 50
cents per pound of fruit picked (the piece rate). The employee works five eight-hour days and
takes 20 minutes of rest breaks each day, as provided by WAC 296-131-020(2). The employee

                                                12
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

the minimum wage, the employer must bring up the employee's pay to the minimum.

Like every employer of piece rate workers, Sakuma already performs this minimum

wage calculation.

      As discussed earlier, however, a pieceworker's right to separate pay for rest

breaks springs not from the MWA but rather from WAC 296-131-020(2)' s mandate

that rest breaks be paid "on the employer's time." That phrase also appears in the

nonagricultural rest break regulation, which we have consistently found to require

equal treatment of every hour worked.                For instance, we found no distinction

"between regular and overtime hours worked" and held employees were entitled to

rest breaks "on the employer's time" if they worked ''regular hours, overtime hours,

or a combination of both." Wingert, 146 Wash. 2d at 848 (citing WAC 296-126-

092(4)). We also recognized that "rest periods constitute 'hours worked'" and held

that for the purposes of computing overtime, hours spent resting are treated the same

as hours spent working. Sacred Heart, 175 Wash. 2d at 831. In other words, under

WAC 296-126-092( 4) all hours worked contribute equally to the employee's right

to a rest break and there is no basis to treat the rate paid for rest breaks "on the

employer's time" differently from the rate paid for other hours worked.

has spent 38.6 hours producing and 1.4 hours on breaks, for 40 hours of total work. If the employee
produces 750 pounds of fruit, he or she earns $375.00 that week. Thus, the employer divides the
employee's total piece rate earnings ($375.00) by 40 hours, which equals only $9.38 per hour. The
employer must increase the worker's total piece rate earnings to meet the $9.47 state minimum
wage, if that is the highest applicable minimum wage in the locality.

                                                13
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

      Nothing in WAC 296-131-020(2) suggests "on the employer's time" means

something different to agricultural workers generally or to pieceworkers specifically.

In fact, the regulation is entirely consistent with our prior interpretations of "on the

employer's time" when a pieceworker's average earnings are less than or equal to

the minimum wage. Time spent on rest breaks and time spent in active work are

both hours worked for the employer and, under the second sentence of WAC 296-

131-020(2), are paid at the same rate (the minimum wage). We find no reason to

depart from this interpretation when a pieceworker's average earnings are more than

the minimum wage. Paying pieceworkers only the minimum wage for rest breaks

and a higher rate for active labor results in the same parsing of hours worked "on the

employer's time" that we rejected in Wingert and Sacred Heart.

       Because all hours worked "on the employer's time" are treated equally, we

hold that WAC 296-131-020(2) entitles pieceworkers to their regular rate of pay for

rest break time. To calculate a pieceworker's regular rate, employers again tally the

total piece rate earnings and divide those earnings by the hours the pieceworker

worked, but here the divisor excludes time spent resting. 4 This formula results in

the average rate of pay pieceworkers earn during active production (i.e., their regular

rate) and prevents rest break time from being double counted. It is also the formula

       4
         In the previous example, the employee's regular rate is $9.72 per hour that pay period.
This results from dividing $375.00 (total piece rate earnings) by 38.6 hours (total hours in active
production, exclusive ofbreak time).

                                                14
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

that Sakuma uses to pay pieceworkers for missed rest breaks, since "it is time [the

employees] have already spent" working. Wash. Supreme Court oral argument,

Demetrio v. Sakuma Bros. Farms, No. 90932-6 (Mar. 17, 2015), at 34 min., 26 sec.,

audio recording by TVW, Washington State's Public Affairs Network, available at

http://www.tvw.org.

       We agree with Sakuma that missed breaks must be compensated at the

pieceworker's regular rate.        And we see no reason to treat missed rest breaks

differently from rest breaks provided. The pieceworker's right to a paid break-

whether taken or not-follows from the same regulatory language: "on the

employer's time." It would be inconsistent to interpret that phrase to mean payment

at the employee's regular rate in one instance and merely the minimum wage in

another. Consistency is especially important here to ensure efficient employees are

not penalized for taking rest breaks. If rest breaks are compensated at a lower wage

than the pieceworker's regular rate, there is a strong incentive to miss rest breaks.

That result frustrates the entire purpose of WAC 296-131-020(2). See Sacred Heart,
175 Wash. 2d at 832.

       Thus we answer the second certified question: WAC 296-131-020(2) requires

that rest break time be compensated at the pieceworker's regular rate ofpay. 5

       5
         We recognize that the rate at which rest breaks are paid might be the subject of voluntary
bargaining between an employer and employee, and this opinion does not impair the ability of

                                                15
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

                                      CONCLUSION

      We answer the first certified question yes. Pay for rest breaks separate from

the piece rate follows from the plain language of WAC 296-131-020(2) and is

consistent with Washington case law interpreting rest break regulations. We answer

the second certified question: in the absence of a separate agreement, pay separate

from the piece rate must equal at least the applicable minimum wage or the

pieceworker's regular rate of pay, whichever is greater. The Workers' attorney fee

request should be directed to the federal district court if that court enters a judgment

in their favor, and therefore the request is denied without prejudice.

parties to contract within the scope of the law. For example, it is conceivable that an employer
and employee could agree to rest break pay at a higher rate than the employee's regular rate.

                                              16
Demetrio v. Sakuma Bros. Farms, Inc., No. 90932-6

WE CONCUR:

                                            -~~#'--
                                                    -VI~ 1!7   /

                                       17