Choate

An employer in California must immediately pay a terminated employee for all of his “vested vacation time” unless the union representing that employee has negotiated a collective bargaining agreement that “otherwise provide[s].” (Lab. Code, § 227.3; see § 201.) We hold that a collective bargaining agreement “otherwise provide[s]” and thereby abrogates an employee’s statutory right under section 227.3 to immediate payment for vested vacation time only if the agreement clearly and unmistakably waives that right. Because the agreement in this case lacked this clarity, Celite Corporation (Celite) was required to immediately pay terminated employees for all their vested vacation time. We nevertheless reverse the trial court’s judgment imposing waiting time penalties because Celite’s nonpayment was not “willful.”

FACTS AND PROCEDURAL HISTORY

Celite mines and manufactures diatomaceous earth in Lompoc, California. International Chemical Workers Union/C-UFCW Local 146-C (Union) represents Celite’s employees. Under the collective bargaining agreements in effect between 2003 and 2007 and 2007 and 2010 (the Agreements), Celite granted its employees between one and five weeks of…