Hospital authorities treat people but are not ‘people’ themselves

In a recent decision, the California Supreme Court takes an in-depth look at legislative history to dissect whether a county hospital authority entity can be liable for meal and rest period violations under the labor code and whether they can be considered “persons” subject to California’s Private Attorneys General Act (PAGA) penalties. In short, they cannot.

Hospital authorities that manage a county’s public health facilities are considered public employers, and as such, they are exempt from the labor code’s provisions relating to meal and rest breaks. As public entities, these authorities aren’t considered people subject to penalties under PAGA.

Public entities are not ‘persons’

All counties in California are given a mandate to provide medical care for their indigent residents. After years of upholding this requirement on its own, the Alameda County Board of Supervisors determined it would be more efficient and effective to transfer the governance of this medical center to a designated “hospital authority.” In 1996, the California Legislature enacted Health and Safety Code section 101850 (the “enabling statute”), which permitted the Alameda Health System (AHS) to operate as a “separate public agency” dedicated to this task.