Preview
Alejandro P. Gutien-ez, SBN 107688
1 agutierrez@hathawaylawfirm.com
HATHAWAY, PERRETT, WEBSTER, POWERS,
2 CHRISMAN & GUTIERREZ, APC
5450 Telegraph Road, Suite 200
3 Venttjra, CA 93006-3577
>^ /i Tel: (805) 644-7111; Fax: (805) 644-8296
4
(@
Daniel J. Palay, SBN 159348
5 djp@calemploymentcounsel. com FlLED/ENDORSIED
Brian D. Hefelfmger, SBN 253054
6 bdh@calemploymentcounsel. com
Jo PALAY HEFELFINGER, APC AUG 1 3 2020
7 1746 S. Victoria Avenue, Suite 230
Venttira, Califomia 93001 By:. . Macias
8 Tel: (805) 628-8220 Deputy Cleik
UL 9
Fax: (805) 765-8600
Attorneys for Plaintiffs JOHN BOUDREAU
10 and the Certified Class
11
SUPERIOR COURT OF THE STATE OF CALIFORNIA
12
FOR THE COUNTY OF SACRAMENTO (UNLIMITED)
13
14 JOHN BOUDREAU, an individual, on behalf CASE NO.: 34-2018-00247272
of himself and all others similarly situated.
15 Complaint filed: Dec. 27, 2018
Plaintiffs, Assigned to Dept. 54
16
vs. PLAINTIFF'S OPPOSITION TO
17
PRIMERITUS FINANCIAL SERVICES, DEFENDANT'S MOTION FOR
18 INC., a Delaware Corporation; and DOES 1 SUMMARY AJUDICATION
through 10, inclusive. PURSUANT TO CALIFORNIA
19 CODE OF CIVIL PROCEDURE
Defendants. §437c(t)
20
[Filed Concurrently with Declarations
21 In Support of Opposition; Opposition
to Separate Statement]
22
RESERVATION #2517993
23 Date: Sept. 24,2020
Time: 9:00 a.m.
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Dept: 54
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PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(l)
1
TABLE OF CONTENTS
2
3
I. INTRODUCTION 1
4
5
H. SUMMARY OF RELEVANT FACTS 1
6
A. Primeritus' Manner of Payment 1
7
8 B. ISSUE ONE: Did the Defendant "Separately" Compensate the Class for Rest Periods and
9
Non-Productive Time as Required by Labor Code §226.2? 2
10
11 C. ISSUE TWO: Did Primeritus Separately Compensate the Class for Rest Breaks at or
12 Above Their Average Rate of Pay? 6
13
14 D. ISSUE THREE: Did Primeritus Separately Compensate the Class for Non-Productive
15 Time at or Above Their Average Rate of Pay? 7
16
17 E. ISSUE FOUR: Primertus' Claim that it Reasonably Estunated the Amount of Non-
18 Productive Time 7
19
F. ISSUE FIVE: Did Primeritus Compensate the Class at Least the Minimum Wage for All
20
21 Tune Worked? 8
22
III. CONCLUSION 9
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PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1
TABLE OF AUTHORITIES
2
Cases
3
Aguirre v. Genesis Logistics (C.D.Cal. July 3, 2013) 2013 WL 10936036 6
4
Armenia v. Osmose, Inc. (2005) 135 Cal.App.4"^ 314, 324 4
5
6 Blufordv. Safeway Stores, Inc. (2013) 216 Cal.App.4"' 864) 5
7 Cardenas v. McLane Food Services, Inc. (C.D.Cal.2011) 796 F.Supp.2d 1246, 1252 4,5
8 Carrillo v. Schneider Logistics, Inc. (C.D.Cal.2011) 823 F.Supp.2d 1040, 1044; 4
9 Cash V. Winn (2012) 205 Cal.App.4th 1285, 1297 9
10
Garybo v. Bros., (E.D.Cal. March 2, 2020) No.: l:15-cv-01487-DAD 2020 WL 999762 9
11
Gonzalez v. Downtown LA Motors, LP (2013) 215 Cal.App.4"' 36 5
12
Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103 9
13
14 Ontiveros v. Zamora (E.D. Cal., Feb. 20, 2009, No. CIV.S-08-567 LKK/DAD), 2009 WL 425962, p. 3 4
15 Ortega v. J.B. Hunt Transport, Inc., (CD. Cal. July 23, 2018) 2018 WL 6131153, *3) 4
16 Peabody v. Time Warner Cable, Inc. (2014) 59 Cal.4th 662, 667 9
17 Reinhardt v. Gemini Motor Transport (E.D.Cal.2012) 869 F.Supp.2d 1158, 1168 4
18
Ridgeway v. Wal-Mart Stores, Inc. (N.D.Cal.2015) 107 F.Supp.3d 1044, 1053 4
19
Perez v. Sun Pacific Farming Co-op., Inc. (E.D. Cal., June 8, 2015, No. 1:15-CV-00259-KJM-SKO),
20
2015 WL 3604165, pp. 5-7 4
21
22 Sheppard V. North Orange County Reg. Occup. Program (2010) 191 Cal.App.4"' 289, 297 4
23 Vaquero v. Stoneledge Furniture LLC, (Ct. App. 2017) 9 Cal. App. 5th 98, 112 9
24 Villalpando v. Exel Direct Inc., (N.D.Cal. 2016) 161 F. Supp. 3d 873, 889 5
25
26
27
28
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
Statutes
1
2 Califomia Code of Civil Procedure §437c 1
3 Califomia Labor Code §226.2 2, 3
4 Califomia Labor Code § 1194 4, 5
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7
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PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION.
3 This case concems the claims of the Plaintiff and the certified class that the Defendant
4 ("Primeritus") failed to comply with Califomia law in the payment of its workers. Plaintiff and the class
5 contend the Defendant failed to remit payment of at least the minimum wage for rest periods and non-
6 productive time and failed to remit legally compliant wage statements in accordance with Califomia law
7 This motion arises from the stipulation of the parties and subsequent order by the Court permitting
8 the determination of legal issues pursuant to Califomia Code of Civil Procedure §437c(t). Here, the class
9 has filed a cross-motion for summary adjudicafion claiming the Defendant's manner of payment,
10 including its pay stubs, violated Califomia law. The manner of payment and the information contained
11 on the paystubs is not factually disputed. Plaintiff and the class contend that the Defendant's pay practices
12 are not in compliance with Califomia law.
13 II. SUMMARY OF R E L E V A N T F A C T S
14 A. Primeritus' Manner of Payment
15 Defendant Primeritus Financial Services, Inc. [hereinafter "Primeritus"] operates a facility in El
16 Dorado Hills, Califomia. At all times relevant herein. Plaintiff and members of the class were employed
17 by Defendant as non-exempt employees in the position of investigator/skip tracer [Undisputed Material
18 Fact "UMF" No. 36]. The class members performed skip searches and other desk-based research to assisi
19 Defendant's clients in locafing collateral [UMF 36]. Defendant plays no role in the physical repossession
20 of collateral [UMF 36]. Plaintiff and each class member's job was to perform skip searches in the
21 repossession process to "locate and recover collateral." (Id.). Because Plaintiff and the class provided a
22 service, they are/were not salespeople and their compensation is/was not tied to performance of a sale
23 The Defendant has stipulated that each class member was told they would be paid $8.00 for each hour
24 worked [UMF 38, 39]. In addition, the Defendant has also stipulated that each member of the class would
25 receive a "piece rate," in addition the hourly rate of $8.00 per hour, for collateral recovered by the third-
26 party re-possessor [UMF 38, 39]. The parties do not dispute that the hourly rate of $8.00 was below the
27
28
1
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1 Califomia minimum wage during the entire statutory period at issue [UMF 40].' The parties also do not
2 dispute the fact that during rest periods and other non-productive time, Plaintiff and each member ofthe
3 class did not and could not work toward eaming a "piece rate" [UMF 42].
4 B. ISSUE ONE: Did the Defendant "Separately" Compensate the Class for Rest Periods
5 and Non-Productive Time as Required by Labor Code §226.2?
6 Although the parties have a factual disagreement conceming the amount of non-productive time
7 worked by class members on a weekly basis, the parties agree that rest periods and possibly other non
8 productive time (e.g. meetings with management, training, time spent tracking collateral located by the
9 class member where the collateral was not recovered by the third-party re-possessor) did occur as that
10 term is defined in Califomia Labor Code §226.2 [UMF 41]. Thus, the relevant question is whether
11 Defendant's manner of payment for rest periods and non-productive time complies with Califomia law.
12 Defendant's compensation plan in effect for Plaintiff and members of the class from December
13 2014 through at least July 31, 2019 consisted of a base hourly rate and a piece-rate [UMF 38]. Under such
14 plan, Boudreau and other investigators were paid $8.00 per hour base and received piece-rate pay based
15 on a "points" system for all vehicles located and recovered [UMF 38, 39]. Each point eamed was worth
16 $25.00 [UMF 38]. The number of "points" eamed per vehicle recovered depended on which ol
17 Defendant's client accounts Plaintiff and each investigator was working on [UMF 38]. The parties have
18 stipulated that this $8.00 per hour was below the minimum wage for the entire period claimed [UMF 40]
19 After all, the Califomia minimum wage in 2014 and 2015 was $9.00/hour; in 2016 it was $10.00/hour; in
20 2017 it was $10.50/hour; in 2018 it was $11.00/hour; and in 2019 it was $12.00/hour [UMF 40]. Here the
21 Defendant did separately compensate the class for rest periods and non-productive time. However, it
22 compensated them at an amount below the minimum wage [$8.00 per hour].
23 The Defendant's failvire to pay at least the minimum wage for rest periods and non-productive time
24 is unlawfiil. The Defendant has admitted that Califomia Labor Code §226.2 is applicable to the claims in
25 this lawsuit [UMF 47]. Califomia Labor Code §226.2 relates:
26
' Despite the stipulated facts and admissions of the Defendant, it now attempts to cast this S8.00 per hour as payment of
27 $64.00 per day for each 8-hour day [note that the wage statements also indicate $8.00 per hour (See Exhibit "1")]. For
purposes of Califomia law, it makes little difference as the Defendant admits that class members are non-exempt employees.
28 As such, even a daily rate of non-exempt employees is required to be broken down hourly. See Califomia Labor Code
§515(d).
2
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1 This section shall apply for employees who are compensated on a piece-rate basis for any
2 work performed during a pay period. This section shall not be constmed to limit or alter
minimum wage or overtime compensation requirements, or the obligation to compensate
3 employees for all hours worked under any other statute or local ordinance. For the purposes
of this section, "applicable minimum wage" means the highest of the federal, state, or local
4 minimum wage that is applicable to the employment, and "other nonproductive time"
means time under the employer's control, exclusive of rest and recovery periods, that is
5 not directly related to the activity being compensated on a piece-rate basis.
6 (a) For employees compensated on a piece-rate basis during a pay period, the
following shall apply for that pay period:
7 (\) Employees shall be compensated for rest and recovery periods and other
nonproductive time separate from any piece-rate compensation.
8 (2) The itemized statement required by subdivision (a) of Section 226 shall, in
9 addition to the other items specified in that subdivision, separately state the following, to
which the provisions of Section 226 shall also be applicable:
10 (A) The total hours of compensable rest and recovery periods, the rate of
compensation, and the gross wages paid for those periods during the pay period.
11 (B) Except for employers paying compensation for other nonproductive time in
accordance with paragraph (7), the total hours of other nonproductive time, as determined
12 under paragraph (5), the rate of compensation, and the gross wages paid for that time during
13 the pay period.
(3) (A) Employees shall be compensated for rest and recovery periods at a regular
14 hourly rate that is no less than the higher of:
(i) An average hourly rate determined by dividing the total compensation for the
15 workweek, exclusive of compensation for rest and recovery periods and any premium
compensation for overtime, by the total hours worked during the workweek, exclusive of
16
rest and recovery periods.
17 (ii) The applicable minimum wage.
(4) Employees shall be compensatedfor other nonproductive time at an hourly rate
18 that is no less than the applicable minimum wage, [emphasis added].
19 The Defendant has stipulated that during both rest periods and non-productive time, class members
20 did not and cannot work toward earning the piece rate [UMF 42]. Thus, it makes perfect sense that an
21 employee must be paid at least the minimum wage for each hour worked. After all, the law requires that
22 an employee be paid the minimum wage for each hour. In an attempt to avoid the clear requirements ol
23 the statute, the Defendant claims that it can "borrow" money from other hours to meet the minimum wage
24 requirements. This is also referred to as "averaging."
25 Califomia law does not permit employers to average hours that the employee is paid at more than
26 the minimum wage against hours for which the employee was either not paid at all or was not paid the
27 minimum wage. Rather, the employee must receive the minimum wage for each hour worked during the
28 payroll period. (Armenia v. Osmose, Inc. (2005) 135 Cal.App.4'^ 314, 324; Sheppard v. North Orange
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1 County Reg. Occup. Program (2010) 191 Cal.App.4"' 289, 297, fh. 5 (employees must be compensated
2 for each hour worked at the legal minimum wage and compliance cannot be determined by averaging
3 hourly compensation."); see Perez v. Sun Pacific Farming Co-op., Inc. (E.D. Cal., June 8,2015, No. 1:15
4 CV-00259-KJM-SKO), 2015 WL 3604165, pp. 5-7; Ridgeway v. Wal-Mart Stores, Inc. (N.D.Cal.2015)
5 107 F.Supp.3d 1044, 1053; Reinhardt v. Gemini Motor Transport (E.D.Cal.2012) 869 F.Supp.2d 1158
6 1168; Carrillo v. Schneider Logistics, Inc. (C.D.Cal.2011) 823 F.Supp.2d 1040, 1044; Cardenas v.
7 McLane Food Services, Inc. (C.D.Cal.2011) 796 F.Supp.2d 1246, 1252; Ontiveros v. Zamora (E.D. Cal
8 Feb. 20, 2009, No. ClV.S-08-567 LKK/DAD), 2009 WL 425962, p. 3; Ortega v. J.B. Hunt Transport,
9 Inc., (CD. Cal. July 23, 2018) 2018 WL 6131153, *3).
10 The Defendant, who essentially admits that it engaged in such unlawful averaging to meet the
11 minimum wage, asserts that this law can be abrogated by attempting to disfinguish Armenia and its
12 progeny. In Armenia, the Court of Appeal constmed the same language in the same wage order that is at
13 issue here and concluded that it "expresses the intent to ensure that employees be compensated at the
14 minimum wage for each hour worked." (Armenia, supra, at p. 323, italics added.) The court in Armenia
15 fiirther concluded that the employer's method of averaging employees' hours worked in a given pay period
16 in order to compute its minimum wage obligations violated the minimum wage law. (Id.).
17 The plaintiffs in Armenia were employed by a company that maintained utility poles. The company
18 provided the employees with a tmck that carried the tools and equipment needed to perform the work in
19 the field, and employees were required to travel in the tmck to the various job sites. (Armenia, supra 135
20 Cal.App.4th at p. 317). Employees' time was considered "productive" if directly related to maintaining
21 utility poles in the field and "nonproductive" if spent performing other tasks such as traveling to and from
22 a job site, loading or maintaining vehicles, and attending safety meetings. (Ibid.). Employees were only
23 paid for "productive" time. In Armenia, the employer, as Defendant does here, argued that the employees'
24 average hourly rate in any given pay period was higher than Califomia's minimum wage and, therefore,
25 it had not violated §1194. Armenia, supra, 135 Cal.App.4"' at 319. However, as the Court of Appeal
26 clarified, the minimum wage provisions ofthe FLSA differ significantly from Califomia's minimum wage
27 law. While the FLSA requires payment of minimum wage to employees who "in any work week" are
28 engaged in commerce. Labor Code § 1194 provides that an employer shall pay each employee wages not
4
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1 less than the minimum wage for all hours worked. (Id. at 323). The Court concluded that, "[t]he
2 averaging method utilized by the federal courts for assessing a violation of the minimum wage law does
3 not apply here." (Id). The court mled that the employer had violated the minimum wage law by not
4 compensating employees for travel time and for time spent on daily paperwork. (Id. at p. 320).
5 The mle established by Armenia—^that employees must be separately compensated at minimum
6 wage or above for all time and each hour worked—was subsequently applied by Califomia courts to
7 "piece-rate" compensation programs, in which employees do not receive an hourly wage, but are paid
8 based on the tasks they perform. (See Gonzalez v. Downtown LA Motors, LP (2013) 215 Cal.App.4"' 36;
9 Bluford V. Safeway Stores, Inc. (2013) 216 Cal.App.4"' 864). "Plainfiffs are correct that pay for rest
10 periods taken by employees must be separate from piece-rate compensation and cannot be satisfied by
11 averaging". See Bluford v. Safeway Stores, Inc., (20\ 3) 216 Cal.App.4th 864, 872 ("a piece-rate
12 compensation formula that does not compensate separately for rest periods does not comply with
13 Califomia minimum wage law"); Villalpando v. Exel Direct Inc., (N.D.Cal. 2016) 161 F. Supp. 3d 873,
14 889); ("[E]mployees must be directly compensated at least minimum wage for all time spent on activities
15 that do not allow them to directly eam wages."); Cardenas v. McLane FoodServices, Inc., (C.D.Cal.2011)
16 796 F.Supp.2d 1246, 1253).
17 In Gonzalez v. Downtown LA Motors, LP (2013) 215 Cal.App.4''^ 36, automotive service technicians
18 were paid piece-rate compensation based on the completion of repair tasks, but with a floor based on the
19 applicable hourly minimum-wage: if a technician's piece-rate compensation for any pay period would be
20 less than what she would have eamed from an hourly minimum-wage for the same number of hours
21 worked, the employer would pay the hourly-wage figure. The plaintiffs in Gonzalez, technicians who had
22 worked for the defendant employer, claimed they should have been paid a separate hourly minimum-wage
23 for time spent during their work shifts waiting for vehicles to repair and performing other non-repair tasks
24 (such as obtaining parts, cleaning their work stations, attending meetings, traveling to other locations to
25 pick up and retum cars, and participating in online training sessions) directed by the employer. Gonzalez,
26 215 Cal. App. 4th at 40. The Court of Appeal, relying heavily on the reasoning in Armenia, agreed with
27 the plaintiffs and held that they were "entitled to separate hourly compensation for time spent waiting for
28 repair work or performing other non-repair tasks directed by the employer during their work shifts
5
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1 Id. at 40-41. This non-productive work had to be separately compensated to satisfy minimum wage
2 law, since the minimum wage law applied to each hour worked and the court found that the non-productive
3 hours were not covered by the piece-rate pay.
4 In an attempt to avoid the clear mandate of these litany of cases. Defendant strangely cites to the
5 singular case of Aguirre v. Genesis Logistics (C.D.Cal. July 3, 2013) 2013 WL 10936036). But the Court
6 in Aguirre specifically related that the Plaintiffs in that case never even asserted that the rates for non
7 productive time fell below the minimum hourly wage. "Plaintiffs' focus on the fact that Route Pay is
8 $22-$30 regardless of whether a driver works fifteen or ninety minutes therefore is misplaced, especially
9 because Plaintiffs do not argue that those rates are below the minimum hourly wase." Id. The Defendant's
10 pay plan does not mirror Aguirre because the hourly rate paid by the Defendant in the case at bar is below
11 the minimum wage. This issue was never even addressed in Aguirre.
12 C. ISSUE TWO: Did Primeritus Separately Compensate the Class for Rest Breaks at or
13 Above Their Average Rate of Pay?
14 Plaintiff does not dispute that Primeritus separately compensated the class for rest breaks. Plaintiff
15 simply contends that this "separate compensation" [$8.00 per hour] was less than the minimum wage and
16 as such, violated Califomia law [Califomia Labor Code §226.2]. To avoid this obvious conclusion, the
17 Defendant resorts to a new factual argument that is not contained within the agreed stipulation of facts.
18 In the stipulation of facts, the Defendant agreed that the class was paid $8.00 per hour for each hour
19 worked in addition to the piece rate. Suddenly, and in direct contradiction with the stipulated fact, the
20 Defendant now asserts that the class was paid a daily rate of $64.00.
21 As set forth above, the Defendant is asserting that this new daily rate can be averaged across multiple
22 hours to arrive at amounts above the minimum wage. But such averaging is not permitted by law
23 Califomia law does not allow employers to average hours that the employee is paid at more than the
24 minimum wage against hours for which the employee was either not paid at all or was not paid the
25 minimum wage. Rather, the employee must receive the minimum wage for each hour worked during the
26 payroll period. (Armenia v. Osmose, Inc. (2005) 135 Cal.App.4'*' 314, 324; Sheppard v. North Orange
27 County Reg. Occup. Program (2010) 191 Cal.App.4"' 289, 297, fn. 5 (employees must be compensated
28 for each hour worked at the legal minimum' wage and compliance cannot be determined by averaging
6
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1 hourly compensation."); see Perez v. Sun Pacific Farming Co-op., Inc. (E.D. Cal., June 8, 2015, No. 1:15
2 CV-00259-KJM-SKO), 2015 WL 3604165, pp. 5-7; Ridgeway v. Wal-Mart Stores, Inc. (N.D.Cal.2015)
3 107 F.Supp.3d 1044, 1053; Reinhardt v. Gemini Motor Transport (E.D.Cal.2012) 869 F.Supp.2d 1158
4 1168; Carrillo v. Schneider Logistics, Inc. (C.D.Cal.2011) 823 F.Supp.2d 1040, 1044; Cardenas v.
5 McLane Food Services, Inc. (C.D.Cal.2011) 796 F.Supp.2d 1246, 1252; Ontiveros v. Zamora (E.D. Cal
6 Feb. 20, 2009, No. ClV.S-08-567 LKK/DAD), 2009 WL 425962, p. 3; Ortega v. J.B. Hunt Transport,
7 Inc., (CD. Cal. July 23, 2018) 2018 WL 6131153, *3).
8 D. ISSUE T H R E E : Did Primeritus Separately Compensate the Class for Non-Productive
9 Time at or Above Their Average Rate of Pay?
10 Plaintiff does not dispute that Primeritus separately compensated the class for non-productive time
11 Plaintiff simply contends that this "separate compensation" [$8.00 per hour] was less than the minimum
12 wage and as such, violated Califomia law. In the interest of brevity. Plaintiff reincorporates the arguments
13 asserted above.
14 E. ISSUE FOUR: Primertus' Claim that it Reasonably Estimated the Amount of Non-
15 productive Time.
16 Plaintiff does not understand the basis for asserting this as an issue for summary adjudication of a
17 legal issue. This is an issue relating to damages, which is not at issue for purposes of the 437tc(t) motion.
18 According to the Stipulation,
19
Plaintiff and Primertus will file Cross-Motions for Summary Adjudication on the legality
20 of the manner in which Primeritus paid Plaintiff and the putative class for rest periods and
non-productive time. These motions may also include adjudication of additional and
21 related legal issues include the Labor Code §226 (paystub claim) and the adjudication of
certain penalties.
22
23 Further, Primertus' current estimates of the reasonable amount of non-productive time is irrelevant.
24 If the Defendant is attempting to assert that its estimates of non-productive time (as it defines it) are
25 accurate as a matter of law, this is also inappropriate for its motion. Once liability has been determined
26 (via the cross-motions filed by the parties), and assuming the Plaintiff prevails. Plaintiff intends on having
27 the class surveyed conceming non-producfive time, including rest periods for purposes of a relatively
28 short damages trial.
7
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1 F. ISSUE F I V E : Did Primeritus Compensate the Class at Least the Minimum Wage for
2 All Time Worked?
3 Plaintiff has addressed this issue above. Primeritus did not compensate the class at least the
4 minimum wage for all time worked because it paid less than the minimum wage for all rest periods and
5 non-productive time. For example, if a class member was required to attend a one-hour meeting, that
6 class member only received $8.00 for that hour, an amount well below the minimum wage.
7 Primeritus' assertion that it can average pay over the balance of other hours worked is legally
8 unsupported. In fact, in the Ward Declaration, Defendant's Appendix C, Exhibit "2", ^7, he admits that
9 he was instmcted to average the pay.^ Again, averaging is not permitted by law. Califomia law does nol
10 permit employers to average hours that the employee is paid at more than the minimum wage againsi
11 hours for which the employee was either not paid at all or was not paid the minimum wage. Rather, the
12 employee must receive the minimum wage for each hour worked during the payroll period. (Armenia v.
13 Osmose, Inc. (2005) 135 Cal.App.4'*^ 314, 324; Sheppard v. North Orange County Reg. Occup. Program
14 (2010) 191 Cal.App.4'^ 289, 297, fh. 5 (employees must be compensated for each hour worked at the legal
15 minimum wage and compliance cannot be determined by averaging hourly compensation."); see Perez v.
16 Sun Pacific Farming Co-op., Inc. (E.D. Cal., June 8, 2015, No. 1:15-CV-00259-KJM-SKO), 2015 WL
17 3604165, pp. 5-7; Ridgeway v. Wal-Mart Stores, Inc. (N.D.Cal.2015) 107 F.Supp.3d 1044, 1053;
18 Reinhardt V. Gemini Motor Transport (E.D.Cal.2012) 869 F.Supp.2d 1158, 1168; Carrillo v. Schneider
19 Logistics, Inc. (C.D.Cal.2011) 823 F.Supp.2d 1040, 1044; Cardenas v. McLane Food Services, Inc.
20 (C.D.Cal.2011) 796 F.Supp.2d 1246, 1252; Ontiveros v. Zamora (E.D. Cal., Feb. 20, 2009, No. CIV.S-
21 08-567 LKJC/DAD), 2009 WL 425962, p. 3; Ortega v. J.B. Hunt Transport, Inc., (CD. Cal. July 23, 2018)
22 2018 WL 6131153, *3).
23 Plaintiff does not dispute that Primeritus separately compensated the class for non-productive time.
24 Plaintiff simply contends that this "separate compensation" [$8.00 per hour] was less than the minimum
25 wage and as such, violated Califomia law.
26
27
^ He relates, "It is my understanding from counsel that the Califomia statute requires that employees paid under a piece rate
system must be compensated for rest breaks separate from their piece rate compensation at an "average hourly pay rate."
28 Also note paragraph 19 of his declaration where he determines whether the "weekly" pay was sufficient to pay for rest breaks
and for non-productive time. He does not perform his calculation on an hourly basis as required by Califomia law.
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
1 As noted, the Court of Appeal in Vaquero v. Stoneledge Furniture LLC pronounced that "the
2 employee must be paid at least the minimum wage (or contract hourly rate if one exists) for the period of
3 time the employee's opportunity to earn commissions or piece rate [is reduced]." (Vaquero v. Stoneledge
4 Furniture LLC, (Ct. App. 2017) 9 Cal. App. 5th 98, 112 (italics in original)). After all, "[s]tate wage and
5 hour laws "reflect the strong public policy favoring protection of workers' general welfare and 'society's
6 interest in a stable job market.'" (Gonzalez, supra, 215 Cal.App.4th at p. 44; see Cash v. Winn (2012) 205
7 Cal.App.4th 1285, 1297). "They are therefore liberally constmed in favor of protecting workers. As
8 our Supreme Court has stated, "[i]n light of the remedial nature of the legislative enactments authorizing
9 the regulation of wages, hours and working conditions for the protection and benefit of employees, the
10 statutory provisions are to be liberally constmed with an eye to promoting such protection.'" (Gonzalez
11 supro, at p. 44, quoting Brinker, supra, 53 Cal.4th at pp. 1026-1027; see Augustus, supra, 2 Cal.5th at p
12 262 ("we liberally constme the Labor Code and wage orders to favor the protection of
13 employees"); Peabody v. Time Warner Cable, /«c. (2014) 59 Cal.4th 662, 667, ("[s]tatutes
14 goveming conditions of employment are to be constmed broadly in favor of protecting
15 employees"); Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103 (same); Vaquero
16 V. Stoneledge Furniture LLC, (Ct. App. 2017) 9 Cal. App. 5th 98, 107-08, as modified (Mar. 20, 2017)
17 (adjudicated in Plaintiffs favor); Garybo v. Bros., (E.D.Cal. March 2, 2020) No.: l:15-cv-01487-DAD
18 2020 WL 999762, citing Gomez, 2019 WL 5787805 at *17; Vaquero, 9 Cal. App. 5th at 110). In the
19 interests of brevity. Plaintiff reincorporates the arguments asserted above.
20 III. CONCLUSION.
21 Based upon the foregoing, it is respectfully requested that the Court deny Defendant's Motion for
22 Summary Adjudication in its entirety.^
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25 ///
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^ Strangely, the Defendant admits in footnote 8 of its moving papers, that even under its untenable theory, that the class
28 would be owed wages under its own analysis. As a result, Defendant's motion based on the argument that Plaintiffs claims
fail "as a matter of law" or that any of the Plaintiffs causes of action should be dismissed cannot be granted.
9
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(l)
Dated: August 12,2020 HATHAWAY PERRETT WEBSTER POWERS
1 CHRISMAN A. GTITTFRREZ, APC
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By:
3 Alejandro P. Gutierrez
Attomeys for Plainfiff JOHN
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BOUDREAU and the Certified Class
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PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(l)
PROOF OF SERVICE
1
2 I am employed in the County of Ventura, State of Califomia. I am over the age of
eighteen (18) years and not a party to the within action. My business address is 5450 Telegraph
3 Road, Suite 200, Ventura, Califomia 93003.
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On the date below, I caused to be served, the foregoing document PLAINTIFF'S
5 OPPOSITION TO MOTION FOR SUMMARY AJUDICATION PURSUANT TO
6 CALIFORNIA CODE OF CIVIL PROCEDURE §437c(t) [Filed Concurrently with
Declarations In Support of Opposition; Opposition to Separate Statement] on the interested
7 parties in said action by placing the tme copies thereof enclosed in sealed envelopes
addressed as follows:
8
9 Keith A. Jacoby Attorneys for Defendants, Primeritus
Bradley E. Schwan
10 Littler Mendelson, PC Financial Services and Chris
2049 Centtiry Park East, 5"^ Floor McGinness
11 Los Angeles, CA 90067-3107
Tel: (310) 553-0308 / Fax: (310)553-5583
12
kjacoby@littler.com/bschwan@littler.com
13
Nathaniel H. Jenkins
14 Littler Mendelson, PC
500 Capitol Mall, Suite 2000
15 Sacramento, CA 95814
16 Tel: (916) 830-7200 / Fax: (916) 561-0828
njenkins@littler.com
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[ ] BY MAIL: By placing a tme copy thereof enclosed in a sealed envelope addressed to
18 the addressee(s) listed above. I am "readily familiar" with the firm's practice of collection and
processing correspondence for mailing. Under that pracfice, it would be deposited with the U.S.
19 Postal Service on that same date with postage thereon fully prepaid at Ventura, Califomia, in the
20 ordinary course of business. 1 am aware that on mofion of the party served, service is presumed
invalid if postal cancellation date or postage meter date is more than one day after date of deposit
21 for mailing in affidavit.
22 [X] (ELECTRONIC MAIL) by electronically mailing the document(s) listed above to the e-mail
23 address(es) set forth above, or as stated on the attached service list per agreement in accordance
with the Code of Civil Procedure §1010.6.
24
I declare under penalty of perjury under the laws of the State of Califomia that the
25 foregoing is tme and correct. Executed on August 14, 2020, at Ventura, Califomia.
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28 Edna Byerly
11
PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)
Preview
Alejandro P. Gutien-ez, SBN 107688 1 agutierrez@hathawaylawfirm.com HATHAWAY, PERRETT, WEBSTER, POWERS, 2 CHRISMAN & GUTIERREZ, APC 5450 Telegraph Road, Suite 200 3 Venttjra, CA 93006-3577 >^ /i Tel: (805) 644-7111; Fax: (805) 644-8296 4 (@ Daniel J. Palay, SBN 159348 5 djp@calemploymentcounsel. com FlLED/ENDORSIED Brian D. Hefelfmger, SBN 253054 6 bdh@calemploymentcounsel. com Jo PALAY HEFELFINGER, APC AUG 1 3 2020 7 1746 S. Victoria Avenue, Suite 230 Venttira, Califomia 93001 By:. . Macias 8 Tel: (805) 628-8220 Deputy Cleik UL 9 Fax: (805) 765-8600 Attorneys for Plaintiffs JOHN BOUDREAU 10 and the Certified Class 11 SUPERIOR COURT OF THE STATE OF CALIFORNIA 12 FOR THE COUNTY OF SACRAMENTO (UNLIMITED) 13 14 JOHN BOUDREAU, an individual, on behalf CASE NO.: 34-2018-00247272 of himself and all others similarly situated. 15 Complaint filed: Dec. 27, 2018 Plaintiffs, Assigned to Dept. 54 16 vs. PLAINTIFF'S OPPOSITION TO 17 PRIMERITUS FINANCIAL SERVICES, DEFENDANT'S MOTION FOR 18 INC., a Delaware Corporation; and DOES 1 SUMMARY AJUDICATION through 10, inclusive. PURSUANT TO CALIFORNIA 19 CODE OF CIVIL PROCEDURE Defendants. §437c(t) 20 [Filed Concurrently with Declarations 21 In Support of Opposition; Opposition to Separate Statement] 22 RESERVATION #2517993 23 Date: Sept. 24,2020 Time: 9:00 a.m. 24 Dept: 54 25 26 27 28 1 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(l) 1 TABLE OF CONTENTS 2 3 I. INTRODUCTION 1 4 5 H. SUMMARY OF RELEVANT FACTS 1 6 A. Primeritus' Manner of Payment 1 7 8 B. ISSUE ONE: Did the Defendant "Separately" Compensate the Class for Rest Periods and 9 Non-Productive Time as Required by Labor Code §226.2? 2 10 11 C. ISSUE TWO: Did Primeritus Separately Compensate the Class for Rest Breaks at or 12 Above Their Average Rate of Pay? 6 13 14 D. ISSUE THREE: Did Primeritus Separately Compensate the Class for Non-Productive 15 Time at or Above Their Average Rate of Pay? 7 16 17 E. ISSUE FOUR: Primertus' Claim that it Reasonably Estunated the Amount of Non- 18 Productive Time 7 19 F. ISSUE FIVE: Did Primeritus Compensate the Class at Least the Minimum Wage for All 20 21 Tune Worked? 8 22 III. CONCLUSION 9 23 24 25 26 27 28 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 TABLE OF AUTHORITIES 2 Cases 3 Aguirre v. Genesis Logistics (C.D.Cal. July 3, 2013) 2013 WL 10936036 6 4 Armenia v. Osmose, Inc. (2005) 135 Cal.App.4"^ 314, 324 4 5 6 Blufordv. Safeway Stores, Inc. (2013) 216 Cal.App.4"' 864) 5 7 Cardenas v. McLane Food Services, Inc. (C.D.Cal.2011) 796 F.Supp.2d 1246, 1252 4,5 8 Carrillo v. Schneider Logistics, Inc. (C.D.Cal.2011) 823 F.Supp.2d 1040, 1044; 4 9 Cash V. Winn (2012) 205 Cal.App.4th 1285, 1297 9 10 Garybo v. Bros., (E.D.Cal. March 2, 2020) No.: l:15-cv-01487-DAD 2020 WL 999762 9 11 Gonzalez v. Downtown LA Motors, LP (2013) 215 Cal.App.4"' 36 5 12 Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103 9 13 14 Ontiveros v. Zamora (E.D. Cal., Feb. 20, 2009, No. CIV.S-08-567 LKK/DAD), 2009 WL 425962, p. 3 4 15 Ortega v. J.B. Hunt Transport, Inc., (CD. Cal. July 23, 2018) 2018 WL 6131153, *3) 4 16 Peabody v. Time Warner Cable, Inc. (2014) 59 Cal.4th 662, 667 9 17 Reinhardt v. Gemini Motor Transport (E.D.Cal.2012) 869 F.Supp.2d 1158, 1168 4 18 Ridgeway v. Wal-Mart Stores, Inc. (N.D.Cal.2015) 107 F.Supp.3d 1044, 1053 4 19 Perez v. Sun Pacific Farming Co-op., Inc. (E.D. Cal., June 8, 2015, No. 1:15-CV-00259-KJM-SKO), 20 2015 WL 3604165, pp. 5-7 4 21 22 Sheppard V. North Orange County Reg. Occup. Program (2010) 191 Cal.App.4"' 289, 297 4 23 Vaquero v. Stoneledge Furniture LLC, (Ct. App. 2017) 9 Cal. App. 5th 98, 112 9 24 Villalpando v. Exel Direct Inc., (N.D.Cal. 2016) 161 F. Supp. 3d 873, 889 5 25 26 27 28 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) Statutes 1 2 Califomia Code of Civil Procedure §437c 1 3 Califomia Labor Code §226.2 2, 3 4 Califomia Labor Code § 1194 4, 5 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION. 3 This case concems the claims of the Plaintiff and the certified class that the Defendant 4 ("Primeritus") failed to comply with Califomia law in the payment of its workers. Plaintiff and the class 5 contend the Defendant failed to remit payment of at least the minimum wage for rest periods and non- 6 productive time and failed to remit legally compliant wage statements in accordance with Califomia law 7 This motion arises from the stipulation of the parties and subsequent order by the Court permitting 8 the determination of legal issues pursuant to Califomia Code of Civil Procedure §437c(t). Here, the class 9 has filed a cross-motion for summary adjudicafion claiming the Defendant's manner of payment, 10 including its pay stubs, violated Califomia law. The manner of payment and the information contained 11 on the paystubs is not factually disputed. Plaintiff and the class contend that the Defendant's pay practices 12 are not in compliance with Califomia law. 13 II. SUMMARY OF R E L E V A N T F A C T S 14 A. Primeritus' Manner of Payment 15 Defendant Primeritus Financial Services, Inc. [hereinafter "Primeritus"] operates a facility in El 16 Dorado Hills, Califomia. At all times relevant herein. Plaintiff and members of the class were employed 17 by Defendant as non-exempt employees in the position of investigator/skip tracer [Undisputed Material 18 Fact "UMF" No. 36]. The class members performed skip searches and other desk-based research to assisi 19 Defendant's clients in locafing collateral [UMF 36]. Defendant plays no role in the physical repossession 20 of collateral [UMF 36]. Plaintiff and each class member's job was to perform skip searches in the 21 repossession process to "locate and recover collateral." (Id.). Because Plaintiff and the class provided a 22 service, they are/were not salespeople and their compensation is/was not tied to performance of a sale 23 The Defendant has stipulated that each class member was told they would be paid $8.00 for each hour 24 worked [UMF 38, 39]. In addition, the Defendant has also stipulated that each member of the class would 25 receive a "piece rate," in addition the hourly rate of $8.00 per hour, for collateral recovered by the third- 26 party re-possessor [UMF 38, 39]. The parties do not dispute that the hourly rate of $8.00 was below the 27 28 1 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 Califomia minimum wage during the entire statutory period at issue [UMF 40].' The parties also do not 2 dispute the fact that during rest periods and other non-productive time, Plaintiff and each member ofthe 3 class did not and could not work toward eaming a "piece rate" [UMF 42]. 4 B. ISSUE ONE: Did the Defendant "Separately" Compensate the Class for Rest Periods 5 and Non-Productive Time as Required by Labor Code §226.2? 6 Although the parties have a factual disagreement conceming the amount of non-productive time 7 worked by class members on a weekly basis, the parties agree that rest periods and possibly other non 8 productive time (e.g. meetings with management, training, time spent tracking collateral located by the 9 class member where the collateral was not recovered by the third-party re-possessor) did occur as that 10 term is defined in Califomia Labor Code §226.2 [UMF 41]. Thus, the relevant question is whether 11 Defendant's manner of payment for rest periods and non-productive time complies with Califomia law. 12 Defendant's compensation plan in effect for Plaintiff and members of the class from December 13 2014 through at least July 31, 2019 consisted of a base hourly rate and a piece-rate [UMF 38]. Under such 14 plan, Boudreau and other investigators were paid $8.00 per hour base and received piece-rate pay based 15 on a "points" system for all vehicles located and recovered [UMF 38, 39]. Each point eamed was worth 16 $25.00 [UMF 38]. The number of "points" eamed per vehicle recovered depended on which ol 17 Defendant's client accounts Plaintiff and each investigator was working on [UMF 38]. The parties have 18 stipulated that this $8.00 per hour was below the minimum wage for the entire period claimed [UMF 40] 19 After all, the Califomia minimum wage in 2014 and 2015 was $9.00/hour; in 2016 it was $10.00/hour; in 20 2017 it was $10.50/hour; in 2018 it was $11.00/hour; and in 2019 it was $12.00/hour [UMF 40]. Here the 21 Defendant did separately compensate the class for rest periods and non-productive time. However, it 22 compensated them at an amount below the minimum wage [$8.00 per hour]. 23 The Defendant's failvire to pay at least the minimum wage for rest periods and non-productive time 24 is unlawfiil. The Defendant has admitted that Califomia Labor Code §226.2 is applicable to the claims in 25 this lawsuit [UMF 47]. Califomia Labor Code §226.2 relates: 26 ' Despite the stipulated facts and admissions of the Defendant, it now attempts to cast this S8.00 per hour as payment of 27 $64.00 per day for each 8-hour day [note that the wage statements also indicate $8.00 per hour (See Exhibit "1")]. For purposes of Califomia law, it makes little difference as the Defendant admits that class members are non-exempt employees. 28 As such, even a daily rate of non-exempt employees is required to be broken down hourly. See Califomia Labor Code §515(d). 2 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 This section shall apply for employees who are compensated on a piece-rate basis for any 2 work performed during a pay period. This section shall not be constmed to limit or alter minimum wage or overtime compensation requirements, or the obligation to compensate 3 employees for all hours worked under any other statute or local ordinance. For the purposes of this section, "applicable minimum wage" means the highest of the federal, state, or local 4 minimum wage that is applicable to the employment, and "other nonproductive time" means time under the employer's control, exclusive of rest and recovery periods, that is 5 not directly related to the activity being compensated on a piece-rate basis. 6 (a) For employees compensated on a piece-rate basis during a pay period, the following shall apply for that pay period: 7 (\) Employees shall be compensated for rest and recovery periods and other nonproductive time separate from any piece-rate compensation. 8 (2) The itemized statement required by subdivision (a) of Section 226 shall, in 9 addition to the other items specified in that subdivision, separately state the following, to which the provisions of Section 226 shall also be applicable: 10 (A) The total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period. 11 (B) Except for employers paying compensation for other nonproductive time in accordance with paragraph (7), the total hours of other nonproductive time, as determined 12 under paragraph (5), the rate of compensation, and the gross wages paid for that time during 13 the pay period. (3) (A) Employees shall be compensated for rest and recovery periods at a regular 14 hourly rate that is no less than the higher of: (i) An average hourly rate determined by dividing the total compensation for the 15 workweek, exclusive of compensation for rest and recovery periods and any premium compensation for overtime, by the total hours worked during the workweek, exclusive of 16 rest and recovery periods. 17 (ii) The applicable minimum wage. (4) Employees shall be compensatedfor other nonproductive time at an hourly rate 18 that is no less than the applicable minimum wage, [emphasis added]. 19 The Defendant has stipulated that during both rest periods and non-productive time, class members 20 did not and cannot work toward earning the piece rate [UMF 42]. Thus, it makes perfect sense that an 21 employee must be paid at least the minimum wage for each hour worked. After all, the law requires that 22 an employee be paid the minimum wage for each hour. In an attempt to avoid the clear requirements ol 23 the statute, the Defendant claims that it can "borrow" money from other hours to meet the minimum wage 24 requirements. This is also referred to as "averaging." 25 Califomia law does not permit employers to average hours that the employee is paid at more than 26 the minimum wage against hours for which the employee was either not paid at all or was not paid the 27 minimum wage. Rather, the employee must receive the minimum wage for each hour worked during the 28 payroll period. (Armenia v. Osmose, Inc. (2005) 135 Cal.App.4'^ 314, 324; Sheppard v. North Orange PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 County Reg. Occup. Program (2010) 191 Cal.App.4"' 289, 297, fh. 5 (employees must be compensated 2 for each hour worked at the legal minimum wage and compliance cannot be determined by averaging 3 hourly compensation."); see Perez v. Sun Pacific Farming Co-op., Inc. (E.D. Cal., June 8,2015, No. 1:15 4 CV-00259-KJM-SKO), 2015 WL 3604165, pp. 5-7; Ridgeway v. Wal-Mart Stores, Inc. (N.D.Cal.2015) 5 107 F.Supp.3d 1044, 1053; Reinhardt v. Gemini Motor Transport (E.D.Cal.2012) 869 F.Supp.2d 1158 6 1168; Carrillo v. Schneider Logistics, Inc. (C.D.Cal.2011) 823 F.Supp.2d 1040, 1044; Cardenas v. 7 McLane Food Services, Inc. (C.D.Cal.2011) 796 F.Supp.2d 1246, 1252; Ontiveros v. Zamora (E.D. Cal 8 Feb. 20, 2009, No. ClV.S-08-567 LKK/DAD), 2009 WL 425962, p. 3; Ortega v. J.B. Hunt Transport, 9 Inc., (CD. Cal. July 23, 2018) 2018 WL 6131153, *3). 10 The Defendant, who essentially admits that it engaged in such unlawful averaging to meet the 11 minimum wage, asserts that this law can be abrogated by attempting to disfinguish Armenia and its 12 progeny. In Armenia, the Court of Appeal constmed the same language in the same wage order that is at 13 issue here and concluded that it "expresses the intent to ensure that employees be compensated at the 14 minimum wage for each hour worked." (Armenia, supra, at p. 323, italics added.) The court in Armenia 15 fiirther concluded that the employer's method of averaging employees' hours worked in a given pay period 16 in order to compute its minimum wage obligations violated the minimum wage law. (Id.). 17 The plaintiffs in Armenia were employed by a company that maintained utility poles. The company 18 provided the employees with a tmck that carried the tools and equipment needed to perform the work in 19 the field, and employees were required to travel in the tmck to the various job sites. (Armenia, supra 135 20 Cal.App.4th at p. 317). Employees' time was considered "productive" if directly related to maintaining 21 utility poles in the field and "nonproductive" if spent performing other tasks such as traveling to and from 22 a job site, loading or maintaining vehicles, and attending safety meetings. (Ibid.). Employees were only 23 paid for "productive" time. In Armenia, the employer, as Defendant does here, argued that the employees' 24 average hourly rate in any given pay period was higher than Califomia's minimum wage and, therefore, 25 it had not violated §1194. Armenia, supra, 135 Cal.App.4"' at 319. However, as the Court of Appeal 26 clarified, the minimum wage provisions ofthe FLSA differ significantly from Califomia's minimum wage 27 law. While the FLSA requires payment of minimum wage to employees who "in any work week" are 28 engaged in commerce. Labor Code § 1194 provides that an employer shall pay each employee wages not 4 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 less than the minimum wage for all hours worked. (Id. at 323). The Court concluded that, "[t]he 2 averaging method utilized by the federal courts for assessing a violation of the minimum wage law does 3 not apply here." (Id). The court mled that the employer had violated the minimum wage law by not 4 compensating employees for travel time and for time spent on daily paperwork. (Id. at p. 320). 5 The mle established by Armenia—^that employees must be separately compensated at minimum 6 wage or above for all time and each hour worked—was subsequently applied by Califomia courts to 7 "piece-rate" compensation programs, in which employees do not receive an hourly wage, but are paid 8 based on the tasks they perform. (See Gonzalez v. Downtown LA Motors, LP (2013) 215 Cal.App.4"' 36; 9 Bluford V. Safeway Stores, Inc. (2013) 216 Cal.App.4"' 864). "Plainfiffs are correct that pay for rest 10 periods taken by employees must be separate from piece-rate compensation and cannot be satisfied by 11 averaging". See Bluford v. Safeway Stores, Inc., (20\ 3) 216 Cal.App.4th 864, 872 ("a piece-rate 12 compensation formula that does not compensate separately for rest periods does not comply with 13 Califomia minimum wage law"); Villalpando v. Exel Direct Inc., (N.D.Cal. 2016) 161 F. Supp. 3d 873, 14 889); ("[E]mployees must be directly compensated at least minimum wage for all time spent on activities 15 that do not allow them to directly eam wages."); Cardenas v. McLane FoodServices, Inc., (C.D.Cal.2011) 16 796 F.Supp.2d 1246, 1253). 17 In Gonzalez v. Downtown LA Motors, LP (2013) 215 Cal.App.4''^ 36, automotive service technicians 18 were paid piece-rate compensation based on the completion of repair tasks, but with a floor based on the 19 applicable hourly minimum-wage: if a technician's piece-rate compensation for any pay period would be 20 less than what she would have eamed from an hourly minimum-wage for the same number of hours 21 worked, the employer would pay the hourly-wage figure. The plaintiffs in Gonzalez, technicians who had 22 worked for the defendant employer, claimed they should have been paid a separate hourly minimum-wage 23 for time spent during their work shifts waiting for vehicles to repair and performing other non-repair tasks 24 (such as obtaining parts, cleaning their work stations, attending meetings, traveling to other locations to 25 pick up and retum cars, and participating in online training sessions) directed by the employer. Gonzalez, 26 215 Cal. App. 4th at 40. The Court of Appeal, relying heavily on the reasoning in Armenia, agreed with 27 the plaintiffs and held that they were "entitled to separate hourly compensation for time spent waiting for 28 repair work or performing other non-repair tasks directed by the employer during their work shifts 5 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 Id. at 40-41. This non-productive work had to be separately compensated to satisfy minimum wage 2 law, since the minimum wage law applied to each hour worked and the court found that the non-productive 3 hours were not covered by the piece-rate pay. 4 In an attempt to avoid the clear mandate of these litany of cases. Defendant strangely cites to the 5 singular case of Aguirre v. Genesis Logistics (C.D.Cal. July 3, 2013) 2013 WL 10936036). But the Court 6 in Aguirre specifically related that the Plaintiffs in that case never even asserted that the rates for non 7 productive time fell below the minimum hourly wage. "Plaintiffs' focus on the fact that Route Pay is 8 $22-$30 regardless of whether a driver works fifteen or ninety minutes therefore is misplaced, especially 9 because Plaintiffs do not argue that those rates are below the minimum hourly wase." Id. The Defendant's 10 pay plan does not mirror Aguirre because the hourly rate paid by the Defendant in the case at bar is below 11 the minimum wage. This issue was never even addressed in Aguirre. 12 C. ISSUE TWO: Did Primeritus Separately Compensate the Class for Rest Breaks at or 13 Above Their Average Rate of Pay? 14 Plaintiff does not dispute that Primeritus separately compensated the class for rest breaks. Plaintiff 15 simply contends that this "separate compensation" [$8.00 per hour] was less than the minimum wage and 16 as such, violated Califomia law [Califomia Labor Code §226.2]. To avoid this obvious conclusion, the 17 Defendant resorts to a new factual argument that is not contained within the agreed stipulation of facts. 18 In the stipulation of facts, the Defendant agreed that the class was paid $8.00 per hour for each hour 19 worked in addition to the piece rate. Suddenly, and in direct contradiction with the stipulated fact, the 20 Defendant now asserts that the class was paid a daily rate of $64.00. 21 As set forth above, the Defendant is asserting that this new daily rate can be averaged across multiple 22 hours to arrive at amounts above the minimum wage. But such averaging is not permitted by law 23 Califomia law does not allow employers to average hours that the employee is paid at more than the 24 minimum wage against hours for which the employee was either not paid at all or was not paid the 25 minimum wage. Rather, the employee must receive the minimum wage for each hour worked during the 26 payroll period. (Armenia v. Osmose, Inc. (2005) 135 Cal.App.4'*' 314, 324; Sheppard v. North Orange 27 County Reg. Occup. Program (2010) 191 Cal.App.4"' 289, 297, fn. 5 (employees must be compensated 28 for each hour worked at the legal minimum' wage and compliance cannot be determined by averaging 6 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 hourly compensation."); see Perez v. Sun Pacific Farming Co-op., Inc. (E.D. Cal., June 8, 2015, No. 1:15 2 CV-00259-KJM-SKO), 2015 WL 3604165, pp. 5-7; Ridgeway v. Wal-Mart Stores, Inc. (N.D.Cal.2015) 3 107 F.Supp.3d 1044, 1053; Reinhardt v. Gemini Motor Transport (E.D.Cal.2012) 869 F.Supp.2d 1158 4 1168; Carrillo v. Schneider Logistics, Inc. (C.D.Cal.2011) 823 F.Supp.2d 1040, 1044; Cardenas v. 5 McLane Food Services, Inc. (C.D.Cal.2011) 796 F.Supp.2d 1246, 1252; Ontiveros v. Zamora (E.D. Cal 6 Feb. 20, 2009, No. ClV.S-08-567 LKK/DAD), 2009 WL 425962, p. 3; Ortega v. J.B. Hunt Transport, 7 Inc., (CD. Cal. July 23, 2018) 2018 WL 6131153, *3). 8 D. ISSUE T H R E E : Did Primeritus Separately Compensate the Class for Non-Productive 9 Time at or Above Their Average Rate of Pay? 10 Plaintiff does not dispute that Primeritus separately compensated the class for non-productive time 11 Plaintiff simply contends that this "separate compensation" [$8.00 per hour] was less than the minimum 12 wage and as such, violated Califomia law. In the interest of brevity. Plaintiff reincorporates the arguments 13 asserted above. 14 E. ISSUE FOUR: Primertus' Claim that it Reasonably Estimated the Amount of Non- 15 productive Time. 16 Plaintiff does not understand the basis for asserting this as an issue for summary adjudication of a 17 legal issue. This is an issue relating to damages, which is not at issue for purposes of the 437tc(t) motion. 18 According to the Stipulation, 19 Plaintiff and Primertus will file Cross-Motions for Summary Adjudication on the legality 20 of the manner in which Primeritus paid Plaintiff and the putative class for rest periods and non-productive time. These motions may also include adjudication of additional and 21 related legal issues include the Labor Code §226 (paystub claim) and the adjudication of certain penalties. 22 23 Further, Primertus' current estimates of the reasonable amount of non-productive time is irrelevant. 24 If the Defendant is attempting to assert that its estimates of non-productive time (as it defines it) are 25 accurate as a matter of law, this is also inappropriate for its motion. Once liability has been determined 26 (via the cross-motions filed by the parties), and assuming the Plaintiff prevails. Plaintiff intends on having 27 the class surveyed conceming non-producfive time, including rest periods for purposes of a relatively 28 short damages trial. 7 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 F. ISSUE F I V E : Did Primeritus Compensate the Class at Least the Minimum Wage for 2 All Time Worked? 3 Plaintiff has addressed this issue above. Primeritus did not compensate the class at least the 4 minimum wage for all time worked because it paid less than the minimum wage for all rest periods and 5 non-productive time. For example, if a class member was required to attend a one-hour meeting, that 6 class member only received $8.00 for that hour, an amount well below the minimum wage. 7 Primeritus' assertion that it can average pay over the balance of other hours worked is legally 8 unsupported. In fact, in the Ward Declaration, Defendant's Appendix C, Exhibit "2", ^7, he admits that 9 he was instmcted to average the pay.^ Again, averaging is not permitted by law. Califomia law does nol 10 permit employers to average hours that the employee is paid at more than the minimum wage againsi 11 hours for which the employee was either not paid at all or was not paid the minimum wage. Rather, the 12 employee must receive the minimum wage for each hour worked during the payroll period. (Armenia v. 13 Osmose, Inc. (2005) 135 Cal.App.4'*^ 314, 324; Sheppard v. North Orange County Reg. Occup. Program 14 (2010) 191 Cal.App.4'^ 289, 297, fh. 5 (employees must be compensated for each hour worked at the legal 15 minimum wage and compliance cannot be determined by averaging hourly compensation."); see Perez v. 16 Sun Pacific Farming Co-op., Inc. (E.D. Cal., June 8, 2015, No. 1:15-CV-00259-KJM-SKO), 2015 WL 17 3604165, pp. 5-7; Ridgeway v. Wal-Mart Stores, Inc. (N.D.Cal.2015) 107 F.Supp.3d 1044, 1053; 18 Reinhardt V. Gemini Motor Transport (E.D.Cal.2012) 869 F.Supp.2d 1158, 1168; Carrillo v. Schneider 19 Logistics, Inc. (C.D.Cal.2011) 823 F.Supp.2d 1040, 1044; Cardenas v. McLane Food Services, Inc. 20 (C.D.Cal.2011) 796 F.Supp.2d 1246, 1252; Ontiveros v. Zamora (E.D. Cal., Feb. 20, 2009, No. CIV.S- 21 08-567 LKJC/DAD), 2009 WL 425962, p. 3; Ortega v. J.B. Hunt Transport, Inc., (CD. Cal. July 23, 2018) 22 2018 WL 6131153, *3). 23 Plaintiff does not dispute that Primeritus separately compensated the class for non-productive time. 24 Plaintiff simply contends that this "separate compensation" [$8.00 per hour] was less than the minimum 25 wage and as such, violated Califomia law. 26 27 ^ He relates, "It is my understanding from counsel that the Califomia statute requires that employees paid under a piece rate system must be compensated for rest breaks separate from their piece rate compensation at an "average hourly pay rate." 28 Also note paragraph 19 of his declaration where he determines whether the "weekly" pay was sufficient to pay for rest breaks and for non-productive time. He does not perform his calculation on an hourly basis as required by Califomia law. PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t) 1 As noted, the Court of Appeal in Vaquero v. Stoneledge Furniture LLC pronounced that "the 2 employee must be paid at least the minimum wage (or contract hourly rate if one exists) for the period of 3 time the employee's opportunity to earn commissions or piece rate [is reduced]." (Vaquero v. Stoneledge 4 Furniture LLC, (Ct. App. 2017) 9 Cal. App. 5th 98, 112 (italics in original)). After all, "[s]tate wage and 5 hour laws "reflect the strong public policy favoring protection of workers' general welfare and 'society's 6 interest in a stable job market.'" (Gonzalez, supra, 215 Cal.App.4th at p. 44; see Cash v. Winn (2012) 205 7 Cal.App.4th 1285, 1297). "They are therefore liberally constmed in favor of protecting workers. As 8 our Supreme Court has stated, "[i]n light of the remedial nature of the legislative enactments authorizing 9 the regulation of wages, hours and working conditions for the protection and benefit of employees, the 10 statutory provisions are to be liberally constmed with an eye to promoting such protection.'" (Gonzalez 11 supro, at p. 44, quoting Brinker, supra, 53 Cal.4th at pp. 1026-1027; see Augustus, supra, 2 Cal.5th at p 12 262 ("we liberally constme the Labor Code and wage orders to favor the protection of 13 employees"); Peabody v. Time Warner Cable, /«c. (2014) 59 Cal.4th 662, 667, ("[s]tatutes 14 goveming conditions of employment are to be constmed broadly in favor of protecting 15 employees"); Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103 (same); Vaquero 16 V. Stoneledge Furniture LLC, (Ct. App. 2017) 9 Cal. App. 5th 98, 107-08, as modified (Mar. 20, 2017) 17 (adjudicated in Plaintiffs favor); Garybo v. Bros., (E.D.Cal. March 2, 2020) No.: l:15-cv-01487-DAD 18 2020 WL 999762, citing Gomez, 2019 WL 5787805 at *17; Vaquero, 9 Cal. App. 5th at 110). In the 19 interests of brevity. Plaintiff reincorporates the arguments asserted above. 20 III. CONCLUSION. 21 Based upon the foregoing, it is respectfully requested that the Court deny Defendant's Motion for 22 Summary Adjudication in its entirety.^ 23 24 25 /// 26 /// 27 ^ Strangely, the Defendant admits in footnote 8 of its moving papers, that even under its untenable theory, that the class 28 would be owed wages under its own analysis. As a result, Defendant's motion based on the argument that Plaintiffs claims fail "as a matter of law" or that any of the Plaintiffs causes of action should be dismissed cannot be granted. 9 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(l) Dated: August 12,2020 HATHAWAY PERRETT WEBSTER POWERS 1 CHRISMAN A. GTITTFRREZ, APC 2 By: 3 Alejandro P. Gutierrez Attomeys for Plainfiff JOHN 4 BOUDREAU and the Certified Class 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(l) PROOF OF SERVICE 1 2 I am employed in the County of Ventura, State of Califomia. I am over the age of eighteen (18) years and not a party to the within action. My business address is 5450 Telegraph 3 Road, Suite 200, Ventura, Califomia 93003. 4 On the date below, I caused to be served, the foregoing document PLAINTIFF'S 5 OPPOSITION TO MOTION FOR SUMMARY AJUDICATION PURSUANT TO 6 CALIFORNIA CODE OF CIVIL PROCEDURE §437c(t) [Filed Concurrently with Declarations In Support of Opposition; Opposition to Separate Statement] on the interested 7 parties in said action by placing the tme copies thereof enclosed in sealed envelopes addressed as follows: 8 9 Keith A. Jacoby Attorneys for Defendants, Primeritus Bradley E. Schwan 10 Littler Mendelson, PC Financial Services and Chris 2049 Centtiry Park East, 5"^ Floor McGinness 11 Los Angeles, CA 90067-3107 Tel: (310) 553-0308 / Fax: (310)553-5583 12 kjacoby@littler.com/bschwan@littler.com 13 Nathaniel H. Jenkins 14 Littler Mendelson, PC 500 Capitol Mall, Suite 2000 15 Sacramento, CA 95814 16 Tel: (916) 830-7200 / Fax: (916) 561-0828 njenkins@littler.com 17 [ ] BY MAIL: By placing a tme copy thereof enclosed in a sealed envelope addressed to 18 the addressee(s) listed above. I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that pracfice, it would be deposited with the U.S. 19 Postal Service on that same date with postage thereon fully prepaid at Ventura, Califomia, in the 20 ordinary course of business. 1 am aware that on mofion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit 21 for mailing in affidavit. 22 [X] (ELECTRONIC MAIL) by electronically mailing the document(s) listed above to the e-mail 23 address(es) set forth above, or as stated on the attached service list per agreement in accordance with the Code of Civil Procedure §1010.6. 24 I declare under penalty of perjury under the laws of the State of Califomia that the 25 foregoing is tme and correct. Executed on August 14, 2020, at Ventura, Califomia. 26 27 28 Edna Byerly 11 PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY AJUDICATION PURSUANT TO CCP §437c(t)