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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
Case No.: JCCP 4980 (Coordinated);
In Re: 17CV310003
ARRIAGA AND ASSOCIATES STATEMENT OF DECISION
WAGE AND HOUR CASES
JUDICIAL COUNCIL COORDINATION Honorable Julia Alloggiamento
PROCEEDING NO. 4980 Department 9
The matter was part of a consolidated and bifurcated/trifurcated case. After the jury
verdict on the wage and hour class action claims, both sides waived jury and requested a court
trial on the defamation claim. The defamation court trial was heard before the Honorable Julia
Alloggiamento on April 10, 11, and 12th. Based on a prior court order dated December 15, 2022
re: Motions to Bifurcate and Trifurcate, the Court would “receive evidence as it may relate to the
PAGA, UCL and indemnification claims at the same time it is presented to the jury for the wage-
and-hour claims. After the jury verdict, if additional evidence is required for the bench trial, the
court will receive it at that time.” The Court has received further evidence and argument from
Plaintiffs and the class and Defendants through submitted briefs, evidence and declarations.
These claims were argued before the Court on June 21, 2023.
Statement of Decision
1 At the hearing, Nathan Reese and Vilmarie Cordero represented Plaintiff George Jordan
2 and the class, Ron Bidgoli represented Plaintiffs Eddie Giron and Jesus Alarcon and the class,
3 Jean Paul LeClerq represented Plaintiffs Jason Lara, Jose Segura, Doug Martin, Russ Oleyer,
4 Martin Verducci and the class, and Steven Berki and Sumble Manzoor represented Plaintiff
5 Francisco Ibarra and the class (collectively “Plaintiffs”).
6 Mr. Stephen Ilg and Ms. Dania Baker represented Defendants Arriaga & Associates and
7 Mr. Christopher Arriaga (collectively “Defendants”).
8 After the Court submitted its Proposed Statement of Decision, Defendants filed
9 objections. The Court held a further hearing and invited Plaintiffs to respond to Defendants’
10 contention that the Proposed Statement of Decision awarded duplicative recovery in certain areas
11 where Defendants had identified that Plaintiffs were awarded damages both individually and as
12 members of the class. Plaintiffs filed a brief in response. The Court has considered all
13 objections, responses, and evidence from the original hearing and cited in the papers and issues
14 the following decision.
15 BACKGROUND
16 The jury reached verdicts in this matter on April 6, 2023 in favor of the Plaintiffs and the
17 Class, completing Verdict Forms 2700, 2702, 2703, 2706, 2707, and special verdict forms under
18 Labor Code section 558.1 as stipulated by the parties.
19 LABOR CODE SECTION 203 PENALTIES
20 Labor Code § 203 provides:
21 If an employer willfully fails to pay, without abatement or reduction, in accordance with
22 Sections 201, 201.3, 201.5, 201.6, 201.8, 201.9, and 205.5, any wages of an employee who is
23 discharged or who quits, the wages of the employee shall continue as a penalty form the due date
24 thereof at the same rate until paid or until an action therefor is commenced. “Waiting time”
25 penalties may be collected only after an employee is discharged or quit until a lawsuit is filed.
26 Id.; see also Triad Data Servs. Inc. v. Jackson, 153 Cal.App.3d Supp 1, 12 (1984) (overruled in
27 part on other grounds).
28
2
Statement of Decision
1 For each named plaintiff, the jury found that the plaintiff performed work for Arriaga &
2 Associates, that their employment ended, that Arriaga & Associates willfully failed to pay the
3 full amount of wages earned by the plaintiff on the last day of employment, and that the Arriaga
4 & Associates willfully failed to pay the full amount of wages for 30+ calendar days after the
5 plaintiffs’ last day of employment. Verdict Forms (“VF”) 2703 for plaintiffs Doug Martin, Eddie
6 Giron, Francisco Ibarra, Jesus Alarcon, Jose Segura, Martin Verducci, Timothy Russ Oleyer,
7 George Jordan. In addition, the jury found that the Waiting Time Penalties Class performed
8 work for Arriaga & Associates, that the Waiting Time Penalties Class’s employment ended, and
9 that Arriaga & Associates willfully failed to pay the full amount of wages earned by the Waiting
10 Time Penalties Class on their last day of employment. VF 2703. Finally, the jury found that
11 Christopher Arriaga was an owner, director, officer, or managing agent of Arriaga & Associates
12 and that he engaged in some affirmative action beyond his states as an owner, officer, or director
13 of Arriaga & Associates and/or had some oversight of Arriaga & Associates’ operations and/or
14 some influence on Arriaga & Associates policies that resulted in the willful failure to pay the full
15 amount of wages earned on the last day of employment. Special Verdict Form LC 558.1 Waiting
16 Time Penalties.
17 WAITING TIME PENALTIES FOR NAMED PLAINTIFFS
18 The jury further found the daily rate for each named plaintiff. Therefore, the Waiting
19 Time Penalties for the Named Plaintiffs are as follows:
20
21 Daily Rate found by jury 30 days plus penalty
22 Doug Martin $306.25 $9,187.50
23 Eddie Giron $280.00 $8,400.00
24 Francisco Ibarra $385.00 $11,550.00
25 Jesus Alacron $210.00 $6,300.00
26 Jose Segura $280.00 $8,400.00
27 Martin Verducci $262.50 $7,875.00
28 Russ Oleyer $280.00 $8,400.00
3
Statement of Decision
1 George Jordan $308.00 $9,240.00
2
3 WAITING TIME PENALTIES FOR WAITING TIME PENALTIES CLASS
4 The Waiting Time Penalties Class is defined as “All members of the Overtime Class,
5 Apple Off-the-Clock Class, Apple Overtime Class and Double Time Class whose employment
6 with Defendants ended on or after July 7, 2014 and up to July 31, 2021.
7 Defendants argue that any final pay penalties awarded in this action should be limited to
8 the final pay penalties under Labor Code section 203 allegedly earned prior to the date the first
9 class action claim commenced on July 7, 2017. See Defendant’s RJN 3, Exh. B. This argument
10 was raised in Defendant’s Motion in Limine 23 which was denied by the Court. See Declaration
11 of Nathan Reese in Support of Plaintiff’s Trial Brief-Rebuttal, Exh. A. There is no authority to
12 support Defendants’ argument that this initial action commenced on July 7, 2017 should preclude
13 class members prior to the certification of the class. Class members are entitled to receive notice
14 of a pending class action, along with an opportunity to opt out. See People v. Pacific Land
15 Research Co, 20 Cal.3d 10, 17 (1977). In this case, the Waiting Time Penalty Class was
16 certified on April 3, 2022. The class composition became final on December 22, 2022 since the
17 opt out deadline was December 21, 2022. However, Plaintiffs have requested the period only
18 continue to July 31, 2021, which was when they received the last batch of records produced by
19 the Defendants. This period falls clearly before the time in which the “action was commenced”
20 for class members.
21 Plaintiffs’ expert, Dr. William Roberts, PhD., calculated the Waiting Time Penalties. Dr.
22 Roberts is an economist/statistician with the firm of Phillips, Fractor & Company, LLC which
23 offers consulting services to firms, governmental agencies, and other organizations as well as
24 expert witness and consulting services in support of litigation, primarily in the areas of statistics,
25 economics, finance and survey related research. Declaration of William Roberts, Ph.D.,
26 hereinafter “Roberts Decl.”¶ 1. Dr. Roberts testified at trial on March 13, 2023, and this Court
27 qualified him as an expert witness regarding econometrics and damage modeling for wage and
28 hour class actions. Id. at ¶ 3
4
Statement of Decision
1 Dr. Roberts first considered the time and pay data to determine who separated
2 employment during the class period. Dr. Roberts and his team constructed a list of 817 names
3 based on the records provided by Defendant, but made calculations for only 798, excluding those
4 who worked four or fewer days and for whom they were not able to match time and pay records.
5 Id. at ¶¶ 10, 11 and fn.1. Then Dr. Roberts determined the average daily rate for Waiting Time
6 Penalties Class Members by looking at the pay data for the class member’s last year of
7 employment. Dr. Roberts calculated the average daily rate of pay for the 798 class members as
8 $208.88325 per day. Id. at ¶ 12. Finally, he assumed that each class member would be owed
9 their daily rate for 30 days. The amount of each member of the Waiting Time Penalty Class was
10 added together to total $5,000,665.00. Id. at ¶¶ 10-11.
11 Defendants argue that Dr. Roberts’ testimony lacked credibility and that the Court should
12 completely disregard his analysis. However, the jury and this Court found him to be credible.
13 Defendants argue that Plaintiffs have not proven that all 798 no longer work for the Defendants.
14 However, Defendant offer no evidence other than conjecture to support that Dr. Roberts
15 calculations were inaccurate.
16 Mr. Arriaga contends that it is not uncommon for employees to leave and then come back
17 and that therefore departure does not necessarily mean their position was terminated
18 permanently. Arriaga Decl. ¶ 6. However, Arriaga has also stated that in 2017 and 2018,
19 Arriaga & Associates “lost its primary client Dave & Busters” and “shrunk down to a shell of its
20 former self” and that the “Apple-related projects ended soon after that.” Defendants’ Trial Brief,
21 p. 10. This is consistent with the evidence that Arriaga no longer employed a substantial number
22 of its guards. Arriaga provides no evidence to support an argument that every person he ever
23 employed simply remains on “inactive but not terminated” status simply because he did not
24 officially provide a notice of termination. Such an analysis would permit Arriaga to avoid his
25 obligations under the law based on semantics but not reality. Moreover, the jury specifically
26 found that the “Waiting Time Penalties Class’s employment with Arriaga” ended. VF-2303.
27 Evidence cited by Defendants indicate that the named Plaintiffs were included in the
28 expert’s calculations for the waiting time class. Therefore, the Court reduces the waiting time
5
Statement of Decision
1 penalty for the class for the totals awarded to the named Plaintiffs (5,000,685.18-69,352.50) for a
2 total penalty to the class of $4,931,332,68.
3
4 UNFAIR COMPETITION LAW (UCL) CLAIM (Restitution)
5 Plaintiffs seek an award of restitution under the Cal. Bus. & Prof. Code sec. 17200
6 (“UCL”) in the amount of unpaid wages. The statute of limitations for bringing an action under
7 UCL is four years, while damages for unpaid wages are recoverable for a three-year statutory
8 period. See Cal. Bus. & Prof. §17208; Cortez v. Purolator Air Filtration Products Co. (2000) 23
9 Cal.4th 163, 168, 178. During the hearing, both sides acknowledged that the jury’s findings as to
10 overtime, double time, meal period and rest period breaks were calculated (by stipulation of both
11 sides) from July 7, 2013 for the class and July 7, 2014 for the individual plaintiffs. See Reporters
12 Transcript (“RT”) attached as Exh. B to the Supplemental Declaration of Nathan Reese, p.3670.
13 While the Plaintiffs initial papers seemed to request the Court award additional restitution for
14 unpaid wages (above what the jury awarded for damages) for 2013-2014, the Plaintiffs
15 acknowledged both in their rebuttal papers and at the hearing that the jury analyzed the class
16 claims from 2013. Therefore, the Court’s analysis under restitution would mirror the award
17 calculated by the jury. Plaintiffs have been clear in their intention that they are not seeking
18 double recovery, nor does the Court intend to award it.
19 Defendants additionally argue that Plaintiffs should not be allowed to recover both for the
20 individual plaintiffs and the class as the individual plaintiffs’ awards would necessarily be
21 subsumed in the class. Plaintiffs argue (and evidence supports this in the record) that some of
22 the damages awarded to individualized plaintiffs were based on specific claims which fell
23 outside the class due to timing or location.
24 Initially, Defendants presented no specific argument or citation to the record where
25 individual damages found by the jury overlapped with the class damages found by the jury.
26 Defendants opted to not present the jury with any alternative damages or evidence to support an
27 alternative calculation. Defendants challenge Plaintiffs’ expert but simultaneously made a
28 strategic decision to not hire an expert of their own, neither for the jury trial nor for the court
6
Statement of Decision
1 trial. Similarly, Plaintiffs have not provided this Court with any updated or different restitution
2 calculation for the individual Plaintiffs for the period of 2013-2014.
3 In their objection to the statement of decision, the Defendants pointed to evidence in the
4 original record suggesting that individual Plaintiffs were counted in the jury’s award of damages,
5 both as individuals and as members of the class. The Court reviewed that evidence (which is not
6 newly submitted evidence but rather evidence already in the record). The Court agrees that the
7 evidence reflects that the jury awarded damages to the class that included some of the individual
8 Plaintiffs as well. To the extent that the Plaintiffs are asking the Court to find an award of
9 restitution under their UCL claim that mirrors the damages found by the jury for unpaid wages,
10 this becomes relevant.
11 When looking at restitution for unpaid wages, the Court considers the amounts presented
12 to the jury by the expert and the jury’s findings as to those amounts. The Court recognizes that
13 some of the individual plaintiffs fell outside the claim period or worked at a different location,
14 but based on the evidence cited by Defendants, it appears those plaintiffs were already excluded
15 from any reduction. In looking at the restitution for the unpaid wages under UCL for the four
16 year period, which would include the Apple off the Clock Class, the Meal Break Class, the Rest
17 Break Class, and the Overtime and Doubletime classes, the Court agrees with the amounts found
18 by the jury, but would reduce those amounts by any overlapping amounts already accounted for
19 to the following named plaintiffs: (1) Apple Off the Clock Class ($336,689.17 restitution of
20 unpaid wages for the class would be reduced by $16,503.60 already accounted for in unpaid
21 wages for Plaintiffs Verducci, Ibarra, Jorden, and Oleyer) (2) Meal Break ($1,839,639.48 unpaid
22 wages for the class would be reduced by $118,476 already accounted for in unpaid wages for
23 Plaintiffs Marin, Giron, Ibarra, Jordan, Alarcon, Segura, Verducci, and Oleyer) (3) Rest Break
24 ($1,984,618.55 unpaid wages for the class would be reduced by $117,695 already accounted for
25 in unpaid wages for Plaintiffs Marin, Giron, Ibarra, Jordan, Alarcon, Segura, Verducci and
26 Oleyer), (4) Overtime ($594,896 in unpaid wages for the class would be reduced by $102,910.33
27 already accounted for in unpaid wages for Plaintiffs Marin, Giron, Alarcon, Segura and
28
7
Statement of Decision
1 Verducci) and (5) Doubletime ($225.804 in unpaid wages for the class would be reduced by
2 $8615 already accounted for in unpaid wages for Plaintiffs Giron, Ibarra, Alarcon and Oleyer).
3
4 LABOR CODE SECTION 226 STATUTORY PENALTIES
5 Plaintiffs withdrew any claims for “actual damages” and agreed to seek only statutory
6 penalties under Labor Code section 226 for individual Plaintiffs and the Class. Plaintiffs Trial
7 Brief, p. 7.
8 Plaintiffs claim for failure to provide accurate itemized wage statement requires a
9 showing that (1) wage statements provided to the employees failed to comply with Labor Code §
10 226 (a)(1)-(9); (2) the employees suffered injury because of the missing information; and (3) the
11 employer’s failure was knowing and intentional. Labor Code § 226(e)(1).
12 Defendants argue that Plaintiffs claims fail for two reasons.
13 First, Defendants argue that Plaintiffs failed to prove that they suffered any injury.
14 However, for purposes of 226(e), a plaintiff is injured “if the accuracy of any items enumerated
15 in 226(a) [] cannot be ascertained from the four corners of the wage statement.” Raines v.
16 Coastal Pac. Food Distributors, Inc. (2018) 23 Cal.App.5th 667, 676 (citation omitted); Arroyo
17 v. International Paper Company (N.D. Cal. 2020) 611 F.Supp.3d 824, 843. The statute provides
18 that “a]n employee is deemed to suffer injury … if the employer fails to provide accurate and
19 complete information” as required by section 226, subdivision (a) and “the employee cannot
20 promptly and easily determine from the wage statement alone one or more of the following: (i)
21 The amount of gross wages or net wages paid to the employee during the pay period or any of
22 the other information required to be provided on the itemized wage statement…” Section
23 226(e)(2)(B) & (e)(2)(B)(i)); Maldonado v. Epsilon Plastics, Inc. (2018) 22 Cal.App.5th 1308,
24 1335. “An actual injury is shown where there is need for both additional documentation and
25 additional mathematical calculations in order to determine whether Plaintiffs were correctly paid
26 and what they may be owed.” See Cal. Lab. Code section 226(e)(2)(C); Arroyo v. International
27 Paper Company, supra at 843. In this case, the Court finds based on the evidence presented at
28 the trial and listed in listed in their Phase 3 trial briefs and supplemental brief (and incorporated
8
Statement of Decision
1 by reference) that the Plaintiffs have proven the elements above to be awarded statutory penalties
2 pursuant to Labor Code section 226.
3 Second, Defendants argue that “While individual Plaintiffs may be able to recover
4 penalties under Labor Code section 226, there can be no class action recovery for that claim
5 because it was not a certified claim.” Plaintiffs concede that the Itemized Wage Statement Class
6 was not certified by the Court but argue that the certified classes are entitled to Labor Code
7 section 226 damages as a derivative claim to their other claims. Plaintiffs’ Rebuttal Br. at pp. 4-
8 6. As an initial matter, Plaintiffs fail to offer any direct argument or authority in support of their
9 position, and it should be deemed abandoned or forfeited. See In re Phoenix H. (2009) 47
10 Cal.4th 835, 845 [“ ‘ “Contentions supported neither by argument nor by citation of authority are
11 deemed to be without foundation and to have been abandoned.” [Citations.]’ [Citation.]”];
12 Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [A court may deem an issue or
13 assertion as forfeited or waived if a party “fails to raise a point or asserts it but fails to support it
14 with reasoned argument and citations to authority[.]”].
15 In the Motion for Class Certification, the Plaintiffs sought to certify an “Itemized Wage
16 Statement Class” as “All members of the Overtime Class, Apple Off-the-Clock Class, Apple
17 Overtime Class, and Double Time Class, and who were employed by Defendants on or after June
18 16, 2016. The Plaintiffs also sought to certify a “Waiting Time Penalties Class” as “All
19 members of the Overtime Class, Apple Off-the-Clock Class, Apple Overtime Class, and Double
20 Time Class, and whose employment with Defendants ended on or after July 7, 2014.” Order Re:
21 Motion for Class Certification dated April 3, 2022 (“Order”), p. 6.
22 The Court explained in the Order that “Plaintiffs submit evidence showing that the
23 proposed classes, with the exception of the Itemized Wage Statement Class, are sufficiently
24 numerous.” Id. at p. 7. “Plaintiffs do not present any argument or evidence regarding the
25 estimated number of individuals in the Itemized Wage Statement …[thus] Plaintiffs fail to
26 establish that the Itemized Wage Statement Class is sufficiently numerous.” Id.
27 At the hearing for Class Certification, Plaintiffs argued “that the Itemized Wage
28 Statement Class is derivative of other claims, such as the Apple Off-The-Clock-Claim, and is
9
Statement of Decision
1 therefore sufficiently numerous and should be certified to the extent the other claims are
2 certified.” The Court rejected this argument, finding the individuals defined in the Itemized
3 Wage Statement Class to not be “coextensive with the Apple Off-The-Clock Class” and
4 therefore the Court could not determine the appropriate number of individuals. Order at pp. 8-9.
5 Specifically, the Court noted that the Itemized Wage Statement Class consisted of individuals
6 employed by Defendants on or after June 16, 2016, while the Apple Off-The-Clock, Apple
7 Overtime, Overtime, and Double Time Classes consisted of individuals employed by Defendants
8 after July 7, 2013. Id. at pp. 6-7, 9. In other words, there was a substantial three-year difference
9 in the class periods.
10 In contrast to the Itemized Wage Statement Class, the Waiting Time Penalties Class was
11 certified. Like the Itemized Wage Statement Class, the Waiting Time Penalties Class was
12 defined as “All members of the Overtime Class, Apple Off-the-Clock Class, Apple Overtime
13 Class, and Double Time Class, and whose employment with the Defendants ended on or after
14 July 7, 2014.” Order at p.6. This too was identified as a derivative claim.
15 Plaintiffs argued at the hearing that they sought to certify classes, not claim. They
16 contend that since this is a derivative claim, it does not matter that the Wage Statement Class was
17 not certified. Again, Plaintiffs provide no legal support for their position. If both the Itemized
18 Wage Statement Class and the Waiting Time Penalties Class are derivative claims involving
19 classes that were already certified, then it is hard to understand why they sought certification at
20 all. However, they did, and the Court certified one and not the other.
21 If a class is not certified, Plaintiffs do not have the right to act on behalf of and bind
22 absent proposed class members. (Smith v. Bayer Corp. (2011) 564 U.S. 299, 315 (Smith)1
23 [“Neither a proposed class action nor a rejected class action may bind nonparties. What does
24 have this effect is a class action approved under Rule 23.”]; id. at 316, fn. 11 [“The great weight
25 of scholarly authority—from the Restatement of Judgments to the American Law Institute to
26
27 1
“Smith held that putative class members in a case where the court refused to certify a class are not bound by that
28 decision; they may relitigate certification in a subsequent case. [Citation.]” (Williams v. U.S. Bancorp Investments,
Inc. (2020) 50 Cal.App.5th 111, 119 (Williams). “Although Smith was decided under federal law, its reasoning has
since been applied to class actions brought under California law.” (Id. at p. 120.)
10
Statement of Decision
1 Wright and Miller—agrees that an uncertified class action cannot bind proposed class members.
2 [Citations.]”]; Daniels v. Bursey (7th Cir. 2005) 430 F.3d 424, 428 2 [where no class is certified,
3 absent class members cannot be bound by the parties]; AAL High Yield Bond Fund v. Deloitte &
4 Touche LLP (11th Cir. 2004) 361 F.3d 1305, 1310 [“Persons who are not class members are not
5 bound at all.”]; see Williams, supra, 50 Cal.App.5th at p. 125 [“[U]nder California law, an order
6 decertifying a class has no preclusive effect on absent class members.”]; Bridgeford v. Pacific
7 Health Corp. (2012) 202 Cal.App.4th 1034, 1044 [following Smith and concluding that “under
8 California law, that the denial of class certification cannot establish collateral estoppel against
9 unnamed putative class members on any issue because unnamed putative class members were
10 neither parties to the prior proceeding nor represented by a party to the prior proceeding so as to
11 be considered in privity with such a party for purposes of collateral estoppel”].)
12 Plaintiffs may not bypass the carefully crafted requirements for class treatment which
13 places the burden on the party moving for class certification to demonstrate “the existence of an
14 ascertainable and sufficiently numerous class[.]” (Brinker Restaurant Corp. v. Superior Court
15 (2012) 53 Cal.4th 1004, 1021 (Brinker).) Indeed, Plaintiffs themselves recognized the necessity
16 of moving for class certification of the Itemized Wage Statement Class, but now focus their
17 arguments on the merits of their claims, largely repeating the argument they made before the
18 Court (Judge Lucas), asserting that “[b]ecause the underlying violations were proven, the wage
19 statements must be inaccurate on a derivative basis. Thus, there is no outstanding question
20 regarding numerosity or whether class members have suffered an injury.” Plaintiffs’ Rebuttal
21 Br. at p. 5. Whether Plaintiffs’ claims are meritorious is not the same as whether the procedural
22 requirements for maintaining a class action are met. (Brinker, supra, 53 Cal.4th at pp. 1023-
23 1024 [noting that while merits issues may overlap with class action requirements, they are
24 distinct].)
25 While the Court maintains discretion to alter or amend the Class Certification Order,
26 Plaintiffs did not move to certify the Itemized Wage Statement Class before or even during the
27
2
28 Decisions from federal courts of appeal may be considered persuasive authority. (People v. Bradford (1997) 15
Cal.4th 1229, 1292 [Decisions from federal courts of appeals “provide persuasive rather than binding authority.
[Citations.]”].)
11
Statement of Decision
1 trial. In fact, at the PAGA hearing, Plaintiffs’ counsel specifically argued that they were not
2 seeking reconsideration of the Certification Order. Plaintiffs could have asked the Court at an
3 earlier stage to revisit the class certification—and presented the Court with evidence establishing
4 that the Itemized Wage Statement Class was sufficiently numerous, but they chose not to.
5 Furthermore, the Court may modify a class certification order only before a decision on
6 the merits. (See B.W.I. Custom Kitchen v. Owens-Illinois, Inc. (1987) 191 Cal.App.3d 1341,
7 1348 [“[A] class certification order may be conditional and may be altered or amended before a
8 decision on the merits. [Citations.]”]; see also Espejo v. The Copley Press, Inc. (2017) 13
9 Cal.App.5th 329, 358 [suggesting in the class action context a later judge is not necessarily
10 bound by the class certification ruling of a prior judge].) Here, the jury has already made its
11 findings in the first phase of the trial regarding the accuracy of the wage statements at issue.
12 Even if Plaintiffs were seeking to modify the Class Certification Order at this stage, it would be
13 untimely. (See In re Citizens Bank, N.A. (3d Cir. 2021) 15 F.4th 607, 618-619, fn. 11 [post-trial
14 class certification generally improper].)
15 The Court finds that 226 Penalties are appropriate for the named Plaintiffs but declines to
16 award them for the Class that was not certified by the Court. The Court awards Labor Code 226
17 penalties for named plaintiffs in the following amounts:
18 George Jordan: $450
19 Eddie Giron: $2,350
20 Jesus Alarcon: $2,550
21 Martin Verducci: $2,550
22 Timothy Russ Oleyer: $2,950
23 Jose Segura: $2,250
24 Douglas Martin: $1,950
25 Francisco Ibarra: $1,550
26 PAGA CLAIMS (civil penalties)
27 Plaintiffs seek penalties under the Private Attorney General Act (“PAGA”) against
28 Defendants for violations to Labor Code sections 510, 512, 1194, 1197, 226, 203, 1198, and
12
Statement of Decision
1 2802. PAGA penalties are separate from and in addition to any civil recoveries. Z.B., N.A. v.
2 Superior Court (2019) 8 Cal. 5th 175, 195.
3 In support of their PAGA claims, Plaintiffs request for this Court to take judicial notice of
4 Exhibits A-C (“RFJN”). Similarly, in their Trial Brief, Defendants request the Court to take
5 judicial notice of their Exhibits A & B. Judicial Notice may be taken of facts and propositions
6 that are not reasonably subject to dispute and are capable of immediate and accurate
7 determination by resort to sources of reasonably indisputable accuracy. Evid. Code section
8 452(h). Plaintiffs Request for Judicial Notice of Exhibits A-C and Defendants Request for
9 Judicial Notice of Exhibits A and B are granted.
10 Plaintiffs satisfied the procedural requirements of PAGA pursuant to Labor Code section
11 2699.3. Plaintiffs Jason Lara, Jose Segura, George Jordan, Francisco Ibarra sent written notice
12 to the LWDA and Defendants. Plaintiffs’ RFJN A, B, C. Plaintiffs did not receive any notice
13 from LWDA of an intent to investigate the alleged violations within 65 calendar days. In
14 addition, the jury’s verdict in Phase I found that all Plaintiffs have suffered at least one of the
15 Labor Code violations during the PAGA period. The PAGA claim period is one year and sixty-
16 five days (Cal. Labor Code section 2699.3(d), Esparza v. Safeway, Inc. (2019) 36 Cal.App.5th 42,
17 59. The statute of limitations for PAGA claims is one year plus any additional time during
18 which the PAGA claim is equitably tolled. Code Civ. Proc. Section 340(b); Brown v. Ralphs
19 Grocery Co (2018) 28 Cal.App.5th 824, 839. In this case, Plaintiffs have agreed to limit the
20 PAGA period to the end date reflected on the time and pay data produced by Defendants,
21 rendering the period July 30, 2016 to July 30, 2021.
22 PAGA penalties in this case were calculated by Plaintiffs’ expert, William Roberts, PhD.
23 Dr. Roberts created modeling for civil penalties recoverable under PAGA such as those at issue
24 in this case. Roberts Decl. ¶ 7. While Plaintiffs argue that Defendants were required to pay
25 employees on a weekly basis (see infra), Dr. Roberts used the Defendants’ two-week payroll
26 period to estimate PAGA penalties (with the exception of penalties for failure to provide weekly
27 wage statements), suggesting an underestimate of penalties. Roberts Decl. ¶ 6.
28
13
Statement of Decision
1 Plaintiffs’ expert and his team reviewed time and payroll records produced by Arriaga &
2 Associates as well as data derived from those documents and incorporated into the excel
3 spreadsheet prepared by iBridge and entered into evidence as Exhibit 273. Roberts Decl. ¶ 25.
4 Dr. Roberts and his team determined that there were 9,817 pay periods worked by covered
5 employees from July 30, 2016 to July 30, 2021 (all future references to “employees” will refer to
6 “covered employees from July 30, 2016 to July 30, 2021). Roberts Decl. ¶ 26.
7 1. PAGA Penalties for Failure to Pay Overtime and Double-time Wages
8 Plaintiffs’ expert calculated 4,992 pay periods worked by employees in which the
9 employee’s workday exceeded 8 hours, giving rise to a potential overtime violation. Id. ¶ 29. In
10 addition, there were 700 pay periods worked by employees in which the employee’s workday
11 exceeded twelve hours, giving rise to a potential double time violation. Id. ¶ 30. Plaintiffs’
12 expert calculated the PAGA penalties at $50 for each pay period for each individual for a total of
13 $76,200 civil penalty. Id. ¶ 32. It is clear from the evidence at trial that Defendants never paid
14 its guards overtime or double-time. The Court awards Plaintiffs $76,200.
15 2. PAGA Penalties for Failure to Pay Minimum Wages
16 The expert considered for this calculation only the employees that worked at the Apple
17 Campus during the PAGA period. This is consistent with the jury verdict related to the Apple
18 Off-the-Clock Class which found that Defendants owed the Apple Off-the-Clock Class wages
19 under the terms of its employment. (VF-2700). The expert calculated the penalties at $100 for
20 each period for each individual for a total of $612,190 for violations of Labor Code 1194, 1197.
21 Roberts Decl. ¶ 32. This calculation had a margin of error of 2.16% with an upper estimate of
22 $625,400 and a lower estimate of $598,900, with an average of $612,190. Given the variation in
23 testimony from workers at the Apple Campus as well as the margin of error, in the interest of
24 justice, the Court awards the lower estimate of $598,900.
25 3. PAGA Penalties for Failure to Provide Rest Breaks
26 The expert determined there were 9,698 pay periods worked by employees in which the
27 workday exceeded 3.5 hours, giving rise to a potential rest break violation in violation of Labor
28 Code 226.7. Roberts Decl. ¶ 27 and Table 1. Dr. Roberts calculated the PAGA penalties for
14
Statement of Decision
1 violation of Labor Code 512 at $100 for each pay period for each individual for a total of
2 $950,508. Id. ¶ 32. The Court awards the average estimate of $950,508.
3 4. PAGA Penalties for Failure to Provide Meal Breaks
4 The expert determined that there were 9,532 pay periods worked by employees in which
5 the workday exceed five hours, giving rise to a potential meal break violation in violation of
6 Labor Code 512. Roberts Decl. ¶ 28. The expert calculated the PAGA penalties at $50 per pay
7 period for each individual for a total of $459,665. Id. ¶ 32.
8 5. PAGA Penalties for Failure to Pay Premium Wages for Missed Meal or Rest Breaks
9 Plaintiffs’ expert calculated Defendants failure to pay meal or rest break premiums at
10 $100 for each pay period for each individual for a total of $919,330 for missing meal premiums
11 and $950,509 for missing rest premiums pursuant to Labor code section 226.7. Roberts Decl. ¶
12 32 and Table 1. The Court awards Plaintiffs the average amount of $919,330 for failure to pay
13 meal premiums and $950,509 for failure to pay rest premiums.
14 6. PAGA Penalties for Violation of Labor Code section 2802
15 The expert determined there were 5,300 months worked by employees at the Apple
16 Campus and/or Dave & Busters giving rise to a potential unpaid reimbursement violation.
17 Roberts Decl. ¶ 31. Dr. Roberts calculated the PAGA penalties to be $334,342. Id. ¶ 32. The
18 margin of error is 7.57% with the lower amount being $308,300 and the upper amount being
19 $358,900. Given the variation of testimony at trial regarding reimbursements and the margin of
20 error, in the interest of justice, the Court awards the lower amount of $308,300.
21 7. PAGA Penalties for Violation of Labor Code 226(a)
22 Plaintiffs seek “PAGA penalties for failure to provide an itemized wage statement at
23 $250 for each work week during the two-week pay period where an employee worked both
24 weeks but received only one wage statement pursuant to section 210 [sic]” 3 for a total civil
25 penalty of $1,985,500. Plaintiffs’ Trial Br. at p. 15.
26
27 3
Plaintiffs’ citation to section 210 appears to be a typographical error. (Plaintiff’s Trial Br. at p. 15.) Section 210
28 applies to “fail[ure] to pay the wages of each employee” and not failure to provide a wage statement. (§ 210, subd.
(a).) It also provides for a penalty of $100 for the initial violation and $200 for subsequent or willful and intentional
violations (§ 210, subds. (a)(1) & (a)(2)) and not the $250 penalty asserted by Plaintiffs. Plaintiffs likely meant to
15
Statement of Decision
1 Plaintiffs also seek “PAGA penalties for failure to provide accurate wage statements at
2 [$]100 for each pay period, for each individual, for a $975,811 civil penalty.” Plaintiffs’ Trial
3 Br. at p. 15. There is no citation to specific statute, but Plaintiffs cite to the Roberts Declaration
4 at paragraph 32, which in turn references section 226. Based on Plaintiffs’ argument that
5 “PAGA allows a claim for a violation of section 226(a) without any reference to subdivision (e)”
6 and citation to Lopez v. Friant & Associates, LLC (2017) 15 Cal.App.5th 773, 784-785 (Lopez)
7 [“Because section 226(e)(1) sets forth the elements of a private cause of action for damages and
8 statutory penalties, its requirement that a plaintiff demonstrate ‘injury’ resulting from a ‘knowing
9 and intentional’ violation of section 226(a) is not applicable to a PAGA claim for recovery of
10 civil penalties.”], Plaintiffs seek PAGA default civil penalties pursuant to section 2699,
11 subdivision (f)(2)4 for violation of section 226, subdivision (a). (See FAC at ¶ 188 [“Thus, under
12 Labor Code § 2699(f)(2), Defendants are subject to a civil penalty of $100 for each aggrieved
13 employee per pay period for the initial violation of Labor Code §§ 226(a) and 1198, and $200 for
14 each aggrieved employee per pay period for each subsequent violation.”].)
15 In short, Plaintiffs seek civil penalties under both section 226.3 and section 2699,
16 subdivision (f)(2).
17 A. Civil Penalties for Violating Section 226, Subdivision (a)
18
19 Depending on the facts, a civil penalty for violation of § 226, subd. (a) is available under
20 the default penalty provision of § 2699, subd. (f)(2) or the heightened penalty provision of
21 § 226.3. Gunther v. Alaska Airlines, Inc. (2021) 72 Cal.App.5th 334, 355-356 (Gunther).
22
23 cite to section 226.3, which provides for “a civil penalty in the amount of two hundred fifty dollars ($250) per
employee per violation in an initial citation and one thousand dollars ($1,000) per employee for each violation in a
24 subsequent citation, for which the employer fails to provide the employee a wage deduction statement or fails to
keep the records required in subdivision (a) of Section 226.” That Plaintiffs likely meant to reference section 226.3
25 is consistent with their citation to paragraph 32 of the Declaration of William Roberts, Ph.D. [] (Roberts Decl.),
which cites to section 226.3 in relation to the $1,985,500 penalty. Accordingly, this Court will analyze the
26 $1,985,500 civil penalty sought as pursuant to section 226.3.
4
“The central provision of PAGA is section 2699. Subdivision (a) of the statute permits aggrieved employees to
27 recover civil penalties that previously could be collected only by LWDA. [Citation.] In addition, to address
violations for which no such penalty had been established, subdivision (f) of the statute created ‘a default penalty
28 and a private right of action’ for aggrieved employees. [Citation.]” (Home Depot U.S.A., Inc. v. Superior Court
(2010) 191 Cal.App.4th 210, 216; Lopez, supra, 15 Cal.App.5th at p. 778.)
16
Statement of Decision
1 In Raines, the plaintiff sought PAGA penalties under section 2699, subdivision (f)(2) for
2 failing to provide accurate itemized wage statements showing “all applicable hourly rates in
3 effect during the pay period” as required under section 226, subdivision (a)(9). (Raines, supra,
4 23 Cal.App.5th at pp. 673-674.) The appellate court explained that there were three possible
5 remedies for a violation of section 226, subdivision (a): (1) statutory penalties to employees who
6 suffered an injury pursuant to section 226, subdivision (e)(1); (2) injunctive relief pursuant to
7 section 226, subdivision (h); and (3) civil penalties pursuant to section 226.3. (Id. at p. 673; see
8 Gunther, supra, 72 Cal.App.5th at p. 354 (discussing Raines).) While “Raines sought recovery
9 under the default provision of section 2699, subdivision (f), applicable where there is no existing
10 civil penalty[,]” “section 226.3 provides civil penalties for a violation of section 226(a)[,]” so the
11 appellate court concluded that Raines’ “PAGA claim [fell] under subdivision (a) of section
12 2699.” (Raines, supra, 23 Cal.App.5th at p. 674; see id. at p. 675 [“We find more persuasive a
13 decision that found section 226.3 sets out a civil penalty for all violations of section 226.
14 [Citation.]” (Emphasis original.)]; Culley v. Lincare Inc. (E.D. Cal. 2017) 236 F.Supp.3d 1184,
15 1194 [“Because § 226.3 sets out a civil penalty for all violations of § 226, PAGA’s default civil
16 penalties do not apply to wage statement violations. Thus, a PAGA plaintiff can collect civil
17 penalties set out in § 226.3, and, if the wage statement violations create ‘injury as a result of a
18 knowing and intentional’ violation, the statutory penalties set out in § 226(e)(1).” (Emphasis
19 original.)].)
20 In Gunther, the trial court, relying on Raines v. Coastal Pacific Food Distributors, Inc.
21 (2018) 23 Cal.App.5th 667, 674-675 (Raines) (§ 226.3 sets forth the civil penalty for all § 226
22 violations) awarded the plaintiff over $25 million in civil penalties under section 226.3 for
23 “violat[ing] section 226(a)(2), (3), and (9) by failing to state the total hours worked, the number
24 of piece-rate units earned, and the corresponding rate of pay for each.” Gunther, supra, 72
25 Cal.App.5th at pp. 343, 353. The defendant challenged this civil penalty award on the basis that
26 “the trial court wrongly imposed heightened penalties under section 226.3.” Id. at p. 347.
27 Specifically, the defendant argued that “[b]ecause it provided wage statements and kept the
28 required records, . . . the $25 million in heightened penalties awarded by the trial court should be
17
Statement of Decision
1 vacated and the matter remanded with an instruction to apply the default penalty amounts set
2 forth in subdivision (f)(2) of section 2699.” Id. at p. 353. Citing Raines, the plaintiff asserted
3 “that section 226.3 provides a civil penalty for all violations of section 226 and is not limited to
4 situations where the employer fails to provide a wage statement or to keep records.” Id. The
5 appellate court declined to follow Raines, explaining:
6 Of course the choice is not, as Raines suggests, between a penalty
7 under section 226.3 and no penalty for an inadequate wage
8 statement. Instead, the question is which penalty provision
9 applies—the default penalty in section 2699, subdivision (f) or the
10 heightened penalty under section 226.3?
11
12 Gunther, supra, 72 Cal.App.5th at p. 355, (emphasis original).
13 The Gunther court continued:
14 Here, it is undisputed that Alaska provided wage statements to its
15 flight attendants, and Gunther dismissed her challenge that Alaska
16 failed to maintain records. Because the violations found by the
17 trial court resulted from Alaska’s failure to include certain
18 information in its wage statements, Alaska should have been
19 subject to the default civil penalties in section 2699, subdivision
20 (f)(2), not the heightened penalties in section 226.3. Accordingly,
21 we reverse the section 226.3 penalties and remand the matter to the
22 trial court for further proceedings regarding civil penalties under
23 section 2699, subdivision (f)(2)[.]
24
25 Gunther, supra, 72 Cal.App.5th at pp. 355-356.
26 In this case, consistent with Gunther, Plaintiffs seek to recover civil penalties under
27 section 226.3 for instances where they did not receive a wage statement at all and additionally
28 separate civil penalties under section 2699, subdivision (f)(2) for different instances where they
18
Statement of Decision
1 did receive a wage statement, but that wage statement was inaccurate. Gunther, supra, 72
2 Cal.App.5th at pp. 355-356.) Plaintiffs seek $1,985,500 at $250 per violation based on 7,942
3 violations of failing to provide a wage statement. Roberts Decl. ¶ 32. In addition, Plaintiffs seek
4 $975,811 at $100 per violation based on 9,758.11 violations of providing inaccurate wage
5 statements. Id.
6 B. Civil Penalties Pursuant to 2699(f)(2) for Failure to Provide Accurate Wage
7 Statements
8 There is no question that based on the evidence presented at trial and supplemented in the
9 papers and declarations presented for Phase III that Defendants failed to provide accurate wage
10 statements. Thus, the Court awards $975,811 in civil penalties for the inaccurate wage
11 statements as determined by the Plaintiffs’ expert pursuant to 2699(f)(2).
12 C. Civil Penalties Pursuant to 226.3 for Failure to Provide A Weekly Wage
13 Statement
14 In their initial Trial Brief, Plaintiffs argue that “[a]ny employer who is the security
15 services industry providing security guards to clients is required by Labor Code section 201.3 to
16 establish weekly pay period.” (Plaintiffs’ Trial Br. P. 13 citing Labor Code section
17 201.3(b)(1)(B)). In their Trial Brief, Defendants argue that Plaintiffs did not meet the specific
18 requirements of that section. Labor Code section 201.3(b)(1)(B) states:
19 (B) …, if an employee of a temporary services employer in the security services industry
20 is a security guard who is registered pursuant to Chapter 11.5 (commencing with Section
21 7580) of Division 3 of the Business and Professions Code, is employed by a private
22 patrol officer licensed pursuant to that chapter and is assigned to work for a client, that
23 employee’s ages are due and payable no less frequently than weekly, regardless of when
24 the assignment ends, and wages for work performed during any workweek, as defined
25 under Section 500, shall be due and payable not later than the regular payday of the
26 following work week.
27
28
19
Statement of Decision
1 Defendants contend that pursuant to section 201.3, subdivision (b)(1)(B), Plaintiffs failed
2
Preview
SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA Case No.: JCCP 4980 (Coordinated); In Re: 17CV310003 ARRIAGA AND ASSOCIATES STATEMENT OF DECISION WAGE AND HOUR CASES JUDICIAL COUNCIL COORDINATION Honorable Julia Alloggiamento PROCEEDING NO. 4980 Department 9 The matter was part of a consolidated and bifurcated/trifurcated case. After the jury verdict on the wage and hour class action claims, both sides waived jury and requested a court trial on the defamation claim. The defamation court trial was heard before the Honorable Julia Alloggiamento on April 10, 11, and 12th. Based on a prior court order dated December 15, 2022 re: Motions to Bifurcate and Trifurcate, the Court would “receive evidence as it may relate to the PAGA, UCL and indemnification claims at the same time it is presented to the jury for the wage- and-hour claims. After the jury verdict, if additional evidence is required for the bench trial, the court will receive it at that time.” The Court has received further evidence and argument from Plaintiffs and the class and Defendants through submitted briefs, evidence and declarations. These claims were argued before the Court on June 21, 2023. Statement of Decision 1 At the hearing, Nathan Reese and Vilmarie Cordero represented Plaintiff George Jordan 2 and the class, Ron Bidgoli represented Plaintiffs Eddie Giron and Jesus Alarcon and the class, 3 Jean Paul LeClerq represented Plaintiffs Jason Lara, Jose Segura, Doug Martin, Russ Oleyer, 4 Martin Verducci and the class, and Steven Berki and Sumble Manzoor represented Plaintiff 5 Francisco Ibarra and the class (collectively “Plaintiffs”). 6 Mr. Stephen Ilg and Ms. Dania Baker represented Defendants Arriaga & Associates and 7 Mr. Christopher Arriaga (collectively “Defendants”). 8 After the Court submitted its Proposed Statement of Decision, Defendants filed 9 objections. The Court held a further hearing and invited Plaintiffs to respond to Defendants’ 10 contention that the Proposed Statement of Decision awarded duplicative recovery in certain areas 11 where Defendants had identified that Plaintiffs were awarded damages both individually and as 12 members of the class. Plaintiffs filed a brief in response. The Court has considered all 13 objections, responses, and evidence from the original hearing and cited in the papers and issues 14 the following decision. 15 BACKGROUND 16 The jury reached verdicts in this matter on April 6, 2023 in favor of the Plaintiffs and the 17 Class, completing Verdict Forms 2700, 2702, 2703, 2706, 2707, and special verdict forms under 18 Labor Code section 558.1 as stipulated by the parties. 19 LABOR CODE SECTION 203 PENALTIES 20 Labor Code § 203 provides: 21 If an employer willfully fails to pay, without abatement or reduction, in accordance with 22 Sections 201, 201.3, 201.5, 201.6, 201.8, 201.9, and 205.5, any wages of an employee who is 23 discharged or who quits, the wages of the employee shall continue as a penalty form the due date 24 thereof at the same rate until paid or until an action therefor is commenced. “Waiting time” 25 penalties may be collected only after an employee is discharged or quit until a lawsuit is filed. 26 Id.; see also Triad Data Servs. Inc. v. Jackson, 153 Cal.App.3d Supp 1, 12 (1984) (overruled in 27 part on other grounds). 28 2 Statement of Decision 1 For each named plaintiff, the jury found that the plaintiff performed work for Arriaga & 2 Associates, that their employment ended, that Arriaga & Associates willfully failed to pay the 3 full amount of wages earned by the plaintiff on the last day of employment, and that the Arriaga 4 & Associates willfully failed to pay the full amount of wages for 30+ calendar days after the 5 plaintiffs’ last day of employment. Verdict Forms (“VF”) 2703 for plaintiffs Doug Martin, Eddie 6 Giron, Francisco Ibarra, Jesus Alarcon, Jose Segura, Martin Verducci, Timothy Russ Oleyer, 7 George Jordan. In addition, the jury found that the Waiting Time Penalties Class performed 8 work for Arriaga & Associates, that the Waiting Time Penalties Class’s employment ended, and 9 that Arriaga & Associates willfully failed to pay the full amount of wages earned by the Waiting 10 Time Penalties Class on their last day of employment. VF 2703. Finally, the jury found that 11 Christopher Arriaga was an owner, director, officer, or managing agent of Arriaga & Associates 12 and that he engaged in some affirmative action beyond his states as an owner, officer, or director 13 of Arriaga & Associates and/or had some oversight of Arriaga & Associates’ operations and/or 14 some influence on Arriaga & Associates policies that resulted in the willful failure to pay the full 15 amount of wages earned on the last day of employment. Special Verdict Form LC 558.1 Waiting 16 Time Penalties. 17 WAITING TIME PENALTIES FOR NAMED PLAINTIFFS 18 The jury further found the daily rate for each named plaintiff. Therefore, the Waiting 19 Time Penalties for the Named Plaintiffs are as follows: 20 21 Daily Rate found by jury 30 days plus penalty 22 Doug Martin $306.25 $9,187.50 23 Eddie Giron $280.00 $8,400.00 24 Francisco Ibarra $385.00 $11,550.00 25 Jesus Alacron $210.00 $6,300.00 26 Jose Segura $280.00 $8,400.00 27 Martin Verducci $262.50 $7,875.00 28 Russ Oleyer $280.00 $8,400.00 3 Statement of Decision 1 George Jordan $308.00 $9,240.00 2 3 WAITING TIME PENALTIES FOR WAITING TIME PENALTIES CLASS 4 The Waiting Time Penalties Class is defined as “All members of the Overtime Class, 5 Apple Off-the-Clock Class, Apple Overtime Class and Double Time Class whose employment 6 with Defendants ended on or after July 7, 2014 and up to July 31, 2021. 7 Defendants argue that any final pay penalties awarded in this action should be limited to 8 the final pay penalties under Labor Code section 203 allegedly earned prior to the date the first 9 class action claim commenced on July 7, 2017. See Defendant’s RJN 3, Exh. B. This argument 10 was raised in Defendant’s Motion in Limine 23 which was denied by the Court. See Declaration 11 of Nathan Reese in Support of Plaintiff’s Trial Brief-Rebuttal, Exh. A. There is no authority to 12 support Defendants’ argument that this initial action commenced on July 7, 2017 should preclude 13 class members prior to the certification of the class. Class members are entitled to receive notice 14 of a pending class action, along with an opportunity to opt out. See People v. Pacific Land 15 Research Co, 20 Cal.3d 10, 17 (1977). In this case, the Waiting Time Penalty Class was 16 certified on April 3, 2022. The class composition became final on December 22, 2022 since the 17 opt out deadline was December 21, 2022. However, Plaintiffs have requested the period only 18 continue to July 31, 2021, which was when they received the last batch of records produced by 19 the Defendants. This period falls clearly before the time in which the “action was commenced” 20 for class members. 21 Plaintiffs’ expert, Dr. William Roberts, PhD., calculated the Waiting Time Penalties. Dr. 22 Roberts is an economist/statistician with the firm of Phillips, Fractor & Company, LLC which 23 offers consulting services to firms, governmental agencies, and other organizations as well as 24 expert witness and consulting services in support of litigation, primarily in the areas of statistics, 25 economics, finance and survey related research. Declaration of William Roberts, Ph.D., 26 hereinafter “Roberts Decl.”¶ 1. Dr. Roberts testified at trial on March 13, 2023, and this Court 27 qualified him as an expert witness regarding econometrics and damage modeling for wage and 28 hour class actions. Id. at ¶ 3 4 Statement of Decision 1 Dr. Roberts first considered the time and pay data to determine who separated 2 employment during the class period. Dr. Roberts and his team constructed a list of 817 names 3 based on the records provided by Defendant, but made calculations for only 798, excluding those 4 who worked four or fewer days and for whom they were not able to match time and pay records. 5 Id. at ¶¶ 10, 11 and fn.1. Then Dr. Roberts determined the average daily rate for Waiting Time 6 Penalties Class Members by looking at the pay data for the class member’s last year of 7 employment. Dr. Roberts calculated the average daily rate of pay for the 798 class members as 8 $208.88325 per day. Id. at ¶ 12. Finally, he assumed that each class member would be owed 9 their daily rate for 30 days. The amount of each member of the Waiting Time Penalty Class was 10 added together to total $5,000,665.00. Id. at ¶¶ 10-11. 11 Defendants argue that Dr. Roberts’ testimony lacked credibility and that the Court should 12 completely disregard his analysis. However, the jury and this Court found him to be credible. 13 Defendants argue that Plaintiffs have not proven that all 798 no longer work for the Defendants. 14 However, Defendant offer no evidence other than conjecture to support that Dr. Roberts 15 calculations were inaccurate. 16 Mr. Arriaga contends that it is not uncommon for employees to leave and then come back 17 and that therefore departure does not necessarily mean their position was terminated 18 permanently. Arriaga Decl. ¶ 6. However, Arriaga has also stated that in 2017 and 2018, 19 Arriaga & Associates “lost its primary client Dave & Busters” and “shrunk down to a shell of its 20 former self” and that the “Apple-related projects ended soon after that.” Defendants’ Trial Brief, 21 p. 10. This is consistent with the evidence that Arriaga no longer employed a substantial number 22 of its guards. Arriaga provides no evidence to support an argument that every person he ever 23 employed simply remains on “inactive but not terminated” status simply because he did not 24 officially provide a notice of termination. Such an analysis would permit Arriaga to avoid his 25 obligations under the law based on semantics but not reality. Moreover, the jury specifically 26 found that the “Waiting Time Penalties Class’s employment with Arriaga” ended. VF-2303. 27 Evidence cited by Defendants indicate that the named Plaintiffs were included in the 28 expert’s calculations for the waiting time class. Therefore, the Court reduces the waiting time 5 Statement of Decision 1 penalty for the class for the totals awarded to the named Plaintiffs (5,000,685.18-69,352.50) for a 2 total penalty to the class of $4,931,332,68. 3 4 UNFAIR COMPETITION LAW (UCL) CLAIM (Restitution) 5 Plaintiffs seek an award of restitution under the Cal. Bus. & Prof. Code sec. 17200 6 (“UCL”) in the amount of unpaid wages. The statute of limitations for bringing an action under 7 UCL is four years, while damages for unpaid wages are recoverable for a three-year statutory 8 period. See Cal. Bus. & Prof. §17208; Cortez v. Purolator Air Filtration Products Co. (2000) 23 9 Cal.4th 163, 168, 178. During the hearing, both sides acknowledged that the jury’s findings as to 10 overtime, double time, meal period and rest period breaks were calculated (by stipulation of both 11 sides) from July 7, 2013 for the class and July 7, 2014 for the individual plaintiffs. See Reporters 12 Transcript (“RT”) attached as Exh. B to the Supplemental Declaration of Nathan Reese, p.3670. 13 While the Plaintiffs initial papers seemed to request the Court award additional restitution for 14 unpaid wages (above what the jury awarded for damages) for 2013-2014, the Plaintiffs 15 acknowledged both in their rebuttal papers and at the hearing that the jury analyzed the class 16 claims from 2013. Therefore, the Court’s analysis under restitution would mirror the award 17 calculated by the jury. Plaintiffs have been clear in their intention that they are not seeking 18 double recovery, nor does the Court intend to award it. 19 Defendants additionally argue that Plaintiffs should not be allowed to recover both for the 20 individual plaintiffs and the class as the individual plaintiffs’ awards would necessarily be 21 subsumed in the class. Plaintiffs argue (and evidence supports this in the record) that some of 22 the damages awarded to individualized plaintiffs were based on specific claims which fell 23 outside the class due to timing or location. 24 Initially, Defendants presented no specific argument or citation to the record where 25 individual damages found by the jury overlapped with the class damages found by the jury. 26 Defendants opted to not present the jury with any alternative damages or evidence to support an 27 alternative calculation. Defendants challenge Plaintiffs’ expert but simultaneously made a 28 strategic decision to not hire an expert of their own, neither for the jury trial nor for the court 6 Statement of Decision 1 trial. Similarly, Plaintiffs have not provided this Court with any updated or different restitution 2 calculation for the individual Plaintiffs for the period of 2013-2014. 3 In their objection to the statement of decision, the Defendants pointed to evidence in the 4 original record suggesting that individual Plaintiffs were counted in the jury’s award of damages, 5 both as individuals and as members of the class. The Court reviewed that evidence (which is not 6 newly submitted evidence but rather evidence already in the record). The Court agrees that the 7 evidence reflects that the jury awarded damages to the class that included some of the individual 8 Plaintiffs as well. To the extent that the Plaintiffs are asking the Court to find an award of 9 restitution under their UCL claim that mirrors the damages found by the jury for unpaid wages, 10 this becomes relevant. 11 When looking at restitution for unpaid wages, the Court considers the amounts presented 12 to the jury by the expert and the jury’s findings as to those amounts. The Court recognizes that 13 some of the individual plaintiffs fell outside the claim period or worked at a different location, 14 but based on the evidence cited by Defendants, it appears those plaintiffs were already excluded 15 from any reduction. In looking at the restitution for the unpaid wages under UCL for the four 16 year period, which would include the Apple off the Clock Class, the Meal Break Class, the Rest 17 Break Class, and the Overtime and Doubletime classes, the Court agrees with the amounts found 18 by the jury, but would reduce those amounts by any overlapping amounts already accounted for 19 to the following named plaintiffs: (1) Apple Off the Clock Class ($336,689.17 restitution of 20 unpaid wages for the class would be reduced by $16,503.60 already accounted for in unpaid 21 wages for Plaintiffs Verducci, Ibarra, Jorden, and Oleyer) (2) Meal Break ($1,839,639.48 unpaid 22 wages for the class would be reduced by $118,476 already accounted for in unpaid wages for 23 Plaintiffs Marin, Giron, Ibarra, Jordan, Alarcon, Segura, Verducci, and Oleyer) (3) Rest Break 24 ($1,984,618.55 unpaid wages for the class would be reduced by $117,695 already accounted for 25 in unpaid wages for Plaintiffs Marin, Giron, Ibarra, Jordan, Alarcon, Segura, Verducci and 26 Oleyer), (4) Overtime ($594,896 in unpaid wages for the class would be reduced by $102,910.33 27 already accounted for in unpaid wages for Plaintiffs Marin, Giron, Alarcon, Segura and 28 7 Statement of Decision 1 Verducci) and (5) Doubletime ($225.804 in unpaid wages for the class would be reduced by 2 $8615 already accounted for in unpaid wages for Plaintiffs Giron, Ibarra, Alarcon and Oleyer). 3 4 LABOR CODE SECTION 226 STATUTORY PENALTIES 5 Plaintiffs withdrew any claims for “actual damages” and agreed to seek only statutory 6 penalties under Labor Code section 226 for individual Plaintiffs and the Class. Plaintiffs Trial 7 Brief, p. 7. 8 Plaintiffs claim for failure to provide accurate itemized wage statement requires a 9 showing that (1) wage statements provided to the employees failed to comply with Labor Code § 10 226 (a)(1)-(9); (2) the employees suffered injury because of the missing information; and (3) the 11 employer’s failure was knowing and intentional. Labor Code § 226(e)(1). 12 Defendants argue that Plaintiffs claims fail for two reasons. 13 First, Defendants argue that Plaintiffs failed to prove that they suffered any injury. 14 However, for purposes of 226(e), a plaintiff is injured “if the accuracy of any items enumerated 15 in 226(a) [] cannot be ascertained from the four corners of the wage statement.” Raines v. 16 Coastal Pac. Food Distributors, Inc. (2018) 23 Cal.App.5th 667, 676 (citation omitted); Arroyo 17 v. International Paper Company (N.D. Cal. 2020) 611 F.Supp.3d 824, 843. The statute provides 18 that “a]n employee is deemed to suffer injury … if the employer fails to provide accurate and 19 complete information” as required by section 226, subdivision (a) and “the employee cannot 20 promptly and easily determine from the wage statement alone one or more of the following: (i) 21 The amount of gross wages or net wages paid to the employee during the pay period or any of 22 the other information required to be provided on the itemized wage statement…” Section 23 226(e)(2)(B) & (e)(2)(B)(i)); Maldonado v. Epsilon Plastics, Inc. (2018) 22 Cal.App.5th 1308, 24 1335. “An actual injury is shown where there is need for both additional documentation and 25 additional mathematical calculations in order to determine whether Plaintiffs were correctly paid 26 and what they may be owed.” See Cal. Lab. Code section 226(e)(2)(C); Arroyo v. International 27 Paper Company, supra at 843. In this case, the Court finds based on the evidence presented at 28 the trial and listed in listed in their Phase 3 trial briefs and supplemental brief (and incorporated 8 Statement of Decision 1 by reference) that the Plaintiffs have proven the elements above to be awarded statutory penalties 2 pursuant to Labor Code section 226. 3 Second, Defendants argue that “While individual Plaintiffs may be able to recover 4 penalties under Labor Code section 226, there can be no class action recovery for that claim 5 because it was not a certified claim.” Plaintiffs concede that the Itemized Wage Statement Class 6 was not certified by the Court but argue that the certified classes are entitled to Labor Code 7 section 226 damages as a derivative claim to their other claims. Plaintiffs’ Rebuttal Br. at pp. 4- 8 6. As an initial matter, Plaintiffs fail to offer any direct argument or authority in support of their 9 position, and it should be deemed abandoned or forfeited. See In re Phoenix H. (2009) 47 10 Cal.4th 835, 845 [“ ‘ “Contentions supported neither by argument nor by citation of authority are 11 deemed to be without foundation and to have been abandoned.” [Citations.]’ [Citation.]”]; 12 Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [A court may deem an issue or 13 assertion as forfeited or waived if a party “fails to raise a point or asserts it but fails to support it 14 with reasoned argument and citations to authority[.]”]. 15 In the Motion for Class Certification, the Plaintiffs sought to certify an “Itemized Wage 16 Statement Class” as “All members of the Overtime Class, Apple Off-the-Clock Class, Apple 17 Overtime Class, and Double Time Class, and who were employed by Defendants on or after June 18 16, 2016. The Plaintiffs also sought to certify a “Waiting Time Penalties Class” as “All 19 members of the Overtime Class, Apple Off-the-Clock Class, Apple Overtime Class, and Double 20 Time Class, and whose employment with Defendants ended on or after July 7, 2014.” Order Re: 21 Motion for Class Certification dated April 3, 2022 (“Order”), p. 6. 22 The Court explained in the Order that “Plaintiffs submit evidence showing that the 23 proposed classes, with the exception of the Itemized Wage Statement Class, are sufficiently 24 numerous.” Id. at p. 7. “Plaintiffs do not present any argument or evidence regarding the 25 estimated number of individuals in the Itemized Wage Statement …[thus] Plaintiffs fail to 26 establish that the Itemized Wage Statement Class is sufficiently numerous.” Id. 27 At the hearing for Class Certification, Plaintiffs argued “that the Itemized Wage 28 Statement Class is derivative of other claims, such as the Apple Off-The-Clock-Claim, and is 9 Statement of Decision 1 therefore sufficiently numerous and should be certified to the extent the other claims are 2 certified.” The Court rejected this argument, finding the individuals defined in the Itemized 3 Wage Statement Class to not be “coextensive with the Apple Off-The-Clock Class” and 4 therefore the Court could not determine the appropriate number of individuals. Order at pp. 8-9. 5 Specifically, the Court noted that the Itemized Wage Statement Class consisted of individuals 6 employed by Defendants on or after June 16, 2016, while the Apple Off-The-Clock, Apple 7 Overtime, Overtime, and Double Time Classes consisted of individuals employed by Defendants 8 after July 7, 2013. Id. at pp. 6-7, 9. In other words, there was a substantial three-year difference 9 in the class periods. 10 In contrast to the Itemized Wage Statement Class, the Waiting Time Penalties Class was 11 certified. Like the Itemized Wage Statement Class, the Waiting Time Penalties Class was 12 defined as “All members of the Overtime Class, Apple Off-the-Clock Class, Apple Overtime 13 Class, and Double Time Class, and whose employment with the Defendants ended on or after 14 July 7, 2014.” Order at p.6. This too was identified as a derivative claim. 15 Plaintiffs argued at the hearing that they sought to certify classes, not claim. They 16 contend that since this is a derivative claim, it does not matter that the Wage Statement Class was 17 not certified. Again, Plaintiffs provide no legal support for their position. If both the Itemized 18 Wage Statement Class and the Waiting Time Penalties Class are derivative claims involving 19 classes that were already certified, then it is hard to understand why they sought certification at 20 all. However, they did, and the Court certified one and not the other. 21 If a class is not certified, Plaintiffs do not have the right to act on behalf of and bind 22 absent proposed class members. (Smith v. Bayer Corp. (2011) 564 U.S. 299, 315 (Smith)1 23 [“Neither a proposed class action nor a rejected class action may bind nonparties. What does 24 have this effect is a class action approved under Rule 23.”]; id. at 316, fn. 11 [“The great weight 25 of scholarly authority—from the Restatement of Judgments to the American Law Institute to 26 27 1 “Smith held that putative class members in a case where the court refused to certify a class are not bound by that 28 decision; they may relitigate certification in a subsequent case. [Citation.]” (Williams v. U.S. Bancorp Investments, Inc. (2020) 50 Cal.App.5th 111, 119 (Williams). “Although Smith was decided under federal law, its reasoning has since been applied to class actions brought under California law.” (Id. at p. 120.) 10 Statement of Decision 1 Wright and Miller—agrees that an uncertified class action cannot bind proposed class members. 2 [Citations.]”]; Daniels v. Bursey (7th Cir. 2005) 430 F.3d 424, 428 2 [where no class is certified, 3 absent class members cannot be bound by the parties]; AAL High Yield Bond Fund v. Deloitte & 4 Touche LLP (11th Cir. 2004) 361 F.3d 1305, 1310 [“Persons who are not class members are not 5 bound at all.”]; see Williams, supra, 50 Cal.App.5th at p. 125 [“[U]nder California law, an order 6 decertifying a class has no preclusive effect on absent class members.”]; Bridgeford v. Pacific 7 Health Corp. (2012) 202 Cal.App.4th 1034, 1044 [following Smith and concluding that “under 8 California law, that the denial of class certification cannot establish collateral estoppel against 9 unnamed putative class members on any issue because unnamed putative class members were 10 neither parties to the prior proceeding nor represented by a party to the prior proceeding so as to 11 be considered in privity with such a party for purposes of collateral estoppel”].) 12 Plaintiffs may not bypass the carefully crafted requirements for class treatment which 13 places the burden on the party moving for class certification to demonstrate “the existence of an 14 ascertainable and sufficiently numerous class[.]” (Brinker Restaurant Corp. v. Superior Court 15 (2012) 53 Cal.4th 1004, 1021 (Brinker).) Indeed, Plaintiffs themselves recognized the necessity 16 of moving for class certification of the Itemized Wage Statement Class, but now focus their 17 arguments on the merits of their claims, largely repeating the argument they made before the 18 Court (Judge Lucas), asserting that “[b]ecause the underlying violations were proven, the wage 19 statements must be inaccurate on a derivative basis. Thus, there is no outstanding question 20 regarding numerosity or whether class members have suffered an injury.” Plaintiffs’ Rebuttal 21 Br. at p. 5. Whether Plaintiffs’ claims are meritorious is not the same as whether the procedural 22 requirements for maintaining a class action are met. (Brinker, supra, 53 Cal.4th at pp. 1023- 23 1024 [noting that while merits issues may overlap with class action requirements, they are 24 distinct].) 25 While the Court maintains discretion to alter or amend the Class Certification Order, 26 Plaintiffs did not move to certify the Itemized Wage Statement Class before or even during the 27 2 28 Decisions from federal courts of appeal may be considered persuasive authority. (People v. Bradford (1997) 15 Cal.4th 1229, 1292 [Decisions from federal courts of appeals “provide persuasive rather than binding authority. [Citations.]”].) 11 Statement of Decision 1 trial. In fact, at the PAGA hearing, Plaintiffs’ counsel specifically argued that they were not 2 seeking reconsideration of the Certification Order. Plaintiffs could have asked the Court at an 3 earlier stage to revisit the class certification—and presented the Court with evidence establishing 4 that the Itemized Wage Statement Class was sufficiently numerous, but they chose not to. 5 Furthermore, the Court may modify a class certification order only before a decision on 6 the merits. (See B.W.I. Custom Kitchen v. Owens-Illinois, Inc. (1987) 191 Cal.App.3d 1341, 7 1348 [“[A] class certification order may be conditional and may be altered or amended before a 8 decision on the merits. [Citations.]”]; see also Espejo v. The Copley Press, Inc. (2017) 13 9 Cal.App.5th 329, 358 [suggesting in the class action context a later judge is not necessarily 10 bound by the class certification ruling of a prior judge].) Here, the jury has already made its 11 findings in the first phase of the trial regarding the accuracy of the wage statements at issue. 12 Even if Plaintiffs were seeking to modify the Class Certification Order at this stage, it would be 13 untimely. (See In re Citizens Bank, N.A. (3d Cir. 2021) 15 F.4th 607, 618-619, fn. 11 [post-trial 14 class certification generally improper].) 15 The Court finds that 226 Penalties are appropriate for the named Plaintiffs but declines to 16 award them for the Class that was not certified by the Court. The Court awards Labor Code 226 17 penalties for named plaintiffs in the following amounts: 18 George Jordan: $450 19 Eddie Giron: $2,350 20 Jesus Alarcon: $2,550 21 Martin Verducci: $2,550 22 Timothy Russ Oleyer: $2,950 23 Jose Segura: $2,250 24 Douglas Martin: $1,950 25 Francisco Ibarra: $1,550 26 PAGA CLAIMS (civil penalties) 27 Plaintiffs seek penalties under the Private Attorney General Act (“PAGA”) against 28 Defendants for violations to Labor Code sections 510, 512, 1194, 1197, 226, 203, 1198, and 12 Statement of Decision 1 2802. PAGA penalties are separate from and in addition to any civil recoveries. Z.B., N.A. v. 2 Superior Court (2019) 8 Cal. 5th 175, 195. 3 In support of their PAGA claims, Plaintiffs request for this Court to take judicial notice of 4 Exhibits A-C (“RFJN”). Similarly, in their Trial Brief, Defendants request the Court to take 5 judicial notice of their Exhibits A & B. Judicial Notice may be taken of facts and propositions 6 that are not reasonably subject to dispute and are capable of immediate and accurate 7 determination by resort to sources of reasonably indisputable accuracy. Evid. Code section 8 452(h). Plaintiffs Request for Judicial Notice of Exhibits A-C and Defendants Request for 9 Judicial Notice of Exhibits A and B are granted. 10 Plaintiffs satisfied the procedural requirements of PAGA pursuant to Labor Code section 11 2699.3. Plaintiffs Jason Lara, Jose Segura, George Jordan, Francisco Ibarra sent written notice 12 to the LWDA and Defendants. Plaintiffs’ RFJN A, B, C. Plaintiffs did not receive any notice 13 from LWDA of an intent to investigate the alleged violations within 65 calendar days. In 14 addition, the jury’s verdict in Phase I found that all Plaintiffs have suffered at least one of the 15 Labor Code violations during the PAGA period. The PAGA claim period is one year and sixty- 16 five days (Cal. Labor Code section 2699.3(d), Esparza v. Safeway, Inc. (2019) 36 Cal.App.5th 42, 17 59. The statute of limitations for PAGA claims is one year plus any additional time during 18 which the PAGA claim is equitably tolled. Code Civ. Proc. Section 340(b); Brown v. Ralphs 19 Grocery Co (2018) 28 Cal.App.5th 824, 839. In this case, Plaintiffs have agreed to limit the 20 PAGA period to the end date reflected on the time and pay data produced by Defendants, 21 rendering the period July 30, 2016 to July 30, 2021. 22 PAGA penalties in this case were calculated by Plaintiffs’ expert, William Roberts, PhD. 23 Dr. Roberts created modeling for civil penalties recoverable under PAGA such as those at issue 24 in this case. Roberts Decl. ¶ 7. While Plaintiffs argue that Defendants were required to pay 25 employees on a weekly basis (see infra), Dr. Roberts used the Defendants’ two-week payroll 26 period to estimate PAGA penalties (with the exception of penalties for failure to provide weekly 27 wage statements), suggesting an underestimate of penalties. Roberts Decl. ¶ 6. 28 13 Statement of Decision 1 Plaintiffs’ expert and his team reviewed time and payroll records produced by Arriaga & 2 Associates as well as data derived from those documents and incorporated into the excel 3 spreadsheet prepared by iBridge and entered into evidence as Exhibit 273. Roberts Decl. ¶ 25. 4 Dr. Roberts and his team determined that there were 9,817 pay periods worked by covered 5 employees from July 30, 2016 to July 30, 2021 (all future references to “employees” will refer to 6 “covered employees from July 30, 2016 to July 30, 2021). Roberts Decl. ¶ 26. 7 1. PAGA Penalties for Failure to Pay Overtime and Double-time Wages 8 Plaintiffs’ expert calculated 4,992 pay periods worked by employees in which the 9 employee’s workday exceeded 8 hours, giving rise to a potential overtime violation. Id. ¶ 29. In 10 addition, there were 700 pay periods worked by employees in which the employee’s workday 11 exceeded twelve hours, giving rise to a potential double time violation. Id. ¶ 30. Plaintiffs’ 12 expert calculated the PAGA penalties at $50 for each pay period for each individual for a total of 13 $76,200 civil penalty. Id. ¶ 32. It is clear from the evidence at trial that Defendants never paid 14 its guards overtime or double-time. The Court awards Plaintiffs $76,200. 15 2. PAGA Penalties for Failure to Pay Minimum Wages 16 The expert considered for this calculation only the employees that worked at the Apple 17 Campus during the PAGA period. This is consistent with the jury verdict related to the Apple 18 Off-the-Clock Class which found that Defendants owed the Apple Off-the-Clock Class wages 19 under the terms of its employment. (VF-2700). The expert calculated the penalties at $100 for 20 each period for each individual for a total of $612,190 for violations of Labor Code 1194, 1197. 21 Roberts Decl. ¶ 32. This calculation had a margin of error of 2.16% with an upper estimate of 22 $625,400 and a lower estimate of $598,900, with an average of $612,190. Given the variation in 23 testimony from workers at the Apple Campus as well as the margin of error, in the interest of 24 justice, the Court awards the lower estimate of $598,900. 25 3. PAGA Penalties for Failure to Provide Rest Breaks 26 The expert determined there were 9,698 pay periods worked by employees in which the 27 workday exceeded 3.5 hours, giving rise to a potential rest break violation in violation of Labor 28 Code 226.7. Roberts Decl. ¶ 27 and Table 1. Dr. Roberts calculated the PAGA penalties for 14 Statement of Decision 1 violation of Labor Code 512 at $100 for each pay period for each individual for a total of 2 $950,508. Id. ¶ 32. The Court awards the average estimate of $950,508. 3 4. PAGA Penalties for Failure to Provide Meal Breaks 4 The expert determined that there were 9,532 pay periods worked by employees in which 5 the workday exceed five hours, giving rise to a potential meal break violation in violation of 6 Labor Code 512. Roberts Decl. ¶ 28. The expert calculated the PAGA penalties at $50 per pay 7 period for each individual for a total of $459,665. Id. ¶ 32. 8 5. PAGA Penalties for Failure to Pay Premium Wages for Missed Meal or Rest Breaks 9 Plaintiffs’ expert calculated Defendants failure to pay meal or rest break premiums at 10 $100 for each pay period for each individual for a total of $919,330 for missing meal premiums 11 and $950,509 for missing rest premiums pursuant to Labor code section 226.7. Roberts Decl. ¶ 12 32 and Table 1. The Court awards Plaintiffs the average amount of $919,330 for failure to pay 13 meal premiums and $950,509 for failure to pay rest premiums. 14 6. PAGA Penalties for Violation of Labor Code section 2802 15 The expert determined there were 5,300 months worked by employees at the Apple 16 Campus and/or Dave & Busters giving rise to a potential unpaid reimbursement violation. 17 Roberts Decl. ¶ 31. Dr. Roberts calculated the PAGA penalties to be $334,342. Id. ¶ 32. The 18 margin of error is 7.57% with the lower amount being $308,300 and the upper amount being 19 $358,900. Given the variation of testimony at trial regarding reimbursements and the margin of 20 error, in the interest of justice, the Court awards the lower amount of $308,300. 21 7. PAGA Penalties for Violation of Labor Code 226(a) 22 Plaintiffs seek “PAGA penalties for failure to provide an itemized wage statement at 23 $250 for each work week during the two-week pay period where an employee worked both 24 weeks but received only one wage statement pursuant to section 210 [sic]” 3 for a total civil 25 penalty of $1,985,500. Plaintiffs’ Trial Br. at p. 15. 26 27 3 Plaintiffs’ citation to section 210 appears to be a typographical error. (Plaintiff’s Trial Br. at p. 15.) Section 210 28 applies to “fail[ure] to pay the wages of each employee” and not failure to provide a wage statement. (§ 210, subd. (a).) It also provides for a penalty of $100 for the initial violation and $200 for subsequent or willful and intentional violations (§ 210, subds. (a)(1) & (a)(2)) and not the $250 penalty asserted by Plaintiffs. Plaintiffs likely meant to 15 Statement of Decision 1 Plaintiffs also seek “PAGA penalties for failure to provide accurate wage statements at 2 [$]100 for each pay period, for each individual, for a $975,811 civil penalty.” Plaintiffs’ Trial 3 Br. at p. 15. There is no citation to specific statute, but Plaintiffs cite to the Roberts Declaration 4 at paragraph 32, which in turn references section 226. Based on Plaintiffs’ argument that 5 “PAGA allows a claim for a violation of section 226(a) without any reference to subdivision (e)” 6 and citation to Lopez v. Friant & Associates, LLC (2017) 15 Cal.App.5th 773, 784-785 (Lopez) 7 [“Because section 226(e)(1) sets forth the elements of a private cause of action for damages and 8 statutory penalties, its requirement that a plaintiff demonstrate ‘injury’ resulting from a ‘knowing 9 and intentional’ violation of section 226(a) is not applicable to a PAGA claim for recovery of 10 civil penalties.”], Plaintiffs seek PAGA default civil penalties pursuant to section 2699, 11 subdivision (f)(2)4 for violation of section 226, subdivision (a). (See FAC at ¶ 188 [“Thus, under 12 Labor Code § 2699(f)(2), Defendants are subject to a civil penalty of $100 for each aggrieved 13 employee per pay period for the initial violation of Labor Code §§ 226(a) and 1198, and $200 for 14 each aggrieved employee per pay period for each subsequent violation.”].) 15 In short, Plaintiffs seek civil penalties under both section 226.3 and section 2699, 16 subdivision (f)(2). 17 A. Civil Penalties for Violating Section 226, Subdivision (a) 18 19 Depending on the facts, a civil penalty for violation of § 226, subd. (a) is available under 20 the default penalty provision of § 2699, subd. (f)(2) or the heightened penalty provision of 21 § 226.3. Gunther v. Alaska Airlines, Inc. (2021) 72 Cal.App.5th 334, 355-356 (Gunther). 22 23 cite to section 226.3, which provides for “a civil penalty in the amount of two hundred fifty dollars ($250) per employee per violation in an initial citation and one thousand dollars ($1,000) per employee for each violation in a 24 subsequent citation, for which the employer fails to provide the employee a wage deduction statement or fails to keep the records required in subdivision (a) of Section 226.” That Plaintiffs likely meant to reference section 226.3 25 is consistent with their citation to paragraph 32 of the Declaration of William Roberts, Ph.D. [] (Roberts Decl.), which cites to section 226.3 in relation to the $1,985,500 penalty. Accordingly, this Court will analyze the 26 $1,985,500 civil penalty sought as pursuant to section 226.3. 4 “The central provision of PAGA is section 2699. Subdivision (a) of the statute permits aggrieved employees to 27 recover civil penalties that previously could be collected only by LWDA. [Citation.] In addition, to address violations for which no such penalty had been established, subdivision (f) of the statute created ‘a default penalty 28 and a private right of action’ for aggrieved employees. [Citation.]” (Home Depot U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, 216; Lopez, supra, 15 Cal.App.5th at p. 778.) 16 Statement of Decision 1 In Raines, the plaintiff sought PAGA penalties under section 2699, subdivision (f)(2) for 2 failing to provide accurate itemized wage statements showing “all applicable hourly rates in 3 effect during the pay period” as required under section 226, subdivision (a)(9). (Raines, supra, 4 23 Cal.App.5th at pp. 673-674.) The appellate court explained that there were three possible 5 remedies for a violation of section 226, subdivision (a): (1) statutory penalties to employees who 6 suffered an injury pursuant to section 226, subdivision (e)(1); (2) injunctive relief pursuant to 7 section 226, subdivision (h); and (3) civil penalties pursuant to section 226.3. (Id. at p. 673; see 8 Gunther, supra, 72 Cal.App.5th at p. 354 (discussing Raines).) While “Raines sought recovery 9 under the default provision of section 2699, subdivision (f), applicable where there is no existing 10 civil penalty[,]” “section 226.3 provides civil penalties for a violation of section 226(a)[,]” so the 11 appellate court concluded that Raines’ “PAGA claim [fell] under subdivision (a) of section 12 2699.” (Raines, supra, 23 Cal.App.5th at p. 674; see id. at p. 675 [“We find more persuasive a 13 decision that found section 226.3 sets out a civil penalty for all violations of section 226. 14 [Citation.]” (Emphasis original.)]; Culley v. Lincare Inc. (E.D. Cal. 2017) 236 F.Supp.3d 1184, 15 1194 [“Because § 226.3 sets out a civil penalty for all violations of § 226, PAGA’s default civil 16 penalties do not apply to wage statement violations. Thus, a PAGA plaintiff can collect civil 17 penalties set out in § 226.3, and, if the wage statement violations create ‘injury as a result of a 18 knowing and intentional’ violation, the statutory penalties set out in § 226(e)(1).” (Emphasis 19 original.)].) 20 In Gunther, the trial court, relying on Raines v. Coastal Pacific Food Distributors, Inc. 21 (2018) 23 Cal.App.5th 667, 674-675 (Raines) (§ 226.3 sets forth the civil penalty for all § 226 22 violations) awarded the plaintiff over $25 million in civil penalties under section 226.3 for 23 “violat[ing] section 226(a)(2), (3), and (9) by failing to state the total hours worked, the number 24 of piece-rate units earned, and the corresponding rate of pay for each.” Gunther, supra, 72 25 Cal.App.5th at pp. 343, 353. The defendant challenged this civil penalty award on the basis that 26 “the trial court wrongly imposed heightened penalties under section 226.3.” Id. at p. 347. 27 Specifically, the defendant argued that “[b]ecause it provided wage statements and kept the 28 required records, . . . the $25 million in heightened penalties awarded by the trial court should be 17 Statement of Decision 1 vacated and the matter remanded with an instruction to apply the default penalty amounts set 2 forth in subdivision (f)(2) of section 2699.” Id. at p. 353. Citing Raines, the plaintiff asserted 3 “that section 226.3 provides a civil penalty for all violations of section 226 and is not limited to 4 situations where the employer fails to provide a wage statement or to keep records.” Id. The 5 appellate court declined to follow Raines, explaining: 6 Of course the choice is not, as Raines suggests, between a penalty 7 under section 226.3 and no penalty for an inadequate wage 8 statement. Instead, the question is which penalty provision 9 applies—the default penalty in section 2699, subdivision (f) or the 10 heightened penalty under section 226.3? 11 12 Gunther, supra, 72 Cal.App.5th at p. 355, (emphasis original). 13 The Gunther court continued: 14 Here, it is undisputed that Alaska provided wage statements to its 15 flight attendants, and Gunther dismissed her challenge that Alaska 16 failed to maintain records. Because the violations found by the 17 trial court resulted from Alaska’s failure to include certain 18 information in its wage statements, Alaska should have been 19 subject to the default civil penalties in section 2699, subdivision 20 (f)(2), not the heightened penalties in section 226.3. Accordingly, 21 we reverse the section 226.3 penalties and remand the matter to the 22 trial court for further proceedings regarding civil penalties under 23 section 2699, subdivision (f)(2)[.] 24 25 Gunther, supra, 72 Cal.App.5th at pp. 355-356. 26 In this case, consistent with Gunther, Plaintiffs seek to recover civil penalties under 27 section 226.3 for instances where they did not receive a wage statement at all and additionally 28 separate civil penalties under section 2699, subdivision (f)(2) for different instances where they 18 Statement of Decision 1 did receive a wage statement, but that wage statement was inaccurate. Gunther, supra, 72 2 Cal.App.5th at pp. 355-356.) Plaintiffs seek $1,985,500 at $250 per violation based on 7,942 3 violations of failing to provide a wage statement. Roberts Decl. ¶ 32. In addition, Plaintiffs seek 4 $975,811 at $100 per violation based on 9,758.11 violations of providing inaccurate wage 5 statements. Id. 6 B. Civil Penalties Pursuant to 2699(f)(2) for Failure to Provide Accurate Wage 7 Statements 8 There is no question that based on the evidence presented at trial and supplemented in the 9 papers and declarations presented for Phase III that Defendants failed to provide accurate wage 10 statements. Thus, the Court awards $975,811 in civil penalties for the inaccurate wage 11 statements as determined by the Plaintiffs’ expert pursuant to 2699(f)(2). 12 C. Civil Penalties Pursuant to 226.3 for Failure to Provide A Weekly Wage 13 Statement 14 In their initial Trial Brief, Plaintiffs argue that “[a]ny employer who is the security 15 services industry providing security guards to clients is required by Labor Code section 201.3 to 16 establish weekly pay period.” (Plaintiffs’ Trial Br. P. 13 citing Labor Code section 17 201.3(b)(1)(B)). In their Trial Brief, Defendants argue that Plaintiffs did not meet the specific 18 requirements of that section. Labor Code section 201.3(b)(1)(B) states: 19 (B) …, if an employee of a temporary services employer in the security services industry 20 is a security guard who is registered pursuant to Chapter 11.5 (commencing with Section 21 7580) of Division 3 of the Business and Professions Code, is employed by a private 22 patrol officer licensed pursuant to that chapter and is assigned to work for a client, that 23 employee’s ages are due and payable no less frequently than weekly, regardless of when 24 the assignment ends, and wages for work performed during any workweek, as defined 25 under Section 500, shall be due and payable not later than the regular payday of the 26 following work week. 27 28 19 Statement of Decision 1 Defendants contend that pursuant to section 201.3, subdivision (b)(1)(B), Plaintiffs failed 2