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1 TIMOTHY J. LONG (STATE BAR NO. 137591)
tilongfftjorrick.com s u o e r i o r i^ourc U T L,aiifornia.
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2 NICHOLAS J. HORTON (STATE BAR NO. 289417)
nhorton@orricl<..com
3 ORRICK. HERRINGTON & SUTCLIFFE LLP
400 Capitol Mall, Suite 3000
4 Sacramento, CA 95814-4497
Telephone: +1 916 447 9200
5 Facsimile: +1 916 329 4900
i5 lira i r a j&^n&ff^ ff=
©IE23 6 Attorneys for Defendant
HEALTH NET OF CALIFORNIA, INC.
7
8 SUPERiOR COURT OF THE STATE OF CALIFORNIA
9 COUNTY OF SACRAMENTO
10
ANDREA SPEARS, an individual, on behalf of Case No. 34-2017-00210560-CU-OE-GDS
11 herself and on behalf of all persons similarly
situated, SEPARATE STATEMENT OF
12 UNDISPUTED MATERIAL FACTS IN
Plaintiff, SUPPORT OF DEFENDANT HEALTH
13 NET OF CALIFORNIA, INC.'S
V. RENEWED MOTION FOR SUMMARY
14 ADJUDICATION
HEALTH NET OF CALIFORNIA INC., a
15 California Corporation; and Does 1through 50, Date: February 4, 2019
inclusive. Time: 9:00 a.m.
16 Dept.: 54
Defendants. Reservation No.: 2380178
17
TOMAS R. ARANA, on behalf of limself, all Complaint Filed: April 5, 2017
18 others similarly situated, FACFiled: June 29, 2017
Consolidated Complaint Filed: Dec. 2, 2017
19 Plaintiff
Complaint Filed: August I , 2017
20
V.
21
HEALTH NET OF CALIFORNIA INC., a
22 California corporation; and DOES 1-50,
inclusive.
23
Defendant.
24
25
26
27
28
SEPARATE STATEMEN T OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTI I NET OF CALIFORNIA,
INC.'S RENEWED MOTION FOR SUMMARY AOIUDICATION
Pursuant to California Code of Civil Procedure Section 437(c), Defendant Health Net of
2 California, Inc. ("HNCA"') submits the following Separate Statement of Undisputed Material Facts,
3 together with references to supporting evidence, in support of its Renewed Motion for Summary
4 Adjudication as to Plaintiffs Andrea Spears and Tomas Arana's (collectively "Plaintiffs") claim
5 that HNCA failed to properly calculate their regular rates of pay for purposes of detennining their
6 overtime compensation, and their derivative PAGA allegations based thereon.
7 SEPARATE STATEMENT OF UNDISPUTED FACTS AND EVIDENCE
8 I. THIRD CAUSE OF ACTION FOR FAILURE TO PAY HOURLY WAGES AND
FAILURE TO PAY OVERTIME WAGES
9
Issue 1: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged
10 failure to include cash benefits received pursuant to a bona fide benefits Plan
in Plaintiff Spears' regular rate of pay fails because cash benefits were
11 properly excluded from her regular rate calculation under the Benefit-Plan
Contributions Exception and Plaintiff Arana never received the cash benefit.
12
Undisputed Material Facts and Supporting Plaintii®s|R^pbnseHiriiWSuppoi^^^
13 -Eyitferice:4|:|^ , ; ' *, Evideiiciy'YJy&^
I . Plaintiff Spears worked as a non-exempt HNCA
14 Customer Service Representative from September
2014 to October 2016 in Rancho Cordova.
15
16 Declaration of Diane C. Rodes (hereinafter "Rodes
Dec") TI 4.
17 2. Plaintiff Arana began working out of the Rancho
Cordova call center in 2008 and continues to work
18 there now. He started as a non-exempt Customer
Service Representative for HNCA until his
19 promotion on or about November 14, 2015 to
Contact Center Analyst, an exempt position.
20 Since June 2017, Plaintiff Arana has been working
as a Call Center Systems Analyst I, also an exempt
21 position.
22 Rodes Dec, U 6.
3. Between January I , 2001 and December 31, 2016,
23 HNI sponsored a cafeteria plan - a written health
and welfare plan - called the "Health Net, Inc.
24 Associates Benefit Program" (the "Plan").
25
Declaration of Debbie Colia ("Colia Dec"), T^l 2-3,
26 Exhs. A-I.
27
28
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTl I NET OF CALIFORNIA.
INC.'S RENEWED MOTION FOR SUMMARY AD.IUD1CATI0N
4. As the Plan sponsor, HNI administered the Plan.
2 Colia Dec, 112.
3 5. HNCA adopted the Plan for the benefit of its
employees.
4
Declaration of Debbie Colia ("Colia Dec"), H 2. Exhs.
5 A-I.
6. The Plan was governed by Section 125 of the
6 Internal Revenue Code.
7 Colia Dec, ^ 4.
7. The Plan was subject to the Employee Retirement
8 Income Security Act.
9
Colia Dec, 114.
10 8. The Plan was overseen by a Benefits Committee.
11 Colia Dec, 114.
9. The HNI Benefits Committee had fiduciary duties
12 and responsibilities requiring the Committee
members to "discharge their duties with respect to
13 the Plan (i) solely in the interest of the Associates,
(ii) for the exclusive purpose of providing benefits
14 to Associates and of defraying reasonable
expenses of administering the Plan and (iii) with
15 the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent
16 person acting in a like capacity and familiar with
such matters would use in the conduct of an
17 enterprise of a like character and with like aims, to
the extent the Committee's duties are subject to
18 ERISA."
19 Colia Dec, 114, Exh. A, § 7.1(e)
20 10. HNI as the plan sponsor and administrator ensured
that HNCA's employer contributions to the Plan
21 were tracked.
22 Colia Dec, H 4.
1 I . HNI as the plan sponsor and administrator ensured
23 that HNCA's employer contributions to the Plan
were kept in a separate account.
24
Colia Dec, 114.
25
26
27
28
-2-
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT I-IEALTH NET OF CALIFORNIA,
INC.'S RENEWED MOTION FOR SUMMARY AD.IUDICATION
12. HNI, as the plan sponsor and administrator,
ensured that HNCA's employer contributions to
2 the Plan were used only for proper Plan purposes
related to providing the health and welfare
3 benefits to Plan Participants, including Plaintiffs
Andrea Spears and Tomas Arana, and their
4 dependents.
5 Colia Dec, 114.
6 13. HNI treated HNCA as a third party for purposes of
administering the plan and vice versa.
7
Colia Dec, H 5.
8 14. During the time that the plan was in effect, HNI
also processed HNCA's payroll.
9
Colia Dec, H I ; Sarabia Dec, H 2.
10
15. Pursuant to the terms of the Plan, HNCA paid the
11 actual costs of benefits under the plan for its
eligible employees who elected to participate (i.e..
12 Plan Participants), including Plaintiffs.
13 Colia Dec, H 5.
16. HNCA paid to HNI in its capacity as Plan sponsor
14 and administrator the full amount necessary to
cover HNCA's employer contributions as defined
15 by the Plan.
16 Colia Dec, H 5
17 17. The actual cost of benefits HNCA paid to HNI
was the total amount necessary to cover HNCA's
18 employer contributions under the Plan, including
both core and optional benefits.
19
Colia Dec.,11 5.
20 18. HNCA's employer contributions included the cash
benefits at issue in this Motion, which were paid
21 by HNI as the Plan sponsor and administrator to
certain eligible Plan Participants, including Ms.
22 Spears.
23 Colia Dec, 115
24 19. Pursuant to a funded arrangement between HNI
and HNCA, HNCA's employer contributions to
25 the Plan were deposited into an account
maintained and controlled by HNI as the Plan's
26 sponsor and administrator.
27 Colia Dec, 11116, 15.
28
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA.
INC. S RENEWED MOTION FOR SUMMARY AD.IUDICATION
i 20. HNCA's contributions were irrevocable in that
once made to HNI, HNCA was unable to
2 recapture or divert the funds for HNCA's use or
benefit.
3
Colia Dec, 11116, 15.
4
21. HNI as the Plan sponsor and administrator,
5 controlled those HNCA's contributions once these
monies were deposited into that account.
6
Colia Dec, 11116, 15.
7 22. After receiving employer contributions, HNI used
those contributions for benefits under the Plan,
8 including the cash benefits at issue in this Motion,
which were paid by HNI as the Plan's sponsor and
9 administrator to those Plan Participants who
elected to waive certain benefits offered by the
10 Plan, which included Ms. Spears.
11 Colia Dec, nil 6, 15.
23. Information regarding the operation of the Plan
12 and a description of the benefits available under
the Plan was communicated to Plan Participants,
13 including HNCA employees, in the Summary Plan
Descriptions (the "Plan SPD") which HNCA
14 employees received upon their hire.
15 Colia Dec, H 7, see generally Exhs. J & K.
16 24. The purpose of the Plan was to offer Plan
Participants a wide range of benefit options and
17 was designed to provide them the flexibility to
choose the benefits that met their needs.
18
Colia Dec, H 7, Exh. J (HNCA000916), Exh. K
19 (HNCA000754).
25. The Plan SPD also explained how the Plan
20 worked, who was eligible to participate and what
were the Plan Participants' rights.
21
Colia Dec, H 7, see generally Exhs. J & K.
22
26. The Plan SPD also described the coverage options
23 available for each benefit category under the Plan.
24 Colia Dec, H 7, see generally Exhs. J & K.
27. The Evidence of Coverage ("EOC") documents,
25 also distributed to HNCA employees when hired,
provided additional details regarding the Plan.
26
Colia Dec, H 7, Exh. L.
27
28
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA,
INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION
1 28. These EOC documents also included the medical
coverage options available and co-payments that a
2 Participant was responsible for with respect to the
Plan's various covered services and supplies.
3
Colia Dec, H 7, Exh. L.
4
29. To the extent that the documents were vague or
5 suggested something different, the Plan controlled
everything, and the EOC controlled over the SPD.
6
Colia Dec, H 9, EOC, Exh. L (HNCA002462), 201 1-
7 2015 SPD, Exhibit J (HNCA000927), 2016 SPD,
Exhibit K (HNCA000774).
8 30. The Plan provided "core" benefits to Participants
such as basic life and basic AD&D insurance at no
9 cost to the Participants.
10 Colia Dec, HU 10, Exh. J (HNCA000918-19), Exh. K
(HNCA000762).
11 31. It also provided "optional" benefits to Participants
and/or their dependents, such as medical and
12 dental coverage, to select as desired based on their
particular needs.
13
Colia Dec, HH 11, Exh. J (HNCA0009I8, 920), Exh.
14 K (HNCA000762-63).
15 32. To help pay for the cost of medical and dental
coverage and pursuant to the Plan, Participants
16 received "Flex Dollars."
17 Colia Dec, H 12; Rodes Dec, H 16.
33. Flex Dollars represented HNCA's employer
18 contribution towards its employees' medical and
dental coverage.
19
Colia Dec, H 12, Exh. J (HNCA00092I): "The
20 amount of Flex Dollars to which you are entitled
represents your Employer's share toward your cost of
21 medical and dental coverage), Exh. K (HNCA000764,
same).
22
23
24
25
26
27
28
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA,
INC S RENEWED MOTION FOR SUMMARY ADJUDICATION
I 34. The exact amount of "Flex Dollars" to which a
Participant was entitled to varied depending on the
2 medical and dental plans that he or she chose, the
number of dependents covered and the
3 Participant's geographic location, but generally,
the amount was less than the total cost of the
4 benefit(s) that a participant elected.
5 Colia Dec,11 12, Exh. A (HNCA00102I: HNI, as the
Plan sponsor and administrator, had sole discretion to
6 determine the amount of Flex Dollars that would be
made available each year); Exh. J (HNCA000921),
7 Exh. K (HNCA000764).
35. Generally, the amount of Flex Dollars a
8 Participant received was less than the total cost of
the benefit(s) that a participant elected.
9
10 Colia Dec.,11 '2; Rodes Dec, HH 19-22, Exhs. F, G.
36. In a vast majority of cases, the Participant was
11 required to contribute some amount toward the
cost of the optional benefit(s) he or she selected.
12
Colia Dec, H 12, Exh. J (HNCA00092I: " I f the cost
13 of your optional benefits exceeds the value of your
Flex Dollars, you must pay the difference. Your cost
14 will be deducted from your paycheck."), Ex. K
(HNCA000764, same); Rodes Dec, HH 19-22, Exhs.
15 F,G.
37. The Participant's portion of the benefit coverage
16 was deducted from his or her pay check and
deposited with HNI as the Plan sponsor and
17 administrator.
18 Colia Dec, H 12; see also Colia Dec, Exh. J
(HNCA000921: describing payroll deductions), Ex. K
19 (HNCA000764: same); Rodes Dec, HH 19-22, Exhs.
F, G (evidencing Participants' payroll deductions for
20 their portion of coverage).
21
22
23
24
25
26
27
28
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA,
INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION
1 38. If a Plan Participant's Flex Dollars exceeded the
cost of coverage or if the Plan Participant waived
2 medical and/or dental coverage, the Plan
Participant received a portion of the Flex Dollars
3 as a cash benefit.
4 Colia Dec, HH '2, 14; .see also Colia Dec, Exh. A
(HNCA001021: HNI, as the plan sponsor and
5 administrator, had discretion to determine if and to
what extent cash benefits would be paid if the total
6 cost of the benefits to be provided to the Participant
each year was less than the amount of Flex Dollars
7 available to that Participant); Exh. J (HNCA00092I:
describing payroll deductions), Ex. K (HNCA000764:
8 same); Rodes Dec, HH 19-21, Exh. F (evidencing
receipt of cash benefit).
9
39. HNI, as the Plan sponsor and administrator, paid
10 cash benefits provided by the Plan to qualifying
Plan Participants.
II
Colia DecHH 12, 15.
12 40. HNI paid the cash benefit provided by the Plan to
Plan Participants such as Spears via their
13 paychecks because in a separate role, HNI also
processed the payroll for the companies who
14 participated in the Plan, including HNCA.
15 Colia Dec, H 12; see also Sarabia Dec, H 2 ("HNI
processed HNCA's payroll from before 20I2 through
16 the end of 2016.").
41. Flex Dollars provided to Plan Participants were
17 tracked by HNI through payroll codes
"MedFlxElcf and "DenFlxElct" and
18 "MedFlxWave" and "DenFlxWave."
19
Sarabia Dec, H 2; Colia Dec, H 14.
20 42. The use of payroll codes to track Flex Dollars
does not change the nature of the cash benefit
21 provided by the Plan. The cash benefit was a Plan
benefit.
22
Colia Dec, H 14.
23 43. Plan Participants could waive one or more of the
available benefits, but could only waive medical
24 coverage if they had coverage elsewhere.
25 Colia Dec, H 13, Exh J (HNCA000920), Exh. K
(HNCA000763); Rodes Dec, HH '9-21, Ex. F.
26
27
28
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA,
INC 'S RENEWED MOTION FOR SUMMARY ADJUDICATION
1 44. The actual cost of benefits contributed by HNCA
to HNI, included all Flex Dollars Plan Participants
2 received as a benefit of the Plan, specifically
including the cash benefit of the Plan that is the
3 subject of this motion.
4 Colia Dec, H 14.
5 45. Flex Dollars are a benefit offered and paid by the
Plan to eligible Plan Participants, such as Ms.
6 Spears.
7 Colia Dec, H 16.
46. That in most cases the total amount of Flex
8 Dollars a Plan Participant received was used in
whole to pay for elected coverage on a pre-tax
9 basis does not change the nature of the Flex
Dollars Plan Participants received from HNI as the
10 Plan sponsor and administrator pursuant to the
terms of the Plan.
11
Colia Dec, H 16.
12 47. Plan Participants who elected optional coverage
received a cash benefit when the actual cost of
13 their elected coverage was less than the amount of
Flex Dollars they were entitled to receive under
14 the Plan.
15
Colia Dec, H 16.
16 48. In each ofthe Plan years 2013, 2014, 2015 and
2016, the total cash benefits provided to
17 Participants who waived dental and/or medical
coverage represented a very small percentage of
18 HNCA's contributions provided under the Plan for
the elected dental and/or medical coverage: 1.4%
19 in 2013, 1.3% in 2014; 0.9% in 2015; and 0.9% in
2016.
20
Declaration of Kelly Sarabia ("Sarabia Dec), HH 3-7.
21 49. Throughout Spears employment with HNCA, she
elected dental coverage and the cost of her
22 coverage always exceeded the amount of Flex
Dollars she received for this coverage.
23
Rodes Dec, HH 19-21, Ex. F.
24
50. Spears waived medical coverage during her
25 employment with HNCA, and as a result, received
a cash benefit of $20.00 per pay period pursuant to
26 the Plan.
27 Rodes Dec, HH 19-21 Ex. F.
28
SEPARATE STATEMENT OF UNDISPUTED MA TERIAL FACTS IN SUPPORT OF DEFENDAN T HEALTI I NET OF CALIFORNIA,
INC 'S RENEWED MOTION FOR SUMMARY ADJUDICATION
51. During Arana's employment with FINCA, he
elected to receive both medical and dental
2 coverage and the cost of his coverage always
exceeded the amount of Flex Dollars he received.
3
Rodes Dec, H 22, Ex. G.
4
5 Issue 2: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged
failure to include SPOT payments in the regular rate of pay fails because
6 SPOT payments were properly accounted for in the regular rate calculation.
7
UnSisputed/Matieri and Supportirig ^Plaintiff's Response a^acl Supportlng|
8 • , E v i d e n c e : | 2 i , i ^ i ' -c;;:-;;;'.^y ff: ;'SMXirymk- • :i{i|yyJQence,,;y^^^ 'i-j.tr-':?
52. HNCA's considers bonuses to be non-regular
9 payments paid to employees in recognition of
services they have performed during a given
10 period.
11 Rodes Dec, H 3
53. HNCA paid certain Premium Rate Compensation
12 to Plaintiffs for certain hours worked in excess of
their normal working hours and on holidays and
13 did not include earnings under this compensation
in their regular rate.
14
Rodes Dec, HH 3, 5, 7.
15
54. HNCA paid Non-Work Time Compensation for
16 occasional periods when no work was performed
by Plaintiffs and did not include this compensation
17 in their regular rate.
18 Rodes Dec, HH 3, 5, 7.
55. Flex Dollar benefits received by Plaintiffs
19 pursuant to the Plan administered by HNI were not
included in the regular rate.
20
Rodes Dec, HH 3, 5, 7.
21
56. At no time during Spears' employment with
22 HNCA did she receive any payments HNCA
considered a bonus.
23
Rodes Dec.,H 5.
24
25
26
27
28
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA.
INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION
1 57. Plaintiff Spears's payroll data produced in this
matter shows earnings under only the following
2 pay code descriptions: Double time. Floating
Holiday, Holiday, Holiday Overtime, Overtime,
3 Reg. Hours Non-Exempt, Bereavement, DTO,
Jury Duty, PTO LOA, PTO Scheduled, PTO Sick,
4 PTO Unscheduled, Prorated PTO Payout, Dental
Flex $ for Elect, and Medical Flex $ for Waive.
5
Rodes Dec, H 5.
6
58. Spears regular earnings as an hourly employee
7 were reflected in her payroll records by the pay
code description Reg. Hours Non-Exempt and
8 were included in her regular rate.
9 Rodes Dec, HH 3, 5.
59. Spears received Premium Rate Compensation
10 under the pay code descriptions Overtime,
Holiday, Holiday Overtime, Floating Holiday, and
II Double time.
12 Rodes Dec, H5.
60. Spears received Non-Work Time Compensation
13 under the pay code descriptions Bereavement,
DTO, Jury Duty, PTO LOA, PTO Scheduled,
14 PTO Sick, PTO Unscheduled, and Prorated PTO
Buyout.
15
Rodes Dec, H5.
16
61. Spears's payroll data reflects she was provided
17 Flex Dollar earnings under the pay code
descriptions Medical Flex $ for Waive and Dental
18 $ for Flex Elect.
19 Rodes Dec, H 5.
62. Throughout Plaintiff Arana's employment with
20 HNCA, the only forms of earnings he received
that HNCA considered bonuses were the bonuses
21 he received through the SPOT Cash Awards
Program ("SPOT") and incentive pay pursuant to
22 the ACA Customer Service & Claims
Representative Pay for Performance Incentive
23 Plan ("ACA Incentive Plan").
24 Rodes Dec, HH 7, 13, 15, Exh. C.
25
26
27
28
- 10-
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA.
INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION
1 63. Plaintiff Arana's payroll data produced in this
matter shows earnings under only the following
2 pay code descriptions as a non-exempt employee:
Double time, Floating Holiday Overtime, Holiday,
3 Overtime, Reg. Hours Non-Exempt, DTO, PTO
LOA, PTO Scheduled, PTO Sick, PTO
4 Unscheduled, Dental Flex $ for Elect, and Medical
Flex $ for Waive, Bonus - SPOT, Bonus Other
5 Plans, Incentive - Other Plans, Wellness -
Incentive.
6
Rodes Dec, H 7.
7
64. Arana's regular earnings as an hourly employee
8 were reflected in her payroll records by the pay
code description Reg. Hours Non-Exempt and
were included in his regular rate.
9
10 Rodes Dec, HH 3, 7.
65. Arana received Premium Rate Compensation
11 under the pay code descriptions Overtime,
Holiday, Floating Holiday Overtime, Double time.
12
Rodes Dec, H 7.
13 66. Arana received Non-Work Time Compensation
under the pay code descriptions DTO, PTO LOA,
14 PTO Scheduled, PTO Sick, PTO Unscheduled.
15 Rodes Dec, H 7.
16 67. Arana's payroll data reflects he was provided Flex
Dollar earnings under the pay code descriptions
17 Medical Flex $ for Elect and Dental Flex $ for
Elect.
18
Rodes Dec, H 7.
19 68. Beginning January I , 2014 and continuing through
December 31, 2016, HNCA adopted SPOT.
20
Rodes Dec, H 8; Horton Dec, Ex. C, Amended
21 Undisputed Fact No. ("AUF") 25.
22 69. Through SPOT, HNCA spontaneously rewarded
certain employees "who demonstrate[d]
23 exceptional behavior on the job . . . whether it
[wa]s within or beyond [the employee's] job
24 scope."
25 Rodes Dec, H 8, Ex. C; Horton Dec, Ex. C, AUF 26.
70. HNCA's SPOT policy informed eligible
26 employees that bonuses were awarded without any
promise or incentive being announced beforehand.
27
Rodes Dec, H 8, Ex. C; Horton Dec, Ex. C, AUF 27.
28
11
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA.
INC S RENEWED MOTION FOR SUMMARY ADJUDICATION
1 71. There were no pre-established criteria for
awarding SPOT bonuses or pre-established
2 amounts to be awarded.
3 Rodes Dec,HH 9-12, Ex. C; Horton Dec, Ex. C, AUF
28.
4 72. The decision of when, for what reason, and in
what amount to award a SPOT bonus - within a
5 range - was subject to the discretion of managers
and the ultimate approval of the head of the
6 appropriate Business Unit.
7
Rodes Dec, HH 9-12, Ex. C, D; Horton Dec, Ex. C,
8 AUF 29.
73. Each Business Unit Leader was allotted an annual
9 SPOT bonus budget that he or she could elect to
use in full, in part, or not at all.
10
Rodes Dec, H 10, Ex. C; Horton Dec, Ex. C, AUF 30.
11 74. Procedurally, a SPOT bonus was initiated if a
manager felt that an employee on his or her team
12 should receive one.
13 Rodes Dec, H 11, Ex. C; Horton Dec, Ex. C, AUF 31
14 75. The manager had the discretion to complete the
SPOT Award Nomination Form detailing the
15 reason for nomination, describing the
achievement, and identifying a specific amount he
16 or she believed appropriate.
17 Rodes Dec, HH 1 L Exhs. A, B; Horton Dec, Ex. C,
AUF 32.
18 76. The manager would submit the completed SPOT
Award Nomination Form to the head of his or her
19 Business Unit.
20 Rodes Dec, H 1 1; Horton Dec, Ex. C, AUF 33.
21 77. The Business Unit Leader exercised his discretion
as to whether to award the SPOT bonus based on
22 the manager's recommendation (or not) and, if so,
in what amount.
23
Rodes Dec, H 12; Horton Dec, Ex. C, AUF 34.
24 78. If the Business Unit Leader decided to award an
employee with a SPOT bonus, the bonus appeared
25 on the recipient's paycheck with the designation
"Bonus-SPOT."
26
Rodes Dec, HH 12-13, Ex. C; Horton Dec, Ex. C,
27 AUF 35.
28
12
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA.
INC 'S RENEWED MOTION FOR SUMMARY ADJUDICATION
1 79. SPOT bonuses were not included in non-exempt
recipients' regular rate calculation because SPOT
2 bonuses were discretionary bonuses.
3 Rodes Dec, HH 12-13, Ex. C; Horton Dec, Ex. C.
AUF 36.
4 80. Arana received SPOT bonuses on three occasions
- each in the amount of $ 1,000. These bonuses
5 were included on his wage statements dated July
5, 2013; October 25, 2013 and June 5, 2015.
6
7 Rodes Dec, H 13, Ex. C.
81. Spears did not receive any SPOT bonuses.
8
Rodes DecHH 5, 13.
9
10
Issue 3: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged
11 failure to include ACA Incentive Plan payments in the regular rate of pay
fails because those payments were properly accounted for in the regular rate
12 calculation.
13
©liaisputed'-MatersiSllFacTs; andfSuplf^^ • ?Sft*!•tPlaihlKffislRespoffsela
14
82. HNCA incorporates Undisputed Material Facts
15 52-67 as though fully re-stated herein.
16 83. Starting January 3, 2014 and lasting through May
31, 2014, HNCA implemented the ACA Incentive
17 Plan for eligible employees.
18
Rodes Dec, H 14, Ex. D; Horton Dec, Ex. C, AUF 37.
19 84. The purpose of the ACA Incentive Plan was to
provide an extra reward if employees voluntarily
20 worked overtime due to the increase in workload,
especially at the call centers, as a result of the
21 implementation of the Patient Protection and
Affordable Care Act.
22
Rodes Dec, H 14, Ex. D; Horton Dec, Ex. C, AUF 38.
23 85. Under the ACA Incentive Plan, eligible employees
who worked a certain number of overtime hours
24 each month received bonus payments.
25 Rodes Dec, H 14, Ex. D; Horton Dec, Ex. C, AUF 39.
26
27
28
13
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA.
INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION
86. Bonus payments pursuant to the ACA Incentive
Plan were included in non-exempt recipients'
2 regular rate of pay.
3 Rodes Dec, HH 14, Ex. E; Horton Dec. Ex. C. AUF
40.
4 87. Arana received payments pursuant to the ACA
Incentive Plan, as reflected in his payroll data
5 produced under the description "Incentive - Other
Plans" or "Bonus - Other Plans."
6
Rodes Dec,HH 7, 15, Exh. E.
7 88. Spears did not receive any payments pursuant to
the ACA Incentive Plan.
8
9 Rodes Dec.,HH 5, 15.
10
11 Issue 4: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged
failure to include Wellness Incentive payments in the regular rate of pay fails
12 because those payments are not bonuses and were properly excluded from the
regular rate.
13
14 ;Knai^ute|l|Mat|^^ PlaintifPs Response and Supporting
flEyidenCe:i|5 ' • :f,. •.^Evidence: i 'Ji:,,f'':&i:s'-Xm •
15 89. HNCA incorporates Undisputed Material Facts
52-67 as though fully re-stated herein.
16
90. From April 5, 2013 to December 31, 2016, HNCA
17 had in place a Wellness Incentive Program for
eligible employees.
18
Rodes Dec, H 23.
19 91. HNCA adopted this program because the
Company determined that it was in its best interest
20 to provide employees an incentive to engage in
certain fitness and weight management programs.
21
Rodes Dec, H 23.
22 92. More specifically, HNCA encouraged these types
of activities to lower HNCA's health care costs,
23 help to improve employees' health and benefit
HNCA through increased productivity.
24
Rodes Dec, H 23.
25
26
27
28
14
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA.
INC. S RENEWED MOTION FOR SUMMARY ADJUDICATION
I 93. Under the Wellness Incentive Program, the
Company provided $35 on a monthly basis to
2 einployees who provided proof that they were
regularly attending a health club, gym,
3 YMCA/YWCA or other aerobic/cardiovascular
fitness program (such as Pilates, dance, yoga,
4 martial arts, lap swimming or Jazzercise) and/or
weight management programs (such as Weight
5 Watchers, Jenny Craig, etc.).
6 Rodes Dec, H 24.
94. Employees who participated in the Wellness
7 Incentive Program had to make a request for a
wellness incentive payment online through
8 HNCA's intranet in order to receive the $35.
9 Rodes Dec, H 25.
10 95. If the employee's wellness program of choice
qualified under the incentive plan, the incentive
I1 payment was non-discretionary.
12 Rodes Dec, H 25.
96. Employees that requested the incentive payment
13 with evidence of participation in a qualifying
wellness program received a flat monthly
14 incentive of $35, regardless of the actual cost of
their qualifying program.
15
Rodes Dec, H 25.
16 97. The payments made to HNCA employees under
the Wellness Incentive Program were not tied to
17 hours worked or performance.
18 Rodes Dec, H 26.
98. The payments made to HNCA employees under
19 the Wellness Incentive Program were not provided
as any sort of bonus or incentive for employees to
20 work harder, better or more efficiently.
21
Rodes Dec, H 26.
22 99. The payments made to HNCA employees under
the Wellness Incentive Program were not
23 compensation for services rendered by the
employees.
24
Rodes Dec, H 26.
25 100. The Wellness Incentive Program's primary
purpose of benefitting HNCA and serving the
26 Company's interests in trying to lower its health
care costs and increase productivity.
27
Rodes Dec, H 26.
28
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA.
INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION
101. Arana received payments pursuant to the
Wellness Incentive Program, as reflected in his
2 payroll data produced under the description
Wellness - Incentive.
3
Rodes Dec, HH 7, 27, Exh. I.
4 102. Spears did not receive any payments pursuant
to the Wellness Incentive Program.
5
Rodes Dec, HH 5, 27.
6
7 2. SEVENTH CAUSE OF ACTION FOR C I V I L PENALTIES PURSUANT TO
LABOR CODE 2698, ET SEQ. (PAGA)
8
Issue 5: Plaintiffs' PAGA claim based on alleged failure to pay overtime wages as a
9 result of alleged failure to include cash benefits received by Plaintiff Spears'
in her regular rate of pay fails because the underlying alleged Labor Code
10 violation did not occur.
II
Defendants' Undisputed Material Facts and PlaintifPs Response and Supporting
12
Supporting Evidence: Evidence:
13
14 103. HNCA incorporates Undisputed Material Facts
15 I-51 as though fully re-stated herein.
16 ISSUE 6: Plaintiffs' PAGA claim based on alleged failure to pay overtime wages as
alleged failure to include SPOT cash awards awarded to Plaintiff Arana in
17 the regular rate of pay calculation fails because the underlying alleged Labor
Code violation did not occur.
18
19 Defendants' Undisputed Material Facts and -Plaintiffs ResponsCiand Suppoi-ting
20 Supporting Evidence: . Evidence: \' .
21 104. HNCA incorporates Undisputed Material Facts
22 52-81 as though fully re-stated herein.
23
24
25
26
27
28
16
SEPARAJ E STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA.
INC'S RENEWED MOTION FOR SUMMARY ADJUDICATION
1 ISSUE 7: Plaintiffs' PAGA claim based on alleged failure to pay overtime wages as
alleged failure to include ACA Incentive Plan payments awarded to Plaintiff
2 Arana in the regular rate of pay calculation fails because the underlying
alleged Labor Code violation did not occur.
3
4 Defendants' Undisputed Material Facts and Plaintiff s Response and Supporting
5 Supporting Evidence: Evidence: , ,
6 105. HNCA incorporates Undisputed Material Facts
7 82-88 as though fully re-stated herein.
8
ISSUE 8: Plaintiffs' PAGA claim based on alleged failure to pay overtime wages as
9 alleged failure to include Wellness Incentive payments made to Plaintiff
Arana in the regular rate of pay calculation fails because the underlying
10 alleged Labor Code violation did not occur.
11 Defendants' Undisputed Material Facts and Plaintiffs Response and Supporting^
12 Supporting Evidence: ' ' Evidence: " ' -
13
106. HNCA incorporates Undisputed Material Facts
14
89-102 as though fully re-stated herein.
15
16
17 Dated: November 19, 2018 ORRICK, HERRINGTON & SUTCLIFFE LLP
18
19 By:
NICHOLAS J. HORTON
20 Attorneys for Defendant
HEALTH NET OF CALIFORNIA, INC.
21
22
23
24
25
26
27
28
17
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA,
INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION
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Fii_Er6 1 TIMOTHY J. LONG (STATE BAR NO. 137591) tilongfftjorrick.com s u o e r i o r i^ourc U T L,aiifornia. rfv.. _ , _.a. 2 NICHOLAS J. HORTON (STATE BAR NO. 289417) nhorton@orricl<..com 3 ORRICK. HERRINGTON & SUTCLIFFE LLP 400 Capitol Mall, Suite 3000 4 Sacramento, CA 95814-4497 Telephone: +1 916 447 9200 5 Facsimile: +1 916 329 4900 i5 lira i r a j&^n&ff^ ff= ©IE23 6 Attorneys for Defendant HEALTH NET OF CALIFORNIA, INC. 7 8 SUPERiOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF SACRAMENTO 10 ANDREA SPEARS, an individual, on behalf of Case No. 34-2017-00210560-CU-OE-GDS 11 herself and on behalf of all persons similarly situated, SEPARATE STATEMENT OF 12 UNDISPUTED MATERIAL FACTS IN Plaintiff, SUPPORT OF DEFENDANT HEALTH 13 NET OF CALIFORNIA, INC.'S V. RENEWED MOTION FOR SUMMARY 14 ADJUDICATION HEALTH NET OF CALIFORNIA INC., a 15 California Corporation; and Does 1through 50, Date: February 4, 2019 inclusive. Time: 9:00 a.m. 16 Dept.: 54 Defendants. Reservation No.: 2380178 17 TOMAS R. ARANA, on behalf of limself, all Complaint Filed: April 5, 2017 18 others similarly situated, FACFiled: June 29, 2017 Consolidated Complaint Filed: Dec. 2, 2017 19 Plaintiff Complaint Filed: August I , 2017 20 V. 21 HEALTH NET OF CALIFORNIA INC., a 22 California corporation; and DOES 1-50, inclusive. 23 Defendant. 24 25 26 27 28 SEPARATE STATEMEN T OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTI I NET OF CALIFORNIA, INC.'S RENEWED MOTION FOR SUMMARY AOIUDICATION Pursuant to California Code of Civil Procedure Section 437(c), Defendant Health Net of 2 California, Inc. ("HNCA"') submits the following Separate Statement of Undisputed Material Facts, 3 together with references to supporting evidence, in support of its Renewed Motion for Summary 4 Adjudication as to Plaintiffs Andrea Spears and Tomas Arana's (collectively "Plaintiffs") claim 5 that HNCA failed to properly calculate their regular rates of pay for purposes of detennining their 6 overtime compensation, and their derivative PAGA allegations based thereon. 7 SEPARATE STATEMENT OF UNDISPUTED FACTS AND EVIDENCE 8 I. THIRD CAUSE OF ACTION FOR FAILURE TO PAY HOURLY WAGES AND FAILURE TO PAY OVERTIME WAGES 9 Issue 1: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged 10 failure to include cash benefits received pursuant to a bona fide benefits Plan in Plaintiff Spears' regular rate of pay fails because cash benefits were 11 properly excluded from her regular rate calculation under the Benefit-Plan Contributions Exception and Plaintiff Arana never received the cash benefit. 12 Undisputed Material Facts and Supporting Plaintii®s|R^pbnseHiriiWSuppoi^^^ 13 -Eyitferice:4|:|^ , ; ' *, Evideiiciy'YJy&^ I . Plaintiff Spears worked as a non-exempt HNCA 14 Customer Service Representative from September 2014 to October 2016 in Rancho Cordova. 15 16 Declaration of Diane C. Rodes (hereinafter "Rodes Dec") TI 4. 17 2. Plaintiff Arana began working out of the Rancho Cordova call center in 2008 and continues to work 18 there now. He started as a non-exempt Customer Service Representative for HNCA until his 19 promotion on or about November 14, 2015 to Contact Center Analyst, an exempt position. 20 Since June 2017, Plaintiff Arana has been working as a Call Center Systems Analyst I, also an exempt 21 position. 22 Rodes Dec, U 6. 3. Between January I , 2001 and December 31, 2016, 23 HNI sponsored a cafeteria plan - a written health and welfare plan - called the "Health Net, Inc. 24 Associates Benefit Program" (the "Plan"). 25 Declaration of Debbie Colia ("Colia Dec"), T^l 2-3, 26 Exhs. A-I. 27 28 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTl I NET OF CALIFORNIA. INC.'S RENEWED MOTION FOR SUMMARY AD.IUD1CATI0N 4. As the Plan sponsor, HNI administered the Plan. 2 Colia Dec, 112. 3 5. HNCA adopted the Plan for the benefit of its employees. 4 Declaration of Debbie Colia ("Colia Dec"), H 2. Exhs. 5 A-I. 6. The Plan was governed by Section 125 of the 6 Internal Revenue Code. 7 Colia Dec, ^ 4. 7. The Plan was subject to the Employee Retirement 8 Income Security Act. 9 Colia Dec, 114. 10 8. The Plan was overseen by a Benefits Committee. 11 Colia Dec, 114. 9. The HNI Benefits Committee had fiduciary duties 12 and responsibilities requiring the Committee members to "discharge their duties with respect to 13 the Plan (i) solely in the interest of the Associates, (ii) for the exclusive purpose of providing benefits 14 to Associates and of defraying reasonable expenses of administering the Plan and (iii) with 15 the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent 16 person acting in a like capacity and familiar with such matters would use in the conduct of an 17 enterprise of a like character and with like aims, to the extent the Committee's duties are subject to 18 ERISA." 19 Colia Dec, 114, Exh. A, § 7.1(e) 20 10. HNI as the plan sponsor and administrator ensured that HNCA's employer contributions to the Plan 21 were tracked. 22 Colia Dec, H 4. 1 I . HNI as the plan sponsor and administrator ensured 23 that HNCA's employer contributions to the Plan were kept in a separate account. 24 Colia Dec, 114. 25 26 27 28 -2- SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT I-IEALTH NET OF CALIFORNIA, INC.'S RENEWED MOTION FOR SUMMARY AD.IUDICATION 12. HNI, as the plan sponsor and administrator, ensured that HNCA's employer contributions to 2 the Plan were used only for proper Plan purposes related to providing the health and welfare 3 benefits to Plan Participants, including Plaintiffs Andrea Spears and Tomas Arana, and their 4 dependents. 5 Colia Dec, 114. 6 13. HNI treated HNCA as a third party for purposes of administering the plan and vice versa. 7 Colia Dec, H 5. 8 14. During the time that the plan was in effect, HNI also processed HNCA's payroll. 9 Colia Dec, H I ; Sarabia Dec, H 2. 10 15. Pursuant to the terms of the Plan, HNCA paid the 11 actual costs of benefits under the plan for its eligible employees who elected to participate (i.e.. 12 Plan Participants), including Plaintiffs. 13 Colia Dec, H 5. 16. HNCA paid to HNI in its capacity as Plan sponsor 14 and administrator the full amount necessary to cover HNCA's employer contributions as defined 15 by the Plan. 16 Colia Dec, H 5 17 17. The actual cost of benefits HNCA paid to HNI was the total amount necessary to cover HNCA's 18 employer contributions under the Plan, including both core and optional benefits. 19 Colia Dec.,11 5. 20 18. HNCA's employer contributions included the cash benefits at issue in this Motion, which were paid 21 by HNI as the Plan sponsor and administrator to certain eligible Plan Participants, including Ms. 22 Spears. 23 Colia Dec, 115 24 19. Pursuant to a funded arrangement between HNI and HNCA, HNCA's employer contributions to 25 the Plan were deposited into an account maintained and controlled by HNI as the Plan's 26 sponsor and administrator. 27 Colia Dec, 11116, 15. 28 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA. INC. S RENEWED MOTION FOR SUMMARY AD.IUDICATION i 20. HNCA's contributions were irrevocable in that once made to HNI, HNCA was unable to 2 recapture or divert the funds for HNCA's use or benefit. 3 Colia Dec, 11116, 15. 4 21. HNI as the Plan sponsor and administrator, 5 controlled those HNCA's contributions once these monies were deposited into that account. 6 Colia Dec, 11116, 15. 7 22. After receiving employer contributions, HNI used those contributions for benefits under the Plan, 8 including the cash benefits at issue in this Motion, which were paid by HNI as the Plan's sponsor and 9 administrator to those Plan Participants who elected to waive certain benefits offered by the 10 Plan, which included Ms. Spears. 11 Colia Dec, nil 6, 15. 23. Information regarding the operation of the Plan 12 and a description of the benefits available under the Plan was communicated to Plan Participants, 13 including HNCA employees, in the Summary Plan Descriptions (the "Plan SPD") which HNCA 14 employees received upon their hire. 15 Colia Dec, H 7, see generally Exhs. J & K. 16 24. The purpose of the Plan was to offer Plan Participants a wide range of benefit options and 17 was designed to provide them the flexibility to choose the benefits that met their needs. 18 Colia Dec, H 7, Exh. J (HNCA000916), Exh. K 19 (HNCA000754). 25. The Plan SPD also explained how the Plan 20 worked, who was eligible to participate and what were the Plan Participants' rights. 21 Colia Dec, H 7, see generally Exhs. J & K. 22 26. The Plan SPD also described the coverage options 23 available for each benefit category under the Plan. 24 Colia Dec, H 7, see generally Exhs. J & K. 27. The Evidence of Coverage ("EOC") documents, 25 also distributed to HNCA employees when hired, provided additional details regarding the Plan. 26 Colia Dec, H 7, Exh. L. 27 28 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA, INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION 1 28. These EOC documents also included the medical coverage options available and co-payments that a 2 Participant was responsible for with respect to the Plan's various covered services and supplies. 3 Colia Dec, H 7, Exh. L. 4 29. To the extent that the documents were vague or 5 suggested something different, the Plan controlled everything, and the EOC controlled over the SPD. 6 Colia Dec, H 9, EOC, Exh. L (HNCA002462), 201 1- 7 2015 SPD, Exhibit J (HNCA000927), 2016 SPD, Exhibit K (HNCA000774). 8 30. The Plan provided "core" benefits to Participants such as basic life and basic AD&D insurance at no 9 cost to the Participants. 10 Colia Dec, HU 10, Exh. J (HNCA000918-19), Exh. K (HNCA000762). 11 31. It also provided "optional" benefits to Participants and/or their dependents, such as medical and 12 dental coverage, to select as desired based on their particular needs. 13 Colia Dec, HH 11, Exh. J (HNCA0009I8, 920), Exh. 14 K (HNCA000762-63). 15 32. To help pay for the cost of medical and dental coverage and pursuant to the Plan, Participants 16 received "Flex Dollars." 17 Colia Dec, H 12; Rodes Dec, H 16. 33. Flex Dollars represented HNCA's employer 18 contribution towards its employees' medical and dental coverage. 19 Colia Dec, H 12, Exh. J (HNCA00092I): "The 20 amount of Flex Dollars to which you are entitled represents your Employer's share toward your cost of 21 medical and dental coverage), Exh. K (HNCA000764, same). 22 23 24 25 26 27 28 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA, INC S RENEWED MOTION FOR SUMMARY ADJUDICATION I 34. The exact amount of "Flex Dollars" to which a Participant was entitled to varied depending on the 2 medical and dental plans that he or she chose, the number of dependents covered and the 3 Participant's geographic location, but generally, the amount was less than the total cost of the 4 benefit(s) that a participant elected. 5 Colia Dec,11 12, Exh. A (HNCA00102I: HNI, as the Plan sponsor and administrator, had sole discretion to 6 determine the amount of Flex Dollars that would be made available each year); Exh. J (HNCA000921), 7 Exh. K (HNCA000764). 35. Generally, the amount of Flex Dollars a 8 Participant received was less than the total cost of the benefit(s) that a participant elected. 9 10 Colia Dec.,11 '2; Rodes Dec, HH 19-22, Exhs. F, G. 36. In a vast majority of cases, the Participant was 11 required to contribute some amount toward the cost of the optional benefit(s) he or she selected. 12 Colia Dec, H 12, Exh. J (HNCA00092I: " I f the cost 13 of your optional benefits exceeds the value of your Flex Dollars, you must pay the difference. Your cost 14 will be deducted from your paycheck."), Ex. K (HNCA000764, same); Rodes Dec, HH 19-22, Exhs. 15 F,G. 37. The Participant's portion of the benefit coverage 16 was deducted from his or her pay check and deposited with HNI as the Plan sponsor and 17 administrator. 18 Colia Dec, H 12; see also Colia Dec, Exh. J (HNCA000921: describing payroll deductions), Ex. K 19 (HNCA000764: same); Rodes Dec, HH 19-22, Exhs. F, G (evidencing Participants' payroll deductions for 20 their portion of coverage). 21 22 23 24 25 26 27 28 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA, INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION 1 38. If a Plan Participant's Flex Dollars exceeded the cost of coverage or if the Plan Participant waived 2 medical and/or dental coverage, the Plan Participant received a portion of the Flex Dollars 3 as a cash benefit. 4 Colia Dec, HH '2, 14; .see also Colia Dec, Exh. A (HNCA001021: HNI, as the plan sponsor and 5 administrator, had discretion to determine if and to what extent cash benefits would be paid if the total 6 cost of the benefits to be provided to the Participant each year was less than the amount of Flex Dollars 7 available to that Participant); Exh. J (HNCA00092I: describing payroll deductions), Ex. K (HNCA000764: 8 same); Rodes Dec, HH 19-21, Exh. F (evidencing receipt of cash benefit). 9 39. HNI, as the Plan sponsor and administrator, paid 10 cash benefits provided by the Plan to qualifying Plan Participants. II Colia DecHH 12, 15. 12 40. HNI paid the cash benefit provided by the Plan to Plan Participants such as Spears via their 13 paychecks because in a separate role, HNI also processed the payroll for the companies who 14 participated in the Plan, including HNCA. 15 Colia Dec, H 12; see also Sarabia Dec, H 2 ("HNI processed HNCA's payroll from before 20I2 through 16 the end of 2016."). 41. Flex Dollars provided to Plan Participants were 17 tracked by HNI through payroll codes "MedFlxElcf and "DenFlxElct" and 18 "MedFlxWave" and "DenFlxWave." 19 Sarabia Dec, H 2; Colia Dec, H 14. 20 42. The use of payroll codes to track Flex Dollars does not change the nature of the cash benefit 21 provided by the Plan. The cash benefit was a Plan benefit. 22 Colia Dec, H 14. 23 43. Plan Participants could waive one or more of the available benefits, but could only waive medical 24 coverage if they had coverage elsewhere. 25 Colia Dec, H 13, Exh J (HNCA000920), Exh. K (HNCA000763); Rodes Dec, HH '9-21, Ex. F. 26 27 28 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA, INC 'S RENEWED MOTION FOR SUMMARY ADJUDICATION 1 44. The actual cost of benefits contributed by HNCA to HNI, included all Flex Dollars Plan Participants 2 received as a benefit of the Plan, specifically including the cash benefit of the Plan that is the 3 subject of this motion. 4 Colia Dec, H 14. 5 45. Flex Dollars are a benefit offered and paid by the Plan to eligible Plan Participants, such as Ms. 6 Spears. 7 Colia Dec, H 16. 46. That in most cases the total amount of Flex 8 Dollars a Plan Participant received was used in whole to pay for elected coverage on a pre-tax 9 basis does not change the nature of the Flex Dollars Plan Participants received from HNI as the 10 Plan sponsor and administrator pursuant to the terms of the Plan. 11 Colia Dec, H 16. 12 47. Plan Participants who elected optional coverage received a cash benefit when the actual cost of 13 their elected coverage was less than the amount of Flex Dollars they were entitled to receive under 14 the Plan. 15 Colia Dec, H 16. 16 48. In each ofthe Plan years 2013, 2014, 2015 and 2016, the total cash benefits provided to 17 Participants who waived dental and/or medical coverage represented a very small percentage of 18 HNCA's contributions provided under the Plan for the elected dental and/or medical coverage: 1.4% 19 in 2013, 1.3% in 2014; 0.9% in 2015; and 0.9% in 2016. 20 Declaration of Kelly Sarabia ("Sarabia Dec), HH 3-7. 21 49. Throughout Spears employment with HNCA, she elected dental coverage and the cost of her 22 coverage always exceeded the amount of Flex Dollars she received for this coverage. 23 Rodes Dec, HH 19-21, Ex. F. 24 50. Spears waived medical coverage during her 25 employment with HNCA, and as a result, received a cash benefit of $20.00 per pay period pursuant to 26 the Plan. 27 Rodes Dec, HH 19-21 Ex. F. 28 SEPARATE STATEMENT OF UNDISPUTED MA TERIAL FACTS IN SUPPORT OF DEFENDAN T HEALTI I NET OF CALIFORNIA, INC 'S RENEWED MOTION FOR SUMMARY ADJUDICATION 51. During Arana's employment with FINCA, he elected to receive both medical and dental 2 coverage and the cost of his coverage always exceeded the amount of Flex Dollars he received. 3 Rodes Dec, H 22, Ex. G. 4 5 Issue 2: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged failure to include SPOT payments in the regular rate of pay fails because 6 SPOT payments were properly accounted for in the regular rate calculation. 7 UnSisputed/Matieri and Supportirig ^Plaintiff's Response a^acl Supportlng| 8 • , E v i d e n c e : | 2 i , i ^ i ' -c;;:-;;;'.^y ff: ;'SMXirymk- • :i{i|yyJQence,,;y^^^ 'i-j.tr-':? 52. HNCA's considers bonuses to be non-regular 9 payments paid to employees in recognition of services they have performed during a given 10 period. 11 Rodes Dec, H 3 53. HNCA paid certain Premium Rate Compensation 12 to Plaintiffs for certain hours worked in excess of their normal working hours and on holidays and 13 did not include earnings under this compensation in their regular rate. 14 Rodes Dec, HH 3, 5, 7. 15 54. HNCA paid Non-Work Time Compensation for 16 occasional periods when no work was performed by Plaintiffs and did not include this compensation 17 in their regular rate. 18 Rodes Dec, HH 3, 5, 7. 55. Flex Dollar benefits received by Plaintiffs 19 pursuant to the Plan administered by HNI were not included in the regular rate. 20 Rodes Dec, HH 3, 5, 7. 21 56. At no time during Spears' employment with 22 HNCA did she receive any payments HNCA considered a bonus. 23 Rodes Dec.,H 5. 24 25 26 27 28 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA. INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION 1 57. Plaintiff Spears's payroll data produced in this matter shows earnings under only the following 2 pay code descriptions: Double time. Floating Holiday, Holiday, Holiday Overtime, Overtime, 3 Reg. Hours Non-Exempt, Bereavement, DTO, Jury Duty, PTO LOA, PTO Scheduled, PTO Sick, 4 PTO Unscheduled, Prorated PTO Payout, Dental Flex $ for Elect, and Medical Flex $ for Waive. 5 Rodes Dec, H 5. 6 58. Spears regular earnings as an hourly employee 7 were reflected in her payroll records by the pay code description Reg. Hours Non-Exempt and 8 were included in her regular rate. 9 Rodes Dec, HH 3, 5. 59. Spears received Premium Rate Compensation 10 under the pay code descriptions Overtime, Holiday, Holiday Overtime, Floating Holiday, and II Double time. 12 Rodes Dec, H5. 60. Spears received Non-Work Time Compensation 13 under the pay code descriptions Bereavement, DTO, Jury Duty, PTO LOA, PTO Scheduled, 14 PTO Sick, PTO Unscheduled, and Prorated PTO Buyout. 15 Rodes Dec, H5. 16 61. Spears's payroll data reflects she was provided 17 Flex Dollar earnings under the pay code descriptions Medical Flex $ for Waive and Dental 18 $ for Flex Elect. 19 Rodes Dec, H 5. 62. Throughout Plaintiff Arana's employment with 20 HNCA, the only forms of earnings he received that HNCA considered bonuses were the bonuses 21 he received through the SPOT Cash Awards Program ("SPOT") and incentive pay pursuant to 22 the ACA Customer Service & Claims Representative Pay for Performance Incentive 23 Plan ("ACA Incentive Plan"). 24 Rodes Dec, HH 7, 13, 15, Exh. C. 25 26 27 28 - 10- SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA. INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION 1 63. Plaintiff Arana's payroll data produced in this matter shows earnings under only the following 2 pay code descriptions as a non-exempt employee: Double time, Floating Holiday Overtime, Holiday, 3 Overtime, Reg. Hours Non-Exempt, DTO, PTO LOA, PTO Scheduled, PTO Sick, PTO 4 Unscheduled, Dental Flex $ for Elect, and Medical Flex $ for Waive, Bonus - SPOT, Bonus Other 5 Plans, Incentive - Other Plans, Wellness - Incentive. 6 Rodes Dec, H 7. 7 64. Arana's regular earnings as an hourly employee 8 were reflected in her payroll records by the pay code description Reg. Hours Non-Exempt and were included in his regular rate. 9 10 Rodes Dec, HH 3, 7. 65. Arana received Premium Rate Compensation 11 under the pay code descriptions Overtime, Holiday, Floating Holiday Overtime, Double time. 12 Rodes Dec, H 7. 13 66. Arana received Non-Work Time Compensation under the pay code descriptions DTO, PTO LOA, 14 PTO Scheduled, PTO Sick, PTO Unscheduled. 15 Rodes Dec, H 7. 16 67. Arana's payroll data reflects he was provided Flex Dollar earnings under the pay code descriptions 17 Medical Flex $ for Elect and Dental Flex $ for Elect. 18 Rodes Dec, H 7. 19 68. Beginning January I , 2014 and continuing through December 31, 2016, HNCA adopted SPOT. 20 Rodes Dec, H 8; Horton Dec, Ex. C, Amended 21 Undisputed Fact No. ("AUF") 25. 22 69. Through SPOT, HNCA spontaneously rewarded certain employees "who demonstrate[d] 23 exceptional behavior on the job . . . whether it [wa]s within or beyond [the employee's] job 24 scope." 25 Rodes Dec, H 8, Ex. C; Horton Dec, Ex. C, AUF 26. 70. HNCA's SPOT policy informed eligible 26 employees that bonuses were awarded without any promise or incentive being announced beforehand. 27 Rodes Dec, H 8, Ex. C; Horton Dec, Ex. C, AUF 27. 28 11 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA. INC S RENEWED MOTION FOR SUMMARY ADJUDICATION 1 71. There were no pre-established criteria for awarding SPOT bonuses or pre-established 2 amounts to be awarded. 3 Rodes Dec,HH 9-12, Ex. C; Horton Dec, Ex. C, AUF 28. 4 72. The decision of when, for what reason, and in what amount to award a SPOT bonus - within a 5 range - was subject to the discretion of managers and the ultimate approval of the head of the 6 appropriate Business Unit. 7 Rodes Dec, HH 9-12, Ex. C, D; Horton Dec, Ex. C, 8 AUF 29. 73. Each Business Unit Leader was allotted an annual 9 SPOT bonus budget that he or she could elect to use in full, in part, or not at all. 10 Rodes Dec, H 10, Ex. C; Horton Dec, Ex. C, AUF 30. 11 74. Procedurally, a SPOT bonus was initiated if a manager felt that an employee on his or her team 12 should receive one. 13 Rodes Dec, H 11, Ex. C; Horton Dec, Ex. C, AUF 31 14 75. The manager had the discretion to complete the SPOT Award Nomination Form detailing the 15 reason for nomination, describing the achievement, and identifying a specific amount he 16 or she believed appropriate. 17 Rodes Dec, HH 1 L Exhs. A, B; Horton Dec, Ex. C, AUF 32. 18 76. The manager would submit the completed SPOT Award Nomination Form to the head of his or her 19 Business Unit. 20 Rodes Dec, H 1 1; Horton Dec, Ex. C, AUF 33. 21 77. The Business Unit Leader exercised his discretion as to whether to award the SPOT bonus based on 22 the manager's recommendation (or not) and, if so, in what amount. 23 Rodes Dec, H 12; Horton Dec, Ex. C, AUF 34. 24 78. If the Business Unit Leader decided to award an employee with a SPOT bonus, the bonus appeared 25 on the recipient's paycheck with the designation "Bonus-SPOT." 26 Rodes Dec, HH 12-13, Ex. C; Horton Dec, Ex. C, 27 AUF 35. 28 12 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA. INC 'S RENEWED MOTION FOR SUMMARY ADJUDICATION 1 79. SPOT bonuses were not included in non-exempt recipients' regular rate calculation because SPOT 2 bonuses were discretionary bonuses. 3 Rodes Dec, HH 12-13, Ex. C; Horton Dec, Ex. C. AUF 36. 4 80. Arana received SPOT bonuses on three occasions - each in the amount of $ 1,000. These bonuses 5 were included on his wage statements dated July 5, 2013; October 25, 2013 and June 5, 2015. 6 7 Rodes Dec, H 13, Ex. C. 81. Spears did not receive any SPOT bonuses. 8 Rodes DecHH 5, 13. 9 10 Issue 3: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged 11 failure to include ACA Incentive Plan payments in the regular rate of pay fails because those payments were properly accounted for in the regular rate 12 calculation. 13 ©liaisputed'-MatersiSllFacTs; andfSuplf^^ • ?Sft*!•tPlaihlKffislRespoffsela 14 82. HNCA incorporates Undisputed Material Facts 15 52-67 as though fully re-stated herein. 16 83. Starting January 3, 2014 and lasting through May 31, 2014, HNCA implemented the ACA Incentive 17 Plan for eligible employees. 18 Rodes Dec, H 14, Ex. D; Horton Dec, Ex. C, AUF 37. 19 84. The purpose of the ACA Incentive Plan was to provide an extra reward if employees voluntarily 20 worked overtime due to the increase in workload, especially at the call centers, as a result of the 21 implementation of the Patient Protection and Affordable Care Act. 22 Rodes Dec, H 14, Ex. D; Horton Dec, Ex. C, AUF 38. 23 85. Under the ACA Incentive Plan, eligible employees who worked a certain number of overtime hours 24 each month received bonus payments. 25 Rodes Dec, H 14, Ex. D; Horton Dec, Ex. C, AUF 39. 26 27 28 13 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA. INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION 86. Bonus payments pursuant to the ACA Incentive Plan were included in non-exempt recipients' 2 regular rate of pay. 3 Rodes Dec, HH 14, Ex. E; Horton Dec. Ex. C. AUF 40. 4 87. Arana received payments pursuant to the ACA Incentive Plan, as reflected in his payroll data 5 produced under the description "Incentive - Other Plans" or "Bonus - Other Plans." 6 Rodes Dec,HH 7, 15, Exh. E. 7 88. Spears did not receive any payments pursuant to the ACA Incentive Plan. 8 9 Rodes Dec.,HH 5, 15. 10 11 Issue 4: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged failure to include Wellness Incentive payments in the regular rate of pay fails 12 because those payments are not bonuses and were properly excluded from the regular rate. 13 14 ;Knai^ute|l|Mat|^^ PlaintifPs Response and Supporting flEyidenCe:i|5 ' • :f,. •.^Evidence: i 'Ji:,,f'':&i:s'-Xm • 15 89. HNCA incorporates Undisputed Material Facts 52-67 as though fully re-stated herein. 16 90. From April 5, 2013 to December 31, 2016, HNCA 17 had in place a Wellness Incentive Program for eligible employees. 18 Rodes Dec, H 23. 19 91. HNCA adopted this program because the Company determined that it was in its best interest 20 to provide employees an incentive to engage in certain fitness and weight management programs. 21 Rodes Dec, H 23. 22 92. More specifically, HNCA encouraged these types of activities to lower HNCA's health care costs, 23 help to improve employees' health and benefit HNCA through increased productivity. 24 Rodes Dec, H 23. 25 26 27 28 14 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA. INC. S RENEWED MOTION FOR SUMMARY ADJUDICATION I 93. Under the Wellness Incentive Program, the Company provided $35 on a monthly basis to 2 einployees who provided proof that they were regularly attending a health club, gym, 3 YMCA/YWCA or other aerobic/cardiovascular fitness program (such as Pilates, dance, yoga, 4 martial arts, lap swimming or Jazzercise) and/or weight management programs (such as Weight 5 Watchers, Jenny Craig, etc.). 6 Rodes Dec, H 24. 94. Employees who participated in the Wellness 7 Incentive Program had to make a request for a wellness incentive payment online through 8 HNCA's intranet in order to receive the $35. 9 Rodes Dec, H 25. 10 95. If the employee's wellness program of choice qualified under the incentive plan, the incentive I1 payment was non-discretionary. 12 Rodes Dec, H 25. 96. Employees that requested the incentive payment 13 with evidence of participation in a qualifying wellness program received a flat monthly 14 incentive of $35, regardless of the actual cost of their qualifying program. 15 Rodes Dec, H 25. 16 97. The payments made to HNCA employees under the Wellness Incentive Program were not tied to 17 hours worked or performance. 18 Rodes Dec, H 26. 98. The payments made to HNCA employees under 19 the Wellness Incentive Program were not provided as any sort of bonus or incentive for employees to 20 work harder, better or more efficiently. 21 Rodes Dec, H 26. 22 99. The payments made to HNCA employees under the Wellness Incentive Program were not 23 compensation for services rendered by the employees. 24 Rodes Dec, H 26. 25 100. The Wellness Incentive Program's primary purpose of benefitting HNCA and serving the 26 Company's interests in trying to lower its health care costs and increase productivity. 27 Rodes Dec, H 26. 28 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA. INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION 101. Arana received payments pursuant to the Wellness Incentive Program, as reflected in his 2 payroll data produced under the description Wellness - Incentive. 3 Rodes Dec, HH 7, 27, Exh. I. 4 102. Spears did not receive any payments pursuant to the Wellness Incentive Program. 5 Rodes Dec, HH 5, 27. 6 7 2. SEVENTH CAUSE OF ACTION FOR C I V I L PENALTIES PURSUANT TO LABOR CODE 2698, ET SEQ. (PAGA) 8 Issue 5: Plaintiffs' PAGA claim based on alleged failure to pay overtime wages as a 9 result of alleged failure to include cash benefits received by Plaintiff Spears' in her regular rate of pay fails because the underlying alleged Labor Code 10 violation did not occur. II Defendants' Undisputed Material Facts and PlaintifPs Response and Supporting 12 Supporting Evidence: Evidence: 13 14 103. HNCA incorporates Undisputed Material Facts 15 I-51 as though fully re-stated herein. 16 ISSUE 6: Plaintiffs' PAGA claim based on alleged failure to pay overtime wages as alleged failure to include SPOT cash awards awarded to Plaintiff Arana in 17 the regular rate of pay calculation fails because the underlying alleged Labor Code violation did not occur. 18 19 Defendants' Undisputed Material Facts and -Plaintiffs ResponsCiand Suppoi-ting 20 Supporting Evidence: . Evidence: \' . 21 104. HNCA incorporates Undisputed Material Facts 22 52-81 as though fully re-stated herein. 23 24 25 26 27 28 16 SEPARAJ E STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA. INC'S RENEWED MOTION FOR SUMMARY ADJUDICATION 1 ISSUE 7: Plaintiffs' PAGA claim based on alleged failure to pay overtime wages as alleged failure to include ACA Incentive Plan payments awarded to Plaintiff 2 Arana in the regular rate of pay calculation fails because the underlying alleged Labor Code violation did not occur. 3 4 Defendants' Undisputed Material Facts and Plaintiff s Response and Supporting 5 Supporting Evidence: Evidence: , , 6 105. HNCA incorporates Undisputed Material Facts 7 82-88 as though fully re-stated herein. 8 ISSUE 8: Plaintiffs' PAGA claim based on alleged failure to pay overtime wages as 9 alleged failure to include Wellness Incentive payments made to Plaintiff Arana in the regular rate of pay calculation fails because the underlying 10 alleged Labor Code violation did not occur. 11 Defendants' Undisputed Material Facts and Plaintiffs Response and Supporting^ 12 Supporting Evidence: ' ' Evidence: " ' - 13 106. HNCA incorporates Undisputed Material Facts 14 89-102 as though fully re-stated herein. 15 16 17 Dated: November 19, 2018 ORRICK, HERRINGTON & SUTCLIFFE LLP 18 19 By: NICHOLAS J. HORTON 20 Attorneys for Defendant HEALTH NET OF CALIFORNIA, INC. 21 22 23 24 25 26 27 28 17 SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF DEFENDANT HEALTH NET OF CALIFORNIA, INC.'S RENEWED MOTION FOR SUMMARY ADJUDICATION fll CM ^ r\ p ^ - C (•..--f;.;. C£:' ••• lit -^r'"- i