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FILED
1 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP ENDORSED
Norman Blumenthal (SBN 068687)
2 Kyle R. Nordrehaug (SBN 205975)
2010 APR II PH 1:1,0
Aparajit Bhowmik (SBN 248066) SUPCRIQH CGURT OF CALIFORNl
3 Piya Mukherjee (SBN 274217) CCUNf V 0,- SACH,HH£Hro
Jeffrey S. Herman (SBN 280058)
4 2255 Calle Clara
La Jolla, Califomia 92037
5 Telephone: (858) 551-1223
Facsimile: (858) 551-1232
6
Attomeys for Plaintiff
7
8
9
SUPERIOR COURT OF THE STATE OF CAL1F0RNL\
10
COUNTY OF SACRAMENTO
11
12
ANDREA SPEARS, an individual, on behalf of Case No. 34-2017-00210560-CU-OE-GDS
13 herself and on behalf of all persons similarly situated.
CLASS ACTION
14 Plaintiff,
PLAINTIFF'S RESPONSIVE SEPARATE
15 vs. STATEMENT OF DISPUTED MATERIAL
FACTS AND ADDITIONAL FACTS IN
16 HEALTH NET OF CALIFORNIA, INC., a Califomia OPPOSITION TO DEFENDANT'S MOTION
Corporation; and Does 1 through 50, Inclusive, FOR SUMMARY JUDGMENT OR, IN THE
17 ALTERNATIVE, SUMMARY
Defendants. ADJUDICATION
18
Reservation No. 2313007
19
TOMAS R. ARANA, on behalf of himself, all others Hearing Date: April 26, 2018
20 similarly situated,
Hearing Time: 9:00 a.m.
21 Plaintifif, Judge: Hon. Steven H. Rodda
Dept: 54
22 vs.
Action Filed: April 5, 2017
23 HEALTH NET OF CALIFORNL\, INC., a Califomia
corporation; and DOES 1 through 50, inclusive,
24
25
Defendants.
FAX
26
27
28
PLAINTIFF'S RESPONSIVE SEPARATE STATEMENT OF DISPUTED MATERIAL FACTS AND ADDITIONAL
FACTS IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT OR, IN THE
ALTERNATIVE, SUMMARY ADJUDICATION
43866436V.3
1 Pursuant to Code of Civil Procedure Section 437c(b) and Califomia Rule of Court 3.1350(d), Plaintiff
2 herebys submit her Responsive Separate Statement Of Dispute Material Facts In Opposition to Defendant's
3 Motion For Summary Judgment or, Altematively, Summary Adjudication.
4 I. THIRD CAUSE OF ACTION FOR FAILURE TO PAY HOURLY WAGES AND FAILURE
5 TO PAY OVERTIME WAGES
6 Issue 1: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged failure to
include cash benefits received in lieu of medical payment in Plaintiff Spears' regular rate of pay fails
7 because cash benefits were properly excluded from her regular rate calculation under the Benefit-Plan
ContributionsException.
8
;-Defen'dai™t|s|Uri Plaintiffs' Response &,Supporting Evidence
9
Evidence 'Mki^^&JOdk: 'f: fc--^ i t : ^ ' -
10 1. Plaintiff Spears served as a non-exempt 1. Undisputed.
HNCA customer service representative
11 from September 2014 to October 2016
in Rancho Cordova.
12
Declaration of Diane C. Rodes (hereinafter
13
"Rodes Dec") H 3.
14 2. Plaintiff Arana began v^^orking out of the 2. Undisputed.
Rancho Cordova call center in 2008 and
15 continues to work there now. He started
as a non-exempt customer service
16 representative for HNCA until his
promotion on or about November 14,
17
2015 to Contact Center Analyst, an
18 exempt position. Since June 2017,
Plaintiff Artana has been working as a
19 Call Center Systems Analyst I , also an
exempt position.
20
Rodes Dec. H 3
21
3. Between January 1, 2001 and December 3.
22 31, 2016, HNI sponsored a cafeteria
plan - a written health and welfare plan-
23 called the "Health Net, Inc. Associates
Benefit Program" (the "Plan"), which
24 HNCA adopted for the benefit of its
25 employees.
26 Declaration of Debbie Colia ("Colia Dec"), 12,
Exhs. A-I.
27
28
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 The Plan was govemed by Section 125 Undisputed.
of the Intemal Revenue Code, was
2 subject to the Employee Retirement
3 Income Security Act, and was overseen
by a Benefits Committee.
4
Colia Dec, 13.
5 5. As called for in the Plan, the Benefits Undisputed.
Committee had fiduciary duties and
6
responsibilities to ensure that HNCA's
7 employer contributions to the Plan were
tracked, kept in a separate account, and
8 used only for proper Plan purpose
related to the health and welfare benefits
9 ofHNCA employees, including Plaintiffs
and their dependents.
10
Colia Dec,TI4.
11
6. HNI treated HNCA as a third party for Undisputed.
12 purposes of administering the plan and
vice versa
13
Colia Dec, 14.
14 Pursuant to the terms of the Plan, HNCA 7. Undisputed.
paid the actual costs of benefits under the
15 plan for its eligible employees who
16 elected to participate ("Participants"),
including Plaintiffs, and their dependents.
17
Colia Dec, 14.
18 8. Pursuant to a funded arrangement Undisputed.
between HNI and HNCA, HNCA
19 arranged for the monies used to pay the
20 actual costs ofbenefits to be deposited
into an account maintained and
21 controlled by HNI as the Plan's sponsor.
22 Colia Dec, 14.
9. The contributions made by HNCA Undisputed.
23 pursuant to the Plan were irrevocable -
once the contributions were made to
24
HNI, HNCA was unable to recapture or
25 divert the funds for HNCA's use or
benefit.
26
Colia Dec, H 4.
27 10. The benefits available under the Plan, 10. Undisputed.
including the various coverage options
28 and co-payments a Participant was
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 responsible for with respect to the Plan's
various covered services and supplies,
2 were explained in detail to HNCA
3 employees in Summary Plan
Descriptions (the "Plan SPD") and
4 Evidence of Coverage ("EOC")
documents.
5
Colia Dec, 11 5-6, Exs. K-L
6 11. The Plan provided "core" benefit to 11. Undisputed.
Participants such as basic life and basic
7
AD&D insurance at no cost to the
8 Participants.
9 Colia Dec.,115-7, Exs. K-L.
12. It also provided "optional" benefits to 12. Undisputed.
10 Participants and/or their dependents,
such as medical and dental coverage, to
11
select as desired based on their
12 particular needs.
13 Colia Dec, 1 8.
13. To help pay for the cost of medical and 13. Disputed, the Flex Dollars paid for
14 dental coverage and pursuant to the medical and dental coverage were not received
Plan, Participants received "Flex by Participates but were paid to a third party for
15 Dollars." the elected benefits only and were tax free.
16 Colia Dec.,19; Rodes Dec.,15. (Colia Decl. para 4)("HNI treated HNCA as a
17 third party for purposes of administering the
Plan, and vice versa. Pursuant to the terms of the
18 Plan, HNCA paid the actual costs ofbenefits
under the Plan for its elegible
19 employees.. .pursuant to a funded arrangement
20 between HNI and HNCA, HNCA arranged for
these monies to be deposited into an account
21 maintained and controlled by HNI as the Plan's
sponsor. HNCA's contributions were
22 irrevocable - once made to HNI, HNCA was
unable to recapture of divert the funds for
23
HNCA's use of benefit").
24 14. The exact amount of "Flex Dollars" to 14. Disputed as determining what the amount
which a Participant was entitled to "generally" was as to all employees requires the
25 varied depending on the medical and additional discovery sought by Plaintiffs
dental plans that he or she chose, the pending motion to compel the wage records of
26 number of dependents covered and the the class members that would allow Plaintiff to
27 Participant's geographic location, but verify the amounts of Flex Dollars Defendant
generally, the amount was less than the claims were provided.
28 total cost ofthe benefit(s) that a
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 participant elected See Plaintiffs Motion to Compel Defendant to
respond to Requests for Production.
2 Colia Dec, 1 9; Rodes Dec, 16-10, Exs. A, B.
3 15. In a vast majority of cases, the 15. Disputed because in order to cooroborate
Participant was required to contribute corroborating what happened in the "vast
4 some amount toward the cost of the majority of cases" requires additional discovery
benefit(s) he or she selected, and the sought by Plaintiffs pending motion to compel
5 portion of the benefit coverage was the wage records of the class members that
deducted from his or her paycheck. would allow Plaintiff to verify the amounts of
6 Flex Dollars Defendant claims were provided.
Colia Dec, 1 9.. See Plaintiffs Motion to Compel Defendant to
7
respond to Requests for Production.
8
16. Eligible employees under the Plan could 16. Undisputed.
9 waive one or more of the available
benefits.
10
Colia Dec.,110.
11
17. Waiver of medical coverage was only 17. Undisputed.
12 permitted where the employee had other
medical coverage, such as through a
13 spouse's plan.
14 Colia Dec.,110.
18. In the event that a Participant waived 18. Disputed as incomplete.
15
medicaland/or dental coverage, the Plan
16 provided that the Participant would When Plaintiff waived coverage. Plaintiff
receive a portion of the Flex Dollars as received cash in lieu ofbenefits in her paycheck
17 cash in his or her paycheck. coded as "MedFlxWave," which was an entirely
different form of payment than the payments
18 Colia Dec, 111; Rodes Dec, 1 7. reflected on her paycheck for accepting medical
19 benefits coded on her paycheck as "DenFlxElct"
as the payments like "DenFlxElcf were tax free
20 and provided irrevocably to the trustee or third
party. The MedFlxWave payments, on the other
21 hand, were subject to tax and paid directly to
Plaintiff
22
23 Colia Dec, 111; Rodes Dec, 1 7.
19. In each ofthe Plan years 2013, 2014, 19. Disputed because in order to corroborate
24 2015 and. 2016, the total cash benefits what amounts were paid to all employees in any
provided to Participants who waived given year requires additional discovery sought
25 dental and/or medical coverage by Plaintiffs pending motion to compel the
represented a very small percentage of wage records of the class members that would
26
HNCA's contributions provided under allow Plaintiff to verify the amounts of Flex
27 the Plan for the elected dental and/or Dollars Defendant claims were provided.
medical coverage: 1.4% in 2013, 1.3%
28 in 2014; 0.9% in 2015; and 0.9% in Disputed as irrelevant because these facts
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 2016. relate to whether tax free payments made
irrevolcably to third parties for benefits can be
2 Declaration of Kelly Sarabia("Sarabia Dec"), excluded from the regular rate, which is a
3
^112-5. different issue than Defendant's motion asking
for whether taxed cash in lieu benfits can be
4 excluded from the regular rate.
5 20. Throughout Plaintiff Spears 20. Undisputed.
employment with HNCA, she elected
6
dental coverage.
7
Rodes Dec.,11 6, 9, Ex. A.
8 21. Plaintiff Spears waived medical 21. Disputed as incomplete, as Plaintiff
coverage during her employment with Spears received a taxed cash payment of $20 for
9 HNCA, and as a result, received a cash waiving benefits, which is different from the tax-
benefit of $20.00 per pay period firee flex dollars provided when employees do
10 pursuant to the Plan. not waive benefits.
11
Rodes Dec.,11 8-9, Ex. A. Exhibit "J" to the Debbie Calia Declaration filed
12 with Defendant's Motion at HNCA000921
22. During Plaintiff Arana's employment 22. Undisputed.
13 with HNCA, he elected to received both
medical and dental coverage and thus
14 never received any cash benefits in lieu
15 of coverage.
16 Rodes Dec.,1 10, Ex. B.
Issue 2: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged failure to
17 include bonus payments in the regular rate of pay fails because bonus payments were properly
accounted for in the regular rate calculation.
18
19 Defendant's Undisputed Facts & Supporting Plaintiffs' Response & Suppbrtihg'Evidence
Evidence
20
23. At no time during Plaintiff Spears' 23. Disputed. Plaintiff received
21 employment with HNCA did she receive "MedFlxWave" payments were taxed and paid
any bonus payments. based on preestablished criteria set forth in
22 Defendant's plan as compensation for Plaintiffs
Rodes Dec.,110 work for Defendant.
23
24 Exhibit "A" to Rodes Declaration at
HNCA000078 shows the MedFlxWave payment
25 Plaintiff contends was a bonus payment that
should have been included in the overtime rate.
26
27 Exhibit "J" to the Colia Decl. explains the
preestablished criteria for being paid the
28 MedFlxWave bonus and at page 1 describes how
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 the cash payments for waiving benefits are part
of Defendant's compensation program that
2 "strives to provide associates with a competitive
3 benefits program that is part of our total
remuneration plan." (Emphasis added)
4 24. Throughout Plaintiff Arana's 24. Undisputed.
employment with HNCA, his bonuses
5 have been limited to only bonuses
through the SPOT Cash Awards
6
Program ("SPOT") and incentive pay
7 pursuant to the ACA Customer Service
& Claims Representative Pay for
8 Performance Incentive Plan ("ACA
Incentive Plan").
9
Rodes Dec.,1112, 18, 21, Exs. E, G
10 25. Beginning January 1, 2014 and 25. Undisputed.
11 continuing through December 31,2016,
HNCA adopted SPOT.
12
Rodes Dec.,113
13 26. Through SPOT, HNCA spontaneously 26. Undisputed.
rewarded certain employees "who
14 demonstrate[ d] exceptional behavior on
15 the job ... whether it [wa]s within or
beyond [the employee's] job scope."
16
Rodes Dec.,1 13, Ex. C
17 27. HNCA's SPOT policy informed eligible 27. Undisputed.
employees that bonuses were awarded
18 without any promise or incentive being
announced beforehand.
19
20 Rodes Dec,1 13, Ex. C.
28. There were no pre-established criteria 28. Undisputed.
21 for awarding SPOT bonuses or pre-
established amounts to be awarded.
22
Rodes Dec.,1113-14, Ex. C.
23
29. The decision of when, for what reason, 29. Undisputed.
24 and in what amount to award a SPOT
bonus - within a range - was subject to
25 the discretion of managers and the
ultimate approval of the head of the
26 appropriate Business Unit.
27
Rodes Dec.,1113-17, Ex. C, D.
28 30. Each Business Unit Leader was allotted 30. Undisputed.
an annual SPOT bonus budget that he or
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 she could elect to use in full, in part, or
not at all.
2
Rodes Dec.,11 13, 17, Ex. C.
3
31. Procedurally, a SPOT bonus was 31. Undisputed.
4 initiated if a manager felt that an
employee on his or her team should
5 receive one.
6 Rodes Dec.,11 13, 16, Ex. C.
32. The manager had the discretion to 32. Undisputed.
7
complete the SPOT Award Nomination
8 Form detailingthe reason for
nomination, describing the achievement,
9 and identifying a specific amount he or
she believed appropriate.
10
11 Rodes Dec.,1113-14, 16, Ex. C, D.
33. The manager would subrmt the 33. Undisputed.
12 completed SPOT Award Nomination
13 Form to the head of his or her Business
Unit.
14
15 Rodes Dec.,1 16.
34. The Business Unit Leader exercised his 34. Undisputed.
16 discretion as to whether to award the
SPOT bonus based on the manager's
17 recommendation (or not) and, if so, in
what amount.
18
19 Rodes Dec.,117-
35. If the Business Unit Leader decided to 35. Undisputed.
20 award an employee with a SPOT bonus,
the bonus appeared on the recipient's
21 paycheck with the designation "Bonus -
22 SPOT."
23 Rodes Dec, 1117-18, Ex. E.
36. SPOT bonuses were not included in 36. Undisputed.
24 non-exempt recipients' regular rate
calculation because SPOT bonuses were
25 discretionary bonuses.
26
Rodes Dec.,1117-18, Ex. E.
27 37. Starting January 3, 2014 and lasting 37. Undisputed.
through May 31,2014, HNCA
28 implemented the ACA Incentive Plan
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 for eligible employees.
2 Rodes Dec.,119, Ex. F.
38. The purpose of the ACA Incentive Plan 38. Undisputed.
3
was to provide an extra reward if
4 employees voluntarily worked overtime
due to the increase in workload,
5 especially at the call centers.
6 Rodes Dec.,1 19, Ex. F. .
39. Under the ACA Incentive Plan, eligible 39. Undisputed.
7
employees who worked a certain
8 number of overtime hours each month
received bonus payments.
9
Rodes Dec ,119, Ex. F.
10 40. Bonus payments pursuant to the ACA 40. Undisputed.
Incentive Plan were included in non-
11
exempt recipients' regular rate of pay.
12
Rodes Dec.,11 20-21, Ex. G.
13
Issue 3: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged failure to
14 include shift differential premiums in the regular rate of pay fails because these premiums were
included in the regular rate calulation.
15
41. HNCA provides shift differential pay 41. Undisputed.
16 when more than half of a non-exempt
employee's regularly scheduled working
17 hours fall outside 7:00 a.m. and 5:00
p.m.
18
19 Rodes Dec, 122, Ex. H.
42. I f more than half of an employee's 42. Undisputed.
20 regularly scheduled hours fall in the
"second shift" - between 3:00p.m. and
21 12:00 a.m.- he or she is eligible to
receive a 8% premium pay for all hours
22
worked.
23
Rodes Dec, 1 22, Ex. H.
24 43. I f more thWl half of an employee's 43. Undisputed.
regularly scheduled hours fall in the
25 "third shift" - between 11:00 p.m. Wld
7:00a.m.-he or she is eligible to receive
26
a 12% premium pay for all hours
27 worked.
28 Rodes Dec, 122, Ex. H.
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 44. Shift differentials are identified in 44. Undisputed.
recipients' paycheck Wid included in
2 their regular rates.
3
Rodes Dec, 1 22, 24, Ex. H, I.
4 45. Plaintiff Spears never worked any 45. Undisputed.
second or third shifts and thus, never
5 received any shift differential pay.
6 Rodes Dec, 1 23.
46. Plaintiff Arana worked the second shift 46. Undisputed.
7
on a few occasions and received
8 corresponding shift differential pay that
was included in his regular rate.
9
Rodes Dec, 1 24, Ex. I.
10
Issue 4: Plaintiffs' Failure to Pay All Wages claim premised on HNCA's alleged rounding practice fails
11
47. At all times during the relevant time 47. Undisputed.
12
period, HNCA has not rounded its
13 employees' recorded time for purposes
of generating paychecks.
14
Rodes Dec, 1 25.
15 48. HNCA's time keeping system does not 48. Undisputed.
round any payable time increments.
16
17 Rodes Dec, 1 26.
18
H. SEVENTH CAUSE OF ACTION FOR CIVIL PENALTIES PURSUANT TO LABOR CODE
19 SS 2698. ET SEQ. (PAGA)
.20
Issue 5: Plaintiffs' PAGA claim based, on alleged failure to pay overtime wages as a result of alleged
21
failure to include cash benefits received in lieu of medical payment in Plaintiff Spears' regular rate of
22 pay fails because the underlying alleged Labor Code violation did not occur.
23 See PlaintiflPs responses to Defendant's Undisputed Material Facts 1-22.
24 Issue 6: Plaintiffs' P AGA claim based on alleged failure to pay overtime wages as alleged failure to include
bonuses awarded to Plaintiffs in the regular rate of pay 'calculation fails because the underlying alleged
25 Labor Code violation did not occur.
26
See Plaintiffs responses to Defendant's Undisputed Material Facts 23^0.
27
Issue 7: Plaintiffs' PAGA claim based on alleged failure to include shift differential premiums in Plaintiff
28 Arana's. regular rate of pay fails because the underlying alleged Labor Code violation did not occur.
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 See Plaintiff's responses to Defendant's Undisputed Material Facts 41-46.
2 Issue 8: Plaintiffs' P AGA claim based on alleged roundmg practice fails as a matter of law because the
underlying alleged Labor Code violation did not occur.
3
4 See Plaintiffs responses to Defendant's Undisputed Material Facts 47-49.
5 m. SEPARATE STATEMENT OF ADDITIONAL FACTS IN OPPOSITION TO DEFENDANT'S
MOTION FOR SUMMARY JUDGMENT
6
""Exhibits attached to Declaration of A.J. Bhovraiik filed concurrently herewith
7
8 No. PlaintifFs Additional Facts Supporting Evidence
9 The Plan Descriptions admitted that the
1. benefit plans providing for cash in lieu of (2011-2015 Summary Plan Description at pg.
benefits to be paid were part of Defendant's 1 and 2016 Summary Plan Description at pg.
10 1, attached respectively as Exhibits 3 & 4 to
effort "to provide associates with a
competitive benefits program that is part the Declaration of Aparajit Bhowmik
11 ("Bhowmik Decl."))
of our total remuneration plan."
12
The Plans specified the compensation is for (Exhibit 4 at pe. HNCA000917 Exhibit 5
2. hours worked by requiring that the employee at HNCA000758)
13
is "a regular associate scheduled to work at
14 least 20 hours per week for the Company."
The Plans further specified that participating (2011-2015 Plan at Exhibit 3 to Bhowmik
15 3. employees may not use the benefits to pay for Decl. at pg. HNCA000970 and 2016 Plan
16 "[ejxpenses incurred for days you are not at Exhibit 4 to Bhowmik Decl. at pe.
working or days when you do not meet HNCA000845 ).
17 eligibility requirements..."
18 Employees who elected to receive optional
4. (Exhibit 3 at HNCA000921 and Exhibit 4
benefits were provided with tax-free Flex at HNCA000764)
19
Dollars that represent the employer's share
20 toward the optional benefit of medical and/or
dental coverage only to be used for paying for
21 these benefits.
Plaintiff Spears received a non-discretionary (Exhibit 1 atpe. HNCA000078)
22 5. bonusfi-omDefendant in the form of the
"MedFlxWave" payments made to her in the
23 taxed amount of $20.
The non-discretionary bonus wage subject to (Exhibit I at pe. HNCA0000781
24 6.
tax in the amount of $20 was not included in
25 overtime payments made to Plaintiff in the
same pay period.
26
27
28
10
DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
43866436V.3
1 Dated: April 10,2018 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP
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4 Jeffrey S. Herman
Attomeys for Plaintiffs
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DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA
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FILED 1 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP ENDORSED Norman Blumenthal (SBN 068687) 2 Kyle R. Nordrehaug (SBN 205975) 2010 APR II PH 1:1,0 Aparajit Bhowmik (SBN 248066) SUPCRIQH CGURT OF CALIFORNl 3 Piya Mukherjee (SBN 274217) CCUNf V 0,- SACH,HH£Hro Jeffrey S. Herman (SBN 280058) 4 2255 Calle Clara La Jolla, Califomia 92037 5 Telephone: (858) 551-1223 Facsimile: (858) 551-1232 6 Attomeys for Plaintiff 7 8 9 SUPERIOR COURT OF THE STATE OF CAL1F0RNL\ 10 COUNTY OF SACRAMENTO 11 12 ANDREA SPEARS, an individual, on behalf of Case No. 34-2017-00210560-CU-OE-GDS 13 herself and on behalf of all persons similarly situated. CLASS ACTION 14 Plaintiff, PLAINTIFF'S RESPONSIVE SEPARATE 15 vs. STATEMENT OF DISPUTED MATERIAL FACTS AND ADDITIONAL FACTS IN 16 HEALTH NET OF CALIFORNIA, INC., a Califomia OPPOSITION TO DEFENDANT'S MOTION Corporation; and Does 1 through 50, Inclusive, FOR SUMMARY JUDGMENT OR, IN THE 17 ALTERNATIVE, SUMMARY Defendants. ADJUDICATION 18 Reservation No. 2313007 19 TOMAS R. ARANA, on behalf of himself, all others Hearing Date: April 26, 2018 20 similarly situated, Hearing Time: 9:00 a.m. 21 Plaintifif, Judge: Hon. Steven H. Rodda Dept: 54 22 vs. Action Filed: April 5, 2017 23 HEALTH NET OF CALIFORNL\, INC., a Califomia corporation; and DOES 1 through 50, inclusive, 24 25 Defendants. FAX 26 27 28 PLAINTIFF'S RESPONSIVE SEPARATE STATEMENT OF DISPUTED MATERIAL FACTS AND ADDITIONAL FACTS IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION 43866436V.3 1 Pursuant to Code of Civil Procedure Section 437c(b) and Califomia Rule of Court 3.1350(d), Plaintiff 2 herebys submit her Responsive Separate Statement Of Dispute Material Facts In Opposition to Defendant's 3 Motion For Summary Judgment or, Altematively, Summary Adjudication. 4 I. THIRD CAUSE OF ACTION FOR FAILURE TO PAY HOURLY WAGES AND FAILURE 5 TO PAY OVERTIME WAGES 6 Issue 1: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged failure to include cash benefits received in lieu of medical payment in Plaintiff Spears' regular rate of pay fails 7 because cash benefits were properly excluded from her regular rate calculation under the Benefit-Plan ContributionsException. 8 ;-Defen'dai™t|s|Uri Plaintiffs' Response &,Supporting Evidence 9 Evidence 'Mki^^&JOdk: 'f: fc--^ i t : ^ ' - 10 1. Plaintiff Spears served as a non-exempt 1. Undisputed. HNCA customer service representative 11 from September 2014 to October 2016 in Rancho Cordova. 12 Declaration of Diane C. Rodes (hereinafter 13 "Rodes Dec") H 3. 14 2. Plaintiff Arana began v^^orking out of the 2. Undisputed. Rancho Cordova call center in 2008 and 15 continues to work there now. He started as a non-exempt customer service 16 representative for HNCA until his promotion on or about November 14, 17 2015 to Contact Center Analyst, an 18 exempt position. Since June 2017, Plaintiff Artana has been working as a 19 Call Center Systems Analyst I , also an exempt position. 20 Rodes Dec. H 3 21 3. Between January 1, 2001 and December 3. 22 31, 2016, HNI sponsored a cafeteria plan - a written health and welfare plan- 23 called the "Health Net, Inc. Associates Benefit Program" (the "Plan"), which 24 HNCA adopted for the benefit of its 25 employees. 26 Declaration of Debbie Colia ("Colia Dec"), 12, Exhs. A-I. 27 28 DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 The Plan was govemed by Section 125 Undisputed. of the Intemal Revenue Code, was 2 subject to the Employee Retirement 3 Income Security Act, and was overseen by a Benefits Committee. 4 Colia Dec, 13. 5 5. As called for in the Plan, the Benefits Undisputed. Committee had fiduciary duties and 6 responsibilities to ensure that HNCA's 7 employer contributions to the Plan were tracked, kept in a separate account, and 8 used only for proper Plan purpose related to the health and welfare benefits 9 ofHNCA employees, including Plaintiffs and their dependents. 10 Colia Dec,TI4. 11 6. HNI treated HNCA as a third party for Undisputed. 12 purposes of administering the plan and vice versa 13 Colia Dec, 14. 14 Pursuant to the terms of the Plan, HNCA 7. Undisputed. paid the actual costs of benefits under the 15 plan for its eligible employees who 16 elected to participate ("Participants"), including Plaintiffs, and their dependents. 17 Colia Dec, 14. 18 8. Pursuant to a funded arrangement Undisputed. between HNI and HNCA, HNCA 19 arranged for the monies used to pay the 20 actual costs ofbenefits to be deposited into an account maintained and 21 controlled by HNI as the Plan's sponsor. 22 Colia Dec, 14. 9. The contributions made by HNCA Undisputed. 23 pursuant to the Plan were irrevocable - once the contributions were made to 24 HNI, HNCA was unable to recapture or 25 divert the funds for HNCA's use or benefit. 26 Colia Dec, H 4. 27 10. The benefits available under the Plan, 10. Undisputed. including the various coverage options 28 and co-payments a Participant was DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 responsible for with respect to the Plan's various covered services and supplies, 2 were explained in detail to HNCA 3 employees in Summary Plan Descriptions (the "Plan SPD") and 4 Evidence of Coverage ("EOC") documents. 5 Colia Dec, 11 5-6, Exs. K-L 6 11. The Plan provided "core" benefit to 11. Undisputed. Participants such as basic life and basic 7 AD&D insurance at no cost to the 8 Participants. 9 Colia Dec.,115-7, Exs. K-L. 12. It also provided "optional" benefits to 12. Undisputed. 10 Participants and/or their dependents, such as medical and dental coverage, to 11 select as desired based on their 12 particular needs. 13 Colia Dec, 1 8. 13. To help pay for the cost of medical and 13. Disputed, the Flex Dollars paid for 14 dental coverage and pursuant to the medical and dental coverage were not received Plan, Participants received "Flex by Participates but were paid to a third party for 15 Dollars." the elected benefits only and were tax free. 16 Colia Dec.,19; Rodes Dec.,15. (Colia Decl. para 4)("HNI treated HNCA as a 17 third party for purposes of administering the Plan, and vice versa. Pursuant to the terms of the 18 Plan, HNCA paid the actual costs ofbenefits under the Plan for its elegible 19 employees.. .pursuant to a funded arrangement 20 between HNI and HNCA, HNCA arranged for these monies to be deposited into an account 21 maintained and controlled by HNI as the Plan's sponsor. HNCA's contributions were 22 irrevocable - once made to HNI, HNCA was unable to recapture of divert the funds for 23 HNCA's use of benefit"). 24 14. The exact amount of "Flex Dollars" to 14. Disputed as determining what the amount which a Participant was entitled to "generally" was as to all employees requires the 25 varied depending on the medical and additional discovery sought by Plaintiffs dental plans that he or she chose, the pending motion to compel the wage records of 26 number of dependents covered and the the class members that would allow Plaintiff to 27 Participant's geographic location, but verify the amounts of Flex Dollars Defendant generally, the amount was less than the claims were provided. 28 total cost ofthe benefit(s) that a DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 participant elected See Plaintiffs Motion to Compel Defendant to respond to Requests for Production. 2 Colia Dec, 1 9; Rodes Dec, 16-10, Exs. A, B. 3 15. In a vast majority of cases, the 15. Disputed because in order to cooroborate Participant was required to contribute corroborating what happened in the "vast 4 some amount toward the cost of the majority of cases" requires additional discovery benefit(s) he or she selected, and the sought by Plaintiffs pending motion to compel 5 portion of the benefit coverage was the wage records of the class members that deducted from his or her paycheck. would allow Plaintiff to verify the amounts of 6 Flex Dollars Defendant claims were provided. Colia Dec, 1 9.. See Plaintiffs Motion to Compel Defendant to 7 respond to Requests for Production. 8 16. Eligible employees under the Plan could 16. Undisputed. 9 waive one or more of the available benefits. 10 Colia Dec.,110. 11 17. Waiver of medical coverage was only 17. Undisputed. 12 permitted where the employee had other medical coverage, such as through a 13 spouse's plan. 14 Colia Dec.,110. 18. In the event that a Participant waived 18. Disputed as incomplete. 15 medicaland/or dental coverage, the Plan 16 provided that the Participant would When Plaintiff waived coverage. Plaintiff receive a portion of the Flex Dollars as received cash in lieu ofbenefits in her paycheck 17 cash in his or her paycheck. coded as "MedFlxWave," which was an entirely different form of payment than the payments 18 Colia Dec, 111; Rodes Dec, 1 7. reflected on her paycheck for accepting medical 19 benefits coded on her paycheck as "DenFlxElct" as the payments like "DenFlxElcf were tax free 20 and provided irrevocably to the trustee or third party. The MedFlxWave payments, on the other 21 hand, were subject to tax and paid directly to Plaintiff 22 23 Colia Dec, 111; Rodes Dec, 1 7. 19. In each ofthe Plan years 2013, 2014, 19. Disputed because in order to corroborate 24 2015 and. 2016, the total cash benefits what amounts were paid to all employees in any provided to Participants who waived given year requires additional discovery sought 25 dental and/or medical coverage by Plaintiffs pending motion to compel the represented a very small percentage of wage records of the class members that would 26 HNCA's contributions provided under allow Plaintiff to verify the amounts of Flex 27 the Plan for the elected dental and/or Dollars Defendant claims were provided. medical coverage: 1.4% in 2013, 1.3% 28 in 2014; 0.9% in 2015; and 0.9% in Disputed as irrelevant because these facts DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 2016. relate to whether tax free payments made irrevolcably to third parties for benefits can be 2 Declaration of Kelly Sarabia("Sarabia Dec"), excluded from the regular rate, which is a 3 ^112-5. different issue than Defendant's motion asking for whether taxed cash in lieu benfits can be 4 excluded from the regular rate. 5 20. Throughout Plaintiff Spears 20. Undisputed. employment with HNCA, she elected 6 dental coverage. 7 Rodes Dec.,11 6, 9, Ex. A. 8 21. Plaintiff Spears waived medical 21. Disputed as incomplete, as Plaintiff coverage during her employment with Spears received a taxed cash payment of $20 for 9 HNCA, and as a result, received a cash waiving benefits, which is different from the tax- benefit of $20.00 per pay period firee flex dollars provided when employees do 10 pursuant to the Plan. not waive benefits. 11 Rodes Dec.,11 8-9, Ex. A. Exhibit "J" to the Debbie Calia Declaration filed 12 with Defendant's Motion at HNCA000921 22. During Plaintiff Arana's employment 22. Undisputed. 13 with HNCA, he elected to received both medical and dental coverage and thus 14 never received any cash benefits in lieu 15 of coverage. 16 Rodes Dec.,1 10, Ex. B. Issue 2: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged failure to 17 include bonus payments in the regular rate of pay fails because bonus payments were properly accounted for in the regular rate calculation. 18 19 Defendant's Undisputed Facts & Supporting Plaintiffs' Response & Suppbrtihg'Evidence Evidence 20 23. At no time during Plaintiff Spears' 23. Disputed. Plaintiff received 21 employment with HNCA did she receive "MedFlxWave" payments were taxed and paid any bonus payments. based on preestablished criteria set forth in 22 Defendant's plan as compensation for Plaintiffs Rodes Dec.,110 work for Defendant. 23 24 Exhibit "A" to Rodes Declaration at HNCA000078 shows the MedFlxWave payment 25 Plaintiff contends was a bonus payment that should have been included in the overtime rate. 26 27 Exhibit "J" to the Colia Decl. explains the preestablished criteria for being paid the 28 MedFlxWave bonus and at page 1 describes how DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 the cash payments for waiving benefits are part of Defendant's compensation program that 2 "strives to provide associates with a competitive 3 benefits program that is part of our total remuneration plan." (Emphasis added) 4 24. Throughout Plaintiff Arana's 24. Undisputed. employment with HNCA, his bonuses 5 have been limited to only bonuses through the SPOT Cash Awards 6 Program ("SPOT") and incentive pay 7 pursuant to the ACA Customer Service & Claims Representative Pay for 8 Performance Incentive Plan ("ACA Incentive Plan"). 9 Rodes Dec.,1112, 18, 21, Exs. E, G 10 25. Beginning January 1, 2014 and 25. Undisputed. 11 continuing through December 31,2016, HNCA adopted SPOT. 12 Rodes Dec.,113 13 26. Through SPOT, HNCA spontaneously 26. Undisputed. rewarded certain employees "who 14 demonstrate[ d] exceptional behavior on 15 the job ... whether it [wa]s within or beyond [the employee's] job scope." 16 Rodes Dec.,1 13, Ex. C 17 27. HNCA's SPOT policy informed eligible 27. Undisputed. employees that bonuses were awarded 18 without any promise or incentive being announced beforehand. 19 20 Rodes Dec,1 13, Ex. C. 28. There were no pre-established criteria 28. Undisputed. 21 for awarding SPOT bonuses or pre- established amounts to be awarded. 22 Rodes Dec.,1113-14, Ex. C. 23 29. The decision of when, for what reason, 29. Undisputed. 24 and in what amount to award a SPOT bonus - within a range - was subject to 25 the discretion of managers and the ultimate approval of the head of the 26 appropriate Business Unit. 27 Rodes Dec.,1113-17, Ex. C, D. 28 30. Each Business Unit Leader was allotted 30. Undisputed. an annual SPOT bonus budget that he or DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 she could elect to use in full, in part, or not at all. 2 Rodes Dec.,11 13, 17, Ex. C. 3 31. Procedurally, a SPOT bonus was 31. Undisputed. 4 initiated if a manager felt that an employee on his or her team should 5 receive one. 6 Rodes Dec.,11 13, 16, Ex. C. 32. The manager had the discretion to 32. Undisputed. 7 complete the SPOT Award Nomination 8 Form detailingthe reason for nomination, describing the achievement, 9 and identifying a specific amount he or she believed appropriate. 10 11 Rodes Dec.,1113-14, 16, Ex. C, D. 33. The manager would subrmt the 33. Undisputed. 12 completed SPOT Award Nomination 13 Form to the head of his or her Business Unit. 14 15 Rodes Dec.,1 16. 34. The Business Unit Leader exercised his 34. Undisputed. 16 discretion as to whether to award the SPOT bonus based on the manager's 17 recommendation (or not) and, if so, in what amount. 18 19 Rodes Dec.,117- 35. If the Business Unit Leader decided to 35. Undisputed. 20 award an employee with a SPOT bonus, the bonus appeared on the recipient's 21 paycheck with the designation "Bonus - 22 SPOT." 23 Rodes Dec, 1117-18, Ex. E. 36. SPOT bonuses were not included in 36. Undisputed. 24 non-exempt recipients' regular rate calculation because SPOT bonuses were 25 discretionary bonuses. 26 Rodes Dec.,1117-18, Ex. E. 27 37. Starting January 3, 2014 and lasting 37. Undisputed. through May 31,2014, HNCA 28 implemented the ACA Incentive Plan DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 for eligible employees. 2 Rodes Dec.,119, Ex. F. 38. The purpose of the ACA Incentive Plan 38. Undisputed. 3 was to provide an extra reward if 4 employees voluntarily worked overtime due to the increase in workload, 5 especially at the call centers. 6 Rodes Dec.,1 19, Ex. F. . 39. Under the ACA Incentive Plan, eligible 39. Undisputed. 7 employees who worked a certain 8 number of overtime hours each month received bonus payments. 9 Rodes Dec ,119, Ex. F. 10 40. Bonus payments pursuant to the ACA 40. Undisputed. Incentive Plan were included in non- 11 exempt recipients' regular rate of pay. 12 Rodes Dec.,11 20-21, Ex. G. 13 Issue 3: Plaintiffs' Failure to Pay Overtime Wages claim premised on HNCA's alleged failure to 14 include shift differential premiums in the regular rate of pay fails because these premiums were included in the regular rate calulation. 15 41. HNCA provides shift differential pay 41. Undisputed. 16 when more than half of a non-exempt employee's regularly scheduled working 17 hours fall outside 7:00 a.m. and 5:00 p.m. 18 19 Rodes Dec, 122, Ex. H. 42. I f more than half of an employee's 42. Undisputed. 20 regularly scheduled hours fall in the "second shift" - between 3:00p.m. and 21 12:00 a.m.- he or she is eligible to receive a 8% premium pay for all hours 22 worked. 23 Rodes Dec, 1 22, Ex. H. 24 43. I f more thWl half of an employee's 43. Undisputed. regularly scheduled hours fall in the 25 "third shift" - between 11:00 p.m. Wld 7:00a.m.-he or she is eligible to receive 26 a 12% premium pay for all hours 27 worked. 28 Rodes Dec, 122, Ex. H. DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 44. Shift differentials are identified in 44. Undisputed. recipients' paycheck Wid included in 2 their regular rates. 3 Rodes Dec, 1 22, 24, Ex. H, I. 4 45. Plaintiff Spears never worked any 45. Undisputed. second or third shifts and thus, never 5 received any shift differential pay. 6 Rodes Dec, 1 23. 46. Plaintiff Arana worked the second shift 46. Undisputed. 7 on a few occasions and received 8 corresponding shift differential pay that was included in his regular rate. 9 Rodes Dec, 1 24, Ex. I. 10 Issue 4: Plaintiffs' Failure to Pay All Wages claim premised on HNCA's alleged rounding practice fails 11 47. At all times during the relevant time 47. Undisputed. 12 period, HNCA has not rounded its 13 employees' recorded time for purposes of generating paychecks. 14 Rodes Dec, 1 25. 15 48. HNCA's time keeping system does not 48. Undisputed. round any payable time increments. 16 17 Rodes Dec, 1 26. 18 H. SEVENTH CAUSE OF ACTION FOR CIVIL PENALTIES PURSUANT TO LABOR CODE 19 SS 2698. ET SEQ. (PAGA) .20 Issue 5: Plaintiffs' PAGA claim based, on alleged failure to pay overtime wages as a result of alleged 21 failure to include cash benefits received in lieu of medical payment in Plaintiff Spears' regular rate of 22 pay fails because the underlying alleged Labor Code violation did not occur. 23 See PlaintiflPs responses to Defendant's Undisputed Material Facts 1-22. 24 Issue 6: Plaintiffs' P AGA claim based on alleged failure to pay overtime wages as alleged failure to include bonuses awarded to Plaintiffs in the regular rate of pay 'calculation fails because the underlying alleged 25 Labor Code violation did not occur. 26 See Plaintiffs responses to Defendant's Undisputed Material Facts 23^0. 27 Issue 7: Plaintiffs' PAGA claim based on alleged failure to include shift differential premiums in Plaintiff 28 Arana's. regular rate of pay fails because the underlying alleged Labor Code violation did not occur. DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 See Plaintiff's responses to Defendant's Undisputed Material Facts 41-46. 2 Issue 8: Plaintiffs' P AGA claim based on alleged roundmg practice fails as a matter of law because the underlying alleged Labor Code violation did not occur. 3 4 See Plaintiffs responses to Defendant's Undisputed Material Facts 47-49. 5 m. SEPARATE STATEMENT OF ADDITIONAL FACTS IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT 6 ""Exhibits attached to Declaration of A.J. Bhovraiik filed concurrently herewith 7 8 No. PlaintifFs Additional Facts Supporting Evidence 9 The Plan Descriptions admitted that the 1. benefit plans providing for cash in lieu of (2011-2015 Summary Plan Description at pg. benefits to be paid were part of Defendant's 1 and 2016 Summary Plan Description at pg. 10 1, attached respectively as Exhibits 3 & 4 to effort "to provide associates with a competitive benefits program that is part the Declaration of Aparajit Bhowmik 11 ("Bhowmik Decl.")) of our total remuneration plan." 12 The Plans specified the compensation is for (Exhibit 4 at pe. HNCA000917 Exhibit 5 2. hours worked by requiring that the employee at HNCA000758) 13 is "a regular associate scheduled to work at 14 least 20 hours per week for the Company." The Plans further specified that participating (2011-2015 Plan at Exhibit 3 to Bhowmik 15 3. employees may not use the benefits to pay for Decl. at pg. HNCA000970 and 2016 Plan 16 "[ejxpenses incurred for days you are not at Exhibit 4 to Bhowmik Decl. at pe. working or days when you do not meet HNCA000845 ). 17 eligibility requirements..." 18 Employees who elected to receive optional 4. (Exhibit 3 at HNCA000921 and Exhibit 4 benefits were provided with tax-free Flex at HNCA000764) 19 Dollars that represent the employer's share 20 toward the optional benefit of medical and/or dental coverage only to be used for paying for 21 these benefits. Plaintiff Spears received a non-discretionary (Exhibit 1 atpe. HNCA000078) 22 5. bonusfi-omDefendant in the form of the "MedFlxWave" payments made to her in the 23 taxed amount of $20. The non-discretionary bonus wage subject to (Exhibit I at pe. HNCA0000781 24 6. tax in the amount of $20 was not included in 25 overtime payments made to Plaintiff in the same pay period. 26 27 28 10 DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3 1 Dated: April 10,2018 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP 2 3 AJ Bhowmik 4 Jeffrey S. Herman Attomeys for Plaintiffs 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 DEFENDANTS' SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF MSJ/MSA 43866436V.3