Nordquist v. McGraw-Hill Broadcasting Co.

• Decision Date: 17 February 1995
• Docket Number: GRAW-HILL,No. F020310,F020310
• Citation: 38 Cal.Rptr.2d 221,32 Cal.App.4th 555
• Court: California Court of Appeals Court of Appeals
• Parties: , 2 Wage & Hour Cas.2d (BNA) 1027 Brian E. NORDQUIST, Plaintiff and Respondent, v. McBROADCASTING COMPANY, INC., Defendant and Appellant.

Page 221

38 Cal.Rptr.2d 221

32 Cal.App.4th 555, 2 Wage & Hour Cas.2d (BNA) 1027

Brian E. NORDQUIST, Plaintiff and Respondent, v. McGRAW-HILL BROADCASTING COMPANY, INC., Defendant and Appellant.

No. F020310.

Court of Appeal, Fifth District, California.

Feb. 17, 1995.

Certified for Partial Publication ^*

Review Denied May 11, 1995.

[32 Cal.App.4th 557] Valerie L. McNamara, James L. Payne, Payne & Fears, Irvine, for appellant.

Edwin T. Shea, Werdel & Shea, Bakersfield, for respondent.

OPINION

THAXTER, Associate Justice.

In the published portion of this opinion we will uphold the trial court's decisions on two novel issues: (1) that plaintiff and respondent Brian E. Nordquist, a television station sports director/newscast anchor, is entitled to overtime compensation under subdivision 3 of Industrial Welfare Commission Order No. 11-80 (IWC Order No. 11-80) because he was not exempt as a professional or administrative employee, "engaged in work which is primarily intellectual, managerial, or creative," and "which requires exercise of discretion and independent judgment" (Cal.Code Regs., tit. 8, § 11110); and (2) that Nordquist was entitled to prejudgment interest following his successful appeal to the superior court following an order by the Labor Commissioner rejecting his compensation claim.

In the unpublished portion of the opinion we will hold that the trial court erred by applying the four-year limitations period of Code of Civil Procedure section 337, subdivision (1) rather than the three-year period of section 338, subdivision (a) to Nordquist's claim. We will remand with directions to apply the correct statute of limitations and to recalculate the amount of overtime compensation and interest payable to Nordquist.

FACTS AND PROCEDURAL HISTORY

Appellant McGraw-Hill Broadcasting Company, Inc., doing business as KERO-TV23 (KERO), hired Nordquist as a sportscaster/reporter on May 24, 1982. On August 5, 1982, Nordquist signed a written employment contract with KERO and his employment continued pursuant to successive written employment contracts until he resigned in 1987. His job responsibilities were the same before and after he signed the contract.

The three letter contracts contained similar terms, including compensation by salary and integration clauses. The contract in effect when Nordquist resigned provided:

"4. Your basic work week will consist of five days. It is understood that from time to time you may be required to work additional days or extended workshifts.

"5. In consideration of your duties hereunder we shall pay you, less only those deductions required by law or mutually agreed upon, a weekly gross compensation based on the following annual rates:

"(i) From 12/30/85 through 12/28/86, $30,000 per year.

"(ii) From 12/29/86 through 12/27/87, $33,000 per year.

"6. Except as superseded by the terms of this agreement, you are subject to, and agree to be bound by, all of the personnel policies and benefits as outlined in the KERO-TV handbook for employees, 'McGraw-Hill Broadcasting Company and You,' and all other KERO-TV policies and procedures."

The employee handbook incorporated into the contract states a normal workweek is 40 hours and consists of five 8-hour days; payment is made for overtime work in excess of 40 hours per week and, in California, for hours worked in excess of 8 hours per day. The handbook also states in answer to the question, "[a]re you 'exempt' or 'nonexempt'?": "... If you are exempt, ... [y]ou do not record your hours worked on a time-card. [p] If you are nonexempt, ... you record your hours worked on a time-card" and must be paid "time and one-half your regular rate for hours worked in excess of 40 hours per week." The handbook also discusses a manager's discretion to grant compensatory time off in lieu of overtime pay.

KERO required Nordquist to keep daily and biweekly time sheets, which were approved by his supervisor, in order to receive his paycheck. According to KERO, the purpose for the time sheets for on-air employees, including Nordquist, was to keep track of vacation and sick leave days. KERO's nonexempt employees punched a time card; exempt employees used the time sheets. Since on-air employees were required to work some holidays and extra days to broadcast the daily news, KERO established an informal compensatory time-off policy. Under the policy, exempt employees were permitted to take one day off for each extra day worked, when the needs of the station would allow. The policy was discretionary with the station management, however, and frequently Nordquist was not permitted to take the promised time off.

When Nordquist was hired, he was assigned a grade level of 4009, which reflects an unclassified employee category signifying (1) Nordquist was an "on-air" employee under a "talent contract," as opposed to a staff employee; and (2) Nordquist's salary increases would not be limited by a set pay range. However, Nordquist was listed as N-E, meaning nonexempt, for Fair Labor Standards Act (FLSA) purposes on the KERO "Personnel Change Notice" form which is generated by the corporate office in New York when an employee is hired. Raymond Schiffhauer, KERO's Director of Business Affairs, testified Nordquist's nonexempt classification resulted from a clerical error which was perpetuated by computer until he caught it in March 1987 when he was conducting a periodic review of personnel records. He admitted, however, he was aware at that time that the station manager was not entirely happy with Nordquist's performance.

In September 1983, KERO promoted Nordquist to the position of sports director/anchor. In this position, Nordquist was responsible for producing and anchoring three sports segments of KERO's live nightly newscasts, two during the hour-long 6 p.m. newscast, and one at 11 p.m., Monday through Friday. The KERO sports department had two regular employees, Nordquist and Pete Cirivilleri, the weekend news anchor. Nordquist remained the sports director/anchor until he resigned on September 4, 1987.

According to Nordquist, the sports director/anchor position involved primarily mundane and unimaginative duties and responsibilities. He gathered sports news throughout the day which he summarized, scripted, and read on-air during the sports segment of the nightly newscasts. His script was essentially a rewrite of material from wire services, satellite feeds, print media, press releases, phone calls and local interviews. Broadcast content was dictated by the sports events of the day and was prepared according to station guidelines and standard formats in the industry. On the other hand, according to KERO's News Director, Walt Brown, Nordquist's duties as sports director/anchor required him to exercise discretion, judgment and creativity. Further, Nordquist's successful exercise of those traits led to his being the most watched sports anchor in the broadcast area.

On December 1, 1987, after he had resigned, Nordquist filed a claim for overtime compensation with the California Labor Commissioner pursuant to Labor Code section 98 et seq. Following an evidentiary hearing, the commissioner ruled that Nordquist was an exempt employee under IWC Order No. 11-80, and thus not entitled to overtime compensation. Nordquist sought a trial de novo in superior court. The parties stipulated to bifurcate the issues of liability and damages for trial. The trial court concluded Nordquist was a nonexempt employee entitled to overtime compensation, and the four-year statute of limitations for obligations arising from a written contract applied rather than the three-year statute of limitations for obligations arising from statute. Thus, Nordquist was entitled to overtime pay for the four-year period prior to December 1, 1987.

The parties stipulated, based on the court's ruling, that Nordquist was entitled to $102,956.14 in overtime compensation and proceeded to trial on the issue of his entitlement to prejudgment interest. The court held Nordquist was not entitled to interest under Labor Code section 98.1, subdivision (c) but was entitled to it under Civil Code section 3287. The parties then agreed Nordquist was due $60,598 in prejudgment interest and $2,512 ($31.40/day from Mar. 23, 1993, through date of judgment on June 11, 1993) in postjudgment interest. The court awarded Nordquist his costs and entered judgment accordingly. KERO's timely appeal followed.

DISCUSSION

1. Substantial evidence supports the finding that Nordquist was a nonexempt employee.

Standard of Review

Labor Code section 98.2 provides for a de novo trial in superior court on appeal from an order by the Labor Commissioner. On appeal from the judgment of the superior court, the findings of the Labor Commissioner are entitled to no weight, and review is of the facts presented to the trial court. (Hernandez v. Mendoza (1988) 199 Cal.App.3d 721, 725, 245 Cal.Rptr. 36.)

Whether Nordquist was exempt from the overtime provisions of IWC Order No. 11-80 is a factual issue which this court reviews under the substantial evidence rule. (Cardenas v. Mission Industries (1991) 226 Cal.App.3d 952, 958, 277 Cal.Rptr. 247.) Thus, our authority begins and ends with a determination whether, on the entire record, there is any substantial evidence--that is, of " 'ponderable legal significance,' " reasonable, credible and of solid value--contradicted or uncontradicted, which will support the judgment. As long as there is such evidence, we must affirm. (Grappo v. Coventry Financial Corp. (1991) 235 Cal.App.3d 496, 507, 286 Cal.Rptr. 714.) Moreover, when, as in this case, the evidence is in conflict, the appellate court will not disturb the findings of the trial court. The court must consider the evidence in the light most favorable to the prevailing party, giving that party the benefit of every reasonable inference and resolving conflicts in support of the judgment. (Aceves v. Regal Pale Brewing Co. (1979) 24 Cal.3d 502, 507...