Camp v. Home Depot U.S.A., Inc.

• Citation: 84 Cal.App.5th 638,300 Cal.Rptr.3d 548
• Decision Date: 24 October 2022
• Docket Number: H049033
• Parties: Delmer CAMP, et al., Plaintiffs and Appellants, v. HOME DEPOT U.S.A., INC., Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

84 Cal.App.5th 638

300 Cal.Rptr.3d 548

Delmer CAMP, et al., Plaintiffs and Appellants,

v.HOME DEPOT U.S.A., INC., Defendant and Respondent.

H049033

Court of Appeal, Sixth District, California.

Filed October 24, 2022

Counsel for Plaintiffs/Appellants: Delmer Camp and Andriana Correa, Moon & Yang, APC, Howard Scott Leviant, Kane Moon, Lilit G. Tunyan, Los Angeles.

Counsel for Defendant/Respondent: Home Depot U.S.A., Inc., Akin Gump Strauss Hauer & Feld LLP, Donna Marie Mezias, Dorothy Frances Kaslow, Aileen Marie McGrath

BAMATTRE-MANOUKIAN, ACTING P.J.

I. INTRODUCTION

Plaintiffs Delmer Camp and Adriana Correa filed a putative class action for unpaid wages against defendant Home Depot U.S.A, Inc. (Home Depot). Plaintiffs alleged that Home Depot's electronic timekeeping system captured each minute worked by employees, but that due to Home Depot's quarter-hour rounding policy, employees were paid for less time than reflected in Home Depot's timekeeping system.

Home Depot moved for summary judgment on plaintiffs’ complaint. Home Depot argued that plaintiff Correa did not have standing to bring a claim for unpaid wages because she did not lose any wages as a result of the rounding policy. Although it acknowledged that plaintiff Camp had lost a total of 470 minutes over approximately four and a half years due to the rounding policy, Home Depot contended it was still entitled to summary judgment because its rounding policy was neutral on its face, neutral as applied, and otherwise lawful under See's Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 148 Cal.Rptr.3d 690 ( See's Candy ). The trial court granted the motion, finding that Home Depot's rounding policy met the standard articulated in See's Candy. Specifically, the trial court found that Home Depot's rounding policy "is neutral on its face and is used in such a manner that it will not result, over a period of time, in failure to compensate employees properly for all the time they have actually worked." The trial court also observed that under Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937 ( Auto Equity ), the trial court was "not free to disregard binding appellate authority and reach a different conclusion."

On appeal, plaintiff Correa concedes that she was overpaid and cannot state a claim for unpaid wages. We will dismiss her appeal as abandoned.

On appeal, plaintiff Camp contends, among other arguments, that notwithstanding See's Candy , neither the Labor Code nor the relevant wage order authorizes time rounding that results in an individual employee failing to receive compensation for all time worked. Camp expressly states that he "do[es] not contend that all rounding is unlawful," and he acknowledges that "there are rounding systems that do not run afoul" of California's wage and hour laws.

Based on the particular facts of this case, and in view of the guidance and direction provided by more recent California Supreme Court opinions in Troester v. Starbucks Corp. (2018) 5 Cal.5th 829, 235 Cal.Rptr.3d 820, 421 P.3d 1114 ( Troester ) and Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58, 275 Cal.Rptr.3d 422, 481 P.3d 661 ( Donohue ), we conclude that Home Depot, in relying on its quarter-hour rounding policy, did not meet its burden to show that there was no triable issue of material fact regarding plaintiff Camp's claims for unpaid wages, where Home Depot could and did track the exact time in minutes that an employee worked each shift and those records showed that Camp was not paid for all the time he worked. We will therefore reverse the judgment against plaintiff Camp and direct the trial court to enter a new order denying Home Depot's summary judgment motion as to Camp.

We limit our analysis to the specific facts before us. We do not reach the issue of whether employer time rounding practices in other contexts comply with California law. For example, we do not address the application of See's Candy and its progeny to other circumstances, such as when an employer uses a neutral rounding policy due to the inability to capture the actual minutes worked by an employee. We also do not reach the issue of whether an employer who has the actual ability to capture an employee's minutes worked is required to do so. We observe that the California Supreme Court has indicated that in circumstances involving " ‘the practical administrative difficulty of recording small amounts of time for payroll purposes,’ " and where "neither a restructuring of work nor a technological fix is practical, it may be possible to reasonably estimate worktime—for example, through surveys, time studies, or, as See's Candy suggested, a fair rounding policy—and to compensate employees for that time." ( Troester, supra , 5 Cal.5th at p. 848, 235 Cal.Rptr.3d 820, 421 P.3d 1114.) We observe that the California Supreme Court has since stated, however, that it "has never decided the validity of the rounding standard articulated in See's Candy ." ( Donohue, supra , 11 Cal.5th at p. 72, 275 Cal.Rptr.3d 422, 481 P.3d 661.)

II. BACKGROUND

A. Plaintiffs’ Complaint

Plaintiffs filed a putative class action for unpaid wages. Plaintiffs alleged that Home Depot's practice of rounding an hourly employee's total daily worktime to the nearest quarter hour, rather than using the actual worktime captured by the minute in Home Depot's timekeeping system "Kronos," resulted in the failure to pay wages to an employee for all worktime in the aggregate within the limitations period. The complaint alleged two causes of action: (1) unpaid minimum and overtime wages pursuant to, among other provisions, Labor Code section 510¹ and the relevant wage order and (2) unfair competition ( Bus. & Prof. Code, § 17200 et seq. ).

B. Home Depot's Motion for Summary Judgment

Home Depot moved for summary judgment on the ground that its practice of rounding time was neutral on its face, neutral as applied, and otherwise lawful under See's Candy, supra , 210 Cal.App.4th 889, 148 Cal.Rptr.3d 690. Home Depot also argued that plaintiff Correa did not have standing to bring a claim for unpaid wages because she did not lose any wages as a result of the rounding policy.

In support of its motion, Home Depot presented the following evidence. Home Depot utilized an electronic software system, "Kronos," to record hourly employees’ time punches for payroll purposes. Hourly employees punched in and out using Kronos at the beginning and end of their work shifts, as well as for meal breaks. The Kronos system captured the punch time to the minute.

Each hourly employee's total shift time was rounded to the nearest quarter-hour for calculating his or her pay for that period. "When total shift time falls between the quarter hour, a time increment of seven minutes or less is rounded down to the nearest quarter hour, while a time increment of eight minutes or more is rounded up to the next quarter hour." For example, if the total shift time was recorded as six hours and three minutes, the time was rounded down to 6.00 hours. If the total shift time was six hours and eight minutes, the shift time was rounded up to 6.25 hours.

The parties stipulated to the analysis of certain time and pay records for purposes of Home Depot's summary judgment motion. Specifically, the agreed-upon records covered a total of 13,387 hourly employees; 4,282,517 shifts; and 516,193 pay periods. The records were analyzed to compare actual time worked with time rounded under Home Depot's rounding policy over work shifts and over pay periods. The results were, as follows: (1) "For over 2.4 million shifts (56.6% [of the total]), employees were paid for the same or a greater number of minutes than [their] actual work time as a result of rounding[, and] employees lost minutes due to rounding on 43.4% of shifts"; (2) For shifts that gained minutes due to rounding, the average gain was 3.6 minutes, and on shifts that lost minutes, the average loss was 3.5 minutes; (3) "Employees gained minutes in 254,210 (49.2%) pay periods, lost minutes in 242,966 (47.1%) pay periods, and were paid for actual work minutes[, meaning no gain or loss,] in 19,017 (3.7%) pay periods"; (4) For pay periods that gained minutes due to rounding, the average gain was 11.3 minutes, and for pay periods that lost minutes, the average loss was 10.4 minutes; and (5) "In the aggregate, employees in the ten percent class sample analyzed were paid for 339,331 more minutes (5,656 hours) than if Home Depot did not round time."

Plaintiff Correa was employed by Home Depot from March 2015, until October 2015. Correa's time and pay records showed that she did not gain or lose minutes "in the aggregate due to rounding, during the relevant period."

Plaintiff Camp was a nonexempt employee who had been working for Home Depot since March 2015. Camp's time and pay records showed that between March 30, 2015, and October 20, 2020, he worked 1,240 shifts.² At various points in time, he gained minutes or lost minutes due to rounding. During the entire period, however, he suffered a total net loss of 470 minutes, or approximately 7.83 hours, due to rounding.

C. Plaintiffs’ Opposition

In opposition, plaintiff Correa conceded that she "was paid for all time worked" and that she "[could ]not state a claim for unpaid wages" based on Home Depot's rounding policy. Plaintiff Camp argued that, notwithstanding the opinions from various Courts of Appeal, neither the Labor Code nor the wage orders authorized time rounding that results in an individual employee failing to receive compensation for all time worked. In this regard, Camp pointed to the evidence presented in Home Depot's own motion showing that he was not paid for 470 minutes of worktime.

D. The Trial Court's Order

The trial court granted the motion for summary judgment after determining that Home Depot's rounding policy met the standard articulated in See's Candy. Specifically, the trial court found that Home Depot's rounding policy ...