Cicairos v. Summit Logistics, Inc.

• Decision Date: 27 October 2005
• Docket Number: No. C048133.,C048133.
• Citation: 35 Cal.Rptr.3d 243,133 Cal.App.4th 949
• Court: California Court of Appeals Court of Appeals
• Parties: Albert H. CICAIROS et al., Plaintiffs and Appellants, v. SUMMIT LOGISTICS, INC., Defendant and Respondent.

35 Cal.Rptr.3d 243

133 Cal.App.4th 949

Albert H. CICAIROS et al., Plaintiffs and Appellants, v. SUMMIT LOGISTICS, INC., Defendant and Respondent.

No. C048133.

Court of Appeal, Third District.

October 27, 2005.

Weinberg, Roger & Rosenfeld, David A. Rosenfeld, and Caren P. Sencer for Plaintiffs and Appellants.

Grotta, Glassman & Hoffman, David F. Faustman, Los Angeles, Lester F. Aponte, and Shea Lukacsko for Defendant and Respondent.

NICHOLSON, Acting P.J.

This appeal involves five plaintiffs who sued their former employer for violations of Labor Code and Industrial Welfare Commission wage order provisions relating to meal periods, rest breaks, and itemized wage statements. The trial court granted summary judgment for the defendant. We conclude the trial court erred and therefore reverse.

PROCEDURE

The plaintiffs' complaint included claims for violation of (1) the meal period provision of Labor Code section 512 and Industrial Welfare Commission (IWC) wage order No. 9, section 11; (2) the rest break provision of IWC wage order No. 9, section 12; and (3) the itemized wage statement provision of Labor Code section 226 and IWC wage order No. 9, section 7. Both sides moved for summary judgment. The trial court granted the defendant's motion and entered judgment for the defendant.

BACKGROUND

Meal Periods

The Labor Code provides that: "An employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes, except that if the total work period per day of the employee is no more than six hours, the meal period may be waived by mutual consent of both the employer and employee. An employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived." (Lab.Code, § 512, subd. (a).) The language of IWC wage order No. 9 relating to meal periods tracks the language in the Labor Code. (Cal.Code Regs., tit. 8, § 11090, subd. (11).)

Wage order No. 9 provides a penalty for noncompliance with the meal period provision: "If an employer fails to provide an employee a meal period in accordance with the applicable provisions of this order, the employer shall pay the employee one (1) hour of pay at the employee's regular rate of compensation for each workday that the meal period is not provided." (Cal.Code Regs., tit. 8, § 11090, subd. (11)(D).)

An opinion letter from the Division of Labor Standards Enforcement (DLSE) states: "The requirement that employees in the State of California receive a meal period is what is commonly known as a minimum state standard." (Dept. of Industrial Relations, DLSE, Opinion Letter 2002.12.09-1, p. 2.) The same letter says that "a collective bargaining agreement may not be used as a tool to waive the requirement that an employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes. The IWC Orders have never allowed an opt-out from the requirements of a meal period." (Ibid.)

Rest Breaks

Wage order No. 9 provides: "Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. However, a rest period need not be authorized for employees whose total daily work time is less than three and one-half (3 1/2) hours. Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages." (Cal.Code Regs., tit. 8, § 11090, subd. (12)(A).)

"If an employer fails to provide an employee a rest period in accordance with the applicable provisions of this order, the employer shall pay the employee one (1) hour of pay at the employee's regular rate of compensation for each workday that the rest period is not provided." (Cal.Code Regs., tit. 8, § 11090, subd. (12)(B).)

An opinion letter from DLSE states: "The requirement that every employee have a net 10-minute rest period every four hours or major fraction thereof is a state-mandated minimum labor standard." (Dept. of Industrial Relations, DLSE, Opinion Letter 1995.06.02, p. 2, underscoring in original, italics added, fn. omitted.)

Itemized Wage Statements

The Labor Code provides: "Every employer shall, semi-monthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee's wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing (1) gross wages earned, (2) total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime under subdivision (a) of Section 515 or any applicable order of the Industrial Welfare Commission, (3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis, (4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item, (5) net wages earned, (6) the inclusive dates of the period for which the employee is paid, (7) the name of the employee and his or her social security number, except that by January 1, 2008, only the last four digits of his or her social security number or an employee identification number other than a social security number may be shown on the itemized statement, (8) the name and address of the legal entity that is the employer, and (9) all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee." (Lab.Code, § 226, subd. (a).) Employers who knowingly and intentionally fail to comply with this provision are subject to monetary penalties and are guilty of a misdemeanor. (Lab.Code, §§ 226, subd. (e), 226.6.)

An opinion letter from DLSE was written in response to questions regarding the application of Labor Code section 226. "[T]he obligation to list the total hours worked during the pay period can only be satisfied by listing the precise, actual number of hours worked." (Dept. of Industrial Relations, DLSE, Opinion Letter 2002.05.17, p. 3.) "The failure to list the precise number of hours worked during the pay period conflicts with the express language of the statute and stands in the way of the statutory purpose." (Ibid.) "If it is left to the employee to add up the daily hours shown on the time cards or other records so that the employee must perform arithmetic computations to determine the total hours worked during the pay period, the requirements of section 226 would not be met." (Id. at p. 6, italics in original.)

Facts

The defendant ran a warehousing business that delivered groceries and perishable goods to Safeway stores in California, Nevada, and Hawaii. The plaintiffs worked for the defendant as truck drivers and were members of the Teamsters Union Local 439. The union and the defendant were parties to a collective bargaining agreement which provided for meal periods and rest breaks.

The collective bargaining agreement provided: "Drivers and hostlers shall take a thirty (30) minute lunch period no later than five (5) hours from their regularly scheduled start time." It also granted "two (2) fifteen (15) minute paid rest periods per eight (8) or ten (10) hour shift — one (1) during the first half of the shift and one (1) during the last half of the shift."

The collective bargaining agreement contained a mandatory arbitration provision which stated: "A grievance is any controversy between the Company, the Union or an employee arising out of an alleged violation of a specific provision of this Agreement. . . . The grievance and arbitration procedure of this Agreement will be the sole and exclusive means available for resolving grievances." The plaintiffs did not file grievances according to the arbitration provisions regarding the claims made in this lawsuit. The collective bargaining agreement also said that the plaintiffs were subject to Department of Transportation (DOT) regulations.

The defendant used an "Activity Based Compensation" system in determining the plaintiffs' wages. Each truck had a computerized on-board system called the XATA system which recorded various factors such as speed, starts and stops, and time. Truck drivers who worked for the defendant had to input factors manually so the on-board computer system could keep track of activities accurately. Absent one of the designated reasons for a delay (such as road construction, for example), a trip that took longer than expected resulted in a loss to the driver because the driver was not paid for the extra time. The defendant did not schedule meal periods or include an activity code for them. The defendant's management pressured drivers to make more than one daily trip. No activity code existed for rest breaks, and they were not on the list of acceptable delays. Some drivers skipped their rest breaks because of this policy.

The defendant provided an earnings statement to the plaintiffs, as well as a statement entitled "Driver Trip Summary — Report of Earnings." These trip summaries did not list the actual hours each plaintiff worked per pay period. Instead, they listed the dispatch date and time for when a driver began working each shift. The earnings statements did not provide an accurate statement of hours worked. No matter how many hours a driver worked, the statements always listed 40 hours per week.¹

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