Cortez v. Purolator Air Filtration Products Co.

• Decision Date: 10 June 1998
• Docket Number: A078523,Nos. A075456,s. A075456
• Citation: 64 Cal.App.4th 882,75 Cal.Rptr.2d 551
• Court: California Court of Appeals Court of Appeals
• Parties: Previously published at 64 Cal.App.4th 882 64 Cal.App.4th 882, 98 Cal. Daily Op. Serv. 5348, 98 Daily Journal D.A.R. 6085, 98 Daily Journal D.A.R. 7505 Rosalba CORTEZ, Plaintiff and Appellant, v. PUROLATOR AIR FILTRATION PRODUCTS COMPANY, Defendant and Appellant.

Page 551

75 Cal.Rptr.2d 551

Previously published at 64 Cal.App.4th 882

64 Cal.App.4th 882, 98 Cal. Daily Op. Serv. 5348,

98 Daily Journal D.A.R. 6085,

98 Daily Journal D.A.R. 7505

Rosalba CORTEZ, Plaintiff and Appellant, v. PUROLATOR AIR FILTRATION PRODUCTS COMPANY, Defendant and Appellant.

Nos. A075456, A078523.

Court of Appeal, First District, Division 2, California.

June 10, 1998.

As Modified on Denial of Rehearing July 7, 1998.

Review Granted Aug. 19, 1998.

[64 Cal.App.4th 886] Cameron M. Cunningham Newman Strawbridge, Santa Rosa, for Plaintiff and Appellant.

Rosner, Owens & Nunziato, Tom. A. Nunziato, Phil J. Montoya, Jr., for Defendant and Appellant.

LAMBDEN, Associate Justice.

These consolidated appeals follow the trial of claims arising from a failure to pay overtime wages. Rosalba Cortez (Cortez) sued Purolator Air Filtration Products Company (Purolator) for back overtime pay, which accrued as a result of Servodyne Company's (Purolator's predecessor corporation) failure to comply with certain regulations when it changed its workers' schedules from five 8-hour days to four 10-hour days. In addition to her individual claim, Cortez prosecuted an Unfair Business Practices Act claim (Bus. & Prof.Code, § 17200 et seq.) seeking restitution of the overtime wages withheld from approximately 175 Purolator employees. Cortez prevailed on her individual claim and the trial court awarded her substantial attorneys' fees. The trial court denied her request for restitution on the Unfair Business Practices Act claim. She appeals from that ruling. Purolator also appeals seeking to overturn the individual award to Cortez for lack of substantial evidence and the award of attorneys' fees on the ground that the amount awarded was excessive. We reverse the denial of restitution, but otherwise affirm the judgment.

BACKGROUND

This lawsuit addresses whether Purolator failed to pay required overtime wages to employees at its filter manufacturing facility located in Santa Rosa. ¹ The Santa Rosa plant was established in the 1970's by Servodyne Corporation (Servodyne), which was owned by the DeBaun family. At the end of the business year of 1988, Servodyne sold the plant to Purolator. ²

It is undisputed that, during the relevant times, Purolator operated the plant on a 40-hour workweek made up of four 10-hour days, rather than the more traditional five 8-hour days. The schedule conversions occurred sometime in the 1980's when Servodyne owned the plant. In July 1994, Purolator converted back to a standard five-day workweek.

At all relevant times, Purolator or Servodyne was subject to the California Industrial Welfare Commission Wage Orders (Wage Order) No. 1-80 and then 1-89. ³ Wage Order No. 1-80 permitted a manufacturing employer to set a workweek of four 10-hour days without paying overtime for the ninth and tenth hours of the workday if certain conditions were met prior to the adoption of the four-day schedule. These conditions included the voluntary execution by at least two-thirds of the affected workforce of a written agreement prior to implementation of the schedule change. (Wage Order No. 1-80(3)(B).) In July of 1989, the regulation was amended by Wage Order 1-89 to include more stringent requirements, including a secret balloting process, that must be met. (Wage Order No. 1-89(3)(B).) Subsequently, the California Labor Commissioner circulated an interpretive bulletin stating that an agreement adopted under Wage Order No. 1-80 remained valid under Wage Order No. 1-89 without the necessity of a new employee vote complying with the requirements of the Cortez was employed by Purolator for several years prior to her termination in May 1993. Believing that she may have been wrongfully terminated, Cortez contacted Michelle Crawford (Crawford), a staff attorney with California Rural Legal Assistance. Crawford obtained Cortez's employment records from Purolator and advised Cortez that "it appeared to be, to have been a lawful or legal termination." Crawford noted, however, that Cortez had worked a four-day, ten-hour per-day, workweek. Crawford contacted Esther Martinez (Martinez), Purolator's Human Resources Administrator, regarding the company's compliance with the applicable wage orders. Martinez agreed to look for documentation relating to the four-day schedule. She subsequently told Crawford "that she had gone all the way back to 1979 and couldn't find any documents." Crawford then referred the case to private counsel.

more recent order. (Division of Labor Standards Enforcement Interpretative Bulletin No. 89-3, dated Nov. 30, 1989.) ⁴

In November of that year, Cortez filed a complaint stating two causes of action against Purolator. The first claim was asserted on behalf of Cortez and the general public and charged Purolator with engaging in unfair business practices within the meaning of California's Unfair Business Practices Act (Bus. & Prof.Code, § 17200 et seq.) Cortez requested relief including restitution, injunctive relief, disgorgement, civil penalties, and attorneys' fees. In connection with this claim, Cortez alleged that overtime pay had been improperly withheld from approximately 175 Purolator employees during the time relevant under the applicable statute of limitations.

The second cause of action stated Cortez's individual claim for failure to pay overtime wages pursuant to Labor Code section 1198. Cortez sought restitution of the overtime wages, civil penalties and attorneys' fees in connection with this claim.

The matter came to trial without a jury in October of 1995. Purolator bore the burden of proving that its employees were exempt from the standard overtime wage requirements. (Nordquist v. McGraw-Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 562, 38 Cal.Rptr.2d 221.) Martinez confirmed at trial that, after a diligent search, Purolator had been unable to locate any written agreement relating to the adoption of the four 10-hour day schedule. Therefore, the bulk of the trial testimony addressed when and how the schedule change or changes were implemented.

Cortez called four former employees of Purolator to testify about their memories of the schedule conversion. Dolores Andrade (Andrade), who was employed by Purolator from 1978 to 1992, was not asked to sign any agreement and was not told that, by agreeing to the change, she was giving up the right to overtime pay for the ninth and tenth hours worked. Similarly, Ivalee Mueller (Mueller), who was employed from 1973 to 1991, did not recall signing any agreement regarding the schedule change. Maria Rosas (Rosas), who was employed from 1982 to 1994, recalled being told of the conversion; however, no one explained that she was giving up rights to overtime pay and she never signed any agreement. She testified: "I can only tell you they told us that we had to work that day--ten hours a day." Oscar Monderrosa, the Production Manager at the time the night-shift changed schedules, testified that he recalled no election and no written agreement relating to the change. To implement the change, he "had to just tell the second-shift supervisor about the change."

Dean DeBaun, General Manager and then President of Servodyne, testified that he did not think that the night-shift ever converted to the longer four-day workweek. He did not recall the details of the day-shift conversion, but believed that proper procedures had been followed. He explained: "[W]e went through a polling of the employees because that was one of the requirements to make the change. I'm not able to recall whether it was done, you know, verbally or in a written manner. And the results indicated the employees Peter Conrow (Conrow), Plant Manager for Servodyne, also was unable to confirm that a written agreement was obtained in connection with the schedule change. He testified that a meeting of the employees was held in 1986 where he answered questions and that a vote was taken regarding a trial period for the new schedule with only a few negative votes registered. Conrow could not recall if a second employee vote was taken after the trial period. He simply recalled that, after the month elapsed, "[t]he supervisors came back to me and basically stated that it was a go." The following exchange occurred on the subject of whether the employees signed an agreement:

were in favor of it, and we made the conversion."

"Q. Do you recall the supervisors obtaining signatures from any of the employees with regard to the new schedule?

"A. Normally just to show that--you always had this kind of problem where people say, 'No one told me about it.' So I solved that problem by having--after the supervisors would discuss things or a memorandum--instead of passing out each one, an individual memorandum, they would get their memorandum, and then they would have to sign the supervisor's copy. Then it would get back to me. That's how we maintained files; so I would be sure that everyone actually saw we were aware that this was going on at the plant...."

"Q. You recall that with the changeover from five to four [days]?

"A. I recall this was my standard procedure, the way I ran things. As to that specifically happening, no."

Esperanza Pena (Pena), who was employed as a night-shift supervisor from 1978 through 1994, testified that the night-shift changed schedules in July or August of 1986. According to Pena, "Pete Conrow called us to the dining room to tell us that they were going to change the shift to ten hours, the reason being that they needed one day to fix the machinery." A vote was taken and the employees were content with the change. Pena further stated that the employees were given a memorandum, which they signed, that explained "the reason why the shift was being changed to four days, ten hours, so that the employees would not be confused."

Purolator also introduced testimony regarding the lack of employee complaints regarding the four-day schedule.

Because of the issues raised and...