Gonzalez v. Downtown La Motors, LP

• Court: California Court of Appeals
• Writing for the Court: CHAVEZ
• Citation: Gonzalez v. Downtown La Motors, LP, 215 Cal.App.4th 36, 155 Cal.Rptr.3d 18 (Cal. App. 2013)
• Decision Date: 17 July 2013
• Docket Number: B235292
• Parties: Oscar GONZALEZ et al., Plaintiffs and Respondents, v. DOWNTOWN LA MOTORS, LP et al., Defendants and Appellants.

215 Cal.App.4th 36

155 Cal.Rptr.3d 18

Oscar GONZALEZ et al., Plaintiffs and Respondents,

v.DOWNTOWN LA MOTORS, LP et al., Defendants and Appellants.

B235292

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

Filed March 6, 2013

Review Denied July 17, 2013 ^*

Affirmed.

See 3 Witkin, Summary of Cal. Law (10th ed. 2005) Agency and Employment, § 382 et seq.

APPEAL from a judgment of the Superior Court of Los Angeles County. Mary H. Strobel, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC350769)

Dickstein Shapiro, Arthur F. Silbergeld and Jennifer A. Awrey, Los Angeles; Greines, Martin, Stein & Richland, Robin Meadow, Cynthia E. Tobisman, and Alana H. Rotter, Los Angeles, for Defendants and Appellants.

Gartenberg Gelfand Hayton & Selden and Aaron C. Gundzik, Los Angeles; Law Offices of Neal J. Fialkow and Neal J. Fialkow for Plaintiffs and Respondents.

Curiale Hirschfeld Kraemer LLP and Felicia R. Reid, San Francisco, for National Automobile Dealers Association as Amicus Curiae on behalf of Defendants and Appellants.

Nossaman LLP and John T. Kennedy, Sacramento, for California Automotive Business Coalition as Amicus Curiae on behalf of Defendants and Appellants.

Fine, Boggs & Perkins LLP, John P. Boggs, Half Moon Bay, and David J. Reese for California New Car Dealers Association and Alliance of Automobile Manufacturers as Amicus Curiae on behalf of Defendants and Appellants.

Altshuler Berzon LLP, Eve H. Cervantez and Eileen B. Goldsmith, San Francisco, for California Employment Lawyers Association as Amicus Curiae on behalf of Plaintiffs and Respondents.

CHAVEZ, J.

In this wage and hour class action, the issue presented is whether California's minimum wage law requires an employer that compensates its automotive service technicians on a “piece-rate” basis for repair work must also pay those technicians a separate hourly minimum wage for time spent during their work shifts waiting for vehicles to repair or performing other non-repair tasks directed by the employer. The employer contends it was not required to pay the technicians a separate hourly minimum wage for such time because it ensured that a technician's total compensation for a pay period never fell below what the employer refers to as the “minimum wage floor”—the total number of hours the technician was at work during the pay period (including hours spent waiting for repair work or performing non-repair tasks), multiplied by the applicable minimum wage rate. The employer did so by supplementing a technician's pay, if necessary, to cover any shortfall between the technician's piece-rate wages and the minimum wage floor.

The trial court concluded that the employer's method of compensation violated the minimum wage law because California law does not allow an employer to avoid paying its employees for all hours worked by averaging total compensation over total hours worked in a given pay period. The trial court cited Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314, 37 Cal.Rptr.3d 460 ( Armenta ), as support for its ruling.

We too find the court's reasoning in Armenta to be persuasive. Applying that reasoning here, we conclude that class members were entitled to separate hourly compensation for time spent waiting for repair work or performing other non-repair tasks directed by the employer during their work shifts, as well as penalties under Labor Code section 203, subdivision (a). We therefore affirm the judgment.

Plaintiffs' experience

Plaintiffs worked eight-hour shifts. During their shifts, plaintiffs were required to remain at DTLA's place of business and had to obtain permission to leave during a shift if they were not working on a repair order. Plaintiffs were also required to clock in when they arrived for work, clock in and out for lunch, and clock out at the end of their shift.

Plaintiffs regularly did not have repair work to do because there were not enough vehicles to service. When this occurred, plaintiffs had to remain at work, and those who asked to leave early were told that they needed to stay because customers might come in. Plaintiffs accrued no flag hours during time spent waiting for cars to repair. While waiting for repair work, plaintiffs were expected to perform various non-repair tasks, including obtaining parts, cleaning their work stations, attending meetings, traveling to other locations to pick up and return cars, reviewing service bulletins, and participating in on-line training. They accrued no flag hours while performing these non-repair tasks.

The instant lawsuit

Plaintiffs filed the instant action against DTLA claiming that DTLA violated California law by failing to pay technicians a minimum wage during their waiting time—periods of time they were on the clock, but waiting for repair orders or performing other non-repair tasks. Plaintiffs also claimed that technicians terminated from employment during the class period were entitled to penalties under Labor Code section 203, subdivision (a) because DTLA had failed to pay these technicians all the wages they were due upon their termination.

The trial court denied cross-motions for summary adjudication filed by the parties as to whether DTLA technicians were entitled to a separate hourly pay for waiting time in addition to their flag hour pay and minimum wage floor supplement, and the matter proceeded to a bench trial.

The parties presented documentary evidence as well as testimony by class members and expert witnesses regarding the amount of waiting time experienced by class members. Both parties also presented expert testimony as to the amount per pay period that class members either were or were not underpaid.

The trial court issued a proposed statement of decision, to which DTLA objected. After hearing argument on those objections, the trial court issued a final statement of decision on June 20, 2011.

The trial court ruled in favor of plaintiffs, concluding that California law requires class members to be paid for their waiting time between work on repair orders. The trial court found the testimony of plaintiffs' expert to be “credible,” and adopted that expert's conclusions that plaintiffs experienced waiting time of 1.85 hours per day on average, that the average amount of unpaid compensation for waiting time per plaintiff was $27.76 per day, and that in total, plaintiffs lost the amount of $553,653 in uncompensated time during the class period. The trial court determined that the value of the class's waiting time, including interest, was $1,555,078 and awarded that sum to plaintiffs. The trial court also awarded plaintiffs penalties in the amount of $237,840 under Labor Code section 203, subdivision (a) for DTLA's willful failure to pay all wages owed them at the time their employment was terminated.

This appeal followed.

DISCUSSION

I. Applicable Legal Principles and Standard of Review

California's minimum wage requirements are set forth in wage orders promulgated by the Industrial Welfare Commission (IWC), the agency formerly authorized to regulate working conditions in California. ( Martinez v. Combs (2010) 49 Cal.4th 35, 54–55, 109 Cal.Rptr.3d 514, 231 P.3d 259.) Although the IWC was defunded in 2004, its wage orders remain in effect. ( Soderstedt v. CBIZ Southern California, LLC (2011) 197 Cal.App.4th 133, 145, fn. 1, 127 Cal.Rptr.3d 394.)

Wage orders are quasi-legislative regulations and are construed in accordance with the ordinary principles of statutory interpretation. ( Aleman v. Air T ouch Cellular (2012) 209 Cal.App.4th 556, 568, 146 Cal.Rptr.3d 849 ( Aleman ).) Under those principles, our analysis begins by ascertaining the legislative intent underlying the wage order “so that we may adopt the construction that best effectuates the purpose of the law. [Citation.]” ( Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, 715, 3 Cal.Rptr.3d 623, 74 P.3d 726.) To do so, we first examine the words of the wage order as the best indication of legislative intent. ( Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1026, 139 Cal.Rptr.3d 315, 273 P.3d 513 ( Brinker ).) Those words should be given their ordinary and usual meaning and should be construed in their statutory context. ( Ibid.) Judicial construction that renders any part of the wage order meaningless or inoperative should be avoided. ( Ibid.)

If the language of the wage order is clear, it is applied without further inquiry. ( Aleman, supra, 209 Cal.App.4th at p. 568, 146 Cal.Rptr.3d 849.) If the language can be interpreted to have more than one reasonable meaning, a court may consider “ ‘a variety of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction, and the statutory scheme of which the statute is a part.’ [Citation.]” ( Id. at pp. 568–569, 146 Cal.Rptr.3d 849.)

“State wage and hour laws ‘reflect the strong public policy favoring protection of workers' general welfare and “society's interest in a stable job market.” [Citations.]’ [Citations.]” ( Cash v. Winn (2012) 205 Cal.App.4th 1285, 1297, 140 Cal.Rptr.3d 867 ( Cash ).) They are therefore liberally construed in favor of protecting workers. As our Supreme Court has stated, “ ‘[I]n light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection.’ [Citations.]” ( Brinker, supra, 53 Cal.4th at pp. 1026–1027, 139 Cal.Rptr.3d 315, 273 P.3d 513; see also Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103, 56 Cal.Rptr.3d 880, 155 P.3d 284 [given the Legislature's remedial purpose, “statutes governing conditions of employment are to be construed broadly in favor of protecting employees”].)

A reviewing court determines the meaning of a wage order de novo. ( ...