Maravilla v. Rosas Bros. Constr., Inc.

• Decision Date: 14 August 2019
• Docket Number: Case No. 16-cv-06117-JST
• Citation: 401 F.Supp.3d 886
• Parties: Antonio MARAVILLA, Jr., Plaintiff, v. ROSAS BROTHERS CONSTRUCTION, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of California

401 F.Supp.3d 886

Antonio MARAVILLA, Jr., Plaintiff,

v.ROSAS BROTHERS CONSTRUCTION, INC., et al., Defendants.

Case No. 16-cv-06117-JST

United States District Court, N.D. California.

Signed August 14, 2019

Tomas Eduardo Margain, Huy Ngoc Tran, Justice at Work Law Group, LLP, San Jose, CA, for Plaintiff.

Kevin M. Christensen, Christensen Law Group, San Ramon, CA, for Defendants.

STATEMENT OF DECISION

JON S. TIGAR, United States District Judge

This matter came before the Court for trial on October 15 and 17, 2018. Plaintiff Antonio Maravilla, Jr., was represented by Tomas E. Margain. Defendants Rosas Brothers Construction, Inc.; Victor Manuel Rosas; Jose Humberto Rosas; and Jose Luis Rosas were represented by Kevin M. Christensen. The parties submitted proposed findings of fact and conclusions of law on December 7, 2018. ECF Nos. 40, 41.

Having considered the evidence and the parties' arguments,¹ and good cause appearing, the Court now finds and orders as follows:

I. BACKGROUND

Plaintiff Antonio Maravilla, Jr., filed this action on October 24, 2016, alleging the following claims: failure to pay minimum wage or overtime pursuant to the federal Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 207, 216(b) ;² failure to pay minimum wage or overtime, Cal. Lab. Code §§ 1194, 1194.2 ; failure to provide an itemized wage statement, Cal. Lab. Code § 226 ; waiting time penalties, Cal. Lab. Code § 203 ; and unfair competition, Cal. Bus. & Prof. Code § 17200 et seq.

Maravilla worked for Defendant Rosas Brothers Construction, Inc. ("Rosas Brothers"), a concrete contractor that primarily performs municipal sidewalk construction. This includes building or retrofitting ADA-compliant ramps installed at intersections to allow individuals with mobility restrictions to use a ramp to move from the street to the sidewalk. The work often involves demolishing existing sidewalks so that new sidewalks can be installed. Defendants Victor Manuel Rosas, Jose Humberto Rosas, and Jose Luis Rosas (collectively, "the Rosas brothers") – the brothers for whom the business is named – jointly own and operate the firm.

Maravilla was employed by Rosas Brothers as a heavy-equipment operator. He primarily operated a backhoe. He performed demolition and removal of existing sidewalks; ground excavation; spreading base rock; and compacting. He also operated a dump truck to bring debris from the job site back to the yard or to a landfill, or to take debris from the yard to the landfill. Although his hourly pay rose over the period of this lawsuit, his rate of pay was the same for any given job during the same time period.

Two different Rosas Brothers's compensation practices are at issue here. First, any time a Rosas Brothers employee worked more than eight hours per day, the hours were "banked," i.e., they were recorded but not immediately paid. Virtually all overtime hours were banked, meaning they were not paid on the pay period following the end of the workweek. There were also whole weeks where regular and overtime hours were banked. This system was already in place when Maravilla began working at Rosas Brothers.

Twice a year, in September and December, Rosas Brothers would issue checks to its employees for their banked hours.³ The banked hours were paid at a straight-time rate, not overtime, even though the banked hours represented hours worked in excess of eight hours per day or 40 hours per week. Maravilla kept a contemporaneous log of his actual work time so that information could be provided to Rosas Brothers when it calculated his banked hours backpay. The parties agree that Maravilla's regular hourly compensation, and the rate at which his banked hours were compensated, was as follows: 2012 – $64.50; 2013 – $67.00; 2014 – $68.83; 2015 – $70.95; and 2016 – $73.95.⁴

When Maravilla worked less than 40 hours in a workweek, the difference was deducted from his banked hours. For example, if Maravilla worked 35 hours in a given week, and he had accumulated 100 banked hours to date that year, his banked hours would be reduced to 95 hours. The effect of the banked hours system was both to (1) delay the payment of compensation owed to Maravilla (and other Rosas Brothers employees) and (2) underpay such compensation.

Initially, the Rosas brothers completed Maravilla's time cards for him. They intentionally misstated the times during which Maravilla was working and understated the total number of hours worked. They knew when they completed the cards that they were false. Eventually, Maravilla filled out his own time cards. However, pursuant to instructions from the Rosas brothers, he did not record all the time he spent working. He never wrote down more than eight hours in one work day, and he kept a record of his banked hours in a separate journal.

At one point, Maravilla told Victor Rosas that he wanted to be paid according to the law. Victor told him that Rosas Brothers was not able to pay overtime.

The majority of these facts were not disputed. Defendants freely admitted that they used a banked hours system; that banked hours were never paid at an overtime rate, but only at straight time; and that employees were not paid for banked hours at the time they were worked, but only at the September and December intervals. Defendants disputed only the number of banked hours at issue, although – unlike Maravilla – they kept no contemporaneous records of banked hours. They did submit computer payroll records, but there was no evidence that these records were created contemporaneously, and Victor Rosas's testimony about the company's banked hours records was internally contradictory. For purposes of this order, the Court therefore accepts Maravilla's calculation of his banked hours and rejects Rosas Brothers's records as not credible.

The second compensation practice at issue is Rosas Brothers's alleged failure to pay for all hours worked (Maravilla's "off-the-clock claim"). Maravilla alleged that Rosas Brothers paid him only for work performed beginning at 7:30 a.m. each day, even though they required him to arrive at the yard before that and to drive from the yard to the job site. He further claimed that hours worked before 7:30 a.m. or hours spent driving from the yard to the job site were not included in banked hours and were not otherwise compensated. Maravilla testified that he also sometimes had to return equipment to the Rosas Brothers yard at the end of the day.

Maravilla did not keep contemporaneous records of the additional time he spent at the yard or transiting to and from the job site, as he did with banked hours. At trial, he was unable to provide any estimate of the total time involved, although he estimated that he spent at least one-half hour per day working before the start time reflected in his log (which was also reflected in Rosas Brothers's payroll records). He further testified that, pursuant to instructions from the Rosas brothers, he never wrote down any of this time on his time card.

Unlike its admission regarding the banked hours system, Rosas Brothers did not concede Maravilla's claim for additional hours worked at the beginning and end of the work day. Victor Rosas testified that Maravilla rarely came to the yard and rarely drove equipment, such as a backhoe, to the job site. According to him, that equipment was driven there by someone else over the weekend to be ready when the work week started.

Rosas Brothers was investigated by the U.S. Department of Labor in 2014 for violation of wage and hour laws. It settled the case in April 2014. In the course of the investigation, and as part of the settlement, the Department of Labor explicitly told Victor Rosas that what the company was doing by banking hours and not paying overtime was illegal. Pursuant to the settlement, Rosas Brothers made a payment to each of its employees in the amount of 50 percent of its prior banked hours payments to account for overtime. Even after this investigation, however, the company did not change its practices. At trial, Victor Rosas testified as follows:

Q. And, Mr. Rosas, after the investigation and the settlement with the Department of Labor, Rosas Brothers kept banking hours for employees; correct?

A. Correct.

Q. Why?

A. I'm going to say for convenience, so both not only the employees, you know, our – you know, to be consistent – you know, more consistent, you know, payroll for them to get and at the same time we was actually getting jobs done.

ECF No. 33 (Reporter's Transcript, Oct. 17, 2018) ("RT") at 142:25-143:8.

From time to time, Rosas Brothers would pay Maravilla extra money, but this was in the nature of a bonus. It was paid because Maravilla "was a good employee." Id. at 119:5-16. It was not overtime compensation. As Victor Rosas testified, the agreement was that overtime would be paid at the regular, straight-time rate. A characterization of these extra payments as overtime would be contrary to this agreement. Also, there was no evidence as to the amount of any such bonuses, much less any correlation between the amount of the bonuses and the hours worked.⁵

Maravilla also collected unemployment benefits during weeks when he was working for Rosas Brothers, even though he was not entitled to receive such benefits – because he was not, in fact, unemployed.⁶

This practice was done with the knowledge, encouragement, and assistance of Rosas Brothers, which helped complete the forms that made unemployment payments available. Victor Rosas encouraged Maravilla to apply for unemployment benefits, even during weeks where he had worked. In those instances, Maravilla's hours would be banked. Thus, although Rosas Brothers did not compensate Maravilla during those periods, Maravilla knew that the company would compensate him in the future for the work he was then performing.

Maravilla worked his last day for Rosas Brothers on July 8, 2016. He was not paid for his accumulated hours when he left.

When the matter first came on for trial, Defendants' attorney appeared without his...