Pellegrino v. Robert Half Internat., Inc.

• Court: California Court of Appeals
• Writing for the Court: Fybel
• Citation: Pellegrino v. Robert Half Internat., Inc., 182 Cal.App.4th 87, 104 Cal.Rptr.3d 790 (Cal. App. 2010)
• Decision Date: 28 January 2010
• Docket Number: No. G039985.,G039985.
• Parties: MARIA PELLEGRINO et al., Plaintiffs and Respondents, v. ROBERT HALF INTERNATIONAL, INC., Defendant and Appellant.

182 Cal.App.4th 87

104 Cal.Rptr.3d 790

MARIA PELLEGRINO et al., Plaintiffs and Respondents, v. ROBERT HALF INTERNATIONAL, INC., Defendant and Appellant.

No. G039985.

Court of Appeals of California, Fourth District, Division Three.

January 28, 2010.

As modified February 25, 2010.

Seyfarth Shaw, Gilmore F. Diekmann, Jr., Raymond R. Kepner, Todd C. Hunt and Michael D. Mandel for Defendant and Appellant.

Shanberg Stafford, Ross E. Shanberg, Shane C. Stafford; Quest Law Firm and Robert C. Robinson for Plaintiffs and Respondents.

OPINION

FYBEL, J.—

INTRODUCTION

Plaintiffs Maria Pellegrino, Nadia Balici, Carolyn Cox, Kelli Maresch, Jennifer McCasland, and James Rossetto (collectively, plaintiffs) sued their former employer, temporary staffing firm Robert Half International, Inc. (RHI), for RHI's alleged failure to comply with Labor Code provisions pertaining to overtime compensation, commissions, meal periods, and itemized wage statements. Plaintiffs also alleged unfair competition claims, under Business and Professions Code section 17200 et seq., which were based on the same alleged Labor Code violations.

RHI asserted two affirmative defenses to plaintiffs' claims. First, RHI contended plaintiffs' claims were barred because a provision, entitled "Limitation on Claims," in their employment agreements shortened the statute of limitations for such claims to six months. Second, RHI argued each plaintiff was exempt from the wage and hour laws based on the administrative exemption.

The trial court determined the limitation on claims provision contained in the employment agreements was unenforceable and granted motions for summary adjudication on that issue accordingly. Plaintiffs' unfair competition claims were tried to the court sitting in equity and began with a trial on the merit of RHI's exemption affirmative defense. The trial court granted plaintiffs' motion for judgment under section 631.8 of the Code of Civil Procedure, having concluded the administrative exemption did not apply to plaintiffs. The parties stipulated as to the amount of damages, penalties, and interest to be awarded each plaintiff; the court entered judgment accordingly.

We affirm. First, the wage and hour laws underlying all of plaintiffs' claims protect unwaivable statutory rights that are supported by strong public policy. The trial court correctly concluded the provision shortening the limitation period violates public policy and is therefore unenforceable.

Second, as authorized by Evidence Code section 320 and Raedeke v. Gibraltar Sav. & Loan Assn. (1974) 10 Cal.3d 665 [111 Cal.Rptr. 693, 517 P.2d 1157], the trial court set the order of proof for trial by having the equitable issues tried first to the bench, to be followed by a trial of the legal issues to the jury, to the extent any outstanding issues remained after resolution of the equitable claims. After the court decided that RHI's exemption affirmative defense was without merit and before the remaining equitable issues were resolved by the court, the parties stipulated to all outstanding issues—both equitable and legal—and judgment was entered accordingly. We find no error.

Finally, the trial court did not err by granting plaintiffs' motion for judgment as to RHI's exemption affirmative defense. Substantial evidence showed plaintiffs' duties and responsibilities did not involve work directly related to management policies or general business operations of RHI or RHI's customers, within the meaning of Industrial Welfare Commission wage order No. 4-2001 (IWC Wage Order No. 4-2001), which is set forth in title 8, section 11040 of the California Code of Regulations and applies in this case.

FACTS¹

RHI is a staffing company that places temporary employees or "candidates" with its clients. RHI's headquarters in Pleasanton, California, houses, inter alia, its corporate human resources, marketing, and legal departments.

RHI has several divisions which include (1) the Robert Half management resources division which places temporary employees to provide high-level accounting and finance-related services; (2) the Robert Half legal division which places attorneys, paralegals, legal support specialists, and law firm administrators; (3) the creative group division which places temporary employees to provide creative, Web site development, marketing, and advertising services; and (4) the office team division which places administrative staff.

Pellegrino worked for RHI as an account executive in the Robert Half legal division from August 2004 until April 2006. Balici worked for RHI as an account executive in its legal division from September 2004 until May 2005. Cox worked for RHI in its management resources division as an account executive. She worked for RHI from 2000 through May 2005. Cox also served as a division director for some period of time, but spent less than 20 percent of her time on division director responsibilities. Maresch worked for RHI as a staffing manager in the office team division from January 2004 until July 2005. McCasland worked for RHI as an account executive in its management resources division from October 2000 to January 2002, and again from June 2004 until April 2005. One month before she left her employment with RHI, she was promoted to branch manager. Rossetto worked for RHI as an account executive in the creative group division from March 2002 until September 2003.

The duties and responsibilities of an account executive² involved recruiting, interviewing, and evaluating candidates to be placed as temporary employees; selecting and placing candidates on job orders and assisting clients with their call-in business needs; and new business development. In performing those functions, account executives were expected to follow the "recipe" established by corporate headquarters. Account executives were expected to perform the three major functions of their position on a three-week rotating basis broken down into a "sales week" or marketing week, "desk week," and "recruiting week."

During sales week, account executives were expected to make 125 telephone calls or "connects" with clients, conduct approximately 15 client visits, and attend networking events. During desk week, account executives were expected to handle incoming telephone calls and take job orders from clients. During recruiting week, they were expected to interview 15 to 25 potential candidates to determine whether those candidates might be added to RHI's self-described "inventory" of individuals to be placed. The three-week rotation system could be modified to suit the number of account executives working in a particular division at any given time. Account executives were also required to participate in "white board meetings" at least twice a day, during which they would utilize a white board to list their daily goals and chart their progress in achieving those goals.

Each account executive was expected to consider the clients and candidates he or she worked with as his or her "book of business" although the "book" ultimately belonged to RHI; an account executive was also expected to assist his or her teammates. Account executives worked as a team in trying to locate candidates when there was a need for a specific skill set. They did not set policy for RHI and were expected to operate within the policy guidelines that were provided to them.

Account executives were evaluated based on how well they met sales production minimum requirements and the number of hours that were billed to clients for services provided by candidates. A direct sale involved placing a candidate with a client. Account executives did not usually make recommendations to a client regarding how to staff projects. The account executive's job was to fill the orders as they came in.

After placing a candidate, account executives had no role in supervising the candidate in his or her performance of services for the client. If a client desired to terminate a candidate's services, the client would inform the account executive and the account executive would relay the message to the candidate and attempt to provide a replacement candidate. Account executives did not have the authority to hire or fire other account executives and did not supervise administrative support staff in the offices.

RHI's supervising manager's guide refers to RHI as "a sales-driven organization where delivering sales results is an important part of our culture. We take pride in being highly skilled and well-trained sales professionals. Our goal as sales professionals must be to develop long-lasting client relationships versus short-term transactional business."

BACKGROUND

I. PLEADINGS

Plaintiffs initiated their lawsuit against RHI in March 2006. In the first amended complaint, plaintiffs alleged RHI (1) failed to pay overtime compensation in violation of Labor Code sections 510, subdivision (a), 1194, 201, 202, and 203; (2) failed to provide proper meal and rest breaks in violation of Labor Code sections 512 and 226.7 and IWC Wage Order No. 4-2001; (3) failed to maintain and submit itemized wage statements in violation of Labor Code section 226; and (4) engaged in unfair competition in violation of Business and Professions Code section 17200 based on the above referenced Labor Code sections. (All further statutory references are to the Labor Code unless otherwise specified.) Cox, McCasland, and Pellegrino alleged additional claims against RHI for nonpayment of commissions and unfair competition for such nonpayment (Bus. & Prof. Code, § 17200 et seq.). The first amended complaint alleged plaintiffs were employed by RHI as account executives, branch managers, and/or division directors. That complaint further alleged they regularly worked more than eight hours per day and/or 40 hours per week, but were not paid overtime wages or commissions and were not provided meal and rest periods or itemized statements of wages.

RHI filed an answer to the first...