Silva v. See's Candy Shops, Inc.

• Decision Date: 09 December 2016
• Docket Number: D068136
• Citation: 7 Cal.App.5th 235,212 Cal.Rptr.3d 514
• Court: California Court of Appeals Court of Appeals
• Parties: Pamela SILVA, Plaintiff and Appellant, v. SEE'S CANDY SHOPS, INC., Defendant and Respondent.

7 Cal.App.5th 235

212 Cal.Rptr.3d 514

Pamela SILVA, Plaintiff and Appellant,

v.SEE'S CANDY SHOPS, INC., Defendant and Respondent.

D068136

Court of Appeal, Fourth District, Division 1, California.

Filed December 9, 2016

Sullivan Law Group, William B. Sullivan and Eric K. Yaeckel, San Diego, for Plaintiff and Appellant.

Jackson Lewis, David S. Bradshaw, James T. Jones, Evan D. Beecher, Sacramento, and Paul F. Sorrentino, San Diego, for Defendant and Respondent.

HALLER, J.

Pamela Silva filed an action against her former employer, See's Candy Shops, Inc., alleging wage and hour violations. Silva brought the action in her individual capacity, on behalf of a class of See's Candy employees, and on behalf of aggrieved workers under the Private Attorney General Act of 2004 (PAGA). The court certified a class on Silva's claims challenging two of See's Candy's policies pertaining to the calculation of employee work time: (1) a rounding policy, which calculates timeclock punches to the nearest tenth of an hour; and (2) a grace-period policy, which permits employees to clock in 10 minutes before and after a shift, but calculates work time from the employee's scheduled start/end times.

In a prior appeal, we granted See's Candy's writ petition challenging the trial court's dismissal of See's Candy's affirmative defense that its rounding policy was lawful. (See's Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 148 Cal.Rptr.3d 690 (See's Candy ).) After remand, See's Candy successfully moved for summary adjudication on Silva's PAGA cause of action. In a later proceeding, the court granted summary judgment in See's Candy's favor on all of Silva's remaining claims.

In this appeal, Silva challenges the summary adjudication order on her PAGA claim and the summary judgment on all remaining causes of action. She raises numerous contentions. We determine the court erred in granting summary judgment with respect to certain of Silva's individual claims, but the court properly entered judgment in See's Candy's favor on all remaining claims, including the PAGA cause of action and the class-certified claims.

FACTUAL AND PROCEDURAL SUMMARY

Background

In October 2009, Silva filed her original complaint alleging wage and hour violations, including See's Candy's failure to pay proper compensation for work performed.

The same day, Silva sent a letter to the Labor and Workforce Development Agency (LWDA) informing the agency, as required by PAGA's notice requirements, of her claim that See's Candy violated numerous Labor Code sections, including by failing to provide statutorily compliant meal and rest periods, overtime compensation, itemized wage statements, compensation for all hours worked, and reimbursement for business expenses. (See Lab. Code, §§ 2699.3, subd. (a)(1), 201, 203, 204, 221, 226, 226.7, 510, 512, 1194, 1199, 2802.)¹ On November 17, 2009, the LWDA responded that "after review," the agency "does not intend to investigate the allegations."

Five days later, Silva filed her first amended complaint (the operative complaint here), alleging three causes of action. In the first two causes of action, Silva alleged See's Candy violated California wage and hour laws and the unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq. ) by failing to: (1) pay for all work performed; (2) pay overtime compensation; (3) maintain lawful meal and rest period policies; (4) pay for each meal or rest period that was not provided; (5) reimburse employees for business related expenses; and (6) provide accurate itemized wage statements. Silva brought these claims on behalf of herself and on behalf of a putative class of current and former See's Candy workers.

In the third cause of action, Silva alleged a PAGA claim, seeking PAGA statutory penalties for the alleged Labor Code violations. (§ 2698 et seq.) In this cause of action, Silva alleged See's Candy "committed the above-referenced and incorporated wage and hour violations against Plaintiffs and the class members." She also specifically identified several alleged statutory violations, including the failure to: (1) pay full compensation due "by improperly ‘rounding’ the time worked by employees," citing sections 204, 510, and 1194 ; (2) provide required rest and meal periods, citing sections 226.7 and 512 ; (3) provide statutorily-compliant itemized wage statements, citing section 226 ; and (4) indemnify employees for necessary business expenditures or losses, citing section 2802.

In its amended answer, See's Candy denied Silva's allegations and asserted numerous affirmative defenses, including that its employees were fully and fairly compensated under its rounding policy and grace-period policy, and that these policies were consistent with state and federal laws.

Based on Silva's request, the court certified a class only on the issues of whether See's Candy's rounding and grace-period policies violate applicable law. The certified class consisted of California workers who were employed by See's Candy "from October 20, 2005 to the present." The court certified the class on two issues: (1) "Whether class members suffered a loss of compensation when they clocked in and out on the ... timekeeping system utilized by See's [Candy] which rounded time to the nearest six minutes" (the rounding policy); and (2) "Whether class members suffered a loss of compensation when they clocked in or out on the ... timekeeping system utilized by See's [Candy] during the ‘grace period,’ defined as up to ten minutes before their scheduled start times and up to ten minutes after their scheduled quitting times" (the grace-period policy).

Silva then moved for summary adjudication on See's Candy's rounding-policy affirmative defense . Silva argued See's Candy's rounding policy violates California law requiring an employer to fully compensate an employee every two weeks and pay premium wages for overtime work. The court (Judge Joel Pressman) agreed, granted the motion, and dismissed See's Candy's rounding defense.

See's Candy successfully petitioned for a writ of mandate in this court. (See's Candy, supra , 210 Cal.App.4th 889, 148 Cal.Rptr.3d 690.) Adopting the federal standard and the rule used by California's regulatory agency, we held an employer is entitled to use a rounding policy if the policy "is fair and neutral on its face" and " ‘is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.’ " (Id. at p. 907, 148 Cal.Rptr.3d 690.) Applying this standard, we found that Silva did not meet her summary adjudication burden to show See's Candy's rounding policy was unlawful as a matter of law, and even if she did meet this burden, See's Candy's evidence showed the existence of triable issues of fact. (Id. at pp. 907–913, 148 Cal.Rptr.3d 690.) Because See's Candy had not affirmatively moved for summary adjudication or judgment, we did not consider whether See's Candy was entitled to judgment based on its own submitted evidence.

Summary Adjudication on PAGA Claim

While this writ proceeding had been pending in this court, See's Candy moved in the trial court for summary adjudication on Silva's PAGA claim seeking penalties for the alleged Labor Code violations. In this motion, See's Candy asserted separate arguments regarding two portions of Silva's PAGA claim: (1) the portion of the PAGA claim challenging See's Candy's rounding and grace-period polices; and (2) the portion of the PAGA claim asserting other statutory violations (e.g., mealtime violations, failure to reimburse for business expenses).

On the portion of Silva's PAGA claim challenging See's Candy's rounding and grace-period policies , See's Candy argued it was entitled to judgment on this claim because: (1) Silva's notice to the LWDA was insufficient to notify the agency of these challenges (see § 2699.3, subd.(a)(1)); (2) PAGA does not govern challenges to rounding and grace-period policies; (3) Silva's position conflicted with the Labor Commissioner's enforcement policies; and (4) PAGA is unconstitutional.

On the portion of the PAGA claim seeking relief for the other alleged labor violations, See's Candy argued these claims were without merit based on See's Candy's discovery responses reflecting that these claims were no longer "at issue."

Silva opposed the motion on numerous grounds. Regarding the rounding/grace-period policies, Silva argued the LWDA notice was adequate and that she was not required to more specifically detail the grounds of the claim in the notice, particularly because these issues pertain to an affirmative defense and because she was unaware of these grounds (alleged improper rounding/grace-period timekeeping policies) when she first sent the LWDA notice.

Regarding the other alleged Labor Code violations, Silva argued she never abandoned these claims, and produced evidence of her counsel's January 2010 letters to defense counsel indicating the grace-period and rounding policy challenges were not the only claims being asserted in her complaint. She did not, however, produce any facts supporting the validity of these alleged Labor Code violations.

Shortly after the parties filed these briefs, the trial court stayed the matter pending the completion of the writ proceeding. Our decision in See's Candy then became final in February 2013. After remand, the trial court gave the parties leave to file supplemental briefs given the lengthy passage of time. In her supplemental brief, Silva focused only on her PAGA claims based on the rounding/grace-period claim, and did not present any argument or evidence on the individual claims.

After considering the parties' submissions and conducting a hearing, the court (Judge Randa Trapp) granted summary adjudication on Silva's PAGA cause of action. On the portion of the PAGA claim challenging See's Candy's rounding and grace-period policies, the court found See's Candy was entitled to prevail as a matter of law...