Morgan v. Rohr, Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 NATHANIEL MORGAN, an individual; Case No.: 20-cv-574-GPC-AHG MICHAEL BEVAN, an individual; 12 individually and on behalf of all others ORDER: 13 similarly situated, 1) GRANTING IN PART AND 14 Plaintiffs, DENYING IN PART DEFENDANTS’ 15 v. MOTION FOR PARTIAL SUMMARY JUDGMENT; and 16 ROHR, INC., a corporation; HAMILTON SUNDSTRAND, d/b/a COLLINS 17 2) GRANTING IN PART AND AEROSPACE; UNITED DENYING IN PART PLAINTIFFS’ 18 TECHNOLOGIES CORPORATION, MOTION FOR PARTIAL 19 Defendants. SUMMARY JUDGMENT 20 [ECF Nos. 163, 164] 21 22 Pending before the Court is Defendants Rohr, Inc.; Hamilton Sundstrand 23 Corporation; and United Technologies Corporation’s (collectively “Defendants”) Motion 24 for Partial Summary Judgment. ECF No. 163. Plaintiffs filed an Opposition, (ECF No. 25 173), and Defendants filed a Reply, (ECF No. 178). Also pending before the Court is 26 Plaintiffs’ Motion for Partial Summary Judgment. ECF No. 164. Defendants filed an 27 1 Opposition, (ECF No. 169), and Plaintiffs filed a Reply, (ECF No. 181). A hearing was 2 held on September 15, 2023. ECF No. 199. For the reasons that follow, the Court 3 GRANTS IN PART and DENIES IN PART both motions. 4 PROCEDURAL BACKGROUND 5 On March 27, 2019, Plaintiff Nathaniel Morgan filed this action in Solano County 6 Superior Court. ECF No. 1 at 6.1 On May 6, 2019, Defendants removed the case to the 7 Eastern District of California pursuant to the Class Action Fairness Act, 28 U.S.C. 8 §1332(d) (“CAFA”). See id. On March 26, 2020, the action was transferred to the 9 Southern District of California. ECF No. 23. 10 On June 19, 2020, a Second Amended Complaint was filed. ECF No. 33, Second 11 Amended Complaint (“SAC”). It remains the operative complaint. Plaintiffs Nathaniel 12 Morgan and Michael Bevan2 brought this class action on behalf of themselves and other 13 individuals employed by Defendants as non-exempt employees in the State of California 14 from March 27, 2015, to March 31, 2022, to seek recovery of unpaid compensation. SAC 15 at 2–3, 8. The Second Amended Complaint alleges eight causes of action: (1) failure to 16 authorize and permit required meal periods (Cal. Labor Code §§ 226.7, 510, 512, 1194, 17 1197; IWC Wage Order No. 9-2001, § 113); (2) failure to authorize and permit required 18 19 20 1 Page citations refer to CM/ECF pagination. 21 2 Plaintiff Michael Bevan was added as a second class representative in the Second 22 Amended Complaint. See SAC. 23 3 Plaintiffs move for judicial notice of (1) California Industrial Welfare Commission (“IWC”) Wage Order No. 1-2001, (2) IWC Wage Order No. 1-52, (3) Statement as to the 24 Basis, IWC Wage Order 4-76, and (4) California Division of Labor Standards 25 Enforcement (“DLSE”) Opinion Letter, dated August 13, 2003. See ECF No. 163-4 at 2; Fed. R. Evid. 201. The motion is unopposed. See generally ECF No. 169. The motion for 26 judicial notice is GRANTED. See, e.g., Schroeder v. Envoy Air, Inc., 2016 WL 27 11520388, at *3 (C.D. Cal. Sept. 27, 2016) (taking judicial notice of wage orders); 1 rest periods (Cal. Labor Code §§ 226.7, 512; IWC Wage Order No. 9-2001, § 12); (3) 2 failure to pay overtime wages (Cal. Labor Code §§ 510, 1194, 1198; IWC Wage Order 3 No. 9-2001, § 3); (4) failure to pay minimum wages (Cal. Labor Code §§ 1194, 1197; 4 IWC Wage Order No. 9-2001, § 4); (5) failure to pay all wages due to discharged and 5 quitting employees (Cal. Labor Code §§ 201, 202, 203); (6) failure to furnish accurate 6 itemized wage statements (Cal. Labor Code § 226; IWC Wage Order No. 9-2001, § 7); 7 (7) failure to indemnify employees for necessary expenditures incurred in discharge of 8 duties (Cal. Labor Code § 2802); and (8) unfair and unlawful business practices (Cal. 9 Bus. & Prof. Code §§ 17200 et. seq.). SAC at 9–24. 10 On March 31, 2022, the Court granted in part Plaintiffs’ Motion for Class 11 Certification. ECF No. 105. The Court granted class certification only for union 12 employees and only for the following classes and subclasses: First and Second Meal 13 Period Claims, based on (a) auto-deduction/recording of meal periods; (b) rounded meal 14 periods; and (c) a failure to pay meal period premiums; Minimum and Overtime 15 Wages Claim, based on (a) auto-deduction of meal periods; (b) rounded meal periods; 16 and (c) regular rate violations; Wage Statement Claim based on earning statements 17 muddled by “inscrutable payroll codes”; and a derivative Unfair Competition Claim. 18 ECF No. 105. 19 On July 7, 2023, the Court granted Defendants’ Motion for Judgment on the 20 Pleadings and dismissed Plaintiffs’ eighth cause of action for unfair and unlawful 21 business practices, (ECF No. 183), later remanding it to state court, (ECF No. 217). 22 Accordingly, the class period was reduced to March 27, 2016, to March 31, 2022. ECF 23 24 25 26 Gonzalez v. Millard Mall Servs., Inc., 281 F.R.D. 455, 459 (S.D. Cal. 2012) (noticing DLSE letter). 27 1 No. 183 at 10. Defendants and Plaintiffs now seek partial summary judgment on several 2 of Plaintiffs’ claims. 3 FACTUAL BACKGROUND 4 During the relevant time period, Defendants had two facilities in California, one in 5 Riverside and the other in Chula Vista, and “provide[d] a broad range of high-technology 6 products and services to the global aerospace and building systems industries.” SAC at 5. 7 Both named Plaintiffs were union employees. Plaintiff Morgan worked for Defendants 8 from December 2014 to December 2016 as an Operations Specialist in multiple 9 departments, including “the shipping and receiving and fan cowl departments.” SAC at 3. 10 Plaintiff Bevan was employed by Defendants from 2013 to approximately October 2019, 11 and then again from December 2019 to present. Id. He has held multiple job titles, 12 including Assembler and Quality Tech. Id. 13 During the class period, union employees and Defendants entered into a series of 14 Collective Bargaining Agreements (“CBAs”) that provided union employees with, among 15 other things, a thirty-minute meal break period.4 See generally ECF Nos. 164-16–21. 16 Defendants posted the relevant Wage Order that guarantees the right to a meal period, 17 Wage Order 1-2001, § 11(A), “at all relevant times inside the Riverside and Chula Vista 18 facilities.” ECF No. 163-1 at 11–12 (citing ECF No. 163-2 at 2). Defendants also had a 19 written policy allowing for timely thirty-minute meal breaks as well as a form for 20 employees to report meal period violations, and they provided training on the meal period 21 provisions. ECF No. 164-14 (Meal Period and Rest Break Policy); ECF No.163-3 at 220 22 (Moua Dep.); ECF No. 163-3 at 45–46 (Harris Dep.); ECF No. 163-5 at 53 ¶ 4 (Garcia 23 Dec.); ECF No. 163-5 at 60 ¶ 8 (Joya Dec.). 24 25 26 4 Employees that worked shifts lasting longer than ten hours were entitled to a second meal period. ECF No. 163-1 at 8. 27 1 Defendants, however, failed through much of the class period to provide 2 employees with a timekeeping system to record their meal periods. Prior to October 13, 3 2019, employees at both of Defendants’ facilities used “AutoTime 6” — a timekeeping 4 system pre-programmed to automatically record a thirty-minute meal period for each 5 employee. ECF No. 164-1 at 7. Employees did not clock in or out for their meal periods, 6 and a thirty-minute meal period was recorded irrespective of an employee’s actual break 7 time. See id. After October 13, 2019, employees at the Riverside facility began using 8 “AutoTime 7,” which required employees to record the start and end times for their meal 9 periods. Id. Under both timekeeping systems, employees working shifts longer than ten 10 hours were required to manually input the start and end times for their second meal 11 period. See ECF No. 163-1 at 9. 12 Plaintiffs’ expert, Teresa Fulimeni, reviewed time punch data associated with 13 1,398,606 shifts spanning from March 27, 2015, to March 31, 2022. ECF No. 164-9 at 5. 14 From the start of the Class Period until October 13, 2019, she identified 1,040,699 shifts 15 where a meal period was either short, late, missing, or automatically deducted. Id. at 7. 16 From October 13, 2019, to the end of the Class Period, she identified 179,440 17 noncompliant meal periods, id., including 148,237 meal periods that were rounded in 18 such a way as to conceal shortened shifts, id. at 9. Finally, she identified that in 226,733 19 shifts lasting between ten and twelve hours and 35,734 shifts lasting more than twelve 20 hours, no second meal period was recorded. ECF No. 163-3 at 1042. 21 LEGAL STANDARD 22 Summary judgment is appropriate where “the pleadings, depositions, answers to 23 interrogatories, and admissions on file, together with the affidavits, if any, show that 24 there is no genuine issue as to any material fact and that the moving party is entitled to a 25 judgment as a matter of law.” Fed. R. Civ. P. 56(c). The movant bears the initial burden 26 27 1 to identify the portions of the record that demonstrate an absence of a genuine issue of 2 material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 3 When the movant bears the burden of proof at trial, the movant must show that no 4 reasonable trier of fact could find for the non-moving party. Matsushita Elec. Indus. Co. 5 v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). When the non-moving party bears the 6 burden of proof, the movant need only demonstrate that there is an absence of evidence to 7 support the claims of the non-moving party. Celotex, 477 U.S. at 322. If the moving party 8 meets this initial burden, the non-moving party must set forth “specific facts showing that 9 there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 10 (1986). 11 A court may only consider admissible evidence in ruling on a motion for summary 12 judgment. Fed. R. Civ. P. 56(e). All inferences regarding credibility must be drawn in the 13 light most favorable to the non-moving party. See T.W. Elec. Serv., Inc. v. Pac. Elec. 14 Contractors Ass’n, 809 F.2d 626, 630–31 (9th Cir. 1987). Still, “conclusory, speculative 15 testimony in declarations or other materials is insufficient to raise genuine issues of fact 16 and defeat summary judgment.” Perez v. Performance Food Grp., Inc., 2017 WL 17 6940526, at *6 (C.D. Cal. Dec. 15, 2017) (citing Thornhill Publ’g Co., Inc. v. GTE Corp., 18 594 F.2d 730, 738 (9th Cir. 1979)). 19 DISCUSSION 20 Plaintiffs move for summary judgment on the meal period claims asserting that (1) 21 Defendants had an obligation to record meal periods and were prohibited from rounding 22 recorded meal periods, (2) Plaintiffs are entitled to a presumption of liability under 23 California law due to Defendants’ rounding of meal periods and failure to record meal 24 periods, and (3) Defendants have failed to rebut the presumption. 25 Defendants seek summary adjudication of (1) the meal period claims, arguing that 26 Plaintiffs are not entitled to any presumption of liability on the meal period claim and, 27 1 otherwise, have failed to offer proof that class members were denied an opportunity to 2 take thirty-minute meal periods; (2) the meal period claim premised on Rohr’s rounding 3 policy, arguing that the employees have not shown how the policy denied employees a 4 full thirty-minute meal period; (3) the overtime cause of action based on the claim that 5 Defendants did not pay wages for work performed during the rounded breaks; (4) the 6 overtime claim that is premised on the alleged miscalculation of six types of 7 compensation for the regular rate; and (5) a wage statement claim that is purportedly 8 barred by the statute of limitations. 9 I. Meal Period Claims 10 California law provides that “[a]n employer may not employ an employee for a 11 work period of more than five hours per day without providing the employee with a meal 12 period of not less than 30 minutes . . . .” Cal. Lab. Code § 512(a). A second meal period 13 is required for shifts lasting longer than ten hours. Id. If an employer fails to provide a 14 meal break as required by law, “the employer shall pay the employee one additional hour 15 of pay at the employee’s regular rate of compensation for each workday that the meal or 16 rest or recovery period is not provided.” Cal. Lab. Code § 226.7(c). But “[p]roof an 17 employer had knowledge of employees working through meal periods will not alone 18 subject the employer to liability for premium pay . . . .” Brinker Rest. Corp. v. Superior 19 Court, 53 Cal. 4th 1004, 1040 (2012). Employers are not required to “police meal breaks” 20 and ensure no work is performed. Id. However, “an employer may not undermine a 21 formal policy of providing meal breaks by pressuring employees to perform their duties 22 in ways that omit breaks.” Id. An employer cannot simply provide an “illusory meal 23 period.” Perez v. Performance Food Grp., Inc., 2017 WL 6940526, at *6 (C.D. Cal. Dec. 24 15, 2017). In sum, “[a]n employer’s duty with respect to meal breaks . . . is an obligation 25 to provide a meal period to its employees. The employer satisfies this obligation if it 26 relieves its employees of all duty, relinquishes control over their activities and permits 27 1 them a reasonable opportunity to take an uninterrupted [thirty]-minute break, and does 2 not impede or discourage them from doing so.” Brinker, 53 Cal. 4th at 1040. 3 If an employer’s time records are incomplete or inaccurate, “a rebuttable 4 presumption arises that the employee was not relieved of duty and no meal period was 5 provided.” Donohue v. AMN Servs., LLC, 11 Cal. 5th 58, 74 (2021). There is a duty to 6 record meal periods unless “operations cease” during the meal period. Cal. Code Regs. 7 Tit. 8, § 11090 (2023). On a plaintiff’s motion for summary judgment, after the 8 presumption is invoked, Defendants carry the burden “to show that a triable issue of one 9 or more material facts exists as to the cause of action or a defense. But Plaintiffs bear the 10 ultimate burden of persuasion to show that no genuine issue of material fact exists and 11 that they are entitled to judgment as a matter of law.” Donohue, 11 Cal. 5th at 79 (cleaned 12 up). 13 A. Cessation of Operations 14 As a threshold matter, Defendants assert that the Donohue presumption does not 15 apply given that they were not required to record meal periods because all operations 16 ceased during meal periods. ECF No. 169 at 8. Plaintiffs move for summary judgment as 17 to this defense, arguing that Defendants “are not excused from the meal period 18 recordkeeping requirements of the applicable Wage Order because all operations did not 19 cease during meal periods throughout [Defendants’] plants.” ECF No. 164 at 2. While 20 both sides offer their interpretation of “operations cease,” neither side provides any 21 caselaw support. Plaintiffs argue that the “operations cease” exception requires the entire 22 plant to cease operations at the same time. ECF No. 164-1 at 14. Defendants contends 23 that this is an absurd interpretation that would render the exception a nullity and that, 24 under a common-sense definition, cessation should be analyzed by work area. ECF No. 25 169 at 9. Under Defendants’ interpretation, the trier of fact simply needs to consider 26 testimony that all work area employees took their breaks together. 27 1 The Court agrees with Defendants that the “operations cease” provision does not 2 require a state-wide or plant-wide shutdown to qualify for the exception. Cal. Code Regs. 3 tit. 8, § 11090 does not establish that operations must cease across an entire floor, 4 department, plant or business. Operations need only cease in a definable work area. 5 Moving on to what “operations cease” means, in Prachasaisoradej v. Ralphs 6 Grocery Co., Inc., the court observed that “[b]ecause the laws authorizing the regulation 7 of wages, hours, and working conditions are remedial in nature, courts construe these 8 provisions liberally, with an eye to promoting the worker protections they were intended 9 to provide.” 42 Cal. 4th 217, 227 (2007). The “operations cease” exception permits an 10 employer to avoid reporting requirements that protect employees’ rights to a full meal 11 break. In Brinker, the court recognized that the burden to show compliant meal periods 12 rests with the employer because “[t]o place the burden elsewhere would offer an 13 employer an incentive to avoid its recording duty and a potential windfall from the failure 14 to record meal periods.” 53 Cal. 4th at 1053 n.1 (Werdegar, J., concurring). The 15 recording exception can only be reconciled with the purpose of the Labor Code and wage 16 orders if it provides safeguards that equal those created by a reporting mechanism. For 17 that to happen, the cessation of operations must be sufficiently definite and provable in 18 every work area to ensure that employees are not denied the means of proving an 19 employer’s denial of full meal breaks. 20 In light of the purpose of recording meal periods, common sense leads to the 21 inescapable conclusion that the “operations cease” exception requires more than a 22 showing that workers took breaks that they were entitled to and, as a result, stopped 23 working. Such an approach would render the recordkeeping requirement a nullity. This 24 tail-wagging-the-dog scenario would effectively deny workers the means to determine (1) 25 whether they have been provided compliant meal periods and (2) the extent of their 26 damages. 27 1 To determine safeguards existed equal those created by a reporting mechanism, the 2 Court approaches cessation through a totality of the circumstances analysis. Here, 3 Defendants offer statements demonstrating that a number of workers took their meal 4 breaks and ceased working. ECF No. 169 at 12–17. Defendants rely on deposition 5 testimony by employees who testify with varying degrees of personal knowledge that 6 they and fellow employees took their meal break at the same time. See, e.g., ECF No. 7 163-3 at 408–10 (Curl Dep.); ECF No. 163-6 at 11 (Walker Dec.); ECF No. 163-6 at 19 8 (White Dec.). Many employees qualified their testimony by stating that “I can’t really say 9 for the entire department.” See, e.g., ECF No. 163-3 at 511. None of the employees 10 testified that work ceased in a given work area because of a Collective Bargaining 11 Agreement provision, company policy, posted orders that required departments to cease 12 operations at particular times, an automated shut down of assembly lines or equipment, 13 training which instructed workers to cease operations in an entire work area, or 14 representative testimony that it was understood by all of the employees in a work area 15 that all work had to cease for a full thirty-minute period. Indeed, several employees, 16 including supervisor Dan Jackson, testified that employees had the option to take their 17 lunches early if they began working before their regularly scheduled shift. ECF No. 163- 18 6 at 43–44. This flexibility tends to undermine Defendants’ cessation argument, because 19 if operations truly ceased during meal periods, then an employee would not be able to 20 work while others in the department were taking lunch, or take lunch while others were 21 working. Instead, this flexibility demonstrates that operations only “ceased” because 22 employees generally took their breaks at the same time. This is not the cessation 23 contemplated by the wage order. 24 To the extent that certain employees agreed with leading questions that the “entire 25 department shut down during meal breaks,” see, e.g., (ECF No. 163-3 at 409–10 (Curl 26 Dep.)), Plaintiffs correctly object that these observations are conclusory, (ECF No. 181 at 27 1 12); see also Fed. R. Civ. P. 56(c)(2). These witnesses provided nothing more than the 2 observation that “everybody in the department took meal period at the same time,” see, 3 e.g., (ECF No. 163-3 at 409–10), and did not establish that everyone took a meal period 4 because operations ceased. As described above, these facts do not demonstrate that 5 operations ceased within the meaning of the wage order. 6 A defense expert, Elizabeth Arnold, evaluated operations in Chula Vista in 2022 7 and observed that operations ceased during meal breaks. ECF No. 163-3 at 772. 8 However, the observations were not made during the class period, were not intended to 9 be representative, and provide minimal support for the position that operations ceased 10 throughout the two Rohr facilities. Id.; ECF No. 164-26 at 8–13. 11 Defendants have failed to produce any evidence of actual cessation outside of 12 employees taking their meal breaks at the same time, and the evidence they have 13 presented, as to employees taking meal periods earlier or later, belies the notion that 14 operations ceased. Defendants’ motion for partial summary judgment based upon the 15 “operations cease” exception is DENIED and Plaintiffs’ motion for partial summary 16 judgment as to the cessation defense is GRANTED. As such, Defendants are foreclosed 17 from pursuing the cessation defense any further, and the Court will continue with its 18 Donohue analysis. 19 B. Whether Employees Had the Opportunity to Take All Meal Breaks 20 In Donohue, the California Supreme Court held that if an employer’s time records 21 are incomplete, inaccurate, or show noncompliant meal periods, “a rebuttable 22 presumption arises that the employee was not relieved of duty and no meal period was 23 provided.” 11 Cal. 5th at 74. This presumption “derives from an employer’s duty to 24 maintain accurate records of meal periods” and prevents an employer from otherwise 25 “avoid[ing] its recording duty” and receiving “a potential windfall from the failure to 26 record meal periods.” Id. (citing Brinker, 53 Cal. 4th at 1053 (Werdegar, J., concurring)). 27 1 “[W]here the employer has failed to keep records required by statute, the consequences 2 for such failure should fall on the employer, not the employee.” Hernandez v. Mendoza, 3 199 Cal. App. 3d 721, 727 (1988). 4 Here, it is undisputed that Defendants did not record first meal periods prior to 5 October 13, 2019. While the rebuttable presumption does not require employers to police 6 meal periods, it does require employers to give employees a mechanism for recording 7 their meal periods and to ensure that employees use the mechanism properly. Donohue, 8 11 Cal. 5th at 77. In this case, there was no mechanism for recording first meal periods at 9 the Riverside facility before 2019 and at the Chula Vista facility through the entire class 10 period. Defendants’ failure to introduce a proper timekeeping mechanism resulted in the 11 creation of an inaccurate and incomplete time record. Plaintiffs’ expert reports that 12 Defendants failed to accurately record 1,040,699 meal periods. ECF No. 164-9 at 7. This 13 is sufficient to trigger the rebuttable presumption. 14 Plaintiffs have presented evidence that starting October 14, 2019, employees at 15 Defendants’ Riverside facility would have their meal periods improperly rounded. ECF 16 No. 105 at 22. For example, an employee at the Riverside facility, who clocked out for a 17 meal break at 11:01 a.m. and clocked back in at 11:28 a.m., would have their meal break 18 automatically rounded to a full thirty minutes, resulting in three minutes of 19 uncompensated time. Id. Plaintiffs’ expert reports that during this time period Defendants 20 improperly rounded 148,237 meal periods. ECF No. 164-9 at 7–8. 21 Defendants argue that Donohue only prohibits rounding to the extent that it masks 22 a noncompliant meal break — namely, where an employer, through their work demands 23 and expectations, requires employees to take a shorter meal break but nevertheless rounds 24 the time entry to appear compliant. ECF No. 163-1 at 14. But this qualification is not 25 found in Donohue. The Donohue court observed that employers may use a timekeeping 26 system which tracks meal period violations as long as the system does not round time 27 1 punches. 11 Cal. 5th at 78. Defendants’ practice of rounding would trigger the 2 presumption of liability without regard to whether the rounding was employed to mask 3 noncompliant meal periods. 4 However, the Donohue presumption does not create automatic liability for 5 employers. Rather, employers have the ability at the summary judgment stage to present 6 evidence “that employees were compensated for noncompliant meal periods or that they 7 had in fact been provided compliant meal periods during which they chose to work.” Id. 8 at 674. “‘Representative testimony, surveys, and statistical analysis,’ along with other 9 types of evidence, ‘are available as tools to render manageable determinations of the 10 extent of liability.’” Id. at 674–75 (quoting Brinker, 53 Cal. 4th at 1054 (Werdegar, J., 11 concurring)). 12 In order to rebut the Donohue presumption, Defendants must prove that they (1) 13 provided a reasonable opportunity to take uninterrupted thirty-minute meal breaks on 14 time; (2) did not impede class members from taking thirty-minute breaks; (3) did not 15 discourage class members from taking thirty-minute meal breaks; (4) relieved class 16 members of all duties during the thirty-minute meal breaks; and (5) relinquished control 17 over class member activities during the thirty-minute breaks. Judicial Council of 18 California Civil Jury Instruction 2766B. 19 To rebut the presumption, Defendants rely on (1) the Collective Bargaining 20 Agreements that provided all union members with a thirty-minute meal break; (2) the 21 relevant Wage Order that was posted inside the Riverside and Chula Vista facilities; (3) 22 the written policy allowing for timely thirty-minute meal breaks as well as a form for 23 employees to report meal period violations; and (4) the provided training on the meal 24 period provisions. In addition, Defendants cite depositions and declarations from twenty- 25 three employees and nine supervisors declaring that Rohr provided all employees in the 26 designated departments with compliant meal periods. See ECF No. 169 at 12–17; 163-2 27 1 at 3–4; e.g., ECF No. 163-3 at 508 (Meza Dep.); ECF No. 163-3 at 480–81 (Winkler 2 Dep.). 3 While “employers do not escape liability simply by having a formal policy of 4 providing meal and rest breaks,” Boyd v. Bank of Am. Corp., 300 F.R.D. 431, 442 (C.D. 5 Cal. 2014), the Court finds that the class-wide evidence relating to the CBAs, meal period 6 policies, training, and absence of any union grievances complaining about noncompliant 7 meal breaks, though not dispositive of the issue, provides a measure of proof in support 8 of rebutting the presumption. The remaining question is whether this class-wide proof 9 coupled with declarations and deposition testimony from employees and supervisors 10 overcomes the presumption. 11 In Donohue, the court reversed a summary judgement for the employer who relied 12 on a policy and training which emphasized that the meal period was an “uninterrupted 30 13 minute” break, during which employees were “relieved of all job duties,” were “free to 14 leave the office site,” and “control[led] the time.” 11 Cal. 5th at 62. The policy further 15 specified that supervisors should not “impede or discourage team members from taking 16 their break.” Id. In addition, the employer submitted declarations from thirty class 17 members who stated that they “always” or “usually” took lunches that were at least thirty 18 minutes long. Id. at 64. No declarant stated that a supervisor had tried to discourage him 19 or her from taking a full or timely meal period and the class representative had certified 20 that he had not been denied meal breaks. Id. These facts closely match those offered by 21 Defendants. The reversal in Donohue would certainly preclude granting summary 22 judgment in favor of Defendants. But a question remains whether this evidence creates a 23 genuine issue of fact that the presumption of liability has been rebutted such that 24 Defendants survive Plaintiffs’ motion for summary adjudication of these issues. 25 Three district courts have addressed the rebuttable presumption in the context of 26 class certification. In Garcia v. Cent. Coast Restaurants, Inc., defendants argued that the 27 1 Donohue presumption had been rebutted through “five declarations from current 2 employees who” stated that missed meal periods were either voluntarily taken or properly 3 compensated. No. 18-CV-02370-RS, 2022 WL 657972, at *6 (N.D. Cal. Mar. 4, 2022). 4 Garcia addressed whether the evidence presented — five declarations — would defeat 5 the Donohue presumption, preventing plaintiff from relying on the presumption as a 6 class-wide theory of liability to support commonality. No. 18-CV-02370-RS, 2022 WL 7 657972, at *6. The court rejected the argument, finding that five declarations could 8 “hardly be considered representative” given the thousands of potential class members and 9 were “insufficient to rebut the Donohue presumption at” the class certification stage. Id. 10 The court reasoned further that because the declarations came from current employees, 11 the declarations could be subject to “bias and coercion.” Id. at *6 n.4.5 Garcia did not 12 directly address the issue presented here, that is, whether five declarations coupled with 13 other evidence could create at least a genuine issue of material fact as to rebuttal of the 14 presumption. See id. 15 In Santillan v. Verizon Connect, Inc., the rebuttable presumption factored into the 16 court’s discussion of predominance. No. 3:21-CV-1257-H-KSC, 2022 WL 4596574, at 17 *12 (S.D. Cal. June 13, 2022). There, defendants presented evidence that their training 18 program and procedures informed employees of their right to a thirty-minute meal period. 19 Id. at *13. Defendants also presented evidence consisting of five declarations from 20 putative class members, that “indicated that they take their full meal periods. Id. The 21 court found that the rebuttable evidence could be considered on a class-wide basis and 22 23 24 5 Although the Court credits that declarations from current Rohr employees could be influenced by bias and coercion, the employee declarants averred and acknowledged that 25 they stood to benefit from Plaintiffs’ class action and provided testimony that “could be 26 against [their] monetary interest as a potential member of the class or representative lawsuits.” See, e.g., ECF No. 163-6 at 14 (Walker Dec.). 27 1 did not defeat predominance. Id. The court concluded that Donohue created common 2 “questions with regard to Verizon’s liability” and certified the meal period class, 3 inherently holding that, at the class certification stage, defendant’s evidence was 4 insufficient to overcome the Donohue presumption. See id. Again, the issue in Santillan 5 was not whether this evidence created a genuine issue of fact on the application of the 6 presumption of liability. 7 Defendants, here, direct the Court to Vega v. Delaware N. Companies, Inc., where 8 the court held that thirty-six declarations in conjunction with the posting of the wage 9 order and inconsistencies in the plaintiff’s declarations were sufficient to rebut the 10 presumption at the class certification stage. No. 1-19CV00484-ADA-SAB, 2023 WL 11 6940198, at *20 (E.D. Cal. Oct. 20, 2023). The court distinguished Garcia, noting that 12 defendants had presented more than the five declarations presented in Garcia. Id. 13 While the Court does not find that Defendants’ proof has rebutted the Donohue 14 presumption, it does find that there is a genuine issue of fact as to whether the 15 presumption has been rebutted. Here, Defendants have presented over thirty witnesses 16 that testify that they always received their first meal breaks, that their meal breaks were 17 often longer than thirty minutes, and that their meal breaks were not cut short by their 18 supervisors. When analyzed alongside Defendants’ CBAs, training, and posted policies, 19 the Court concludes that the Defendants have created at least a genuine issue of fact as to 20 whether the presumption has been rebutted. As a result, the Court DENIES the Plaintiffs’ 21 Motion for Partial Summary Judgment and DENIES the Defendants’ Motion for Partial 22 Summary Judgment as they relate to Defendants’ liability to the First Meal Period Class. 23 C. Second Meal Period 24 Under both AutoTime systems, employees were required to record their second 25 meal period. On multiple occasions, they failed to do so. But that does not absolve 26 Defendants. Although “[t]he rebuttable presumption does not require employers to police 27 1 meal periods,” an employer must do more than provide “employees a mechanism for 2 recording their meal periods.” Donohue, 11 Cal. 5th at 77. They must “ensure that 3 employees use the [timekeeping] mechanism properly.” Id. It follows, then, that an 4 employee’s failure to use timekeeping mechanisms properly does not thwart an 5 employee’s attempts to trigger the rebuttable presumption. For Donohue places the 6 consequences of that “failure . . . on the employer, not the employee.” Id. at 75 (quoting 7 Brinker, 53 Cal. 4th at 1053 n.1 (Werdegar, J., concurring)). 8 Defendants’ failure, to ensure that employees properly recorded their second meal 9 periods, triggers the rebuttable presumption. Fulimeni concluded that in 226,733 shifts 10 lasting between ten and twelve hours and 35,734 shifts lasting more than twelve hours, no 11 second meal period was recorded. ECF No. 163-3 at 1042. Though Defendants tasked 12 union employees with manually recording their second meal period, Defendants retained 13 the burden to ensure proper timekeeping. Donohue does not contain an exception 14 whereby Defendants may shift that burden. See 11 Cal. 5th at 81 (citing Wage Order No. 15 4, §7(A)(3)) (“It is the employer’s duty to maintain accurate time records; the law does 16 not expect or require employees to keep their own time records to uncover potential meal 17 period violations.”). As such, even if employees failed to record time as instructed, the 18 consequences of that failure rest with Defendants, and Fulimeni’s findings as to missed 19 second meal periods are sufficient to trigger the rebuttable presumption. 20 Testimony from employees, that they received compensation for missed second 21 meal periods or voluntarily waived them, does not prevent triggering of the presumption. 22 That is because such information must be “reflected in the employer’s time records.” 23 Donohue, 11 Cal. 5th at 78. “If time records show missed . . . meal periods with no 24 indication of proper compensation, then a rebuttable presumption arises.” Id. For the 25 purposes of determining whether the presumption is triggered, the Court is restricted to 26 the four corners of Defendants’ time records. As Defendants elicited during Fulimeni’s 27 1 deposition, Defendants’ timekeeping records do not reflect the reason behind a missed 2 meal period. ECF No. 163-3 at 651. Defendants concede that there is no common 3 evidence of waiver and that class members would need to be individually examined. ECF 4 No. 162-1 at 28. Thus, because such evidence is not reflected in the time records, the 5 presumption is triggered as to the second meal period claim. 6 Of course, testimony and evidence extrinsic to Defendants’ timekeeping records 7 may be relevant to rebutting the presumption. Donohue, 11 Cal. 5th at 77. Defendants 8 argue that Plaintiffs’ second meal period class fails because Defendants have 9 demonstrated that employees regularly waived their second meal period. Defendants’ 10 meal period policy states that employees who “work more than [ten] hours in a day, but 11 not more than [twelve] hours” may “waive [their] second meal period.” ECF No. 163-3 at 12 196–97. The policy does not discuss waiver for shifts lasting longer than twelve hours. 13 See id. At least some employees, who worked between ten- and twelve-hour shifts, 14 routinely waived their second meal period so that they “could go home earlier.” See, e.g., 15 ECF No. 163-3 at 492 (Winkler Dep.). And it appears that the general waiver practice 16 was to “just [not] take” the second meal period, see (ECF No. 163-3 at 572 (Hernandez 17 Dep.)), and to tell a supervisor orally or in writing, see, e.g., (ECF No. 163-3 at 492 18 (Winkler Dep.), 560 (Meza Dep.)); (ECF No. 163-5 at 10 (Alvarez Dec.), 27 (Burke 19 Dec.), 34 (Cano Dec.)). Defendants’ Human Resources Department explains that if 20 employees did not “manually enter the second meal break,” they would “receive pay for 21 the time spent on the second meal break,” see (ECF No. 163-4 at 10 (Harris Dec.)); (ECF 22 No. 163-4 at 12–13 (Moua Dec.)). Defendants’ written meal policy, employee 23 declarations, and human resources practices, suggest that there was a company-wide 24 practice of waiving second meal periods, either by informing a supervisor orally or in 25 writing, or by simply not inputting any information in the timekeeping system. The Court 26 DENIES both parties’ motions as they pertain to the 226,733 noncompliant shifts taken 27 1 by employees working between ten and twelve hours long, concluding that the evidence 2 is sufficient to raise a genuine issue of material fact as to whether there existed a practice 3 of regularly waiving second meal periods. See Donohue, 11 Cal. 5th at 74. 4 But the same cannot be said for the 35,734 noncompliant shifts taken by 5 employees working more than twelve hours. Defendants did not have a policy of waiver 6 for shifts lasting longer than twelve hours, and the employee declarations they rely upon 7 in the context of the second meal period class, see (ECF No. 169-2 at 4), primarily 8 discuss waiver of shifts lasting between ten and twelve hours, see, e.g., (ECF No. 163-3 9 at 539); (ECF No. 163-5 at 10 (Alvarez Dec.), 27 (Burke Dec.), 34 (Cano Dec.), 38 10 (Cervantes Dec.)). Moreover, Defendants raised their waiver affirmative defense only as 11 to “shifts of more than [ten] but less than [twelve] hours.” ECF No. 35 at 10. The Court 12 finds that Defendants have failed to rebut the Donohue presumption as it relates to shifts 13 lasting longer than twelve hours, and GRANTS Plaintiffs’ Motion for Partial Summary 14 Judgment as it relates to missing meal periods for shifts lasting longer than twelve hours. 15 II. Unpaid and Overtime Wage Class: the “Rounding” Theory 16 In its order dated March 31, 2022, the Court granted class certification for the 17 rounded meal period subclass within the overarching Minimum Wage and Overtime 18 Class. See ECF No. 105 at 15, 22–24. Plaintiffs’ theory of liability is that Defendants’ 19 practice of rounding meal period times to the compliant thirty-minute window, regardless 20 of the time employees clocked in and out for a meal period, caused Defendants to 21 undercompensate employees for time worked. Id. at 22. The Court granted certification 22 of the rounded meal period subclass after finding employees could have been 23 systematically uncompensated. Id. at 24. Defendants argue they are entitled to summary 24 judgment on this claim because Donohue does not create a presumption of time worked, 25 and Plaintiffs have not provided evidence of employee work or that the employees were 26 under employer control during the rounded time. ECF No. 163-1 at 18. 27 1 The Court agrees that the “distinction between meal period violations and time 2 worked is important because each creates different liability.” ECF No. 163-1 at 19. A 3 meal period violation gives rise to a claim for a meal period premium pursuant to 4 California Labor Code § 226.7, and an unpaid wage claim gives rise to a claim for 5 payment of wages for time worked. See Kaanaana v. Barrett Bus. Servs., Inc., 29 Cal. 6 App. 5th 778, 798 (2018). The Court also agrees that Donohue did not presume that an 7 employee worked during a shortened or missed meal period and should be compensated 8 as such. See ECF No. 163-1 at 19. Instead, to receive compensation for alleged unpaid 9 wages under Plaintiffs’ rounded meal period theory, Plaintiffs must demonstrate that, at a 10 minimum, employees were under Rohr’s control during an auto-recorded and rounded 11 meal period. See Morillion v. Royal Packing Co., 22 Cal. 4th 575, 584 (2000) (“Under 12 California law it is only necessary that the worker be subject to the ‘control of the 13 employer’ in order to be entitled to compensation.”); see also Kaanaana, 29 Cal. App. 14 5th at 808 (“Where there is no control, no compensation for ‘hours worked’ is due.”). 15 Here, it is not disputed that at the Riverside facility on October 14, 2019, 16 Defendants began a policy of rounding meal periods. See ECF No. 163-3 at 684–85 17 (Fulimeni Dep.). As a result, there are thousands of rounded meal periods longer than the 18 actual clock-in and clock-out times of employees. To find Defendants liable for unpaid 19 compensation stemming from the rounded meal periods, Plaintiffs must be able to 20 demonstrate that employees were under Rohr’s control and/or performed work during an 21 auto-recorded or rounded meal period. Defendants argue Plaintiffs have no evidence to 22 prove this. ECF No. 163-1 at 19. 23 The Court finds that Plaintiffs have provided some evidence that tends to prove 24 class members performed some work or were under the control of Rohr during an auto- 25 recorded or rounded meal period. Specifically, the Court notes the deposition of 26 Rasheedah Wills. See ECF No. 174-3 at 468. Ms. Wills provided testimony that her 27 1 department did not completely shut down during the lunch hour. Id. at 568. She also 2 testified that managers and supervisors made clear to her and other employees that their 3 “lunch is [thirty] minutes so they expected [them] to be gone for [thirty] minutes and not 4 back in [thirty-two] minutes, not [thirty-three] minutes, and not [thirty-one] minutes. The 5 expectation [was] that [they’re] back in there on time.” Id. at 571. The combination of the 6 fact that the department did not shut down and this overt pressure from supervisors not to 7 return even a minute late to work creates a likelihood that employees were under the 8 control of Rohr once they clocked back in after a lunch break, regardless of whether the 9 full thirty minutes had lapsed. In addition, Donald Hall provided testimony tending to 10 show that he was aware of a number of employees who did not take lunch breaks at all, 11 or full thirty-minute lunch breaks, because “they were asked to [stay through lunch] for 12 production reasons, to help catch up or get something done.” ECF No. 174-4 at 893. 13 Thus, the Court finds that there still exists a genuine issue of material fact as to whether 14 class members were under Defendants’ control during auto-recorded and rounded meals. 15 Accordingly, the Court DENIES summary judgment for Defendants on this claim.6 16 III. Overtime Class: Regular Rate Theory 17 The Court previously certified Plaintiffs’ overtime class on the theory that 18 Defendants allegedly incorrectly calculated employees’ overtime rate by excluding six 19 pay codes from the regular rate calculation. ECF No. 105 at 31. California law states that 20 employees must be paid overtimes wages at a rate of “no less than one and one half times 21 22 6 Defendants also argue that they must be granted summary judgment because any 23 rounding that occurred benefited employees by overcompensating them. See ECF No. 24 163-1 at 21. The Court agrees with Plaintiffs that Defendants’ expert, Daniel Kuang, did not perform analysis on rounding in the meal period context. See ECF No. 173 at 17. Mr. 25 Kuang analyzed pre- and post-shift rounding, which is materially different from rounding 26 in the meal period context. As such, Defendants have failed to produce evidence warranting summary judgment on these grounds. 27 1 the regular rate of pay” for that individual employee. Cal. Lab. Code § 510(a); 8 Cal. 2 Code Reg. § 11199, subd. 3(A)(1). To calculate the “regular rate” for overtime pay, 3 employers must include not only the base rate of pay, but also additional non- 4 discretionary forms of renumeration for that pay period. Ferra v. Loews Hollywood 5 Hotel, LLC, 11. Cal. 5th 858, 868 (2021). “Regular rate of pay, which can change from 6 pay period to pay period, includes adjustments to the straight time rate, reflecting, among 7 other things, shift differentials and the per-hour value of any nonhourly compensation the 8 employee has earned.” Id. (quoting Alvarado v. Dart Container Corp. of Cal., 4 Cal. 5th 9 542, 561 (2018). Essentially, the regular rate is an employee’s total earnings, except 10 statutory exclusions, for the work week divided by the total number of hours worked at 11 all jobs. 29 C.F.R. § 778.115; Huntington Memorial Hosp. v. Sup. Ct., 131 Cal. App. 4th 12 893, 903 (2005) (finding California Labor Code follows federal standard in determining 13 regular rate of pay). The Court granted certification of this subclass, finding that the 14 payroll codes relevant to this question included “SHIFT PREM,” “MERIT LUMP,” 15 “AWARD,” “SPECIAL AWARD,” “GIFT CARD,” and “CTCT SGNBON.” ECF No. 16 105 at 30. 17 A. Whether California Labor Code § 514 Preempts the Regular Rate Theory 18 for Certain Employees 19 Defendants first argue that California Labor Code § 514 preempts the regular rate 20 theory for certain bargaining unit members. ECF No. 163-1 at 22. California Labor Code 21 § 514 states: 22 Sections 510 and 511 [overtime provisions] do not apply to an employee covered by a valid collective bargaining 23 agreement if the agreement expressly provides for the wages, 24 hours of work, and working conditions of the employees, and if the agreement provides premium wage rates for all 25 overtime hours worked and a regular hourly rate of pay for 26 those employees of not less than 30 percent more than the state minimum wage. 27 1 Sections 510 and 511 govern overtime, and courts have found that “the default 2 definition of overtime and overtime rates in section 510 does not apply to an employee 3 who is subject to a qualifying CBA.” Curtis v. Irwin Indus., Inc., 913 F.3d 1146, 1153–54 4 (9th Cir. 2019). Defendants state that it is undisputed that the CBAs for certain 5 employees and certain years provide for “(1) the wages, hours of work, and working 6 conditions of employees (SUF No. 58); (2) premium wage rates for all overtime hours 7 (SUF No. 59); and (3) a regular hourly rate of pay of not less than 30 percent more than 8 the state minimum wage, (SUF No. 60).” ECF No. 163-1 at 22. Plaintiffs respond that § 9 514 preemption could only at most apply to individual damages of certain class members 10 who were subject to some of Defendants’ CBAs. ECF No. 173 at 19. Plaintiffs also argue 11 that Defendants have not shown that the CBAs satisfy the § 514 preemption 12 requirements, namely: (1) a valid CBA; (2) that provides for the wages, hours of work, 13 and working conditions; and (3) provides premium wage rates for overtime hours and a 14 regular hourly rate of pay for those employees of not less than 30 percent more than the 15 state minimum wage. Id. at 20 (citing Martinez v. Omni Hotels Management Corp., 514 16 F. Supp. 3d 1227, 1237 (S.D. Cal. 2021). Plaintiffs assert that Defendants have not 17 presented “any admissible evidence of what Class Members, if any, were bound by the 18 particular CBAs” or any evidence of signed CBAs, the number of employees covered by 19 the CBA, or when the class members were subject to the CBAs. Id. 20 The Court finds that Defendants have met their burden to establish § 514 21 preemption for the following groups of employees: 22 1. The members of the International Association of Machinists bargaining units at 23 Chula Vista and Riverside for the year 2015. See ECF No. 163-3 at 244 (Moua 24 Dep., Exh. E, Riverside CBA); ECF No. 163-3 at 69 (Harris Dep., Exh. 6, Chula 25 Vista CBA). 26 27 1 2. The members of the International Union of Operating Engineers at Chula Vista 2 from the years 2015–2022. See ECF No. 163-4 at 23, 57 (Harris Dec., Exh. A, 3 Chula Vista 2015 CBA); ECF No. 163-4 at 369, 398 (Harris Dec., Exh. E, Chula 4 Vista 2020 CBA). 5 3. The members of the International Association of Machinists (Non-Destructive 6 Technician) at Riverside from the years 2016–2022. See ECF No. 163-4 at 87, 109 7 (Harris Dec., Exh. B, 2016 Riverside CBA); ECF No. 163-4 at 423, 443 (Harris 8 Dec., Exh. F, 2021 Riverside CBA). Although, the minimum wage for the years 9 2021 and 2022 was not above 30% of the state minimum wage, that wage was for 10 non-destructive technician trainees. See ECF No. 163-1 at 23 (129.29% and 11 123.67%, respectively); ECF No. 163-4 at 443. It is undisputed that Defendants 12 employed no non-destructive technician trainees in the years 2021 and 2022. See 13 ECF No. 163-4 at 19 (Harris Dec.); ECF No. 163-2 at 12, SUF No. 64; ECF No. 14 173-1 at 22. However, Defendants have not directed the Court to the CBA for the 15 Chula Vista location for these same years. Thus, the Court DENIES summary 16 judgment as to the Chula Vista employees. 17 These were the years that the respective CBAs evidenced that the lowest applicable 18 hourly wage was more than 130% of the state minimum wage. Thus, Defendants have 19 provided evidence of CBAs that are valid, provided for wages, hours of work, and 20 working conditions of the employees; and provided a regular rate of hourly pay that is at 21 least 1.3 times California minimum wage. As such, the Court finds that Defendants have 22 met their burden to establish § 514 preemption. Plaintiffs present no case law supporting 23 the argument that Defendants must include evidence of the signed CBAs as well as each 24 employees’ individual name. The Court disagrees that Defendants must present the 25 number of employees covered by each CBA or the actual signed CBAs. Accordingly, the 26 27 1 Court GRANTS Defendants summary judgment as to this claim and the above- 2 referenced employees. 3 B. Whether Defendants Properly Calculated the Regular Rate 4 Defendants next argue that they are entitled to summary judgment on the regular 5 rate claim because they correctly calculated the regular rate with regard to five of the pay 6 codes: “SHFT PREM,” “AWARD,” “GIFT CARD,” CTRT SGN BON,” and “SPECIAL 7 AWARD.” The Court discusses each. 8 1. “AWARD,” “GIFT CARD,” AND “SPECIAL AWARD” 9 Defendants argue these codes did not need to be included in the regular rate base 10 pay because they were discretionary bonuses. ECF No. 163-1 at 27-28. According to the 11 California Department of Industrial Relations Guidelines, discretionary bonuses need not 12 be included in calculating an employee’s regular rate of pay. See Cal. Dep’t of Indus. 13 Relations, Overtime.7 A bonus is discretionary “if both the fact that the bonuses are to be 14 paid and the amounts are determined at the sole discretion of the employer at or near the 15 end of the periods to which the bonuses correspond and they are not paid pursuant to any 16 prior contract, agreement, or promise causing the employee to expect such payments 17 regularly.” 29 C.F.R. § 778.211(b). Plaintiffs do not dispute that these bonuses were 18 discretionary. ECF No. 173 at 23–24. 19 “AWARD” was a pay code used in connection with the “UTC Level Awards 20 Program,” a discretionary bonus program. See ECF No. 163-2 at 14 (SUF Nos. 75-77). 21 “GIFT CARD” was a pay code “used to issue discretionary bonuses under Rohr’s Star 22 Awards Program.” ECF No. 163-1 at 27; see also ECF No. 163-2 at 15 (SUF Nos. 78– 23 24 25 7 Available at 26 https://www.dir.ca.gov/dlse/faq_overtime.htm#:~:text=To%20properly%20compute%20 overtime%20on,the%20flat%20sum%20bonus%20earnings. 27 1 80). Last, “SPECIAL AWARD” was a pay code used in 2016 for a discretionary bonus 2 Rohr paid employees from a discretionary pool of funds. ECF No. 163-1 at 29; ECF No. 3 163-2 at 16 (SUF Nos. 84–87). Plaintiffs do not dispute that these payments came from 4 discretionary funds and that there was no contract, agreement, or promise to pay 5 employees under this pay code. ECF No. 173-1 at 27. Plaintiffs also do not dispute that it 6 “was a discretionary bonus Rohr elected to pay without advance criteria or pursuant to 7 any commitment.” Id. 8 All three of these codes were paid “at the sole discretion of the employer.” 29 9 C.F.R. § 778.211(b). These bonuses were not paid pursuant to any “prior contract, 10 agreement, or promise” that would lead the employees to regularly expect the payments. 11 Id. Thus, the Court finds that these three codes were properly excluded from the 12 calculation of the regular rate and GRANTS Defendant summary judgment as to these 13 codes. 14 2. “SHFT PREM” 15 Defendants argue that Rohr included the “SHFT PREM” pay in the regular rate 16 calculation. ECF No. 163-1 at 26. Defendants cite to Plaintiffs’ expert Teresa Fulimeni’s 17 deposition in which she “concedes that Rohr included shift premiums in its regular rate 18 calculation.” Id. (citing ECF No. 163-3 at 686 (Fulimeni Dep.)). Defendants also state 19 that Plaintiff Bevan’s wage statements show that for the pay period of January 6, 2020, to 20 January 19, 2020, shift premiums were calculated in his regular rate of pay. Id. at 26–27. 21 Plaintiffs respond that Bevan’s wage statement is not enough to establish that Defendants 22 properly included “SHIFT PREM” in regular rate calculations. ECF NO. 173 at 23. 23 In her deposition, Fulimeni was asked if she found “any pay periods in [her] pay 24 analysis that showed that . . . shift premiums weren’t included in the regular rate.” ECF 25 No. 163-3 at 686. Fulimeni responded, “I mean I am not sure how many I looked at, but 26 they appear to be included in these examples, yes.” Id. Although it is clear that Fulimeni 27 1 did not examine every single wage statement over the Class Period, Plaintiffs have 2 provided no evidence of a wage statement in which the “SHIFT PREM” pay code was 3 not calculated into the regular rate. Plaintiffs dispute the fact that “Plaintiffs’ expert 4 Fulimeni concedes that Rohr included shift premiums in its regular rate calculation” with 5 argument that it is “[v]ague as to time” and “overbroad.” See ECF No. 173-1 at 24. Yet, 6 Plaintiffs do not direct the Court to any evidence showing even a single wage statement 7 that did not include “SHIFT PREM” in the calculation of the regular rate. Thus, the Court 8 GRANTS Defendants summary judgment as to this pay code. 9 3. “CTRCT SGN BON” 10 Defendants argue “CTRCT SGN BON” is properly excluded from the regular rate 11 calculation under 29 U.S.C. § 207(e)(2) because it is a payment not made as 12 compensation for hours of employment. It is an undisputed fact that this pay code was for 13 a signing bonus paid to all union employees upon ratification of the CBA. ECF No. 163-2 14 at 15. Defendants argue that federal guidelines state that signing bonuses are excludable 15 from regular rate calculation when they are “given to employees with or without 16 clawback provisions . . . as other payments that are not compensation for hours of 17 employment, or otherwise tied to quality or quantity of work performed.” ECF No. 163-1 18 at 28. “However, sign-on bonuses paid pursuant to a CBA, ordinance, or policy with a 19 clawback provision may not be excluded . . . and must be included in the regular rate.” Id. 20 (emphasis added) (quoting U.S. Dept. of Labor, Fact Sheet #56C at 28). Defendants argue 21 the “CTRCT SGN BON” is properly excluded because the CBA does not contain a 22 23 24 8 Available at https://www.fortworthapa.org/wp-content/uploads/2020/01/FS56c- 25 Bonuses.pdf#:~:text=Fact%20Sheet%20%2356C%3A%20Bonuses%20under%20the%2 26 0Fair%20Labor,of%20pay%20under%20the%20FLSA%20for%20non- exempt%20employees. 27 1 clawback provision and the payment was not made for compensation of hours worked or 2 otherwise tied to the quality or quantity of work performed. ECF No. 163-1 at 28–29. 3 Plaintiffs respond that the Fact Sheet cited by Defendants is applicable to “sign-on 4 bonuses” only, and sign-on bonuses are distinct from the signing bonuses at issue here. 5 ECF No. 173 at 24. They argue that “sign-on bonuses” are made to new employees as an 6 incentive to start employment. Id. (citing Loewen v. Lyft, Inc., 129 F. Supp. 3d 945, 950 7 (N.D. Cal. 2015)). By contrast, the signing bonus here was a bonus paid to all employees 8 covered by the applicable CBA at the time of ratification. Id. Plaintiffs argue Defendants 9 have cited no controlling authority that states that the contract signing bonus in this case 10 should be excluded from the regular rate of pay calculation. Id. 11 The Court finds that the signing bonus in this case is properly excluded from the 12 regular rate calculation under 29 U.S.C. § 207(e)(1). Specifically, the signing bonus was 13 a reward to mark the ratification of the CBA. ECF No. 163-2 at 15 (SUF No. 81). As 14 such, the Court views this as a gift made on a “special occasion[], as a reward for service, 15 the amount[] of which [was] not measured by or dependent on hours worked, production, 16 or efficiency.” 29 U.S.C. § 207(e)(1). Thus, the Court GRANTS Defendants’ summary 17 judgment as to the “CTRCT SGN BON” pay code. 18 C. Whether the LMRA Preempts the Regular Rate Theory Based on the 19 “MERIT LUMP” Payments 20 Last, Defendants argue the Labor Management Relations Act (“LMRA”) § 310 21 preempts any state law claim that is for a violation of the CBA. ECF No. 163-1 at 24. 22 Defendants argue that Plaintiffs’ claim based on the pay code “MERIT LUMP” is really a 23 claim for a violation of the CBA and thus is preempted by the LMRA. Id. at 24-25. 24 Plaintiffs respond that preemption does not apply because the state law claim can be 25 resolved without interpreting the CBA. ECF No. 173 at 22. 26 27 1 “Section 301(a) provides federal jurisdiction over ‘[s]uits for violation of contracts 2 between an employer and a labor organization.’” Young v. Anthony’s Fish Grottos, Inc., 3 830 F.2d 993, 997 (9th Cir. 1987) (quoting 29 U.S.C. § 185(a)). “The preemptive force of 4 section 301 is so powerful as to displace entirely any state claim based on a collective 5 bargaining agreement, and any state claim whose outcome depends on analysis of the 6 terms of the agreement.” Id. Section 301 “does not preempt a claim alleging state law 7 substantive rights that apply without regard to a CBA and can be resolved without 8 interpreting a CBA.” Gregory v. SCIE, LLC, 317 F.3d 1050, 1052 (9th Cir. 2003). Courts 9 in the Ninth Circuit apply a two-step test to determine section 301 preemption: (1) 10 whether the right at issue exists solely as a result of the CBA; and (2) if the right exists 11 independently of a CBA, whether the right is “substantially dependent on analysis of a 12 collective-bargaining agreement.” Burnside v. Kiewit Pac. Corp., 491 F.3d 1053, 1059 13 (9th Cir. 2007) (quoting Caterpillar, Inc. v. Williams, 482 U.S. 386, 394 (1987)). 14 The “MERIT LUMP” pay code was used to reference “the annual 2.5% base rate 15 increase to employees in non-destructive testing inspector or trainee positions whose base 16 rate exceeded the maximum base rate for the position.” ECF No. 163-1 at 25 (citing ECF 17 No. 163-2 at 13 (SUF No. 67)). Defendants argue the “MERIT LUMP” pay code passes 18 the two-step test articulated above for Section 301 preemption because the right at issue 19 exists solely as a result of the CBA, and thus is preempted, (ECF No. 178 at 11), and 20 Plaintiffs’ claim depends on an analysis of the collective bargaining agreement. ECF No. 21 163-1 at 25. 22 As to step one of the Burnside test, the Court finds Defendants’ argument 23 misplaced. Although the “MERIT LUMP” pay code itself solely exists because of the 24 CBA, the right to proper overtime compensation and the correct regular rate calculation 25 exists independently of the CBA and is a matter of state law. See e.g., Burnside, 491 F.3d 26 at 1060–1061 (finding that the right to be compensated for employer-mandated travel 27 1 exists as a matter of state law). Thus, “on this initial basis . . . the employees’ claims are 2 not preempted.” Id. at 1061. 3 In step two of the Burnside test, the Court must assess if the right is “substantially 4 dependent on analysis of a collective-bargaining agreement.” Id. at 1059. To determine 5 this, the Court should “decide whether the claim can be resolved by ‘look[ing] to’ versus 6 interpreting the CBA.” Id. at 1060 (quoting Livadas v. Bradshaw, 512 U.S. 107, 125 7 (1994)). If the Court can simply “look to” the CBA without interpreting the terms of the 8 CBA, the claim is not preempted. Id. The “‘simple need to refer to bargained-for wage 9 rates’ is not enough to warrant preemption.” Id. (quoting Livadas, 512 U.S. at 125). 10 Here, Plaintiffs’ claim requires determining whether the “MERIT LUMP” 11 compensation should have been included in the determination of the regular rate. As 12 discussed above, this requires determining whether the pay code was tied to hours 13 worked or whether it was a discretionary gift payment made to employees. The answer to 14 this question would require the Court to do more than merely “look to” the CBA. The 15 Court must instead interpret the terms of the CBA to determine the purpose of the pay 16 and whether it is fairly included in the regular rate calculation. See also Firestone v. 17 Southern Cal. Gas Co., 219 F.3d 1063, 1066 (9th Cir. 2000) (stating it could not be 18 determined whether plaintiffs were receiving a “premium wage rate” for overtime under 19 the CBA without interpreting the terms of the agreement). Accordingly, the Court 20 GRANTS summary judgment in favor of the Defendants and finds that the state law 21 claim is preempted because the resolution of how the “MERIT LUMP” pay code should 22 be considered requires interpretation of the CBA. 23 IV. Wage Statement Claim: Statute of Limitations 24 Defendants next argue they are entitled to summary judgment on Plaintiffs’ wage 25 statement claim because it is time barred by the one-year statute of limitations. ECF No. 26 163-1 at 29. Defendants argue that Plaintiff Bevan did not receive any wage statements 27 1 || with three specific “confusing pay codes” within the year prior to the filing of the lawsuit. 2 || /d. at 29-30. Plaintiffs respond that the three pay codes discussed in Defendants’ Motion 3 in the Court’s Class Certification Order are not an exhaustive list, and that confusing 4 || pay codes have been used since initiation of this lawsuit. ECF No. 173 at 25. 5 The Court agrees with Plaintiffs. In its Class Certification Order, the court did not 6 || intend to include an exhaustive list of the “confusing” pay codes. The Court simply 7 || certified a class based on Defendants’ alleged failure to provide earnings statements that 8 allowed employees to “promptly and easily determine” the hours worked and the 9 || applicable pay code, as is required by the Labor Code. ECF No. 105 at 42. Defendants 10 || only reference three specific pay codes—"OT3Rdshf@1.5”; “Reg 3" Shift”, and 11 “Ot3Rdshf@2x”—however, the Court did not purport to certify the class based only on 12 these three pay codes. They were simply examples of Defendants’ payroll practice. 13 || Accordingly, the Court DENIES Defendants’ summary judgment on the wage statement 14 || claim.’ 15 CONCLUSION 16 For the reasons above, the Court GRANTS IN PART and DENIES IN PART 17 || Defendants’ Motion for Summary Judgment. The Court GRANTS IN PART and 18 || DENIES IN PART Plaintiffs’ Motion for Summary Judgment. 19 IT IS SO ORDERED. 20 || Dated: December 20, 2023 <= 22 United States District Judge 23 24 || ————_ 25 Because the Court denies summary judgment on the wage statement claim, the Court 26 ||also DENIES summary judgment on the derivative wage statement violations because the underlying claim remains. See ECF No. 163-1 at 30. 31 28 20-cv-574-GPC-AHG