Thursday, July 19, 2012

Two Trucking Related Wage Opinions of Note: Quezada v. Con-Way Freight, Inc. and Clayton v. Knight Transp., Inc.

On July 11, 2012, Northern District Court Judge, James Ware, granted a plaintiff-side summary judgment in Quezada v. Con-Way Freight, Inc., 2012 U.S. Dist. LEXIS 98639, 21 (N.D. Cal. July 11, 2012), finding that the defendant’s practice of paying employee truck drivers on a per-mile basis, without providing additional compensation for other required non-driving tasks, violated California law.  As held by the Court, “the California Labor Code requires employees to be paid an hourly rate for all time performing tasks other than driving” [See id., at 21], because “when employees are required to perform a task that precludes them from earning piece-rate compensation, they must be directly compensated for that time.”  See id., at 19.  Significantly, in making this determination, the Court rejected the proposition that an employer can simply assert that that piece rate funds can be spread out to compensate employees for all compensable, non-piece rate tasks:
Upon review of these authorities and the language of the pertinent provisions of the Labor Code, the Court finds that California law does not allow an employer to "build in" time for non-driving tasks into a piece-rate compensation system. Although Armenta is factually distinguishable from this case in that it considered a payment system based only on hours, the Court finds that it is nonetheless applicable, and stands for the proposition that employees must be directly compensated for all time worked. n20 The well-reasoned opinions of both the Ontiveros and Cardenas courts further support this interpretation. This interpretation is also supported by the DLSE opinion letter, which expressly precludes the possibility of allowing time to go uncompensated when employees cannot earn piece-rate compensation for a given task.
See Quezada, 2012 U.S. Dist. LEXIS 98639, at 18-19.

On July 15, 2012, Eastern District Magistrate Judge, Dennis L. Beck, entered an order in Clayton v. Knight Transp., Inc., 2012 U.S. Dist. LEXIS 98459 (E.D. Cal. July 15, 2012), recommending certification of labor code claims brought on behalf of a class of individuals who failed to receive minimum wage compensation for approximately 19 hours of time spent in standardized new hire “orientation” classes.  The defendant’s effort to defeat certification by injecting a dispute as to its status as an “employer” was deemed incapable of undermining the element of predominance, as the facts underpinning plaintiff’s theory of liability and the issue of defendant’s status as an “employer” both turned on the issue of “control”, which the Court concluded could be established based on identical evidence common to the class as a whole:
The parties argue extensively about which test the Court should ultimately apply to determine whether those who attended orientation are employees. The Court need not decide the test at this point, however. Regardless of the test used, individual issues do not predominate. Defendant would have this Court believe that employment status cannot be determined on a non-individualized basis, but for the reasons discussed above, common questions of law and fact predominate.  In other words, for attendees attending classroom orientation, employment status can be determined on a group-wide basis because the relevant facts are the same for the group. Defendant exerted control over the times and places of orientation and the daily schedule, and the time spent at orientation was generally consistent. n3 Similarly, assuming attendees are employees, the consistency in time spent at orientation will allow for determination of whether the employees would be entitled to minimum wage. See eg., Ortega v. J.B. Hunt Transport, 258 F.R.D. 361 (C.D. Cal. 2009).
See Clayton, 2012 U.S. Dist. LEXIS 98459, at 17-18.

Tuesday, July 10, 2012

Northern District Concludes that Employer May Not Avoid Class Liability Because At-Issue Policies Only Withheld Overtime Compensation in Amounts Less Than $0.50: Provine v. Office Depot, Inc.

On July 6, 2012, Northern District Judge, Susan Illston, entered an order in Provine v. Office Depot, Inc., 2012 U.S. Dist. LEXIS 93881 (N.D. Cal. July 6, 2012), denying a defense summary judgment and granting certification of various wage claims arising out of a $50 bonus award drawing conducted by Office Depot at each of its California stores each month.  The plaintiff’s theory of liability alleged that the fixed amount and monthly award of the bonus rendered it non-discretionary, and thereon, a necessary component of the employee’s “regular rate” for purposes of computing overtime compensation.  What makes the Court’s opinion in this case particularly interesting is that the named Plaintiff only sustained $0.23 of unpaid overtime for the month which he was awarded the bonus, which Office Depot attempted (albeit unsuccessfully) to use as grounds for summary judgment and/or denial of certification of plaintiff’s overtime and section 203 waiting time penalty claims.

In addition to concluding that the “awards are not ‘discretionary’ under the California Labor Code because the amount of payment was known to all employees in advance” [Provine, 2012 U.S. Dist. LEXIS 93881, at 13], the Court also rejected Office Depot’s argument that the amount of overtime wages owed were de minimis as a matter of law because the amount at issue with regard to the named plaintiff was less than fifty-cents.  Id., at 13-17.  Moreover, the Court declined to rule on Office Depot’s challenge to Plaintiff’s section 203 claim on the grounds that the ratio of damages to penalty rendered the waiting time penalty claim unconstitutional.

In granting certification, the Court concluded that variations in the standards for awarding the bonus at the various Office Depot stores was immaterial to certification, as commonality / predominance of “the claims for which plaintiff seeks certification hinge on whether defendant was required to include Bravo Awards in employees' regular rate of pay to calculate overtime.”  See id., at 25-27, 29.  According to the Court, the uniformity of this question was sufficient to render class adjudication superior (notwithstanding the defendant’s various challenges based on the small value of the named plaintiff’s claim).  Id., at 33-34.

Based on the totality of the forgoing, the instant opinion stands for the general proposition that failure to pay as little as $0.23 in wages is not only sufficient to state a legally viable overtime and waiting time penalty claim, but that such small value claims may withstand challenges regarding superiority.