Friday, May 24, 2013

Third District Order’s Rest Period Claim To Be Certified Based on Employer’s Use of Unlawful “Piece Rate” Policy: Bluford v. Safeway Stores

On May 24, 2013, the Third District ordered publication of the rest period component of its opinion in Bluford v. Safeway Stores, __ Cal.App.4th __ (2013), which addressed the trial court’s denial of certification based on a purported lack of predominance. In finding that that the trial court erred, the Court followed the lead of various Federal District Court opinions to hold that California law categorically prohibits “piece rate” compensation policies which fail to separately compensate employees for rest period time:
[C]ontrary to Safeway’s argument, a piece-rate compensation formula that does not compensate separately for rest periods does not comply with California minimum wage law. (See Reinhardt v. Gemini Motor Transport (E.D. Cal. 2012) 869 F.Supp.2d 1158, 1168 [piece-rate pay system that did not separately pay truck drivers for non-driving duties violates California law requiring compensation for each hour worked]; Cardenas v. McLane FoodServices, Inc. (C.D. Cal. 2011) 796 F.Supp.2d 1246, 1252 [piece-rate pay system that did not separately pay truck drivers for non-driving duties and rest periods violates California law requiring compensation for each hour worked].)
See Slip Opinion, at 9 ¶1. 

In reaching this conclusion, the Court extended the analysis in Armenta v. Osmose, Inc., (i.e. that employers have an obligation to compensate employees for “non-productive” time) to cover “rest period” time, which under subpart 12 of the Wage Orders, cannot result in a “deduction of wages”:
However, under the rule of Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314, 323 (Armenta), rest periods must be separately compensated in a piece-rate system.  Rest periods are considered hours worked and must be compensated. (Cal. Code Regs., tit. 8, §§ 11070, subd. 12; 11090, subd. 12.) Under the California minimum wage law, employees must be compensated for each hour worked at either the legal minimum wage or the contractual hourly rate, and compliance cannot be determined by averaging hourly compensation. (Ibid.; Sheppard v. North Orange County Regional Occupational Program (2010) 191 Cal.App.4th 289, 297, fn. 5.).
See Slip Opinion, at 8 ¶4.

Boiled to its essence, the Bluford opinion stands for the proposition that because rest period time is by definition time that precludes the employee from completing the compensable “piece rate” event (i.e. it is time away from the task, which affirmatively precludes completion of the task), rest period compensation cannot be “lumped-in” as a component of a piece-rate task under California law.  This is a legal theory which I personally obtained certification on last year, and having this opinion would have been great, as the Court’s analysis directly examines the rest period issue, unlike the Federal District Court opinions that currently exist.

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