calwages.com

Posts Tagged ‘San Diego’

Southern District Holds That Compensation Received But Later Forfeited Under Cliff Vesting Schedule in Mandatory Investment Plan, Are Not Unpaid Wages

In Securities, Wages on September 16, 2010 at 6:40 pm
LONDON - APRIL 17:  The company logo is displa...
Image by Getty Images via @daylife

In Callan v. Merrill Lynch & Co., Inc., No. 09 CV 0566 BEN (BGS), 2010 WL 3452371 (S.D. Cal. Aug. 30, 2010) (slip op.), the Southern District held that compensation plans that contained cliff vesting schedules in which awards are forfeited if employment terminates before the awards are vested did not constitute unpaid wages under the Labor Code.

Facts

Former employees of the Defendants Merrill Lynch & Co., Inc. and Merrill, Lynch, Pierce, Fenner & Smith, Inc. participated in three of Merrill Lynch’s employee compensation packages.  Id. *1. Plaintiffs alleged they were required to accept part of their wages in the form of “awards” under the plans. Id. Plaintiffs alleged the plans contain forfeiture provisions that constitute unlawful conversion and violate California’s Labor Code and Unfair Competition Law. Id. Read the rest of this entry »

Advertisements

Second District Holds That Hotel Service Charge Reform Ordinance Is Not Preempted by Labor Code’s Tip Provisions

In Preemption, Tips on September 9, 2010 at 7:09 am
Cute toiletries at Four Points by Sheraton
Image by drcw via Flickr

Yesterday, the Second District issued an opinion addressing the validity of the Hotel Service Charge Reform Ordinance (Ordinance) enacted by the City of Los Angeles, which requires non-unionized hotels in the Century Corridor near Los Angeles International Airport (LAX) to pass along mandatory service charges to workers who render the services for which the charges have been collected.  Garcia v. Four Points Sheraton LAX, et al., Nos. B210720, B210716, B210719, B210726, B210730, — Cal. Rptr. 3d —-, 2010 WL 3491954 (Cal. Ct. App. 2d Dist. Sept. 8, 2010). Read the rest of this entry »

Waiting Time Penalty Under Labor Code Section 203(a) Should Be Calculated Based on Actual Hours Worked

In Waiting Time Penalties on August 15, 2010 at 1:46 am

Image by mdid

The Fourth District issued an unpublished opinion discussing the proper means of calculating the waiting time penalty under Labor Code section 203.  In Riley v. Valencia, 2010 WL 3195816 (Cal. Ct. App. 4th Dist. Aug. 13, 2010), the trial court utilized the actual hours the employee worked to calculate the penalty.  The employee, Ashley Riley, contended the trial court improperly calculated the section 203 waiting time penalty, arguing that the court should have multiplied her hourly rate ($6.75) for 30 days at eight hours per day for a total penalty of $1,620, as opposed to multiplying her hourly rate ($6.75) by her average daily hours worked (3.5 hours) for 30 days for a total penalty of $708.75.  Riley contends that section 203 required the trial court to use eight hours per day in its calculations, even though Riley actually worked only three to four hours per day.

The Fourth District concluded the trial court properly calculated the penalty and affirmed the judgment.

Facts

Riley bused tables for employer Valencia (doing business as La Carreta Mexican Restaurant). Eventually, Riley left or was discharged from her employment and filed suit against Valencia for waiting time penalties for unpaid wages due, among other employment-related causes of action. The trial court found in favor of Riley pursuant to section 203 and made the following calculations: “a. Penalty for failure to pay all wages due upon discharge: 6.75 x 3.5 = 23.625 x 30 = $708.75.”

Issue

The sole issue facing the Fourth District was whether the trial court properly calculated the waiting time penalty pursuant to section 203 where it used Riley’s actual hours worked, instead of a generic eight-hour work day, to calculate the “wages” of the employee at the “same rate” pursuant to Labor Code § 203(a).

Because section 203 does not explicitly define “same rate,” Riley contends the waiting time penalty calculus should rely on section 510, subdivision (a)’s definition of a day’s work: “Eight hours of labor constitutes a day’s work.” We conclude the trial court properly calculated the waiting time penalty because the trial court averaged Riley’s daily pay rate ($6.75 x 3.5 hours) and applied that number ($23.625) to reach the correct penalty result of $708.75.

Section 203(a) states:

If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment.”

The court concluded that “same rate” as used in Section 203(a) means the “employee’s actual daily wage and does not refer to an arbitrary daily wage based on a standard eight-hour workday.”  Id. *2.

Following the plain meaning of section 203, California courts have consistently construed the “same rate” variable of the waiting time penalty calculus to consist of the ratio of dollars per hours actually worked. (Mamika v. Barca (1998) 68 Cal.App.4th 487, 490; Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 7-8; Oppenheimer v. Sunkist Growers, Inc. (1957) 153 Cal.App.2d Supp. 897, 898-899.) Courts take this “daily wage” and multiply it by up to 30 days, thereby yielding the waiting time penalty. (Mamika, at p. 490; Barnhill, at pp. 7-8; Oppenheimer, at pp. Supp. 898-899.)

Following this authority, we also conclude that section 203, subdivision  (a) means exactly what it says that “the wages of the employee shall continue … at the same rate” for up to 30 days. Here, the trial court correctly calculated the waiting time penalty because the employee’s “same rate” plainly refers to the employee’s actual daily wage and does not refer to an arbitrary daily wage based on a standard eight-hour workday. (Mamika v. Barca, supra, 68 Cal.App.4th at pp. 492-493.) This interpretation has been utilized by California courts since at least 1957, and as early as 1909 in other state courts interpreting similar statutes. (Oppenheimer v. Sunkist Growers, Inc., supra, 153 Cal.App.2d at pp. Supp. 898-899; St. Louis, I.M. & S.R. Co. v. Bryant (1909) 92 Ark. 425 [122 S.W. 996].) Riley does not cite, nor have we found, any case law supporting her contention that section 203 requires trial courts to calculate the waiting time penalty with a fixed eight-hour workday.

Plaintiff contended that the court should import section 510(a) statement that eight hours of labor constitutes a “day’s work” into section 203’s waiting time penalty calculation.  But the court concluded that section 510(a) “applies to overtime pay rates and thus is not applicable to section 203’s waiting time penalty calculation”.  The court noted that “neither a ‘day’s work,’ nor ‘an 8 hour workday,’ nor any reference to section 510 appears in section 203.”  Id. *2.  The court found that section 203(a) requires “employee-specific calculations because it refers to ‘the wages of an employee’ or the employee’s wage per the employee’s hours worked.”

Judges and Attorneys

The appeal was taken from a judgment of Hon. Eddie C. Sturgeon, the Superior Court of San Diego County.

Justice Gilbert Nares wrote the opinion, with Justices Patricia D. Benke and Cynthia Aaron concurring.

Scott A. McMillan of The McMillan Law Firm, APC in La Mesa, CA represented Plaintiff and Appellant.

Marc Howard Mandelblatt of the Law Offices of Marc Mandelblatt in San Diego, CA represented Defendant and Respondent.

By CHARLES H. JUNG

Enhanced by Zemanta

S.D. California Certifies 23(b)(3) Class of Newspaper Home Delivery Carriers

In 23(b)(3) Class, Class Actions, Employee/Independent Contractor on August 4, 2010 at 8:14 am
Galveston, Texas, 1943. Newspaper delivery boy...
Image via Wikipedia

In another case involving an employer’s attempt to contract around a putative employer/employee relationship, the Southern District of California certified a 23(b)(3) class of newspaper home delivery carriers.  Dalton v. Lee Publications, Inc., 2010 WL 2985130 (S.D. Cal. July 27, 2010) (slip op.).

Defendant Lee Publications, doing business as North County Times (“NCT”), operates the North County Times, a newspaper of general circulation in the San Diego area. Plaintiffs are current and former home-delivery newspaper carriers for NCT.

The class was defined as “[a]ll persons presently and formerly engaged as newspaper home delivery carriers by LEE PUBLICATIONS, INC. and for the North County Times newspaper in the State of California during the period from and including April 18, 2004, through and including the date of trial set for this action, and who, as a condition of such engagement, signed a written agreement for the home delivery of newspapers, which categorized them as independent contractors and not employees.”  Id. at *1, n.1.

Each class member has signed contracts with NCT that contained provisions regarding the carriers’ primary duties, rate of pay, liabilities, penalties, and expense reimbursement, among other things.  All the contracts stated that the carrier “is an independent contractor, is not an employee or agent of the Company, and is not subject to the Company’s direction or control.” And either party may terminate the contract without cause with thirty-days notice, or for cause without notice. The Court examines the contracts in more detail below.

The Court described the Plaintiff’s Tasks as follows:

Plaintiffs deliver the North County Times to the homes of subscribers. Each morning, the newspaper carriers arrive at one of several distribution centers in San Diego County. The carriers arrive at different times. Although they generally arrive between 1:00 a.m. and 4:00 a.m., some arrive earlier or later. The arrival time varies depending on the day of the week.

The carriers are contractually obligated to deliver the assembled newspapers by 6:00 a.m. each weekday and 7:00 a.m. on Saturday and Sunday.

Upon arrival, the carriers are responsible for assembling the newspapers. Some assemble the papers at the distribution center-those that use the distribution center pay a rental fee-and others assemble the papers elsewhere. Assembling the newspapers may involve folding or inserting the following: newspaper inserts, sections, pre-prints, samples, supplements and other products at NCT’s direction. The carriers pay for their own rubber bands and plastic bags used to assemble the papers. Some carriers buy the rubber bands and bags from Defendant, and others purchase them elsewhere. The carriers also pay for their own gas and automobile expenses they incur delivering the newspapers.

Id. at *1.

In analyzing whether the primary factor in determining the employee-employer relationship, the right to control, is susceptible to common proof, the court found that the class members are all home-delivery newspaper carriers who work, or used to work, for Defendant. They all did the same job. Although there are differences between them, which Defendant lists in detail, whether they are independent contractors or employees is still susceptible to common proof.  Thus, the Court found that common questions predominate on this issue.

Defendant argued that calculating damages on each of Plaintiffs’ causes of action would require individualized proof. The court rejected this argument stating that “although calculating damages is generally an individualized task, the Court finds that calculating them here would not require so much individualized analysis to defeat certification. That is mainly because Defendant has kept extensive records.”  Id. at *7.  The Court concluded that the “calculation of the [damages] for each individual [carrier], if necessary, will likely be fairly mechanical.”  Id. at *8.

Thus, the Court certified the Rule 23(b)(3) class.

By CHARLES H. JUNG

Enhanced by Zemanta