JEFFERSON v. CPC LOGISTICS, INC., ET AL.
DEMURRER TO FIRST AMENDED COMPLAINT
MOTION TO STRIKE PORTIONS OF FIRST AMENDED COMPLAINT
TENTATIVE RULING
Overrule demurrer in full; deny motion to strike; Defendants to answer within thirty (30) days
DISCUSSION
I. Background
Plaintiff Kevin Jefferson brought this individual and putative class action against his employers, Defendants CPC Logistics, Inc. and CPC Parts Delivery, LLC (collectively, ?CPC?), and against his former Operations Manager, Andrew Pate. Plaintiff, an African-American who was employed by CPC as a truck driver, alleges that he was subject to harassment, retaliation, and discrimination culminating in his March 1, 2013 termination. [FAC, ?32.] Plaintiff also alleges that he suffered from physical disabilities, of which the Defendants were aware, but which Defendants did not accommodate. Ultimately, Plaintiff alleges he was terminated effective March 1, 2013 for the false reasons of theft of company time by willful falsification of logs/manifests, which reasons allegedly constitute a pretext for unlawful harassment, retaliation, and discrimination. [FAC, ?45.] A series of events led to the Employer Defendants replacing Plaintiff with a less experienced, younger Hispanic/Latino driver at a lower wage rate following Plaintiff?s termination. [FAC, ?47.]
Plaintiff alleges that the Employer Defendants harassed, discriminated, and retaliated against Plaintiff based on his age, color, disabilities, engagement in protected activity, family care or medical leave, and medical conditions, retaliated against him for exercising his rights under the Fair Employment and Housing Act (?FEHA?), failed to prevent and correct discrimination and harassment, and retaliated against him for complaining about his working conditions. [FAC, ?48.] As a result, Plaintiff alleges he was denied a good faith interactive process, denied a work environment free of discrimination and/or retaliation, denied reasonable accommodation, and was terminated. Plaintiff?s termination was unlawful and retaliatory in violation of the FEHA and the Cal. Lab. Code, as well as other statutes, public policy, and common law principles. [Id.]
In addition to the allegations pertinent to the individual claims, Plaintiff alleges class claims. Plaintiff alleges that the Employer Defendants in the past, and/or on a continuing basis violated wage and hour laws, including but not limited to engaging in various unlawful conduct (including, inter alia, failing to pay and timely pay wages for all hours worked; failing to pay premium pay for meal periods, even when meal periods are not taken; failing to keep accurate records of time worked; failing to provide first and second meal periods; failing to pay premium pay for rest break violations; failing to provide and authorize timely paid rest periods; and violating Labor Code ?226?s pay stub requirements. [FAC, ?49.]
Based on these allegations and the other allegations more fully set forth in the FAC, Plaintiff alleges the following causes of action:
1. Violations of the Labor Code (Labor Code ?? 98.6, 98.7, 232, 232.5, 1102.5(c), 2856, 6310, 6311) (INDIVIDUAL CLAIM);
2. Wrongful Termination in Violation of Public Policy or Statute (INDIVIDUAL CLAIM);
3. Harassment Based on Age, Race, Color, Medical Conditions, and Actual and Perceived Physical Disabilities (Government Code ? 12940(j)) (INDIVIDUAL CLAIM);
4. Discrimination and Retaliation Based on Age, Race, Color, Medical Conditions, and Actual and Perceived Physical Disabilities (Government Code ??12940(a), 12940(h)) (INDIVIDUAL CLAIM);
5. Failure to Accommodate (Government Code ? 12940 (m)) (INDIVIDUAL CLAIM);
6. Failure to Engage in the Interactive Process (Government Code ? 12940(n)) (INDIVIDUAL CLAIM);
7. Failure to Prevent Discrimination and Harassment (Government Code ?12940(k)) (INDIVIDUAL CLAIM);
8. Defamation (INDIVIDUAL CLAIM);
9. Failure to Pay Statutorily Mandated Wages (INDIVIDUAL AND CLASS CLAIM);
10. Failure to Provide Adequate Meal Periods or Proper Compensation in Lieu Thereof (INDIVIDUAL AND CLASS CLAIM);
11. Failure to Provide Rest Periods or Proper Compensation in Lieu Thereof (INDIVIDUAL AND CLASS CLAIM);
12. Failure to Indemnify and Reimburse Expenditures and/or Losses (INDIVIDUAL AND CLASS CLAIM);
13. Failure to Furnish Accurate Itemized Wage Statements (INDIVIDUAL AND CLASS CLAIM);
14. Failure to Keep Accurate Payroll Records (INDIVIDUAL AND CLASS CLAIM);
15. Waiting Time Penalties; (INDIVIDUAL AND CLASS CLAIM);
16. California Labor Code Private Attorney General Act (INDIVIDUAL AND REPRESENTATIVE CLAIM); and
17. Unlawful, Unfair, and Fraudulent Activity (Business and Professions Code ? 17200) (INDIVIDUAL AND CLASS CLAIM).
The CPC Defendants have demurred to the 9th, 10th, 11th, 13th, 14th, 15th, and 16th causes of action. The CPC Defendants have also moved to strike portions of the 17th cause of action (erroneously labeled as the 16th cause of action in the caption) at ?222, stating ?[Cal. Lab. Code ??] 201-202, 204, 210, 218.5, 218.6, 226, 226.3, 226.7, 510, 512, 558, 1174(c), 1174(d), 1174.5, 1194, 1194.5, and.?
II. Request for Judicial Notice
Defendant?s request judicial notice is granted as to Exhibit C pursuant to Evidence Code ?452(d), as this is an order of a court of the United States, and is subject to judicial notice under this section. The request is granted as to the existence of Exhibits A and B. The Court may take judicial notice of the ?existence of a document.? StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn.9. ?When judicial notice is taken of a document, however, the truthfulness and proper interpretation of the document are disputable.? Id. Accordingly, the Court?s order granting judicial notice does not in any way rely on the truthfulness of these agreements and recognizes that the interpretation of the document is disputable.
III. Demurrer
Defendants seek an order sustaining their demurrer to the 9th, 10th, 11th, 13th, 14th, 15th, and 16th causes of action. There are a number of different bases for the demurrer. These are taken in turn.
a. Demurrer to 10th and 11th causes of action based on the existence of the CBA
Defendants claim that the causes of action for meal and rest break violations (the 10th and 11th causes of action) are not viable, since Labor Code ?512(e) exempts from ?512(a)?s requirements employees subject to a collective bargaining agreement (?CBA?). Labor Code ?512(e) states:
(e) Subdivisions (a) and (b) do not apply to an employee specified in subdivision (f) if both of the following conditions are satisfied:
(1) The employee is covered by a valid collective bargaining agreement.
(2) The valid collective bargaining agreement expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for meal periods for those employees, final and binding arbitration of disputes concerning application of its meal period provisions, premium wage rates for all overtime hours worked, and a regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate.
While the Court has judicially noticed the existence of the various collective bargaining agreements attached as Exhibits A and B to Defendants? request for judicial notice, the Court cannot, at the pleading stage, interpret the CBAs or attribute any effect the CBAs have on the claims alleged in this litigation. Again, the Court?s role on demurrer is to assess whether Plaintiff has stated his causes of action.
In C.R. v. Tenet Healthcare Corp. (2009) 169 Cal.App.4th 1094, 1103-1104, the Court of Appeal observed:
As to accepting the accuracy of the contents of judicially noticed documents, in Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374?375 [228 Cal. Rptr. 878], the Court of Appeal analyzed three different approaches to judicial notice at the demurrer stage: the truth of a document’s contents will not be considered unless it is a judgment, statement of decision, or order [citations]; the truth of statements may be accepted when made by a party but not those of third parties or an opponent [citations]; and the contents of a document may only be accepted ? ? ?where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed.? ? ? [Citations.] And the general rule is that the truthfulness and interpretation of a document’s contents are disputable. [Citations.]
Here too, the Court cannot presume the validity of any of the CBAs at the pleading stage. Labor Code ?512(e) above specifically requires the employee to be covered by a ?valid? CBA in order to render Labor Code ??512(a) and (b) inapplicable.
Araquistain v. Pacific Gas & Electric Company (2014) 229 Cal.App.4th 227, relied on by Defendants, is inapposite. While that case upheld a CBA provision under ?512(e)(2) (which provided that employees working shifts of eight consecutive hours would be permitted to eat their meals during work hours and would not be allowed additional time at company expense), the decision arose following a motion for summary judgment. It did not arise at the pleading stage. Again, it is improper for the Court to interpret the import of the CBA in this case on demurrer ? notwithstanding Defendants? assertion in the reply brief that there is ?no genuine dispute as to the CBA?s validity[.]? [Reply Brief at 1:8.] For that reason, the other cases Defendants rely on in support of their request for judicial notice (Ruscigno v. American National Can Co. (2000) 84 Cal.App.4th 112, 118; Hendy v. Losse (1991) 54 Cal.3d 723, 728; Bonner v. County of San Diego (2006) 139 Cal.App.4th 1336, 1342, n.3; and Busey v. P.W. Supermarkets, Inc. (N.D. Cal. 2005) 368 F.Supp.2d 1045, 1049-50) are not persuasive.
Since the Court cannot determine the validity of any of the CBAs at this time, the demurrer to the 10th and 11th causes of action on this ground is not well-taken and is overruled. Of course, Defendants will fully be able to assert the existence, and validity, of the CBA as an absolute affirmative defense to the claims.
The remand order from Judge Morrow (Exhibit C to Defendants? Request for Judicial Notice) does not change this. Judge Morrow did not determine that the CBA, in fact, applied to bar the claims; instead, the court stated in pertinent part:
Jefferson specifically and repeatedly pleads violations of state law, not a violation of the CBA or a right it provides. As noted, it is well established that ?512 is a non-negotiable state law right independent of any right established by contract?.[?]The mere fact that the ?512(e) exemption may apply does not alter the substance of Jefferson?s claim; however, if it applies, it would simply mean that Jefferson has alleged a claim under a statute he cannot invoke, and under which he is unable to recover. While CPC?s argument that ? 512(e) applies would be properly raised in a Rule 12(b)(6) motion, this does not require that Jefferson?s motion to remand be denied. Stated differently, although Jefferson?s claim may ultimately fail, the court is unable to conclude that its resolution is substantially dependent on analysis of the CBA when the supporting allegations focus only on state law. Had Jefferson alleged violation of rights provided by the Labor Code and rights provided by the CBA, the court would reach a different conclusion. As pled, however, the court is unable to construe Jefferson?s claim for violation of ? 512 as a claim that CPC violated the CBA. [See Exh. C to Defendants? RJN, at 30:9-31:4].
Thus, it is evident that Judge Morrow?s order has no res judicata or collateral estoppel effect with respect to the issues surrounding the CBA.
b. Demurrer to 9th C/A
Defendants demur to the 9th cause of action for failure to pay statutorily mandated wages, minimum wages, and overtime on grounds that Labor Code ?510, by virtue of Labor Code ?514, is not applicable to employees governed by a CBA and because it is derivative of the 10th and 11th causes of action.
For the reasons discussed above, the Court cannot judicially notice the import or assess the validity of the CBA at issue at the pleading stage. The related argument by Defendants? related argument – that the claim based on failure to pay minimum wages during meal breaks is derivative of the meal and rest break claims and fails on the same basis ? is similarly flawed, given the Court?s view that it cannot judicially notice the validity of the CBA at this time. As such, the demurrer to the 9th cause of action should also be overruled, to the extent the demurrer is based on the applicability of the CBA.
Even so, the 9th cause of action is based, in addition to Labor Code ?510, on an alleged violation of Labor Code ??1194. Section 1194(a) provides in applicable part:
(a) Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit.
Even if the Court could determine on demurrer that the CBA operated to bar the claim to the extent it is based on Labor Code ?510, the demurrer to the 9th cause of action would not, at the pleading stage, dispose of the claim, to the extent it is based on Labor Code ?1194. This provides another reason for overruling the demurrer.
Moreover, Labor Code ?514 states:
Sections 510 and 511 do not apply to an employee covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of the employees, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage. Labor Code ?514.
Here, the FAC alleges that the Employer Defendants ?also failed to pay for all overtime worked and for all hours worked.? [FAC, ?156.] Thus, even assuming the Court could consider assume the validity of the CBA at this time on demurrer, it appears that, by virtue of ?514, the CBA would not prevent an employee for bringing a claim based on a failure to provide premium wage rates for all hours worked. At the very least, this is an issue that cannot be resolved at the pleading stage.
Similarly, Plaintiff alleges that Defendant failed to ?calculate the regular rate of compensation for employees who worked overtime.? [FAC, ?156.] Again, under ?514 above, the CBA would shield Defendants from liability, on the condition the CBA provides a ?regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage.? Since Plaintiff has alleged Defendants did not calculate the regular rate of compensation, the existence of the CBA would not, at the pleading stage, shield Defendants from potential liability under the 9th cause of action.
For all of these reasons, the demurrer to the 9th cause of action is overruled.
c. Demurrer to 13th through 16th causes of action
Defendants demur to the 13th through 16th causes of action, on grounds that these claims are derivative of the meal, rest break, and overtime claims (which Defendants contend are without merit, given the existence of the CBA). Again, for the reasons discussed supra, the Court cannot judicially notice the validity of the CBA at the pleading stage. The demurrer on this ground is overruled.
Defendants separately demur to the 13th through 16th causes of action on grounds these claims are uncertain. A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures. Khoury v. Maly?s of California (1993) 14 Cal.App.4th 612, 616. See also California Practice Guide, Civil Procedure Before Trial, ?7:85 (The Rutter Group 2015) (?[a] demurrer for uncertainty will be sustained only when the complaint is so bad that defendant cannot reasonably respond ? i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her?). Here, the 13th through 16th causes of action are all standard claims in the wage and hour context. There is no uncertainty on the face of the pleading; the Defendants can reasonably respond to the allegations in the pleading, and they can determine the counts directed against them. On that basis, the demurrer under CCP ?430.10(f) is overruled. Even if there were some uncertainty, pursuant to Khoury v. Maly?s, any ambiguity can be clarified during the discovery phase of the litigation.
IV. Motion to Strike
Defendants seek an order striking the allegations set forth in the 17th cause of action for violation of the Private Attorney General Act (?PAGA?) seeking penalties related to the alleged violations of the meal break and overtime laws. The grounds for the motion are the same as those set forth in the demurrer ? namely, that a valid CBA governs, and that Plaintiff is expressly precluded by Labor Code ??512(e) and 514 from bringing the claims.
For the reasons discussed in the analysis of the demurrer, the motion to strike the PAGA claims at this time is not well-taken. The Court cannot interpret the effect of the CBA at this time by virtue of the request for judicial notice. The motion to strike is denied on the same grounds as set forth in the analysis of the demurrer.