Quinonez v. Payless 4 Plumbing CA4/2 ( 2021 )

Filed 10/7/21 Quinonez v. Payless 4 Plumbing CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
ROBERT QUINONEZ,
Plaintiff and Appellant, E074467
v. (Super.Ct.No. CIVDS1912898)
PAYLESS 4 PLUMBING, INC. et al., OPINION
Defendants and Respondents.
APPEAL from the Superior Court of San Bernardino County. John M. Tomberlin,
Judge. Reversed.
Loyr, Young W. Ryu, Alexander D. Wallin, Britanie A. Martinez, Elizabeth M.
Votra, and Sarah H. Cohen for Plaintiff and Appellant.
Law Offices of Alan G. Novodor and Alan G. Novodor for Defendants and
Respondents.
1
Appellant Robert Quinonez brought a lawsuit under the Private Attorneys General
Act (PAGA), Labor Code section 2698 et seq., alleging his employer had committed
several wage and hour violations. Specifically, Quinonez alleged respondents Payless 4
Plumbing, Inc. and Alex Beltran denied him and other employees meal and rest breaks,
failed to pay overtime compensation, deducted wages illegally, failed to properly itemize
wage statements, failed to reimburse for business expenses, and failed to pay unpaid
wages after the termination of employment.
Quinonez brought the suit after exhausting the administrative process required by
Labor Code section 2699.3, subdivision (a). However, respondents filed a general
demurrer arguing the lawsuit should be dismissed because they had taken advantage of a
safe harbor provision in Labor Code section 2699.3, subdivision (c) by sending Quinonez
a “cure letter” stating the violations he complained about had ceased and been corrected.
According to respondents, after receiving the cure letter, Quinonez was required to
respond and couldn’t sue them. The trial judge accepted this argument and dismissed the
lawsuit with prejudice on the ground that Quinonez hadn’t exhausted his administrative
remedies.
Quinonez argues the trial judge erred because the safe harbor provision of Labor
Code section 2699.3, subdivision (c) doesn’t apply to the violations which were the basis
of his complaint. He says the administrative remedies that apply to his cause of action are
in section 2699.3, subdivision (a), and he exhausted those remedies before filing suit.
We agree and therefore reverse and remand for further proceedings.
2
I
FACTS
A. The Alleged PAGA Violations
1
According to Quinonez, Payless 4 Plumbing, Inc. and Alex Beltran (together
“Payless”) employed him as a plumber in San Bernardino County from July 3, 2015 to
November 20, 2018.
Quinonez alleged Payless committed a string of Labor Code violations during the
term of his employment, which affected himself and other employees. On December 21,
2018, he sent a notice of these violations and his intent to file a PAGA claim to his
employers and the Labor Workforce and Development Agency (LWDA), as required by
statute, and mailed out a check of $75 to the LWDA as a fee for filing the notice.
What follows is a list of the violations and the Labor Code provisions Quinonez
alleges his employers transgressed.
• Failure to relieve employees of all duties during meal breaks, pay them for the
break time during which they worked, or pay the statutory penalty for missed
breaks. (Lab. Code, §§ 226, 226.7, 512, 558, & 1198.)
• Failure to pay employees for all hours worked. (Lab. Code, §§ 200, 203, 218.5,
226, 558, 1194, & 1198; Industrial Welfare Commission Order 9.)
• Failure to pay overtime. (Lab. Code, §§ 500, 510, & 1194.)
1 Quinonez alleged Beltran owned or controlled the Payless 4 Plumbing business
and “exercised control over the labor practices of each and every one of the employees
. . . and caused the violations at issue in this Complaint.”
3
• Failure to maintain accurate payroll records and issuing inaccurate wage
statements. (Lab. Code, § 226(a).)
• Failure to reimburse employees for tools they were required to purchase for
work. (Lab. Code, § 2802.)
• Failure to pay employees wages owed at the time of separation from
employment. (Lab. Code, §§ 201, 202, & 203.)
On April 26, 2019, Quinonez sued Payless under PAGA as a representative of all
current or former non-exempt employees who worked for Payless between July 3, 2015
and the present. Quinonez claimed to act “in the public interest as a private attorney
general, seek[ing] assessment and collection of unpaid wages and civil penalties for
[himself], all other aggrieved employees, and the State of California against [Payless], in
addition to other remedies, for violations of California Labor Code sections 201-203.”
The prayer for relief specified the provisions that formed the basis of the suit. He
sought a decree that Payless had violated Labor Code sections “226.7, and 512(a) (by
failing to provide meal and rest periods or compensation in lieu thereof); 500, 510 and
1194, et seq. (by failing to pay overtime compensation); 226(a) (by failing to provide
accurate wage statements); and 201-203 (by failing to pay compensation upon
termination).” He sought to recover civil penalties and unpaid wages under “Labor Code
sections 2699(a) and/or 2699(f) and (g), 203, 226(e), and 558, plus costs and attorneys’
fees, for violations of California Labor Code sections 201-203, 218.5, 226(a) 226.7, 510,
512(a); 1174, 1194, 1197, and 1198.”
4
B. Payless’s Motion for a General Demurrer
Payless responded to the complaint by filing a general demurrer. The sole ground
for dismissal was “plaintiff Robert Quinonez failed to exhaust his administrative
remedies under California Labor Code Section 2699.3(c)(3) when such action, as a
precondition for bringing [a] civil suit under the Private Attorneys General Act, was
statutorily required by the PAGA claim’s allegation of provision violations other than
those listed in Section 2699.5 or Division 5 (commencing with section 6300) of the
California Labor Code, and defendants’ Notice of Cure filing pursuant to the safe harbor
provisions of California Labor Code Section 2699.3(c)(2)(A).”
The notice of cure refers to Payless’s response to Quinonez’s allegations when he
filed them with the LWDA on December 21, 2018 as part of his obligation to exhaust
administrative remedies. On January 16, 2019, Payless informed Quinonez they would
“be taking advantage of the safe harbor provisions of [PAGA] by filing a Notice of Cure
and Response to [his] PAGA claim with the [LWDA].” On January 22, 2019, they filed
the cure notice, which they claimed to include “a description of all actions taken” to
remedy the violations Quinonez alleged.
Payless represented they had remedied the violations Quinonez alleged. They said
they had “conducted interviews with all current employees and all former employees they
have been able to locate who have worked for [Payless] within the last four years to
obtain information from them about the average number of total hours actually worked
per week.” They claimed to have “paid and satisfied—with the sole exception of Robert
5
E. Quinonez—all claims of non-exempt employees for minimum wages for all hours
worked, including overtime wages and the difference between the regular pay and all
claims for unpaid penalty premium for missed meal and rest period[s], and claims for un-
reimbursed business expenses for work performed within the past four years, including
interest and waiting time penalties.” They also claimed to have corrected any problems
with granting breaks by distributing written copies of their policy to all employees.
They attached numerous copies of the signed meal and rest break policy and
acknowledgement as exhibits. The policy, which is addressed to “All Payless 4
Plumbing, Inc. employees,” begins with a paragraph defining the term “non-exempt
employee,” which they said “refers to a category of employees entitled to overtime pay
and minimum wage as described in the Fair Labor Standards Act (FLSA). . . . Employees
who earn less than twice the current California state minimum wage and those who do
not use personal discretion and independent judgment at least 50% of the time are
considered non-exempt.” The policy says non-exempt employees “must be paid for each
hour that they work and 1.5x their hourly wage for any hours worked over 8 hours per
day and 40 hours per week” and also lays out the rest and meal break periods non-exempt
employees are entitled to receive. Though the policy has a signature line for the
employee, the policy does not provide guidance as to whether the person signing is
exempt or non-exempt.
Payless’s response to the LWDA does have some guidance on that point. They
told the agency many of Quinonez’s allegations are “demonstrably false and inaccurate”
6
and represented their plumbers, whether they work on a commission or salary basis, are
in fact exempt employees. Thus, according to this filing and the policy Payless circulated
to their employees, none of the employees Quinonez seeks to represent are non-exempt
employees to whom overtime laws or the meal and rest break policy would apply.
Payless also denied any employee had ever had job related expenses deducted from
wages or ever incurred unreimbursed business expenses. Finally, they represented their
employees had “always been encouraged and given ample opportunity to take their meal
and rest breaks.”
Quinonez didn’t file a response to the cure notice, but instead filed this lawsuit
after the period allotted for a response from the LWDA to his notice of violations under
section 2699.3, subdivision (a). Payless argued the trial court should sustain their general
demurrer and strike the complaint because he was required by a different provision—
section 2699.3, subdivision (c)(3)—to respond and wait for the LWDA’s response to the
cure notice before filing the lawsuit. They pointed to the language of section 2699.3,
subdivision (c)(2)(A), which provides “[t]he employer may cure the alleged violation
within 33 calendar days of the postmark date of the notice” sent by the aggrieved
employee or representative, must give notice of the claim of a cure, and that “no civil
action pursuant to Section 2699 may commence.” They also pointed out that the safe
harbor provision says, “[i]f the aggrieved employee disputes that the alleged violation has
been cured, the aggrieved employee or representative shall provide written notice . . .
including specified grounds to support that dispute, to the employer and the agency.”
7
(Lab. Code, § 2699.3, subd. (c)(3), emphases in Payless’s motion.) If the agency receives
a notice of dispute from the employee, it has 17 days to “review the actions taken by the
employer to cure the alleged violation and provide written notice of its decision by
certified mail to the aggrieved employee and the employer.” “If the agency determines
that the alleged violation has not been cured or if the agency fails to provide timely or
any notification, the employee may proceed with the civil action.” (Italics omitted.) Since
Quinonez didn’t provide notice to the agency that he was disputing the cure notice, the
agency didn’t decide whether Payless had cured the violations and, Payless argued in the
trial court, he was not permitted to file the lawsuit.
Quinonez responded that the administrative safe harbor provision in section
2699.3, subdivision (c) doesn’t apply to the types of violations he’s alleging. For the kind
of wage and hour violations he’s alleging, the administrative remedies are set out in
section 2699.3, subdivision (a), which doesn’t allow the employer to cure the alleged
violations and allows the plaintiff to file a civil action if the agency hasn’t responded
within a specified period of the filing of the employee’s notice of the complaint. He
argued that means he was entitled to file a PAGA lawsuit in April 2019.
At a hearing on November 5, 2019, the trial judge, superior court Judge John M.
Tomberlin, sustained Payless’s demurrer. The minute order records that the judge found
Quinonez “has failed to properly exhaust his administrative remedies.” The judge ordered
the complaint dismissed with prejudice and entered judgment on November 5, 2019.
Quinonez filed a timely notice of appeal.
8
II
ANALYSIS
Quinonez’s primary argument is one we find persuasive and dispositive. He argues
the trial court erred as a matter of law by interpreting the statutory safe harbor in Labor
Code section 2699.3, subdivision (c) as applying to his PAGA claim. He argues the
statute’s plain language establishes the administrative remedies in Labor Code section
2699.3, subdivision (a) apply to the violations he alleges Payless committed, and those
administrative remedies don’t include a safe harbor. We agree.
“On appeal from a judgment dismissing an action after sustaining a demurrer
without leave to amend, the standard of review is well settled. We give the complaint a
reasonable interpretation, reading it as a whole and its parts in their context. Further, we
treat the demurrer as admitting all material facts properly pleaded, but do not assume the
truth of contentions, deductions or conclusions of law. When a demurrer is sustained, we
determine whether the complaint states facts sufficient to constitute a cause of action.”
(City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865.) It is not proper on a
general demurrer, as Payless filed, to dismiss a part of a cause of action; a general
demurrer challenges only the sufficiency of the cause of action pleaded and must be
overruled if any valid cause of action is pleaded. (Venice Town Council, Inc. v. City of
Los Angeles (1996) 47 Cal.App.4th 1547, 1561-1562.) We review the trial judge’s order
sustaining a demurrer and dismissing a cause of action de novo. (People ex rel. Harris v.
Pac Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 777.)
9
Labor Code Section 2699.3 provides three different sets of obligations for a
plaintiff bringing PAGA claims under Labor Code section 2699, subdivisions (a) or (f).
(Unlabeled statutory citations refer to the Labor code.) The statutory provisions make
clear that the required administrative process differs depending on the kind of violations
the employee alleges.
Under subdivision (a), “[a] civil action by an aggrieved employee . . . alleging a
violation of any provision listed in Section 2699.5 shall commence only after” the
employee has given the LDWA and the employer notice (in the approved form) “of the
specific provisions of this code alleged to have been violated, including the facts and
theories to support the alleged violation.” The agency then decides whether to investigate
the violations on its own and must provide notice of its decision to the employee and the
employer. If the agency doesn’t intend to investigate or doesn’t provide the employee any
notice within a specified period, the employee may file a PAGA action under section
2
2699. (§ 2699.3, subd. (a), italics added.)
Under subdivision (b), “[a] civil action by an aggrieved employee . . . alleging a
violation of any provision of Division 5 (commencing with Section 6300) other than those
listed in Section 2699.5 shall commence only after” the employee has given the Division
of Occupational Safety and Health (division) and the employer notice (in the approved
form) of the specific provisions of Division 5 alleged to have been violated, “including
2
The employee may also sue on a different timetable if the agency investigates but
decides not to issue a citation. (§ 2699.3, subd. (a).) That provision isn’t relevant to this
appeal.
10
the facts and theories to support the alleged violation.” (§ 2699.3, subd. (b), italics
added.) The division is then required to investigate or inspect the violation and decide
whether to issue a citation. (§ 2699.3, subd. (b)(2)(A).) “If the division issues a citation,
the employee may not commence an action pursuant to Section 2699. The division shall
notify the aggrieved employee and employer in writing within 14 calendar days of
certifying that the employer has corrected the violation.” (§ 2699.3, subd. (b)(2)(A)(i).)
The employee may file a lawsuit if the agency doesn’t issue a citation in the proscribed
period. (§ 2699.3, subd. (b)(2)(A)(ii).) However, the division may permit long-term
abatement periods and the employee may not bring a civil lawsuit “during the period that
an employer has voluntarily entered into consultation with the division to ameliorate a
condition.” (§ 2699.3, subd. (b)(3)(A) & (B).)
Under subdivision (c)—which Payless argues is the governing provision in this
case—the process is different because it includes a short safe harbor period for the
employer to cure any violations. First, this provision applies explicitly to claims of
“violation of any provision other than those listed in Section 2699.5”—to which
subdivision (a) applies—“or Division 5 (commencing with Section 6300)”—to which
subdivision (b) applies. (§ 2699.3, subd. (c), italics added.) As with subdivision (a), an
employee may commence a PAGA claim under subdivision (c) only after giving the
LDWA and the employer notice “of the specific provisions of this code alleged to have
been violated, including the facts and theories to support the alleged violation.”
(§ 2699.3, subd. (c)(1)(A).)
11
However, for this kind of violation, the employer has a right to cure any alleged
defects. “The employer may cure the alleged violation within 33 calendar days of the
postmark date of the notice sent by the aggrieved employee or representative. The
employer shall give written notice within that period of time by certified mail to the
aggrieved employee or representative and by online filing with the agency if the alleged
violation is cured, including a description of actions taken, and no civil action pursuant to
Section 2699 may commence. If the alleged violation is not cured within the 33-day
period, the employee may commence a civil action pursuant to Section 2699.” (§ 2699.3,
subd. (c)(2)(A).)
If the employer files a cure notice, the employee is required to respond and allow
the LWDA a period of time to decide whether the employer has in fact cured the alleged
violations. “If the aggrieved employee disputes that the alleged violation has been cured,
the aggrieved employee or representative shall provide written notice by online filing
with the agency and by certified mail to the employer, including specified grounds to
support that dispute, to the employer and the agency. Within 17 calendar days of the
receipt of that notice, the agency shall review the actions taken by the employer to cure
the alleged violation and provide written notice of its decision by certified mail to the
aggrieved employee and the employer.” (§ 2699.3, subd. (c)(3), italics added.) “If the
agency determines that the alleged violation has not been cured or if the agency fails to
provide timely or any notification, the employee may proceed with the civil action.”
12
(Ibid.) The employee may challenge the agency’s determination that the alleged violation
has been cured by appealing to the superior court. (Ibid.)
This appeal comes down to deciding which of these administrative remedy
provisions Quinonez was required to exhaust. There’s no dispute he satisfied the
administrative remedies set out in subdivision (a), which apply to violation of any
provision listed in section 2699.5. And there’s no dispute that he did not satisfy the
administrative remedies set out in subdivision (c), which apply to violation of any
provision not listed in section 2699.5 or Division 5. There’s also no dispute that his
PAGA claim was not based on allegations that Payless violated the provisions of
Division 5. We’re left, then, with the question whether the conduct Quinonez complained
about violated provisions listed in section 2699.5 or provisions not listed in section
2699.5.
The answer is fairly straightforward, even if it does require some digging into the
weeds. Omitting irrelevant statutory references, section 2699.5 says “[t]he provisions of
subdivision (a) of Section 2699.3 apply to any alleged violation of the following [Labor
Code] provisions: . . . Sections . . . 201, . . . 202, 203, . . . paragraphs (1) to (5), inclusive,
(7), and (9) of subdivision (a) of Section 226, Sections 226.7, . . . 510, . . . 512, . . . 1194,
1197, . . . 1198, . . . [and] 2802.” Those provisions have to do with an employer’s
obligations concerning wages and hours—to make timely payment of wages earned on
termination of employment (§§ 201-203), provide accurate wage statements containing
certain required information (§ 226), provide meal and rest periods (§§ 226.7, 512), pay
13
overtime wages (§§ 510, 1194, 1198), pay the minimum wage (§§ 1194, 1197), and
compensate employees for business expenses (§ 2802).
The statutory provisions we identified in section 2699.5 all form the basis of
Quinonez’s PAGA cause of action. As we spelled out above, Quinonez alleged Payless
(i) failed to pay employees wages owed at the time of separation from employment in
violation of sections 201, 202, and 203, (ii) didn’t maintain accurate payroll records and
issued inaccurate wage statements in violation of section 226(a), (iii) didn’t relieve
employees of all duties during meal breaks, didn’t pay them for the break time during
which they worked, and didn’t pay the statutory penalty for missed breaks in violation of
sections 226, 226.7, 512, and 1198, (iv) didn’t pay employees for all hours worked in
violation of sections 203, 226, 1194, and 1198, (v) didn’t pay overtime in violation of
sections 510 and 1194, and (vi) didn’t reimburse employees for tools they were required
to purchase for work in violation of section 2802. The plain language of sections 2699.5
and 2699.3, subdivision (a) establishes that PAGA claims alleging violations of these
statutory provisions are governed by section 2699.3, subdivision (a) and not by section
2699.3, subdivision (c).
It follows that Quinonez exhausted the administrative remedies required to bring
his action in superior court. The safe harbor under section 2699.3, subdivision (c) simply
doesn’t apply to allegations of this kind of wage and hour violation. The trial court erred
in determining otherwise as a matter of law.
14
Payless points to a few additional statutory citations in Quinonez’s complaint, but
they don’t bring the complaint under the safe harbor provision. Quinonez refers to
sections 200, 500, and 218.5. But section 200 defines the terms wages and labor as
they’re used in related provisions. Section 500 defines the terms workday and workweek.
Section 218.5 allows for an employee to recover reasonable attorney fees “[i]n any action
brought for the nonpayment of wages, fringe benefits, or health and welfare or pension
fund contributions.” None of these provisions sets out a cause of action or otherwise
establishes a duty for the employer enforceable by a civil suit under section 2699. Thus
section 2699.3 doesn’t apply to them at all, because it governs “civil action[s] by an
aggrieved employee pursuant to subdivision (a) or (f) of Section 2699.”
Nor does Quinonez’s request for unpaid wages under section 558 bring the safe
harbor provision into play. Section 558, which preceded the passage of PAGA, sets out
civil penalties for “[a]ny employer or other person acting on behalf of an employer who
violates, or causes to be violated, a section of this chapter or any provision regulating
hours and days of work in any order of the Industrial Welfare Commission.” (§ 558,
subd. (a).) It specifies a civil penalty of “fifty dollars ($50) for each underpaid employee
for each pay period for which the employee was underpaid in addition to an amount
sufficient to recover underpaid wages.” (§ 558, subd. (a)(1).) The civil penalty increases
to $100 for subsequent violations. (§ 555, subd. (a)(2).) Wages recovered are to be paid
to the affected employee. (§558, subd. (a)(3).) Our Supreme Court has held section 558
does not provide for a private right of action and the unpaid wages which may be
15
recovered are compensatory damages, not civil penalties which can be collected in a
PAGA lawsuit. (ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 197-198.) Thus, to the
extent Quinonez’s complaint seeks unpaid wages under section 558, the provisions of
PAGA, including the administrative remedy provisions governing claims under section
2699, do not apply.
Moreover, including a request for remedies available under section 558 does not
provide a basis for dismissing Quinonez’s entire complaint on a general demurrer. (Olson
v. Hornbrook Community Services Dist. (2019) 33 Cal.App.5th 502, 522, fn. 9 [“‘a
general demurrer may not be sustained, nor a motion for judgment on the pleadings
granted, as to a portion of a cause of action,’ but that portion may be attacked by filing a
motion to strike”].) If a portion of the pleading is deficient under the holding of ZB, the
parties may address the deficiency by a motion to strike that portion of the pleadings or
by amending the pleadings on remand, the same remedy the Supreme Court approved in
ZB. (ZB, N.A. v. Superior Court, supra, 8 Cal.5th at p. 198.)
We therefore conclude the trial judge erred by applying the safe harbor provision
of section 2699.3, subdivision (c) to Quinonez’s cause of action. Quinonez exhausted the
administrative remedies required by section 2699.3, subdivision (a) and is entitled to
proceed with his PAGA lawsuit.
16
III
DISPOSITION
We reverse the judgment of the trial court and remand for further proceedings.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
SLOUGH
J.
We concur:
McKINSTER
Acting P. J.
MILLER
J.
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