Rodriguez v. Parivar, Inc. ( 2022 )

Filed 9/26/22
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FOUR
PATRICIA RODRIGUEZ,
Plaintiff and Respondent, A158939, A160694
v. (Alameda County Super. Ct.
PARIVAR, INC., et al., No. RG-17-847828)
Defendants and Appellants.
By a split vote of 9 to 3, Patricia Rodriguez won a jury verdict against
Parivar, Inc. and Yadav Enterprises, Inc. (collectively Parivar) for failure to
pay her overtime wages during the 23-month period she was employed as a
salaried manager at a Jack in the Box restaurant in San Leandro. This
appeal is from the ensuing judgment and a postjudgment order against
Parivar for, respectively, $38,356.75 in unpaid overtime plus prejudgment
interest, and $932,842.63 in attorney fees and costs.
The primary focus of the appeal is a special verdict question that was
designed to elicit a finding of ultimate fact on Parivar’s affirmative defense of
executive exemption. When asked whether “Ms. Rodriguez performed
exempt duties more than half of the time,” the jury answered “No.”
According to Parivar, the narrow framing of this question effectively barred it
from proving its executive exemption defense by allowing the jury to find
liability without addressing the issue of Parivar’s realistic expectations for
how Rodriguez should have allocated her time.
1
We agree that the challenged special verdict question was erroneous
and that the error was prejudicial. Accordingly, we reverse the judgment and
vacate the award of fees and costs, without reaching any of Parivar’s other
arguments attacking the judgment or the merits of its attack on the award of
fees and costs.
I. BACKGROUND
In February 2017, Rodriguez filed a complaint against Parivar 1
alleging, among other things, causes of action for Parivar’s failure to pay her
overtime and provide her with meal periods and rest periods required under
California’s labor laws.
Rodriguez alleged that Parivar misclassified her as an exempt
employee, contending that she “spent the majority of her time performing the
exact same duties as non-exempt employees” at her restaurant. By way of
affirmative defense, Parivar argued that under the Industrial Welfare
Commission (IWC) wage order No. 5-2001’s “executive exemption” Rodriguez
was exempt from overtime, meal period and rest period requirements.
The case proceeded to a jury trial over a two-week period in May 2019.
The jury rejected Parivar’s executive exemption affirmative defense. By a 9
to 3 vote, the jury found Parivar failed to prove that, as the special verdict
question put it, “Rodriguez performed exempt duties more than half of the
time.”
The complaint names as defendants Parivar, Inc. and JIB
1
Management, Inc. (and also Jack in the Box, Inc., the claims against which
were later dismissed with prejudice). Parivar, Inc. and Yadav Enterprises,
Inc., appellants here, answered the complaint, with Yadav Enterprises, Inc.
answering instead of JIB Management, Inc. The parties indicated in their
papers below that Yadav Enterprises, Inc. was formerly known as JIB
Management, Inc. At trial, the parties stipulated that Parivar, Inc. and
Yadav Enterprises, Inc. were Rodriguez’s joint employers.
2
The jury further found that Rodriguez proved Parivar knew or should
have known that she worked more than eight hours a day, that Rodriguez
worked an average of 9.73 overtime hours a week and that she was owed
$26,786.54 in overtime pay. The jury also found that Rodriguez did not prove
that Parivar failed to provide her with proper meal periods and rest periods.
The trial court entered judgment in Rodriguez’s favor, ordering Parivar
to pay her $26,786.54 in overtime pay and $11,570.21 in prejudgment
interest, for a total of $38,356.75. It further ruled that Rodriguez was
entitled to costs and attorney fees under Code of Civil Procedure sections
1032 and 1033.5 and California Rules of Court, rules 3.1700 and 3.1702.
Subsequently, the trial court rejected Parivar’s motions for a new trial
and for a judgment notwithstanding the verdict. It later ordered Parivar to
pay Rodriguez $932,842.63 in attorney fees and litigation costs.
Parivar, Inc. and Yadav Enterprises, Inc. separately filed timely notices
of appeal from the judgment, unspecified orders after the judgment and the
denial of their motion for judgment notwithstanding the verdict. Parivar,
Inc. and Yadav Enterprises, Inc. also separately filed timely notices of appeal
from the court’s attorney fees award order.
II. DISCUSSION
A. Parivar’s Executive Exemption Affirmative Defense
Although the Labor Code “mandates overtime pay for employees who
work more than 40 hours in a given work week[,] . . . the Legislature
authorized the [IWC 2] to establish exemptions for various categories of
2 The IWC was defunded in 2004, but its wage orders remain in effect.
(Wesson v. Staples the Office Superstore, LLC (2021) 68 Cal.App.5th 746, 760,
fn. 2 (Wesson).) “The California Supreme Court has instructed that ‘[t]he
IWC’s wage orders are to be accorded the same dignity as statutes.’ ” (Ibid.,
quoting Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004,
1027.)
3
employees, including ‘executive . . . employees.’ ” (Lab. Code, §§ 510,
subd. (a), 515, subd. (a); Batze v. Safeway, Inc. (2017) 10 Cal.App.5th 440,
471.)
Our Supreme Court has instructed, “When construing the Labor Code
and wage orders, we adopt the construction that best gives effect to the
purpose of the Legislature and the IWC. [Citations.] Time and again, we
have characterized that purpose as the protection of employees—particularly
given the extent of legislative concern about working conditions, wages, and
hours when the Legislature enacted key portions of the Labor Code.
[Citations.] In furtherance of that purpose, we liberally construe the Labor
Code and wage orders to favor the protection of employees.” (Augustus v.
ABM Security Services, Inc. (2016) 2 Cal.5th 257, 262.)
IWC wage order No. 5-2001 (wage order), which governs employees in
the “public housekeeping industry” 3 and is codified in the California Code of
Regulations, exempts “executive” employees from overtime pay, meal period
and rest period requirements. (Cal. Code Regs., tit. 8, § 11050, subds. 1(B)(1),
3, 11, 12.) This exemption is an affirmative defense, for which the employer
bears the burden of proof. (See Safeway Wage & Hour Cases (2019)
43 Cal.App.5th 665, 671, 676 (Safeway) [regarding a similar executive
exemption for the mercantile industry found at Cal. Code Regs., tit. 8,
§ 11070, subd. 1(A)(1)].)
At trial, Parivar asserted the executive exemption affirmative defense
against Rodriguez’s claims. In the public housekeeping industry, “[a] person
“Public Housekeeping Industry” is defined as “any industry, business,
3
or establishment which provides meals . . . as a primary business . . . ,”
including restaurants and similar establishments. (Cal. Code Regs., tit. 8,
§ 11050, subd. (2)(P).) The parties do not dispute that Parivar’s business
comes within this definition.
4
employed in an executive capacity” means any employee whose work meets
the six prongs of the exemption, including that the employee is “primarily
engaged in duties which meet the test of the exemption.” (Cal. Code Regs.,
tit. 8, § 11050, subd. 1(B)(1)(e).) 4 In this appeal, the parties, aside from their
attorney fees award dispute, focus entirely on the trial court’s special verdict
form and jury instructions regarding this particular prong of Parivar’s
affirmative defense. The sole focus of dispute here is prong (e) of the
six-factor test governing the executive exemption.
The wage order provides that “[t]he activities constituting exempt work
and non-exempt work shall be construed in the same manner as such items
are construed” in corresponding federal regulations. (Cal. Code Regs., tit. 8,
§ 11050, subd. 1(B)(1)(e) [citing 29 C.F.R. §§ 541.102, 541.104–111 and
541.115–116 as they were effective on the date of the order].) Under the
relevant federal regulations, managerial and supervisory tasks within the
scope of the exemption are generally “ ‘easily recognized’ ” and include such
tasks as: “ ‘[i]nterviewing, selecting, and training of employees; setting and
4 The six prongs that must be proven to establish that a person is
employed in an “executive capacity” are that the person is someone (a) whose
duties and responsibilities involve the management of an enterprise or of a
customarily recognized department or subdivision thereof; (b) who
customarily and regularly directs the work of two or more other employees;
(c) who has the authority to hire and fire, or whose recommendations and
suggestions regarding a change in an employee’s status receive particular
weight; (d) who customarily and regularly exercises discretion and
independent judgment; (e) who is “primarily engaged in duties which meet
the test of the exemption”; and (f ) who earns a monthly salary equivalent to
no less than two times the state minimum wage for full-time employment,
defined as 40 hours a week. (Cal. Code Regs., tit. 8, § 11050, subd. 1(B)(1)
(a)–(f ).) At trial, the parties stipulated that prongs (a) through (c) and (f )
were met; they contested only whether prongs (d) and (e) were met. The
parties do not raise any issues regarding prong (d) on appeal, so we need not
discuss it.
5
adjusting their rates of pay and hours of work; directing their work;
maintaining their production or sales records for use in supervision or
control; appraising their productivity and efficiency for the purpose of
recommending promotions or other changes in their status; handling their
complaints and grievances and disciplining them when necessary; planning
the work; determining the techniques to be used; [and] apportioning the work
among the workers . . . .’ ” (Safeway, supra, 43 Cal.App.5th at pp. 676–677,
quoting 29 C.F.R. §§ 541.102(a) & (b) (2001).)
Tasks that are inherently managerial or supervisory are not the only
ones the federal regulations recognize as exempt. Also exempted are tasks
“ ‘directly and closely related’ ” to those functions. (Safeway, supra,
43 Cal.App.5th at p. 677, quoting 29 C.F.R. § 541.108 (2001).) Consistent
with these regulations, the wage order recognizes that “[e]xempt work shall
include, for example, all work that is directly and closely related to exempt
work and work which is properly viewed as a means for carrying out exempt
functions.” (Cal. Code Regs., tit. 8, § 11050, subd. 1(B)(1)(e).) “By contrast,
nonexempt work includes all work that is neither management or supervision
nor directly and closely related to those functions. (Safeway, supra,
43 Cal.App.5th at p. 678.) ‘ “[I]n the usual case, it consists of work of the
same nature as that performed by the nonexempt subordinates of the
‘executive.’ ” ’ (Ibid., quoting 29 C.F.R. § 541.111(b) (2001).)” (Wesson, supra,
68 Cal.App.5th at p. 761.)
To illuminate the phrase “primarily engaged in duties which meet the
test of the [executive] exemption,” the wage order defines “primarily” as
“more than one-half the employee’s work time.” (Cal. Code Regs., tit. 8,
§ 11050, subds. 1(B)(1)(e), 2(O).) It also instructs that in determining
whether an employee is primarily engaged in such duties, “[t]he work
actually performed by the employee during the course of the workweek must,
6
first and foremost, be examined and the amount of time the employee spends
on such work, together with the employer’s realistic expectations and the
realistic requirements of the job, shall be considered in determining whether
the employee satisfies this requirement.” (Cal. Code Regs., tit. 8, § 11050,
subd. 1(B)(1)(e).)
In Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785 (Ramirez),
which involved an “outside salesperson” exemption structured quite similarly
to IWC wage order No. 5-2001, our Supreme Court explained why a simple
quantitative approach to determining an employee’s “primary function”—i.e.,
totaling up hours for types of tasks that employee actually performs—while
an important and good starting place, is ultimately unsatisfactory. (Ramirez,
at pp. 802, 793–794.) “On the one hand, if hours worked on sales were
determined through an employer’s job description, then the employer could
make an employee exempt from overtime laws solely by fashioning an
idealized job description that had little basis in reality. On the other hand,
an employee who is supposed to be engaged in sales activities during most of
his working hours and falls below the 50 percent mark due to his own
substandard performance should not thereby be able to evade a valid
exemption.” (Id. at p. 802.)
These nuances have implications in the factfinding process, the
Ramirez court explained. “A trial court, in determining whether the
employee is an outside salesperson, must steer clear of these two pitfalls by
inquiring into the realistic requirements of the job. In so doing, the court
should consider, first and foremost, how the employee actually spends his or
her time. But the trial court should also consider whether the employee’s
practice diverges from the employer’s realistic expectations, whether there
was any concrete expression of employer displeasure over an employee’s
substandard performance, and whether these expressions were themselves
7
realistic given the actual overall requirements of the job.” (Ramirez, supra,
20 Cal.4th at p. 802, italics in original.) Courts applying the executive
exemption wage order have cited and drawn upon this rationale for the
consideration of an employer’s realistic expectations. (See Heyen v. Safeway
Inc. (2013) 216 Cal.App.4th 795, 825; Batze v. Safeway, Inc., supra,
10 Cal.App.5th at pp. 473–475.)
B. The Trial Court’s Jury Instructions and Special Verdict Question
1. The Jury Instructions
Using a modified version of the California Civil Jury Instruction (CACI)
No. 2720, the trial court instructed the jury that Parivar had to prove as part
of its executive exemption affirmative defense that “Ms. Rodriguez performed
exempt duties more than half of the time.” The court further instructed, “In
determining whether Ms. Rodriguez performed exempt duties more than half
of the time, the most important consideration is how she actually spent her
time. But you should also consider whether Ms. Rodriguez’s practice differed
from [Parivar’s] realistic expectations of how Ms. Rodriguez should spend her
time and the realistic requirements of the job.” The court also instructed,
“Each of Ms. Rodriguez’s activities is either an exempt or a nonexempt
activity depending on the primary purpose for which she undertook it at that
time. Time spent on an activity is either exempt or nonexempt, not both.”
In addition, the court gave the jury a series of special instructions.
These included special instruction No. 6, in which the court stated that “[t]he
test to determine whether [Parivar] met [its] burden to show that
Ms. Rodriguez spent more than 50% of her time engaged in exempt tasks is
quantitative. [¶] The test requires that, first and foremost, you must look to
the actual tasks performed by Ms. Rodriguez.”
In special instruction No. 7, the court instructed on exempt versus
nonexempt work: “Exempt work includes tasks necessary for the actual
8
management of the restaurant and the supervision of its employees. Work
that is closely related to managerial or supervisory functions, so long as it is
not ordinary ‘production’ work, is also considered exempt work.” The court
listed numerous illustrative examples of exempt and nonexempt work as a
guide. 5 The court added, “you may consider whether the manager is doing
work of the same nature as work routinely done by [non-exempt] Team
Members. An otherwise non-exempt task may also be considered exempt if it
is performed by Ms. Rodriguez for a separate managerial purpose such as
training another employee or to respond to an occasional emergency caused
by unforeseen circumstances beyond the control of the defendants.”
In special instruction No. 9, the court further instructed that “[e]xempt
work includes work that is directly and closely related to exempt work.” The
court explained, “The supervision of employees and the management of a
department include a great many directly and closely related tasks which are
different from the work routinely performed by Team Members and are
commonly performed by supervisors because they are helpful in supervising
the employees or contribute to the smooth functioning of the department for
which they are responsible.” 6
5 This list includes 15 examples of exempt work, such as interviewing,
selecting and training employees, directing the work of employees, planning
the work, determining the techniques to be used, and appraising employees’
productivity and efficiency for the purpose of recommending changes in their
status; and 12 examples of nonexempt work, such as ringing up sales for
customers, cashiering, bagging groceries, assisting customers with routine
matters, and mopping and sweeping floors.
6 As one example, the court noted that a department manager of a
retail establishment “who goes about the sales floor observing the work of
sales personnel under his supervision to determine the effectiveness of their
sales techniques, checking on the quality of customer service being given, or
observing customer preferences and reactions to . . . the merchandise offered,
9
In special instruction No. 13, the court instructed the jury to consider
Parivar’s realistic expectations regarding Rodriguez’s use of her time and to
consider the realistic requirements of her job: “In determining whether
Ms. Rodriguez performed executive duties more than half of the time, the
most important consideration is how she actually spent her time. But you
should also consider [Parivar’s] realistic expectations of how Ms. Rodriguez
should spend her time and the realistic requirements of the job. In particular
you may consider: whether Ms. Rodriguez’s practice diverged from
[Parivar’s] realistic expectations, whether there was any concrete expression
of [Parivar’s] displeasure of her substandard performance, and whether these
expressions were themselves realistic given the actual overall requirements
of the job. [¶] The reason for this rule is twofold. First, an employee is not
exempt if his or her duties do not realistically allow the employee to perform
exempt activities more than 50% of the time. By the same token, an
employee cannot defeat the exemption by surreptitiously performing non-
exempt duties that are not within the employer’s realistic expectations.”
2. The Special Verdict Question
Parivar urged the trial court to give a special verdict form that
presented two questions regarding the “primarily engaged” prong of its
executive exemption affirmative defense. Specifically, it proposed a question
regarding whether Parivar proved that Rodriguez performed managerial or
supervisorial duties more than half the time and another question asking if
is performing work which is directly and closely related to his managerial
and supervisory functions. His actual participation, except for supervisory
training or demonstration purposes, in such activities as making sales to
customers, replenishing stocks of merchandise on the sales floor, removing
merchandise from fitting rooms and returning to stock shelves, however, is
not.”
10
Parivar reasonably expected her to do so. Rodriguez argued only one
question was necessary—which was, as her counsel stated at one hearing,
whether Parivar proved Rodriguez “performed executive exempt tasks more
than half of the time.” Rodriguez contended that the issue of Parivar’s
realistic expectations was subsumed within that question.
The court, after hearing argument by the parties and considering the
matter, expressed its concern that if it asked more than one question,
Ramirez and the wage order would require so many intermediate fact
questions that the special verdict form would become “far too detailed and far
too close to what the jury instructions are.” The court decided it would ask
just one ultimate fact question along the lines of whether Parivar proved
Rodriguez “performed duties more than half of the time.” Ultimately, the
court asked the jury to answer yes or no to the following question on a special
verdict form: “Did [Parivar] prove that Patricia Rodriguez performed exempt
duties more than half of the time?” 7 The jury answered “No” to this question.
7 The special verdict form contains 16 questions. It states in relevant
part:
“2. Did Defendants prove that Patricia Rodriguez performed exempt
duties more than half of the time?
“YES [ ] NO [ ]
“If you answered ‘yes,’ sign and date this verdict form where indicated
and return it to the clerk of the court (you should not answer any more
questions). If you answered ‘no,’ proceed to Question 3.”
Questions 3 through 6 asked the jury questions regarding Rodriguez’s
unpaid overtime claim. The other questions were regarding whether Parivar
proved Rodriguez had customarily exercised discretion and independent
judgment (to which the jury answered “yes”), Rodriguez’s meal period and
rest period claims and her total damages.
11
C. The Special Verdict Question Was Defective
1. Relevant Legal Standards
“ ‘The verdict of a jury is either general or special. A general verdict is
that by which they pronounce generally upon all or any of the issues, either
in favor of the plaintiff or defendant; a special verdict is that by which the
jury find the facts only, leaving the judgment to the Court. The special
verdict must present the conclusions of fact as established by the evidence,
and not the evidence to prove them; and those conclusions of fact must be so
presented as that nothing shall remain to the Court but to draw from them
conclusions of law.’ (Code Civ. Proc., § 624.)” (J.P. v. Carlsbad Unified
School Dist. (2014) 232 Cal.App.4th 323, 338 (Carlsbad Unified School
Dist.).)
“The elements of a cause of action constitute the essential or ultimate
facts in a civil case.” (Stoner v. Williams (1996) 46 Cal.App.4th 986, 1002.)
“Ultimate facts are distinguished from evidentiary facts and from legal
conclusions.” (Central Valley General Hospital v. Smith (2008)
162 Cal.App.4th 501, 513 [“the term ‘ultimate fact’ generally refers to a core
fact, such as an essential element of a claim”]; see Doe v. City of Los Angeles
(2007) 42 Cal.4th 531, 550 [a complaint is ordinarily sufficient if it pleads
ultimate rather than evidentiary facts, meaning “ ‘ “ ‘the essential facts of [a
plaintiff’s] case’ ” ’ ”].)
“We analyze the special verdict form de novo. (City of San Diego v.
D.R. Horton San Diego Holding Co., Inc. (2005) 126 Cal.App.4th 668, 678
[‘ “[A] special verdict’s correctness must be analyzed as a matter of law” ’].)”
(Saxena v. Goffney (2008) 159 Cal.App.4th 316, 325; accord, Taylor v. Nabors
Drilling USA, LP (2014) 222 Cal.App.4th 1228, 1242.) “A special verdict is
‘fatally defective’ if it does not allow the jury to resolve every controverted
issue.” (Saxena, at p. 325.)
12
2. Analysis
Parivar argues the special verdict question that dictated the outcome
on its executive exemption defense (“Did [Parivar] prove that Patricia
Rodriguez performed exempt duties more than half of the time?”) was fatally
defective because it did not allow the jury to resolve a key controverted
issue—Parivar’s “realistic expectations” of Rodriguez’s use of her time.
Parivar contends the court should have required the jury to reach a factual
conclusion on the realistic expectations issue because it was “a mandatory
consideration under the ‘primarily engaged’ requirement of the executive
exemption.” Instead, Parivar argues, the court improperly asked only the
first part of this “primarily engaged” prong, a quantitative inquiry that
required it to determine whether Rodriguez worked more than 50 percent of
the time at “exempt duties.” Rodriguez, for her part, argues the trial court’s
special verdict question regarding the “primarily engaged” prong was not
defective because it asked a question of ultimate fact. Further, even if it were
defective, she contends, the error was harmless because there is
overwhelming support in the record for the jury’s conclusion that Parivar
failed to prove the “primarily engaged” prong of its executive exemption
affirmative defense.
We disagree with Parivar that the trial court was required to ask the
jury two questions, i.e., whether Parivar had realistic expectations for
Rodriguez’s work along with the special verdict question actually posed by
the court. Whether one considers Parivar’s “realistic expectations” to be an
issue of evidentiary fact (as argued by Rodriguez) or a critical element (as
argued by Parivar), it is only one of several matters the jury was required to
consider in determining whether Rodriguez was, as the wage order requires,
“primarily engaged in duties which meet the test of the [executive]
exemption.” (Cal. Code Regs., tit. 8, § 11050, subd. 1(B)(1)(e).) These matters
13
include the amount of time Rodriguez spent on the work she actually
performed and the realistic requirements of her job (ibid.), and also
“ ‘whether [Rodriguez’s] practice diverge[d] from [Parivar’s] realistic
expectations, whether there was any concrete expression of employer
displeasure over [Rodriguez’s] substandard performance, and whether these
expressions were themselves realistic given the actual overall requirements
of the job.’ ” (Wesson, supra, 68 Cal.App.5th at p. 762, quoting Ramirez,
supra, 20 Cal.4th at p. 802.)
The two questions Parivar proposed, by themselves, do not cover all of
these considerations. Alone, or together, they would not have provided the
court with a decision on an ultimate fact. That is, they would not have
supplied a factual conclusion that left the trial court with nothing to do but
draw conclusions of law (see Code Civ. Proc., § 624; Carlsbad Unified School
Dist., supra, 232 Cal.App.4th at p. 338) because it would not reach
conclusions on all the matters that it was required to consider.
Parivar cites several authorities in support of its argument to the
contrary. The appellate court in Saxena v. Goffney, supra, 159 Cal.App.4th
316, found error where a jury was asked whether the plaintiff gave his
“informed consent” to a medical procedure, an element of a medical
negligence claim, but was not asked if the plaintiff gave “ ‘no consent’ at all,”
although this was an essential element of the plaintiff’s separate battery
claim. (Id. at pp. 326–327.) In Trejo v. Johnson & Johnson (2017)
13 Cal.App.5th 110, error was found on appeal where the trial court failed to
include a special verdict question that would have “resolve[d] a necessary
element of a negligent failure to warn claim.” (Id. at p. 137.) In Myers
Building Industries, Ltd. v. Interface Technology, Inc. (1993) 13 Cal.App.4th
949, the appellate court struck a punitive damages award where the jury, in
returning a special verdict for breach of contract, determined the defendants
14
had acted with oppression, fraud or malice, but did not determine whether a
tort for which punitive damages could be awarded had been committed. (Id.
at pp. 956–962.) And in Fuller-Austin Insulation Co. v. Highlands Ins. Co
(2006) 135 Cal.App.4th 958, which in turn relied on Myers Building
Industries, Ltd., an appellate panel found error where the trial court did not
ask the jury to determine whether a settlement challenged by an excess
insurer was reasonable, even though the insurer was entitled to defend
against the insured’s indemnity claim on that ground. (Fuller-Austin
Insulation Co., at pp. 1005–1006.)
These cases found fault with special verdict forms that failed to ask the
jury to make determinations regarding all of the essential elements of certain
causes of action or, in the case of Myers Building Industries, Ltd., failed to
ask the jury to find liability for the necessary cause of action itself. But that
is not what Parivar argues here. Whether one considers Parivar’s “realistic
expectations” to be an issue of evidentiary fact or an essential element, it is
only one of several matters of equal importance that the jury was required to
consider to determine if Parivar had proved the “primarily engaged” prong of
its executive exemption affirmative defense. Because Parivar’s proposed two
questions would fail to ask the jury to make findings on all these matters, we
reject its argument.
This, however, is not the end of our analysis. As mentioned above, a
special verdict question “ ‘must present the conclusions of fact as established
by the evidence, and not the evidence to prove them; and those conclusions of
fact must be so presented as that nothing shall remain to the Court but to
draw from them conclusions of law.’ (Code Civ. Proc., § 624.)” (Carlsbad
Unified School Dist., supra, 232 Cal.App.4th at p. 338.) Contrary to
Rodriguez’s contentions, the trial court’s special verdict question failed to
meet this statutory requirement. As Parivar puts it, the question was “only
15
part of the necessary inquiry.” (See Cal. Code Regs., tit. 8, § 11050,
subd. 1(B)(1)(e) [“The work actually performed by the employee during the
course of the workweek must, first and foremost, be examined and the
amount of time the employee spends on such work, together with the
employer’s realistic expectations and the realistic requirements of the job, shall
be considered . . . ” (italics added)]; see also Wesson, supra, 68 Cal.App.5th at
p. 762 [listing additional issues to consider].)
There was, to be sure, an ultimate fact question the court could have
asked the jury regarding the “primarily engaged” test. The wage order
required that the jury find whether Parivar proved that Rodriguez was
“primarily engaged in duties which meet the test of the [executive]
exemption.” (Cal. Code Regs., tit. 8, § 11050, subd. 1(B)(1)(e).) This is the
basis for a proper ultimate fact question, e.g., “Did [Parivar] prove that
Patricia Rodriguez performed duties which met the test of the exemption more
than half of the time?” 8 It is a materially different question than whether
Rodriguez spent more than half of her time 9 performing “exempt duties.”
And the difference is not merely semantic. That is because duties which
“meet the test of the exemption” include not only (1) directly “exempt
duties”—i.e., “managerial and supervisory tasks” (Safeway, supra,
43 Cal.App.5th at pp. 676–677, quoting 29 C.F.R. §§ 541.102(a) & (b)
(2001))—but also (2) “work that is directly and closely related to exempt work
and work which is properly viewed as a means for carrying out exempt
8We do not mean to imply that the trial court here was necessarily
barred from asking a jury to reach conclusions on multiple questions of
ultimate fact in determining the factual merits of Parivar’s executive
exemption affirmative defense. This question is not before us.
9As we have discussed, this is another way of stating whether she was
“primarily” engaged. (See Cal. Code Regs., tit. 8, § 11050, subd. 2(O).)
16
functions” (Cal. Code Regs., tit. 8, § 11050, subd. 1(B)(1)(e); see Safeway, at
p. 677 [referring to tasks “ ‘directly and closely related’ ” to managerial or
supervisory tasks as its own category of “exempt tasks”]), and (3) work that,
while nonexempt, is the result of the employee’s own substandard
performance as an executive that diverges from the employer’s realistic
expectations and realistic job requirements (Cal. Code Regs., tit. 8, § 11050,
subd. 1(B)(1)(e); Wesson, supra, 68 Cal.App.5th at p. 762 [“ ‘an employee who
is supposed to be engaged in [exempt tasks] during most of his [or her]
working hours and falls below the 50 percent mark due to his [or her] own
substandard performance should not thereby be able to evade a valid
exemption’ ”], quoting Ramirez, supra, 20 Cal.4th at p. 802). By asking the
jury about “duties which meet the test of the [executive] exemption,” the trial
court would have posed a question of ultimate fact, under which the several
matters the jury was to consider in determining the nature of Rodriguez’s
duties, including Parivar’s realistic expectations, would have been subsumed.
As Rodriguez points out, a special verdict question is proper when it
presents a question of ultimate fact to the jury, and the court is not
necessarily required to give questions to the jury regarding all of the
subsidiary matters it must consider in answering this question. For example,
in Carlsbad Unified School Dist., supra, 232 Cal.App.4th 323, a special
verdict form asked: “ ‘Should Carlsbad Unified School District be estopped
from asserting that [the minor’s] parents filed a late government claim on
[the minor’s] behalf because Carlsbad Unified School District did or said
something that caused [the minor’s] parents to delay in filing a claim?’ ” (Id.
at p. 339.) The appellate court rejected the school district’s argument that
the trial court erred by not including a separate question on each element of
estoppel. (Id. at pp. 338–339.) The court, relying on the rule that a special
verdict form should ask about conclusions of fact and not about the evidence
17
to prove those conclusions, held that the verdict form adequately “presented
the issue of estoppel as a whole to the jury as a single question.” (Id. at
p. 339.) It further concluded that “[t]he [trial] court also fully instructed the
jury on the proof required in order for estoppel to be established. The court
did not abuse its discretion by not repeating those instructions as questions
in the special verdict form.” (Id. at p. 340, fn. omitted.) 10
Unfortunately, the trial court here, while it did provide instructions
regarding all of the matters underlying Parivar’s executive exemption
affirmative defense, did not ask the jury in the special verdict form to answer
a sufficiently broad question of ultimate fact regarding the “primarily
engaged” prong of that defense. With Parivar, we agree that the question the
court posed was unduly restrictive and therefore erroneous.
The special verdict question—which asks whether “Ms. Rodriguez
performed exempt duties more than half of the time”—has the virtue of
simplicity, but the simplicity came at the cost of nuance on a nuanced point of
law. It leaves the distinct impression that the relevant inquiry is essentially
quantitative, a matter of counting up hours that qualify as something called
“exempt duties.” But that undefined term has no counterpart in special
10 Rodriguez also relies on Markow v. Rosner (2016) 3 Cal.App.5th
1027, where the appellate court rejected the argument that a special verdict
form should have included questions about the plaintiffs’ alternative theories
of negligence in regard to their one negligence cause of action. (Id. at
p. 1047.) The court held that the form “properly required the jury to make
findings only as to ultimate facts” and that “[i]ncluding questions that
separately addressed each of plaintiffs’ theories of negligence would have
required the jury to decide evidentiary facts, in contravention of [Code of
Civil Procedure] section 624.” (Ibid.) Markow is of only limited value to
Rodriguez, however, because she does not establish that questions about such
matters as Parivar’s “realistic expectations” were mere evidentiary facts
rather than essential elements of Parivar’s executive exemption affirmative
defense, an issue that we need not and do not decide.
18
instruction No. 13, which uses the term “executive duties,” not “exempt
duties.” This created a mismatch in the language of the special verdict
question and in the only instruction specifically designed to guide the jury in
answering it. One sentence in special instruction No. 13 does, to be sure,
gesture in the right direction—telling the jury “you should also consider
[Parivar’s] realistic expectations of how Ms. Rodriguez should spend her time
and the realistic requirements of the job”—but ultimately that directive leads
nowhere because it fails to inform the jury what significance the employer’s
“realistic expectations” should be given in the formulation of an answer.
These are not the only problematic aspects of the way the jury
instructions deal with Parivar’s executive exemption defense. There are
other points of imprecision. On the one hand, for example, the instructions
state that the jury, “[i]n determining whether Ms. Rodriguez performed
exempt duties more than half of the time,” should most importantly consider
“how she actually spent her time,” but also should consider “whether
Ms. Rodriguez’s practice differed from [Parivar’s] realistic expectations of
how Ms. Rodriguez should spend her time and the realistic requirements of
the job.” On the other hand, the instructions, in discussing the various
matters the jury is to consider, include references to categories of work that
are not intended to encapsulate all duties which meet the test of the
executive exemption, such as references to “exempt or non-exempt activity,”
“[e]xempt work,” “executive duties,” and “exempt activities”—all undefined
terms raising questions about whether they mean the same thing. That
compounded the terminological confusion.
Despite the instructional ambiguities the jury faced in trying to answer
the critical special verdict question addressing Parivar’s affirmative defense
of executive exemption, Rodriguez insists that we must affirm under the
principle that a jury is presumed to have followed the instructions it was
19
given. But the cases she relies upon involved situations in which a
challenged special verdict form, read together with accompanying jury
instructions, provided full and complete legal guidance. (See Carlsbad
Unified School Dist., supra, 232 Cal.App.4th at p. 340 [“The court . . . fully
instructed the jury on the proof required in order for estoppel to be
established”]; Red Mountain, LLC v. Fallbrook Public Utility Dist. (2006)
143 Cal.App.4th 333, 364–365 & fn. 21 [trial court’s refusal to include
contract defenses of impossibility or impracticability in special verdict
question asking about breach was not erroneous because the jury instructions
addressed those defenses].) We cannot say that here. The trial court failed
altogether to ask a question on a determinative issue of ultimate fact,
properly phrased to encompass as subsidiary issues all required elements of
Parivar’s affirmative defense. (See Trejo v. Johnson & Johnson, supra,
13 Cal.App.5th at p. 138 [jury instruction on a required element “did not
obviate the necessity of including that required element in the special
verdict”].) 11
Thus we are constrained to conclude that simply presuming the jury
followed the instructions it was given does not resolve the issue presented
here. For a variety of reasons, the instructions themselves are not such a
model of clarity that they ensure the jury understood the phrase “exempt
duties” in the special verdict question called for them to consider all of the
matters that are subsidiary to “duties which meet the test of the exemption”
The trial court’s error in crafting the special verdict form is
11
understandable because it drew from standard CACI No. 2720, which
instructs that a defendant must prove that a plaintiff “perform[ed] executive
duties more than half of the time.” Unfortunately, however, that standard
instruction does not refer to “duties which meet the test of the exemption.”
Perhaps this case will lead the drafters of the CACI instructions to revisit the
language of CACI No. 2720 and adopt a clarifying revision.
20
(Cal. Code Regs., tit. 8, § 11050, subd. 1(B)(1)(e)) under the wage order and
Ramirez. A reasonable juror may well have looked no further than what
Rodriguez actually did—according to her own testimony—without taking into
account whether, upon a consideration of the employer’s reasonable
expectations, she should have been engaged in more managerial tasks than
she actually performed, and thus been charged with having spent more time
on expected managerial tasks than she claimed she did. The court’s
instructions explained (albeit ambiguously) how to undertake this broader,
contextual assessment, but the actual question the jury was asked to answer
was so narrow that it short-circuited any need to consider the broader
context.
D. The Court’s Special Verdict Error Was Prejudicial
A court’s defective special verdict question requires reversal if the error
results in a miscarriage of justice. (Taylor v. Nabors Drilling USA, LP,
supra, 222 Cal.App.4th at pp. 1244–1245.) A “miscarriage of justice” has
occurred if, upon our examination of the entire cause, including the evidence,
we conclude “ ‘it is reasonably probable that a result more favorable to the
appealing party would have been reached in the absence of the error.’ ”
(Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800, quoting People v.
Watson (1956) 46 Cal.2d 818, 836.)
“ ‘A “reasonable probability” “does not mean more likely than not, but
merely a reasonable chance, more than an abstract possibility.” [Citation.] It
“does not mean ‘more likely than not,’ but merely ‘probability sufficient to
undermine confidence in the outcome.’ ” [Citation.] Therefore, reversal is
necessary when it cannot be determined whether or not the error affected the
result, as in such a case there “exists . . . at least such an equal balance of
reasonable probabilities” “ ‘that it is reasonably probable that a result more
favorable to the appealing party would have been reached in the absence of
21
the error.’ ” [Citation.]’ (People v. Hardy (2021) 65 Cal.App.5th 312, 329–
330; see People v. Beck and Cruz (2019) 8 Cal.5th 548, 668 [a reasonable
probability of a different result is shown when the error ‘ “ ‘undermines
confidence in the outcome’ ” ’]; People v. Mar (2002) 28 Cal.4th 1201, 1225
[under the reasonable probability standard, ‘reversal is required when there
exists “at least such an equal balance of reasonable probabilities as to leave
the court in serious doubt as to whether the error affected the result” ’];
People v. Mower (2002) 28 Cal.4th 457, 484 [same].)” (People v. Rodriguez
(2021) 68 Cal.App.5th 301, 324.)
On this record, the prejudice question is close because there is not
much evidence favoring Parivar’s argument that, in effect, Rodriguez spent
too much time on nonexempt tasks and, in the assessment of how she spent
her time, could have been fairly charged with having spent more time on
executive tasks in accordance with Parivar’s reasonable expectations. But
while it is thin, evidence for that perspective on the facts presented here is
not wholly absent. Parivar points out, for example, that Muhammad Haq,
Rodriguez’s district manager, told her she needed to spend more time
training employees and also advised her to hire more employees. Drawing
inferences for Parivar, Rodriguez—who was indisputably well-regarded as an
employee and received multiple bonuses—had essentially taken on a role
akin to a “player-coach” in athletics, and despite the fact that her team
performed well, she was told by her district manager that she needed to
spend less time on the “playing field.” Without endorsing this line of
argument or assessing the credibility of the evidence on which it is based
(which is not our role), we are satisfied that, had a properly phrased question
asking for a finding of ultimate fact on Parivar’s executive exemption been
asked, there is a reasonable probability of a result more favorable to Parivar
than the one the jury delivered.
22
In the end, two considerations are dispositive on the prejudice question.
First, the 9 to 3 vote clearly indicates the jury did not consider the evidence
overwhelming for either Rodriguez or Parivar on this question, because the
vote mustered only the bare minimum required to find Parivar had not
proven the matter. The split vote is one of two factors that undermine our
confidence that the jury would have rejected Parivar’s affirmative defense in
the absence of the court’s special verdict error. (See Seaman’s Direct Buying
Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752, 774 [that only the bare
number of jurors required agreed on a plaintiff’s verdict “ ‘len[t] . . . support
to the probability’ ” that an erroneous instruction “ ‘was the factor which
tipped the scales in [plaintiff’s] favor’ ”], overruled in part on other grounds in
Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85, 102–103 and
disapproved in part on another ground in Della Penna v. Toyota Motor Sales,
U.S.A., Inc. (1995) 11 Cal.4th 376, 393, fn. 5; followed in Barouh v. Haberman
(1994) 26 Cal.App.4th 40, 47–48; see also Huntingdon v. Crowley (1966)
64 Cal.2d 647, 660–661 [noting jury returned a 9 to 3 verdict in finding an
instructional error was prejudicial].)
Second, the question of whether Rodriguez spent most of her time
engaged in duties that meet the test of the executive exemption was
extensively contested at trial. The evidence in support of the position that
she did not includes Rodriguez’s own testimony that she spent 70 to 80
percent of her time covering one or the other of the restaurant’s workstations,
where her primary purpose was to perform the same duties as nonexempt
employees, such as taking orders, preparing drinks, cooking food and serving
customers. She testified that she worked most at the drive-thru and in the
kitchen, covered for employees when they went on breaks or did not show up
for work, and spent six to 12 hours a week prepping food. There is also
evidence that restaurant managers, while instructed to work at designated
23
workstations as the “person-in-charge” as part of their supervising and
managing employees, were nonetheless expected to serve customers when
working at these workstations.
Rodriguez further testified that she spent so much time performing the
work of nonexempt employees in order to meet Parivar’s prescribed speed of
service and the labor budget for her restaurant with the knowledge,
instruction and approval of her direct supervisor. She similarly testified that
she worked in the kitchen because her supervisor, Haq, told her that, along
with checking on employees’ food preparation, she should do the preparation
herself if she could in order to control food costs. Haq testified that Rodriguez
was “very good at her job,” that he never “wrote her up,” and that she more
often than not received a quarterly bonus for meeting Parivar’s goals for her
restaurant.
On the other hand, the evidence in support of the position that
Rodriguez did spend most of her time engaging in duties that meet the test of
the executive exemption includes that Rodriguez was instructed in her
training that she was expected to engage in a variety of executive tasks
designed to ensure her restaurant was successful, including managing labor
and food costs, training and coaching employees, ensuring food safety and
creating “an effective schedule that builds sales” through “diligent attention
to staffing levels, proactive interviewing and thoughtful planning.”
There is also evidence supporting the position that, in practice, Parivar
realistically expected Rodriguez to supervise and manage more than she
claimed she was able to do. Haq (who only visited the restaurant two to three
times per week) testified that he expected Rodriguez to train employees and
staff her restaurant so that she had “enough people and right people at every
station” to perform the necessary tasks. There is evidence that at times he
advised her to spend more time training employees and to hire more of them,
24
and that, if Rodriguez’s restaurant was not meeting expectations, he expected
her to identify and solve the problem by applying the management training
she had received. Further, if Rodriguez did work on the restaurant floor a
considerable number of hours, evidence indicates that she was expected to
supervise and manage employees by “keep[ing her] eye on all of the stations”
and “visibly managing the shift” from one of the workstation positions
specifically designated for the “person-in-charge” in order to keep the
restaurant running smoothly.
Finally, there is evidence that Rodriguez, contrary to her testimony,
was not necessarily required to spend most of her time engaging in
nonexempt tasks, including evidence that employees complained about their
lack of hours; evidence that her supervisor at times told her to hire more
employees; and the testimony of a defense expert witness that he concluded,
based on his review of Rodriguez’s restaurant’s records, that the restaurant
was not busy all of the time and was adequately staffed, so that Rodriguez
should have been able to spend more than half of her time performing
managerial duties. Since the issue of how Rodriguez spent her time was
hotly contested, with evidence favoring both sides, any ambiguity in what the
jury was asked to find could easily have had a significant impact on the
verdict.
Accordingly, given the jury’s 9 to 3 vote that Parivar did not prove
Rodriguez spent more than half of her time performing exempt duties, and
given the heavily contested question of whether she spent that time
performing duties which meet the test of the executive exemption, we
conclude it is reasonably probable that the jury would have reached a result
more favorable to Parivar in the absence of the court’s special verdict error.
25
III. DISPOSITION
The judgment and attorney fees award are reversed and this matter is
remanded to the trial court for further proceedings consistent with this
opinion. Parivar, Inc. and Yadav Enterprises, Inc. are awarded costs of
appeal.
STREETER, J.
WE CONCUR:
POLLAK, P. J.
BROWN, J.
26
Trial Court: Superior Court of California, County of Alameda
Trial Judge: Hon. Jenna Whitman
Counsel: Rogers Joseph O’Donnell, Dennis C. Huie,
Sharon Ongerth Rossi and Si Eun Amber Lee for Defendants
and Appellants.
Leonard Carder, Amy Endo and Jennifer Keating for Plaintiff
and Respondent.
Rodriguez v. Parivar, Inc., et al. – A158939, A160694