Hyams v. CVS Health Corporation ( 2020 )

1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 EUREKA DIVISION 4 5 RYAN HYAMS, et al., Case No. 18-cv-06278-HSG (RMI) 6 Plaintiffs, ORDER ON DISCOVERY 7 v. Re: Dkt. Nos. 67, 69 8 CVS HEALTH CORPORATION, et al., 9 Defendants. 10 11 On March 31, 2020, the undersigned held a hearing on several discovery disputes and 12 resolved all but one issue regarding a deposition topic upon which the parties were instructed to 13 submit supplemental briefing (dkt. 59). The parties submitted a joint supplemental letter brief (dkt. 14 67), and Defendants submitted a separate brief to address an argument that Plaintiffs did not 15 include in the version they exchanged with Defendants prior to filing (dkt. 69).1 The outstanding 16 discovery dispute concerns whether Plaintiffs are entitled to inquire about the cost of full-time 17 employee benefits. See Jt. Ltr. Br. (dkt. 56) at 7-8. In their portion of the brief, Plaintiffs argue that 18 the benefits information is discoverable as relevant compensation which they may be due as 19 restitution under the California Business & Professions Code §17200, et. seq. (“UCL”). See Suppl. 20 Ltr. Br. (dkt. 67) at 1-2. Defendants argue that full-time employee benefits are not relevant to any 21 claims or defenses, and thus, outside the scope of discovery. Id. at 3-4. 22 “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any 23 party’s claim or defense.” Fed. R. Civ. P. 26(b)(1). Additionally, “[f]or good cause, the court may 24 order discovery of any matter relevant to the subject matter involved in the action. Relevant 25 26 1 In its separate brief, Defendants state that the parties agreed to, and did, exchange their portions of the 27 supplemental brief prior to filing with the court to give one another an opportunity to review and respond to the arguments presented. In the filed brief, however, Plaintiffs presented a new argument – that the 1 information need not be admissible at the trial if the discovery appears reasonably calculated to 2 lead to the discovery of admissible evidence.” Id. The UCL proscribes unlawful business 3 practices, and it “‘borrows violations of other laws and treats them as unlawful practices that the 4 unfair competition law makes independently actionable.’” Puentes v. Wells Fargo Home Mortg., 5 Inc., 160 Cal. App. 4th 638, 644 (Cal. Ct. App. 2008) (quoting Cel-Tech Commc’ns, Inc. v. Los 6 Angeles Cellular Telephone Co., 20 Cal. 4th 163, 180 (Cal. 1999)). 7 In their Complaint, Plaintiffs allege that Defendants committed the following labor 8 violations: 1) failure to provide uninterrupted meal periods; 2) failure to authorize and permit rest 9 breaks; 3) failure to pay overtime; 4) failure to pay minimum wages; 5) failure to pay timely 10 wages due at termination/waiting time penalties; 6) failure to timely pay all wages; 7) failure to 11 reimburse for employment related expenses; 8) failure to maintain required records; 9) failure to 12 furnish accurate itemized wage statements; 10) failure to provide notice of paid sick leave; 11) 13 failure to provide one day’s rest in seven; and 12) failure to comply with Labor Code Sections 850 14 and 851. See generally, Second Am. Compl. (“SAC”) (dkt. 22). Plaintiffs argue that their claim 15 under Labor Code Sections 850 and 851 is the basis for discovery of full-time employee benefits 16 information. Suppl. Ltr. Br. (dkt. 67) at 1. Labor Code Section 850 provides that “[n]o person 17 employed to sell at retail drugs and medicines or to compound physicians’ prescriptions shall 18 perform any work in any store, dispensary, pharmacy, laboratory, or office for more than an 19 average of nine hours per day, or for more than 108 hours in any two consecutive weeks . . . .” 20 Cal. Lab. Code § 850. Section 851 prohibits employers from “requiring or permitting” employees 21 covered by Section 850 to work more than the maximum hours prescribed therein. See Cal. Lab. 22 Code § 851. 23 Plaintiff alleged in the SAC that “Defendants required Plaintiff and the Pharmacy 24 Employee Subclass to work in excess of the hours prescribed by Labor Code Section 850.” SAC 25 (dkt. 22) at 28. By way of facts, Plaintiff Duhon alleged that at all relevant times, she was a 26 pharmacy cashier and technician for Defendants, and throughout her employment she was unable 27 to take uninterrupted rest breaks due to Defendants’ understaffing, fill-time metrics, and an 1 5. In the joint supplemental brief, Plaintiffs argue that they are entitled to discovery of the cost of 2 full-time benefits “initially provided to and then taken away from Plaintiff Duhon and other 3 aggrieved employees as a result of [Defendants’] illegal and unfair understaffing in violation of 4 Labor Code sections 850 and 851.” Suppl. Ltr. Br. (dkt. 67) at 1. They assert that “by failing to 5 abide by California laws regarding staffing levels for those employed to sell retail drugs and 6 medicine, [Defendants] deprived [Plaintiffs] of a 32 [] hour week schedule which resulted in the 7 loss of value of employment benefits associated with full-time work.” Id. In its portion of the 8 brief, Defendants argue that full-time employee benefits are not relevant to any of Plaintiffs’ 9 claims. Id. at 3-4. In its separate brief, Defendants add that Labor Code Sections 850 and 851, like 10 the remainder of Plaintiffs’ claims, do not place full-time employee benefits at issue in this case 11 because those provisions set maximum work hours for employees who “sell drugs at retail.” See 12 (dkt. 69). Defendants emphasize that because the UCL does not proscribe any specific conduct, 13 Plaintiffs are required to allege that Defendants violated some other law – a predicate offense. 14 Something Defendants argue that Plaintiffs cannot do because working less than full time is not a 15 violation of Labor Code Sections 850 and 851. 16 Indeed, California Labor Code Sections 850 and 851 set the maximum allowable work 17 hours for pharmacy employees. In the SAC, Plaintiffs allege that Defendants’ understaffing led to 18 pharmacy employees regularly working in excess of the maximum allowable work hours, and that 19 employees could not take uninterrupted breaks as required under California law due to 20 understaffing. In their requests for discovery, Plaintiffs add that Defendants’ understaffing 21 simultaneously resulted in too few hours for other pharmacy employees; specifically, Plaintiff 22 Duhon went from full-time to part-time employment which deprived her of the associated full- 23 time benefits. Therefore, Plaintiffs allege, in their discovery letter brief, but not in the operative 24 complaint, that because Defendants scheduled some people to work too many hours in violation of 25 Labor Code Sections 850 and 851, other employees were scheduled part-time and deprived of both 26 work hours and benefits associated with full-time employment. 27 It appears that Plaintiffs are arguing that the understaffing was a cause that gave rise to two 1 been avoided if Defendants did not require some employees to work an unlawful amount of hours. 2 || Their logic is that if Defendants had distributed the hours among the pharmacy staff in accordance 3 with the law, then Plaintiff Duhon and others similarly situated would have been scheduled for 4 || full-time shifts and received benefits. The thrust of this allegation is that Defendants violated labor 5 laws in order to have fewer full-time employees to whom they would owe benefits. In other 6 || words, the understaffing policy resulted in some employees working too many hours and other 7 employees working fewer hours. The issue for Plaintiffs is that the former is unlawful while the 8 latter is not. Plaintiffs attempt to allege the inverse of the proscribed conduct from Labor Code 9 || Sections 850 and 851 in a discovery letter brief. Those code sections guarantee pharmacy 10 || employees that they will not be required to work too many hours; it does not guarantee that they 11 will be scheduled for no less than a minimum amount of hours or for any benefits that accompany 12 || full-time work. Thus, the undersigned finds discovery on the cost of full-time employee benefits is 5 13 || not relevant to Plaintiffs’ claim under the UCL predicated on Labor Code Sections 850 and 851. 14 Believing this discovery to be relevant to the claim for excessive overtime, most of 3 15 || Plaintiffs’ portion of the brief is dedicated to arguing that full-time benefits are just as much a part 16 || of “compensation” as are wages, which are the typical form of restitution in UCL claims 3 17 predicated on violations of employment law. The undersigned does not resolve this issue because 18 || the discovery sought is not relevant to any of Plaintiffs’ claims. 19 Therefore, Plaintiffs’ request to take deposition testimony about the cost of full-time 20 || employee benefits, identified as Topic 65 in the original discovery letter brief (dkt. 56), is 21 DENIED. 22 IT IS SO ORDERED. 23 || Dated: April 29, 2020 24 Mt Z 25 6 ROBERT M. ILLMAN United States Magistrate Judge 27 28