Hydraulics International v. Superior Court CA2/1

Filed 5/19/16 Hydraulics International v. Superior Court CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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
SECOND APPELLATE DISTRICT
DIVISION ONE
HYDRAULICS INTERNATIONAL, INC., B268073
Petitioner, (Los Angeles County
Super. Ct. No. BC518522)
v.
THE SUPERIOR COURT OF LOS
ANGELES COUNTY,
Respondent;
FERNANDO VEGA,
Real Party in Interest.
ORIGINAL PROCEEDING; petition for writ of mandate. Kenneth R. Freeman,
Judge. Petition granted.
Ballard Rosenberg Golper & Savitt, Linda Miller Savitt, Jeffrey P. Fuchsman and
Rami Yomtov for Petitioner.
No appearance by Respondent.
Ehlert Appeals, Allison L. Ehlert; Boren Osher & Luftman, Paul K. Haines;
Baltodano & Baltodano and Hernaldo J. Baltodano for Real Party in Interest.
_________________________
On the record before us, we hold that substantial evidence does not support
certifying an unpaid wages class. Further, we reverse the trial court’s finding that
common questions of fact predominate: Apart from isolated anecdotal accounts, the
employee-declarants have provided no evidence of a company-wide policy allowing pre-
shift work and no evidence that any supervisors knew that the employees were working
before their shifts. (See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th
1004 (Brinker).) In fact, the evidence presented in the trial court is to the contrary: the
employee handbooks, which advise employees that employer pays only for pre-approved
overtime, and the new-employee orientation that reiterates the overtime rule, demonstrate
that the employer neither encourages nor condones individual decisions to start work
before the scheduled shift time; the record establishes that none of the hourly employees
sought either permission to work overtime or to be paid for overtime.
Accordingly, we order that respondent court reverse its order certifying the class
and enter and new and different order, denying certification.
BACKGROUND
Hydraulics International, Inc. (Hydraulics) employs both hourly (nonexempt) and
salaried (exempt) workers. On August 16, 2013, hourly-worker Fernando Vega sued
Hydraulics, alleging failure to pay overtime wages to nonexempt employees.1 (Lab.
Code, §§ 204, 510, 558, 1194, 1198) Nearly two years later,2 Vega moved to certify an
1 Vega’s other causes of action are not at issue in the case at bar. In the original
complaint, Vega set forth causes of action for failure to comply with minimum wage
requirements (Lab. Code, §§ 1182.12, 1194, 1194.2, 1197), failure to provide meal
periods (Lab. Code, § 204, 211, 226.7, 512), failure to provide accurate and complete
wage statements (Lab. Code, § 226), and failure to pay last wages within 72 hours (Lab.
Code, §§ 201, 202, 203). He alleges that these violations of the Labor Code constitute
unfair business practices (Bus. & Prof. Code, § 17200 et seq.) and support an award of
attorney fees. (Lab. Code, § 2698 et seq.) Vega dismissed with prejudice the causes of
action for meal period violations and wage statement violations, and also dismissed with
prejudice his demand for civil penalties and attorney fees and costs.
2
Vega originally set his motion to be heard on July 30, 2015; it was actually heard
on August 6, 2015.
2
Unpaid Wages Class3 of “Hydraulics’ current and former non-exempt employees in
California whose timekeeping records reflect that they clocked in for work prior to the
scheduled start of their shift on at least one occasion, from August 16, 2009 through the
present.”
In support of his motion, Vega provided the employee handbooks in use during the
subject employment period. Each requires overtime to be approved in writing. The
“Working Together at Hydraulics International, Inc. Employee Handbook” expressly
states “[a]ny unauthorized overtime will not be paid” and sets forth in bold font that
overtime must be approved by a supervisor in writing. Two other handbooks, HR003
Rev A and HB003 Rev B, also in use during the subject employment period, require that
a supervisor approve overtime not only in writing but also in advance. Both place this
information is a section entitled, “Overtime”: “Please remember that you are not allowed
to work overtime unless it has been authorized in advance in writing, by your supervisor.
Employees working unauthorized overtime may be subject to disciplinary action, up to
and including termination.”
Juanita Porras, Hydraulics’ “person most knowledgeable,” testified at her
deposition that since May 2010, Hydraulics has used ADP’s biometric work “clock-in”
system, which requires employees “to put their hand inside the machine” to clock in and
out. Before the adoption of this system, the employees swiped time cards to track when
their workdays began and ended. Porras testified that company policy forbids employees
from clocking in more than 10 minutes before their scheduled shifts, but no one has
actually been disciplined for doing so.4 She further testified that the current policy is to
3Vega had also sought to certify a waiting time penalty class, employees whose
last wages were not paid within 72 hours. In petition No. B268083, Vega seeks review of
respondent court’s denial of certification. In a separate order, we deny that petition
summarily.
4 Both HR-003 Rev A and Rev B provide: “It is against company policy to clock-
in prior to 10 minutes before your shift starts. You should clock out immediately from
your shift end. Repeated violation of this policy will result in disciplinary action.”
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deny payment for any clocked-in time before the start of the employee’s shifit. Porras
subsequently changed her deposition testimony to say, “‘Employees are always paid for
overtime work even if it was not authorized.’”5
David Maqui, another “person most knowledgeable,” testified at his deposition
that Hydraulics uses the Made 2 Manage (M2M) system, a bar-code tracking system that
ascertains and monitors the particular job order on which an employee works.
Vega also proffered the expert report of J. Michael Dumond, Ph.D., an economist,
who analyzed three data sources provided by Hydraulics for the period from May 10,
2010 through November 7, 2014. He reported that “for nearly 78% of the shifts analyzed
(i.e., 6,197 of the 7,961 shifts), the employee . . . clocked in 10.20 minutes earlier, on
average, than the scheduled starting time.” As for the M2M data, over 50 percent of the
shifts started before the scheduled start time, with the employees starting, on average,
about eight minutes before the shift.
Vega also provided the declarations of eleven former Hydraulics employees.6 The
declarants stated that they regularly clocked in before their scheduled work time;
although they believed that their supervisors observed that they had clocked in early, the
supervisors never told them to refrain from working. However, no declarant stated that
she or he sought permission to work overtime or asked to be paid for overtime.
In opposition to the class certification motion, Hydraulics submitted multiple
declarations wherein employees averred that they had never started work before their
shifts began, nor had they seen various Vega declarants start working before their shifts.
Human Resources Director Heidi Marusa explained the clock-in procedure as well
as the overtime process in her declaration. She also provided facts that countered
statements made by the Vega declarants: “Employees who arrive early before their shift
starts are permitted to clock into the timekeeping system up to 10 minutes before the start
5 Vega does not challenge the grace period.
6All of the non-English declarations were translated into English. The parties do
not dispute the accuracy of the translations.
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of their shift for their own convenience. HII has employee break rooms in each building.
Employees are free to wait in the employee break room where they can have coffee, eat
breakfast, read the newspaper, or visit with co-workers before their shift begins.
Employees are prohibited from performing work before their shift starts. The start of
shifts are announced by a bell system. [¶] . . . Employees were never instructed or
encouraged to clock in early before their shift was scheduled to start. No employees were
ever disciplined for not clocking in early. . . . [¶] Under our 7-minute rounding rule,
employees will be paid from their scheduled start time if the[y] punch in up to seven
minutes after their scheduled work time. If employees are asked to come in early due to
production needs, a manual adjustment is made so they will be paid for all of their work
hours. Otherwise, because employees are not permitted to, and do not begin work before
their scheduled start time, early punches are disregarded. [¶] . . . [¶] [A] notice that is
posted by the M2M bar code readers . . . states: ‘Please do not clock-in to M2M before
your shift begins or after your shift ends.’” 7
Human Resources Generalist Angie Grimaldo stated in her declaration that she
instructs all new employees that no employee is permitted to work before his or her shift
begins: “I make it clear to the employee that HII prohibits them from starting work
before their shift begins, or during their meal and rest breaks.”
Mechanical Assembly Supervisor Manuel Ismael Gutierrez refuted several Vega-
proffered declarations: “I am employed by HII as a Supervisor in the Mechanical
Assembly Department. Employees in this department are normally scheduled to start
work at 7:00 a.m. when the bell rings. I have never observed any employees working
prior to their shift starting. I would not allow any of my employees to start work before
the shift started.”
Hydraulics submitted the declaration of its expert, Deborah K. Foster, Ph.D., an
economist, stating that Vega and the other employees who submitted declarations in
7 “HII” refers to Hydraulics.
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support of certification were paid the correct amount for the time worked, because
Hydraulics’ policy is to round work time to the nearest quarter hour.
Respondent court granted certification as to the unpaid wages class. This petition
followed. We issued an alternative writ, accepted briefing, and heard oral argument.
DISCUSSION
Generally, we defer to a trial court’s certification of a class, except where
substantial evidence does not support the trial court’s determination that common issues
predominate.8 In the case at bar, Vega provided no evidence of a company-wide policy
encouraging pre-shift work and any evidence, apart from anecdotal accounts, that any
supervisors knew that the employees were working before their shifts. The electronic
clock-in system shows when the workers clock in, but not when they actually commence
their job-related tasks. Moreover, the employee handbooks, which advise employees that
Hydraulics pays only for pre-approved overtime and the new-employee orientation that
reiterates this policy, support a conclusion that Hydraulics neither encourages nor
condones individual decisions to start work before the scheduled shift time.
An employer is responsible to pay wages for off-the-clock work; “‘the time during
which an employee is subject to the control of an employer, and includes all the time the
employee is suffered or permitted to work, whether or not required to do so.’” (Morillion
v. Royal Packing Co. (2000) 22 Cal.4th 575, 582.) In Morillion, the California Supreme
Court held that the time agricultural workers spent traveling on their employer’s buses to
and from the fields was compensable as “hours worked.” (Id. at p. 595.)
The facts in Brinker, supra, 53 Cal.4th 1004 are remarkably similar to the facts in
the case at bar. Nonexempt hourly workers sued the Brinker employers, alleging that the
employees worked off the clock during meal periods.9 In support of certification, the
8 “[W]hen the question is one of a common or general interest, of many persons,
or when the parties are numerous, and it is impracticable to bring them all before the
court, one or more may sue or defend for the benefit of all.” (Code Civ. Proc., § 382.)
9
Plaintiffs also alleged that Brinker failed to provide rest and meal breaks or
premium wages in lieu of such breaks. (Brinker, supra, 53 Cal.4th at p. 1019.)
6
plaintiff provided “numerous declarations from proposed class members.” (Id. at
p. 1020.) Brinker countered that the off-the-clock subclass should not be certified
because “Brinker did not suffer or permit off-the-clock work, and any such off-the-clock
work would require individualized employee-by-employee proof. Brinker submitted
hundreds of declarations in support of its opposition to class certification.” (Ibid.)
The trial court certified the off-the-clock class, but the appellate court reversed.
The Supreme Court agreed with the appellate court’s reversal of certification of the off-
the-clock class, because the plaintiff did not present a common policy or a common
method of refusal to pay for overtime work; to the contrary, the “only formal Brinker off-
the-clock policy submitted disavows such work, consistent with state law. Nor has
[plaintiff] presented substantial evidence of a systematic company policy to pressure or
require employees to work off-the-clock . . . .” (Brinker, supra, 53 Cal.4th at p. 1051,
fn. omitted.) The Supreme Court went on to explain that there is a presumption that
clocked-out employees are not working and that the plaintiffs have to rebut that
presumption. The employees failed to do so. They simply provided “anecdotal evidence
of a handful of individual instances in which employees worked off-the-clock, with or
without knowledge or awareness by Brinker supervisors.” (Id. at pp. 1051–1052.) The
Supreme Court held that the record was insufficient, because the plaintiffs failed to
provide substantial evidence of a uniform, companywide policy, thus requiring proof of
off-the-clock liability “in an employee-by-employee fashion, demonstrating who worked
off the clock, how long they worked, and whether Brinker knew or should have known of
their work.” (Id. at p. 1052.)
Vega’s reliance on Jones v. Farmers Ins. Exchange (2013) 221 Cal.App.4th 986,
is unavailing. In that case, our colleagues in Division Three upheld the class certification
where the employer, Farmers Insurance Exchange, expressly, in writing, required
employees to perform work tasks at home. (Id. at p. 990.) In contrast, the former
Hydraulics workers present no evidence of a system-wide management protocol that
forced them to work off the clock; instead, the workers state in their declarations that they
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chose to clock in early and that no one stopped them. In the case at bar, there has been no
showing of any policy—let alone a written policy—mandating (or even encouraging)
workers to clock in ahead of their scheduled work times. This distinction renders Jones,
where Farmers Insurance had a written policy requiring employees to work off the clock,
inapposite to the case at bar.
Williams v. Superior Court (2013) 221 Cal.App.4th 1353 (Williams) also lends no
support to Vega’s position. Therein, Division Eight of this court ordered the trial court to
recertify the class of auto field adjusters after Allstate Insurance Company had been
forced to reclassify them as hourly workers, rather than as salaried employees exempt
from overtime. (Id. at p. 1356.) Allstate’s policy was that the work day started when the
adjuster had the first appointment of the day, and Allstate refused to pay for any time
spent preparing for that first appointment, including the adjusters’ checking on the day’s
assignments on their work computers and making courtesy calls to auto repair shops and
car owners to confirm appointments. (Id. at pp. 1357–1358.) Employees stated in their
declarations that they “hesitated to request overtime because they did not want to be
perceived as ‘bad’ employees.” (Id. at p. 1358.) The employees presented evidence that
Allstate had a companywide practice of adjusters’ working off-the-clock. (Id. at
p. 1370.)
The most significant difference between Williams, supra, 221 Cal.App.4th 1353,
and the case at bar is that, unlike the Allstate employees in Williams, Hydraulics did not
require its employees to perform tasks on their own time. Hydraulics formally prohibits
overtime work without prior permission and reiterates this policy in its new-employee
orientation. Like Allstate in Williams, Hydraulics has an electronic check-in system.
However, the knowledge as to when the hourly workers clock in is not equivalent to
awareness that the clocked-in employees are working before their shift begins. As
Brinker, supra, 53 Cal.4th 1004 instructs, where a formal policy prohibits working before
a shift begins and where new-employee orientation explicitly prohibit pre-shift work,
employee anecdotes do not provide substantial evidence that the employer knew they
8
were working. (Id. at pp. 1051–1052.) Moreover, in contrast to the Allstate employees in
Williams who stated in their declarations that they “hesitated” to ask for overtime, no
Vega declarant states that she or he ever asked to be approved for overtime when they
clocked in ahead of his or her scheduled shift.
DISPOSITION
The petition is granted. The alternative writ is discharged. Let a peremptory writ
of mandate issue, directing the superior court to vacate the September 11, 2015 order
granting the motion for class certification of an “Unpaid Wages Class,” in Los Angeles
Superior Court case No. BC51822, entitled Fernando Vega v. Hydraulics International,
Inc., and thereafter make a new and different order denying same. The parties shall bear
their own costs related to this petition.
NOT TO BE PUBLISHED.
JOHNSON, J.
We concur:
ROTHSCHILD, P. J.
LUI, J.
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