Court of Appeal Finds Insufficient Evidence Attributing Electronic Signature to Employee

Employers increasingly rely on electronic acknowledgements of policies and procedures.  An "electronic signature" is valid under California law.  But the reason those signatures exist is so that employers can prove the employee read and signed the document.  That's what Moss Bros. Auto found out in a recent case.

The document was an arbitration agreement, which Moss Bros. claimed that its employee, Ruiz, signed.  However, Ruiz claimed he did not "remember" signing it.  So, Moss Bros. had to establish that he did when it moved to compel Ruiz to arbitrate his wage-hour claims.

Moss Bros. adduced the declaration of its business manager, Mary K. Main, who was “required to be familiar with the generation and maintenance” of employee personnel records. Main summarily asserted that Ruiz “electronically signed” the 2011 agreement “on or about September 21, 2011,” and that the same agreement was presented to “all persons who seek or seek to maintain employment” with Moss Bros. or its affiliated dealerships and service/parts centers. Main did not explain how Moss Bros. verified that Ruiz, or other Moss Bros. employees, electronically signed the 2011 agreement. 

The 2011 agreement is just over two pages in length. “Ernesto Zamora Ruiz” appears in print on the first page, under the title, “Employee Acknowledgment and Agreement,” and the phrases “Ernesto Zamora Ruiz (Electronic Signature)” and “9/21/2011 11:47:27 AM” appear in print on the third page, under the signature and date lines of the 2011 agreement. 

In a supplemental declaration, Main testified that Ruiz had to log in using a unique user name and password. 

The court of appeal decided that was not enough because Main did not "authenticate" the electronic signature.  here is the standard for doing so:

Civil Code section 1633.9 addresses how a proponent of an electronic signature may authenticate the signature—that is, show the signature is, in fact, the signature of the person the proponent claims it is. The statute states: “(a) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.” (Civ. Code, § 1633.9, subd. (a), italics added.) 

Here, the court found that Main's testimony about the general procedures applicable to electronically signing the arbitration agreement was insufficient.  The court provided some hints as to what would have been enough:

Main did not explain that an electronic signature in the name of “Ernesto Zamora Ruiz” could only have been placed on the 2011 agreement (i.e., on the Employee Acknowledgement form) by a person using Ruiz’s “unique login ID and password”; that the date and time printed next to the electronic signature indicated the date and time the electronic signature was made; that all Moss Bros. employees were required to use their unique login ID and password when they logged into the HR system and signed electronic forms and agreements; and the electronic signature on the 2011 agreement was, therefore, apparently made by Ruiz on September 21, 2011, at 11:47 a.m. Rather than offer this or any other explanation of how she inferred the electronic signature on the 2011 agreement was the act of Ruiz, Main only offered her unsupported assertion that Ruiz was the person who electronically signed the 2011 agreement. In the face of Ruiz’s failure to recall electronically signing the 2011 agreement, the fact the 2011 agreement had an electronic signature on it in the name of Ruiz, and a date and time stamp for the signature, was insufficient to support a finding that the electronic signature was, in fact, “the act of” Ruiz. (Civ. Code, § 1633.9, subd. (a).) For the same reason, the evidence was insufficient to support a finding that the electronic signature was what Moss Bros. claimed it was: the electronic signature of Ruiz. (Evid. Code, § 1400, cl. (a).) This was not a difficult evidentiary burden to meet, but it was not met here. 

As a result, the court found there was insufficient evidence of an agreement to arbitrate and upheld the trial court's denial of Moss Bros.'s petition to compel arbitration.

Yes, it may be that Moss Bros. failed to compel Ruiz to arbitrate due to a poorly drafted declaration, rather than some flaw in the electronic signing protocol.  But litigators need proof that an employee signed handbook acknowledgements, training attendance forms, etc. Although an arbitration agreement was involved here, this decision applies to all sorts of electronically signed documents.  The average manager has no idea how the electronic signing process works, cannot testify that he or she actually saw the employee at the computer electronically signing, etc.

Therefore, when implementing electronic versions of documents, employers must have their IT professionals build in ways to do so.  For example, there could be an acknowledgment email sent to the employee, with a copy to the employer.  Or  the IT management could create a step-by-step explanation of how the system ensures that the  name appearing on the electronic application is attributable to the actual person and not merely inserted later. 

This case is Ruiz v. Moss Bros. Auto and the decision is here.

Ninth Circuit to California Supreme Court: About that One Day's Rest in Seven Law?

If only I could ask the California Supreme Court to answer some wage and hour questions for my clients and me. Fortunately, the federal Ninth Circuit Court of Appeals has that authority.
In this instance, the Ninth Circuit has asked the California Court to take up three questions pertaining to California's rarely litigated "day of rest" laws.   In California, there is a statute requiring "one day's rest" in seven. There are some exceptions too.

Here are the questions the Court asked about these statutes:

"Rolling v. Workweek" 

(A) California Labor Code section 551 provides that “[e]very person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.” Is the required day of rest calculated by the workweek, or is it calculated on a rolling basis for any consecutive seven- day period?

This question is very important.  Sometimes employees may work seven days in a row, but across two different work weeks.  If the rule is any consecutive seven days, that could cause significant scheduling issues.

Exemption for Part Timers?

(B) California Labor Code section 556 exempts employers from providing such a day of rest “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.” (Emphasis added.) Does that exemption apply when an employee works less than six hours in any one day of the applicable week, or does it apply only when an employee works less than six hours in each day of the week?

The Court wants to know:  may an employee work 7 days if he works 8-8-8-5-8-8-8 without causing a violation?  Or must the hours be under 6 for each day worked in the seven consecutive days, e.g., 5-5-5-5-5-5-5?

Switching / Trading Shifts 

(C) California Labor Code section 552 provides that an employer may not “cause his employees to work more than six days in seven.” What does it mean for an employer to “cause” an employee to work more than six days in seven: force, coerce, pressure, schedule, encourage, reward, permit, or something else? 

Here the Court wants to know whether an employer violates the law merely by allowing a worker to work 7 days in a row?  For example, what if an employee is scheduled to work only 6 days per week. But the employee 'picks up" a shift because a co-worker asks him or her to do so?

* * * *

The Supreme Court may decline to answer the questions, but may choose to do so.   If the Court rules in favor of the employee-friendly interpretation presented as an alternative in the Ninth Circuit's order, it would completely change the way employers schedule employees, and likely would result in fewer hours worked per employee.   So, this is a very important case for the Supreme Court to rule on.

The case is Mendoza v. Nordstrom, and the opinion is here.  Interesting reading, employers and lawyers.

Court of Appeal Limits Meal Break Waivers in Healthcare Industry

Here's one of those cases where California's labyrinth of employment laws conflict, the employer chooses to rely on one of them, and the employer finds out it made the wrong choice.  The lesson arises in the context of a meal break class action.

Many health care workers work 12-hour shifts, often as part of an alternative workweek arrangement.  And many of this 12-hour shift workers prefer to keep the day 1/2 hour shorter, and, therefore, waive a second meal period.  Otherwise, they are going to be at work for at least 13 hours for each 12-hour shift, because they have to take two meal periods of at least 30-minutes each.  It seems to me the employer does not gain financially from permitting employees to waive the second meal period; the meal period is unpaid.  Only the employee benefits, because the employee can go home 1/2 hour earlier.  

Fortunately, the Industrial Welfare Commission Wage Orders include one applicable to the health care industry.  This is Wage Order 5-2001.  Section 11(D) of that Wage Order says:

Notwithstanding any other provision of this order, employees in the health care industry who work shifts in excess of eight (8) total hours in a workday may voluntarily waive their right to one of their two meal periods.” 

Relying on that provision, Orange Coast Memorial Medical Center issued a policy allowing health care workers to voluntarily waive second meal periods. Employees duly signed waivers authorizing this waiver. However, because of the language in Section 11(D), the waiver applied even when employees occasionally worked more than 12 hours. 

So, what's the problem?  Well, the Labor Code also contains meal period requirements, enacted as part of AB 60, that 1999 law that created the penalties for meal period violations, among other things.

Labor Code Section 512(a) provides in pertinent part:

 “An employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.” (Italics added.) 

Furthermore, section 516 explains: “Except as provided in Section 512, the [IWC] may adopt or amend working condition orders with respect to break periods, meal periods, and days of rest for any workers in California consistent with the health and welfare of those workers.” (Italics added.) 

Rejecting the hospital's arguments, the Court of Appeal held that Section 11(D) of the Wage Order could not stand because section 512 of the Labor Code was controlling.  Therefore, under Section 512 and 11(D) employees could waive second meal periods. But, because of Section 512's limitations, the waiver is valid only if the total hours worked were 12 or less. 

That means 

- if an employee has to work 12 1/2 hours, the meal period waiver is invalid, and
- the employee must either take a second meal period or be paid one extra hour of premium pay.

Given that employees' shifts sometimes will go longer than 12 hours because of unanticipated issues that arise after the 10th hour of work, employers will have to be nimble to schedule second meal periods or pay the one-hour premium.

More bad news, the hospital argued that the decision should not be retroactive, because the hospital relied on the Wage Order, which has the force of law.   The Court of Appeal decided that prior decisions of the courts held that no Wage Order could grant any waivers or vary the meal period structure set forth in section 512.  Therefore, Section 11(D) of the Wage Order was invalid from the beginning, waiting only for a court to expressly say so.  The Court held that the hospital would be liable for meal period premiums resulting from its employing health care workers for more than 12 hours without providing a second meal period.

So, this case applies only to the health care industry, and only to meal period waivers allowing a waiver for shifts > 12 hours.  But it's also precedent that precludes employers from relying on Wage Order provisions that are more employer-friendly than AB 60 allows.

This case is Gerard v. Orange Coast Memorial Med. Ctr. and the opinion is here. 

Court of Appeal Finds Rest Periods Valid Even If Employees Potentially Could be Interrupted

The Court of Appeal ruled that security guards' rest periods were lawful, even though employees might have to respond to an emergency call during a rest period.  We're especially happy about this decision because we wrote an amicus curiae brief supporting the employer on behalf of the California Chamber of Commerce.

As explained by the Court:

Plaintiff Jennifer Augustus and others, formerly security guards employed by defendant ABM Security Services, Inc. (hereafter ABM), allege on behalf of themselves and a class of similarly situated individuals that ABM failed to provide rest periods required by California law in that it failed to relieve security guards of all duties during rest breaks, instead requiring its guards to remain on call during breaks. 

So, the security guards were posted a job sites, where they were responsible for ensuring the security of the property, responding to calls, etc.  They were provided rest periods in accordance with the law (at least 10 minutes, paid, for each four hours of work).  But

ABM admitted it requires its security guards to keep their radios and pagers on during rest breaks, to remain vigilant, and to respond when needs arise, such as when a tenant wishes to be escorted to the parking lot, a building manager must be notified of a mechanical problem, or an emergency situation occurs. 

Of note, the plaintiffs did not provide any evidence that an employee's rest period was actually interrupted. Ever. However, The trial court ruled that the Plaintiffs' rest periods were not valid, because of the potential for interruption.  The trial court also awarded the class $90 million in rest period premiums and penalties because every rest period was noncompliant.

The Court of Appeal disagreed.  In doing so, it analyzed what the employer must do to authorize and permit a valid rest period.  Here's the meat of the analysis:

The text of the wage order does not describe the nature of a rest period, but section 226.7 offers a partial definition: “An employer shall not require an employee to work during a meal or rest or recovery period.” (Italics added.)   *** Section 226.7 therefore provides our only guidance as to the nature of a rest break, and it says only that an employee cannot be required “to work” during a break. ***

Not only did the IWC decline to distinguish between on- and off-duty rest periods, its prescription that on-duty meal periods be paid, coupled with the mandate that all rest periods be paid, implies rest periods are normally taken while on duty, i.e., while subject to employer control. There is no support, therefore, in the text of Wage Order No. 4, the Labor Code, or any DLSE opinion letter for plaintiffs’ claim that a rest break is valid only if the employee is relieved of all duties. ***

After a petition for rehearing, the Court considered the effect of Mendiola v. CPS Security Solutions, a recent California Supreme Court decision that we blogged here.  There, the Supreme Court held that time an employee was required to remain on premises was compensable as hours worked, even though the employees were permitted to sleep and were not formally "on duty."  The Court rejected the plaintiff's argument that Mendiola required the court to hold that being on-call means no rest period:

On-call status is a state of being, not an action. But section 226.7 prohibits only the action, not the status. In other words, it prohibits only working during a rest break, not remaining available to work. * * *

“In sum, although on-call hours constitute “hours worked,” remaining available to work is not the same as performing work. (See Mendiola, supra, 2015 Cal. LEXIS at p. 9 [distinguishing readiness to serve from service itself]; see also Cal. Code Regs., tit. 8, § 11040, subd. 2(K) [distinguishing “hours worked” from work actually performed].) Section 226.7 proscribes only work on a rest break.” 

The Court then held that the trial court properly certified the class. However, the effect of that part of the ruling is to doom the entire class's claim.

This case is Augustus v. ABM Security Services, Inc. and the opinion is here.  Please note, however, that the court modified the opinion at the end, and the modifications have not yet been integrated into the main opinion.

Have a restful weekend!

CA Supreme Court: Employer Lawfully Fired Employee on CFRA Leave Who Violated Employer's Policy

The California Supreme Court did not decide whether an employer's "honest belief" that an employee is misusing family or medical leave is a defense to a claim against an employer for violating the California Family Rights Act.  Instead, the Court decided whether a court had the power to vacate an arbitrator's decision because the arbitrator's ruling adopted the "honest belief" defense.  BUT, if you get through the arbitration portion of this post, you'll see that the high Court announced an important rule regarding CFRA leave. 

First, arbitrators' decisions generally are NOT reviewable for legal error, because arbitration is supposed to be quick and less expensive than litigation. But a few years ago, the California Supreme Court carved out an exception for statutory claims based on "unwaivable" rights (such as the Fair Employment and Housing Act, or the California Family Rights Act).  The Court held in Pearson Dental Supply v. Superior Court (my post is here.) that an appellate court may vacate an arbitration award when the arbitrator's legal error denies the plaintiff a hearing. 

In the present case, Richey v. Autonation, the Supreme Court held that the court of appeal did NOT have the power to vacate an arbitrator's decision that Automation lawfully fired Richey, based on its honest belief that Richey was abusing CFRA leave. Regardless of whether the honest belief defense is valid in California, the arbitrator's decision is unreviewable for that kind of claimed legal error.

The error addressed in Pearson Dental therefore kept the parties from receiving a review on the merits. Its narrow rule was sufficient to resolve the case. (Ibid.) Plaintiff here has not advocated for a greater scope of judicial review in cases involving unwaivable statutory rights, and thus, there is no reason to go beyond the framework Pearson Dental established.

But that's only half the story.

The Court also ruled that even if the arbitrator relied on the "honest belief" defense erroneously, Richey would have lost anyway.  That is because, the Court found, Automation justifiably fired Richey while he was on CFRA leave, because Richey violated Automation's policy prohibiting work during CFRA leave:

Even if the arbitrator erred, and even if such an error could serve as a basis for vacating an arbitration award, plaintiff has not shown that the error was prejudicial.  

Here, the arbitrator found plaintiff was fired because he violated Power Toyota‘s employment policy against outside work while on approved CFRA medical leave, not because he was on approved leave. 3 The evidence to support that finding, as reflected in the arbitrator‘s factual findings, was overwhelming. Power Toyota explicitly warned plaintiff that its policy prohibited any outside employment, including self-employment, while on leave. Plaintiff knowingly ignored the warnings. Power Toyota invited plaintiff to communicate regarding his outside employment, and he deliberately avoided any such communication. ***

[P]laintiff blatantly ignored his superiors‘ clear instructions not to work at the restaurant while on CFRA leave. To ignore this fact and to hold that Power Toyota could not have fired plaintiff under any circumstances for violating company policy while on leave would ignore the rule that plaintiff had ―no greater right to reinstatement or to other benefits and conditions of employment than if [he] had been continuously employed‖ during the statutory leave period. (29 C.F.R. § 825.216(a).)

The arbitrator found plaintiff‘s firing was based on a clear violation of company policy — a legally sound basis for upholding the arbitrator‘s award — and would likely have made that finding regardless of the evidence or findings as to the employer‘s honest belief plaintiff was misrepresenting his medical condition. 

So, you thought it was an arbitration case, but it's really a very significant CFRA case.  Richey v. Automation is here.

California Employers: A Reminder from CalOSHA

CalOSHA reminds employers to post their Form 300A, which must include any reportable injury or death during the previous reporting period.  See the handy press release here, which contains links to forms and other information

A Pot Pourri of Recent Employment Law Decisions

Here are some recent significant California employment law developments I missed. Long post, but chock full of employment law goodness. Or something:

Employer's Summary Judgment on Disability Discrimination and Related Claims
The court of appeal in Swanson v. Morongo Unified School District (opinion here) reversed summary judgment in favor of the school district.

Swanson was a teacher who was treated with breast cancer.  The school district voted not to renew her contract based on her performance.  Swanson believed the district's vote was based on her cancer and treatment.  She also claimed that the district failed to accommodate her by refusing to allow her to teach a second grade class rather than the assignment they gave her, and failed to adequately engage in the "interactive process."

On the discrimination claim, the court of appeal acknowledged the district demonstrated Swanson's poor performance as a legitimate reason.  That shifted the burden to Swanson to raise a triable issue of fact regarding whether discrimination motivated the district, rather than performance. Here is the pretext analysis:

Swanson had to present evidence showing (1) the District’s stated reason for not renewing her contract was untrue or pretextual; (2) the District acted with a discriminatory animus in not renewing her contract; or (3) a combination of the two. *** We conclude Swanson met this burden by presenting evidence establishing a triable issue of fact on whether the District intentionally discriminated against her when making its teaching assignments and its treatment of her after her cancer diagnosis and medical leaves. ***We conclude Swanson met this burden by presenting evidence establishing a triable issue of fact on whether the District intentionally discriminated against her when making its teaching assignments and its treatment of her after her cancer diagnosis and medical leaves. 

Here's the evidence the court found significant:

The evidence the parties presented establishes the following disputed facts creating a triable issue on Swanson’s liability theory: (1) Swanson performed well in the teaching assignments she held during her first two years with the District, but the District gave her a new teaching assignment for the first full school year after she completed her cancer treatments; (2) the District gave Swanson the new assignment knowing it would require her to spend additional time planning and preparing to teach her new class and Swanson’s weakened health condition impaired her ability to do so; (3) the District denied Swanson’s request to teach a second grade class similar to one she recently had taught at her previous school, and instead assigned the available second grade class to another teacher; (4) the District assigned Swanson to teach a kindergarten class even though she had not taught kindergarten in nearly 30 years and expressed concern her weakened immune system could not protect her from the many illnesses prevalent in kindergarten classes; (5) although promising to do so, Lowe did not provide Swanson the preevaluation format she needed to prepare for her first series of teacher observations; (6) the District did not provide Swanson the mentor teacher she requested after receiving the remediation plan or any of the other training or assistance she requested; (7) Lowe told Swanson the District wanted him to make a determination on her employment status before he had time to complete the second series of teacher observations; (8) Lowe asked Swanson to resign her teaching position even though he gave her a positive review on the first teaching observation following the remediation plan and implied her review on the second observation also would be positive; and (9) the District’s Board of Education voted not to renew Swanson’s contract before she completed the remediation plan and all of the observations were conducted.

This is to say that the court of appeal felt that a jury should decide whether the district's personnel actions against Swanson that led to her poor performance were motivated by her disability. Therefore, to win these cases, the employer should show on summary judgment that it treated the plaintiff the same as the other, similarly situated, employees.

On the failure to accommodate claim, the plaintiff claimed she would have been able to perform her essential job functions if she was assigned to teach a second grade class, rather than the kindergarten class she was assigned. Although the district showed the court several accommodations it provided, the court was unpersuaded that the district was entitled to summary judgment:

Swanson does not claim the District failed to grant her leave or any other scheduling accommodation. Instead, she alleges the District failed to reasonably accommodate her cancer-related conditions because it refused to provide her the accommodation she sought after the District decided to move her out of the reading specialist position she held during the 2007/2008 school year. Specifically, she alleges the District refused her request to teach an available second grade class. According to Swanson, the second grade class assignment was a reasonable accommodation that would allow her to perform her essential job functions because she recently had taught a second grade class when working in another district, and therefore was familiar with the curriculum and children of that age. Swanson alleged any other new teaching assignment would require additional time to prepare and plan lessons, but the effect of her cancer treatments jeopardized her ability to prepare for her new assignment. 

         *  *  *

To meet its initial burden on Swanson’s failure to accommodate claims, the District therefore had to present evidence showing the second grade position Swanson sought was not available or otherwise was not a reasonable accommodation, or the fifth grade or kindergarten assignments the District offered were reasonable accommodations that would have allowed Swanson to adequately perform her essential job functions. The District produced no such evidence. 

The court also held that the district did not adequately engage in the interactive process to determine an accommodation:

The District contends Swanson’s interactive process claims fail because it engaged in the interactive process by switching her from fifth grade to kindergarten when she objected to the fifth grade assignment. That contention is not adequate to satisfy the District’s initial burden on summary judgment. The FEHA required the District to engage in an ongoing dialogue regarding the accommodations Swanson believed she needed to mitigate her cancer-related conditions, but the District failed to present any evidence to show it engaged Swanson in such a dialogue. For example, the District offers no evidence to show it discussed with Swanson the second grade assignment she sought or provided any explanation why it could not grant her request as a reasonable accommodation. To the contrary, the evidence shows the District simply assigned Swanson to teach kindergarten and failed to engage in any further discussion with her. Accordingly, the trial court erred in granting summary judgment on the interactive process claims. 

Arbitration Compelled Even Though Insufficient Proof Unsigned Arbitration Policy Was in Effect

Stephanie Cruise signed an employment application with Kroger Corporation, in which she agreed to mandatory, final, binding arbitration. The application referenced a separate mediation and arbitration policy, which was "incorporated by reference."  After her termination, Cruise sued Kroger. Kroger moved to compel arbitration. The trial court denied the motion, holding that Kroger had not proved that Cruise had received the arbitration policy, or that the one attached to the motion was the one she had allegedly received.

The court of appeal reversed the trial court and ordered arbitration. The court held that the following language in the application "eliminate[d]" Cruise's argument there was no agreement to arbitrate:

“MANDATORY FINAL & BINDING ARBITRATION: I acknowledge and understand that the Company has a Dispute Resolution Program that includes a Mediation & Binding Arbitration Policy (the ‘Policy’) applicable to all employees and applicants for employment . . . . I acknowledge, understand and agree that the Policy is incorporated into this Employment Application by this reference as though it is set forth in full, . . . the Policy applies to any employment-related disputes that exist or arise between Employees and the Company . . . and that the Policy requires that any Employee who wishes to initiate or participate in formal proceedings to resolve any Covered Disputes must submit the claims or disputes to final and binding arbitration in accordance with the Policy.” (Italics added.)

The court rejected Cruise's argument that the employer did not sign the application, reasoning that the employer submitted the application to Cruise of signature, and that it was Kroger's own application, after all.

BUT, what of the policy?  The court of appeal accepted the trial court's conclusion that the employer had not established the existence of the policy, which governed the terms and procedures re arbitration. The court of appeal, however, ruled that Cruise was still obligated to arbitrate, only under the California Arbitration Act.

The only impact of Kroger‟s inability to establish the contents of the 2007 Arbitration Policy is that Kroger failed to establish that the parties agreed to govern their arbitration by procedures different from those prescribed in the CAA (§ 1280 et seq.). Unless the parties otherwise agree, the conduct of an arbitration proceeding is controlled by the CAA. (See, e.g., §§ 1281.6, 1282, 1282.2.) Here, because Kroger failed to establish an agreement to the contrary, the instant arbitration proceeding is to be governed by the procedures set forth in the CAA. Because this arbitration is controlled by California statutory and case law, Cruise‟s arguments that Kroger‟s Arbitration Policy is unconscionable, both procedurally and substantively, are meritless.

If this case remains good law, then (1) employers can include clear agreements to arbitrate in applications and (2) they can rely on the California Arbitration Act rather than prescribe specific procedures.

This case is Cruise v. Kroger Co .and the opinion is here.

                                                                 * * *
Here are some narrow decisions, but which may contain helpful holdings for other cases.

LA Hotel Service Charge Ordinance - Class Action - UCL Claim 

The court of appeal in Audio Visual Services Group, Inc. v. Superior Court opinion here, handled a narrow issue: whether Los Angeles's Hotel Service Charge Reform Ordinance applied to third party employees who do not traditionally depend on tips.  The Ordinance requires certain hotels to pay certain employees all service charges added to customers bills.  The Audio Visual employees provided AV services to hotels, for which they charged a fee plus a service charge. The plaintiffs sued, claiming they were owed that service charge. The Court of Appeal issued a writ, sustaining the employer's demurrer to the class complaint (extraordinary in and of itself). The court of appeal decided that the ordinance does not apply to Audio Visual's employees.  Of note, the court clearly held that the employees "unfair competition claim" under Business and Professions Code section 17200 was not actionable because the statutory claim also was without merit. So, this case can help in other UCL actions. Money quote:

In light of our construction of the Ordinance that Solares, an audio-visual technician, is not among the class of hotel workers entitled to be paid service charges pursuant to the Ordinance, Solares cannot assert a UCL claim against PSAV. Business and Professions Code section 17200 defines “unfair competition” as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with [Business and Professions Code ] Section 17500) of Part 3 of Division 7 of the Business and Professions Code.” The UCL claim is dependent upon a violation of the Ordinance. Thus, the class action complaint failed to state a cause of action.

U.S. Supreme Court: Whistle Blower Under Homeland Security Act Protected

Department of Homeland Security v. MacLean (opinion here)  involves an Air Marshall who reported  to MSNBC that the TSA had canceled Air Marshall missions during a time when there was a heightened security alert regarding possible Al Qaeda highjackings.  He had been told that TSA canceled missions to save money.  After MacLean made the disclosure, TSA reversed its position under pressure from Congress.

The TSA discovered MacLean was the leaker and fired him in 2006.  He sued for whistleblower retaliation. TSA argued that MacLean's disclosure was "specifically prohibited" by its regulation, which was as good as "law." TSA had issued regulations prohibiting disclosure of what they called "sensitive security information." That information could include "information concerning specific numbers of Federal Air Marshals, deployments or missions, and the methods involved in such operations.”

Federal law generally provides whistleblower protections to an employee who discloses information revealing “any violation of any law, rule, or regulation,” or “a substantial and specific danger to public health or safety.” 5 U. S. C. §2302(b)(8)(A). An exception exists, however, for disclosures that are “specifically prohibited by law.”

So, the question for the Court was whether MacLean's disclosure was prohibited by law.  The Court held (7-2) that the statute's use of "specifically prohibited by law" meant statutory law, rather than regulations.  The Court reasoned that Congress had used "law, rule or regulation" throughout the whistleblower law, but limited the disclosure exception only to "law."

 

CA Supreme Court: On-Premises, On-Call Time = Hours Worked (All Sleeping Time Too).

The California Supreme Court (unanimously) affirmed the Court of Appeal's decision in Mendiola v. CPS Security Solutions, Inc.  We posted about the Court of Appeal's decision here.  However, the Supreme Court actually went farther than the Court of Appeal in deciding that security guards' on-premises, on-call time is compensable as hours worked.

At issue were security guards who were required to remain on premises and on call at times when they were not active.  When "on-call" time applied, they could stay in trailers provided for their use on the construction sites to which they were assigned.  They were paid for time actually worked, but not for time they were "on call" in the trailers. There are more details in the post linked above.

The Supreme Court agreed with the court of appeal that the on-call time involved significant enough employer control to constitute hours worked.  Here's some of the key analysis:

California courts considering whether on-call time constitutes hours worked have primarily focused on the extent of the employer’s control.  * * * Indeed, we have stated that “[t]he level of the employer’s control over its employees . . . is determinative” in resolving the issue. * * *  ‘When an employer directs, commands or restrains an employee from leaving the work place . . . and thus prevents the employee from using the time effectively for his or her own purposes, that employee remains subject to the employer’s control.  According to [the definition of hours worked], that employee must be paid.’ ”  (Id. at p. 583.)
Courts have identified various factors bearing on an employer’s control during on-call time:  “ ‘(1) whether there was an on-premises living requirement;  (2) whether there were excessive geographical restrictions on employee’s movements;  (3) whether the frequency of calls was unduly restrictive;  (4) whether a fixed time limit for response was unduly restrictive;  (5) whether the on-call employee could easily trade on-call responsibilities;  (6) whether use of a pager could ease restrictions; and  (7) whether the employee had actually engaged in personal activities during call-in time.’  ([Owens v. Local No. 169 (9th Cir. 1992) 971 F.2d 347,] 351, fns. omitted.)”  (Gomez v. Lincare, Inc. (2009) 173 Cal.App.4th 508, 523-524 (Gomez).)    Courts have also taken into account whether the “[o]n-call waiting time . . . is spent primarily for the benefit of the employer and its business.”  

The Supreme Court, applying these factors, easily found sufficient control:

The guards here were required to “reside” in their trailers as a condition of employment and spend on-call hours in their trailers or elsewhere at the worksite.  They were obliged to respond, immediately and in uniform, if they were contacted by a dispatcher or became aware of suspicious activity.  Guards could not easily trade on-call responsibilities.  They could only request relief from a dispatcher and wait to see if a reliever was available.  If no relief could be secured, as happened on occasion, guards could not leave the worksite.  CPS exerted control in a variety of other ways.  Even if relieved, guards had to report where they were going, were subject to recall, and could be no more than 30 minutes away from the site.  Restrictions were placed on nonemployee visitors, pets, and alcohol use. 

Additionally, the Court of Appeal correctly determined that the guards’ on-call time was spent primarily for the benefit of CPS.  

So, we're not talking about a beeper or a requirement that on call employees call into work within 30 minutes of a page.  We're also not talking about special rules applicable to ambulance drivers. We're talking about people required to live on the premises during on-call periods. We are also not talking about the specific sleep provisions contained in Wage Order 5 and 9. So,
relax those of you who have on-call employees who are not required to stay at work.

Of note, though, the Court rejected federal regulations that allow on-premises employees to be uncompensated when they are free to engage in personal pursuits.  Therefore, the level of control that one must exercise over an on-premises employee is not dependent on federal case law.

The Court of Appeal cut CPS some slack, holding that an employee could agree that 8 of a 24 hour shift was unpaid sleep time under certain conditions. But the Supreme Court was having none of it.
Analyzing the control issue, the Court said that the employees were sleeping on premises, they were restricted and, therefore, they were "engaged to wait."

Finally, the Court took a slap at the Legislature concerning the difficulty employers have in deterring how to conduct themselves under the myriad wage hour laws:

We acknowledge CPS’s efforts to ascertain whether its policy complied with California’s labor laws and recognize the difficulty it and other employers can face in this regard.  Several factors may contribute to ongoing uncertainty, including the defunding of the IWC and the lack of adequate funding for DLSE enforcement.  Such issues, however, must be addressed by the Legislature

So, employers should ensure that their on-call policies comply with this new decision, particularly employers who exercise significant control.  The Court did not reject or modify the multiple factor test for on-call employees who are not required to live or sleep on premises.

The case is Mendiola v. CPS Security Solutions and the opinion is here.

.

DLSE's Digest of New California Employment Laws

The California Division of Labor Standards Enforcement compiled a booklet of new California employment laws, as well as some bills that did not make the cut.

The digest includes the new wage-hour related laws, organized by subject matter, a brief description, and whether the law was passed or vetoed.  Download your own copy here.

Don't ever say I did not give you anything for Festivus.

Greg

California Confusion over Paid Sick Leave

DLSE: The Wage Theft Templates Need Updating!  Or do they?

Per Labor Code 2810.5, employers must provide non-exempt workers with a Wage Theft Notice at the time of hire and after certain changes to wages and other covered matters.

The DLSE publishes a template on a website, called Wage Theft Protection Act.  The template forms are available in several languages.

California's new paid sick leave law, AB 1522,  modified Lab. Code section 2810.5.  The revised law requires the Wage Theft Notice to include information about paid sick leave. Although no sick leave accrues until July 1, 2015, employers must issue a new Wage Theft Notice beginning January 1, 2015.

So, DLSE should have issued a revised template.  Oh, you want the revised template notice?  DON'T look at the Wage Theft Protection Act page linked above.  Instead, go over to the DLSE's paid sick leave page, here. There, you will find the new Wage Theft form.

DLSE, please fix this.

Exempt Employees

Section 2810.5, the Wage Theft Protection Act, requires the notice discussed above. But exempt employees (i.e., executive, administrative and professional exempt) do not count. They are not required to receive the notice.

At the same time, exempt employees ARE required to receive paid sick leave under the new law.  Do you have to provide exempt employees within individualized information about paid sick leave?

Nobody knows. It appears that exempt employees are required to have their accrued sick leave balances on their checks, and they must be able to see the poster.  But, because section 2810.5 does not apply to exempt employees they do not have to receive a Lab. Code section 2810.5 notice.

* * * *

Merry Christmas!

IRS Increases Standard Mileage Reimbursement Rate to $0.575

Please see the Chamber's post on the increase to the standard mileage rate. (Here).  Most employers are concerned with the business reimbursement rate, which goes up to $0.575 per mile effective January 1, 2015.

Here's a quick spiel on the significance of the standard mileage rate:

Employers in California are required to reimburse employees for reasonably necessary expenses incurred in connection with their work via Labor Code section 2802.  Expenses associated with personal use of their vehicles are included within 2802.

Most employers pay the IRS reimbursement rate. It is not mandatory to do so. But how do you calculate how much oil, tires, and brake shoes that an employee's business trip will consume?
Right, you can't.  That's why it pays to pay the standard rate.

Employees may argue that the standard rate is not enough. But it's their burden to show that their actual, reasonably necessary expenses were worth more than the standard rate. And it's going to be hard for them to measure the "actual" necessary costs of operating a car for a 30 mile trip.

NLRB Overrules Itself and Appropriates Companies' Email Systems for Employees' Protected Communications

In 2007 the National Labor Relations Board held, in The Guard Publishing Company, dba Register Guard, 351 NLRB 1110 (2007), that employers do not have to permit union organizing activity over their own email system.  Here's the essence of that decision:

An employer has a “basic property right” to “regulate and restrict employee use of company property.” Union Carbide Corp. v. NLRB, 714 F.2d 657, 663–664 (6th Cir. 1983). The Respondent’s communications system, including its e-mail system, is the Respondent’s property and was purchased by the Respondent for use in operating its business. The General Counsel concedes that the Respondent has a legitimate business interest in maintaining the efficient operation of its e-mail system, and that employers who have invested in an e-mail system have valid concerns about such issues as preserving server space, protecting against computer viruses and dissemination of confidential information, and avoiding company liability for employees’ inappropriate e-mails. * * * *In numerous cases, however, where the Board has addressed whether employees have the right to use other types of employer-owned property—such as bulletin boards, telephones, and televisions—for Section 7 communications, the Board has consistently held that there is “no statutory right . . . to use an employer’s equipment or media,” as long as the restrictions are nondiscriminatory. * * * *Accordingly, we hold that the Respondent may lawfully bar employees’ nonwork-related use of its e-mail system, unless the Respondent acts in a manner that discriminates against Section 7 activity.

Good times.  But, to paraphrase a talking head's recent statement in another context, "dude, that was like 7 years ago!"  Relying in part on "scholars," second only to referencing "studies" when justifying a peremptory exercise of raw power, the Board has overruled itself.  As a result, employers may not prohibit employees' personal use of email, during non-work time, about a host of subjects covered under section 7 of the National Labor Relations Act, including union activity.

The new decision, following a long tradition of colorful NLRB precedent names, is Purple Communications, Inc., 361 NLRB No. 126 (2014). There, the Company had an email policy that will remind you of your company's policy:

INTERNET, INTRANET, VOICEMAIL AND ELECTRONIC COMMUNICATION POLICY
Computers, laptops, internet access, voicemail, electronic mail (email), Blackberry, cellular telephones and/or other Company equipment is provided and maintained by the [sic] Purple to facilitate Company business. All information and messages stored, sent, and received on these systems are the sole and exclusive property of the Company, regardless of the author or recipient. All such equipment and access should be used for business purposes only.

Prohibited activities
Employees are strictly prohibited from using the computer,  internet, voicemail and email systems, and other Company equipment in connection with any of the following activities
2. Engaging in activities on behalf of organizations or persons with no professional or business affiliation with the Company.
. . . .
5. Sending uninvited email of a personal nature.

All agreed that the policy was lawful under Register Guard, by the way.  Rather, the union and NLRB's general counsel specifically asked the NLRB to overrule the prior decision.

Challenge accepted.  Here's the Board's ruling:

we will presume that employees who have rightful access to their employer’s email system in the course of their work have a right to use the email system to engage in Section 7-protected communications on nonworking time. An employer may rebut the presumption by demonstrating that special circumstances necessary to maintain production or discipline justify restricting its employees’ rights.66 Because limitations on employee communication should be no more restrictive than necessary to protect the employer’s interests,67 we anticipate that it will be the rare case where special circumstances justify a total ban on nonwork email use by employees. In more typical cases, where special circumstances do not justify a total ban, employers may nonetheless apply uniform and consistently enforced controls over their email systems to the extent that such controls are necessary to maintain production and discipline.

(emphasis mine)

I will spare you the detailed rationale. The opinion is above. But the gist of it is that email is a ubiquitous form of communication; employees have special rights to communicate at work about section 7 issues; and the special nature of email warrants treating it different from other company property like bulletin boards. And the employer's property rights must yield to section 7 rights.

Finally, the NLRB decided to apply its decision "retroactively" to pending cases.  So, employers must take action.

So, what does this change mean?

1.  Email policies must allow employees to communicate about activities protected by Section 7 of the National Labor Relations Act.  The catch is that Section 7 is very broad, and permits communications about "wages, hours, and other terms and conditions of employment."  That means, for example, that it's unlawful to prohibit employees' criticism of a boss related to working conditions, or to share salary information over email, and more.

2. The Board's decision applies only to employees.  It does not grant outsiders' access to the Company's email.  It may be, although this is unclear, it means that the employer can ban non-work-related communications over its email system with outsiders.

3.  The decision allows employers to prohibit use of its email system during working time, as long as the policy remains non-discriminatory.

4.  Employers must re-draft their electronic communications policies now, as this decision applies to the unionized and non-unionized workforce, at least those within the jurisdiction of the NLRB.

5. Employers are not required to grant email access to employees for the purpose of making such communications.

6. The decision does not apply to other types of communication (e.g., instant message, text). However, my prediction is that the Board will address those modes in another case.

7.  There will be litigation over what will qualify as allowed "uniform and consistently enforced controls over their email systems to the extent that such controls are necessary to maintain production and discipline."  So, prepare for more handbook updates.

8. The decision may be appealed to the U.S. Court of Appeals, which could decline to enforce it. But this case is Board precedent, which will guide future decisions by Administrative Law Judges.  Also, Courts of Appeals usually (almost always) enforce the Board's interpretation of the NLRA.

What of employer monitoring?

You may ask, rightly, whether an employer who monitors email will be accused of "spying" in violation of the NLRA.  Of course it will!  But, to its credit, the Board addressed this issue, and allows employers to continue email monitoring as a general practice, so long as it is not targeted at section 7-related communications, including of course union organizing activity:

Our decision does not prevent employers from continuing, as many already do, to monitor their computers and email systems for legitimate management reasons, such as ensuring productivity and preventing email use for purposes of harassment or other activities that could give rise to employer liability.73 The Respondent and some amici assert that such monitoring may make them vulnerable to allegations of unlawful surveillance of employees’ Section 7 activity. We are confident, however, that we can assess any surveillance allegations by the same standards that we apply to alleged surveillance in the bricks-and-mortar world. Board law establishes that “those who choose openly to engage in union activities at or near the employer’s premises cannot be heard to complain when management observes them. The Board has long held that management officials may observe public union activity without violating the Act so long as those officials do not ‘do something out of the ordinary.’”74 An employer’s monitoring of electronic communications on its email system will similarly be lawful so long as the employer does nothing out of the ordinary, such as increasing its monitoring during an organizational campaign or focusing its monitoring efforts on protected conduct or union activists. Nor is an employer ordinarily prevented from notifying its employees, as many employers also do already, that it monitors (or reserves the right to monitor) computer and email use for legitimate management reasons and that employees may have no expectation of privacy in their use of the employer’s email system.

So, it's not illegal to monitor for harassment, trade secret misappropriation, etc. 

Happy holidays!

Greg

Unanimous U.S. Supreme Court: Security Screenings Non-Compensable Under FLSA

The Supreme Court further explained how to determine whether time spent at work is "preliminary" or "postliminary" and therefore not compensable under the federal Fair Labor Standards Act.  Per the Court:

The employer in this case required its employees, warehouse workers who retrieved inventory and packaged it for shipment, to undergo an antitheft security screening before leaving the warehouse each day.

The case involved temporary workers at an Amazon warehouse.  They were actually employed by Integrity Staffing Solutions, an agency.  Naturally, with all of that inventory around, security was important to minimize theft. So, 

Integrity Staffing required its employees to undergo a security screening before leaving the warehouse at the end of each day. During this screening, employees removed items such as wallets, keys, and belts from their persons and passed through metal detectors.

Busk and other employees filed a class action, claiming that the time spent on the screenings should be compensated because they were required to wait to be screened, because screening was for the employer's benefit, and because the screening process could take considerably more than a couple of minutes in some cases (sometimes up to 25 minutes even).

In a 9-0 opinion by Justice Thomas, with a concurrence by Justice Sotomayor with Justice Kagan joining, the Supreme Court reversed the 9th Circuit Court of Appeals.

The legal issue here involves the "Portal to Portal Act," which modified the federal Fair Labor Standards Act.  The P2P Act, as I like to call it today,  exempts from compensable time "activities which are preliminary to or postliminary" to "principal activities.” If they are pre- or post-luminary, they are not compensable.

Security screenings obviously are not "principal" actives. But that does not render them automatically pre- or postliminiary. That is because the term, "principal" activities, includes "all activities which are an ‘integral and indispensable part of the principal activities."

The Court explained what "integral and indispensable" means:

An activity is therefore integral and indispensable to the principal activities that an employee is employed to perform if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.

Again, if it's "integral and indispensable" then it's compensable time under the FLSA.

So, the court applied the above definition of integral and indispensable to security screenings, thusly:

The security screenings at issue here are noncompensable postliminary activities. To begin with, the screenings were not the “principal activity or activities which [the] employee is employed to perform.” 29 U. S. C. §254(a)(1). Integrity Staffing did not employ its workers to undergo security screenings, but to retrieve products from ware- house shelves and package those products for shipment to Amazon customers.

The security screenings also were not “integral and indispensable” to the employees’ duties as warehouse workers. As explained above, an activity is not integral and indispensable to an employee’s principal activities unless it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform those activities. The screenings were not an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment. And Integrity Staffing could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.

(emphasis mine)

The Court rejected the 9th circuit court of appeals's conclusion that the time was compensable because the employees were "required" to undergo the screenings, and also rejected the notion that the time was compensable because it was for the employer's benefit:

If the test could be satisfied merely by the fact that an employer required an activity, it would sweep into “principal activities” the very activities that the Portal-to-Portal Act was designed to address. The employer in Anderson, for instance, required its employees to walk “from a timeclock near the factory gate to a workstation” so that they could “begin their work,” . . . . A test that turns on whether the activity is for the benefit of the employer is similarly overbroad.

The plaintiffs argued that the employer could have reduced the screening time by adding more screeners or by staggering break and shift times.  But the Court held that the employer's power to reduce the time it took did not change the character of  the activity from non-compensable to compensable. 

So, big victory for employers under the FLSA.  California employers, not so fast.

There is no P2P Act under California law.  Rather, all time is compensable if the employee is "subject to the control of the employer." That's why what may seem as "preiminary" or "postliminary" under California law may nonetheless be compensable.  As the California Supreme Court once wrote in rejecting importation of the P2P Act: "we conclude that the federal statutory scheme, which differs substantially from the state scheme, should be given no deference." Morillion v. Royal Packing Co., 22 Cal. 4th 575, 588 (2000).

Therefore, my opinion is, and I say that emphasizing this is NOT legal advice: employers should not change practices in California unless or until the California courts adopt the holding in this case, or unless or until a wage-hour lawyer with really good insurance says it's ok. 

Good luck out there.

The opinion in Integrity Staffing Solutions, Inc. v. Busk is here.

Greg 

About My Post Below on McLean v. California

I just learned the California Supreme Court has granted review in the McLean case that discussed below (here). So, as Emily Litella said, "never mind" until the high court rules...

Court of Appeal: Employees Who "Retire" Have Quit Under the Labor Code

McLean v. California involves public sector employees, but it's applicable to the private sector as well.  McLean worked as a deputy attorney general. She retired in November 2010.  On her last day, she alleges, the state did not pay her final wages.

In California, all wages (including base pay, unused vacation, vested bonuses or commissions, etc.) are due on the termination date, subject to a few, narrow exceptions.  Employees who resign with less than 72 hours notice are due their wages within 72 hours of the termination date.   These provisions are contained within sections 201 and 202 of the Labor Code. There are various statutory exceptions applicable to certain industries. 

This requirement by law generally applies to state agencies.  However, state employees may elect to transfer accrued leave pay to a retirement account rather than take payment.  The state is deemed timely if it makes that transfer within 45 days of termination.

When employers pay employees after the deadline, Labor Code section 203 says that employers owe a penalty of one day's pay for each day that the pay is late, up to a maximum of 30 days' pay.  (Example: employee earns $100 per day. Employer is 31 days late with final pay. Employer owns penalty of 30 X $100 = $3,000).   The failure to pay must be "willful," which is a liberal definition and means that the employer intentionally did not pay what was owed.  Mistakes may not be deemed "willful" but many are.  Genuine disputes over what is owed (such as the calculation of a commission "earned" as of the termination date) do not count as "willful."

Attempting to avoid penalties, the state argued that "retirement" is not "quitting" under the Labor Code.  McLean and the state argued the dictionary definition and other issues to the court of appeal.    Not surprisingly, to me anyway, the court of appeal held that a retirement is a type of "quit."

So, when a person "retires," that person also "quits" within the meaning of Labor Code section 202.  If you think this post is too long, consider that it took about 14 pages for the court to get there.  

This case is McLean v. California and the opinion is here. 

Court of Appeal: Meal Period Class Action Not "Welcome to Walgreens"

This is not a class action post, bored blog readers. Read this one if you are interested in meal and break issues.

The Court of Appeal affirmed the denial of class certification in a meal and break case.  The ruling is against a recent tide of class action opinions.  The opinion, though is good not only about class certification, but about explaining meal break rules.

The Court of Appeal explained the current state of California law on meal breaks in refreshing, plain English, as follows:

Under the make available standard, the employer merely must make meal breaks available. That is, the employer must relieve the employee of all job duties for the meal break, and then the employer may allow employees to decide for themselves whether to take the break. This make available standard thus allows an employee to choose to skip the break and, for instance, to leave work early instead. If the employer provides a break opportunity to the worker, the employer incurs no liability if the employee then decides to skip or delay the break.

Walgreens employees sometimes did decide to skip or delay breaks. One employee explained, for instance, that “I generally take my lunch breaks, but about once a week I will skip lunch because I want to be able to leave work early.” Another testified that, “[e]ven though it has always been Walgreens’ policy to provide a 30-minute meal period, I preferred to skip mine and instead leave early. If I am not hungry, which is typically the case, I do not need a meal period, especially since it is unpaid time.” There was other similar evidence about skipping or delaying breaks. 

The Court then explained what the law is not.

Under the alternative ensure standard, an employer must ensure employees take breaks. That is, an employer must make workers take meal breaks whether they want them or not. Employers are liable for missed meal breaks even when workers choose to skip their breaks because the ensure rule makes breaks mandatory. 

Recall that the California Supreme court has rejected the "ensure" standard.

The Court of Appeal then explained why the "make available" standard is not amenable to class certification:

Meal break classes are harder to certify under a make available test because the fact of a missed break does not dictate the conclusion of a violation (and thus employer liability). Rather, under the make available standard you additionally must ask why the worker missed the break before you can determine whether the employer is liable. If the worker was free to take the break and simply chose to skip or delay it, there is no violation and no employer liability. This make available test thus can make analysis of break violations more complex than under the ensure standard.

Amen.  Bold is mine.

The plaintiff, curiously, argued that Walgreens management's emails insisting that employees take meal breaks supported class certification.  The trial court disagreed and so did the Court of Appeal:

“Just an FYI . . . if anyone is on this list, they did not receive a lunch. Please, you must talk to the assistant managers and find out why. . . . please make a big deal about this . . . remind employees that it is their job to ask for a break or lunch if they did not receive it, but also remind the Managers on duty that they must have a break schedule created for every shift . . . there is no negotiation about this . . . there is no excuse not to give a break or lunch . . . look at your schedule and make sure you have the right people at the right time." 

* * * *

This email evidence cut against Collins’s motion. “[A]n employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks.” (Brinker Restaurant Corp. v. Superior Court, supra, 53 Cal.4th at p. 1040.) These emails, however, do not show Walgreens pressuring employees to omit breaks. They show the opposite: Walgreens pressuring store managers to ensure employees took meal breaks. The emails show respect for workers’ rights, not pressure against them.

Here's a part of the opinion that makes me want to apply for State Bar Judge. The Court of Appeal exposed the plaintiff's attorney's practices of drafting form declarations containing information that contradicted what employees had told the plaintiffs'  lawyers, which the employees then signed anyway:

Collins presented 44 form declarations. They were mostly identical. Each one
stated that on some occasions “meal periods were not made available to me.” The ostensible reason was “we were short-handed and I was required to work through my meal period.” 

The trial court gave the declarations no weight because they were unreliable. Most deposition witnesses recanted their declarations to some degree or entirely. The prevalence of falsity in the declarations raised questions about how Collins’s lawyers had created these declarations in the first place. * * * 

The trial judge repeatedly said these declarations “appalled” him, and he told counsel, “You know better.” 

The trial court was “especially troubled” that, once deposed, so many witnesses recanted their declarations. 

Form declarations present a problem. When witnesses speak exactly the same words, one wonders who put those words there, and how accurate and reliable those words are. 

There is nothing attractive about submitting form declarations contrary to the witnesses’ actual testimony. This practice corrupts the pursuit of truth.
It was not error for the trial court to give these unreliable declarations no weight. 

To employers:
- Ensure your meal period policies are lawful and require employees to take meal periods. Do not make them "optional" because of the "make available" legal standard.  If they do not take them, contrary to company expectations, that will not result automatically in liability and will help  thwart class certification.
- Follow up on policies by auditing compliance and ensuring management and employees understand, in writing, that they are expected to comply with the policy, not wink at it.

To defense lawyers:
- Depose declarants and find out how they filled out declarations that are too good to be true. Do not accept form declarations that result in mass, identical testimony.

This case is In re Walgreens Overtime Cases and the opinion is here.