Woodworth v. Loma Linda Univ. Med. Center (2023) · DecisionDepot
Woodworth v. Loma Linda Univ. Med. Center
California Court of Appeal Jul 24, 2023 No. E072704Published
Filed 7/24/23 CERTIFIED FOR PARTIAL PUBLICATION *
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
NICOLE WOODWORTH,
Plaintiff and Appellant, E072704
v. (Super.Ct.No. CIVDS1408640)
LOMA LINDA UNIVERSITY OPINION MEDICAL CENTER,
Defendant and Appellant.
APPEAL from the Superior Court of San Bernardino County. David S. Cohn,
Judge. Affirmed in part; reversed in part with directions. Motion to dismiss appeal
denied. Motion to dismiss cross-appeal granted.
Law Office of Joseph Antonelli, Joseph Antonelli, Janelle Carney; Clarkson Law
Firm and Glenn A. Danas for Plaintiff and Appellant Nicole Woodworth.
Lewis Brisbois Bisgaard & Smith, Jeffry A. Miller, Allison Arabian Hill, Jon P.
Kardassakis and Michael K. Grimaldi for Defendant and Appellant Loma Linda
University Medical Center.
*Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of parts I, III, IV, V, and VII of the Discussion.
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Seyfarth Shaw, Jeffrey A. Berman and Kiran A. Seldon for California Hospital
Association as Amicus Curiae on behalf of Defendant and Appellant Loma Linda
University Medical Center.
Nicole Woodworth was a registered nurse at Loma Linda University Medical
court could review interim order on summary judgment motion, because the ruling
“impacted the trial court’s decision to strike the class allegations”].) As to the absent
putative class members, that means we should review the order denying Woodworth’s
motion to strike their declarations and denying her motion for class certification.
(Barriga v. 99 Cents Only Stores LLC (2020) 51 Cal.App.5th 299, 320-321 (Barriga)
[order denying motion to strike putative class declarations was reviewable on appeal from
order denying class certification motion].) As to the absent aggrieved employees, it
means we should review the May 2019 order granting the medical center’s motions for
summary adjudication, plus the November 2018 order granting the medical center’s
motion for summary adjudication on the rounding claim. The court granted each of those
motions with respect to the PAGA cause of action (as well as Woodworth’s individual
claims). Collectively, the two orders disposed of every theory of liability on which
Woodworth based the PAGA cause of action—the regular rate claim, the wage statement
claim, the waiting time claim, the overtime claim, the rest period claim, and the rounding
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claim. All of those orders contributed to the de facto final judgment for the absent
plaintiffs.
For all of these reasons, we deny the medical center’s motion for partial dismissal
of the appeal.
B. Woodworth’s Motion to Dismiss the Cross-Appeal
Woodworth moves to dismiss the medical center’s cross-appeal, arguing that the
death knell doctrine renders the orders that she challenges appealable, but it does not give
the medical center the right to appeal. We agree.
As discussed, the death knell doctrine permits us to review orders that terminated
the claims of absent class members and absent aggrieved employees. But the order from
which the medical center cross-appeals—the order denying the motion to strike the
PAGA allegations—did not contribute to that de facto final judgment against the absent
class members and aggrieved employees. Rather, the order would have kept the PAGA
claims alive, if the claims had survived the medical center’s other motions. The death
knell doctrine therefore does not give us jurisdiction over the cross-appeal.
Nevertheless, Woodworth observes that we may consider the medical center’s
arguments in its cross-appeal as “alternative grounds to affirm” the court’s rulings
terminating the PAGA cause of action, so the cross-appeal is “wholly unnecessary.”
Again, we agree with her. To the extent that we conclude the trial court erred by
terminating the PAGA claims, we consider the arguments advanced by the medical center
in its motion to strike the PAGA allegations as alternative grounds to affirm those orders.
(See Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 924, fn. 56 [“it
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is not necessary for the respondent to file a cross-appeal in order to raise an additional
legal ground for affirming the judgment or order against the appellant”].)
For these reasons, we dismiss the cross-appeal but consider the arguments raised
in the cross-appeal as alternative grounds to affirm the orders from which Woodworth
appeals.
II. Motion for Summary Adjudication on the Rounding Claim
Woodworth argues that the trial court erred by granting the medical center’s
motion for summary adjudication on the rounding claim. In particular, she urges us to
follow Camp. Camp reversed a judgment for the employer on a rounding claim, holding
that “if an employer . . . can capture and has captured the exact amount of time an
employee has worked during a shift, the employer must pay the employee for ‘all the
time’ worked.” (Camp, supra, 84 Cal.App.5th at p. 660.) We agree with the reasoning in
Camp, and we accordingly reverse the order granting summary adjudication for the
medical center on the rounding claim.
A. Relevant Background
The medical center’s motion for summary adjudication argued that its rounding
policy was fair and neutral as to all nonexempt employees, and the policy therefore was
lawful under See’s Candy, supra, 210 Cal.App.4th 889. (Id. at p. 903 [“Assuming a
rounding-over-time policy is neutral, both facially and as applied, the practice is proper
under California law”].) It sought summary adjudication on the stand-alone cause of
action alleging rounding and several other causes of action, including the PAGA cause of
action, to the extent that they were based on the rounding claim.
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The evidence offered by the medical center showed that employees clock in and
out for work on a computer-based system. For purposes of calculating employees’ pay,
the medical center rounds the employees’ time punches. The hourly time clock is divided
into 10 six-minute increments beginning with the hour mark, and the time punches are
rounded down to the nearest tenth of an hour. For example, if an employee clocks in for
a 7:00 a.m. shift at 6:59 a.m., the time punch is rounded down to 6:54 a.m. If that same
employee clocks in at 7:05 a.m., the time punch is rounded down to 7:00 a.m. And if the
employee clocks in at 7:00 a.m., no rounding occurs, because the time punch is already at
the nearest tenth of an hour.
In support of the motion, the medical center also offered the declaration of
Michael J. Buchanan, an applied economist with experience in evaluating economic and
statistical issues in class action cases. Buchanan analyzed the timekeeping and payroll
data for all hourly nonexempt employees from June 2010 to August 2015. (Woodworth
proposed a class period starting in June 2010.) The data set included records for 10,534
employees. He compared the rounded time from the payroll data to the unrounded clock
entries from the timekeeping data. The timekeeping data reflected “the actual time an
employee punched in or out.”
Buchanan concluded that 5,418 employees (or approximately 51.4 percent) were
paid for more time than they were on the clock, while 5,002 employees (or approximately
47.4 percent) were paid for less time than they were on the clock. Another 114
employees (or about 1.1 percent) were unaffected by rounding. Buchanan opined that the
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rounding policy was neutral and that there was no systematic advantage to either the
medical center or the employees.
In opposition to the motion for summary adjudication, Woodworth argued that the
rounding policy was not neutral because it systematically undercompensated employees
assigned to work 12-hour shifts (the 12-hour employees). She asserted that she was
going to seek certification of a rounding class consisting of 12-hour employees only.
Woodworth offered the declaration of Brian Kriegler, a statistician who was the
managing director of an economic and statistical consulting firm. Kriegler analyzed the
timekeeping and payroll data from the same period as Buchanan, but Kriegler did not
analyze the data for all nonexempt employees. Instead, he analyzed the data only for the
12-hour employees. His data set included 4,620 employees.
Kriegler’s analysis differed from Buchanan’s analysis in another way. Kriegler
conducted a “‘weighted hours’” analysis that attempted to quantify how rounding
impacted the 12-hour employees’ earnings. He noted that 12-hour employees worked
straight time hours but often also worked overtime hours (one and one-half times their
regular rate of pay) and double time hours (two times their regular rate of pay). He
opined that determining “whether rounding is fair in terms of earnings requires taking
into account the respective amounts of straight time, overtime, and double time—and not
simply applying equal weight to all hours worked.” 1 Kriegler criticized Buchanan’s
1 Kriegler explained his weighted hours analysis as follows: “[O]ne way to think about how employees are paid is in terms of the equivalent number of straight time hours: [¶] 1.0 x Straight Time Hours + 1.5 x Overtime Hours + 2.0 x Double Time Hours. [¶]
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analysis because it compared the employees’ time on the clock to their rounded time, but
it did not examine how the difference might have affected their earnings, and it did not
apply “the correct weight to straight time, overtime, and double time hours.”
According to Kriegler’s weighted hours analysis, 3,121 of the 12-hour employees
(or approximately 67.6 percent) were underpaid because of rounding, while 1,477 of
them (or about 32 percent) were overpaid. Another 22 of the 12-hour employees (or
about 0.5 percent) were neither underpaid nor overpaid. Kriegler also analyzed all of
Woodworth’s own data. He concluded that the medical center underpaid her in 37 out of
60 pay periods, resulting in 6.3 weighted hours of unpaid work worth $202.72.
In the medical center’s reply brief, it argued that Woodworth’s evidence did not
dispute that the rounding policy was neutral as applied to all employees. Instead, her
evidence focused on 12-hour employees, a theory that she did not plead in the TAC. The
TAC defined the putative class for the rounding claim as all hourly nonexempt
employees. Likewise, the PAGA cause of action defined “‘aggrieved employees’” as all
hourly nonexempt employees of the medical center. The medical center asserted that
opposition papers could not “create issues outside the pleadings.” It further argued that it
was irrelevant whether Woodworth was underpaid as a result of rounding, because the
proper analysis examined the effect of rounding on the employees as a whole.
. . . [C]onsider an 8-hour shift employee who works 12.5 hours in a day and is paid $25 per hour. This employee’s Weighted Hours are 1.0 x 8 + 1.5 x 4 + 2.0 x 0.5 = 15 Weighted Hours. This employee’s earnings are 15 x $25/hour = $375.”
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The court granted the medical center’s motion for summary adjudication on
Woodworth’s individual rounding claim and the PAGA cause of action, to the extent that
the cause of action “reiterate[d] the rounding claim.” The court ruled that Buchanan’s
declaration constituted a “prima facie” showing that the rounding policy was neutral on
its face and as applied. The court reasoned that Kriegler’s declaration did not controvert
that evidence, because he looked only at the 12-hour employees. The TAC defined the
issues for summary adjudication, and the TAC defined the allegedly affected class as all
nonexempt employees, not just the 12-hour employees. The court further reasoned that
Woodworth’s individual experience was irrelevant, because the question was how the
employees as a group fared.
B. Standard of Review
A defendant may move for summary adjudication on a cause of action if the
defendant contends that the cause of action has no merit. (Code Civ. Proc., § 437c, subd.
(f)(1).) The defendant may carry its initial burden by showing that one or more elements
of the challenged cause of action cannot be established or that there is a complete defense
to the cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).) For purposes of summary
adjudication, a cause of action “‘means “‘a group of related paragraphs in the complaint
reflecting a separate theory of liability.’”’” (Silva v. See’s Candy Shops, Inc. (2016) 7
Cal.App.5th 235, 257 (Silva), disapproved on another ground by Donohue v. AMN
Services, LLC (2021) 11 Cal.5th 58, 77.)
Once the moving defendant has carried its initial burden, the burden shifts to the
plaintiff to show a triable issue of material fact with respect to the cause of action. (Code
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Civ. Proc., § 437c, subd. (p)(2).) The trial court must consider all of the evidence and the
reasonable inferences from it in the light most favorable to the nonmoving party.
(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) The court may grant the
motion if there is no triable issue of material fact and the issues raised by the pleadings
may be decided as a matter of law. (Code Civ. Proc., § 437c, subds. (c), (f)(1);
Biancalana v. T.D. Service Co. (2013) 56 Cal.4th 807, 813.) “There is a triable issue of
material fact if, and only if, the evidence would allow a reasonable trier of fact to find the
underlying fact in favor of the party opposing the motion in accordance with the
applicable standard of proof.” (Aguilar, supra, at p. 850.)
We review summary adjudication orders de novo and apply the same legal
standard as the trial court. (Travelers Property Casualty Co. of America v. Superior
Court (2013) 215 Cal.App.4th 561, 574.) We independently examine the record to
determine whether there are triable issues of material fact and whether the moving party
is entitled to summary adjudication as a matter of law. (Id. at p. 574.)
C. Analysis
A federal regulation “allows employers to compute employee worktime by
rounding ‘to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour,’
provided that the rounding system adopted by the employer ‘is used in such a manner that
it will not result, over a period of time, in failure to compensate the employees properly
for all the time they have actually worked.’” (AHMC Healthcare, Inc. v. Superior Court
that every employee must “gain[] or break[] even over every pay period or set of pay
periods analyzed”].) Requiring neutral results for every individual employee “‘would
undercut the purpose’ and ‘gut the effectiveness’ of the typical rounding policy.”
(AHMC Healthcare, at p. 1022.)
Camp recently broke with the See’s Candy line of cases. In Camp, the stipulated
evidence showed that under the employer’s rounding policy, 56.6 percent of employees
were paid for the same or a greater amount of time than their actual work time, while
43.4 percent of employees were underpaid. (Camp, supra, 84 Cal.App.5th at p. 646.)
The plaintiff was one of the employees whom the employer had underpaid—he had lost
7.83 hours because of rounding. (Ibid.)
The employer argued that its rounding policy was lawful under See’s Candy and
that it therefore was entitled to summary judgment on the plaintiff’s claim for unpaid
wages, but the Camp court rejected that argument. (Camp, supra, 84 Cal.App.5th at
pp. 643-644.) The court held that if an employer “can capture and has captured the exact
amount of time an employee has worked during a shift, the employer must pay the
employee for ‘all the time’ worked.” (Id. at p. 660.)
The Camp court relied heavily on two California Supreme Court decisions that
postdate See’s Candy. The first decision, Troester v. Starbucks Corp. (2018) 5 Cal.5th
829 (Troester), concerned the de minimis doctrine found in federal labor law, which
“excuse[s] the payment of wages for small amounts of otherwise compensable time upon
a showing that the bits of time are administratively difficult to record.” (Id. at p. 835.)
Troester declined to adopt the federal de minimis doctrine. (Id. at pp. 835, 837-841.)
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The second decision, Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58 (Donohue),
held that “employers cannot engage in the practice of rounding time punches . . . in the
meal period context. The meal period provisions are designed to prevent even minor
infringements on meal period requirements, and rounding is incompatible with that
objective.” (Id. at p. 61.) 2
Camp identified four reasons for rejecting the employer’s showing that its
rounding policy was lawful. (Camp, supra, 84 Cal.App.5th at pp. 656-658.) First,
Troester clarified that the Labor Code and the relevant wage order both contemplate that
employers will pay employees for “‘all work performed.’” 3 (Camp, at p. 657.) The
evidence in Camp showed that the employer had not paid the plaintiff for all work
performed. (Ibid.)
Second, as our high court explained in Troester, the Labor Code and the wage
order provisions form a regulatory scheme that “‘is . . . concerned with “small things.”’”
(Camp, supra, 84 Cal.App.5th at p. 657.) And when Troester rejected the de minimis
doctrine, it “indicated that even small amounts of worktime—indeed amounts measured
in minutes—are compensable where the worktime is regularly occurring.” (Camp, at
2 Donohue held that rounding is unlawful in the meal period context but stopped short of deciding the validity of the See’s Candy rounding standard. (Donohue, supra, 11 Cal.5th at p. 72.) The court noted that it had not been asked to decide that issue. (Ibid.) It instead assumed the validity of See’s Candy and determined that rounding in the meal period context did not comport with the See’s Candy neutrality standard. (Donohue, at p. 72.)
3 The Industrial Welfare Commission (IWC) has adopted wage orders that are “‘accorded the same dignity as statutes’” and that “take precedence over the common law to the extent they conflict.” (Troester, supra, 5 Cal.5th at p. 839.)
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p. 657; accord Donohue, supra, 11 Cal.5th at p. 68 [given the regulatory scheme’s
concern “with small amounts of time” and “the relatively short length of a 30-minute
meal period, the potential incursion that might result from rounding is significant”].) The
evidence in Camp demonstrated that the small amounts of worktime periodically lost
through rounding could add up over time—indeed, the plaintiff lost more than seven
hours of worktime over five-plus years. (Camp, at pp. 646, 657.)
Third, there was no convincing evidence that the IWC or the Legislature intended
to adopt the federal rounding regulation for determining whether time is compensable
under state law. (Camp, supra, 84 Cal.App.5th at p. 657.) Under those circumstances,
our high court had declined to adopt by implication any federal standard that expressly
eliminates substantial protections for employees. (Ibid.) Similarly, our high court had
cautioned against relying on federal labor law to construe state labor law if the language
or intent of the laws substantially differs. (Ibid.) In the case of rounding, there was not
merely a difference in language but “a complete absence of language.” (Ibid.) The
federal regulation has no analog in the Labor Code or in the relevant wage order. (Id. at
p. 657.) In the 60-plus years since the federal regulation took effect, neither the
Legislature nor the IWC had amended the law to recognize a rounding exception to the
general requirement that an employee be paid for all time worked. (Id. at p. 658.)
Troester declined to adopt the federal de minimis doctrine under substantially similar
circumstances. (Troester, supra, 5 Cal.5th at p. 841; Camp, at p. 658.)
Fourth and finally, Donohue “appear[ed] to have called into question the
efficiencies historically attributed to time rounding given that advances in technology
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have enabled employers to more easily and more precisely capture time worked by
employees.” (Camp, supra, 84 Cal.App.5th at p. 658.) Donohue recognized that
employers had developed rounding as a way to efficiently calculate hours worked and
wages owed. (Donohue, supra, 11 Cal.5th at p. 73.) But the employer in Donohue used
an electronic timekeeping system that “had to take the extra step of converting the
unrounded time punches to rounded ones,” so it was unclear what efficiencies the
employer had gained from the practice. (Id. at p. 74.) The same was true in Camp: The
employer’s timekeeping system recorded time worked to the minute and took the extra
step of rounding that time, but there were no clear efficiencies gained. (Camp, at p. 658.)
We find Camp’s reasons for rejecting the See’s Candy rounding standard
persuasive. We therefore conclude that the medical center was not entitled to summary
adjudication on Woodworth’s individual rounding claim or the PAGA rounding claim.
The medical center’s evidence showed that over 5,000 employees were not paid for all
time worked under the rounding policy. Woodworth’s evidence showed that she was not
paid for 6.3 weighted hours under the policy. In addition, the evidence showed that the
medical center’s computer-based timekeeping system captured the employees’ time to the
minute and took the extra step of rounding the time punches. Because the medical center
could and did capture the exact number of minutes that employees worked, it “must pay
the employee[s] for ‘all the time’ worked.” (Camp, supra, 84 Cal.App.5th at p. 660.)
Camp was decided after we issued our tentative opinion in this matter, so we gave
the parties an opportunity to file supplemental briefs regarding the case. In its
supplemental brief, the medical center contends that Woodworth forfeited the argument
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that See’s Candy does not apply here. It points out that Woodworth did not challenge
See’s Candy in the trial court or in her opening or reply brief on appeal. We agree that, in
general, appellants forfeit arguments not raised in the trial court or in their appellate
briefing. (DiCola v. White Brothers Performance Products, Inc. (2008) 158 Cal.App.4th
666, 676 (DiCola).) But we also have discretion to consider a forfeited issue on the
merits. (JRS Products, Inc. v. Matsushita Electric Corp. of America (2004) 115
Cal.App.4th 168, 179.)
We conclude that there are good reasons to exercise that discretion here. Camp
had not been decided when the parties briefed this motion in the trial court. Even the
cases on which Camp relied, Troester and Donohue, were decided after the parties had
fully briefed the motion in mid-July 2018. And when the trial court ruled on the motion
in November 2018, See’s Candy was binding appellate authority. Troester, Donohue,
and Camp represent an intervening change in the case law that validates the new
argument urged on appeal. (In re Marriage of Moschetta (1994) 25 Cal.App.4th 1218,
1227, fn. 12.)
Moreover, the medical center has not identified any disputed factual issue
precluding reliance on Camp. (See Krechuniak v. Noorzoy (2017) 11 Cal.App.5th 713,
725 [if a “‘new theory contemplates a factual situation . . . open to controversy’” and
“‘not put in issue or presented’” in the trial court, then “‘the opposing party should not be
required to defend against it on appeal’”].) It argues that section 2928 “require[s] a new
factual analysis” and that Camp is distinguishable because it does not address section
2928. On this record, we disagree that section 2928 renders Camp inapplicable.
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Section 2928 states: “No deduction from the wages of an employee on account of
his coming late to work shall be made in excess of the proportionate wage which would
have been earned during the time actually lost, but for a loss of time less than thirty
minutes, a half hour’s wage may be deducted.” The medical center asserts that nothing in
the record shows that Woodworth would have lost time if the medical center had chosen
to apply section 2928 as opposed to rounding. The apparent argument is that Woodworth
might have fared better under rounding than she would have if the medical center had
deducted one-half hour’s wage every time she clocked in fewer than 30 minutes late. But
that comparative analysis would not change the fact that in actual practice, the medical
center was applying rounding and not section 2928. And the evidence showed that under
that rounding policy, Woodworth was not paid for all time worked.
The medical center further argues that we should decline to follow Camp because
the court did not identify any language in the Labor Code or wage orders prohibiting a
neutral rounding policy. On the contrary, Camp identified specific provisions of the
Labor Code and the relevant wage order that required employees to “‘be paid for all work
performed.’” (Camp, supra, 84 Cal.App.5th at p. 657, citing § 510, subd. (a), Cal. Code
Regs., tit. 8, § 11070, subds. 2(G), 3(A), 4(A).) And although Camp involved wage order
No. 7-2001 (Camp, at p. 648), and this case involves wage order 5-2001 (Wage Order 5),
there are no material differences between the relevant provisions of the two wage orders.
§ 11050, subds. 2(K), 3(A), 4(A); see Singh v. Superior Court (2006) 140 Cal.App.4th
387, 390, 397-398 (Singh) [Wage Order 5 governs hospitals].)
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The medical center lastly argues that Camp’s holding should apply prospectively
only, given the longstanding approval of rounding by the DLSE manual and See’s Candy.
The medical center contends that retroactive application would be unfair and violate its
due process rights. We are not persuaded. “The general rule that judicial decisions are
given retroactive effect is basic in our legal tradition.” (Newman v. Emerson Radio Corp.
(1989) 48 Cal.3d 973, 978.) In exceptional circumstances, “‘“fairness and public policy
may require that a decision be given only prospective application. [Citations.] Particular
considerations relevant to the retroactivity determination include the reasonableness of
the parties’ reliance on the former rule, the nature of the change as substantive or
procedural, retroactivity’s effect on the administration of justice, and the purposes to be
served by the new rule.’”” (Claxton v. Waters (2004) 34 Cal.4th 367, 378-379.) The
medical center relies on the reasonableness of its reliance on the pre-Camp authorities but
ignores the other relevant factors. The medical center thus fails to demonstrate that this
case warrants an exception to the general rule of retroactivity.
In sum, we agree with Camp that if an employer “can capture and has captured the
exact amount of time an employee has worked during a shift, the employer must pay the
employee for ‘all the time’ worked.” (Camp, supra, 84 Cal.App.5th at p. 660.) The
evidence in this case showed that under the rounding policy, (1) the medical center
captured the exact number of minutes employees worked, and (2) Woodworth and many
other employees were not paid for all time worked. The medical center therefore was not
entitled to summary adjudication on Woodworth’s individual rounding claim or the
PAGA rounding claim.
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III. Motion to Strike the Putative Class Members’ Declarations
Woodworth contends that the court erred by denying her motion to strike the
putative class members’ declarations. She argues that the court abused its discretion
because she presented evidence that the medical center’s counsel behaved in a deceptive
and coercive manner with respect to the declarants. We conclude that Woodworth has
not shown an abuse of discretion.
A. Relevant Background
Woodworth moved to certify five classes of current and former medical center
employees. The medical center offered 43 putative class member declarations in support
of its opposition. All 43 declarants were current employees of the medical center.
The declarations all stated that the declarant understood a former employee had
“filed a proposed class action lawsuit which alleges that she and other hourly employees
were denied rest breaks, not paid all wages owed due to an invalid [AWS] and failing to
include certain bonuses in calculating overtime, and provided with inaccurate paystubs.”
The final numbered paragraph of 42 of the declarations stated: “The statements in
this declaration are voluntary and I understand that I do not have any obligation to sign
this declaration. I understand that whether I choose to do so or not will not affect my
employment status in any way. I have not been pressured or promised anything in
connection with this declaration, nor have I been coerced to provide this declaration. I
have had the opportunity to review the contents of this declaration and make any changes
I believe are necessary to ensure that it is accurate. I understand that this declaration may
be used in the proposed class action case entitled Woodworth v. Loma Linda University
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Medical Center. I have also been advised that I could potentially be a member of such a
class action if the Plaintiff is successful, and that my statement and this declaration could
affect whether this matter is certified as a class action and my potential recovery from
such a lawsuit, if any. I understand that the attorney who discussed this testimony with
me is the [medical center’s] attorney and that the [medical center] does not represent me
or the individual who brought this lawsuit. Finally, I know that if I ever become a
participant in the lawsuit, my interests will be opposed to [the medical center’s]
interests.” The 43rd declaration contained the same final numbered paragraph with one
minor change—the declarant crossed out “coerced” and handwrote “forced” in its place.
Woodworth moved to strike all of the putative class members’ declarations,
arguing that the medical center misled the declarants about the nature of the lawsuit and
obtained statements against the declarants’ interests in a coercive setting. She also
argued that the defense counsel had violated the California Rule of Professional Conduct
governing communications between an organization’s lawyer and the organization’s
constituents.
A few days after Woodworth moved to strike the declarations, she also filed an ex
parte application seeking to disqualify defense counsel or, in the alternative, to limit
counsel’s communications with putative class members. Like the motion to strike, the ex
parte application argued that defense counsel’s communications with the putative class
members were misleading and coercive, and the ex parte application also requested that
the court strike the declarations. The court ordered the ex parte application to proceed as
a noticed motion, giving the parties time to file opposition and reply briefs.
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1. The Declarants’ Deposition Testimony
Woodworth based her motion to strike and ex parte application largely on the
deposition testimony of 10 declarants. She randomly selected the 10 deponents from the
group of 43 declarants. In the medical center’s opposition briefs, it also relied on
portions of the deposition testimony. We summarize relevant deposition testimony in the
following paragraphs.
Maricela Baca: Baca’s director told her that the director had to choose two people
from the department for an interview with the medical center’s lawyers regarding breaks.
The director said that someone was going to cover for Baca so that the lawyers could
interview her. The medical center’s lawyers told her about this case, but not “down to
detail.” They “mainly” told her that a former employee (a nurse) was suing the medical
center “over breaks and the three 12s.” Baca did not know that Woodworth was alleging
the medical center should have included Christmas bonuses when calculating the
overtime rate. She discussed her pay stub with the medical center’s lawyers, and she told
them that she understood it. No one explained to her that Woodworth was claiming an
employee should be able to look at his or her pay stub and see ‘“the total number of
hours’” worked.
Baca did not know that Woodworth had filed this lawsuit on behalf of the state,
and she did not know that Woodworth was seeking penalties for the state on behalf of the
medical center employees. No one told her that she would be considered an aggrieved
employee under PAGA, and no one told her that she might be a class member in this
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case. No one explained to her that the plaintiff’s attorney was “on [her] side” and
“want[ed] the employees to be paid properly.”
Baca did not remember if anyone told her that her declaration would be filed in
court. The medical center’s lawyers did not say whether they were going to do anything
with the declaration. They did not tell her that her declaration might hurt Woodworth’s
chances of prevailing on the motion for class certification. No one told her to look at her
declaration before she signed it. But the statements about the “day-to-day work
environment” in her declaration were true. The statements in her declaration were also
voluntary, no one forced her to sign the declaration, and no one promised her anything
for signing it. She did not get a copy of her declaration.
Marissa Benter: Benter’s boss told her that she needed to meet with the medical
center’s lawyer regarding a declaration. Benter felt that she could refuse to go to the
meeting, and it was not a “scary” meeting. The medical center’s lawyer told her that
Woodworth’s case was a proposed class action. The lawyer told her that she could be a
potential member of the class because Woodworth was seeking to represent “the whole
hospital.” The lawyer explained that Woodworth was attempting to invalidate the AWS.
Benter did not know whether her declaration had been filed in court, but the
lawyer told her that the declaration was “[f]or the lawsuit.” Benter reviewed her
declaration and made changes before signing it. All of the statements in the final
numbered paragraph of her declaration were true.
Elvia Bermudez: A nurse manager asked Bermudez if she could go to a meeting
about a case against the medical center. The manager said that a person was suing the
32
medical center about breaks, and she said that if Bermudez did not feel comfortable going
to the meeting, Bermudez could refuse. Bermudez said that she would go. At the
meeting, the lawyers told her that they worked for a law firm that represented the medical
center. They explained that a person named “Nicole” was suing the medical center about
rest breaks “and all this stuff,” but she did not recall exactly what they said.
Bermudez did not remember the lawyers using the term “class action,” and they
did not tell her that if the lawsuit were successful, she would receive money. They did
not tell her that Woodworth was suing on behalf of all employees, and they did not tell
her that Woodworth was suing as a private attorney general. She also did not remember
them saying that Woodworth was suing on behalf of the state. She did not understand
what it meant “to be potentially a member of a class action” or “to be certified as a class
action.” The lawyers did not tell her that she could talk to the lawyer representing the
employees, and they did not tell her that she could contact Joseph Antonelli, who
represented Woodworth.
Bermudez did not know what the following sentence from her declaration meant:
“‘I know that if I ever become a participant in the lawsuit, my interests will be opposed to
[the medical center’s] interests.’” But she signed the declaration because she “was
agreeing” with what she had said, and no one forced her to sign it. She reviewed it line
by line before signing it. Woodworth’s counsel asked whether Bermudez would have
signed the declaration if she knew that the medical center would use it to defeat the class
action and that Bermudez would “‘not get money.’” Bermudez replied: “Well, I cannot
do just because the money. I just can say the truth about the money.”
33
With one minor correction to a date, Bermudez confirmed that everything in her
declaration was accurate. No one told Bermudez that the declaration would be filed in
court, and the lawyers did not tell her that the declaration might be against her interests.
But they told her that her declaration could be used by the medical center.
Steven Clark: Clark did not feel that the meeting with the medical center’s
lawyers was a coercive environment, and he did not feel intimidated. The lawyers
introduced themselves and told him that they represented the medical center. They told
him that a former employee was suing the medical center regarding rest periods, pay, and
“something else,” but he did not remember their exact words. Before he signed his
declaration, he did not know that Woodworth’s pay stub claim involved the failure to put
the words “‘Total Hours Worked’” on the pay stubs.
Clark did not remember anyone using the term “private attorney general” before
he signed his declaration. He had never heard of the “Private Attorney General Act of
California.” He did not remember the medical center’s lawyers explaining that
Woodworth was representing the employees on behalf of the state. Nobody explained
that Woodworth was seeking more than $60 million in penalties for failing to put “‘Total
Hours Worked’” on the pay stubs. Clark did not remember the lawyers telling him that
he was a potential class member, but he read that in the declaration. Clark also did not
remember the lawyers saying that he had a right to speak to the lawyers representing
Woodworth or the employees.
When Clark signed the declaration, he believed that the declaration “could be used
to support the case.” The lawyers did not specify how they would use the declaration.
34
He did not remember if they told him that Woodworth had filed a class certification
motion, and they did not explain that his declaration could be against his interests. Clark
confirmed that he understood the statements in the final numbered paragraph of his
declaration at the time he signed it. He reviewed the declaration before signing it and
believed everything in it was accurate. He would not make any changes to the statements
in his declaration about his experience at the medical center. He did not get a copy of his
declaration.
Devon Dean: One of Dean’s supervisors asked whether she would be willing to
talk with “some people for the [medical center] about meal breaks.” The supervisor did
not say that the meeting involved a lawsuit. The lawyers that interviewed her did not
explain “anything really about the case.”
The medical center’s lawyers did not tell Dean that Woodworth was suing on
behalf of the state and all employees as a private attorney general. At one point, she
testified that she did not remember if the lawyers told her that the case involved a class
action claim or that she might be a member of a class action. But at another point, she
testified that they said this could be a class action lawsuit and that she could be included
as a class member. Before Dean signed her declaration, the lawyers did not tell her that
she could speak to Woodworth’s attorneys. They did not mention Antonelli by name.
She did not remember the lawyers telling her that she could talk to any lawyer of her
choosing about this case.
The medical center’s lawyers did not explain how her declaration could affect her
potential recovery from this lawsuit. The lawyers said that her declaration could be used
35
in court and that it might be used against her as a potential class member, but she did not
recall what they said about how it could be used. The lawyers “wanted to make sure that
[she] agreed with everything that [she] was about to sign,” so they had her review her
declaration. Dean reviewed it and signed it. She did not get a copy of her declaration.
Rebecca Manzo: Manzo’s manager asked her to go to a meeting, and Manzo
agreed. Manzo did “not really” know what the meeting was about before she got there.
She met with two women whom she believed were lawyers, and she knew that they
represented the medical center. They told her that a former employee was suing the
hospital, and they wanted to ask her some questions. Manzo could not recall whether the
medical center’s lawyers told her about Woodworth’s claims.
The medical center’s lawyers told Manzo that Woodworth had filed a class action,
and Manzo knew that she could be a member of a class action, but they did not tell her
what a class action was. They did not tell her that Woodworth was seeking to represent
other hourly employees, and she did not understand what a class action was when she
signed her declaration.
The lawyers told her that the judge in this case might see her declaration, but they
did not tell her that the medical center would use the declaration to oppose Woodworth’s
request for class certification. Manzo testified that each of the statements in the final
numbered paragraph of her declaration were true at the time she signed it. She reviewed
her declaration before signing it. She explained: “So I just know that when I signed this,
I was willing and voluntarily [sic] to just give the truth of whatever I know to the best of
36
my ability and whoever it’s going to help or not help.” She did not get a copy of her
declaration.
Craig Midget: Midget’s supervisor asked Midget if he “would . . . mind going to
talk to the lawyers.” He felt that he could refuse to go to the meeting. He could not
remember what the supervisor said about the subject of the interview. When Midget met
with the lawyers, he understood that they represented the medical center. The lawyers
told him that Woodworth was trying “to invalidate the [AWS], the voting part of it.” He
might have been told that Woodworth was seeking overtime wages for her AWS claim,
but he could not remember. He could not remember if he had been told about her rest
period allegations, but he had been told about her allegations regarding pay stubs.
Midget asked the medical center’s lawyers about “the exact nature of this lawsuit,”
and they explained that the plaintiff had alleged a class action on behalf of herself and
other hourly employees. They did not say that Midget could be a member of the class if
Woodworth were successful, but he understood that he might be entitled to some money
if Woodworth were successful.
The medical center’s lawyers stressed that his declaration “would go to the other
side,” and he assumed that meant the judge would see it also. He reviewed his
declaration, and he did not think that he made any changes to it. Midget did not recall the
lawyers giving him the contact information for the plaintiff’s lawyers. He did not receive
a document from the medical center’s lawyers asking for a conflict waiver.
Brittany Ormerod: Ormerod’s manager asked her “to meet with our lawyers and
talk about the rest breaks and other things that might come up due to a lawsuit that was
37
going on with the hospital.” When she met with the lawyers, they told her that they
represented the medical center, and she did not think that they represented her. She felt
that she could have told her manager that she did not want to meet with the lawyers, and
she felt that she could leave the meeting at any time.
The medical center’s lawyers did “[n]ot really” tell Ormerod anything about this
lawsuit. They told her about the rest period allegations, but she did not think they
mentioned a claim for overtime or allegations about pay stubs, and she could not
remember any allegations about the Christmas bonus. But they asked her questions about
all of those things. The lawyers might have told her that Woodworth had brought a class
action, but she did not recall. She understood that she could be a class member if
Woodworth were successful, although she did not recall what the lawyers said about that
possibility.
The medical center’s lawyers told Ormerod that her declaration could be used in
the lawsuit, but she did not recall if they told her for “which side” it could be used. She
did not know whether they had filed her declaration. She did not receive or sign any
documents referring to a waiver of any conflict. She reviewed her declaration before she
signed it, and everything in it was truthful.
Dominic Ortiz: Ortiz’s managers asked him if he would be willing to meet with
the medical center’s lawyers. When he met with the lawyers, they told him that they
represented the medical center. They wanted to know about his rest breaks, and they told
him that “there was someone filing a lawsuit.” He believed they told him that this case
was a class action, but no one explained that Woodworth had brought the action on behalf
38
of herself and all hourly nonexempt employees. He did not think that they told him he
would stand to win if Woodworth won the lawsuit. He does not remember whether they
said anything about the lawsuit also being a private attorney general action. No one
explained that employees can sue on behalf of the state and all the employees at a place
of business.
Ortiz did not remember the medical center’s lawyers mentioning that there was a
plaintiff’s lawyer in this case or providing the name of that person. They did not tell him
that he could talk to Woodworth’s lawyers. They told him that his declaration would
probably be used in this lawsuit, but they did not explain how. He did not know how his
declaration could affect whether the matter was certified as a class action. Ortiz
understood that if he had any questions, the medical center’s lawyers would answer them,
but he did not have any questions. He reviewed his declaration and made one change to
it before he signed it.
Elizabeth Picazo: Picazo’s supervisor asked if she could go to a meeting to talk
about how everything works in Picazo’s unit, and Picazo agreed. At the meeting, the
medical center’s lawyers told her that they represented the hospital. They told her that
there was a pending lawsuit, they wanted to ask her questions, and they “wanted [her]
honest opinion.” She did not remember if they told her what the lawsuit was about, and
she did not remember their words “exactly.” They did not say anything about the
Christmas bonus in the meeting. No one explained Woodworth’s claim that the pay stubs
should include “‘Total Hours Worked’” on them. Picazo did not know whether
Woodworth wanted “to get rid of” the AWS. No one explained that Woodworth was
39
claiming the medical center “didn’t do the right things” necessary to pay the employees
“straight time for 12 hours,” and no one explained that Woodworth was seeking backpay
for everyone who worked overtime on 12-hour shifts.
Picazo did not recall if the medical center’s lawyers told her that Woodworth was
suing on behalf of other people. She did not know what a class action was, and they did
not tell her that she was a potential class member. She did not know that she had the
chance of recovering some money if this lawsuit were successful. It was possible the
medical center’s lawyers told her that Woodworth was suing on behalf of the state as a
private attorney general. But Picazo had never heard of the “Private Attorney General
Act.” No one explained to her that this lawsuit was seeking more than $60 million in
penalties, and no one told her that she could potentially recover money if Woodworth
won on her private attorney general claim.
The medical center’s lawyers did not tell Picazo that her “‘declaration could affect
whether this matter is certified as a class action and [her] potential recovery from such a
lawsuit, if any.’” She did not understand what those words meant when she read and
signed her declaration, but she signed it because she was “honest on the questions” the
lawyers asked her in the meeting. They told her that the declaration was in support of the
medical center and that it was possible her declaration would be filed in court. The
lawyers did not tell her how she could contact the lawyer for the plaintiff, and they did
not tell her Antonelli’s name. After showing Picazo her declaration and asking whether it
was accurate, the lawyers said that she was not obligated to sign it. There was nothing
inaccurate in the declaration about her “actual work” at the medical center. Picazo told
40
the lawyers that she had “‘no problem signing”’ it, and she asked for a copy of it, which
they gave her.
2. Defense Counsel’s Declaration in Opposition to the Motion to Strike
In opposition to the motion to strike the putative class members’ declarations, the
medical center also relied on the declaration of Rachel Lee, a partner at the firm
representing the medical center. Lee and an associate attorney at her firm conducted the
interviews of the putative class members. The interviews took place at the medical center
in a private room. No medical center employees were present at the interviews, other
than the employees being interviewed.
Lee’s declaration described “standard disclosures” that defense counsel made
during each interview. The attorneys introduced themselves and informed the employees
that counsel represented only the medical center and did not represent the employees.
Next, defense counsel asked whether an attorney represented the employees and whether
an attorney had contacted them regarding this case. Defense counsel briefly described
“the proposed class action lawsuit and the claims at issue.” Lee and the associate
attorney explained that they wanted to talk to the employees because “this was being
brought as a class action” and counsel “wanted to find out what the employee[s] had
experienced in [their] department.”
Defense counsel also explained that the interviews were voluntary and that the
employees did not have to participate in the interviews. Counsel stated that the medical
center could not retaliate against the employees for participating or failing to participate
in the interviews or for any information provided during interviews. Counsel then asked
41
the employees to affirm that they were comfortable proceeding with the interview and
whether they had any questions before starting the interview. According to Lee, the
“amount of information provided to the employees about the lawsuit varied depending on
whether they had specific questions about it.”
For those employees who chose to participate in the interviews, defense counsel
asked that they be as truthful, honest, and accurate as possible, and counsel told them that
they could decline to respond to any question. At no time did counsel suggest or
recommend to the employees that they should answer the questions in a certain way. At
the end of the interviews, counsel asked whether the employees would be willing to
provide a declaration summarizing the information that they had conveyed. Counsel
advised them that the declaration would be under oath and subject to the perjury laws,
that the declaration was voluntary, and that they did not have to provide one. Counsel did
not promise the employees anything in exchange for their declarations, and counsel did
not obtain declarations from any employee who said that they did not want to provide
one.
If an employee was willing to provide a declaration, defense counsel prepared and
printed it. Counsel gave the employees a chance to review their declarations and make
changes to ensure that they were accurate, and some employees made changes. Counsel
asked the employees to let counsel know if they had questions about their declarations.
Defense counsel advised the employees that the declarations “would be used in the
case of Woodworth v. Loma Linda University Medical Center and filed with the court to
defend [the medical center] against the Plaintiff’s claims.” Counsel explained to the
42
employees “that the attorney on the other side is trying to bring this case as a class
action” and that counsel was “going to use the declarations to try to prevent that from
happening, or words to that effect.” Consistent with the final numbered paragraph of the
declarations, counsel advised the employees that (1) “they could potentially be members
of the class if Plaintiff succeeded on her motion,” (2) “their statements could affect
whether the case was certified as a class action and their potential recovery from the
lawsuit,” and (3) “if they ever became participants in the lawsuit, their interests would be
opposed to [the medical center’s] interests.” Some employees had questions about those
disclosures, so counsel provided “additional information” to those employees.
3. Defense Counsel’s PowerPoint Presentation
The 43 putative class member interviews took place between January 2 and
January 14, 2019. The depositions of the 10 putative class members took place between
February 7 and February 11, 2019. Before the depositions, on February 6, 2019, defense
counsel met with the 10 deponents and reviewed a 23-slide PowerPoint presentation with
them. At that meeting, defense counsel confirmed that each employee “already knew and
continued to understand” that counsel represented the medical center and not the
individual employees.
The PowerPoint presentation included slides briefly describing this lawsuit,
identifying the medical center’s counsel, and identifying Woodworth’s counsel. One
slide explained the “[p]urpose of a deposition” and stated: “Your obligation is to tell the
truth. [¶] You are not required to guess about anything. [¶] If you don’t know or don’t
remember, saying you don’t know is perfectly appropriate.” Another slide explained the
43
“[i]ssues in the lawsuit” as (1) “AWS elections,” (2) “Regular rate,” (3) “Overtime,” (4)
“Wage statements,” (5) “Rest period,” and (6) “PAGA.” Five more slides briefly
addressed the AWS issue, the regular rate claim, the overtime claim, the rest period
claim, and the wage statement claim. Other slides showed the medical center’s rest
period policies and sample wage statements.
4. The Court’s Ruling
At the hearing on the motion to strike the putative class members’ declarations and
the motion to disqualify defense counsel, the court indicated that it had reviewed all of
the materials identified in its written tentative decision. The tentative decision listed all
of the parties’ filings, including the hundreds of pages of deposition excerpts, the putative
class members’ declarations, and defense counsel’s declaration. At the end of the
hearing, the court adopted its tentative decision denying both motions.
As to the motion to disqualify defense counsel, the court’s written ruling
summarized the evidence on which the parties relied. The court observed that some of
the deposition testimony supported Woodworth’s argument that the deponents did not
understand or retain all of the information that defense counsel conveyed. But the court
also observed that the disclosures in the putative class members’ declarations and Lee’s
declaration regarding the interviews were “more reliable” than the “inconsistent” and
“less clear” deposition testimony of the putative class members. The court also
concluded that Woodworth based her motion largely on federal district court cases
“involving facts considerably more serious tha[n] those at issue here.” The court ruled
that the facts and authorities did not support disqualification.
44
As to the motion to strike, the court’s written ruling noted that Woodworth made
largely the same arguments in support of her motion to disqualify defense counsel. The
court determined that there was no evidence defense counsel had affirmatively
misrepresented facts to the putative class members. The court also observed that, as it
had explained in connection with the motion to disqualify, the putative class members’
declarations and Lee’s declaration “demonstrate the lack of coercion or unethical tactics
by defense counsel.” 4 In addition, the court determined that, under the Code of Civil
Procedure, motions to strike applied only to pleadings and not to declarations. The court
ruled that (1) the motion to strike was procedurally defective and (2) the evidence did not
support Woodworth’s argument that defense counsel had misled the declarants. The
court therefore denied the motion.
B. Analysis
In employment litigation, employers may investigate a plaintiff-employee’s
allegations and obtain statements from other employees. (Barriga, supra, 51 Cal.App.5th
at p. 327; see Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The
Rutter Group 2022) ¶ 14:92.1 [before class certification, “it is not ethically improper for
defendant to contact members of the putative class, conduct informal discovery or
4 Woodworth argues that the trial court should have disregarded Lee’s declaration because Lee improperly summarized 43 interviews and drew “numerous improper legal conclusions.” Woodworth has forfeited the argument for two reasons. First, she did not object to Lee’s declaration in the trial court. (Evid. Code, § 353, subd. (a); Seibert v. City of San Jose (2016) 247 Cal.App.4th 1027, 1057.) Second, the argument consists of a conclusory assertion with no citation to legal authority and no identification of which statements amounted to improper legal conclusions. (Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1303.)
45
attempt to defeat the class action by explaining its position, offering settlements, etc.”].)
However, “[c]ourts must be cognizant of the danger of coercion and exercise a healthy
skepticism when assessing the evidentiary weight to be given to employee statements.”
(Barriga, at p. 327.) Thus, when an employer offers declarations of employees in
opposition to a motion for class certification, the trial court has “the duty to carefully
scrutinize” those declarations “for coercion or abuse.” (Id. at p. 323.)
Some federal district courts have “concluded an ongoing employer-employee
relationship between the class opponent and putative class members is inherently
conducive to coercive influence.” (Barriga, supra, 51 Cal.App.5th at p. 326.) But “the
mere existence of a potentially or inherently coercive relationship is insufficient to
support an order” striking employee declarations or “severely discounting the weight to
be given those declarations.” (Id. at p. 327.) On the other hand, “a compelling showing
that the employees were misled or that the declarations were not freely and voluntarily
given will suffice.” (Ibid.)
“‘In considering whether pre-certification communications between employers
and employees are sufficiently deceptive or coercive to warrant relief, courts have
considered several factors, including whether the employer adequately informed the
employees about: (1) the details underlying the lawsuit, (2) the nature and purpose of the
communications, and (3) the fact that any defense attorneys conducting the
communications represent the employer and not the employee.’” (Barriga, supra, 51
Cal.App.5th at p. 330.)
46
If the court concludes that the employer obtained the employee declarations
through coercion or abuse, it has “broad discretion to either strike some or all of the
declarations or to discount the evidentiary weight to be given the declarations.” (Barriga,
supra, 51 Cal.App.5th at p. 323; see Sav-On Drug Stores, Inc. v. Superior Court (2004)
34 Cal.4th 319, 334 (Sav-On Drug Stores) [weight accorded to declarations is “a matter
generally entrusted to the trial court’s discretion”].) In deciding whether the court abused
its discretion, “[w]e are also bound in our reviewing function by the substantial evidence
rule. [Citations.] Thus, if substantial evidence supports the trial court’s express or
implied findings of fact, we review the resulting legal conclusions for an abuse of
discretion. [Citation.] The judgment of the trial court is presumed correct; all
intendments and presumptions are indulged to support the judgment; conflicts in the
[evidence] must be resolved in favor of the prevailing party, and the trial court’s
resolution of any factual disputes arising from the evidence is conclusive.” (In re
Marriage of Zimmerman (1993) 16 Cal.App.4th 556, 561-562.)
Here, the court did not abuse its discretion by denying the motion to strike the
putative class members’ declarations. The record contains substantial evidence
supporting the trial court’s finding that there was a lack of coercion. Eight of the 10
employees testified that their supervisors or managers asked if they would attend the
interview with defense counsel, not that they were ordered to attend. Several of those
employees also said that they felt comfortable refusing the request or were told that they
could refuse the request, and one testified that he did not feel that the environment was
coercive. Two of the employees, Baca and Benter, testified that their supervisors told
47
them to attend, not that they asked the employees to attend. But Benter also felt that she
could refuse to go to the meeting, and Baca testified that the statements in her declaration
were voluntary, no one forced her to sign it, and no one promised her anything for
signing it. In addition, according to Lee’s declaration, defense counsel told all of the
employees that the interviews were voluntary and that the medical center could not
retaliate against them for failing to participate. Defense counsel also told the employees
that providing a declaration was voluntary, and counsel asked the employees whether
they would be willing to provide one. Defense counsel did not obtain declarations from
employees who said that they were unwilling. The declarations stated that the declarants’
statements were voluntary, and all but one of the employees testified that they reviewed
their declarations before signing.
The record also contains substantial evidence supporting the finding that defense
counsel did not affirmatively mislead the declarants. The record shows that defense
counsel informed the employees that counsel represented the medical center, not the
employees. Lee’s declaration provided evidence of that, and several employees testified
that they were told defense counsel represented the medical center or that they
understood that. The declarations all stated that the declarants understood defense
counsel represented the medical center and not the employees. And there was no
evidence that the employees failed to understand whom defense counsel represented.
Further, there is substantial evidence that defense counsel “‘adequately informed
the employees about . . . the details underlying the lawsuit.’” (Barriga, supra, 51
Cal.App.5th at p. 330.) According to Lee, defense counsel briefly described this lawsuit
48
and Woodworth’s claims. Counsel also told the employees that Woodworth had brought
the case as a class action and that they could potentially be members of the class if she
were successful. Further, the employee declarations contained a brief description of
Woodworth’s claims and explained that the case was a proposed class action. And much
of the employee testimony substantiated defense counsel’s statement that counsel had
described the lawsuit and Woodworth’s claims. For instance, Baca testified that defense
counsel told her that a former employee was suing the medical center “over breaks and
three 12s” (an apparent reference to the AWS issue). Benter said that counsel told her
that Woodworth had filed a proposed class action and that Woodworth was seeking to
represent “the whole hospital.” Bermudez said that counsel told her that Woodworth was
suing over rest breaks and other things, but she could not recall exactly what was said.
Clark said something similar—counsel told him that the former employee was suing the
medical center over rest periods, pay, and something else, but he did not recall what else
was said. Dean said that she was told this case could be a class action and that she could
be included as a class member. According to Midget, counsel told him that Woodworth
had brought a class action on behalf of herself and other hourly employees. Midget
understood that he might be entitled to some money if Woodworth were successful. He
was also told about Woodworth’s pay stub claim and that Woodworth was trying to
invalidate the AWS, and he might have been told that she was seeking overtime wages
for her AWS claim.
Lastly, there is substantial evidence that defense counsel informed the employees
about “‘the nature and purpose’” of the interviews. (Barriga, supra, 51 Cal.App.5th at
49
p. 330.) According to Lee, defense counsel told the employees that the declarations
would be filed in court to defend the medical center against Woodworth’s claims.
Counsel also explained that the medical center was going to use the declarations to try to
prevent the case from becoming a class action, “or words to that effect.” And counsel
advised the employees that their statements could affect (1) whether the court certified
the case as a class action and (2) the employees’ potential recovery from the action.
Again, employee testimony corroborated much of Lee’s declaration on those points.
Benter said that defense counsel told her that the declaration was for this action, and
Benter confirmed the truth of the statements in the final numbered paragraph of her
declaration. That is, she understood that she could be a member of the class if
Woodworth were successful and that her declaration could affect whether the court
certified this case as a class action. Clark and Manzo similarly confirmed that, at the time
they signed their declarations, the statements in the final numbered paragraph were true.
Dean testified that counsel said that her declaration might be used in court and against her
as a potential class member. According to Ormerod, defense counsel told her that her
declaration could be used in this case. Similarly, Ortiz said that defense counsel told him
that his declaration would probably be used in this case.
In sum, the record contains substantial evidence that the medical center did not
coerce the employees or affirmatively mislead them into providing declarations. This is
not a case in which there was a compelling showing of coercion or abuse. On this record,
the trial court did not abuse its discretion by declining to strike the employees’
declarations.
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Woodworth’s arguments do not convince us otherwise. She argues that the court
erred because defense counsel affirmatively misrepresented that Woodworth sought to
invalidate the AWS. The declarations do state that the declarants understood that
Woodworth was alleging she and other hourly employees were “not paid all wages owed
due to an invalid” AWS, but that was not a misrepresentation. That was what the TAC
alleged—that the AWS was “null and void” because of defects in the process by which
employees voted to implement it, and the medical center therefore owed overtime
backpay.
Woodworth also argues that defense counsel failed to obtain a signed waiver of or
consent to any conflict of interest. The single legal authority that Woodworth cites on
this point, Richardson v. Interstate Hotels & Resorts, Inc. (N.D. Cal. Mar. 12, 2018, No.
C 16-06772 WHA) 2018 U.S.Dist. Lexis 40377, does not show an abuse of discretion. In
Richardson, the employer’s defense counsel also represented the employee declarants at
their depositions “without obtaining informed written consent” as to the conflict of
interest. (Id. at p. [23].) The failure to obtain the employees’ consent regarding the
conflict was only one factor, among others, that justified striking the employees’
declarations. (Id. at pp. [19]-21.) Woodworth does not contend that defense counsel
represented the employees at their depositions. And Richardson did not state a blanket
rule that a waiver of any conflict of interest was required in every case.
Woodworth further argues that defense counsel omitted important information.
For example, she asserts that counsel did not (1) provide a copy of the TAC, (2) provide
contact information for Woodworth’s counsel, (3) give full detail about each of
51
Woodworth’s claims, including that she was alleging a PAGA claim, (4) explain that
employees could become class members and would benefit if Woodworth prevailed, and
(5) explain how the medical center would use the declarations or how they could affect
any recovery. There is evidence that defense counsel explained some of these points, like
the fact that employees could be class members if Woodworth prevailed on her motion or
that the medical center was going to use the declarations to try to prevent the case from
becoming a class action. To the extent that Woodworth relies on conflicting evidence,
we defer to the trial court’s resolution of conflicts in the evidence and do not reweigh the
evidence. (Eidsmore v. RBB, Inc. (1994) 25 Cal.App.4th 189, 195.)
As to other points that are undisputed—for instance, defense counsel did not
provide a copy of the TAC or contact information for Woodworth’s counsel—
Woodworth fails to show an abuse of discretion. She cites a handful of federal district
court decisions in which the trial courts found defense counsel’s communications with
putative class members coercive or misleading on the basis of various omissions, plus
other evidence. The cases are distinguishable on their facts and do not compel the
conclusion that the trial court here abused its discretion. (E.g., Camp v. Alexander (N.D.
Cal. 2014) 300 F.R.D. 617, 623-624 [letter sent to employees to convince them to sign
opt-out declaration predicted that the class action, if successful, would cause the
employer to shut down, “with the obvious consequence that employees would lose their
Woodworth has not shown a violation of rule 1.13 or 4.3 here. Rule 1.13(f) states: “In
dealing with an organization’s constituents, a lawyer representing the organization shall
explain the identity of the lawyer’s client whenever the lawyer knows or reasonably
should know that the organization’s interests are adverse to those of the constituent(s)
53
with whom the lawyer is dealing.” (Asterisk omitted.) Ample evidence shows that
defense counsel complied with that rule by explaining that counsel represented the
medical center. As to rule 4.3(a), it states in relevant part: “If the lawyer knows or
reasonably should know that the interests of the unrepresented person are in conflict with
the interests of the client, the lawyer shall not give legal advice to that person, except that
the lawyer may, but is not required to, advise the person to secure counsel.” (Asterisks
omitted.) Woodworth cites no evidence that after the predeposition meeting, the
employees had the impression that defense counsel represented them. Moreover, beyond
the conclusory assertion that the employees were coached, she does not explain what
precisely defense counsel did at the meeting that amounted to providing legal advice. We
have no duty to develop the argument for her. (Cahill v. San Diego Gas & Electric Co.
(2011) 194 Cal.App.4th 939, 956 (Cahill).)
Finally, in her reply brief, Woodworth argues that this court’s decision in Barriga
requires us to reverse the order denying the motion to strike. (We decided Barriga after
Woodworth had filed her opening brief.) While some of Barriga’s statements of the law
are relevant here, it does not compel a reversal. The facts of the case render it materially
distinguishable. In Barriga, we reversed for the trial court to reconsider the motion to
strike employee declarations. (Barriga, supra, 51 Cal.App.5th at p. 338.) We did that for
two reasons. First, the court concluded that it lacked statutory authority to strike the
employee declarations. (Id. at p. 335.) And although the court also addressed the merits
of the plaintiff’s argument, it was “not entirely clear the court scrutinized the declarations
54
from the perspective that communications between a class opponent and its current
employees are fraught with potential abuse.” (Ibid.)
Second, the trial court “misunderstood the scope of its authority,” because it ruled
that the federal case law on which the plaintiff relied did not warrant striking the
declarations of employees who were not putative class members (which amounted to 121
of the 174 declarations at issue). (Barriga, supra, 51 Cal.App.5th at p. 335.) We held
that the court had a duty to scrutinize all of the declarations and had the authority to strike
any of them, regardless of whether the declarants were putative class members. (Id. at
p. 336.)
The circumstances that compelled reversal in Barriga are not present here. The
record demonstrates that the trial court carefully scrutinized the declarations for coercion
and abuse. Even if the court ruled that the Code of Civil Procedure did not authorize the
motion to strike, the record is clear that the court also considered all of the evidence and
ruled on the merits of the motion. Importantly, the court considered essentially the same
evidence and arguments in connection with the motion to disqualify defense counsel.
The court did not question the procedural validity of the motion to disqualify and ruled
purely on the merits. Moreover, the court here did not misunderstand the scope of its
authority in the manner at issue in Barriga; the declarants were all putative class
members, so there was no question about whether the court had authority to strike
declarations from nonmembers. Accordingly, there was no reason to believe that the
court carefully scrutinized some declarations but not others.
55
For all of these reasons, we conclude that the court did not abuse its discretion by
denying Woodworth’s motion to strike the putative class members’ declarations.
IV. Motion for Class Certification
Woodworth contends that the court abused its discretion by denying her motion
for class certification. We agree that the court abused its discretion as to the class
proposed for her stand-alone wage statement claim. But as to the other classes that she
sought to certify, the court did not abuse its discretion.
A. Overview of Class Certification Principles and Standard of Review
“[T]he class action proponent bears the burden of establishing the propriety of
class certification.” (Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906,
922.) The movant “must demonstrate the existence of an ascertainable and sufficiently
numerous class, a well-defined community of interest, and substantial benefits from
certification that render proceeding as a class superior to the alternatives.” (Brinker
Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021 (Brinker).) “‘In turn,
the “community of interest requirement embodies three factors: (1) predominant
common questions of law or fact; (2) class representatives with claims or defenses typical
of the class; and (3) class representatives who can adequately represent the class.”’”
(Ibid.)
The predominance element “hinges on ‘whether the theory of recovery advanced
by the proponents of certification is, as an analytical matter, likely to prove amenable to
class treatment.’” (Brinker, supra, 53 Cal.4th at p. 1021.) The “court must examine the
plaintiff’s theory of recovery, assess the nature of the legal and factual disputes likely to
56
be presented, and decide whether individual or common issues predominate.” (Id. at
p. 1025.) “The ‘ultimate question’” is “whether ‘the issues which may be jointly tried,
when compared with those requiring separate adjudication, are so numerous or
substantial that the maintenance of a class action would be advantageous to the judicial
process and to the litigants.’” (Id. at p. 1021.)
“[W]hether common or individual questions predominate will often depend upon
resolution of issues closely tied to the merits.” (Brinker, supra, 53 Cal.4th at p. 1024.)
To assess predominance, the trial court must examine the law applicable to the plaintiff’s
causes of action and “determine whether the elements necessary to establish liability are
susceptible of common proof or, if not, whether there are ways to manage effectively
proof of any elements that may require individualized evidence.” (Ibid.) In addition, the
court must consider the defendant’s affirmative defenses, because the individualized
issues presented by those defenses may predominate over common issues. (Walsh v.
IKON Office Solutions, Inc. (2007) 148 Cal.App.4th 1440, 1450.)
Even if common questions predominate, “[i]n considering whether a class action is
a superior device for resolving a controversy,” the court “must pay careful attention” to
the manageability of any individual issues, including those arising from affirmative
defenses. (Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 29 (Duran).) Class
certification is appropriate only if the plaintiff’s trial plan shows how the individual
issues can be managed fairly and efficiently. (Id. at pp. 27, 29.) “[A]ny procedure to
determine the defendant’s liability to the class must still permit the defendant to introduce
its own evidence, both to challenge the plaintiffs’ showing and to reduce overall
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damages.” (Id. at p. 38.) The court cannot abridge the defendant’s presentation of a
defense “simply because that defense [is] cumbersome to litigate in a class action.”
(Id. at p. 35.)
Trial courts have broad discretion to grant or deny certification because they are
“ideally situated to evaluate the efficiencies and practicalities of permitting group action.”
(Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435 (Linder).) Our review is “narrowly
circumscribed.” (Brinker, supra, 53 Cal.4th at p. 1022.) “[W]e must examine the trial
court’s reasons for denying class certification. ‘Any valid pertinent reason stated will be
sufficient to uphold the order.’” (Linder, supra, at p. 436.) But if the court’s stated
reasons “are erroneous, we must reverse, whether or not other reasons not relied upon
might have supported the ruling.” (Ayala v. Antelope Valley Newspapers, Inc. (2014) 59
Cal.4th 522, 530 (Ayala).)
We review the court’s order granting or denying certification “‘for a manifest
abuse of discretion.’” (Brinker, supra, 53 Cal.4th at p. 1022.) At the same time, we
review the trial court’s underlying factual determinations for substantial evidence,
presuming in favor of the order “‘the existence of every fact the trial court could
reasonably deduce from the record.’” (Ibid.) Overall, we will not disturb the court’s
order “‘unless (1) it is unsupported by substantial evidence, (2) it rests on improper
criteria, or (3) it rests on erroneous legal assumptions.’” (Ibid.)
The predominance element presents a factual question, so we review the trial
court’s predominance finding for substantial evidence. (Brinker, supra, 53 Cal.4th at
p. 1022; Sav-On Drug Stores, supra, 34 Cal.4th at p. 328.) “[I]f the parties’ evidence is
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conflicting on the issue of whether common or individual questions predominate . . . , the
trial court is permitted to credit one party’s evidence over the other’s in determining
whether the requirements for class certification have been met.” (Dailey v. Sears,
Roebuck & Co. (2013) 214 Cal.App.4th 974, 991 (Dailey); Sav-On Drug Stores, at p. 331
[“the trial court was within its discretion to credit plaintiffs’ evidence on these points over
defendant’s, and we have no authority to substitute our own judgment for the trial court’s
respecting this or any other conflict in the evidence”].) We need not conclude that the
prevailing party’s evidence is compelling or that the trial court would have abused its
discretion if it had credited the other party’s evidence instead. (Sav-On Drug Stores, at
p. 331.) “‘[I]t is of no consequence that the trial court believing other evidence, or
drawing other reasonable inferences, might have reached a contrary conclusion.’” (Ibid.)
B. Woodworth’s Class Certification Motion
Woodworth moved to certify five classes of current and former medical center
employees. The proposed “‘AWS Overtime Class’” consisted of all hourly nonexempt
employees who were scheduled to work and did work at least one day of more than eight
hours and up to 12 hours without receiving overtime pay. (Boldface omitted.)
The proposed “‘Regular Rate Class’” consisted of all hourly nonexempt
employees who were paid overtime or a missed meal or rest period premium (the missed
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break premium) in a week when the employee earned a Christmas bonus or a “flat sum
bonus.” 5 (Boldface omitted.)
The proposed “‘Rest Break Class’” consisted of all hourly nonexempt employees
who were in patient care and worked under the medical center’s policy requiring
employees to remain on premises during their rest periods. “Alternatively,” Woodworth
proposed a Rest Break Class consisting of nonexempt patient care employees who did not
take at least one rest period because the medical center failed to provide a relief worker.
(Boldface omitted.)
The proposed “‘Wage Statement Class’” consisted of all hourly nonexempt
employees who received a wage statement that did not include “‘Total Hours Worked’”
or did not accurately report hourly rates and all wages earned. (Boldface omitted.)
Woodworth characterized this as both a stand-alone class and a derivative class.
The proposed “‘Waiting Time Penalty Class’” consisted of all hourly nonexempt
employees who no longer worked for the medical center but were members of the AWS
Overtime Class, the Regular Rate Class, or the Rest Break Class. (Boldface omitted.)
Woodworth characterized this as a derivative class only.
5 California courts and the DLSE use the term “‘flat sum’ bonuses” to distinguish bonuses that are a flat amount from “bonuses ‘based on a percentage of production or some formula other than a flat amount.’” (Marin v. Costco Wholesale Corp. (2008) 169 Cal.App.4th 804, 809; Alvarado v. Dart Container Corp. of California (2018) 4 Cal.5th 542, 561, fn. 6 [distinguishing a flat sum bonus from “a production or piecework bonus or a commission”].)
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1. AWS Overtime Class
Woodworth contends that the court abused its discretion by denying certification
of the AWS Overtime Class because she presented substantial evidence of common legal
and factual issues. The argument lacks merit.
i. Relevant Background
Woodworth proposed an AWS Overtime Class period starting in June 2010 and
ending on the date of certification. According to her moving papers, this class consisted
of 5,855 employees who worked shifts of eight and one-half, nine, 10, or 12 hours during
which they were paid straight time wages only. The medical center instituted the relevant
AWS’s through elections dating back to 2001.
Woodworth argued that the medical center would have the burden of proving that
it had instituted a valid AWS for the various work units that were subject to an AWS. In
her trial plan, she explained that the medical center would have to prove that (1) it made
the proper written disclosures to the employees before they voted on whether to adopt the
AWS, (2) it duly noticed informational meetings with the employees before the votes,
and (3) each unit of affected employees voted in favor of the AWS by a two-thirds
majority. She further argued that there were “no true ‘individual’ issues” as to this class
because the medical center used the same method and templates for all of the AWS
elections. She asserted that the template disclosures were invalid on their face, so the
question of whether the medical center complied with the applicable legal requirements
for disclosures, which Wage Order 5 sets forth, was common to all class members.
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Woodworth’s evidence in support of the motion included 12 examples of AWS
agreements with various dates. (See Cal. Code Regs., tit. 8, § 11050, subd. 3(C)(1)
[requiring that the employer propose an AWS to employees “in the form of a written
agreement”].) One agreement had a date of June 2001, and the others had a range of
dates from January 2012 through March 2014. The agreements were substantially similar
but not identical. For example, two agreements stated that “no regularly scheduled shift
shall be for a period of less than four hours.” The other agreements did not contain that
statement.
Woodworth also offered 18 examples of written disclosures that the medical
center had provided to employees for AWS elections in 2013 and 2014. (See Cal. Code
Regs., tit. 8, § 11050, subd. 3(C)(3) [requiring the employer to make “a disclosure in
writing to the affected employees, including the effects of the proposed arrangement on
the employees’ wages, hours, and benefits”].) The disclosures were substantially similar
but included variations for the name of the relevant work unit, the date of the AWS
election, and the schedule proposed (three 12-hour shifts, four 10-hour shifts, or four
nine-hour shifts per week).
Woodworth relied on deposition testimony from several medical center employees
stating that the medical center used templates for the AWS written disclosures. One
employee—Kenya Baker, the manager of compensation in the human resources
department—testified that she had made changes to the templates, but she could not
recall the specific changes.
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Woodworth contended that all of the AWS disclosures failed to comply with
Wage Order 5, because they did not fully disclose the proposed AWS’s effects on wages,
hours, and benefits. She identified eight claimed omissions in the disclosures.
Woodworth also claimed that the AWS’s were invalid because the AWS disclosures and
agreements granted the medical center the right to terminate the AWS’s. She further
claimed that the medical center had not complied with “additional pre-election
requirements,” but she did not elaborate further. Instead, she cited her brief in opposition
to the medical center’s earlier motion for summary adjudication on the AWS defense.
That brief is not part of the record. 6
In opposition to the class certification motion, the medical center argued that
Woodworth was not an adequate class representative because she had a conflict of
interest with the current medical center employees. The medical center asserted that the
AWS’s were popular, and the employees had voted overwhelmingly to adopt them. If
they were invalidated, the medical center would adopt five eight-hour shifts per week.
According to the medical center, because Woodworth sought to invalidate the AWS’s
and the majority of employees had voted for them, she had a conflict that precluded her
from representing the class.
6 The medical center filed two motions for summary adjudication on the AWS defense. The court denied the first one without prejudice in November 2018, before Woodworth had moved for class certification. The medical center filed its second AWS summary adjudication motion in February 2019, after Woodworth had moved for class certification. We address that second motion in a later part.
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The medical center also argued that common questions of law or fact did not
predominate because liability would depend on reviewing the election procedures for
hundreds of AWS elections. The medical center offered evidence that it had conducted
more than 390 AWS elections between 2001 and 2013, approximately 150 elections in
2013, and approximately 100 elections since 2013.
The medical center’s opposition relied in large part on the declaration of Baker,
who had been directly involved in conducting AWS elections since 2003. According to
Baker’s declaration, the medical center did not use the same templates for all AWS
elections. Baker had personally revised most of the template agreements on which
Woodworth relied in her moving papers. There were “dozens of other forms” of
agreements that the medical center had used for other elections. The medical center
offered 12 more examples of AWS agreements that were substantially similar but not
identical. Baker asserted that the examples were not an exhaustive set of all templates
used for the AWS elections. The medical center also offered 20 more examples of AWS
disclosure statements that, again, were substantially similar but not identical.
Setting aside the template agreements and disclosures, the medical center also
argued that Woodworth sought to challenge the AWS elections for reasons that did not
apply to all of the hundreds of elections. It noted that in discovery, it had asked her to
state the facts supporting her allegation that the medical center failed to institute a valid
AWS. Woodworth responded with numerous factual theories, including that (1) the
medical center had failed to report the results of many AWS elections to the Division of
Labor Statistics and Research (DLSR); and (2) a change in work hours could not be
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implemented for at least 30 days after the announcement of the election results, but the
medical center had implemented some AWS’s before the waiting period had expired.
The medical center also noted that Woodworth had pursued another theory when
deposing a medical center employee—that one AWS was invalid because fewer than
two-thirds of the affected employees had approved it. In that deposition, Woodworth
questioned the employee about documentation showing that out of 121 employees, 80 of
them had voted in favor of the particular AWS, which was one vote shy of the required
two-thirds majority.
The medical center argued that the failure to report the results of an AWS election,
the failure to observe the 30-day waiting period, or the failure to obtain the required
two-thirds approval might, if proven, invalidate some elections but not others in which
those failures did not occur. It thus argued that Woodworth’s theories would require
election-specific evidence and would generate different results for the hundreds of
different elections.
In her reply brief, Woodworth continued to argue that whether the AWS
disclosures and agreements complied with Wage Order 5 presented a common question
applicable to all AWS Overtime Class members. She argued that her other theories of
liability—such as the failure to observe the 30-day waiting period or the failure to report
AWS election results to the DLSR—did not preclude certification. She contended that to
the extent those theories applied to some but not all AWS elections, the court could
certify subclasses to address them.
65
The trial court denied certification of the AWS Overtime Class for several reasons.
To start, the court concluded that Woodworth was not an adequate class representative,
because she had a conflict of interest with the AWS Overtime Class.
In addition, the court concluded that common questions of law or fact did not
predominate, so Woodworth failed to show a well-defined community of interest. It
observed that proof of liability would depend on the validity of potentially hundreds of
different AWS elections. The court rejected Woodworth’s argument that the AWS
templates permitted common proof, noting that even if the documents were similar, that
“does not show they [were] the same.” The court also observed that one of Woodworth’s
theories of liability—the failure to gain a two-thirds majority approval—would require
individual proof. And the court rejected Woodworth’s argument that the court could
certify subclasses to deal with the various theories of liability, noting that it was unclear
whether the proposed subclasses would require the parties “to go back to the drawing
board on discovery that should have occurred pre-certification.” Lastly, the court ruled
that Woodworth had not provided a manageable trial plan for dealing with the validity of
hundreds of AWS elections.
ii. Analysis
Section 510 mandates that employees receive one and one-half times their regular
rate of pay for work in excess of eight hours per workday, unless an exception applies.
(§ 510, subd. (a).) A validly adopted AWS is one such exception. (Ibid.) As an
exception to the overtime rules, a properly adopted AWS constitutes an affirmative
defense that the employer bears the burden of proving. (Ramirez v. Yosemite Water Co.
employers to compensate employees for overtime at one and one-half or twice their
“regular rate of pay,” depending on the number of overtime hours. “California law also
provides for meal, rest, and recovery periods. If an employer does not provide an
employee with a compliant meal, rest, or recovery period, section 226.7, subdivision (c)
. . . requires the employer to ‘pay the employee one additional hour of pay at the
employee’s regular rate of compensation.’” (Ferra, supra, at p. 863.) For purposes of
calculating an employee’s overtime rate and missed break premium, the terms ‘“regular
rate of pay”’ and ‘“regular rate of compensation”’ are synonymous. (Ibid.)
California courts construe “‘regular rate of pay’ . . . to have the same meaning as
‘regular rate’” in the Fair Labor Standards Act of 1938 (FLSA) (29 U.S.C. § 201 et seq.).
(Ferra, supra, 11 Cal.5th at p. 868; Prachasaisoradej v. Ralphs Grocery Co., Inc. (2007)
42 Cal.4th 217, 242, fn. 14.) FLSA defines the regular rate as including “all
remuneration for employment,” subject to numerous exclusions. (29 U.S.C. § 207(e);
Huntington Memorial Hospital v. Superior Court (2005) 131 Cal.App.4th 893, 903
(Huntington Memorial).) Bonuses that do not fall within one of the exclusions “must be
added into the total compensation received by the employee before his [or her] regular
hourly rate of pay is determined.” (29 C.F.R. § 778.200(c) (2022); id., § 778.208;
Huntington Memorial, supra, at p. 904.) Thus, the employee’s regular rate of pay “can
75
change from pay period to pay period,” depending on whether the employee received a
qualifying bonus during the period. (Ferra, at p. 869.)
Two of the regular rate exclusions are relevant here. First, the regular rate
calculation need not include “payments in the nature of gifts made at Christmas time or
on other special occasions, as a reward for service.” (29 U.S.C. § 207(e)(1); 29 C.F.R.
§ 778.200(a)(1) (2022).) To qualify for this special occasion gift exclusion, the amount
of a Christmas bonus must not be “measured by or dependent on hours worked,
production, or efficiency.” (29 U.S.C. § 207(e)(1).) In addition, a Christmas bonus does
not qualify for the exclusion if it “is paid pursuant to contract (so that the employee has a
legal right to the payment and could bring suit to enforce it).” (29 C.F.R. § 778.212(b)
(2022).) But a Christmas bonus qualifies for the exclusion even if it is paid “to all
employees” and “with regularity so that the employees are led to expect it.” (Id.,
§ 778.212(c).)
Second, the regular rate calculation need not include discretionary bonuses. (29
C.F.R. §§ 778.208, 778.211 (2022).) Discretionary bonuses are “[s]ums paid in
recognition of services performed during a given period,” so long as both the fact of
payment and “the amount of the payment are determined at the sole discretion of the
employer at or near the end of the period and not pursuant to any prior contract,
agreement, or promise causing the employee to expect such payments regularly.” (29
U.S.C. § 207(e)(3); 29 C.F.R. § 778.200(a)(3) (2022).) “The label assigned to a bonus
does not conclusively determine whether a bonus is discretionary . . . .” (29 C.F.R.
76
§ 778.211(d) (2022).) Instead, FLSA’s terms “and the facts specific to the bonus at issue
determine whether bonuses are excludable discretionary bonuses.” (Ibid.)
In this case, substantial evidence supports the trial court’s finding that common
questions did not predominate for the Regular Rate Class. Woodworth asserted that a
common legal question predominated: Did the medical center properly exclude the
Christmas bonus and the flat sum bonus from the regular rate calculation? But as to the
Christmas bonus, the precise factual and legal dispute likely to be presented was whether
it qualified for the special occasion gift exclusion. (See Brinker, supra, 53 Cal.4th at
p. 1025 [court must “assess the nature of the legal and factual disputes likely to be
presented” when evaluating predominance element].) Woodworth acknowledged that
whether the Christmas bonus was excludable turned on whether the employees had been
promised the bonus. That might show that the bonus was “paid pursuant to contract.”
(29 C.F.R. § 778.212(b) (2022).) However, Woodworth did not explain how the
existence of that promise would be subject to common proof. On appeal, she argues that
the Outline of Benefits gave rise to an implied promise that the medical center would pay
the Christmas bonus, at least as “to those employees who actually saw the Outline of
Benefits.” That would require individualized evidence regarding which employees saw
the document and understood it as a promise to pay the Christmas bonus. Moreover,
Woodworth proposed a class period starting in June 2010, nearly five years before the
medical center published the Outline of Benefits. She does not explain what method of
common proof would show promises dating back to 2010. And the fact that the medical
center might have paid the Christmas bonus regularly or to all employees who were
77
eligible did not give rise to a promise disqualifying it from the gift exclusion. The
regulations implementing the gift exclusion expressly permit employers to exclude such a
bonus. (29 C.F.R. § 778.212(c) (2022).)
With respect to the flat sum bonus, the medical center offered evidence that there
was no single type of flat sum bonus. Rather, it paid many types of bonuses during the
proposed class period, and the medical center included some of those in the regular rate
calculation. Bonus-specific evidence would be required to determine whether the
medical center had properly excluded a particular bonus as discretionary. That is, “facts
specific to the bonus at issue” (29 C.F.R. § 778.211(d) (2022)) would be necessary to
determine (1) whether the bonus was “paid in recognition of services performed during a
given period,” (2) whether the medical center determined the fact and amount of the
bonus in its sole discretion, (3) whether the medical center made those determinations “at
or near the end” of the relevant period, and (4) whether there was a “prior contract,
agreement, or promise causing the employee” to expect the bonus regularly. (29 U.S.C.
§ 207(e)(3).) Again, Woodworth did not explain how any of those elements would be
subject to common proof as to any one bonus, much less as to the potentially numerous
bonuses at issue for 1,435 class members. (See Lampe v. Queen of the Valley Medical
Center (2018) 19 Cal.App.5th 832, 843-844 (Lampe) [“‘vague assertion’” that the
employer miscalculated the regular rate without any specific detail as to what bonus
categories were or were not excluded was insufficient to show common issues
predominated].)
78
For all of these reasons, substantial evidence supports the trial court’s finding that
common questions of fact or law did not predominate with respect to the Regular Rate
Class. The court therefore did not abuse its discretion by denying certification of the
class. Given that conclusion, we need not reach Woodworth’s additional argument that
the court erred by concluding that she was an inadequate class representative. (Cruz,
supra, 243 Cal.App.4th at p. 394.)
3. Rest Break Class
Woodworth argues that the court’s reasons for denying certification of the Rest
Break Class were “unsound,” so it abused its discretion. We conclude that Woodworth
has not shown an abuse of discretion.
i. Relevant Background
According to Woodworth’s moving papers, the Rest Break Class consisted of
7,083 patient care employees. In support of the class certification motion, Woodworth
offered the declaration of Elsie Crowninshield, a doctor of nursing practice.
Crowninshield determined which employees were patient care employees by reviewing
the medical center’s “department descriptions and job titles.” The list of job titles
representing those 7,083 patient care employees was 73 pages long.
As discussed, Woodworth proposed two options for the Rest Break Class—the
on-premises Rest Break Class and the no-relief Rest Break Class. Regarding the
on-premises Rest Break Class, she argued that the medical center had a facially invalid
rest period policy, presenting a predominant common legal question for the class. In
relevant part, the rest period policy applied to all nonexempt employees and provided for
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one 10-minute rest period for each four hours worked. It specified that employees
working between 10 and 14 hours were entitled to three rest periods. The policy also
stated: “It is expected that ten minute rest periods will be taken on the premises.”
Woodworth contended that requiring employees to remain on premises was unlawful per
se, because the law required employers to relinquish control over employees during rest
periods.
As for the no-relief Rest Break Class, Woodworth argued that the medical center
failed to provide dedicated relief personnel for patient care employees who worked
10- and 12-hour shifts. Crowninshield explained in her declaration that the medical
center had “staff-to-patient ratio obligations” and that certain licensed patient care
employees (like nurses) had similar ethical obligations. She opined that without adequate
relief personnel, patient care employees were prone to missing breaks to ensure that they
were providing appropriate care. After reviewing certain of the medical center’s written
policies and deposition testimony, Crowninshield opined that the medical center had no
system for providing dedicated rest period relief. She asserted that the medical center
planned rest periods on an informal basis, did not provide formal training on rest period
coverage, had no daily log or journal showing when rest periods were scheduled or taken,
had no operational plan to ensure adequate staffing for rest periods, and had an onerous
and intimidating process for claiming the missed break premium. (While an exhibit to
Crowninshield’s declaration listed the documents and deposition testimony that she had
reviewed in forming her opinions, Woodworth did not provide the majority of those
documents with her moving papers.)
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According to Woodworth’s declaration in support of her motion, she rarely took
any of her rest periods on her 12-hour shifts. She attributed that to the medical center’s
failure to provide relief personnel and stated that the medical center rarely provided a
dedicated relief nurse.
In her trial plan, Woodworth asserted that she would prove the failure to provide
rest periods by deposing a random sample of Rest Break Class members. She would ask
them whether they were restricted to the medical center’s premises for rest periods and
how often, on average, they took rest periods in which they were permitted to leave the
premises. In addition, she would ask them how often relief personnel was available. She
would also rely on Crowninshield’s testimony, scheduling documents, and “daily
assignment sheets.”
Regarding sampling, Woodworth offered a declaration from Kriegler, the same
statistician on whom she relied in connection with the motion for summary adjudication
on the rounding claim. Kriegler opined that the parties could randomly select class
members to depose in increments of 25. The parties would analyze the testimony from
the first 25 Rest Break Class members to gauge whether the margins of error were
sufficiently small. If the margins were small enough, there would be no need for further
depositions. If they were not sufficiently small, the parties would proceed with the next
batch of 25 depositions. Kriegler provided calculations for the margin of error under
various hypothetical circumstances, using sample sizes ranging from 20 to 200 class
members.
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In opposition, the medical center argued that common questions of law or fact did
not predominate with respect to the Rest Break Class. As to the on-premises class, the
medical center argued that the “expect[ation]” stated in the rest period policy was not a
requirement, and the vast majority of supervisors and employees did not interpret the
policy as requiring them to stay on premises. It contended that proof of liability would
require individualized evidence as to what supervisors communicated to employees and
whether employees were actually prevented from leaving the premises when they wanted.
The medical center offered a declaration from the executive director of benefits and
compensation, who stated that the medical center does not track whether employees
remain on premises during rest periods. In addition, most of the putative class member
declarants stated that no one told them about an on-premises requirement. A number of
them also said that they were free to leave or were not, in fact, required to stay on
premises. And a number of them stated that they did not leave the medical center
because they had only 10 minutes for rest periods or they did not want to leave. At least
one supervisor explained that he never told employees that they could not leave the
premises during rest periods; they were free to do whatever they pleased, so long as they
returned to work by the end of the 10-minute rest period.
Regarding the no-relief class, the medical center likewise argued that the theory
would require an individualized inquiry, because there was no uniform policy or practice
of failing to provide relief or rest periods. It again relied on the putative class members’
declarations. Many of the 12-hour employees said that they could take three rest periods
if they wanted to do so, they had someone to relieve them while they took their breaks, or
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they had never been denied a rest period. Some of them said that they actually did take
three rest periods some or all of the time. Many of them said that they often chose to skip
one or more rest periods voluntarily. Some putative class members described how certain
employees were assigned to provide relief during rest periods. Some described how their
unit used a sign-up sheet to schedule rest periods or how a supervisor created a schedule
for rest periods. Others described a more informal process in which employees took their
rest breaks whenever they wanted, so long as they had coverage at the time or notified
their supervisors.
The medical center also argued that Woodworth had not shown that the Rest
Break Class was ascertainable. She defined it as all patient care employees, but
according to the executive director of benefits and compensation, Woodworth’s 73-page
list of patient care job titles did not accurately identify patient care employees. The list
included whole departments that had nothing to do with patient care, employees who did
not provide patient care, or employees who might provide patient care on some days but
not others. Overall, there were hundreds of job titles on the list that did not involve
patient care at all or most of the time. There was no accurate, existing list that identified
patient care positions by job title and department. The medical center argued that to
develop an accurate list, the court would need to hear evidence on what hundreds of
employees do.
The medical center further argued that Woodworth had no manageable trial plan
for dealing with the individual issues raised by both the on-premises and the no-relief
classes. It asserted that her plan to randomly sample class members for deposition was
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not statistically valid. The medical center offered the declaration of the applied
economist, Buchanan, on whom it had relied in connection with the motion for summary
adjudication on the rounding claim. Applying a mathematical formula, Buchanan
calculated that the parties would have to depose at least 365 randomly selected class
members to get a correct sample size for a homogenous population of 7,083 people,
assuming a confidence level of 95 percent and an error tolerance of 5 percent. The
medical center argued that Kriegler provided no statistical basis for his claim that, at
most, 200 depositions would be required, nor had he provided a basis for starting with an
initial sample size of 25. Moreover, it argued, Woodworth had offered no evidence that
the Rest Break Class members were a homogenous population, whereas the putative class
members’ declarations suggested that the hundreds of different types of employees in the
class would have different rest period experiences.
In her reply brief, Woodworth narrowed the definition of the Rest Break Class,
proposing two alternatives. The first option was all patient care employees who worked
only 12-hour shifts. Using her 73-page list of patient care positions, she narrowed the
class down to 4,584 members fitting that description. The second option was patient care
employees who were registered nurses and worked only 12-hour shifts. She did not
specify how many people would be in that second alternative class.
Woodworth continued to argue that the legality of the on-premises rest break
policy presented a predominant common question warranting certification. She further
argued that the medical center had a systematic practice of failing to provide 12-hour
patient care employees with relief personnel and that damages could be resolved through
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Kriegler’s random sampling method. She submitted a reply declaration from Kriegler
stating that he had reviewed the putative class members’ declarations and the testimony
of the 10 deponents from that group. On the basis of that information, he estimated that
the class members missed their third rest period at a rate of between 60 and 80 percent.
The court denied certification of the Rest Break Class. As to the proposed on-
premises class, the court’s order was somewhat unclear on the predominance element. In
the section of the order addressing that element, the court noted that Woodworth based
her theory of liability on the on-premises policy. But it did not expressly decide whether
common questions predominated for the on-premises class. However, in the section of
the order addressing manageability, the court concluded that Woodworth had “failed to
demonstrate manageability in her trial plan,” given that it would have to determine which
patient care employees “missed breaks because they were required to remain on
premises.”
As to the proposed no-relief class, the court ruled that common questions did not
predominate. It observed that Woodworth had not produced evidence of a common
policy or practice of denying 12-hour employees rest periods and that individualized
inquiries would predominate as to the reasons that employees did not take rest periods.
The court additionally observed that the “‘patient care’ label” was “problematic,” because
the medical center had shown that Woodworth’s list of patient care job titles included
employees who did not provide patient care. The court ruled that Woodworth had not
provided a manageable trial plan for determining which employees were patient care
employees.
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ii. Analysis
“California law requires employers to relieve their employees of all work-related
duties and employer control during 10-minute rest periods.” (Augustus, supra, 2 Cal.5th
at p. 272.) As relevant here, employees are entitled to 10 minutes of rest for every four
hours worked “or major fraction thereof.” (Cal. Code Regs., tit. 8, § 11050, subd. 12(A).)
Accordingly, employees who work 12-hour shifts are entitled to three 10-minute rest
periods during which they are relieved of all duties and free from employer control.
In this case, Woodworth fails to show that the court erred by denying certification
of the on-premises Rest Break Class. Her theory of liability asserts that the medical
center’s written policy violated the law requiring rest periods free from duties and
employer control. 7 The medical center would defend itself by showing that regardless of
its written policy, it did not actually require employees to remain on premises. In other
words, even if the policy were unlawful on its face, the medical center did not enforce the
7 In Augustus, our Supreme Court reasoned that “[b]ecause rest periods are 10 minutes in length [citation], they impose practical limitations on an employee’s movement. That is, during a rest period an employee generally can travel at most five minutes from a work post before returning to make it back on time. Thus, one would expect that employees will ordinarily have to remain on site or nearby. This constraint, which is of course common to all rest periods, is not sufficient to establish employer control.” (Augustus, supra, 2 Cal.5th at p. 270.)
The medical center argues that the trial court properly denied certification because the on-premises rest period policy was facially valid under Augustus. It does not explain why the facial validity of the policy means that class treatment is inappropriate. In any event, the medical center did not make this argument in the trial court, and the court did not base its decision on any determination about the merits of Woodworth’s on-premises theory. Given that we must review the court’s actual reasons for granting or denying certification, we decline to affirm the order on grounds not relied on by the court. (Ayala, supra, 59 Cal.4th at p. 530.)
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policy. The court’s stated reason for denying certification was that Woodworth lacked a
manageable trial plan for dealing with that defense and determining which employees
were required to remain on premises. (See Duran, supra, 59 Cal.4th at p. 29 [when the
plaintiff seeks class certification on the basis that the employer imposed a uniform policy,
the plaintiff “must still demonstrate that the illegal effects of this conduct can be proven
efficiently and manageably within a class setting”].) Woodworth does not carry her
burden of demonstrating that the manageability ruling constituted an abuse of discretion.
(Cristler v. Express Messenger Systems, Inc. (2009) 171 Cal.App.4th 72, 80 [appellant
bears the burden of showing an abuse of discretion].) In a conclusory fashion, she asserts
that she will depose a randomly selected group of class members and that random
sampling can be used to determine the number of class members to testify at trial. But
she does not attempt to describe Kriegler’s method in any detail, Buchanan’s criticisms of
it, or why the court erred by implicitly crediting Buchanan over Kriegler. She does not
even mention Buchanan’s declaration. Nor does she apply the controlling case law on
manageability and sampling, Duran, to any of the experts’ disputes. (Duran, at p. 31
[holding that while “it may be possible to manage individual issues through the use of
surveys and statistical sampling,” any “statistical plan for managing individual issues
must be conducted with sufficient rigor”].) And the record is clear that the court
considered both declarations—the court’s order contains a section discussing the
declarations and overruling the medical center’s objections to Kriegler’s declaration. We
decline to reverse the court’s order, in the absence of any reasoned discussion of the
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evidence about manageability or the relevant legal authority. (Cahill, supra, 194
Cal.App.4th at p. 956.)
With respect to the no-relief Rest Break Class, substantial evidence supports the
court’s finding that common questions did not predominate. The evidence showed that
the formal rest period policy complied with the law by providing for three rest periods
when an employee worked a 12-hour shift. Crowninshield opined that the medical center
had no system for providing dedicated relief personnel, but beyond Woodworth’s own
declaration, Woodworth did not proffer any evidence that the medical center denied rest
periods because relief personnel were lacking. Woodworth’s individual experience did
not constitute evidence of a “uniform, companywide policy.” (Brinker, supra, 53 Cal.4th
at p. 1052.)
The medical center, on the other hand, proffered evidence that there was no
uniform practice of denying rest periods for lack of relief personnel, and Woodworth
does not persuasively explain how liability could be shown through common proof. (See,
e.g., Arenas v. El Torito Restaurants, Inc. (2010) 183 Cal.App.4th 723, 734 [“having
credited defendants’ evidence over plaintiffs’, the trial court could reasonably conclude
there was insufficient evidence of widespread misclassification, hence plaintiffs’ theory
of recovery was not susceptible to common proof”].) Many of the putative class member
declarants took three rest periods on their 12-hour shifts. Even if the declarants did not
take all of their rest periods, some said that they voluntarily chose to skip rest periods and
that relief was available if they wanted to take the rest periods. And the declarations
showed that the process for taking rest periods varied. Some supervisors scheduled rest
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periods for the employees. Some units had employees sign up for rest periods during a
shift. And other declarants described a more informal process in which employees
notified supervisors when they wanted to take a rest period. On this record, the court
could reasonably conclude that there was no uniform policy of denying rest periods for
lack of relief, and proof of liability “would have had to continue in an employee-by-
employee fashion,” demonstrating who did not take all of their rest periods and the
reasons for any failure to take them. (Brinker, supra, 53 Cal.4th at p. 1052; Lampe,
supra, 19 Cal.App.5th at p. 848 [question of whether a missed meal period “was due to
the employer’s failure to allow it or from the employee’s voluntary choice” required an
individualized inquiry, precluding class certification].)
In sum, substantial evidence supports the trial court’s predominance finding on the
no-relief Rest Break Class, so the court did not abuse its discretion by denying
certification of the class. Moreover, Woodworth has not shown that the court abused its
discretion by denying certification of the on-premises Rest Break Class on manageability
grounds. Given those conclusions, we need not reach Woodworth’s additional argument
that the court erred by rejecting her definition of patient care employees for the Rest
Break Class. (Cruz, supra, 243 Cal.App.4th at p. 394.)
4. Wage Statement Class
Woodworth argues that the court abused its discretion when it determined that
common questions did not predominate as to the Wage Statement Class and that she was
an inadequate representative. We conclude that the court abused its discretion by
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denying certification of the stand-alone Wage Statement Class but not the derivative
Wage Statement Class.
i. Relevant Background
Under section 226, employers must provide employees with “an accurate itemized
statement in writing showing” nine categories of information. (§ 226, subd (a).) For a
nonexempt employee, the wage statement must show “total hours worked by the
employee,” gross wages earned, and net wages earned, among other things. (§ 226, subd.
(a); § 226, subd. (j).)
Woodworth sought to certify the Wage Statement Class on stand-alone and
derivative theories. As to the stand-alone class, Woodworth presented evidence that
before June 2018, the medical center issued wage statements that did not include a line
item showing the total hours worked by an employee. Beginning in June 2018, the
medical center added a line item setting forth “Total Worked Hours” (capitalization and
boldface omitted), as the following example illustrates:
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Woodworth therefore argued that the wage statements issued before June 2018 did not
comply with section 226 because they failed to show total hours worked. She asserted
that whether the wage statements complied with section 226 presented a predominant
legal question common to the class. The class consisted of over 10,000 members who
received wage statements.
As to the derivative Wage Statement Class, Woodworth argued that liability would
depend on the class members’ overtime and regular rate claim. That is, to the extent that
the medical center owed class members overtime pay or missed break premiums, the
wage statements did not accurately reflect all of their overtime pay or premium pay.
The medical center argued in opposition that common questions did not
predominate for this class. It contended that under Morgan v. United Retail Inc. (2010)
186 Cal.App.4th 1136 (Morgan), section 226 did not require a separate line item showing
total hours worked. According to the medical center, so long as the employee could use
simple arithmetic to “determine the sum of all hours worked without referring to time
records or other documents,” the wage statement complied with section 226. (Morgan,
supra, at p. 1147.)
The medical center contended that common proof of liability was lacking because
the employees’ wage statements differed greatly. Even before June 2018, some
employees received simple wage statements that did not require arithmetic at all to
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determine the total hours worked, such as this one:
This employee worked 80 regular hours during the pay period, and the line item for the
total accurately reported 80 total hours worked. Other employees received wage
statements that included regular hours and overtime hours, like this one:
This employee worked 79.8 regular hours and 0.8 overtime hours, and the line item for
the total accurately reported 80.6 total hours worked.
Other employees received more complex wage statements, like this one that
Woodworth received in April 2012:
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During this two-week pay period, Woodworth worked 73 regular hours, 0.8 double time
hours one week, and 0.3 double time hours the second week, for a total of 74.1 hours.
The wage statement also reported that she worked 70.4 hours for which the medical
center paid her a night differential. Those night differential hours were part of the 74.1
hours that she had worked. But the line item reporting the total hours added the night
differential hours to the 74.1 hours she had worked, so the wage statement reported
144.50 total hours. Woodworth testified at her deposition, however, that she could
determine her total hours worked by adding the regular hours and the double time hours,
and she could determine from this wage statement that she had worked 74.1 hours during
the pay period.
The medical center argued that Woodworth’s theory of liability turned on the
complexity of the wage statement and whether the employee could use simple arithmetic
to determine total hours worked, which would require individual inquiries for each
employee and each wage statement. The medical center would seek to introduce the
wage statements of hundreds of employees and would call those employees to testify that
they had no difficulty determining the total hours worked from their wage statements.
Thus, individual questions predominated, and Woodworth had no manageable trial plan
for that. In addition, the medical center argued that Woodworth could not represent the
class because she had admitted that she could determine her total hours worked by adding
her regular hours and double time hours.
As to the derivative Wage Statement Class, the medical center argued that
California law did not permit derivative wage statement liability for an underlying wage
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and hour violation. Even if a derivative claim were permitted, the medical center argued,
certification of a derivate Wage Statement Class was not appropriate because certification
of the underlying classes was not appropriate.
In Woodworth’s reply brief, she argued that Morgan did not apply because it was
factually distinguishable, and in any event, whether it applied was a legal question
common to the entire class. She further argued that even if the medical center were not
required to include a single line item accurately reporting total hours worked, there was a
common predominant question as to whether employees could determine their total hours
worked from the more complex wage statements. She used another of her wage
statements as an example, this one from October 2013:
The line item reporting total hours did not accurately reflect her total hours worked for
the period, because the figure included night differential hours, weekend differential
hours, and paid leave hours. The line item for night differential and weekend differential
hours merely reported extra pay that she received for working night and weekend shifts,
and she did not work during the paid sick leave hours. Thus, the total reported on more
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complex wage statements like this one double-counted some work hours and included
some nonwork hours.
Woodworth relied again on Kriegler’s declaration in support of her reply brief. He
had examined the payroll data for all current and former employees from June 2013 to
August 2015. According to him, 90.4 percent of the pay periods included hours for shift
differentials, paid time off, and/or holiday bonuses in the total reported hours. Thus, the
total did not accurately reflect hours actually worked on 90.4 percent of the wage
statements for that period. He identified 13 earnings codes that he characterized as shift
differentials or paid time off resulting in the discrepancy. Woodworth contended that
whether those 90.4 percent of wage statements violated section 226 presented a
predominant legal question common to the class. The question did not require
individualized inquiries because all wage statements in the group inaccurately reported
total hours worked by including shift differentials and paid time off. Moreover,
Woodworth argued, she was an adequate representative of the class. It did not matter that
she could determine her total hours worked after the medical center’s counsel
“‘coached’” her through the process at her deposition.
The court denied certification of the stand-alone Wage Statement Class. Citing
Morgan, the court observed that section 226 did not require a separate line item for total
hours worked. It further observed that some employees received more complex wage
statements than others. It concluded that determining liability would require an
individualized review of the allegedly noncompliant wage statements, which ‘“would
generate different results for different employees (and different results for different wage
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statements issued to the same employee).”’ The court thus ruled that common questions
did not predominate.
In addition, because Woodworth had testified that she could add the hours on her
wage statement and determine her total hours worked, the court ruled that she was not an
adequate representative for the class. As to the derivative Wage Statement Class, the
court denied certification because it was denying certification on the underlying AWS
Overtime and Regular Rate Classes.
ii. Analysis
As discussed, section 226, subdivision (a), requires employers to furnish accurate
itemized wage statements showing “total hours worked by the employee.” Subdivision
(e) of the statute describes an employer’s liability for failing to furnish compliant wage
statements. (Morgan, supra, 186 Cal.App.4th at p. 1143.) It provides that “[a]n
employee suffering injury as a result of a knowing and intentional failure by an employer
to comply with subdivision (a) is entitled to recover the greater of all actual damages” or
statutory penalties. (§ 226, subd. (e)(1).) An employee suffers injury for this purpose if
(1) the employer fails to provide the required “accurate and complete information” and
(2) “the employee cannot promptly and easily determine” their total hours worked “from
the wage statement alone.” (§ 226, subd. (e)(2)(B), (e)(2)(B)(i).) “‘[P]romptly and easily
determine’ means a reasonable person would be able to readily ascertain the information
without reference to other documents or information.” (§ 226, subd. (e)(2)(C).)
Here, the record does not contain substantial evidence to support the court’s
predominance finding on the stand-alone Wage Statement Class. The evidence showed
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that the simpler wage statements reported only regular hours or regular and overtime
hours, and the more complex ones like Woodworth’s reported hours for differential pay
and paid time off. But that did not mean that proof of liability would require an
individualized inquiry for each employee or wage statement. The wage statements could
be grouped into two categories—those reporting regular and overtime hours only, and
those reporting hours under one or more of the earning codes that Kriegler had identified
as shift differentials or paid time off. Common questions apply to each of the two
categories: Did the wage statement provide accurate and complete information about
total hours worked? (§ 226, subd. (e)(2)(B).) And could a reasonable person readily
ascertain total hours worked from the statement alone, without reference to other
documents or information? (Id., subd. (e)(2)(C).) As Woodworth argues, her theory of
liability would require review of samples from each category but not review of each wage
statement. Moreover, it would not require each and every employee to testify about
whether they could determine their total hours worked from any one wage statement.
The statute establishes an objective “reasonable person” standard for that determination.
Some employees’ testimony might be probative to establish whether a reasonable person
could ascertain the information, but it is not a subjective, individualized inquiry.
Woodworth thus showed that common proof was possible and common questions
predominated, and there is not substantial evidence to support a contrary conclusion.
Moreover, the court abused its discretion by concluding that Woodworth was an
inadequate representative of the stand-alone Wage Statement Class. The trial court may
conclude that the class representative does not satisfy the adequacy requirement if the
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representative ‘“fail[s] to raise claims reasonably expected to be raised by the members
of the class.”’ (Evans, supra, 178 Cal.App.4th at p. 1432.) The rule applies, for instance,
when the class representative seeks only one form of available damages and would be
waiving other forms of available damages on behalf of all other putative class members.
(Id. at pp. 1432-1433.) But nothing like that was at issue here. Woodworth asserted a
wage statement claim on behalf of class members whose statements closely resembled
hers, in that the statements included hours for shift differentials and paid time off. The
court prejudged the merits of her claim on the basis of her deposition testimony, but she
was not required to show that her claim has merit to demonstrate that she was an
adequate representative. (See Linder, supra, 23 Cal.4th at pp. 439-440 [“the question of
certification [is] essentially a procedural one that does not ask whether an action is legally
or factually meritorious”].) The court therefore applied improper criteria and abused its
discretion when it determined that Woodworth was an inadequate representative. (Id. at
p. 436 [“an order based upon improper criteria or incorrect assumptions calls for
reversal”].)
As to the derivative Wage Statement Class, however, Woodworth fails to show an
abuse of discretion. She argues that the court erred by denying certification of the
underlying AWS Overtime and Regular Rate Classes, so it necessarily erred by denying
certification of the derivative class. But because we have determined that the court
properly denied certification of the underlying classes, we reject Woodworth’s argument.
In sum, the court abused its discretion by denying certification of the stand-alone
Wage Statement Class. The record does not contain substantial evidence to support the
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predominance finding, and the court applied improper criteria when it found that
Woodworth was an inadequate class representative. We therefore reverse the order
denying certification of the stand-alone Wage Statement Class and remand for the court
to consider (1) whether Woodworth carried her burden on the other elements of class
certification and (2) any other arguments that the parties made (or may make in light of
this opinion) concerning certification of this class. (See, e.g., Linder, supra, 23 Cal.4th at
pp. 448-449 [reversing and remanding for reconsideration because the court was not
“prepared to say that class treatment necessarily is proper,” and “upon a fresh look [the
trial court] may discern valid reasons for denying” the certification motion].) However,
we do not disturb the portion of the court’s order denying certification of the derivative
Wage Statement Class.
5. Waiting Time Penalty Class
Woodworth sought to certify a Waiting Time Penalty Class that was “purely
derivative” of her AWS Overtime, Regular Rate, and Rest Break Classes. Her moving
papers addressed the Waiting Time Penalty Class in three brief sentences and did not
discuss any evidence or authorities. The court denied certification of the Waiting Time
Penalty Class because there was “no support in [Woodworth’s] motion for certification”
of the class. On appeal, Woodworth argues that the court abused its discretion because it
should have certified the underlying classes. Because we have determined that the court
properly denied certification of the underlying classes, we reject the argument.
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V. Motion for Summary Adjudication on the Regular Rate Claim, the Wage Statement
Claim, and the Waiting Time Claim
The medical center moved for summary adjudication on Woodworth’s regular
rate, wage statement, and waiting time claims. (The medical center labeled the motion,
“Motion for Summary Adjudication No. 1” (capitalization and boldface omitted).) It
sought summary adjudication of her individual claims as well as the PAGA cause of
action, to the extent that she based that cause of action on the regular rate, wage
statement, and waiting time claims. The court granted the motion in its entirety. We
conclude that the court erred with respect to (1) the PAGA regular rate claim, (2)
Woodworth’s individual wage statement claim and the PAGA wage statement claim, and
(3) the PAGA waiting time claim. The court properly granted summary adjudication,
however, on Woodworth’s individual regular rate and waiting time claims.
A. Regular Rate Claim
Woodworth argues that the court erred by granting summary adjudication in favor
of the medical center as to her individual regular rate claim and the PAGA regular rate
claim. We disagree that the court erred by granting summary adjudication on her
individual claim. But as to the PAGA regular rate claim, we agree that the court erred.
1. Relevant Background
The medical center offered its written policy on the Christmas bonus in support of
the motion for summary adjudication. The policy described the bonus as a “discretionary
bonus provided to eligible employees as a gift for their service.” “The availability of the
bonus, the amount, and the eligibility criteria [were] discretionary and subject to review,
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change, and approval each year.” “Generally,” eligibility for the bonus was based on
“the average number of eligible hours paid during a specified six (6) pay periods prior to
the bonus payment.” If the medical center had paid the employee for an average of 39.90
eligible hours or more, the employee generally was eligible for the bonus. In addition,
the employee had to be an active employee who had passed their “90-day introductory
period” by a specified date before the bonus payment. The policy identified 13 types of
hours that would count toward an employee’s average eligible hours—for example,
plaintiff seeking civil penalties under PAGA for a violation of section 226, subdivision
(a), “does not have to satisfy the ‘injury’ and ‘knowing and intentional’ requirements” of
subdivision (e). (Lopez, supra, at p. 788; Raines v. Coastal Pacific Food Distributors,
Inc. (2018) 23 Cal.App.5th 667, 679.) The PAGA plaintiff need only show that the
employer failed to provide an accurate wage statement under subdivision (a) of section
226. (Raines, supra, at p. 679; Lopez, at p. 785.)
Morgan construed the requirement that wage statements show total hours worked
under section 226, subdivision (a). (Morgan, supra, 186 Cal.App.4th at pp. 1144-1149.)
There, the employer’s wage statements accurately listed the regular hours worked and
overtime hours worked, but the statements did not include a separate line item reporting
the sum of those two figures. (Id. at pp. 1140, 1147.) At her deposition, the employee
admitted that the wage statements “‘reflected’” her total hours worked. (Id. at p. 1140.)
The court held that the wage statements complied with section 226, subdivision (a)’s
requirement to show total hours worked. (Morgan, at p. 1149 & fn. 9.) It reasoned that
“nothing in the plain language of section 226” supported the employee’s argument “that
wage statements which accurately list the total regular hours and overtime hours worked
during the pay period must also contain a separate category with the sum of those two
figures.” (Id. at p. 1147.) “The employee could simply add together the total regular
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hours figure and the total overtime hours figure shown on the wage statement to arrive at
the sum of hours worked.” (Ibid.)
The Morgan court addressed a DLSE opinion letter interpreting section 226. 8
(Morgan, supra, 186 Cal.App.4th at pp. 1144-1145 [discussing “DLSE Opn. Letter No.
2002.05.17 (May 17, 2002)]”.) The DLSE was responding to a query from an employer
that listed 86.67 hours worked, which the employer calculated by “dividing the total
number of non-overtime hours in a year (2,080) by the number of pay periods in a year
(24).” (DLSE Opn. Letter No. 2002.05.17 (May 17, 2002), at p. 1.) The employer
acknowledged that its “pay periods never consist[ed] of precisely 86.67 hours,” because
the number of workdays and non-overtime work hours varied in each pay period. (Id. at
p. 2.) The agency concluded that the employer’s practice violated section 226: “[T]he
obligation to list the total hours worked during the pay period can only be satisfied by
listing the precise, actual number of hours worked. . . . The reason for this requirement is
simple enough—it is designed to provide the employee with a record of hours worked,
and to assist the employee in determining whether he [or she] has been compensated
properly for all of his or her hours worked. The failure to list the precise number of hours
worked during the pay period conflicts with the express language of the statute and stands
in the way of the statutory purpose.” (DLSE Opn. Letter, supra, at p. 3.) The DLSE
opined that the employer could satisfy its obligation by attaching time records to the
8 “The DLSE is the state agency authorized to interpret and enforce California wage and hour laws.” (Morgan, supra, 186 Cal.App.4th at p. 1144, fn. 5.) “While the DLSE’s construction of a statute is entitled to consideration and respect, it is not binding” on the courts. (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1105, fn. 7.)
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employee’s wage statement, but only if the time records “separately listed” the total hours
worked and did not leave it “to the employee to add up the daily hours shown on the time
cards or other records.” (Id. at p. 6.)
Morgan reasoned that the wage statements separately listing regular hours and
overtime hours were consistent with the DLSE’s opinion letter. (Morgan, supra, 186
Cal.App.4th at p. 1147.) The statements satisfied the obligation to list the “‘precise,
actual number of hours worked,’” and they did not leave it to the employees to add up the
daily number of hours shown on time records. (Ibid.) Moreover, the wage statements
were consistent with an exemplar wage statement posted on the DLSE’s website. (Ibid.)
The exemplar statement separately listed the total regular hours worked and the total
overtime hours worked during the pay period, but it did not include a line item showing
the sum of those hours. 9 (Ibid.)
In this case, the court properly determined that the medical center had carried its
burden with respect to the stand-alone wage statement claim of Woodworth and the
aggrieved employees. The medical center demonstrated that its wage statements
complied with section 226 by reporting the total number of hours worked by an
employee. It offered evidence of Woodworth’s wage statements, which precisely listed
her regular pay hours and double pay hours for the pay period. Woodworth could derive
9 For the exemplar statement described in Morgan, see https://www.dir.ca.gov/dlse/faq_paydays.htm (directing readers to click a link for “an example of an itemized wage statement (pay stub) as required by Labor Code Section 226 for an employee paid an hourly wage”), and https://www.dir.ca.gov/dlse/PayStub.pdf (linked exemplar statement).
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her total hours worked by adding those entries. And listing those hours separately, along
with the applicable rates of pay, permitted her to determine whether she had been
compensated properly for all of her hours worked. (Morgan, supra, 186 Cal.App.4th at
p. 1145.) The medical center thus showed that, consistent with Morgan, it provided
accurate wage statements “showing . . . total hours worked.” (§ 226, subd. (a).) That
compliance with subdivision (a) of section 226 defeats her individual, “private cause of
action” as well as the PAGA claim. (Lopez, supra, 15 Cal.App.5th at p. 784.)
Woodworth argues that the court erred because the wage statements “failed to
provide ‘total hours worked.’” To the extent that she means there was no line reporting
the sum of regular and overtime hours worked, that was not required under Morgan.
(Morgan, supra, 186 Cal.App.4th at p. 1147.) She also argues that the wage statements
“provided an inaccurate hours total.” She presumably refers to the fact that the
“TOTAL” on the wage statements reflected the sum of regular pay hours, double pay
hours, and other earnings codes on the wage statements (like differential pay hours or
paid leave hours). But on its face, that total does not purport to reflect only total hours
worked, as opposed to a total of the various types of hours listed on the statement. The
fact that the medical center reported that latter total does not mean that it failed to
accurately report her total hours worked. Woodworth does not dispute the accuracy of
the entries for regular pay hours and double pay hours, the sum of which showed total
hours worked.
Notwithstanding the court’s correct ruling on the stand-alone wage statement
claim, the court erred by implicitly rejecting Woodworth’s derivative wage statement
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claim. The medical center argued that California law does not permit derivative wage
statement claims, but our Supreme Court recently rejected that proposition in Naranjo.
That case involved an underlying claim for missed meal breaks. (Naranjo, supra, 13
Cal.5th at pp. 102-103.) The plaintiff alleged that his employer unlawfully required
employees to remain on duty during meal periods, and he sought missed break premiums
under section 226.7, subdivision (c), for the on-duty meal periods. (Naranjo, at pp. 102-
103.) He further alleged that the employer was liable under section 226 for failing to
report those missed break premiums on the employees’ wage statements, and he sought
damages on that basis for inaccurate wage statements. (Naranjo, at p. 103.) The high
court held that the missed break premium constituted wages subject to the wage
statement reporting requirements of section 226. (Naranjo, at pp. 102, 117-121, 125.)
Thus, the failure to report the missed break premium could support liability “for failure to
supply an accurate itemized statement reflecting an employee’s gross wages earned, net
wages earned, and credited hours worked.” (Id. at p. 121.)
Woodworth and the aggrieved employees may pursue a derivative wage statement
claim under Naranjo. Woodworth’s rest period claim survives, and as we discuss in a
following subpart, the PAGA rest period claim survives as well. To the extent that
Woodworth proves the medical center unlawfully denied her and the aggrieved
employees rest periods, the medical center owes them missed break premiums. (§ 226.7,
subd. (c).) And the omission of those missed break premiums from the employees’ wage
statements may support liability for inaccurate wage statements. (Naranjo, supra, 13
Cal.5th at p. 121.) Likewise, the aggrieved employees’ regular rate claim survives and
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may support derivative liability for inaccurate wage statements. Overtime pay, like the
additional hour of pay that constitutes the missed break premium, is a form of wages that
the employer must accurately report on wage statements. (Id. at pp. 107, 109.) To the
extent that Woodworth proves the medical center miscalculated the regular rate by
excluding nondiscretionary bonuses, the corresponding wage statements would not
accurately reflect the employees’ overtime rate or their hourly rate for the missed break
premium. The wage statements thus would inaccurately report overtime wages and
premium pay. According to Naranjo, those inaccuracies would support liability under
section 226.
In sum, the court correctly determined that the medical center was entitled to
summary adjudication on the stand-alone wage statement claim. But the medical center
was not entitled to summary adjudication on the derivative form of the wage statement
claim, so its motion did not completely dispose of the claim. The court therefore erred by
granting summary adjudication on the claim. (Code Civ. Proc., § 437c, subd. (f)(1) [“A
motion for summary adjudication shall be granted only if it completely disposes of a
cause of action, an affirmative defense, a claim for damages, or an issue of duty”].)
C. Waiting Time Claim
Woodworth argues that the court erred by granting the medical center’s summary
adjudication motion on the waiting time claim. We agree with respect to the PAGA
claim but not as to her individual claim.
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1. Relevant Background
In support of the medical center’s arguments on this claim, it relied again on
Bowell’s declaration. She declared that the medical center had paid Woodworth for all
hours that she worked, for all vacation time, and all other compensation owed to her. The
medical center also submitted Woodworth’s response to an interrogatory asking her to
state all facts in support of her individual waiting time claim. She responded that the
medical center had not paid her all wages due because of its rounding policy, the failure
to include all remuneration in her regular rate calculation, the failure to pay her overtime
for shifts over eight hours, and the failure to pay her missed break premiums.
The medical center argued that the waiting time claim failed because the
underlying claims failed—the court had granted summary adjudication for the medical
center on the rounding claim and the claim for missed meal periods, the instant motion
showed her regular rate claim lacked merit, and her overtime claim failed based on a
valid AWS (which was addressed in the concurrently filed summary adjudication motion
on that defense). The medical center further argued that even if the underlying claims
had merit, the law mandated waiting time penalties only if the failure to pay wages was
willful. It contended that Woodworth’s interrogatory response failed to set forth any
facts showing willfulness. In addition, it argued, a good faith dispute that wages were
due precluded a willfulness finding, and the summary adjudication motions presented a
good faith dispute about whether Woodworth was due wages for the underlying claims.
Woodworth argued in her opposition brief that the medical center knew what it
was doing and intended to pay the amounts set forth in the wage statements of
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Woodworth and the aggrieved employees. She asserted that such conduct was willful
and that the medical center had offered no contrary argument. She additionally argued
that the medical center failed to present evidence of a good faith dispute with respect to
the regular rate claim or the AWS defense. And she contended that she had a stand-alone
waiting time claim based on a check issued several days late. Her evidence showed that
on May 19, 2014, she resigned and informed the medical center that her last day of work
would be June 1, 2014. On May 30, 2014, the medical center issued her a check for net
earnings and sick pay of over $1,300. But on June 5, 2014, the medical center issued her
a second check for net “Retro Pay” of over $300.
In its reply brief, the medical center generally argued that Woodworth had offered
no evidence to dispute Bowell’s declaration, and she had offered no evidence of a willful
failure to pay wages owed at the time of her separation.
The court granted summary adjudication for the medical center on the waiting
time claim. It ruled that Bowell’s declaration showed that the medical center had paid
Woodworth all wages owed. Moreover, the court ruled, Woodworth failed to offer
evidence showing a triable issue of fact as to the willfulness element.
2. Analysis
If an employee gives “72 hours previous notice of his or her intention to quit,” the
“employee is entitled to his or her wages at the time of quitting.” (§ 202, subd. (a).)
When an employer discharges the employee, “the wages earned and unpaid at the time of
discharge are due and payable immediately.” (§ 201, subd. (a).) The employer must pay
a penalty for “willfully fail[ing] to pay” the employee’s wages in accordance with those
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deadlines. (§ 203, subd. (a).) “A willful failure to pay wages” means that the employer
intentionally failed to pay when the wages were due. (Cal. Code Regs., tit. 8, § 13520.)
A failure to pay that is inadvertent or a mistake is not “‘willful’” for these purposes.
(Nishiki v. Danko Meredith, APC (2018) 25 Cal.App.5th 883, 892.)
Also, “a good faith dispute that any wages are due will preclude imposition of
waiting time penalties.” (Cal. Code Regs., tit. 8, § 13520.) “A ‘good faith dispute’ that
any wages are due occurs when an employer presents a defense, based in law or fact
which, if successful, would preclude any recovery on the part of the employee. The fact
that a defense is ultimately unsuccessful will not preclude a finding that a good faith
dispute did exist. Defenses presented which, under all the circumstances, are
unsupported by any evidence, are unreasonable, or are presented in bad faith, will
preclude a finding of a ‘good faith dispute.’” (Cal. Code Regs., tit. 8, § 13520(a).)
Whether a good faith dispute exists is “an issue of fact.” (Maldonado, supra, 22
Cal.App.5th at p. 1332.)
Here, Woodworth fails to show that the court erred by granting the summary
adjudication motion on her individual waiting time claim. (Dinslage v. City and County
of San Francisco (2016) 5 Cal.App.5th 368, 379 [appellant seeking review of an order
granting summary adjudication bears the burden of affirmatively demonstrating error, as
in any appeal].) First, she argues that the court erred by implicitly overruling her
objections to the statements in Bowell’s declaration that the medical center had paid her
all compensation owing. But as before, Woodworth forfeited the argument. (Cahill,
supra, 194 Cal.App.4th at p. 956.) She asserts that Bowell’s statements amounted to
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improper legal conclusions, offering no further argument or citation to authority. That
conclusory assertion does not establish that the court abused its discretion or that any
error was prejudicial.
Second, Woodworth contends that evidence of the “Retro Pay” check (issued four
days after she resigned) created a triable issue of fact as to whether she had a stand-alone
waiting time claim. That argument lacks merit. The TAC did not allege that the medical
center had issued her a check several days late. And the medical center submitted
Woodworth’s interrogatory response describing her waiting time claim as a derivative
one based on underlying wage and hour violations. She made no mention of a stand-
alone waiting time claim. That shifted the burden to Woodworth to show a triable issue
of material fact as to a stand-alone waiting time claim. (Silva, supra, 7 Cal.App.5th at
pp. 259-260 [plaintiff’s interrogatory response was devoid of facts to support certain
claims, shifting the burden to her to show a triable issue of fact on those claims]; Union
Bank v. Superior Court (1995) 31 Cal.App.4th 573, 581.) Even if the check for “Retro
Pay” constituted wages that were due upon her separation, she proffered no evidence that
the medical center intentionally—as opposed to inadvertently or mistakenly—failed to
issue the payment four days earlier. She thus did not show a triable issue of material fact
on any stand-alone waiting time claim.
Third, Woodworth argues that the medical center failed to present evidence of a
good faith dispute about the regular rate claim or the AWS defense, so her derivative
waiting time claim should survive. We also reject that argument. A good faith defense
based in law or fact constitutes a good faith dispute. The medical center presented such
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defenses. The same motion showed that Woodworth’s regular rate claim lacked merit,
and the concurrently filed motion on the AWS defense showed that the defense had
merit. (We discuss the merits of the AWS motion in a following subpart.) The medical
center therefore showed a good faith dispute precluding liability for waiting time
penalties based on Woodworth’s individual regular rate claim and overtime claim. 10
However, as to the waiting time claim of the aggrieved employees, the court erred
by granting summary adjudication on the PAGA waiting time claim. The medical center
argued that the waiting time claim lacked merit insofar as the regular rate claim lacked
merit. But we have concluded that the court erred by granting summary adjudication in
favor of the medical center on the PAGA regular rate claim. Because that underlying
claim survives, the derivative waiting time claim survives. Moreover, the medical center
did not carry its burden of showing a good faith dispute about the PAGA regular rate
claim, such that a finding of willful failure to pay would be precluded. As discussed, the
10 At oral argument in this matter, Woodworth argued that her derivative waiting time claim survives on the basis of her surviving rest period claim, and the medical center did not show a good faith dispute regarding her rest period claim. But Woodworth forfeited the argument that the medical center was not entitled to summary adjudication on that ground. Her brief opposing the summary adjudication motion did not argue that she had a derivative waiting time claim on the basis of the surviving rest period claim. Similarly, neither her opening nor her reply brief on appeal made that argument. Woodworth’s failure to preserve the argument in the trial court and failure to raise it in her appellate briefing forfeited the argument. (Animal Protection & Rescue League v. City of San Diego (2015) 237 Cal.App.4th 99, 107, fn. 5 [declining to consider an argument raised for the first time at oral argument on appeal]; Saville v. Sierra College (2005) 133 Cal.App.4th 857, 872-873 [appellant’s failure to make an argument in opposition to the summary judgment motion forfeited the argument on appeal].) By contrast, her briefing both in the trial court and on appeal argued that she had a derivative wage statement claim on the basis of her rest period claim, so she did not forfeit that argument.
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medical center presented no evidence whatsoever about flat sum bonuses it excluded
from the regular rate calculation, except for the Christmas bonus. A defense that is
“unsupported by any evidence” precludes a finding of a good faith dispute. (Cal. Code
Regs., tit. 8, § 13520(a); see Maldonado, supra, 22 Cal.App.5th at p. 1333 [affirming
finding of no good faith dispute when “there was no objectively reasonable factual basis
for [the employer’s] defense” to overtime claim on which derivative waiting time claim
was based].)
In sum, we conclude that the court properly granted summary adjudication in
favor of the medical center on Woodworth’s individual waiting time claim but not on the
PAGA waiting time claim.
VI. Motion for Summary Adjudication on the AWS Defense
The medical center moved for summary adjudication on its affirmative defense to
the overtime claim, the AWS defense. (The medical center labeled the motion, “Motion
for Summary Adjudication No. 3” (capitalization and boldface omitted).) The trial court
granted the motion as to Woodworth’s individual overtime claim and the PAGA cause of
action, to the extent that she based the latter on allegedly invalid AWS’s. We conclude
that the court did not err.
A. Relevant Background
The medical center offered the declaration of its vice president of human
resources, Lizette Norton, in support of the motion. Norton started working at the
medical center in July 2001, left in 2010, and returned in 2016. She was familiar with the
medical center’s policies and procedures for AWS elections from 2001 to the present.
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According to Norton, Woodworth was a clinical nurse in the cardio thoracic intensive
care unit. Before Woodworth’s time at the medical center, the clinical nurses voted to
adopt an AWS—namely, a workweek consisting of three 12-hour workdays (3/12 AWS).
The AWS election took place in September 2001. Norton declared that the election
followed certain procedures set forth in a memorandum sent to employees. The election
was by secret ballot and occurred during regular work hours at the employees’ work site.
The medical center mailed the clinical nurses a disclosure document, a proposed AWS
agreement, and the secret ballot. In relevant part, the disclosure document stated:
• “Duly noticed meetings will be held for the specific purpose of discussing” the
effects of the AWS.
• The AWS “shall consist of a regularly scheduled workweek of three workdays of
12 hours each,” and “[e]mployees will not receive overtime pay for their regularly
scheduled hours.”
• “Employees will be paid one and one-half times their regular rate of pay for all
hours worked in excess of 40 in a workweek.” They “will be paid two times their
regular rate of pay for all hours worked in excess of 12 in a workday.”
• “The amount of overtime that an employee will be required to work will be subject
to the requirements of sections 3(B1)(8) and (9) of Wage Order 5-2000.”
• “Employees who work an alternative work schedule will be eligible for all
Medical Center-sponsored benefits on the same basis as other employees. . . .
Employee benefits are summarized in the Employee Handbook and the summary
plan descriptions given to each employee.”
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• “The Medical Center may terminate the use of the alternative work schedule
described above upon two weeks’ advance notice. In such an event, the Medical
Center may institute and implement a different schedule, workweek or work
period that is consistent with any applicable legal requirements.”
Similar to the disclosure document, the AWS agreement stated that the medical center
could terminate the AWS with two weeks’ advance notice to the affected employees.
The medical center posted notices to inform the employees that it would hold
meetings to discuss the effects of the AWS, and it held those meetings at least 14 days
before the voting began. It distributed the disclosure document again at the meetings.
The medical center placed ballot boxes in the departments to collect the secret ballots.
After a two-week voting period, it collected and counted the ballots. Out of 1,785 nurses
eligible to vote in the election, 1,583 voted, and 1,545 voted in favor of the AWS. The
work unit did not include 5 percent or more employees who primarily spoke a non-
English language. The medical center reported the election results to the DLSR in
October 2001.
When the medical center hired Woodworth, she agreed to the 3/12 AWS that the
clinical nurses had adopted in 2001. She executed an AWS agreement in December
2011.
The 2001 AWS was in effect until 2013. The medical center restructured the
AWS work units that year. In June 2013, it conducted an AWS election for registered
nurses in various units, including Woodworth’s unit. The medical center’s policy and
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practice at all times was to hold AWS elections during regular working hours at the work
site.
Norton was not at the medical center during the 2013 election, but she had
reviewed the medical center’s records for the election, which records had been made at
the time by medical center employees in the regular course of business. Those records
were attached to Norton’s declaration and showed that in April 2013, a human resources
employee emailed the AWS disclosure document and a schedule for pre-election
meetings to Woodworth and the other registered nurses eligible to vote in the AWS
election. The medical center proposed to retain the 3/12 AWS. The relevant disclosures
in the 2013 document were nearly identical to those in the 2001 disclosure document.
The medical center held pre-election meetings on various dates between May 6
and May 25, 2013. According to the medical center’s records, Woodworth attended the
May 22 meeting and voted in the election, which took place from June 11 through June
13. Out of 701 nurses eligible to vote in the election, 575 nurses voted. They all voted in
favor of the 3/12 AWS. The medical center reported those results to the DLSR in June
2013. Woodworth executed a new AWS agreement in July 2013. Like the earlier AWS
agreement, the new agreement stated that the medical center could terminate the AWS
with two weeks’ notice to the affected employees.
Norton declared that the medical center required all clinical and registered nurses
to be capable of reading, writing, and speaking English at a professional level. That was
because the medical center maintained patient records in English, and doctors’ orders and
other patient care information were conveyed in English. The nurses who were eligible
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to vote in the 2013 AWS election could read, write, and speak English “with professional
quality as their primary language.”
Apart from Norton’s declaration, the medical center offered the declaration of
Beth Cook, a registered nurse employed by the medical center from 1996 to the present.
During the 2013 AWS election, Cook was director of patient care for two departments
(orthopedics and transplant). Human resources copied her and other directors on the
2013 email attaching the AWS disclosures. According to Cook, the medical center sent
that email to all registered nurses who were eligible to vote in the election.
The trial court granted the medical center’s motion for summary adjudication on
the AWS defense in its entirety. The court ruled that there was no triable issue of
material fact and, more specifically, that the medical center’s evidence showed that it had
substantially complied with the AWS election procedures. The court thus concluded that
the medical center was entitled to summary adjudication on Woodworth’s individual
overtime claim as well as the PAGA claim, to the extent that Woodworth based the latter
on the overtime claim. In addition, the court overruled Woodworth’s objections to
Norton’s declaration. (Woodworth had filed a 37-page document consisting of 59
objections to Norton’s declaration.)
B. Analysis
To recap, a validly adopted AWS is an exception to the overtime rules and an
affirmative defense that the employer bears the burden of proving. (§ 510, subd. (a);
Ramirez, supra, 20 Cal.4th at pp. 794-795; Maldonado, supra, 22 Cal.App.5th at
p. 1327.) Wage Order 5 governs AWS’s in the health care industry. (Cal. Code Regs.,
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tit. 8, § 11050, subds. 1, 2(G), (J), (P)(4); Singh, supra, 140 Cal.App.4th at pp. 397-398.)
We liberally construe the IWC’s wage orders to favor the protection of employees.
(Augustus, supra, 2 Cal.5th at p. 262.) The “usual rules of statutory interpretation apply.”
(Brinker, supra, 53 Cal.4th at p. 1027.) Thus, if the wage order is clear, we give effect to
the ordinary, plain meaning of the language. (Singh, at p. 392.)
Under Wage Order 5, the employer’s proposal for an AWS shall be in the form of
a written agreement. (Cal. Code Regs., tit. 8, § 11050, subd. 3(C)(1).) For an AWS to be
valid, at least two-thirds of the employees in the affected work unit must vote in favor of
the AWS in a secret-ballot election. (Id., § 11050, subd. 3(C)(2).) The employer shall
hold the election during regular working hours at the employees’ work site. (Ibid.)
Before the election, the employer must disclose in writing “the effects of the
proposed [AWS] on the employees’ wages, hours, and benefits.” (Id., § 11050,
subd. 3(C)(3).) “Such a disclosure shall include meeting(s), duly noticed, held at least 14
days prior to voting, for the specific purpose of discussing the effects” of the AWS.
(Ibid.) Further, the “employer shall provide that disclosure in a non-English language, as
well as in English, if at least five (5) percent of the affected employees primarily speak
that non-English language. The employer shall mail the written disclosure to employees
who do not attend the meeting.” (Ibid.) The failure to comply with these pre-election
requirements “shall make the election null and void.” (Ibid.)
Wage Order 5 also requires any AWS agreement adopted under the order to
“provide for not less than four (4) hours of work in any shift.” (Cal. Code Regs., tit. 8,
§ 11050, subd. 3(B)(1), (B)(8)(c).) In addition, the order requires the employer to report
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the results of the AWS election to the DLSR within 30 days. (Id., § 11050,
subd. 3(C)(6).)
In this case, the court did not err by granting the medical center’s motion for
summary adjudication. The medical center proffered evidence that it complied with the
AWS election procedures for both of the AWS’s under which Woodworth worked. With
respect to the 2001 election, Norton’s declaration and exhibits to it established the
following: The medical center mailed the AWS disclosure document to the affected
employees and held meetings to discuss the proposed AWS at least 14 days before the
election. The medical center provided another copy of the disclosures to the employees
who attended the meetings. The population of affected employees did not consist of 5
percent or more non-English speakers, so there was no need to provide the disclosures in
a language other than English. The disclosures informed employees about the AWS’s
effect on wages and hours—that is, employees would not receive overtime pay for their
regularly scheduled 12-hour shifts, but they would receive overtime pay if they worked
over 40 hours in the workweek or over 12 hours in the workday. As to the AWS’s effect
on benefits, the disclosures informed employees that they would be eligible for benefits
on the same basis as all other employees, as summarized in the employee handbook. The
secret-ballot election took place at the work site during regular work hours, which was
the medical center’s policy and practice at all times. And 1,545 out of 1,785 affected
employees approved the AWS—well beyond the two-thirds vote required.
The medical center’s evidence with respect to the 2013 election was similar.
Norton’s and Cook’s declarations, along with their exhibits, established that the medical
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center emailed the AWS disclosures to the affected employees in April 2013. The
employees who were eligible to vote spoke English as their primary language, so they did
not need the disclosures in another language. The medical center held meetings to
discuss the AWS in May 2013, at least 14 days before the June election. The medical
center disclosed the same information about the AWS’s effect on wages, hours, and
benefits that it did in connection with the 2001 election. Five hundred seventy-five out of
701 employees voted in favor of the AWS, more than the two-thirds required.
On the basis of the foregoing evidence, the medical center carried its initial burden
of showing a validly adopted AWS in 2001 and 2013. None of Woodworth’s arguments
persuades us that she raised a triable issue of material fact or that the court otherwise
erred by granting the motion. (Dinslage, supra, 5 Cal.App.5th at p. 379 [appellant bears
the burden of affirmatively demonstrating error on appeal from summary adjudication
order].)
Woodworth first argues that the court erred by overruling her objections to
Norton’s declaration because Norton lacked personal knowledge of (1) what occurred
during the 2001 election, (2) the email to employees regarding the 2013 election, and (3)
the English language skills of the voting employees. We are not persuaded that the court
committed prejudicial error here. Woodworth claims that Norton started working at the
medical center after the 2001 election, but that is incorrect. Norton declared that she
began working there in July 2001, and the election took place in September 2001. The
court thus could reasonably conclude that Norton had personal knowledge of the 2001
election. Similarly, the court could reasonably conclude that Norton, a long-time human
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resources employee at the medical center, knew what language skills the medical center
required for nurses. And even though Norton was not at the medical center for the 2013
election, Woodworth does not challenge the admissibility of the business records
showing that another human resources employee emailed the 2013 disclosures to the
affected employees. (See Evid. Code, § 1271 [permitting the admission of business
records to establish the truth of the matters contained therein].) Nor does Woodworth
challenge the declaration of Cook, who declared that she received the 2013 email and that
it was sent to all nurses eligible to vote.
Besides her evidentiary challenge to Norton’s declaration, Woodworth argues that
the medical center did not fully disclose the AWS’s effects on wages, hours, and benefits,
rendering the elections “null and void.” (Cal. Code Regs., tit. 8, § 11050, subd. 3(C)(3).)
In particular, she asserts that the medical center failed to disclose the AWS’s effect on
meal and rest periods and benefits.
Wage Order 5 requires disclosure of the AWS’s effects, but it does not require the
employer to disclose when the AWS will have no effect. Woodworth does not identify
what claimed effect the AWS had on meal and rest periods, so she fails to show any
deficiency on that issue. She claims that the disclosures falsely informed the affected
employees that they would be eligible for benefits on the same basis as all other
employees, but that argument also is meritless. Paid leave hours provide an apt example.
According to the employee handbook, employees accrued paid leave on the basis of
hours worked and paid, “up to 80 hours each pay period.” The handbook also described
the rate at which paid leave hours would accrue, which varied depending on how long the
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employee had worked at the medical center. In other words, a formula determined paid
leave hours—the number of hours worked and paid multiplied by the accrual rate. Given
that employees on a 3/12 AWS worked only 72 hours in a two-week pay period, they
accrued fewer paid leave hours than those working 80 hours during the same period. But
that would have been true for any employee who worked fewer than 80 hours in a pay
period, regardless of whether they worked under an AWS. Woodworth points to no
evidence that the AWS changed the formula for determining paid leave hours or any
other benefit, so there was no effect to disclose.
In a similar vein, Woodworth claims that the medical center failed to disclose that
the employees were entitled to at least four hours of work per shift. That argument also
fails. She relies on the provision of Wage Order 5 stating that the AWS agreement “shall
provide for not less than four (4) hours of work in any shift.” (Cal. Code Regs., tit. 8,
§ 11050, subd. 3(B)(8)(c).) Woodworth’s AWS agreements provided for shifts of four
hours or more—they provided for shifts of 12 hours, thereby complying with that portion
of the wage order. Moreover, the disclosures informed employees that they would be
working regularly scheduled shifts of 12 hours. There was no other “effect[]” to disclose.
(Id., § 11050, subd. 3(C)(3).)
Woodworth also claims that the medical center failed to disclose when it may
require employees to work overtime. She points to the 2001 disclosure stating that the
“amount of overtime that an employee will be required to work will be subject to the
requirements of sections 3(B1)(8) and (9) of Wage Order 5-2000.” The cited wage order
is a former version of Wage Order 5. (See IWC Wage Order 5-2000, available at
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https://www.dir.ca.gov/iwc/wageorderindustriesprior.htm.) The 2013 disclosures
referred employees to the equivalent provisions of current Wage Order 5. (Cal. Code
Regs., tit. 8, § 11050, subd. 3(B)(9)-(11).) Those provisions set forth detailed rules for
when employees who work a 12-hour shift may be required to work more than 12 hours
in any 24-hour period. 11 (Ibid.)
Woodworth contends that even though the AWS disclosures cited the relevant
provisions of the wage order, the medical center had to provide a copy of Wage Order 5.
Otherwise, she argues, the medical center failed to disclose the AWS’s effects on hours,
and the elections were null and void. We are not persuaded by that argument for two
reasons. First, the disclosures put employees on notice that special rules would govern
overtime under Wage Order 5. The employees were free to ask for a copy of the wage
order if it was not already posted in an employee area, and the medical center would have
been obligated to provide it. (Cal. Code Regs., tit. 8, § 11050, subd. 22 [requiring
employers to post the wage order except when “the location of work or other conditions
make this impractical,” in which case employers must “keep a copy of [the] order and
11 In particular, the employer may require a 12-hour employee to work up to 13 hours if the employee scheduled to relieve them does not report for duty and does not provide more than two hours’ advance notice. (Cal. Code Regs., tit. 8, § 11050, subd. 3(B)(11).) In addition, the 12-hour employee may be required to work up to 16 hours if an authorized executive declares that (1) a healthcare emergency exists, (2) the employer has taken reasonable steps to provide required staffing, and (3) “[c]onsidering overall operational status needs, continued overtime is necessary to provide required staffing.” (Id., § 11050, subd. 3(B)(9)(a)-(c).) Beyond that, the 12-hour employee must voluntarily agree to work more than 16 hours, and they may not work more than 24 consecutive hours unless they have at least eight consecutive hours off duty immediately following the 24 hours of work. (Id., § 11050, subd. 3(B)(10).)
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make it available to every employee upon request”].) Woodworth proffered no evidence
that an employee requested the wage order and that the medical center failed to respond.
Second, the omission of Wage Order 5’s detailed rules did not qualify as a
“[f]ailure to comply” that justified nullification of the elections. (Cal. Code Regs., tit. 8,
§ 11050, subd. 3(C)(3).) We hold that an employer’s failure to comply with the pre-
election disclosure requirement renders the election null and void only if the employer
omits material information about the proposed AWS’s effects. Materiality can be
determined by the familiar prejudice standard applicable to errors of state law. (See
Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800 [error is prejudicial if “‘it is
reasonably probable that a result more favorable to the appealing party would have been
reached in the absence of the error’”].) That is, information is material if it is reasonably
probable that disclosure of the information would tend to cause more employees to vote
against the AWS.
That is not to say that employers may pick and choose which “effects . . . on the
employees’ wages, hours, and benefits” to disclose. (Cal. Code Regs., tit. 8, § 11050,
subd. 3(C)(3).) Rather, employers should attempt to comply with their disclosure
obligations in full and in good faith by disclosing all such effects. In the event of a
disclosure error, however, the reviewing court should assess the materiality of the
omission. And if there is a reasonable probability that disclosure of the information
would tend to cause more employees to vote against the AWS, the omission renders the
AWS election null and void.
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That standard is not met here. Although we gave Woodworth the opportunity to
submit supplemental briefing on this issue (Gov. Code, § 68081; Code Civ. Proc. § 437c,
subd. (m)(2)), she articulates no way in which the relevant omission could have
prejudiced the employees. Nor does she contend that we should remand to allow her to
present evidence or conduct discovery on the issue. (Code Civ. Proc., § 437c,
subd. (m)(2).) The wage order’s rules governing work over 12 hours are favorable to
employees. They protect employees from having to work more than 12 hours except
under narrowly defined circumstances (discussed in fn. 11, ante). Consequently,
disclosure of those rules in a more explicit, detailed fashion would have persuaded an
employee to vote against the AWS only if the employee preferred that the medical center
be less constrained in requiring employees to work overtime. On this record, we see no
reasonable probability that more employees would have voted against the AWS if the
medical center had set forth those rules in detail. Indeed, if anything, disclosure of the
details would have made the AWS more likely to pass. The omission therefore was not
material. Wage Order 5 does not require employers to reproduce every potentially
applicable provision of the order in their AWS disclosures to protect against nullification
of the election by a reviewing court.
Woodworth next argues that (1) both AWS’s were invalid because the disclosures
and agreements gave the medical center the right to terminate the AWS and (2) the 2013
AWS was invalid because the employees never repealed the 2001 AWS. We also reject
those arguments. Wage Order 5 states that an AWS “may be repealed by the affected
employees,” and the order sets forth how the employees may accomplish that through a
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petition and new secret-ballot election. (Cal. Code Regs., tit. 8, § 11050, subd. 3(C)(5).)
But nothing in the wage order states that the employees have the exclusive right to
terminate the AWS, and nothing in it states that the employer may not reserve the right to
terminate the AWS. Even if there were some authority to that effect, Woodworth cites no
authority for the further proposition that merely reserving the right to terminate the AWS
automatically voids or invalidates the election. Similarly, beyond the wage order, she
cites no authority for the proposition that the employees had to repeal an old AWS before
a newly constituted work unit could vote to adopt a new AWS. Nothing in Wage Order 5
requires a vote to repeal under those circumstances.
Woodworth also challenges the validity of both AWS’s because the medical center
failed to report the election results to the DLSE (in addition to the DLSR). She cites
section 511, subdivision (e), for the DLSE reporting requirement. That provision does
not apply here. Section 511 authorizes a secret-ballot election for AWS’s of “no longer
than 10 hours per day within a 40-hour workweek without the payment to the affected
employees of an overtime rate of compensation.” (§ 511, subd. (a).) It is true that an
employer must report the results to the DLSE if it conducted the election pursuant to
section 511. (§ 511, subd. (e) [“The results of any election conducted pursuant to this
section shall be reported by an employer to the [DLSE] within 30 days after the results
are final”].) But the medical center conducted the elections here pursuant to Wage Order
5—that is the authority permitting a 3/12 AWS in the healthcare industry. (Cal. Code
Regs., tit. 8, § 11050, subd. 3(B)(8); Singh, supra, 140 Cal.App.4th at p. 398.) Wage
Order 5 requires reporting to the DLSR, the agency to which the medical center reported
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the results. The medical center could not have conducted the election under section 511,
which does not authorize a 3/12 AWS in which the employees waive overtime for their
12-hour shifts. (See Mitchell v. Yoplait (2004) 122 Cal.App.4th Supp. 8, 12 [§ 511 limits
the number of hours in an AWS shift to 10 per day without triggering daily overtime].)
Woodworth further argues that the AWS’s were invalid because the medical
center failed to present evidence that it executed the AWS agreements. As authority for
the argument, she cites the provisions of Wage Order 5 dealing with meal periods. In
particular, the wage order permits health care employees to waive one of their two meal
periods when they work shifts longer than eight hours. (Cal. Code Regs., tit. 8, § 11050,
subd. 11(D).) The parties must document that waiver in a written agreement signed by
both the employer and the employee. (Ibid.) On its face, that rule governing meal period
waivers does not apply to AWS agreements. Nothing in Wage Order 5 indicates that
employers must sign AWS agreements.
Lastly, Woodworth challenges the 2013 AWS on the basis of two documents that
the medical center produced in discovery—a script and a document answering frequently
asked questions. She contends that the script erroneously informed employees that they
had to vote in favor of the AWS, but she mischaracterizes the document. The script
merely explained that two-thirds of the affected employees had to vote in favor of the
AWS for it to pass—not that the employees were somehow required to cast a vote in
favor of it. The script contemplated that the AWS could fail to pass, and it informed the
employees that they would switch to eight-hour shifts if that occurred. Woodworth
further contends that the documents erroneously informed the employees that they were
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voting to reaffirm an existing AWS. But the evidence indeed showed that the employees
were working under the existing 2001 AWS at that point. There was nothing inaccurate
about that statement.
As for the court’s ruling on the PAGA claim, the validity of the two AWS’s is a
defense to Woodworth’s overtime claim and the overtime claim of any aggrieved
employees who worked under the same AWS’s. In her opposition brief, Woodworth did
not argue that the medical center failed to carry its burden with respect to aggrieved
employees outside of her work unit. Likewise, on appeal, she does not contend that her
PAGA claim extended to aggrieved employees outside of her work unit or that the
medical center failed to produce evidence about other AWS elections. She therefore
forfeited any such argument, and the court properly granted summary adjudication for the
medical center on the PAGA overtime claim. (DiCola, supra, 158 Cal.App.4th at p. 676;
Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6.)
For the foregoing reasons, we conclude that the court did not err by granting the
medical center’s summary adjudication motion on the AWS defense. 12
12 The medical center requests that we take judicial notice of a DLSE opinion letter and documents representing legislative history of section 511. Woodworth requests that we take judicial notice of a document disseminated by the IWC in connection with Wage Order 5 and other wage orders. Additionally, amicus curiae California Hospital Association requests that we take judicial notice of various IWC documents relating to the current and former versions of Wage Order 5. We deny all of the requests for judicial notice because they are unnecessary to our resolution of this appeal. (County of San Diego v. State of California (2008) 164 Cal.App.4th 580, 613, fn. 29.)
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VII. Motion for Summary Adjudication on the PAGA Cause of Action
The medical center moved for summary adjudication on the PAGA cause of action
for failure to exhaust administrative remedies. (The medical center labeled this motion,
“Motion for Summary Adjudication No. 2” (capitalization and boldface omitted).) After
the court’s other rulings, only the PAGA rest period claim survived. The court granted
this motion as to the rest period claim, concluding that Woodworth failed to give the
LWDA proper notice of the rest period claim. We agree with Woodworth that the court
erred as to the rest period claim. Moreover, Woodworth gave the LWDA sufficient
notice of the regular rate, wage statement, waiting time, and rounding claims under
PAGA, so those claims survive as well.
A. Relevant Background
Woodworth filed her original complaint in this action on June 11, 2014. The
complaint did not include a PAGA cause of action. On June 18, 2014, she sent a letter to
the LWDA and the medical center, advising them of alleged Labor Code violations by
the medical center (the PAGA letter). As relevant here, the PAGA letter alleged as
follows:
• The medical center “failed to properly compensate its non-exempt work force the
proper amount of straight time and overtime wages as a result of, but not limited to,
its unlawful rounding policies and failure to include all required remuneration
(including but not limited to bonuses) when calculating the regular rate for
overtime purposes.”
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• The medical center’s “rounding policy is set up such that it systematically
underpays California based non-exempt employees for all hours worked.”
• The medical center did “not provide the requisite number of rest periods for a 12
hour shift, such that only two (2) rest periods are provided to the non-exempt
hourly employees.” Further, Woodworth was “denied . . . rest periods . . . and thus
entitled to an extra hour of pay at the regular rate of pay.”
• “[E]ach non-exempt employee that is no longer employed with [the medical
center], [who] was subjected to the . . . improper regular rate calculation, was not
paid all earned wages at termination.” Similarly, Woodworth “and the aggrieved
employees were not paid all their wages at the time of termination,” so they were
“entitled to recover back wages” and waiting time “penalties under [section] 203.”
• The medical center “failed to provide accurate itemized wage statements based on
the underlying wage and hour violations.” Similarly, “the pay stubs issued by the
[medical center] did not comply with the provisions of [section] 226.”
The PAGA letter elsewhere alleged that the medical center had violated numerous Labor
Code sections, including sections 203, 226, 226.7, and 510.
Woodworth offered her counsel’s declaration to show that she attached her
original complaint to the PAGA letter. The letter stated that the complaint was attached,
and it referenced the complaint several times. For instance, at the beginning of the letter,
it stated that it was from Woodworth “on behalf of herself and all aggrieved employees
who were subject to the employer’s wage and hour policies as set forth below and in the
attached Complaint.”
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In relevant part, the complaint alleged that the medical center “failed . . . or
refused to implement a relief system by which [Woodworth] and aggrieved employees
could receive rest breaks and/or work free rest breaks for every four hours worked, or
major fraction thereof.” It also alleged that the medical center had “failed to properly
include items of remuneration when determining the employees’ regular rate,” including
“non-discretionary bonuses paid to all eligible employees.” Additionally, the complaint
alleged that the medical center failed to provide “accurate wage and hour statements
showing gross wages earned, total hours worked, . . . net wages earned, . . . and all
applicable hourly rates in effect during each pay period.” And it alleged that the medical
center had “[r]ounded the actual time worked and recorded by” employees such that they
“were paid far less than they would have been paid had they been paid for actual recorded
time rather than ‘rounded’ time.” Finally, it alleged that the medical center had violated
sections 201, 202, 226, 226.7, and 510, among other sections, as well as a wage order
5659, at pp. [7]-8; Hoang v. Vinh Phat Supermarket, Inc. (E.D.Cal. Aug. 12, 2013, No.
Civ. 2:13-00724 WBS GGH) 2013 U.S.Dist. Lexis 114475, at pp. [12], [20]-21.) Like
those courts, we see no reason to punish Woodworth for “‘acting too quickly,’” given that
exhaustion of her administrative remedy “subsequently occurred” when the LWDA
responded. (Magadia, supra, 319 F.Supp.3d at p. 1189.)
In sum, the court erred by granting the medical center’s motion for summary
adjudication on the PAGA cause of action. Woodworth gave sufficient notice of at least
one theory of liability underlying the rest period claim. Also, her PAGA regular rate
claim, PAGA wage statement claim, PAGA waiting time claim, and PAGA rounding
claim remain viable, and she gave sufficient notice of those claims. Moreover, the
premature filing of her first amended complaint did not defeat her PAGA cause of action.
The medical center therefore was not entitled to summary adjudication on the PAGA
cause of action.
VIII. Motion to Strike the PAGA Allegations
The medical center moved to strike all of the PAGA allegations from the TAC,
arguing that the PAGA cause of action was unmanageable and could not be tried without
violating the medical center’s due process rights. At the time, there was no published
California decision addressing whether PAGA actions are subject to a manageability
requirement. The court denied the motion, reasoning that although it had discretion to
grant the motion, it would not do so “in the absence of controlling California authority
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and conflicting [federal] district court authority.” It further ruled that the motion was
moot, in light of its other rulings disposing of the PAGA claims.
In the medical center’s cross-appeal, it argues that (1) we should impose a
manageability requirement for PAGA claims and (2) Woodworth failed to demonstrate
the PAGA cause of action was manageable. Although we grant Woodworth’s motion to
dismiss the cross-appeal, we consider the medical center’s arguments. If they are
meritorious, they would provide alternative grounds to affirm the erroneous rulings
disposing of the PAGA claims. (See part I.B. of the discussion, ante.) We conclude,
however, that the arguments lack merit.
Since the trial court’s ruling, two appellate decisions have addressed the
manageability of PAGA claims: Wesson, supra, 68 Cal.App.5th 746, and Estrada, supra,
76 Cal.App.5th 685. Wesson held that “courts have inherent authority to ensure that
PAGA claims can be fairly and efficiently tried and, if necessary, may strike claims that
cannot be rendered manageable.” (Wesson, at p. 756.) Estrada came to the opposite
conclusion. (Estrada, at p. 697.) It held that courts “cannot strike a PAGA claim based
on manageability,” but they “may still, where appropriate and within reason, limit the
amount of evidence PAGA plaintiffs may introduce at trial.” (Ibid.)
Our Supreme Court is reviewing the issue and will resolve the split. In the
meantime, we agree with Estrada. Trial courts may not strike a PAGA claim for lack of
manageability. They may limit the evidence to be presented at trial or otherwise limit the
scope of the PAGA claim, but they may not strike the claim altogether.
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Wesson observed that courts have inherent power under the state Constitution to
control and manage litigation, as the courts have done with respect to class actions.
(Wesson, supra, 68 Cal.App.5th at pp. 763-764.) Specifically, “[i]n the class action
context, the courts have required class action proponents to demonstrate that ‘litigation of
individual issues, including those arising from affirmative defenses, can be managed
fairly and efficiently.’” (Id. at p. 764, quoting Duran, supra, 59 Cal.4th at pp. 28-29.)
The Wesson court also relied on a UCL case, which it characterized as “approv[ing] a
trial court’s use of its inherent authority to bar a representative . . . UCL claim as
unmanageable.” (Wesson, at p. 764, citing South Bay Chevrolet v. General Motors
Acceptance Corp. (1999) 72 Cal.App.4th 861 (South Bay Chevrolet).) 13 Wesson
reasoned that “[t]he same concerns attendant to the fair and efficient trial of
representative claims apply in the context of PAGA actions. . . . [Citation.] A PAGA
action may . . . cover a vast number of employees, each of whom may have markedly
different experiences relevant to the alleged violations. Under those circumstances,
determining whether the employer committed Labor Code violations with respect to each
13 The trial court in South Bay Chevrolet did not dismiss the representative UCL claim as unmanageable before trial or rely on the inherent authority to manage litigation. Rather, after a bench trial, the court granted the defendant’s motion for judgment under Code of Civil Procedure section 631.8. (South Bay Chevrolet, supra, 72 Cal.App.4th at pp. 869, 875.) The trial court determined that the plaintiff (a car dealership) “failed to meet its evidentiary burden to show that its individual claim should be afforded private attorney general status.” (Id. at p. 891.) The court based that determination on a lack of evidence that any car dealership was likely to be deceived by the defendant’s practices or that dealerships “were similarly situated as to their likelihood of deception.” (Ibid.) The appellate court held that the ruling was supported by substantial evidence, so the trial “court properly determined it could not make any determination that [the defendant] was liable statewide.” (Id. at p. 895.)
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employee may raise practical difficulties and may prove to be unmanageable.” (Wesson,
at pp. 765-766.) The court therefore concluded “that courts have inherent authority to
ensure that PAGA claims can be fairly and efficiently tried and, if necessary, may strike a
claim that cannot be rendered manageable.” (Id. at p. 765.)
Estrada disagreed with Wesson for reasons that we find persuasive. First, our
Supreme Court held in Arias that an aggrieved employee bringing a representative PAGA
action need not satisfy class action requirements. (Arias, supra, 46 Cal.4th at p. 975;
Estrada, supra, 76 Cal.App.5th at pp. 711-712.) The high court has emphasized that a
PAGA action is a law enforcement action on behalf of the state and “is different from a
class action.” (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 86;
Estrada, at p. 711.) The manageability requirement in the class action context permits
courts to deny class certification, in effect dismissing the class claims from the action.
Permitting courts to strike or otherwise dismiss PAGA claims on manageability grounds
“would effectively graft a class action requirement onto PAGA claims, undermining”
Arias’s holding that PAGA plaintiffs need not satisfy class action requirements.
(Estrada, at p. 697.)
Second, permitting courts to strike or dismiss PAGA claims on the basis of
“manageability would interfere with PAGA’s express design as a law enforcement
mechanism.” (Estrada, supra, 76 Cal.App.5th at p. 712.) The Legislature enacted
PAGA to incentivize private parties to recover civil penalties on behalf of the
overburdened state agency. (Arias, supra, 46 Cal.4th at p. 986 [Legislature’s declared
purpose in enacting PAGA was “to supplement enforcement actions by public agencies,
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which lack adequate resources to bring all such actions themselves”]; § 2699, subd. (i)
[75 percent of the penalties recovered in a PAGA action go to the LWDA, and 25 percent
go to the aggrieved employees].) The LWDA “is not subject to a manageability
requirement when it investigates Labor Code violations and assesses fines internally.”
(Estrada, at p. 712.) Allowing courts to dismiss PAGA claims for unmanageability
places a burden on PAGA plaintiffs that does not fall on the LWDA in its own
enforcement proceedings, thus undermining PAGA’s purpose and the Legislature’s
objectives. (Ibid.)
While Estrada held that trial courts may not strike or dismiss PAGA claims on the
basis of manageability, it also held that “courts are not powerless when facing unwieldy
PAGA claims.” (Estrada, supra, 76 Cal.App.5th at p. 697.) We agree with Estrada on
that point as well. “[C]ourts may, where appropriate and within reason, limit witness
testimony and other forms of evidence when determining the number of violations that
occurred and the amount of penalties to assess. [Citations.] Consequently, in cases with
individualized circumstances and vast numbers of alleged aggrieved employees, PAGA
plaintiffs may have difficulty proving purported violations suffered by other employees.”
(Id. at p. 713.) Like the court in Estrada, we encourage the parties to try to overcome any
difficulties by “work[ing] with the trial courts . . . to define a workable group or groups of
aggrieved employees for which violations can more easily be shown.” (Ibid.) For
instance, the parties could agree to limit the scope of the PAGA claim by defining the
aggrieved employees as those in a single department or at a single location. (Id. at
p. 713, fn. 8.)
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Estrada’s approach to PAGA claims has the virtue of incentivizing the parties to
cooperate in devising a plan that works for trial. Wesson’s approach, however,
disincentivizes cooperation and instead incentivizes employers to portray PAGA claims
as hopelessly unmanageable. Ultimately, PAGA plaintiffs may prove that the employer
violated the Labor Code with respect to all of the aggrieved employees, some of them, or
none at all. (Estrada, supra, 76 Cal.App.5th at p. 713.) But even if a PAGA claim is
somewhat burdensome to try, it should “‘not mean that [the plaintiff] cannot bring it at
all.’” (Ibid.)
For all of these reasons, we conclude that trial courts may not strike or dismiss a
PAGA claim for lack of manageability. When faced with unwieldy PAGA claims, the
courts may limit the scope of the claims or the evidence to be presented at trial, but they
may not prohibit PAGA plaintiffs from presenting their claims entirely. Accordingly, the
medical center’s argument that the PAGA cause of action should have been stricken as
unmanageable does not provide an alternative ground to affirm the erroneous orders
terminating the PAGA claims.
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DISPOSITION
The medical center’s motion for partial dismissal of the appeal is denied.
Woodworth’s motion to dismiss the cross-appeal is granted. The November 2018 order
granting the medical center’s motion for summary adjudication on the rounding claim is
reversed. On remand, the trial court shall enter a new order denying the motion for
summary adjudication on the rounding claim.
The March 2019 order denying Woodworth’s motion for class certification and
denying her motion to strike the putative class members’ declarations is affirmed in part
and reversed in part. To the extent that the order denied the motion to strike the putative
class members’ declarations, it is affirmed. To the extent that the order denied
certification of the stand-alone Wage Statement Class, it is reversed and the matter is
remanded for the court to reconsider the certification motion as to that class, consistent
with this opinion. The order denying the class certification motion is otherwise affirmed.
The May 2019 order granting the medical center’s motions for summary
adjudication is reversed. On remand, the trial court shall enter a new order: (1) denying
the medical center’s motion for summary adjudication no. 1 as to the PAGA regular rate