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Friday, February 18, 2011

Price v. Starbucks: Court of Appeal Issues Decision on Check Stubs, Reporting Time Pay, and Waiting Time Penalties

Price v. Starbucks Corporation (2/17/11) --- Cal.App.4th ----, 2011 WL 169177, addresses a number of recurring issues in wage cases. This may be one of those cases where bad facts help make bad law, as the plaintiff was employed for only about three weeks before being fired and filing suit.
Price was an entry-level employee at Starbucks from October 22, 2007 through November 16, 2007, when he was terminated. Price was scheduled to work November 11, but he called the store and informed a coworker that he was unable to work. Price called the store later that day, and he was informed by a coworker that he was not scheduled to work for the rest of the week. Price's coworker told him to call the branch manager regarding his schedule. The next day, the branch manager left Price a voicemail message stating that Price should “come to the store on November 16, 2007, to have a talk.”

On November 16, Price arrived at the store, and the branch manager informed Price that he “was letting him go.” Price received two paychecks; one paycheck for the work he performed up until November 10, and another paycheck for two hours of reporting time pay for the meeting on November 16. The earning statements attached to these paychecks are exhibits to the complaint.

Price, on behalf of himself and a putative class, alleged causes of action for (1) violation of Labor Code section 203 seeking continuing wages for failure to timely pay wages upon discharge, alleging he was fired on November 11 when he was taken off the schedule; (2) violation of sections 204 and 1198 for failure to pay all reporting time pay due him for the November 16th meeting; (3) violation of section 226, subdivision (a) for non-compliant wage statements; and (4) violation of the unfair competition law (UCL) ( Bus. & Prof.Code, § 17200) based upon these alleged Labor Code violations. Price also alleged a fifth cause of action to recover civil penalties under the Private Attorneys General Act (PAGA) in the Labor Code (§ 2699).
First, the Court attempted to clarify the requirement that a plaintiff suffer injury in order to recover penalties under Labor Code section 226.
The injury requirement in section 226, subdivision (e), cannot be satisfied simply if one of the nine itemized requirements in section 226, subdivision (a) is missing from a wage statement. (See Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, 1306, 105 Cal.Rptr.3d 443; see also Elliot v. Spherion Pacific Work, LLC (C.D.Cal.2008) 572 F.Supp.2d 1169, 1181.) By employing the term “ ‘suffering injury,’ “ the statute requires that an employee may not recover for violations of section 226, subdivision (a) unless he or she demonstrates an injury arising from the missing information. (Jaimez v. Daiohs USA, Inc., supra, at pp. 1306-1307, 105 Cal.Rptr.3d 443.) Thus, the “deprivation of that information,” standing alone is not a cognizable injury. (Ibid.)
Price alleged a “mathematical injury,” that required him to add up his overtime and regular hours and to ensure his overtime rate of pay is correct, but the allegedly missing information from Price's wage statement is not the type of mathematical injury that requires “ ‘computations to analyze whether the wages paid in fact compensated [him] for all hours worked.’ [Citation.]” (Jaimez v. Daiohs USA, Inc., supra, 181 Cal.App.4th at p. 1306, 105 Cal.Rptr.3d 443.) Price only speculates on the “possible underpayment of wages due,” which is not evident from the wage statements attached to the complaint. Price's complaint, therefore, is distinguishable from the plaintiffs in the cases he relies on that sufficiently alleged (and presented evidence) of an injury arising from inaccurate or incomplete wage statements, which required those plaintiffs to engage in discovery and mathematical computations to reconstruct time records to determine if they were correctly paid. (See, e.g., Wang v. Chinese Daily News, Inc. (C.D.Cal.2006) 435 F.Supp.2d 1042, 1050, affd on other grounds (9th Cir.2010) 623 F.3d 743 [wage statements inaccurately listed hours worked and omitted hourly wage]; see also Ortega v. J.B. Hunt Transport, Inc. (C.D.Cal.2009) 258 F.R.D. 361, 373-374 [wage statements failed to include hours worked and applicable hourly rate]; Perez v. Safety-Kleen Systems, Inc. (N.D.Cal.2008) 253 F.R.D. 508, 517 [inaccurate hours on wage statements]; Jaimez v. Daiohs USA, Inc., supra, at pp. 1305-1306, 105 Cal.Rptr.3d 443 [wage statement listed “total hours paid,” which left employees unable to determine if they were paid for all hours worked]; Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 956, 961, 35 Cal.Rptr.3d 243 [inaccurate hours on wage statements].) Price's simple math is not based upon any allegation that the information is inaccurate.
Slip op. at 3-4.

Next, the Court affirmed the trial court's decision that the plaintiff was timely paid his earned wages:
Price seeks additional pay under the theory he should have been paid his final paycheck on November 11, 2007, when he was taken off the schedule, instead of November 16, 2007, when he was fired. We find no abuse of discretion in striking the allegations in the complaint to support this theory.
We reject Price's contention that his removal from the schedule was an indefinite layoff. This legal theory was not alleged and contradicts the allegations that he was terminated on November 16, 2007.
Slip op. at 4 (emphasis added).

Finally, the Court rejected the plaintiff's argument that he should have been paid 3.3 hours of reporting time pay for the day that he was fired.
Section 5(A) of Wage Order Number 5-2001 states: “Each workday an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee's usual or scheduled day's work, the employee shall be paid for half the usual or scheduled day's work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee's regular rate of pay, which shall not be less than the minimum wage.” (Cal.Code Regs., tit. 8, § 11050, subd. 5(A).)

The use of the disjunctive “or” in this regulation, is used in the ordinary sense, suggesting alternatives. If an employee is required to work, reports to work, and is not put to work or does not work half of the employees' usual or scheduled day's work, the employee is paid a half-shift reporting wage not to exceed four hours. (Cal.Code Regs ., tit. 8, § 11050, subd. 5(A).) If an employee is not scheduled to work or does not expect to work his usual shift, but must report to work for a meeting, the employee falls into the regulatory category of those employees called to work on their day off for a scheduled meeting. Price was entitled to the minimum payment, which is what he received.

The DLSE states the primary purpose of the reporting time pay regulation “is to guarantee at least partial compensation for employees who report to work expecting to work a specified number of hours, and who are deprived of that amount because of inadequate scheduling or lack of proper notice by the employer.” (DLSE Operations and Procedures Manual (1989) § 10.88; see also California Manufacturers Assn. v. Industrial Welfare Com. (1980) 109 Cal.App.3d 95, 112, 167 Cal.Rptr. 203 [purpose of regulation is to ensure proper scheduling].) The reporting time pay regulation protects an employee from losing all pay because of scheduling errors.

We do not agree with Price that he is entitled to receive more than the two-hour minimum; he did not report to work with the expectation that he would work a scheduled shift, but rather was scheduled to attend a meeting for an unspecified number of hours. Nor do we agree with Price that the term “usual” in the statute means the average of his previously scheduled days' worked during his employment at Starbucks. Rather, the term “usual” refers to the employee's expectation of the hours in the customary workday, just as, in the alternative, a scheduled work day formalizes the expectation of the hours worked. During his employment, Price's expectations of hours worked was solely based upon his scheduled hours. Price was not scheduled to work on November 16, and his expectation was he had been called to work for a meeting on his day off. He did not lose any pay because of a scheduling error. He was paid for reporting to the meeting consistent with the reporting time pay regulation.
Slip op. at 5-6.

The opinion is available here.

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