Flores v. Dart Container Corporation

[7] 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- [11] 12 ANGELA FLORES, individually and No. 2:19-cv-00083 WBS EFB on behalf of other similarly 13 situated current and former employees, 14 MEMORANDUM AND ORDER RE: Plaintiff, MOTION TO DISMISS [15] v. [16] DART CONTAINER CORPORATION, a 17 Nevada corporation; DART CONTAINER CORPORATION OF 18 CALIFORNIA, a Michigan corporation; and DOES 1-100, 19 inclusive, 20 Defendants. [21] 22 ----oo0oo---- 23 Plaintiff Angela Flores filed this action against Dart 24 Container Corporation and Dart Container Corporation of 25 California (collectively “Dart”), and Does 1 through 100 26 (collectively “defendants”), alleging that defendants furnished 27 inaccurate wage statements and underpaid sick leave. Before the 28 court is defendants’ motion to dismiss the second, third, and 1 fourth causes of action of plaintiff’s First Amended Complaint 2 (“FAC”). (Docket No. 24.) 3 I. Relevant Allegations 4 Flores was hired by Dart as an Inspector/Packer in 5 Dart’s Victor, California warehouse. (FAC ¶ 8 (Docket No. 23).) 6 Flores was properly classified as a non-exempt employee of Dart 7 and paid on a bi-weekly pay period basis. (Id.) In conjunction 8 with each bi-weekly payday, Flores was provided a wage statement 9 that purported to document her hours and earnings. (Id. ¶ 11.) 10 The wage statements allegedly failed to identify the total hours 11 worked during the pay period. (Id. ¶ 14.) Although the wage 12 statements contained a column designated “Hours,” the documents 13 contained no specific line item for total hours worked. (Id.) 14 Further, simply adding the numbers in the “Hours” column did not 15 result in a number that accurately reflected the total number of 16 hours worked by plaintiff. (Id. ¶ 15.) 17 In addition, although Dart was required to pay “paid 18 sick days” to plaintiff at plaintiff’s regular rate of pay, Dart 19 paid plaintiff’s paid sick days at her base hourly rate. (Id. ¶ 20 22.) Shift differentials and other remuneration was not included 21 in the calculation of her rate of pay. (Id.) 22 Plaintiff filed suit individually and on behalf of 23 other similarly situated current and former employees alleging 24 the following causes of action: (1) failure to furnish accurate 25 wage statements, Cal. Labor Code § 226 (a); (2) failure to 26 properly pay sick leave wages, Cal. Labor Code §§ 218.5 ; 246(l); 27 (3) failure to pay all wages due and owing on separation, Cal. 28 Labor Code §§ 203; (4) unfair business practices, Cal. Bus. & 1 Prof. Code § 17200 et seq.; and (5) Private Attorney General’s 2 Act claim for recovery of civil penalties, Cal. Labor Code § 2698 3 et seq. (See generally FAC.) 4 II. Failure to Properly Pay Sick Leave Wages (Second Cause of Action) [5] Plaintiff alleges that defendants failed to compensate [6] plaintiff for sick leave at the “regular rate of pay” in [7] violation of the Healthy Workplaces, Healthy Families Act [8] (“HWHFA” or “the Act”). See Cal. Labor Code § 246 (l)(1). The [9] parties agree that the HWHFA does not provide plaintiff a private [10] cause of action. (See Mot. at 5; Opp’n at 1 (Docket No. 28); see [11] also Titus v. McLane Foodservice, Inc., No. 2:16-CV-00635 KJM [12] EFB, 2016 WL 4797497 , at *4 (E.D. Cal. Sept. 14, 2016).) [13] Plaintiff instead purports to enforce the HWHFA under Section 218 [14] of the California Labor Code. [15] Section 218 provides that “[n]othing in this article [16] shall limit the right of any wage claimant to sue directly or [17] through an assignee for any wages or penalty due him under this [18] article.” Cal. Labor Code § 218 (emphasis added). Section 218 [19] falls under Article 1, which spans Sections 200 through 243. [20] However, because the HWHFA falls under Article 1.5, which [21] includes Sections 245 through 249, rather than Article 1, [22] plaintiff cannot rely on Section 218 to enforce the Act. See [23] Benitez v. Wilbur, No. 1:18-cv-1122 LJO GSA, 2009 WL 498085 (E.D. [24] Cal. Feb. 26, 2009); see also Valenzuela v. Giumarra Vineyards [25] Corp., 614 F. Supp. 2d 1089, 1101 (E.D. Cal. 2009); Campbell v. [26] Pricewaterhouse Coopers, LLP, No. CIV. 2:06-cv-2376 LKK GGH, 2007 27 WL 841694 , at *8 (E.D. Cal. Mar. 20, 2007). [28] 1 This court recognizes that the district court in Kamar 2 v. RadioShack Corporation, No. CV07-2252AHM(AJWX), 2008 WL 3 2229166 (C.D. Cal. May 15, 2008), held that Section 218 4 authorized plaintiff’s private action to recover “wages of any 5 kind,” not just those specified in Article 1. Id. at *7-8 .1 The 6 Kamar court noted that when Article 1 was enacted in 1919, 7 Article 1 contained “no provision creating any right to a 8 particular kind of wages.”2 Kamar, 2008 WL 2229166 , at *8. 9 Article 1 instead governed “the time and manner of payment.” See [10] id. Because Section 218 “simply does not specify what kinds of 11 wages a worker may seek in a lawsuit,” id., the Kamar court 12 interpreted the phrase “wages . . . due under this article” “to 13 refer not to a specific mandated category of wages, but to wages 14 of any kind that had not been paid in accordance with 15 requirements in Article 1 governing the time and manner of 16 payment.” Id. (emphasis added). 17 Relying on Kamar, plaintiff asks the court to find that 18 a plaintiff has a private cause of action simply to recover 19 unpaid “wages of any kind.” (Opp’n at 7.) This interpretation [20] 1 No other court has explicitly decided the issue. In Sanchez v. Aerogroup Retail Holdings, Inc., No. 12-CV-0544521 LHK, 2013 WL 1942166 , at *6 n.4 (N.D. Cal. May 8, 2013), for example, the court considered whether plaintiff had a private [22] cause of action under Section 450. The court “[did] not take a position on whether Benitez or Kamar is correct.” Id. at *6 n.4. [23] The court appeared to agree with Benitez, however, because the court noted that “Section 218’s use of the phrase ‘under this [24] article’ further undermine[d] the Court’s ability to discern a clear legislative intent to authorize an action under Section 450 [25] as it is not contained in the same article as Section 218.” [26] 2 In all of Article 1, only Section 226.7, which was 27 enacted in 2000, creates such a right. Kamar, 2008 WL 2229166 , at *8. [28] 1 would render the phrase “under this article” superfluous. See 2 Benitez, 2009 WL 498085 , at *4 n.2 (“A right of private action 3 under section 218 pertains only to ‘this article.’”). Under this 4 interpretation, a plaintiff could avoid all references to Article 5 1 in its action under Section 218. This court disagrees with 6 plaintiff’s interpretation and instead finds that Section 218 7 does not authorize a private cause of action absent allegations 8 under Article 1. 9 In the alternative, plaintiff contends that the 10 allegations support a violation of Section 233 of Article 1. 11 Section 233 prohibits employers from denying employees the use of 12 accrued sick leave. Cal. Labor Code § 233 . Plaintiff, however, 13 “is not seeking redress for denied sick leave, she is seeking 14 redress for the underpayment of redeemed and vested sick pay.” 15 (Pl.’s Opp’n at 5; see also FAC ¶ 20.) Because plaintiff does 16 not argue that the allegations constitute a violation of any 17 other Article 1 provision, plaintiff does not have a private 18 cause of action for her HWHFA claim. The court will therefore 19 dismiss the Second Cause of Action of the FAC. [20] III. Failure to Pay All Wages Due and Owing on Separation (Third 21 Cause of Action) 22 Plaintiff alleges a violation of Section 203(a) of the 23 California Labor Code. Section 203 does fall under Article 1 and 24 is therefore actionable under Section 218. See supra. 25 An action under this section is not an action to 26 collect due and unpaid wages, but rather one to collect a penalty 27 arising out of the failure to pay wages. Lane v. Francis Capital 28 Mgmt., LLC, 224 Cal. App. 4th 676, 684 (2d Dist. 2014); see also [1] Cal. Labor Code § 203 ; Cal. Labor Code § 218 (authorizing suit 2 “for any wages or penalty due him under this article”). To 3 allege a claim under Section 203, plaintiff must establish that 4 the sick leave defendants allegedly owe plaintiff constitutes 5 “wages” within the meaning of the statute. See Cal. Labor Code § 6 203(b) (“Suit may be filed for these penalties . . . on an action 7 for the wages from which the penalties arise.”) 8 Section 200(a) defines “wages” to include “all amounts 9 for labor performed by employees of every description, whether 10 the amount is fixed or ascertained by the standard of time, task, 11 piece, commission basis, or other method of calculation.” Cal. 12 Labor Code § 200(a). This has been interpreted to encompass 13 “anything ‘promised as part of the compensation for employment,’ 14 and it is due when ‘all conditions agreed to in advance have been 15 satisfied.’” Naranjo v. Spectrum Sec. Servs., Inc., 40 Cal. App. 16 5th 444, 464 (2d Dist. 2019) (quoting Davis v. Farmers Ins. 17 Exch., 245 Cal. App. 4th 1302, 1331 (2016), as modified on denial 18 of reh’g (Apr. 21, 2016), 245 Cal. App. 4th at 1331 ). The 19 California Supreme Court construes statutes governing conditions 20 of employment, including Section 200(a), “broadly in favor of 21 protecting employees.” Murphy, 40 Cal. 4th at 1103. 22 The court finds that paid sick leave is “wages” within 23 the meaning of Section 200(a). In construing the definition of 24 “wages” “broadly,” the California Supreme Court has unambiguously 25 stated that “wages” encompass “sick pay.” Murphy, 40 Cal. 4th at 26 1103 (citing Suastez v. Plastic Dress–Up Co., 31 Cal. 3d 774 , 780 27 (1982); Dept. of Indus. Relations v. UI Video Stores, Inc., 55 28 Cal. App. 4th 1084, 1091 (1st Dist. 1997)). Also, in Katosh v. 1 Sonoma County Employees’ Retirement Association, 163 Cal. App. 2 4th 56 (1st Dist. 2008), the court held that sick leave “when 3 taken as time off during the period of employment” constitutes 4 “regular compensation” under the Government Code. Id. at 69-70 . 5 Defendants argue that sick pay does not constitute 6 wages because a worker is not entitled to payment of sick days as 7 they accrue. Under the HWHFA, “an employer is not required to 8 provide compensation to an employee for accrued, unused paid sick 9 days upon termination, resignation, retirement, or other 10 separation from employment.” Cal. Lab. Code § 246 (g)(1). 11 Because, unlike other kinds of wages, sick leave does not “vest” 12 as labor is rendered, see Suastez, 31 Cal. 3d at 781 , defendants 13 contend that sick leave is different from wages. 14 Here, however, plaintiff has already used the sick 15 leave at issue. The HWHFA entitles plaintiff to a “regular rate 16 of pay” for sick leave taken, and plaintiff alleges that 17 defendants paid a lower rate. See Cal. Labor Code § 246 (l)(1). 18 While, as defendants correctly point out, pursuant to Section 19 246(g)(1), defendants do not owe plaintiff compensation for 20 “accrued, unused” sick leave, defendants owe plaintiff accurate 21 payment of sick leave already taken. See id. Although sick 22 leave may not vest as labor is rendered, it vests when it is 23 taken, as is the case here. 24 For the foregoing reasons, the court finds that sick 25 leave constitutes “wages,” and will not dismiss the Third Cause 26 of Action of the FAC. 27 IV. Unfair Business Practices (Fourth Cause of Action) 28 To bring a claim for unfair business practices in WAS YUYUYOU VERDE BP MVVUTTIOCT Ot PRU eOorev Faye OVI GO 1 violation of the Cal. Bus. & Prof. Code § 17200 , a plaintiff must 2 show either (1) unlawful, unfair, or fraudulent business acts or 3 practices, or (2) unfair, deceptive, untrue, or misleading 4 advertising. Lippitt v. Raymond James Fin. Servs., Inc., 340 5 F.3d 1033 , 1043 (9th Cir. 2003) (citing Cal. Bus. & Prof. Code § 6 17200). Section 17200 is a “borrowing statute” that effectively 7 renders violation of “virtually any law” actionable under its 8 “unlawful” prong. Gafcon, Inc. v. Ponsor & Assocs., 98 Cal. App. 9 4th 1388, 1425 n.15 (4th Dist. 2002); Shasta Linen Supply, Inc. 10 v. Applied Underwriters, Inc., No. 2:16-00158 WBS Ac, 2017 WL 11 4652758 * 8 (E.D. Cal. Oct. 17, 2017). Section 17200 thus makes 12 violations of other statutes “independently actionable.” Gafcon, 13 98 Cal. App. 4th at 1425 n.15. 14 Defendants do not dispute that the allegations in the 15 complaint sufficiently allege that defendants have failed to 16 comply with the HWHFA. Further, at oral argument, defendants 17 agreed that plaintiff has successfully alleged a § 17200 claim 18 for restitution only. Accordingly, the court will not dismiss 19 | the Fourth Cause of Action. 20 IT IS THEREFORE ORDERED that defendants’ motion to 21 dismiss (Docket No. 24) be, and the same hereby is, GRANTED as to 22 the Second Cause of Action and DENIED as to the Third and Fourth 23 | Causes of Action of the First Amended Complaint. 24 | Dated: May 27, 2020 . - ak. ah tle (LA. WILLIAM B. SHUBB 26 UNITED STATES DISTRICT JUDGE