Friday, March 13, 2020
Page 3
Court of Appeal:
Penalties Improperly Imposed Based on Employer Not Doing Impossible
Judge Found Wage-and-Hour Violations Where Wage Statements Did Not Include Hourly Rate as to Flat-Amount Bonuses Paid by-the-Task
By a MetNews Staff Writer
Div. Three of the Fourth District Court of Appeal has reversed a judgment for $425,000 in civil penalties imposed in an action under the Private Attorney General Act on a company that did not list the “hourly rate” in its wage statements for work done by employees on a per-task basis, without regard to the amount of time consumed.
It also reversed a $203,733 award of attorney fees by Orange Superior Court Judge William D. Claster to plaintiff Christian Morales in his action against his employer, Bridgestone Retail Operations, LLC. Morales is a maintenance technician who services customers’ vehicles.
“This case is anomalous—perhaps even unique—in that there is not and never was a claim that Morales had been underpaid,” Acting Presiding Justice William Bedsworth said in an opinion filed Wednesday. “Instead, the dispute is over the information provided on the wage statement accompanying his paycheck.”
Although Bedsworth noted that “the parties may be correct in labeling this a case of first impression on this precise issue,” the opinion was not certified for publication.
Labor Code Section
The case centers on an interpretation of Labor Code §266(a)(9) which requires an employer to state “all applicable hourly rates in effect during the pay period.” Although Bridgestone did state an hourly rate for regular time and overtime, it did not do so in connection with “production bonuses” which are based on a flat payment for performing a particular service, such as an oil change.
Bedsworth wrote:
“We offer no opinion regarding how the complicated calculation for an overtime production bonus could or should be expressed on a wage statement in a way employees can understand and verify. That is a legislative task. Our job here is to ascertain whether the trial court correctly interpreted the Labor Code when it decided that Bridgestone violated section 226, subdivision (a)(9), by not including an ‘applicable hourly rate in effect during the pay period’ for the overtime premium on Morales’ wage statement. Because there is no ‘applicable hourly rate in effect during the pay period’ for the overtime premium, we conclude that Bridgestone did not violate the subdivision.”
Allocation of Penalties
The Private Attorney General Act of 2004—or “PAGA”—authorizes “a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees” in quest of statutorily-set penalties for wage and hour violations, with the employees receiving 25 percent of any penalties that are imposed, with an award of attorney fees being mandatory.
Bedsworth said in a footnote:
“Bridgestone has already reconfigured its wage statements to reflect the trial court’s decision in this case. Thus the real drivers of this appeal, for Bridgestone’s purposes, are the PAGA award and the subsequent attorney fee award.”
The case is Morales v. Bridgestone Retail Operations, LLC, G057043.
Morales was represented in the trial court and in the appeal by the Riverside/Orange County law firm of Fernandez & Lauby, which specializes in suing employers. Arguing for Bridgestone in the Superior Court and the Court of Appeal was the Newport Beach firm of Klatte, Budensiek & Young-Agriesti, LLP, which defends employers.
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