Court of Appeal:
One-Year Period for Filing PAGA Notice Is Triggered by Final Wage Statement
By a MetNews Staff Writer
The Court of Appeal for this district has reversed a summary judgment in favor of the defendants in a wage-and-hour representative suit based on its determination that the plaintiff did not lack standing, rejecting the defendants’ theory that any short-changing to her did not occur within the limitations period, and rebuffing the trial judge’s ruling that no violation was effectively shown to have taken place at any time.
Presiding Justice Laurence D. Rubin of Div. Five authored the opinion, filed Sept. 19 and certified for publication on Thursday. It reverses a decision by Los Angeles Superior Court Judge William F. Highberger.
Plaintiff/appellant Cecilia Arce sued under the Private Attorneys General Act of 2004 (“PAGA”), asserting that, repeatedly, she was effectively denied a compensated 10-minute rest-break after every four hours of work and a 30-minute meal-break after working five hours, as statutorily required, because, working for a hospital as a certified nursing assistant, her services were frequently required when she was off the clock.
When required breaks are denied, an employee is entitled to a “premium”—that is, added pay for one hour for each workday when a break was denied. Arce’s final paycheck did not reflect payment for any such premiums
Los Angeles Superior Court Judge William F. Highberger, in granting summary judgment in favor of defendants Southland Management LLC and The Ensign Group Inc., agreed with the defendants that Arce lacked standing to pursue a representative action for two reasons.
Given that Arce’s last shift was on Nov. 8, 2018, no wage-and-hour violation could have occurred later than that, and that her Nov. 15, 2019 notice to the California Labor and Workforce Development Agency of a PAGA claim was not filed within one year, as required, depriving her of standing, he ruled.
He also found that no wage-and-hour violation was shown by the evidence.
Rubin said the one-year period actually commenced on Nov. 21, 2018 when Arce’s final wage statement was issued, explaining:
“All unpaid premiums were ‘wages’ due upon termination….Thus, any overdue premiums were required to have been paid in the November 21, 2018 wage statement—and every outstanding premium Arce’s employer failed to pay as part of this wage statement constituted its own Labor Code violation, each of which fell within the limitations period. It is undisputed that the final wage statement did not contain any premium payments.”
He went on to say:
“[I]t was not enough…for respondents to show that Arce had not been denied a meal or rest break during the year before she submitted her PAGA notice. They also needed to establish that Arce had been paid all outstanding meal and rest premiums—either before or after her termination. That is, respondents needed to provide evidence that either (1) Arce had never suffered a Labor Code violation, and thus, no premiums were due upon her termination, or (2) they paid all premiums at the time of the violations, so no additional monies were due Arce upon her termination. Arce would lack standing in the former case because she had not suffered a Labor Code violation; in the latter, because the violations were outside the limitations period.”
In ruling that the evidence failed to show any violation, Highberger said:
“While Defendants focus on the circumstances of the last pay period, the Court has reviewed the transcript of Plaintiff’s deposition with a broader view to see if there is any competent evidence that she suffered an uncompensated denial of a meal or rest break during any portion of her employment since any such violation would arguably create an obligation on the employer to make up the shortfall in her final paycheck.”
“Here, the competent testimony of Plaintiff was that she was aware of her right to take meal and rest periods, to submit time adjustment requests if a meal period, once started, was interrupted, and to ‘record all of your time on the timekeeping system in order to be paid for it.’ ”
The judge noted that according to Arce, in her deposition, she never advised her night-shift supervisors that she was caused to work while clocked out; that “[n]o night shift supervisor told her to work off the clock”; “[s[he never informed anyone that she was not getting rest breaks, and no one prevented her from taking such a rest break”; she could not point to a date when she worked off the clock; and no one in management told her that a licensed vocational nurse (“LVN”) had authority to interrupt a break.
“The most that Plaintiff could say in support of her claim that various meal periods were interrupted after she had clocked out was a vague statement that non-supervisory LVN’s would ask for her urgent assistance with patients,” the judge recited.
Highberger drew this conclusion:
“The high-water mark of her purported proof that she can make out the elements of a prima facie claim that she was denied a meal or rest period at any time during her employment (regardless of how close this was to her more relevant final pay period) was when she was answering leading questions from her own attorney…, which do not, read in context, provide any competent proof that such a violation existed, particularly when she acknowledged her right to submit time adjustment requests in the event that such a thing had happened.”
“This concession, coupled with her total lack of specificity about one or more event where a meal or rest period was denied and she was denied compensation after submitting a time adjustment request, leave her with no competent proof that one or more cognizable Labor Code violation occurred during her employment in connection with her right to meal and rest periods.”
Presiding Justice’s View
Rubin viewed the evidence differently, saying:
“Respondents emphasized that Arce knew her employer’s policies required her to take meal and rest breaks, and she was never explicitly told not to follow those policies….Here, Arce alleged her employer’s understaffing and workload policies made it effectively impossible for her to take the required breaks. Respondents’ moving papers did not present any evidence to negate this claim.”
He pointed to places in Arce’s deposition testimony where she had uttered complaints to supervisors as to under-staffing but that the situation was not remedied.
The jurist wrote:
“[R]espondents insisted that Arce knew she could make corrections to her recorded time, and that such a request had never been rejected. But company records respondents submitted as exhibits state that Arce was not required to track her rest periods, only her meal breaks. And, in any event, respondents do not present any evidence that, after adjusting her time, Arce was paid the required premiums.
“On this record, we conclude that respondents did not produce sufficient evidence to meet their initial burden of production on the standing issue, i.e., that Arce had not suffered a Labor Code violation during her employment.”
The case is Arce v. Ensign Group, 2023 S.O.S. 3852.
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