Shook et al v. Indian River Transport Co.

Filing 85

MEMORANDUM OF DECISION, FINDINGS OF FACT AND CONCLUSIONS OF LAW signed by Senior Judge William B. Shubb on 2/15/2017 ORDERING that the Court hereby finds in favor of defendants on all claims by all defendants. Each side shall bear its own attorneys' fees. The Clerk of Court is instructed to enter judgment accordingly. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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TODD SHOOK and HERSCHEL
BERRINGER, on behalf of
himself and others similarly
situated, and on behalf of
all other “aggrieved”
employees,

CIV. NO. 1:14-1415 WBS BAM
MEMORANDUM OF DECISION, FINDINGS
OF FACT AND CONCLUSIONS OF LAW

Plaintiffs,

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v.
INDIAN RIVER TRANSPORT CO., a
Florida Corporation,
Defendants.

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----oo0oo---Plaintiffs, truck drivers formerly employed by Indian

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River Transport Co. (“Indian River”), brought this action on

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behalf of themselves and similarly aggrieved employees against

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Indian River alleging various violations of California law,

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including 1) Labor Code § 226.7 (failure to provide mandated rest

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breaks); 2) Labor Code § 226(a) (failure to provide accurate

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itemized wage statements); 3) Labor Code §§ 2699, et seq.
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(California Private Attorneys General Act (“PAGA”)) (failure to

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separately compensate for rest breaks and unpaid wages); 4)

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Business & Professions Code § 17200 (California Unfair

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Competition Law); 5) Labor Code §§ 201 and 203 (failure to

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compensate employees for non-driving work before and after

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employees’ shifts and failure to timely pay compensation and

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wages to former employees); and 6) Labor Code § 226.2 (failure to

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provide accurate itemized wage statements and separately

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compensate for rest and recovery periods and other nonproductive

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time).

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violated the California Labor Code by not providing its drivers

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with rest breaks, not compensating them for rest breaks and other

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time they were working but not driving, and by providing them

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with wage statements that did not include all the information

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required by the Labor Code.

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The gravamen of their claims is that Indian River

After a two-day bench trial and extended closing

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arguments, the matter was submitted to the court for decision.

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Having considered the evidence and arguments of counsel, and

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having read and considered the briefs, the court finds in favor

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of defendant Indian River on all claims.

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constitutes the court’s findings of fact and conclusions of law

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pursuant to Federal Rule of Civil Procedure 52(a).

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I.

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This memorandum

Findings of Fact
1.

Plaintiffs Shook and Berringer and other aggrieved

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employees are current and former California-resident drivers

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(“California drivers”) employed by Indian River.

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2.

Plaintiff Shook worked for Indian River from May

to October 2012 and plaintiff Berringer worked for Indian River
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from November 2012 to January 2014.
3.

Plaintiffs paid California state income taxes on

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all their earnings for Indian River.

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all their Indian River wage statements in California.

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4.

Plaintiffs also received

Indian River is a Florida corporation with its

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headquarters in Winter Haven, Florida.

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liquid food-grade tank carrier services nationwide, transporting

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products such as milk and orange juice.

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5.

Indian River offers

Indian River’s administrative staff and management

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are located at Indian River’s headquarters in Winter Haven.

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headquarters is responsible for payroll and other back office

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functions, including the issuing of wage statements and the

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resulting electronic deposits of paychecks, and drivers are hired

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out of Winter Haven and trained there.

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also has a tank wash and maintenance facilities.

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Haven facility provides 24-hour dispatch service, including for

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drivers in the western United States after hours.

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6.

The

The Winter Haven facility
The Winter

Indian River provides transportation services

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across the country.

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weeks away from home, during which they pick up and drop off

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product between suppliers and recipients that are 1-5 days apart.

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The area where a driver has his or her residence will normally

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determine only the beginning and end of the overall trip.

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a driver who lives in California will usually begin and end his

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or her overall trip in California but may spend the majority of

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that time outside California.

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customers in California.

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7.

Drivers typically spend several days or

Indian River has about 25

Although Indian River dispatches most of its
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Thus,

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trucks out of it headquarters in Winter Haven, it has facilities

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in Clovis, New Mexico and in Turlock, California, with

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dispatchers in both locations.

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Turlock facility, and its California drivers live throughout

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California.

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Winter Haven facility, provides light maintenance for Indian

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River trucks and has two dispatchers and only a few other

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employees.

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drivers may use and parking spots where drivers can leave their

There are no drivers based in the

The Turlock facility, which is much smaller than the

The Turlock facility also has a small lounge that

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trucks after hours.

Drivers may also send paperwork to Indian

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River’s headquarters from the Turlock facility, though they were

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not required to do so and could submit some, if not all,

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paperwork at commercial truck rest stops across the country.

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Turlock facility does not have shower facilities or an indoor

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restroom for drivers, who may use a single portable toilet

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outside the facility.

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8.

The

Indian River hires and employs drivers nationwide,

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of which there are 600-650 at any time.

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had approximately 50 drivers at any particular time who were

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residing in California.

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based upon freight demands and the location of drivers at the

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time of demand, not their place of residence.

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estimates that based on fuel and tax records, Indian River

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drivers, including those living in California, spend on average

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15-30% of their time driving in California.

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9.

In 2016, Indian River

Indian River drivers are dispatched

Defendant

While some California drivers spend almost no time

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in California, others spend nearly half their time in the state

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in any particular pay period.

These figures vary from driver to
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driver and from one week to the next, depending on driver

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preferences and demand.

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10.

Until September 5, 2016, all Indian River drivers

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throughout the United States were generally only paid “piece-

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rate” or per mile driven, at a rate of approximately $.41 per

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mile.

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rest breaks or paid for rest breaks at all.

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not paid for other “nonproductive” time related to their work as

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drivers, including time spent on pre- and post-trip safety

Plaintiffs and other drivers were not separately paid for
Plaintiffs were also

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inspections, fueling, loading and unloading, waiting time before

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loading and unloading, tank washes, and waiting time before the

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tank washes.

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all of its drivers.

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11.

Defendant’s compensation system was the same for

Until September 5, 2016, Indian River wage

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statements identified the dates of each trip during the weekly

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pay period, and the rate and dollar amount paid for that trip.

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The wage statements did not list the actual hours worked, whether

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driving, on duty but not driving, or while on break, though

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drivers recorded such time on daily logs.

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also did not list any hourly rates for drivers, with the

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exception of certain hourly work not at issue in this case.

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Pls.’ Exs. 1-2.)

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12.

The wage statements

(See

Indian River drivers were informed of their

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obligations to comply with federal regulations regarding rest

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breaks and the penalties that would result from failure to

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comply.

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regulations requiring drivers to take a 30-minute, off-duty break

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within 8 hours of coming on duty, to not exceed more than 11

Specifically, drivers were informed of federal

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hours of driving in a 14-hour period, and to be off-duty for at

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least 10 hours after 14 hours of work.

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informed of federal regulations prohibiting working more than 70

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hours in an 8-day period.

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30-day and daily logs (prior to the implementation of electronic

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logs) recording hours driving, hours on-duty but not driving, and

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hours off-duty.

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punishments that Indian River would impose for failure to comply

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with federal regulations.

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Drivers were also

Drivers were also required to maintain

Indian River drivers were warned of the

(See, e.g., Pls.’ Ex. A-10 (Indian

River employee handbook).)

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13.

Defendant did not schedule rest breaks for its

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drivers, as drivers were permitted and encouraged to take rest

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breaks for safety and comfort reasons when they wanted.

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Defendant’s rest break policy was the same for all its drivers,

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and Indian River drivers understood that they were free to take

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breaks as desired.

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14.

Indian River did not discourage its drivers from

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taking rest breaks.

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testimony of Jeffrey Pilon credible to the extent that he claimed

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he was punished four times in connection with taking rest breaks.

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Even assuming Mr. Pilon was punished in connection with his rest

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breaks as he claimed, those isolated episodes do not establish

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that Indian River discouraged any other drivers from taking rest

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breaks, including plaintiffs Shook and Berringer.

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finds the testimony of all other witnesses to be substantially

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credible.

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15.

In that regard, the court does not find the

The court

Indian River drivers were not specifically

informed of California law regarding rest breaks prior to
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September 5, 2016.

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assert any cause of action based on Indian River’s failure to

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inform plaintiffs or its California drivers of California law

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regarding rest breaks.

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allegation to that effect.

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Nor does their Complaint raise any

On September 5, 2014, plaintiffs filed the present

action against Indian River.

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However, plaintiffs’ Complaint does not

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On June 27, 2016, Indian River provided written

notice to the California Department of Industrial Relations of

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its intent to make payments to current and former California

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drivers under California Labor Code § 226.2’s “Safe Harbor”

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provision.

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(See Def.’s Ex. F-1.)
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Indian River modified its compensation and payroll

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system for California drivers on September 5, 2016 in order to

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comply with California law.

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paid per mile from $.41 to $.14 and now compensates its

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California drivers separately for rest periods and other

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nonproductive time at $11.00 per hour.

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compensation structure and payroll system, in order to separately

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track, account for, and pay for productive and nonproductive

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time, was a lengthy process.

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delay in transitioning to this new compensation and payroll

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system was unreasonable, given the substantial changes to

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defendant’s payroll structure that had to be implemented during

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that period of time.

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19.

Indian River reduced the piece-rate

The transition to the new

The court does not find that the

This change in compensation structure was not

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well-taken by Indian River’s California drivers, with

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approximately 20% resigning, leaving Indian River with
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approximately 35 California drivers in 2017.

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Since September 5, 2016, Indian River’s rest-break

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policy specifically informs drivers who live in California of

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their rights to take breaks under California law, and it now

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separately pays for rest breaks.

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On December 15, 2016, pursuant to section 226.2’s

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Safe Harbor provision, Indian River paid its current and former

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California drivers (including plaintiffs) 4% of their gross wages

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from July 1, 2012 to December 31, 2015, which totaled

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approximately $282,000.

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reduce the amount of the Safe Harbor payment based on the

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percentage of time its drivers worked outside of California.

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only drivers who did not receive such payment were drivers for

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which the payments were returned by the U.S. Mail due to lack of

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a current address.

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(Def.’s Ex. F.)

Indian River did not

The

Indian River did not make any payments to its

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drivers for any violations of the California Labor Code’s rest

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break and wage requirements occurring after January 1, 2016.

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Although plaintiffs’ Complaint was filed as a

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class action on behalf of all California drivers, plaintiffs did

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not move for class certification under Federal Rule of Civil

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Procedure 23.

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themselves and other California drivers under PAGA, Cal. Labor

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Code §§ 2698-2699.5, as well as statutory penalties and damages

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in their individual capacity.

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II.

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At trial, plaintiffs sought civil penalties for

Conclusions of Law
A.

Work Performed Outside California
The California Supreme Court has explained that there
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is a presumption against the extraterritorial application of

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California law, under which a court should presume the California

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legislature “did not intend a statute to be operative, with

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respect to occurrences outside the state, unless such intention

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is clearly expressed or reasonably to be inferred from the

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language of the act or from its purpose, subject matter, or

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history.”

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(citation and internal punctuation omitted).

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applies “in full force” to California’s Unfair Competition Law,

Sullivan v. Oracle, 51 Cal. 4th 1191, 1207 (2011)
This presumption

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as “[n]either the language of the UCL nor its legislative history

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provides any basis for concluding the Legislature intended the

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UCL to operate extraterritorially.”

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Id.

California law is unclear as to exactly what a

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California resident must show in order to overcome this

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presumption and invoke the protection of the California Labor

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Code’s rest break and wage requirements extraterritorially.

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Sarviss v. Gen. Dynamics Info. Tech., Inc., 663 F. Supp. 2d 883,

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898-99 (C.D. Cal. 2009) (“There is no ‘clear express[ion]’ of

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extraterritorial application for California wage and hour

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laws.”).

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See

Neither the California Supreme Court nor the Ninth

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Circuit have established a test for determining when the

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provisions of the California Labor Code might apply to work

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performed outside the territorial boundaries of the state.

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courts addressing the question examined factors such as the

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nature of the work being performed, the amount of work being

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performed in California, the residence of the employee, the

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residence of the employer, whether the conduct which gives rise
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Lower

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to liability occurred in California, and the employer’s ties to

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the jurisdiction.

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15-cv-00131-WHO, 2017 WL 66838, *5-7, --- F. Supp. 3d ---- (N.D.

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Cal. Jan. 6, 2017); Bernstein v. Virgin Am., Inc., Case No. 15-v-

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02277-JST, 2017 WL 57307, *7, --- F. Supp. 2d ---- (N.D. Cal.

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Jan. 5, 2017); Ward v. United Airlines, No. C 15-02309, 2016 WL

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3906077, *3-5 (N.D. Cal. July 19, 2016); Sarviss, 663 F. Supp. 2d

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at 900.

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See Oman v. Delta Air Lines, Inc., Case No.

Looking at these factors, the court in Oman v. Delta

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Air Lines, Inc., 2017 WL 66838, at *5-7, held that

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extraterritorial application of certain California Labor Code

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requirements to California-resident flight attendants was not

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permissible where the flight attendants spent 14% or less of

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their time in California, the employer was not based in

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California, and the nature of the work required working in

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multiple other jurisdictions in a given pay period or day.

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Similarly, the court in Ward v. United Airlines, 2016

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WL 3906077, at *3-5, held that the extraterritorial application

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of California wage statement requirements to California-resident

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pilots was impermissible where the pilots spent an average of 12%

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of their total work time in California, notwithstanding the

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issuance of the wage statements in California.

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determination, the court focused on where the employee

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“principally worked,” rejecting plaintiffs’ argument that the

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pilots’ residency was dispositive.1

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In making this

See also Sarviss, 663 F.

The court in Ward, 2016 WL 3906077, at *3-5, did not
distinguish between work performed inside California and work
performed outside California, given its determination that a
certain Labor Code section did not apply at all to employees who
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Supp. 2d at 900 (holding that certain California wage orders did

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not apply to a California resident because he did not principally

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work in California).

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On the other hand, the California Supreme Court has

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observed that in some circumstances the Legislature has

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explicitly extended application of its statutes outside the

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state’s territorial boundaries and may have so intended in other

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instances.

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4th 557, 577-78 (1996) (state employment law explicitly governs

See Tidewater Marine W., Inc. v. Bradshaw, 14 Cal.

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employment outside the state’s territorial boundaries in some

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circumstances, and “[t]he Legislature may have similarly intended

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extraterritorial enforcement of [Industrial Welfare Commission]

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wage orders in limited circumstances, such as when California

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residents working for a California employer travel temporarily

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outside the state during the course of the normal workday but

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return to California at the end of the day.”).

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Specifically, the court noted in Tidewater that

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employees who reside in California, receive pay in California,

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and work exclusively or principally in California are “wage

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earner[s] of California” who presumptively enjoy the protections

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of the state’s IWC regulations.

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79; accord Sullivan, 51 Cal. 4th at 1197-1206 (California

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overtime law applies to all work within its borders, with the

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possible exception of work by non-resident employees who enter

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California temporarily during the course of the workday).

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Tidewater, 14 Cal. 4th at 578-

principally worked outside California. The court assumes,
without deciding, that the California Labor Code’s wage and rest
break provisions apply to work performed by California residents
inside California.
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There is no evidence that plaintiffs in this case

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worked exclusively or principally in California.

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as was presented was to the contrary.

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undisputed evidence that the majority of the drivers’ time

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working was spent outside California.

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overall routes usually began or ended in California, the drivers

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would spend days, weeks, or even months on the road working

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outside of California.

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worked principally outside of California.

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Such evidence

It is apparent from the

While California drivers’

In other words, the California drivers

Courts have also given substantial weight to the fact

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that the employer is based in California or receives subsidies or

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other benefits for its California-related work in determining

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whether its California employees are covered by California laws

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while working outside the state.

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Virgin America, Inc., 2017 WL 57307, at *4-8, the court in the

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Northern District held that extraterritorial application of the

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California Labor Code to California-resident flight attendants

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who spent about 25% of their time in California was permissible

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where the employer was based in California, had its headquarters

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in California, and had received substantial state subsidies to

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train its flight attendants; 88-99% of the employer’s flights

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each day either departed or arrived in a California airport; and

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the wrongful conduct, e.g., the issuance and application of

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compensation policies, emanated from California.

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For example, in Bernstein v.

In the present case, in contrast, defendant was neither

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based nor had its headquarters in California.

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was presented, again, was to the contrary. It appears from the

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undisputed evidence adduced at trial that Indian River was
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Such evidence as

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headquartered in Florida, sent drivers payments from that

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headquarters, and had most of its facilities at that

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headquarters.

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break policies were developed and applied at Indian River’s

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headquarters in Florida and it trained new employees in Florida.

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Indian River’s compensation structure and rest

Plaintiffs talk about the Turlock facility as if it

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were somehow defendant’s headquarters.

The evidence at trial

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could not have been more to the contrary.

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from the evidence about that facility was that it employed only

What the court learned

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two dispatchers, performed only minor maintenance, and had a

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small lounge and space for parking trucks.

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involved the facility, as loading and unloading occurred at the

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customer’s businesses.

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shower facilities for drivers.

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was provided.

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paperwork to Indian River from the Turlock facility, they were

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not required to do so and could submit some, if not all,

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paperwork at commercial truck rest stops across the country.

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Apparently, no routes

The facility had no permanent bathroom or
Only a single outdoor porta potty

Finally, while drivers could submit their

Thus, because plaintiffs did not work exclusively or

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principally in California, and defendant was not based or

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headquartered in California, this case is unlike either Tidewater

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or Bernstein, and the court must look to the other factors

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considered by other courts to determine whether plaintiffs have

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met their burden of overcoming the presumption against

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extraterritorial application of the California laws in this case.

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Plaintiffs did establish that they were residents of

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California, received their wages and wage statements in

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California, and paid their taxes to the State of California.
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What is clear to the court from the case law, however, is that

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the mere residency of the plaintiffs in California is

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insufficient in itself to entitle them to the benefits of the

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California wage and hour provisions while they are working

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outside the state.

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(noting that the focus on situs of employment as opposed to

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residence of the employee is consistent with the decisions of

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California state courts); Ward, 2016 WL 3906077, at *3-5 (same).

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The California drivers’ receipt of wages and wage statements in

See, e.g., Sarviss, 663 F. Supp. 2d at 900

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California is simply a consequence of the drivers’ California

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residency if their wage statements are mailed to their mailing

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addresses in California.

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of California income taxes, which has never been discussed as a

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relevant factor in any authority cited to the court, is also a

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result of the drivers’ California residency.

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Similarly, California drivers’ payment

Beyond showing their California residency, plaintiffs

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have shown very little in their attempt to overcome the

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presumption against extraterritorial application of the

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California laws relating to wages and rest breaks to them while

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working outside of California.

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performed, truck driving, adds nothing to the analysis.

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conduct which gave rise to the alleged liability was Indian

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River’s practice with regard to wages and rest breaks, which can

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best be inferred to have been devised and implemented in Indian

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River’s corporate offices in Florida.

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The nature of the work being
The

Plaintiffs point to evidence that Indian River has

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about 25 customers in California, and the drivers sometimes

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completed paperwork in and/or sent paperwork to Indian River from
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California.

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establish how much business Indian River conducts in California

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or nationally, the court cannot draw any significance from the

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fact of those 25 customers.

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turned in the hard copies of their paperwork at the Turlock

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facility, but the court gathered from the evidence that the

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electronic submission, which they could submit from stations in

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various parts of the country, was the significant transmittal.

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However, because the evidence at trial did not

The drivers may have sometimes

From the evidence adduced at trial, the court concludes

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that the presumption against extraterritorial application of

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California’s wage and rest break laws to Indian River’s

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California drivers’ work outside California is not overcome.

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Thus, California’s wage and rest break laws do not apply to

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Indian River’s drivers’ work performed outside California, and

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Indian River is entitled to judgment on all of plaintiffs’ causes

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of action with respect to work performed outside California.

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B.

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Work Performed in California
Assuming the California Labor Code’s wage and rest

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break provisions apply to work performed in California by Indian

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River’s California drivers,2 plaintiffs have not met their burden

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of establishing when any Labor Code violations occurred or what

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the resulting penalties or damages should be.

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claims, with respect to work performed in California, fail due to

Thus, plaintiffs’

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While the California Supreme Court has specifically
stated that California overtime law applies to all work within
its borders, with the possible exception of work by non-resident
employees who enter California temporarily during the course of
the workday, Sullivan, 51 Cal. 4th at 1197-1206, it has not
addressed whether the California Labor Code’s rest break and wage
requirements apply to all work within its borders.
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lack of sufficient proof.
Prior to trial, the parties were directed to submit

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proposed findings of fact and conclusions of law and a proposed

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form of judgment.

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effort to calculate or even estimate of the number of violations

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or amount of penalties or damages.

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plaintiffs assumed and argued that California law applied to all

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work performed by all California drivers, regardless of the

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location, and assumed that damages and penalties could be

Plaintiffs’ submissions, however, made no

At trial, counsel for

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determined simply by estimating the amounts of time spent on

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various categories of nonproductive work per pay period and

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looking to the number of pay periods worked by each employee.

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However, it appears from the evidence that California

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drivers spent most and sometimes all of their time in a given pay

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period outside of California.

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regarding total nonproductive time in a given pay period and the

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total number of pay periods without reference to where that time

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was spent are of no assistance to the court.

Thus, plaintiffs’ estimates

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It would be reasonable to assume that plaintiffs spent

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some time working in California during the relevant time period.

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But it is not for the court to speculate on how many, if any,

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uncompensated rest breaks or other breaks occurred while they

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were in California.

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by competent evidence, such as the percentage of work, number of

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pay periods, or number of hours performed inside California.

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Plaintiffs made no effort to do so at trial.

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court is unable on its own to reconstruct that information from

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the evidence before it.

It was plaintiffs’ burden to establish that

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Try as it may, the

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At trial, the pay stubs for plaintiffs Shook and

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Berringer were introduced, which show the total miles driven by

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the drivers and the beginning and end points of the routes

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driven.

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determine what how much time plaintiffs spent in California

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during a given pay period.

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be determined through a combination of the drivers’ daily logs

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and pay stubs, mileage charts, and an online map service, the

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testimony and exhibits introduced at trial leave the court

Such information is insufficient to allow the court to

While perhaps such information could

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without any feasible method of calculating the proper penalties

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and damages as to Shook and Berringer, much less all other

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California drivers, for whom pay stubs and daily logs were not

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introduced at trial.

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An examination of the evidence also does not give the

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court the tools necessary to determine defendants’ potential

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liability.

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miles driven by all Indian River drivers in each state in a

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particular quarter.

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allow the court to determine what percentage of time, number of

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pay periods, or number of hours Indian River’s California drivers

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spent working in California overall, much less in any particular

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pay period.

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chart due to its failure to show how much time drivers spent in

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California.

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Defendant introduced charts showing the number of

(See Def.’s Ex. D.)

Such charts do not

Indeed, plaintiff’s counsel himself criticized the

Accordingly, plaintiffs’ claims for violations

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occurring within the state of California fail due to their

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failure to meet their burden of establishing the extent of any

28

violations by Indian River as well as the proper penalties or
17

1

damages for such violations.

2

judgment on all of plaintiffs’ claims with respect to all work

3

performed inside California.

4

C.

Defendants are thus entitled to

Safe Harbor

5

Even assuming the California Labor Code’s provisions

6

applied extraterritorially or that plaintiffs met their burden of

7

proof to establish the extent of any violations and accompanying

8

penalties or damages, the court concludes that California’s Safe

9

Harbor provision in Labor Code § 226.2 bars plaintiffs’ claims.

10

California Labor Code § 226.2(b) provides that if an

11

employer pays its current and former piece-rate employees 4% of

12

their gross wages between July 1, 2012 and December 31, 2015

13

(“the Safe Harbor period”), the employer will have an affirmative

14

defense:

15

20

to any claim or cause of action for recovery of wages,
damages, liquidated damages, statutory penalties, or
civil penalties, including liquidated damages pursuant
to Section 1194.2, statutory penalties pursuant to
Section 203, premium pay pursuant to Section 226.7,
and actual damages or liquidated damages pursuant to
subdivision (e) of Section 226, based solely on the
employer’s failure to timely pay the employee the
compensation due for rest and recovery periods and
other nonproductive time for time periods prior to and
including December 31, 2015.

21

See Fowler Packing Co. v. Lanier, 844 F.3d 809, 811-12 (9th Cir.

22

2016) (discussing section 226.2’s Safe Harbor provision).

16
17
18
19

23

Here, Indian River properly notified the California

24

Department of Industrial Relations of its election to make Safe

25

Harbor payments to its current and former employees on June 27,

26

2016.

27

employees’ gross wages to its current former employees, including

28

plaintiffs, for the period between July 1, 2012 and December 31,

Indian River also paid 4% of its current and former

18

1

2015 complied with California Labor Code § 226(b).

2

defendant has fully complied with California Labor Code §

3

226(b)’s requirements.

4

1.

5

Even where an employer complies with Labor Code §

6

226.2(b)’s notice and payment requirements, the Safe Harbor

7

defense does not apply to claims exempted under certain “carve-

8

outs” provided in section 226.2(g).

9

13.

Thus,

Carve-out

See Fowler, 844 F.3d at 812-

One such carve-out, section 226.2(g)(3), provides that the

10

Safe Harbor defense shall not apply to “[c]laims that employees

11

were not advised of their right to take rest or recovery breaks,

12

that rest and recovery breaks were not made available, or that

13

employees were discouraged or otherwise prevented from taking

14

such breaks.”

15

defendant’s Safe Harbor defense because plaintiffs claimed they

16

were not informed of their right to take rest breaks under

17

California law, were not provided rest breaks, and were

18

discouraged from taking rest breaks.

Here, plaintiffs contend that this carve-out bars

19

However, plaintiffs’ Complaint asserts no claim based

20

on Indian River’s failure to advise California drivers of their

21

right to take rest or recovery breaks under California law.

22

Rather, the Complaint refers to Indian River’s alleged failure to

23

authorize and permit drivers to take rest breaks and failure to

24

separately pay for such breaks, without any mention of a failure

25

to inform drivers of such rights.

26

34-37, 46, 56 (Docket No. 4).)

27

out for claims that an employer failed to inform its employees of

28

their right to take breaks under California law does not apply

(See, e.g., Compl. ¶¶ 4-6, 21,

Thus, section 226.2(g)(3)’s carve

19

1

and does not bar Indian River’s Safe Harbor defense.

2

The court assumes that section 226.2(g)(3)’s carve-out

3

applies to plaintiffs’ claim that Indian River failed to provide

4

rest breaks and prevented or discouraged such breaks.

5

the court finds no credible evidence that Indian River failed to

6

provide rest breaks or sought to discourage or prevent drivers

7

from taking such breaks.

8

credible the testimony of multiple witnesses that drivers were

9

encouraged to take breaks at any time and as frequently as

However,

As discussed above, the court finds

10

necessary and that drivers did so.

The court also finds credible

11

the testimony of multiple witnesses that drivers were not

12

discouraged or prevented from taking breaks.

13

Shook and Berringer did not testify that they were prevented or

14

discouraged from taking breaks.

15

out for claims that claims that rest and recovery breaks were not

16

made available, or that employees were discouraged or otherwise

17

prevented from taking such breaks, does not apply due to lack of

18

sufficient proof and does not bar Indian River’s Safe Harbor

19

defense.

Indeed, plaintiffs

Thus, section 226(g)(3)’s carve-

20

2.

Scope of Safe Harbor

21

Section 226.2’s Safe Harbor provision bars all of

22

plaintiffs’ claims based on conduct during the Safe Harbor

23

period, as the affirmative defense applies broadly to any claim

24

for recovery of wages, damages, statutory penalties, civil

25

penalties, and premium pay, including claims based on the failure

26

to pay drivers for nonproductive time under section 226.2(a)(1);

27

failure to provide a proper itemized wage statement under

28

sections 226(a) and 226.2(a)(2); waiting time penalties under
20

1

section 203; and penalties under PAGA.3

2

entitled to judgment on all of plaintiffs’ claims with respect to

3

all work performed during the Safe Harbor period.

Thus, defendants are

4

3.

Post Safe-Harbor Period

5

Because Indian River changed its compensation policy

6

and wage statements to comply with California law on September 5,

7

2016, any liability could only be based on conduct from January

8

1, 2016 to September 4, 2016.

9

during which there could be violations relating to the non-

Thus there are only 36 pay periods

10

payment of nonproductive time, and to the non-payment of rest-

11

break time, which would include any derivative claims for

12

statutory or civil penalties.

13

employed by Indian River after the Safe Harbor period and thus

14

cannot personally recover penalties or damages for the post-Safe

15

Harbor period.

16

However, plaintiffs were not

Nor can plaintiffs recover on behalf of other employees

17

for the post-Safe Harbor period.

18

were extinguished by their receipt of the Safe Harbor payments

19

and they were not employed after the Safe Harbor period.

20

they are not “aggrieved employees” under PAGA, at least with

21

respect to the post-Safe Harbor period.

22
23
24
25
26
27
28

3

Shook’s and Berringer’s claims

Thus,

See Cal. Labor Code §

The text of Labor Code § 226.2 specifically references
“civil penalties,” i.e., penalties that may be collected only by
the Labor Commissioner or by an aggrieved employee acting as a
private attorney general under PAGA. See Caliber Bodyworks, Inc.
v. Superior Court, 134 Cal. App. 4th 365, 377-78 (2d Dist. 2005).
Moreover, section 226.2(f) specifically provides that one who has
paid back wages through the Safe Harbor will void “[a]ny notice
to the Labor and Workforce Development Agency on or before
December 31, 2015, pursuant to paragraph (1) of subdivision (a)
of Section 2699.3, alleging violations based upon failure to
properly compensate employees for rest and recovery periods.”
21

1

2699(a), (i); Wassink v. Affiliated Comput. Servs., Inc., Case

2

No. 8:11-cv-00554-CJC(MLGx), 2011 WL 130377358, at *3 (C.D. Cal.

3

Dec. 21, 2011) (plaintiff must be an “aggrieved employee” to

4

bring a representative PAGA action); accord Thomas v. Home Depot

5

USA, Inc., 527 F. Supp. 2d 1003, 1009 (N.D. Cal. 2007) (plaintiff

6

could not assert PAGA claim in representative capacity as the

7

statute of limitations had run with respect to his individual

8

PAGA claim).

9

The court accordingly finds that Indian River is

10

entitled to judgment on all of plaintiffs’ causes of action based

11

on Indian River’s Safe Harbor defense.

12

III. Conclusion

13

For all the foregoing reasons, THE COURT HEREBY FINDS

14

in favor of defendants on all claims by all defendants.4

15

side shall bear its own attorneys’ fees.

16

instructed to enter judgment accordingly.

17
18

Each

The Clerk of Court is

IT IS SO ORDERED.
Dated:

February 15, 2017

19
20
21
22
23
24
25
26
27
28

4

Because the court finds in favor of defendant for the
reasons above, the court does not address defendant’s other
arguments raised in its defense.
22