Denton v. G4S Secure Solutions (USA) Inc.

Filing 19

ORDER granting 10 Motion for leave to amend signed by Judge Kimberly J. Mueller on 5/7/15. (Kaminski, H)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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No. 2:14-cv-01697-KJM-CKD

TIMOTHY DENTON,
Plaintiff,

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ORDER

v.

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G4S SECURE SOLUTIONS (USA) INC.,

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Defendant.

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This matter is before the court on plaintiff’s motion for leave to file an amended

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complaint. Pl.’s Mot., ECF No. 10. Defendant opposes the motion as to the proposed fifth and

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sixth claims only, and plaintiff has replied. Opp’n at 11, ECF No. 11; Reply, ECF No. 13. The

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court held a hearing on this matter on February 27, 2015. John Briscoe appeared for plaintiff and

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Alison Hong appeared for defendant. For the following reasons, the court GRANTS plaintiff’s

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motion.

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I.

FACTS AND PROCEDURAL HISTORY
A.

Procedural Background
Plaintiff filed his complaint in Sacramento County Superior Court on August 2,

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2013. Notice of Removal ¶ 3, ECF No. 1. He alleged the following claims: (1) retaliation under

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California Government Code section 12940(h) (Fair Employment and Housing Act, FEHA);

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(2) failure to prevent retaliation under California Government Code section 12940(k) (FEHA);

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(3) violation of California Labor Code section 510 (failure to pay overtime); and (4) violation of

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California Labor Code section 226 (failure to provide accurate wage statements). Id. ¶ 4.

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Defendant filed and served its answer on September 25, 2013 and removed the case to this court

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on October 1, 2013. Id. ¶¶ 6, 7. Plaintiff filed a motion for remand on November 4, 2013, on the

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grounds defendant had not met its burden of establishing an amount in controversy greater than

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the jurisdictional requirement of $75,000. Id. ¶ 8. This court granted the motion and remanded

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the case on January 23, 2014. Id. ¶ 9. After engaging in discovery, defendant ascertained the

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amount in controversy satisfied the jurisdictional requirement and again removed the case on

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July 18, 2014. ECF No. 1.

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Plaintiff’s Department of Fair Employment and Housing (DFEH) complaint, filed

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January 14, 2014, alleges plaintiff was discriminated against, harassed and retaliated against

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based on his race/color and because he engaged in protected activity, which ultimately resulted

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in his termination. Hong Decl., Ex. B, ECF No. 11-1. The California Labor Workforce and

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Development Agency (LWDA) sent a letter, dated April 24, 2013, stating defendant failed to pay

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overtime and failed to issue proper/accurate pay stubs in violation of Labor Code sections 510,

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1198, and 226(a). Id. Plaintiff has not provided any other letter to or from the LWDA that

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addresses any violation of Labor Code sections 1194, 1194.2, 1197, 1197.1, 1198 as pled in

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plaintiff’s proposed fifth claim for failure to pay minimum wage, or any violation of Labor Code

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section 201 or 203 as pled in plaintiff’s proposed sixth claim for failure to pay wages upon

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cessation of employment. Id. at 3.
On December 31, 2014, following a pretrial scheduling conference, this court

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issued a pretrial scheduling order setting a January 12, 2015 deadline for any stipulation or

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motion seeking amendment of the complaint. ECF No. 9. Plaintiff filed his motion for leave to

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file the amended complaint on January 12, 2015. ECF No. 10. With his reply, plaintiff filed a

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revised amended complaint striking all language that would suggest plaintiff seeks Private

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Attorney General Act of 2004 (“PAGA”) civil penalties under the fifth and sixth claims. See

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Cal. Lab. Code § 2698, et seq. He has also stricken his prayer for civil penalties under Labor

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Code section 1197.1. Additionally, to further clarify the fifth cause of action for failure to pay

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minimum wage, he has inserted into paragraph 25 the following language: “[Plaintiff] was thus

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not always paid the minimum wage for all time worked, nor for overtime wages as earned.”

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Reply at 3, ECF No. 13.

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B.

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Facts Alleged in Original Complaint
Plaintiff’s claims arise from his employment by defendant, a Florida corporation.

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Compl., Ex. A, ECF No. 1. Plaintiff was hired as a Transportation Officer by defendant on or

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about February 21, 2011. Id. ¶ 7. He was promoted to Bank Captain on or about December 21,

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2011 and to Area Supervisor on or about June 4, 2012. Id. ¶ 8. Shortly thereafter, plaintiff was

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instructed by employees of the defendant to not record his overtime but told he would instead be

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awarded “comp time” because they were “hiding his wages under the Regional Trust Account.”

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Id. ¶ 9.

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On or about December 19, 2012, defendant’s California and Pacific Regional

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Manager Rod Natale investigated a complaint filed by plaintiff’s co-worker Maurice Bass. Id.

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¶ 10. When Natale asked plaintiff if he had “witnessed anything out of the ordinary” between

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Bass and then-Sacramento Branch Manager Malcom Howe, plaintiff stated he witnessed Howe

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frequently inviting Bass for cigarettes, friction between the two, and inappropriate touching and

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comments by Howe. Id. He stated the conduct made him uncomfortable, that it was wrong, and

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that he would like to help Bass if possible. Id.
Shortly thereafter, plaintiff alleges defendant’s employees began to retaliate

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against plaintiff by excluding him from meetings, shunning him, denying him jobsites, tools

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necessary to do his job, and issuing him verbal and written warnings. Id. ¶¶ 11–13.
On February 5, 2013, Natale returned to the Sacramento branch and again

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questioned plaintiff about Bass. Id. ¶ 14. Plaintiff demurred. Id. On February 8, 2013, plaintiff

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was issued two separate write-ups and was assigned a company vehicle he believed to be unsafe

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and unfit for the road. Id. ¶ 15. He instead used his personal vehicle. Id.
On February 12, 2013, plaintiff filed a complaint with defendant’s Secure Ethics

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and Compliance Hotline. Id. ¶ 16. He complained of his retaliation for participating in an

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investigation of another employee’s sexual harassment claims. Id. On February 25, 2013,

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Natale called plaintiff regarding his complaint, and asked why plaintiff did not go to him with

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the issue. Id. ¶ 17. Since the filing of the complaint and that conversation, plaintiff has

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continued to experience retaliation. Id. ¶ 18. This alleged retaliatory behavior includes

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exclusion from meetings, unfair criticism, and treating plaintiff as a salaried employee although

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he is an hourly worker. Id. ¶¶ 18, 19.

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C.

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Proposed Additional Claims
Since plaintiff filed his original complaint, defendant terminated plaintiff.

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Plaintiff seeks to add additional factual allegations of his retaliation, and claims under the Labor

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Code for retaliation, failure to pay all wages due upon termination, and failure to pay minimum

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wage. Pl.’s Mot. at 5. Defendant claims it first became aware of these additional claims on

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January 12, 2015, the deadline to stipulate to an amended complaint or for plaintiff to seek leave,

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giving defendant little or no time to investigate the new claims. Opp’n at 3; Hong Decl. at 2.

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II.

LEGAL STANDARD

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Federal Rule of Civil Procedure 15(a)(2) states “[t]he court should freely give

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leave [to amend its pleading] when justice so requires” and the Ninth Circuit has “stressed Rule

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15’s policy of favoring amendments.” Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149,

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1160 (9th Cir. 1989). “In exercising its discretion [regarding granting or denying leave to

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amend] ‘a court must be guided by the underlying purpose of Rule 15 -- to facilitate decision on

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the merits rather than on the pleadings or technicalities.’” DCD Programs, Ltd. v. Leighton,

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833 F.2d 183, 186 (9th Cir. 1987) (quoting United States v. Webb, 655 F.2d 977, 979 (9th Cir.

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1981)). However, “the liberality in granting leave to amend is subject to several limitations.

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Leave need not be granted where the amendment of the complaint would cause the opposing

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party undue prejudice, is sought in bad faith, constitutes an exercise in futility, or creates undue

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delay.” Ascon Properties, 866 F.2d at 1160 (internal citations omitted). It is the consideration of

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prejudice to the opposing party that carries the greatest weight. See DCD Programs, 833 F.2d at

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185.

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III.

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ANALYSIS
A.

Undue Delay

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Plaintiff’s motion for leave to file a first amended complaint “is made on the

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grounds that, since the filing of the current, operative pleading, Plaintiff’s employment with

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Defendant was terminated, giving rise to new claims.” Pl.’s Mot. at 1. Plaintiff was terminated

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in December 2013. In the parties’ joint status report, plaintiff anticipated amendment only to

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include an additional claim for retaliation in light of his termination. Am. Joint Case

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Management Statement at 4, ECF No. 4. There is no mention of additional wage-related claims.

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Plaintiff has offered no reason for his delay in seeking to add his sixth claim, failure to pay

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wages upon cessation of employment. In his moving papers, plaintiff does not explain how his

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termination gave rise to the proposed new wage claims, or why they are only now discoverable.

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The facts giving rise to this claim were evident upon termination in December 2013, and plaintiff

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had engaged in discovery in state court prior to removal and the court’s issuance of the

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scheduling order. However, “delay alone no matter how lengthy is an insufficient ground for

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denial of leave to amend.” United States v. Webb, 655 F.2d 977, 980 (9th Cir. 1981).

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B.

Futility
“[A] proposed amendment is futile only if no set of facts can be proved under the

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amendment to the pleadings that would constitute a valid and sufficient claim or defense.”

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Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). In determining whether a

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proposed amendment is futile, the court applies the standard articulated in Federal Rule of Civil

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Procedure 12(b)(6) for determining sufficiency of pleadings. Id.

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a. Administrative Exhaustion
Defendant argues plaintiff’s newly alleged violations of Labor Code sections

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1194, 1194.2, 1197, 1197.1 and 1198, as pled in plaintiff’s proposed fifth claim for failure to pay

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minimum wage, and the alleged violation of Labor Code section 201 or 203 as pled in plaintiff’s

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proposed sixth claim for failure to pay wages upon cessation of employment, do not meet the

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jurisdictional requirements because they were not included in plaintiff’s written notice to the

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LWDA. Opp’n at 2–3. That notice included only the alleged overtime and pay stub violations

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under Labor Code sections 510, 1198, and 226(a), which plaintiff has pled in his original

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complaint in the third and fourth claims. Ex. B, ECF No. 11-1. Plaintiff responds that he does

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not seek PAGA penalties under the newly proposed claims, but seeks only to recover unpaid

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wages and penalties for minimum wage and waiting violations for himself under Labor Code

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section 1194.2 and California Labor Code section 203. Reply at 2.
It is only when an aggrieved employee pursues a civil action under PAGA that he

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must give written notice to the LWDA and the employer of the specific provisions of the

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California Labor Code alleged to have been violated and wait for a notice from the LWDA of its

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intent not to investigate the alleged violations, or if no notice is received, wait 33 calendar days

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after providing notice before commencing a civil action. Cal. Lab. Code § 2699.3. PAGA

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penalties are separate and apart from the actual damages that a plaintiff may recover under other

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Labor Code sections. See Thurman v. Bayshore Transit Management, Inc., 203 Cal. App. 4th

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1112, 1144–48 (2012).
California Labor Code section 1194 provides that “any employee receiving less

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than the legal minimum wage . . . is entitled to recover in a civil action the unpaid balance of the

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full amount of this minimum wage.” See Cal. Lab. Code § 1194. California Labor Code section

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203 provides that “[i]f an employer willfully fails to pay, without abatement or reduction, . . . any

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wages of an employee who is discharged or who quits, the wages of the employee shall continue

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as a penalty from the due date thereof at the same rate until paid or until an action therefor is

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commenced; but the wages shall not continue for more than 30 days.” Cal. Lab. Code § 203(a).

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Upon discharge, the employees’ earned and unpaid wages are due within 72 hours. Cal. Lab.

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Code § 201(a). Plaintiff did not include allegations of violations of these sections of the Labor

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Code in his LWDA letter.
To the extent plaintiff seeks only individual recovery provided for by the Labor

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Code sections he has clarified he relies on, his claims are not barred by administrative

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exhaustion.

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b.

Statute of Limitations

An amendment is futile if the statute of limitations has run. See Deutsch v.

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Turner Corp., 324 F.3d 692, 718 (9th Cir. 2003). As noted, plaintiff has clarified that the prayer

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for PAGA penalties under the fifth and sixth claims was included erroneously in the proposed

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pleading, and he has submitted a corrected pleading with those requests removed. Reply at 1.

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He also has stricken his prayer for civil penalties under Labor Code section 1197.1. Id. Plaintiff

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does seek liquidated damages “in an amount equal to the wages unlawfully unpaid and interest

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thereon” under Labor Code § 1194.2 under his proposed fifth claim.

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Defendant argues plaintiff’s claims for liquidated damages under Labor Code

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section 1194.2, for failure to pay minimum wage, are time barred under California Code of Civil

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Procedure section 338(a). That section provides that an action upon a liability created by statute,

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other than a penalty or forfeiture, has a three year statute of limitation, but a statute imposing a

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penalty or forfeiture has a one year statute of limitations. Cal. Civ. Proc. Code § 338(a); see

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also Sarkisov v. StoneMor Partners, L.P., 2014 WL 1340762, at *2 (N.D. Cal. Apr. 3, 2014)

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(two potentially applicable statutes of limitations—one year for penalties, and three years for

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damages) Claims for liquidated damages under § 1194.2 seek “in effect a penalty,” Martinez v.

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Combs, 49 Cal. 4th 35, 48, 109, n.8 (2010), and are therefore subject to the one-year statute of

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limitations. If defendant is correct that the one year statute of limitations applies, Opp’n at 6,

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plaintiff must have brought his claim under Labor Code section 1194.2 within one year of his

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termination on December 20, 2013, by December 20, 2014. Id.

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The Federal Rules of Civil Procedure provide in pertinent part that a new claim

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asserted in an amended pleading relates back to the date of the original pleading when the new

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claim “arose out of the conduct, transaction, or occurrence set out-or attempted to be set out-in

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the original pleading.” Fed. R. Civ. P. 15(c)(1)(B). The court considers sua sponte whether the

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claim here relates back. Garland v. Lewis, No. CV 10-9010, 2013 WL 4198278, at *2 (C.D. Cal.

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Aug. 12, 2013), aff'd, 585 F. App’x 392 (9th Cir. 2014). To determine whether a claim relates

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back, the court “compares the original complaint with the amended complaint and decides

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whether the claim to be added will likely be proved by the ‘same kind of evidence’ offered in

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support of the original pleading.” Percy v. San Francisco Gen. Hosp., 841 F.2d 975, 978

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(9th Cir. 1988). Relation back is “liberally applied especially if no disadvantage will accrue to

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the opposing party.” Rural Fire Protection Co. v. Hepp, 366 F.2d 355, 362 (9th Cir.1966). “It is

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the ‘conduct, transaction, or occurrence’ test of Rule 15(c) which assures that the relation back

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doctrine does not deprive the defendant of the protections of the statute of limitations.” Santana

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v. Holiday Inns, Inc., 686 F.2d 736, 739 (9th Cir.1982).

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Plaintiff’s claim for liquidated damages arises from defendant’s alleged failure to

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pay plaintiff minimum wage. This wage claim is related to and will require similar evidence, in

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the form of time records and wage statements, as plaintiff’s original fourth claim for failure to

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provide accurate wage statements. “So long as a party is notified of litigation concerning a

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particular transaction or occurrence, that party has been given all the notice that Rule 15(c)

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requires.” ASARCO, LLC v. Union Pac. R. Co., 765 F.3d 999, 1006 (9th Cir. 2014). Here,

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defendant has been on notice of plaintiff’s allegations of improper wage practices; it is therefore

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not prejudiced by application of the relation back doctrine. See Ramirez v. Ghilotti Bros. Inc.,

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941 F. Supp. 2d 1197, 1209 (N.D. Cal. 2013) (allowing relation back so plaintiff could amend to

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include a claim for waiting time penalties, because the penalties related to his existing claims for

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unpaid work); see also DeLodder v. Aerotek, Inc., No. CV–08–6044, 2009 WL 1684409, at *5

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(C.D. Cal. June 15, 2009) (same).

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Plaintiff’s request for liquidated damages is timely. Amendment to include this
claim will not be futile.

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C.

Bad Faith
Defendant argues the court may infer bad faith because “plaintiff never mentioned

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any claim for unpaid minimum wages whether in his original complaint, during discovery in

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state court, or during any meet and confer efforts prior to the pretrial scheduling conference, nor

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at the pretrial scheduling conference.” Opp’n at 8–9. Indeed, the joint status report does not

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include any indication plaintiff planned to amend to include additional wage-based claims. Am.

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Joint Case Management Statement at 4. In his moving papers, plaintiff does not suggest any

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newly discovered facts giving rise to proposed claims five and six, or why they could not have

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been pled before. Moreover, plaintiff had an opportunity to conduct discovery in state court, and

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does not allege that discovery revealed these claims. Defendant posits plaintiff intentionally

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neglected to assert these claims in an effort to prevent defendant from meeting the amount in

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controversy necessary for removal. Plaintiff concedes the new wage-based claims are based on

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facts available to him since his termination in December 2013. This factor weighs against

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plaintiff.

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D.

Prejudice
As noted, prejudice to the nonmoving party is the most significant factor in the

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court’s analysis. Defendant argues it will be prejudiced by the new claims because the “amount

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of discovery that Defendant can now conduct will be reduced by the amount of discovery

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conducted in state court, while at the same time, Plaintiff now adds additional claims which will

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require further discovery.” Opp’n at 10. Plaintiff, in his reply, asserts he will not oppose any

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motion to reopen or allow for more extensive discovery. Reply at 2. Plaintiff’s position

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ameliorates the potential prejudice to defendant. There are no pending dispositive motions, and

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discovery remains open until September 2015. This factor weighs against defendant.

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On balance, the applicable factors weigh in favor of granting plaintiff leave to

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amend, subject to the limitations above.

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IV.

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CONCLUSION
The motion for leave to amend is GRANTED. Plaintiff shall file an amended

complaint consistent with this order within fourteen days.
IT IS SO ORDERED.
DATED: May 7, 2015.

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UNITED STATES DISTRICT JUDGE

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