Garnett v. ADT LLC

Filing 33

MEMORANDUM AND ORDER RE: CROSS-MOTIONS FOR SUMMARY JUDGMENT signed by Senior Judge William B. Shubb on 10/6/2015 GRANTING 18 Plaintiff's Motion for Summary Judgment, and DENYING 21 Defendant's Motion for Summary Judgment on plaintiffs itemized wage statement claim. (Kirksey Smith, K)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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SHIRLEY GARNETT, on behalf of
herself and all others
similarly situated,
Plaintiff,

CIV. NO. 2:14-02851 WBS DAD
MEMORANDUM AND ORDER RE: CROSSMOTIONS FOR SUMMARY JUDGMENT

v.
ADT LLC, and Does 1 through
50, inclusive,
Defendants.

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Plaintiff Shirley Garnett brought this putative class

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action against defendant ADT LLC, asserting claims arising out of

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the alleged failure to reimburse her and others for work-related

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expenses and failure to provide accurate wage statements required

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by California law.

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County Superior Court under the Class Action Fairness Act of

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2005.

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Civil Procedure 56, plaintiff and defendant both move for summary

Defendant removed the action from San Joaquin

28 U.S.C. §§ 1332(d), 1446.

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Pursuant to Federal Rule of

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judgment on plaintiff’s wage statement claim.

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I.

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Factual and Procedural History
Plaintiff worked for defendant for two years, from July

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10, 2012 through July 24, 2014, as a commission sales

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representative.

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Plaintiff earned commissions based on the alarm systems and

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services she sold to homeowners.

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training wage for her first sixteen weeks of employment and,

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after that, was paid solely on commission.

(Garnett Decl. ¶ 2 (Docket No. 18-3).)

(Id.)

Plaintiff received a

(Id.)

Each week,

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plaintiff received a commission statement from defendant

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describing her sales for that week.

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C, example sales production and commission statement.)

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would then pay plaintiff for her commissions via check and issue

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a wage statement.

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statement.)

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of hours plaintiff worked.

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(Id. ¶ 4; see also id. Ex.
Defendant

(Id. ¶ 4; see also id. Ex. D, example earnings

The wage statements did not include the total number
(Id. ¶ 5.)

In her First Amended Complaint (“FAC”), plaintiff

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brings claims for: (1) failure to adequately reimburse plaintiff

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and other employees for expenses incurred from use of their

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personal vehicles in the course of performing their jobs, Cal.

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Labor Code § 2802; (2) unlawful business practices, Cal. Bus. &

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Prof. Code § 17200; and (3) violations of the Private Attorney

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General Act (“PAGA”), Cal. Labor Code § 2699 et seq.

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29 (Docket No. 1).)

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failure to provide accurate itemized wage statements, Cal. Labor

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Code § 226, and a failure to reimburse for work-related expenses,

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Cal. Labor Code § 2802.

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(FAC ¶¶ 18-

Both claims (2) and (3) are premised on a

Plaintiff seeks restitution and equitable relief under
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her second claim.

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statutory penalties under California Labor Code section 226,

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which governs the furnishing of accurate wage statements to

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employees, and civil penalties under PAGA.

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Plaintiff seeks penalties for the 34 wage statements that fall

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within section 226’s one year statute of limitations.

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Decl. ¶¶ 8, 10 (Docket No. 26-1).)

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(FAC ¶ 26.)

In addition, plaintiff seeks both

(Id. ¶ 28.)

(Workman

Plaintiff alleges in her FAC that she “gave written
notice by certified mail to the California Labor and Workforce

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Development Agency and Defendant ADT, LLC, of Labor Code

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violations as prescribed by California Labor Code section

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2699.3.”

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Labor and Workforce Development Agency (“LWDA”) on October 1,

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2014, (id.; Ahearn Decl. Ex. 12), a notice of cure on November 3,

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2014, (FAC ¶ 29), and a supplementary notice of violations on May

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18, 2015, (id.; Ahearn Decl. Ex. 13).

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written notification from the LWDA that it intended to

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investigate plaintiff’s allegations.

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¶ 11.)

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II.

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(FAC ¶ 29.)

She sent a notice of violation to the

Plaintiff did not receive

(FAC ¶ 29; Workman Decl.

Evidentiary Objections
On a motion for summary judgment, “[a] party may object

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that the material cited to support or dispute a fact cannot be

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presented in a form that would be admissible in evidence.”

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R. Civ. P. 56(c)(2).

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does not necessarily have to produce evidence in a form that

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would be admissible at trial, as long as the party satisfies the

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requirements of Federal Rules of Civil Procedure 56.”

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Goodale, 342 F.3d 1032, 1036–37 (9th Cir. 2003) (quoting Block v.

Fed.

“[T]o survive summary judgment, a party

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Fraser v.

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City of Los Angeles, 253 F.3d 410, 418–19 (9th Cir.2001))

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(internal quotation marks omitted).

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party’s evidence is presented in a form that is currently

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inadmissible, such evidence may be evaluated on a motion for

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summary judgment so long as the moving party’s objections could

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be cured at trial.

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433 F. Supp. 2d 1110, 1119–20 (E.D.Cal.2006).

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Even if the non-moving

See Burch v. Regents of the Univ. of Cal.,

Defendant raises six evidentiary objections, objecting

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to portions of two declarations submitted by plaintiff on grounds

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of relevance, lack of foundation and personal knowledge, hearsay,

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improper legal opinion or conclusion, and contradiction of prior

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sworn testimony.

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(Def.’s Obj.’s (Docket No. 31-1).)

Objections to evidence on the ground that the evidence

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is irrelevant, speculative, or constitutes an improper legal

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conclusion are all duplicative of the summary judgment standard

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itself.

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grant summary judgment only when there is no genuine dispute of

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material fact.

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relevance objections are redundant.

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parties should argue that certain facts are not material.

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Similarly, statements based on speculation, improper legal

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conclusions, or personal knowledge are not facts and can only be

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considered as arguments, not as facts, on a motion for summary

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judgment.

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evidence, lawyers should challenge its sufficiency.

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on any of these grounds are superfluous, and the court will

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overrule them.

See Burch, 433 F. Supp. 2d at 1119–20.

A court can

It cannot rely on irrelevant facts, and thus
Instead of objecting,

Instead of challenging the admissibility of this

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Objections

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The court declines to rule on the admissibility of

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Exhibits F and G to Robin Workman’s declaration or paragraph 11

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of the declaration because it found it unnecessary to rely on

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this evidence.1

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to paragraph 10 of Workman’s declaration as it is confident that

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plaintiff is capable of presenting this evidence in an acceptable

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form at trial and defendant’s objection will be cured.

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The court overrules defendant’s third objection

Defendant’s objections to plaintiff’s deposition
testimony about whether she received hard copies of her wage

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statements are overruled as moot.

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judgment concerns only defendant’s failure to include total hours

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worked on plaintiff’s wage statements, not whether hard copies of

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the wage statements were provided.

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testimony about how and when she received wage statements is

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irrelevant to this Order.

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are overruled.

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III. Discussion

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This motion for summary

As a result, plaintiff’s

Accordingly, defendant’s objections

Summary judgment is proper “if the movant shows that

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there is no genuine dispute as to any material fact and the

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movant is entitled to judgment as a matter of law.”

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P. 56(a).

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of the suit, and a genuine issue is one that could permit a

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reasonable jury to enter a verdict in the non-moving party’s

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favor.

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Fed. R. Civ.

A material fact is one that could affect the outcome

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

There was no need for the court to rely on the payroll
registers or earning statements attached to Workman’s declaration
given that plaintiff attached an example commission and earning
statement to her own declaration. (See Garnett Decl. Ex.’s C,
D.) Moreover, the fact that defendant failed to provide total
hours worked on plaintiff’s wage statements is undisputed.
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(1986).

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burden of establishing the absence of a genuine issue of material

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fact and can satisfy this burden by presenting evidence that

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negates an essential element of the non-moving party’s case.

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Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

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Alternatively, the moving party can demonstrate that the non-

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moving party cannot produce evidence to support an essential

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element upon which it will bear the burden of proof at trial.

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Id.

The party moving for summary judgment bears the initial

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Once the moving party meets its initial burden, the

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burden shifts to the non-moving party to “designate ‘specific

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facts showing that there is a genuine issue for trial.’”

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324 (quoting then-Fed. R. Civ. P. 56(e)).

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the non-moving party must “do more than simply show that there is

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some metaphysical doubt as to the material facts.”

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Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

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“The mere existence of a scintilla of evidence . . . will be

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insufficient; there must be evidence on which the jury could

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reasonably find for the [non-moving party].”

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at 252.

Id. at

To carry this burden,

Matsushita

Anderson, 477 U.S.

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In deciding a summary judgment motion, the court must

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view the evidence in the light most favorable to the non-moving

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party and draw all justifiable inferences in its favor.

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255.

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and the drawing of legitimate inferences from the facts are jury

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functions, not those of a judge . . . ruling on a motion for

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summary judgment . . . .”

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judgment, the court “must review the evidence submitted in

Id. at

“Credibility determinations, the weighing of the evidence,

Id.

On cross-motions for summary

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support of each cross-motion [in a light most favorable to the

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non-moving party] and consider each party’s motions on their own

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merits.” Corbis Corp. v. Amazon.com, Inc., 351 F. Supp. 2d 1090,

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1097 (W.D. Wash. 2004).

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Both plaintiff and defendant move for summary judgment

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with respect to plaintiff’s claim that defendant violated

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California Labor Code section 226(a) by failing to report hours

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worked on plaintiff’s wage statements.

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A. Notice and Exhaustion Requirements under PAGA

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Under the California Labor Code, employers may be

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subject to liability for violations of the law in three ways.

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First, certain labor code provisions allow an individual to bring

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a private action for unpaid wages and statutory penalties.

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e.g., Cal. Labor Code § 203 (providing for statutory penalty for

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failure to pay wages due to an employee who quits or is

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discharged); see also Caliber Bodyworks, Inc. v. Superior Court,

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134 Cal. App. 4th 365, 377-78 (2d Dist. 2005).

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departments may also assess and collect civil penalties for

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violations of specified provisions of the Labor Code.

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Cal. Labor Code § 210; Caliber Bodyworks, 134 Cal. App. 4th at

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370.

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against an employer for violations of specific provisions of the

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Labor Code and recover civil penalties.

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§ 2699(a); Thomas v. Home Depot USA Inc., 527 F. Supp. 2d 1003,

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1006 (N.D. Cal. 2007).

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See,

The LWDA and its

See, e.g.,

Finally, under PAGA, individuals may bring a private action

See Cal. Labor Code

Plaintiff seeks civil penalties under PAGA, Cal. Labor

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Code § 2699(f)(2), as well as statutory penalties under

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California Labor Code section 226(a).
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Subsection 2699(f)(2)

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provides a civil penalty for “all provisions of this code except

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those for which a civil penalty is specifically provided.”

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aggrieved employee who brings a PAGA claim seeking such penalties

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must comply with certain pre-filing notice and exhaustion

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requirements set forth in California Labor Code section 2699.3.

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See Caliber Bodyworks, 134 Cal. App. 4th at 381.

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must also plead compliance with those requirements.

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An

The individual
Id. at 382.

The administrative requirements are laid out in
subdivision (a) of California Labor Code section 2699.3: the

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aggrieved employee must “give written notice by certified mail to

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the Labor and Workforce Development Agency and the employer of

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the specific provisions of this code alleged to have been

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violated, including the facts and theories to support the alleged

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violation.”

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civil suit containing a PAGA claim if: (1) she receives written

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notice from the LWDA within thirty days that the agency does not

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intend to investigate the alleged violation, or (2) thirty-three

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days pass from the date the employee provided notice to the LWDA

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and the LWDA does not respond.

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requirements of subdivision (a) must be met where a plaintiff

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alleges a violation of any Labor Code provision listed in Labor

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Code section 2699.5.

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violation of section 226(a), one of the provisions listed in

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section 2699.5.

Id. § 2699.3(a)(1).

The employee may then bring a

Id. § 2699.3(a)(2).

Id. § 2699.3(a).

The

Plaintiff alleges a

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Although Labor Code section 2699.3(a) provides that “a

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civil action by an aggrieved employee . . . alleging a violation

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of any provision listed in Section 2699.5 shall commence only

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after” exhausting pre-filing notice and exhaustion requirements,
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Caliber Bodyworks recognized that a plaintiff’s failure to

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provide notice to the LWDA prior to commencing suit need not be

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fatal to the plaintiff’s PAGA claim if the plaintiff subsequently

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satisfies the notice and exhaustion requirements and amends the

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complaint accordingly.

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at 383 n.18 (“[P]laintiffs certainly may follow the

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administrative procedures in section 2699.3, subdivision (a),

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and, should the LWDA choose not to investigate or cite Caliber

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based on the alleged violations, then request leave to amend the

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See Caliber Bodyworks, 134 Cal. App. 4th

first amended complaint to seek civil penalties.”).

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Federal courts applying PAGA have also excused strict

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compliance with section 2699.3’s notice and exhaustion

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requirements and have considered a PAGA claim despite delayed

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notice to the LDWA.

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plaintiff initially pled a PAGA claim in her FAC but failed to

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send notice to the LWDA until almost six months later.

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08-5198 EMC, 2010 WL 56179, at *1-2 (N.D. Cal. Jan. 5, 2010).

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Although the court ultimately denied the plaintiff’s request for

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leave to amend her complaint because the PAGA claim was time

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barred, the court found that the delayed notice to the LWDA was

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not dispositive.

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“obvious purpose of the notice to the LWDA is to give the agency

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a timely opportunity to investigate the alleged violation.”

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“The bottom line is that [the employee] has now sent a PAGA

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notice and furthermore has received a response from the state

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agency.

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existing PAGA claim earlier based on the failure to exhaust, that

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problem has now, in essence, been cured.”

In Harris v. Vector Marketing Corp., the

Id. at *2.

Civ. No.

The court explained that the

Id.

While [the employer] could have moved to dismiss the

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Id.

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Similarly, in Hoang v. Vinh Phat Supermarket, Inc.,

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this court denied defendant’s motion to dismiss with regard to

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plaintiffs’ PAGA claim even though plaintiffs did not send

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written notice of their PAGA claims to LWDA until a week after

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filing their original complaint.

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2013 WL 4095042, *8 (E.D. Cal. May 13, 2015).

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letter of notice to LWDA, plaintiffs filed first and second

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amended complaints.

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is no indication that plaintiffs’ notice--sent so soon after the

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original Complaint was filed--precluded the LWDA from performing

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its administrative function.

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had been well over thirty-three days since they provided notice

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to the LWDA.”

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plaintiffs had cured the defects in complying with section

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2699.3’s notice requirements.

Id. at *1.

Id. at *7.

Civ. No. 2:13-00724 WBS DAD,
Following their

This court explained that “there

When plaintiffs filed the FAC, it

As a result, the court held that

Id. at *8.

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In Cardenas v. Mclane FoodServices, Inc., the court

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found that the plaintiffs exhausted the administrative notice

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requirements on their PAGA claims even though the notice letter

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named thirty-seven specific plaintiffs but in the FAC they

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asserted PAGA claims “on behalf of all ‘aggrieved employees.’”

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796 F. Supp. 2d 1246, 1259 (C.D. Cal. 2011).

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that the plaintiffs provided “reasonably detail[ed] facts and

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theories” that put LWDA on notice.

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to plaintiffs’ letter indicating that it would not investigate

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and this decision would not have been impacted by the “addition

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of a few plaintiffs.”

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require employees who supply specific information in a notice-

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providing letter to an agency to then draft new letters each time

Id. at 1260.

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The court found

Id. at 1261.

LWDA responded

The court explained that “to

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they learned of future plaintiffs or additional facts would place

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an enormous obstacle to pursuing PAGA claims and would require

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employees to conduct what would amount to discovery prior to even

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requesting an investigation.”

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Id. at 1261-62.

Plaintiff sent her first notice letter to LWDA on

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October 1, 2014 and, rather than waiting the required thirty-

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three days, she filed her original Complaint the same day.

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(Compl. (Docket No. 18-2).)

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defendant violated both California Labor Code sections 2802 and

In the letter, she alleged that

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226.

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theories” were that defendant had failed to reimburse employees

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for work-related expenses and failed to provide employees with

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hard copies of their wage statements.

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described plaintiff’s PAGA claims under California Labor Code

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sections 2699(f) and 2699.5.

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specifically mention defendant’s failure to include total hours

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worked on her wage statements.

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(Ahearn Decl. Ex. 12.)

However, her only “facts and

(Id.)

The notice letter also

Plaintiff did not

(Id.)

Thirty-three days later, on November 3, 2014, plaintiff

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filed her FAC.

(FAC.)

Thus, as in Hoang, plaintiff cured the

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administrative default by waiting the appropriate amount of time

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from her notice letter before filing her amended complaint.

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her FAC, plaintiff alleged that defendant failed to provide

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plaintiff “with accurate wage statements as required by the Labor

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Code . . . because, among other things, [d]efendant did not

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provide hard copies of the statements.”

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FAC suggests there are other grounds for a wage statement

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violation, aside from the hard copy issue, plaintiff again failed

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to specifically identify her claim regarding the failure to
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(FAC ¶ 6.)

In

While the

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include total hours worked.

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On May 18, 2015, six-and-a-half months after filing her

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FAC, plaintiff sent a supplemental notice letter to LWDA.

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(Ahearn Decl. Ex. 13.)

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the specific labor code provisions alleged to have been violated

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and of plaintiff’s allegation that defendant violated California

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Labor Code section 226 by failing to “list hours worked on the

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wage statements.”

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plaintiff’s notice letters.

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This letter clearly notified LWDA both of

(Id.)

The LWDA did not respond to any of
(Workman Decl. ¶ 11 (Docket No. 26-

1).)
As in Harris and Hoang, plaintiff’s notice did not

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preclude LWDA from performing its administrative function.

The

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purpose of the pre-filing notice requirements is to provide LWDA

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with the opportunity to investigate the alleged violations.

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Plaintiff put LWDA on notice of the alleged violations of Labor

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Code section 226(a) prior to filing her FAC, even if she referred

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only to the failure to provide hard copies of the wage statements

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and not the failure to list hours worked.

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supplemental notice letter filed six-and-a-half months after her

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FAC (the same amount of time as in Harris), more specifically put

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LWDA on notice of the claim regarding hours worked.

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LWDA had enough information on which to base an investigation,

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had it desired to pursue one.

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responsibility to plead compliance with the requirements of PAGA

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in her complaint.

Moreover, her

Presumably,

Lastly, plaintiff satisfied her

(FAC ¶ 29.)

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Accordingly, the court finds that plaintiff cured the

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defects in her conformance with section 2699.3’s administrative

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requirements.
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B. California Labor Code Section 226(a)’s Itemized Wage
Statement Requirements
Under California Labor Code section 226(a), every

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employer has an obligation “semimonthly or at the time of each

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payment of wages” to provide employees with “an accurate itemized

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statement in writing showing” nine critical payroll elements.

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This includes the furnishing of “total hours worked by the

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employee, except for any employee whose compensation is solely

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based on a salary and who is exempt from payment of overtime

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under subdivision (a) of Section 515 or any applicable order of

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the Industrial Welfare Commission.”

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Section 226 does not apply to governmental entities, id. §

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226(i), or to certain employees employed by the owner or occupant

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of a residential dwelling, id. § 226(d).

Cal. Labor Code § 226(a)(2).

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If an employee suffers injury “as a result of a knowing

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and intentional failure by an employer to comply with subdivision

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(a),” the employee is “entitled to recover the greater of all

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damages or fifty dollars ($50) for the initial pay period in

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which a violation occurs and one hundred dollars ($100) per

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employee for each violation in a subsequent pay period, not to

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exceed an aggregate penalty of four thousand dollars ($4,000),

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and is entitled to costs and reasonable attorney’s fees.”

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§ 226(e)(1).

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Id.

1. The Outside Salesperson Exemption and Industrial

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Welfare Commission Wage Order 4-2001

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Defendant contends it was not required to provide the

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total hours worked on plaintiff’s wage statements because

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plaintiff was an exempt “outside salesperson,” as defined by
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Industrial Welfare Commission (“IWC”) Wage Order 4-2001.
Mem. at 3 (Docket No. 21-1); Perlman Dep. at 159:8-9.)

(Def.’s
This is a

question of law that is appropriate for decision on summary
judgment.
“The IWC is the state agency empowered to formulate
regulations (known as wage orders) governing minimum wages,
maximum hours, and overtime pay in the State of California.”
Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 795 (1999).

“The

Legislature defunded the IWC in 2004, however its wage orders
remain in effect.”

Murphy v. Kenneth Cole Prods., Inc., 40 Cal.

4th 1094, 1102 n.4 (2007).

IWC wage orders are given

“extraordinary deference, both in upholding their validity and
enforcing their specific terms.”
35, 61 (2010).

Martinez v. Combs, 49 Cal. 4th

“To the extent a wage order and a statute

overlap, [courts] will seek to harmonize them, as . . . with any
two statutes.”

Brinker Rest. Corp. v. Superior Court, 53 Cal.

4th 1004, 1027 (2012).

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Defendant points to Wage Order 4-2001 (“Wage Order”) as

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evidence that plaintiff was exempt from section 226(a)’s itemized

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wage statement requirements.

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professional, technical, clerical, mechanical, and other similar

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occupations but has a clear exemption for outside salespersons.

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Cal. Code Regs. tit. 8, § 11040(1)(C) (“The provisions of this

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order shall not apply to outside salespersons.”).

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exempt employees, subsection 7 of the Wage Order provides record

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requirements similar to those of California Labor Code section

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226(a): it requires that employers “keep accurate information

Wage Order 4-2001 applies to

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For all non-

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with respect to each employee including . . . [t]ime records
showing when the employee begins and ends each work period. . . .
[m]eal periods, split shift intervals, and total daily hours
worked.”

Id. § 11040(7)(A)(3).

In addition, “[t]otal hours

worked in the payroll period . . . shall be made readily
available to the employee upon reasonable request.”
§ 11040(7)(A)(5).

Id.

The defendant argues that because outside

salespersons are exempt from the Wage Order’s record requirements
they must also be exempt from the itemized wage statement
requirements of California Labor Code section 226(a)(2).

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12

In determining whether an exemption applies, “the

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statutory provisions are to be liberally construed with an eye to

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promoting [the] protection” and “benefit of employees.”

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20 Cal. 4th at 794.

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statutory . . . provisions are narrowly construed.”

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assertion of an exemption . . . is considered to be an

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affirmative defense, and therefore the employer bears the burden

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of proving the employee’s exemption.”

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Ramirez,

“Thus, under California law, exemptions from
Id.

“[T]he

Id. at 794-95.

The only two cases defendant relies on in support of

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its allegation that outside salespersons are exempt from section

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226(a)(2) are Barnick v. Wyeth, 522 F. Supp. 2d 1257, 1261 (C.D.

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Cal. 2007) and Dailey v. Just Energy Marketing Corp., Civ. No.

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14-02012 HSG, 2015 WL 4498430, at *5 (N.D. Cal. July 23, 2015).

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In Barnick, the court granted the defendant’s motion for summary

26

judgment with respect to the plaintiff’s overtime, meal and rest

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break, and unfair competition claims because the plaintiff--a

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pharmaceutical representative on the defendant’s sales staff--was
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found to be an exempt outside salesperson under IWC Wage Order 4-

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2001.

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Barnick had conceded that his wage statement claim was barred by

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the statute of limitations prior to moving for summary judgment.

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Id.

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outside salesperson exception to overtime wages but provides no

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guidance on the applicability of the exception to the itemized

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wage statement requirements.

522 F. Supp. 2d at 1264, 1261.

However, the plaintiff in

As a result, this case is persuasive with respect to the

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Moreover, overtime wages are addressed in Part 4,

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Chapter 1 of the Labor Code, which opens by stating that the

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“provisions of this chapter . . . shall not include any

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individual employed as an outside salesman.”

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§ 1171.

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requirements are located in Part 1, Chapter 1, which does not

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have a parallel exception for outside salespersons.

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Labor Code § 200.

17

Cal. Labor Code

In contrast, section 226(a)’s itemized wage statement

See Cal.

Dailey is the only case defendant cites that grants

18

summary judgment with respect to an itemized wage statement claim

19

due to the outside salesperson exemption.

20

*5.

21

section 226(a)(2) for employees that are paid solely on salary

22

and exempt from overtime.

23

outside salesperson exception in California Labor Code section

24

1171, which pertains to overtime, and Wage Order 4-2001.

25

*2.

26

break, overtime, minimum wage, and wage statement claims and

27

concluded that outside salespersons are exempt from all

28

California Labor Code protections.

2015 WL 4498430, at

Dailey failed to address the very limited exception in

Instead, the court looked to the

Id. at

The court lumped together the plaintiff’s meal and rest

16

Id.

To the extent that

1

Dailey can be read to say the outside salesperson exemption

2

applies to section 226(a)(2), this court disagrees.

3

In addition to offering little support from case law,

4

defendant fails to acknowledge the recent amendments to section

5

226(a)(2) that expanded, rather than restricted, the scope of the

6

total hours worked requirement.

7

required employers to provide the total hours worked only to

8

employees paid by the hour.

9

2509, Introduced Bill Text, Feb. 24, 2000 (Docket No. 26-3).)

Previously, section 226(a)(2)

(Locker Decl. Ex. A, Bill Number: AB

10

However, in 2000, Assembly Bill 2509 amended subsection 226(a) by

11

striking the language about employees “whose compensation is

12

based on an hourly wage” and making the requirement applicable to

13

“the employee, except for any employee whose compensation is

14

solely based on a salary and who is exempt from payment of

15

overtime.”

16

of the requirement and explicitly included an exception for

17

salaried workers exempt from overtime but not for outside

18

salespersons paid by commission.

19

reporting total hours worked for employees paid solely by

20

commission is not entirely clear, (see Rupp Decl. ¶¶ 11-12

21

(Docket No. 21-5); Def.’s Req. for J. Notice Ex. 4 (Docket No.

22

21-3)), it is nonetheless required by Labor Code section 226(a),

23

(see Locker Decl. ¶ 17).

24

(Id.)

The amendment purposefully expanded the scope

While the usefulness of

In light of the clear statutory language and

25

legislative history of section 226(a) and the principle of

26

interpreting statutes with an eye towards protecting employees,

27

the court finds that plaintiff was not exempt from the itemized

28

wage statement requirements of California Labor Code section
17

1

226(a)(2).

2

salesperson2, Wage Order 4-2001 does not provide an additional

3

exception, not enumerated in the statute, to California Labor

4

Code section 226(a)(2).

5

2. Injury

6

While plaintiff likely qualifies as an outside

If plaintiff is not exempt from California Labor Code

7

section 226(a)(2), defendant contends that plaintiff’s motion for

8

summary judgment still should be denied and defendant’s granted

9

because plaintiff failed to establish the elements for a section

10

226 violation.

“A claim for damages under Section 226(e)

11

requires a showing of three elements: (1) a violation of Section

12

226(a); (2) that is “knowing and intentional”; and (3) a

13

resulting injury.”

14

1116, 1130-31 (N.D. Cal. 2014).

Willner v. Manpower Inc., 35 F. Supp. 3d

15

An employee “is deemed to suffer injury . . . if the

16

employer fails to provide accurate and complete information as

17

required by . . . subdivision (a) and the employee cannot

18

promptly and easily determine from the wage statement alone” the

19

information required to be provided pursuant to section 226(a).

20

Id. § 226(e)(2)(B).

Promptly and easily “means a reasonable

21
22
23
24
25
26
27
28

2

Determining whether an employee is an exempt outside
salesperson is “a mixed question of law and fact.” Ramirez, 20
Cal. 4th at 794. “In classifying workers under the exemption,
the Court must apply a ‘quantitative’ approach that looks at
whether the employee spends more than fifty percent of his time
engaged in sales activities.” Barnick, 522 F. Supp. 2d at 1261.
It is clear that plaintiff spent more than fifty percent of her
time engaged in sales activity--her sole responsibility was
selling ADT products and services. (Garnett Dep. at 59:13-25,
60:1-5, 62:21-24.) In addition, she spent most of her time away
from the employer’s place of business, driving to potential
customers’ residences. (See, e.g., id. at 61:19-24.)
18

1

person would be able to readily ascertain the information without

2

reference to other documents or information.”

3

§ 226(e)(2)(C).

Id.

4

This statutory language was added to section 226 by

5

Senate Bill 1255 in 2013 in order to “define what constitutes

6

‘suffering injury’” and “provide clarity regarding the

7

information that must be included in a workers wage statement.”

8

(Pl.’s Req. for J. Notice Ex. 1, Senate Comm. on Labor & Indus.

9

Relations Hearing Report on SB 1255, Apr. 11, 2012 (Docket No.

10

26-4).)

11

and erroneous interpretation of what constitutes ‘suffering

12

injury’” that had been adopted by several state and federal

13

courts.

14

even though there was key payroll information either missing

15

from, or reported incorrectly on, the workers’ wage statements”

16

because the plaintiffs failed to demonstrate actual injury, such

17

as loss of wages.

18

that “[s]uch an interpretation flouts the entire purpose of this

19

provision, which is to ensure compliance so that workers can

20

easily and adequately understand the breakdown and source of

21

their pay.”

22

SB 1255, Apr. 30, 2012.)

23

The amendment was a reaction to the “very restrictive

(Id.)

“[T]hese courts found that there was no injury

(Id.)

The California legislators explained

(Id. at Ex.2, Senate Judiciary Committee Report on

The amendment made clear that the “lack of each item of

24

required information in and of itself could harm the employee.”

25

(Id. at Ex. 2, Senate Judiciary Committee Report on SB 1255, Apr.

26

30, 2012.)

27

co-sponsor of the bill, stated that “employees benefit from this

28

bill’s affirmation that Labor Code section 226(a) means what it

The California Rural Legal Assistance Foundation, the

19

1

says: Employees must get an itemized pay stub that contains

2

accurate and complete information about all nine of the required

3

pay-related information items, and the analysis of whether the

4

employee suffered injury is to be based solely on what

5

information the employer provided on the pay stub.”

6

4, Assembly Committee on Labor and Employment Hearing Report on

7

SB 1255, May 15, 2012 (emphasis added).)

8
9

(Id. at Ex.

Subsequent to the statutory modification, courts have
found that the “injury requirement should be interpreted as

10

minimal in order to effectuate the purpose of the wage statement

11

statute; if the injury requirement were more than minimal, it

12

would nullify the impact of the requirements of the statute.”

13

Seckler v. Kindred Healthcare Operating Grp., Inc., Civ. No. 10-

14

01188 DDP, 2013 WL 812656, at *11 (C.D. Cal. Mar. 5, 2013).

15

employee is “deemed” injured so long as critical information is

16

missing from the wage statement and that information cannot

17

promptly and easily be determined.

18

at *12 (finding “the minimal injury requirement has been met by

19

Plaintiffs’ inability to determine whether they have been paid

20

appropriately” without the total number of hours worked); Boyd v.

21

Bank of America Corp., Civ. No. 13-0561 DOC, 2015 WL 3650207, at

22

*33 (C.D. Cal. May 6, 2015) (holding that the plaintiffs met the

23

“minimal” injury requirement under “because Plaintiffs have shown

24

that they could not readily determine the total hours worked and

25

applicable hourly pay, which made it difficult for them to

26

determine the amount of overtime worked”); Escano v. Kindred

27

Healthcare Operating Co., Inc., Civ. No. 09-04778 DDP, 2013 WL

28

816146, at *12 (C.D. Cal. Mar. 5, 2013) (finding that hourly
20

An

See Seckler, 2013 WL 812656,

1

employees were injured by the employer’s failure to provide their

2

total hours worked and rates of pay on their wage statements

3

because they were unable to determine whether they had been paid

4

appropriately).

5

Defendant argued at oral argument that the use of the

6

language “is deemed” in section 226(e)(2)(B) creates a rebuttal

7

presumption that an employee was injured by an employer’s failure

8

to provide required payroll information.

9

If the legislators wanted to create a rebuttal presumption, the

The court disagrees.

10

statute could have been drafted to read “An employee may be

11

deemed to suffer injury if . . .” rather than “An employee is

12

deemed to suffer injury if the employer fails to provide accurate

13

and complete information as required by any one or more of items

14

(1) to (9) . . . .”

Cal. Labor Code § 226(e)(2)(B).

15

Plaintiff has satisfied the minimal injury requirement.

16

First, defendant does not dispute that it failed to include total

17

hours worked on plaintiff’s itemized wage statements.

18

Mem. at 3; Perlman Dep. at 158: 19-25.)

19

item was absent from plaintiff’s wage statements.

20

plaintiff could not “readily ascertain” her total hours worked

21

from her wage statement.

22
23
24
25
26

(Def.’s

Thus, a critical payroll
Second,

In her declaration, plaintiff stated:

As the attached wage statement reflects, my hours
worked were not set forth in any manner on my wage
statements.
As I testified at my deposition, when I
reviewed my wage statements during my employment with
ADT this is a fact that I noticed, that there were no
hours worked on my wage statements. There was no way
that I could tell from reviewing my wage statements, or
any other documents that ADT provided to me how many
hours that I worked during any pay period.

27

(Pl.’s Supp. Decl. ¶ 5 (Docket No. 26-2).)

28

deposition she explains that there were times when she would look
21

Similarly, in her

1

at her wage statement and notice that the hours were not listed.

2

(Garnett Dep. at 151:6-13.)

3

any reason other than idle curiosity why this plaintiff would

4

have needed or even wanted to know how many hours she worked.

5

Nevertheless, that is not necessary for a finding of injury under

6

the statute.

7

on the information provided on the wage statement.

8

Concededly, the court cannot discern

Whether an employee suffered injury is based solely

3. Knowing and Intentional

9

The employer’s violation of section 226 must be

10

“knowing and intentional.”

Cal. Labor Code § 226(e)(1).

The

11

violation is not knowing and intentional if it was “an isolated

12

and unintentional payroll error due to a clerical or inadvertent

13

mistake.”

14

Ex. 4, Assembly Committee on Labor and Employment Hearing Report

15

on SB 1255, May 15, 2012.)

16

considered by the factfinder is “whether the employer, prior to

17

the alleged violation, has adopted and is in compliance with a

18

set of policies, procedures, and practices that fully comply with

19

this section.”

(Id. § 226(e)(3); see also Pl.’s Req. for J. Notice

A relevant factor that may be

Id.

20

Section 226 is not a strict liability statute--“the

21

phrase ‘knowing and intentional’ in Section 226(e)(1) must be

22

read to require something more than a violation of Section 226(a)

23

alone.”

24

(N.D. Cal. 2014).

25

employee to recover damages for an employer's violation of

26

Section 226(a) without having to make any showing beyond a

27

showing of the Section 226(a) violation itself, then the

28

legislature could simply have omitted the qualifier ‘knowing and

Willner v. Manpower Inc., 35 F. Supp. 3d 1116, 1130-31
“If the legislature had intended to allow an

22

1

intentional’ before the word ‘failure.’”

2

demonstrate that the defendant “knew that facts existed that

3

brought its actions or omissions within the provisions of section

4

226(a).”

5

demonstrate that the employer knew that its conduct was unlawful.

6

Id. at 1131; Perez v. Safety-Kleen Systems, Inc., Civ. No. 05-

7

5338 PJH, 2007 WL 1848037, at *9 (N.D. Cal. June 27 2007)

8

(“Ignorance of the law, however, does not excuse Safety-Kleen.”).

9

To the extent that some district courts have found that

10

an employer can lack the necessary knowledge and intent if it had

11

a good faith belief that its employee was exempt from section

12

226, this court disagrees.

13

WL 3650207, at *34 (C.D. Cal. May 6, 2015); Lopez v. United

14

Parcel Serv., Inc., Civ. No. C08-05396, 2010 WL 728205, at *9

15

(N.D. Cal. Mar. 1, 2010); Guilfoyle v. Dollar Tree Stores, Inc.,

16

Civ. No. 12-00703 GEB CKD, 2014 WL 66740, at *7 (E.D. Cal. Jan.

17

8, 2014); Hurst v. Buczek Enterprises, LLC, 870 F. Supp. 2d 810,

18

829 (N.D. Cal. 2012); Rieve v. Coventry Health Care, Inc., 870 F.

19

Supp. 2d 856, 876-77 (C.D. Cal. 2012)).

20

Novoa v. Charter Communications, LLC, the good faith defense

21

“stands contrary to the often repeated legal maxim: ‘ignorance of

22

the law will not excuse any person, either civilly or

23

criminally.’”

24

*14 (E.D. Cal. Apr. 22, 2015) (citation omitted).

25

California Labor Code makes no mention of a good faith defense

26

and “refusal to recognize the judicially-created good faith

27

defense is more consistent with Section 226(e)(3).”

28

example, section 226(e)(3) directs the court to consider whether

Id. at 1131.

Id.

The plaintiff must

However, a plaintiff is not required to

See Boyd, Civ. No. 13-0561 DOC, 2015

As was articulated in

Civ. No. 1:13-1302 AWI BAM, 2015 WL 1879631, at

23

Further, the

Id.

For

1

the employer had adopted a set of policies that complied with

2

section 226.

3

that it [wa]s in compliance with Section 226(a) were adequate to

4

render any violation not knowing and not intentional.”

5

This would be irrelevant “[i]f an employer’s belief

Id.

Defendant knew that it was not providing total hours

6

worked to plaintiff or other employees paid on commission.

7

(Def.’s Mem. at 10; Perlman Dep. at 158: 19-25.)

8

president of total rewards, Howard Perlman, explained that

9

employees paid solely on commission or commission and salary “are

10

exempt and therefore we do not record hours on a wage statement.”

11

(Perlman Dep. at 159:8-9.)

12

accident, clerical error or mistake but was, and continues to be,

13

defendant’s policy.

14

excluding the total hours worked violated the California Labor

15

Code, that is no defense.

16

defendant’s failure to include total hours worked was both

17

knowing and intentional.

18

III. Conclusion

19

(Id.)

ADT’s vice

The exclusion was not due to an

While defendant did not know that

Therefore, the court finds that

Though plaintiff may qualify as an “outside

20

salesperson,” she was not properly classified as exempt from

21

California Labor Code section 226.

22

violated section 226(a)(2) by failing to provide total hours

23

worked on plaintiff’s wage statements.

24

As a result, defendant

IT IS THEREFORE ORDERED that plaintiff’s motion for

25

summary judgment (Docket No. 18) be, and the same hereby is,

26

GRANTED;

27
28

AND IT IS FURTHER ORDERED that defendant’s partial
motion for summary judgment on plaintiff’s itemized wage
24

1

statement claim (Docket No. 21) be, and the same hereby is,

2

DENIED.

3

Dated:

October 6, 2015

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