Sullivan v. Kelly Services, Inc.

Filing 75

ORDER by Judge Claudia Wilken granting 51 Motion for Summary Judgment (scc, COURT STAFF) (Filed on 11/12/2008)

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v. KELLY SERVICES, INC. and DOES 1 TO 10, inclusive, Defendants. / CATHERINE E. SULLIVAN, Plaintiff, No. C 07-2784 CW ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

Defendant Kelly Services, Inc. has filed a motion for summary judgment. Plaintiff Catherine Sullivan opposes the motion. The

motion was heard on October 30, 2008.

Having considered all of the

parties' papers and argument on the motions, the Court hereby grants Defendant's motion. BACKGROUND Defendant is a temporary employment agency. Stahl Dec. ¶ 2.

Plaintiff worked for Defendant as a temporary staffing employee beginning in February, 2006. Sullivan Dep. at 29:12-15. Defendant

employs individuals, and then assigns those individuals to work in

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various work settings.

Stahl Dec. ¶ 2.

Unless either Defendant or

an employee affirmatively acts to terminate the employment relationship, an employee will remain listed as a Kelly employee and appear on searches of current available employees, even if that employee is not performing a work assignment. Id. at ¶ 7.

Plaintiff signed an agreement with Defendant that states, "as a Kelly employee, I understand that I am not an employee of the customers to whom Kelly assigns me, regardless of any customer statement, conduct, or belief." Deboskey Dec., Ex. F at 2.

After two interviews with Defendant's customer Managed Health Network (MHN), Plaintiff accepted an assignment to work for MHN. Sullivan Dep. at 97:9-101:13. Plaintiff's assignment at MHN was

extended several times and ultimately lasted approximately six months. Id. at 102:1-10. The assignment ended on August 11, 2006.

Id. at 107:8-11.

On August 15, 2006, Plaintiff called Defendant to Stahl Dec. ¶ 16 and Ex. B. Plaintiff

ask for her final paycheck.

was informed that, although her assignment with MHN ended, she was still Defendant's employee. Sullivan Dep. at 112:13-20. Plaintiff

received her final paycheck for the work she performed with MHN on August 16, 2006. Id. at 84:10-16. She received this paycheck in Stahl Dec.

accordance with Kelly's normal weekly payment schedule. ¶ 12-13.

Within weeks of the end of Plaintiff's assignment with MHN, Plaintiff attended two interviews with Wells Fargo Bank, also one of Defendant's customers. Sullivan Dep. at 123:11-125:6. Sometime

in August or September, 2006, Wells Fargo offered Plaintiff a temporary position. Id. at 127:12-129:7. 2 Plaintiff declined the

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assignment. Services.

Id.

At no point did Plaintiff resign from Kelly Nor did Kelly Services tell

Id. at 112:9-113:11.

Plaintiff that it was terminating her employment when her assignment with MHN ended. Id.1

On April 20, 2007, Plaintiff filed a class action complaint in Alameda County Superior Court alleging violations of California Labor Code §§ 201 and 202, which provide that an employer must, in most cases, pay its employee's earned and unpaid wages immediately upon discharge, layoff or resignation. Plaintiff also alleged a

claim for unfair business practices pursuant to California Business and Professions Code § 17200. on May 29, 2007. In July, 2007, the parties stipulated that Plaintiff could file a first amended complaint adding a claim pursuant to the private attorneys general provision of the California Labor Code. Cal. Lab. Code § 2699. operative complaint. On September 17, 2007, the Court entered a case management order, setting December 31, 2007, the date proposed by the parties, as the deadline to add additional parties or claims. No. 19. See Docket On July 27, 2007, Plaintiff filed the Defendant filed a notice of removal

On July 10, 2008, Plaintiff moved the Court for relief The

from the scheduling order to file a second amended complaint. Court denied Plaintiff's request on August 11, 2008.

Defendant now

moves for summary judgment against Plaintiff on all claims. To the extent the Court relied upon evidence to which Defendant objected, the objections are overruled. To the extent the Court did not rely on such evidence, Defendant's objections are overruled as moot. 3
1

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JUDICIAL NOTICE Under Rule 201 of the Federal Rules of Evidence, a court may take judicial notice of facts that are not subject to reasonable dispute because they are either generally known or capable of accurate and ready determination. See, e.g., Lee v. City of Los

Angeles, 250 F.3d 668, 688-690 (9th Cir. 2001); Interstate Natural Gas Co. v. Southern California Gas Co., 209 F.2d 380, 385 (9th Cir. 1953). The Court grants Defendant's request for judicial notice of

Exhibits H through M and O through S of Geoffrey D. DeBoskey's declaration because these documents are public court records and legislative history documents capable of accurate and ready determination. The Court denies Defendant's request to take

judicial notice of Exhibit N of DeBoskey's declaration, the Amended Notice of Adverse Action for Miles E. Locker. The Court grants

Plaintiff's request for judicial notice of Exhibits A through F because these documents are public court records and excerpts from public websites, not offered for the truth of their contents. LEGAL STANDARD Summary judgment is properly granted when no genuine and disputed issues of material fact remain, and when, viewing the evidence most favorably to the non-moving party, the movant is clearly entitled to prevail as a matter of law. Fed. R. Civ. P.

56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir. 1987). The moving party bears the burden of showing that there is no material factual dispute. Therefore, the court must regard as true 4

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the opposing party's evidence, if supported by affidavits or other evidentiary material. F.2d at 1289. Celotex, 477 U.S. at 324; Eisenberg, 815

The court must draw all reasonable inferences in

favor of the party against whom summary judgment is sought. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991). Material facts which would preclude entry of summary judgment are those which, under applicable substantive law, may affect the outcome of the case. are material. (1986). DISCUSSION I. California Labor Code §§ 201, 202, 203 Plaintiff claims that she is entitled to continuing wages under Labor Code section 203 because Defendant failed to pay her wages within the time period required by Labor Code Section 201. Section 203 provides, in relevant part, "If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201 . . . [and] 202, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty." Section 201 provides, "If an employer discharges an The substantive law will identify which facts

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

employee, the wages earned and unpaid at the time of the discharge are due and payable immediately." Finally, § 202 provides, "If an

employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and

5

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payable not later than 72 hours thereafter."2 Plaintiff claims that when her temporary assignment ended on August 11, she was "discharged" within the meaning of section 201, which triggered Defendant's obligation "immediately" to pay her unpaid wages. Instead of paying Plaintiff's wages immediately,

Defendant paid her wages in accord with its routine schedule, issuing paychecks the Friday following the week worked.3 The

question before the Court is whether Defendant "discharged" Plaintiff when her temporary assignment ended, entitling her to "immediate" payment of wages under § 201. Recently, the California Supreme Court addressed the meaning of "discharge" in § 201. (2006). Smith v. Superior Court, 39 Cal. 4th 77

In Smith, the plaintiff worked for L'Oreal as a hair model Id. at 81. L'Oreal didn't Id.

at a show featuring L'Oreal products.

pay Smith for her work until over two months after the show.

Smith filed a lawsuit against L'Oreal, alleging that it failed to pay her immediately upon discharge from employment. The Court of

Appeal held that discharge means "the affirmative dismissal of an employee by an employer from ongoing employment and does not include the completion of a set period of employment or a specific task." Id. at 84. However, the California Supreme Court disagreed

and instead concluded that "an employer effectuates a discharge Plaintiff does not claim that she quit her employment, or that she was not working under a written contract. Therefore, her claim under § 202 fails. Plaintiff actually received her final paycheck ahead of the normal schedule. Plaintiff's last day of work for MHL was Friday, August 11, 2006, and she was paid by Kelly Services on Wednesday, August 16, 2006. 6
3 2

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within the contemplation of sections 201 and 203, not only when it fires an employee, but when it releases an employee upon the employee's completion of the particular job assignment or time duration for which he or she was hired." Id. at 90. Therefore,

Smith was protected under sections 201 and 203 of the Labor Code. Id. Smith did not address whether the end of a temporary assignment for an employee of a temporary staffing agency rendered the employee "discharged" within the meaning of section 201. is a key distinction between Smith and the present case. This

In Smith,

the plaintiff was directly employed by L'Oreal to work for one day, but was paid over two months later. one day of work. Id. L'Oreal "released" Smith after

In the present case, Plaintiff was employed Through

by Kelly Services, a temporary employment agency.

Plaintiff's relationship with Kelly Services, she was placed at MHN for six months. Plaintiff's employment relationship with Kelly Nor did

Services did not end when her appointment with MHN ended.

Kelly Services "release" Plaintiff after she completed working at MHN. In fact, after Plaintiff's last day of work with MHN,

Plaintiff remained an active Kelly employee by going on multiple job interviews for other temporary assignments. Therefore,

although Plaintiff completed her temporary job assignment with MHN, she did not complete her "job assignment or time duration for which she was hired" by her employer, Kelly Services. Thus, Plaintiff

was not "dismissed" from Kelly Services when she finished working for MHN. After the California Supreme Court decided Smith, a 7

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controversy arose as to whether temporary services employees would be considered "discharged" after every temporary assignment ended. Senate Floor Analysis of Senate Bill 940 (June 24, 2008). Although

Smith did not address temporary services employees, State Senator Leland Yee sponsored Senate Bill 940 to "clarify this issue by [enacting a law that] explicitly stat[es] that an employee of a temporary services employer will be paid weekly, regardless of when the assignment ends, but in the case of an employee of a temporary services employer being discharged, the employee will be paid immediately." Id. On July 22, 2008, Governor Schwarzenegger Effective January 1, 2009, Labor

signed Senate Bill 940 into law.

Code Section 201.3 will state that if an employee of a temporary services employer is assigned to work for a client, that employee's wages are due and payable no less frequently than weekly, regardless of when the assignment ends, and wages for work performed during any calendar week shall be due and payable not later than the regular payday of the following calendar week. A temporary services employer shall be deemed to have timely paid wages upon completion of an assignment if wages are paid in compliance with this subdivision. S.B. 940, 2008 Cal. Legis. Serv. Ch. 169. "`A statute that merely clarifies, rather than changes, existing law' may be `applied to transactions predating its enactment.'" Valles v. Ivy Hill Corp., 410 F.3d 1071 (9th Cir.

2005) (quoting W. Sec. Bank v. Superior Court, 15 Cal. 4th 232, 243 (1997)) (emphasis in original). The Court gives particular weight

to the "legislative declaration of the meaning of the original act, where the amendment was adopted soon after the controversy arose concerning the proper interpretation of the statute." 8 Id. (quoting

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W. Sec. Bank, 15 Cal. 4th at 243).

The Court also considers

"whether the legislature's expressed views have objective support in either the language or history of the legislation, and whether they are in accordance with the practice of the affected agency." Id.; see W. Sec. Bank, 15 Cal. 4th at 246-252. Plaintiff argues that the legislative history of the Labor Code shows that SB 940 changes, rather than clarifies, existing law. Smith traced the legislative history behind Labor Code The California Legislature first enacted an

sections 201 and 202.

immediate wage payment provision similar to section 201 in 1911. In 1911, the Bureau of Labor Statistics (BLS) recommended and enforced wage-related legislation. Smith, 39 Cal. 4th at 89. The

California Supreme Court noted that, since 1911, the BLS "consistently emphasized the success of, and continued need for, wage payment legislation to protect working men and women from exploitative employers and to alleviate the predicament of discharged employees and quitting employees who were unable to promptly obtain the wages they earned." Smith, 39 Cal. 4th at 89.

Plaintiff argues that this legislative history supports an extension of the definition of "discharge" to include temporary employees who have completed a job assignment. not persuasive. Plaintiff also points to a 1996 letter written by the Division of Labor Standards Enforcement (DLSE).4
4

This argument is

However, California courts

In 1976, the DLSE "succeeded to the duties, powers, purposes, responsibilities that originally resided with the BLS Commissioner, including the power to interpret and enforce state wage and hour laws." Smith, 39 Cal. 4th at 90 n.7. 9

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do not defer to DSLE opinion letters, see Estrada v. FedEx Ground Package System, Inc., 154 Cal. App. 4th 1, 22 (2007), and often disagree with the DLSE's views regarding various issues, see Church v. Jamison, 143 Cal. App. 4th 1568, 1578-1580 (2006); Conley v. Pacific Gas and Elec. Co., 131 Cal. App. 4th 260, 270-71 (2005); Hudgins v. Neiman Marcus Group, Inc., 34 Cal. App. 4th 1109, 1121 (1995). In the 1996 letter, the DLSE responded to an employer who asked it to confirm the following statement: "if an employee's assignment ends, but the employee has not been terminated by the temporary service, remains on the temporary service's payroll, and is available for future assignments, that employee has not been terminated, and hence, may be paid for hours worked in accordance with the temporary service's regularly weekly payroll." Dec., Ex. D at 2. Locker

The DLSE refused to confirm the statement and

noted that the employer did not provide a "rationale or reason for exempting an employer from the provisions of §§ 201 and 202 because the employer chooses to hire on a temporary basis." Id. The

letter also noted that the legislature did not explicitly exempt temporary employers from § 201. Id. The letter did not directly

address whether employees of temporary services agencies are considered terminated once they complete a job assignment even though they would still receive a weekly paycheck from the temporary employment agency. The Court concludes that SB 940 clarifies existing law and applies to Plaintiff. For the foregoing reasons, Defendant is entitled to judgment 10

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on Plaintiff's first cause of action under Labor Code sections 201, 202 and 203. II. Business and Professions Code §§ 17200, et seq. Plaintiff's cause of action under Business and Professions Code § 17200 also fails because it is solely based on the alleged violations of Labor Code sections 201, 202 and 203. Defendant did

not engage in unlawful and unfair business practices because it properly paid Plaintiff after she finished her job assignment with MHN. III. Labor Code § 2699 Plaintiff's cause of action under Labor Code § 2699 also fails because it is solely based on the alleged violations of Labor Code sections 201, 202 and 203. Plaintiff is not an "aggrieved

employee" under § 2699 because Kelly Services did not violate any section of the Labor Code. CONCLUSION For the foregoing reasons, the Court grants Defendant's motion for summary judgment (Docket No. 51). judgment and close the file. from Plaintiff. IT IS SO ORDERED. Dated: 11/12/08 The clerk shall enter

Defendant shall recover its costs

CLAUDIA WILKEN United States District Judge

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