Case Name:   Huff v. Securitas Security Services USA, Inc.

Case No.:       1-10-CV-172614

 

Plaintiff Forrest Huff (“Plaintiff”) sues defendant Securitas Security Services USA, Inc. (“Defendant” or “SUSA”) for failure to pay overtime wages and to timely pay regular wages.  According to the operative Second Amended Complaint (“SAC”), Defendant provides security services to various client companies by posting its security officer employees at the client site and directing them to patrol the premises and perform other duties at the site.[1]  Plaintiff alleges he worked as a security officer for Defendant at a number of client sites from January 2009 to March 2010.[2]

 

The case was originally filed on May 21, 2010.  The SAC, filed on May 17, 2013, asserts two causes of action for: (1) failure to pay overtime compensation in violation of California Labor Code section 1194; and (2) violation of Labor Code provisions and Private Attorney General Act of 2004 (“PAGA”) (Cal. Lab. Code, §§ 2698 through 2699.5) penalties.[3]  In the second cause of action, Plaintiff complains of three general practices by Defendant.  First, Plaintiff alleges that Defendant is a “temporary services employer” within the meaning of California Labor Code section 201.3 subdivision (a)(1),[4] and therefore, Defendant is required by section 201.3 subdivision (b) to pay its security officers their wages on a weekly basis rather than on a bi-monthly schedule.  Plaintiff alleges that Defendant’s practice of paying security officers bi-monthly violates their rights to have their final wages paid on a timely basis as mandated by law.[5]  Second, Plaintiff alleges that Defendant must pay security officers for their time spent interviewing with Defendant’s clients and preparing with a generalist.[6]  Third, Plaintiff refers to prior allegations regarding Bonnie Iddings, resulting in unpaid overtime work being performed for Defendant by Plaintiff and other officers who arrived early to relieve Iddings.[7]

 

On February 13, 2014, the Court made the following rulings on the parties’ cross-motions for summary adjudication of issues: (1) Plaintiff’s motion for summary adjudication that Defendant is a “temporary services employer” within the meaning of California Labor Code section 201.3 was granted; (2) Defendant’s cross-motion on the same issue was denied; (3) Defendant’s motion for summary adjudication based on the exception in Labor Code section 201.3 subdivision (b)(6) was denied; (4) Plaintiff’s motion for summary adjudication on Defendant’s violation of Labor Code section 201.3 subdivision (b)(1) was granted; and (5) Defendant’s motion for summary adjudication of Plaintiff’s PAGA claim on standing grounds was denied.

 

Trial is set for March 10, 2015.

 

Plaintiff now moves to set a trial management plan.  Plaintiff also brings a motion in limine regarding the burden of proof on Defendant’s Twenty-Eighth Affirmative Defense in its First Amended Answer.

 

Defendant brings five motions in limine: (1) regarding the burden of proof for the statutory exception under Labor Code section 201.3 subdivision (b)(6); (2) regarding the applicability of section 201.3 subdivision (b)(6) during initial 90-day period of assignment and right to present individual evidence at trial; (3) to bar recovery of civil penalties on behalf of any current or former employee who was assigned to a client for 90 days or more and related issues; (4) to exclude evidence and testimony regarding any current or former employee subject to the Dispute Resolution Agreement; and (5) barring civil penalties awarded under PAGA.

 

Judicial Notice

 

In support of his motions, Plaintiff requests judicial notice of Defendant’s First Amended Answer to Verified Second Amended Complaint.  The request is GRANTED.  (Cal. Evid. Code, § 452, subd. (d) [judicial notice of court records].)

 

In opposition to Plaintiff’s motions and in support of its own motions in limine, Defendant requests judicial notice of: (1) Senate Bill 796, Senate Judiciary Committee’s Bill Analysis, dated April 29, 2003 (Exh. 1 to Def’s RJN in Opp. to Pltf’’s MIL #1); (2) Senate Bill 796, Assembly Committee on Labor and Employment Bill Analysis, dated July 9, 2003 (Exh. 2 to Def’s RJN in Opp. to Pltf’’s MIL #1); (3) slip opinion in Hale v. Sharp Healthcare (Dec. 5, 2014) Slip Op. No. D064023 (Super. Ct. No. 37-2007-00060598-CU-BT-CTL) (Exh. 3 to Def’s RJN in Opp. to Pltf’’s MIL #1); (4) Senate Bill 940, Senate Rules Committee Bill Analysis, dated June 24, 2008 (Exh. 10 to Def’s RJN ISO MIL #1-5); and (5) Senate Bill 940, Assembly Committee Appropriations Bill Analysis, dated June 18, 2008 (Exh. 11 to Def’s RJN ISO MIL #1-5).  The request is GRANTED.  (See Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2005) 133 Cal.App.4th 26, 31-37 [discussing categories of documents that constitute cognizable legislative history for purposes of judicial notice]; Cal. Evid. Code, § 451, subd. (a) [mandatory judicial notice of decisional law of this state].)

 

Plaintiff’s Motion to Set Trial Management Plan

 

Plaintiff moves for a trial management plan order requiring Defendant to produce all requested Worked Hours reports using the “141011 Huff – Crystal Report v2.rpt” template created by Plaintiff’s computer expert and used previously on the Excel data of employees in approximately 14 departments within Defendant’s San Jose branch.  Once these reports are produced, Plaintiff proposes to process the data and send Defendant Penalty Claim reports detailing each departments’ employees whose improper payments triggered penalties and each specific week they worked for which a penalty is claimed.  Under Plaintiff’s proposed trial plan, Defendant would then be required to make a make a prima facie showing as to why any employee’s multi-week break in service at a particular client’s facility should still be counted as “being assigned to work for a client” under California Labor Code section 201.3 subdivision (b)(6).[8]  Plaintiff cites Cottle v. Superior Court (1992) 3 Cal.App.4th 1367 for the position that trial courts in complex litigation have the authority to require such a prima facie showing in order to control and manage the case.  Finally, Plaintiff asks that Defendant’s San Jose branch be tried first, with further trial management orders to follow on the remaining 30 or so branches.

 

The motion is DENIED as to the proposed Cottle procedure.  Although “courts have the power to fashion a new procedure in a complex litigation case to manage and control the case before them” based on the totality of the circumstances, (see Cottle, supra, 3 Cal.App.4th at p. 1380), the circumstances in Cottle justifying the prima facie showing procedure and evidence exclusion order are not analogous to any circumstances here.  In Cottle, the personal injury plaintiffs admitted in interrogatories that they could not identify any injuries caused by exposure to the chemical substances that were deposited on the site where the defendants built the residential subdivision.[9]  Here, there are no similar circumstances that would justify requiring Defendant to undertake the burden and expense of making a prima facie showing of its section 201.3(b)(6) defense prior to trial under the threat of an evidentiary exclusion.

The motion is otherwise DENIED WITHOUT PREJUDICE.  Plaintiff must still present a viable and detailed trial plan that addresses the issue of manageability, particularly how a trial of all SUSA employees at all branch locations can be effectively managed.  The Court also declines to adopt Defendant’s proposed trial limited to individuals who worked out of the San Jose branch.

 

Plaintiff’s Motion in Limine No. 1 and Defendant’s Motion in Limine No. 1

 

Plaintiff moves for an order that Defendant has the burden of proof as to the applicability of the “90 consecutive calendar days” exception as set forth in Defendant’s Twenty-Eighth Affirmative Defense in its First Amended Answer.

 

In a competing motion, Defendant moves for an order precluding Plaintiff from presenting any evidence or argument at trial that Defendant has the burden to prove an individual was assigned to work for a client for over 90 consecutive calendar days.  Defendant argues that as a matter of law, Plaintiff must demonstrate that an individual does not fall under the section 201.3(b)(6) exception as part of his burden of proof of establishing an individual is an “aggrieved employee” under PAGA.

Under the PAGA, any provision of the California Labor Code “that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.”  (Cal. Lab. Code, § 2699, subd. (a).)  The PAGA defines an “aggrieved employee” as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”  (Cal. Lab. Code, § 2699, subd. (c).)  “[A]n aggrieved employee may recover the civil penalty described in subdivision (f) in a civil action pursuant to the procedures specified in Section 2699.3 filed on behalf of himself or herself and other current or former employees against whom one or more of the alleged violations was committed.”  (Id., subd. (g)(1).)  Here, the relevant Labor Code provisions that Plaintiff claims have been violated are found in section 201.3 governing the timely payment of wages to temporary service employees.  Subdivision (a) sets forth relevant definitions, including the definition for temporary services employer.  (The Court has already found by way of summary adjudication that Defendant is a temporary services employer within the meaning of the statute.)  Subdivision (b)(1) requires the weekly payment of wages to employees of a temporary services employer, except as provided in paragraphs (b)(2)-(b)(5), which set forth various exceptions not at issue here.  Subdivision (b)(6) then goes on to state:  “ If an employee of a temporary services employer is assigned to work for a client for over 90 consecutive calendar days, this section shall not apply unless the temporary services employer pays the employee weekly in compliance with paragraph (1) of subdivision (b).”

 

It seems clear to the Court that section 201.3(b)(6) provides an exception to the application of the requirements of section 201.3.  Under Simpson Strong-Tie Co., Inc. v. Gore (2010) 49 Cal.4th 12 and other well-settled law, the party claiming a statutory exception has the burden of proof on that issue.  Thus, Defendant has the burden of proving that any particular paycheck at issue is exempt from section 201.3 because of the application of subdivision (b)(6).

 

Defendant relies upon the “aggrieved employee” definition in the PAGA to argue that Plaintiff has the burden of proof to demonstrate that those he seeks to represent do not fall within the statutory exception of section 201.3(b)(6) (since those falling within the exception would not have actually sustained a violation of §201.3).  Defendant cites the legislative history of the PAGA and the concerns of opponents of the bill that the PAGA would be abused similar to the abuses that occurred prior to the standing amendments to the Unfair Competition Law.  The “aggrieved employee” definition does not speak to the issue of burden of proof, nor does it require a demonstration of an actual violation in order to confer basic standing on the PAGA representative.  It merely states that an “aggrieved employee” is someone who was employed by the “alleged violator” and is someone against whom one or more of the “alleged violations” was committed.  (See Lab. Code, § 2699, subd. (c).)  To the extent this definition was included in order to avoid the abuses similar to bringing UCL claims “on behalf of the general public,” that purpose is achieved if those individuals Plaintiff seeks to represent were employed by the “alleged violator” and were subjected to the “alleged violations.”  Here, there is no dispute that Plaintiff seeks to represent individuals currently or formerly employed by Defendant who were subject to Defendant’s pay policies.  The Court is not persuaded that the PAGA’s “aggrieved employee” definition – which is met here for purposes of Plaintiff’s standing to represent current and former employees of Defendant subject to the same policy of which he complains in this action – should go further and alter the well-settled rule that the party claiming a statutory exception has the burden of proof on that issue.

 

For these reasons, Plaintiff’s motion is GRANTED and Defendant’s is DENIED.

 

Defendant’s Motion in Limine No. 2

 

Defendant moves for an order which will clarify the standard for proving liability under section 201.3(b)(6) during the initial 90-day period of an employee’s assignment.  Defendant also asks to be permitted to introduce evidence at trial from individual employees and management staff regarding the parties’ intentions and understandings of the length of their assignments.

 

The motion is DENIED IN PART as an untimely motion for reconsideration of issues addressed in the Court’s February 13, 2014 order on the parties’ cross-motions for summary adjudication.  Defendant also seeks clarification for “an array of possibilities and circumstances under which an employee may not fulfill a ‘definite term’ or long-term assignment.”[10]  While Defendant’s vague arguments about “an array of possibilities” is not very helpful in assessing the actual circumstances of this case, for purposes of guidance, the Court is inclined to agree with Defendant that the focus of the statutory interpretation inquiry is the “assignment” – whether the employee of a temporary services employer “is assigned to work for a client for over 90 consecutive calendar days[.]”  (Cal. Lab. Code, § 201.3, subd. (b)(6), emphasis added.)  Accordingly, Defendant should be permitted to present evidence as to the terms of assignments if it is relevant to the defense and not inadmissible for any other reasons Plaintiff may raise.

 

For all of these reasons, Defendant’s motion in limine no. 2 is GRANTED IN PART, DENIED IN PART.

 

Defendant’s Motion in Limine No. 3

 

Defendant seeks an order barring Plaintiff from seeking to recover at trial any PAGA penalties on behalf of himself or other current or former SUSA security guards who actually worked at a client site for 91 days or more.  Defendant argues these employees are categorically exempt from section 201.3 pursuant to subdivision (b)(6) once the 91-day mark is achieved.  Defendant further moves for an order setting forth that: (1) section 201.3(b)(6) is satisfied once an employee has been assigned to work at a client site for 91 days, even if the employee worked at more than one client site during the initial 90-day period; and (2) the 90-day “clock” does not re-start each time the same employee commences work at a different client site.  Finally, Defendant asks the Court to issue an order barring Plaintiff from seeking to recover civil penalties for any week in which wages were paid in a final paycheck on the grounds that final paychecks are exempt from section 201.3(b)(1)’s weekly paycheck requirement.

 

The motion is GRANTED IN PART.  The Court agrees with Defendant that the section 201.3(b)(6) exemption applies for a security guard working for a client once he or she achieves the 91st consecutive calendar day of work for that client.  This is a reasonable interpretation of section 201.3 and is consistent with the purposes underlying enactment of the statute.  The Court is also inclined to agree with Defendant that a break in work for a regularly assigned client (e.g., leave of absence, vacation) does not restart the 90-day clock upon the employee’s return to work for the same assigned client.

 

The motion is otherwise DENIED.  The Court does not agree that the section 201.3(b)(6) exemption should apply by aggregating multiple less-than-90-day assignments for multiples client for a total of 90 calendar days, as this would contradict the statute’s language of an employee being “assigned to work for a client for over 90 consecutive calendar days[.]”[11]  However, the Court is inclined to agree that an employee who is assigned to work for a client for over 90 consecutive calendar days may pick up an extra shift at another assignment without triggering Defendant’s weekly payment obligations under section 201.3 for the extra assignment, since that employee is still assigned to work for “a client” for over 90 consecutive calendar days.

 

The Court also declines to bar Plaintiff from seeking civil penalties for final paycheck weeks.  Defendant argues that final paychecks are exempt from section 201.3(b)(1)’s weekly paycheck requirement because they are governed by sections 201 and 202.  On the contrary, the payment of wages to temporary services employees who are discharged or quit from their employment is still governed by section 201.3, which then refers to sections 201 (Discharge of employee; Immediate payment) and 202 (Quitting employee; Payment within 72 hours).  (See Cal. Lab. Code, § 201.3, subd. (b)(4) and (5).)  In other words, section 201.3(b)(4) and (b)(5) can still be violated if payment is not made pursuant to sections 201 and 202.

 

Willner v. Manpower Inc. (2014 N.D. Cal.) 2014 U.S. Dist. LEXIS 44848 does not compel a different conclusion.  There, the plaintiff temporary services employee sought penalties under Labor Code section 203 in connection with purported violations of section 201.3(b)(1), and the U.S. District Court for the Northern District of California held that the plaintiff could not recover section 203(a) penalties for late weekly wages under section 201.3(b)(1).  The Willner court reasoned that section 201.3(b)(1) lacked a private right of action, and neither section 201.3 nor section 203 clearly and unmistakably permits a temporary services employee to recover penalties for the untimely payment of weekly wages, while the penalties in section 203(a) are expressly limited to the late payment of final wages owed to employees who have been discharged or who have quit.  (See Willner, supra, at *17.)  Notably, the Willner court denied summary judgment on the derivative UCL claim for recovery of penalties under section 203 for violations of section 201.3 “because a party may bring a UCL claim under the unlawful prong even if the predicate law does not provide for a private cause of action.”  (See Willner, supra, at *39-40.)  Here, Plaintiff brings a PAGA claim for violations of section 201.3, and as discussed above, section 201.3(b)(4) and (5) can be violated if payment for discharged or quitting temporary services employees is not made pursuant to sections 201 and 202.

 

Defendant’s Motion in Limine No. 4

 

Defendant moves to exclude from trial any evidence or testimony regarding any current or former SUSA employee who is bound by a Dispute Resolution Agreement (“DRA”).  Defendant argues such employees lawfully waived their right to participate in this action.  Alternatively, Defendant moves for an order barring Plaintiff from presenting evidence or testimony in pursuit of collection of PAGA penalties on behalf of any employee subject to the DRA until such time as those employees have arbitrated the underlying issue of whether they are “aggrieved employees” under the PAGA.

 

In opposition, Plaintiff points out that he worked for Defendant in 2009 and 2010, and the DRA at issue was first instituted in 2011.  Plaintiff argues there is no evidence that he is bound by any DRA with Defendant.  Plaintiff further argues that Defendant has not filed a request to arbitrate any of Plaintiff’s claims, and that Defendant long ago waived any right to arbitration it might have by litigating the case for more than four years, filing a summary judgment motion, and engaging in discovery.  Finally, Plaintiff argues that under Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, PAGA actions are not waivable because they are fundamentally law enforcement actions by the State of California.

 

Defendant argues Iskanian is not controlling because here, the DRA was voluntary for many individuals, not compelled as a condition of employment.

 

Defendant does not appear to be arguing that Plaintiff has waived his right to bring a PAGA action, only that Plaintiff cannot represent SUSA employees who are subject to the DRA.  The motion essentially seeks to adjudicate issues properly raised in a motion to compel arbitration under California Code of Civil Procedure sections 1281, et seq.  Defendant argues that it is not seeking to compel anyone to arbitration with this motion in limine, but is seeking to bar Plaintiff from recovering penalties on behalf of anyone who would have to arbitrate their dispute.  However, the premise behind barring Plaintiff from recovery is the existence of a binding and enforceable arbitration agreement between Defendant and those of its employees represented by Plaintiff in this PAGA action.  In that respect, the motion is wholly incomplete in that it does not identify or provide supporting evidence for the SUSA employees who are purportedly bound by the DRA.[12]  Thus, Defendant provides no way of knowing what particular evidence should be excluded from the outset.

 

Furthermore, Plaintiff’s point is well-taken that Defendant’s actions in this lawsuit have been inconsistent with its purported right to arbitrate the claims of SUSA employees subject to the DRA.  The PAGA claim has been asserted in this case for years now with the parties engaging in full discovery and motion practice, and Defendant has never moved to compel arbitration against those represented by Plaintiff herein.  In its own motion for summary adjudication on the PAGA claim, Defendant did purport to move for summary adjudication only as to those SUSA employees not subject to arbitration.  The Court does not decide the issue of waiver at this time (see Aviation Data, Inc. v. American Express Travel Related Servs. Co., Inc. (2007) 152 Cal.App.4th 1522, 1537-1542 [discussing factors for waiver of arbitration]), but merely notes that Defendant’s barebones motion in limine is wholly inadequate to address the issues that would necessarily arise in a proper motion to compel arbitration under the Code of Civil Procedure.

 

For these reasons, Defendant’s motion in limine no. 4 is DENIED WITHOUT PREJUDICE.

 

Defendant’s Motion in Limine No. 5

 

Defendant moves for an order precluding Plaintiff from presenting any evidence or argument at trial that 25% of any penalties awarded under PAGA are issued to Plaintiff only.  Defendant argues that as a matter of law, the 25% must be distributed to all aggrieved employees.

 

Under the PAGA, “civil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency for enforcement of labor laws and education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 25 percent to the aggrieved employees.”  (Cal. Lab. Code, § 2699, subd. (i), emphasis added.)  The PAGA defines “aggrieved employees” as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”  (Id., subd. (c).)  “This language indicates that all persons against whom a violation was committed, rather than only the representative plaintiff who brings the action, recover a share of 25 percent of the total penalties.”  (Garrett v. Bank of Am., N.A. (2014 N.D. Cal.) 2014 U.S. Dist. LEXIS 57523, at *22.)  Under the PAGA, “a portion of the penalty goes not only to the citizen bringing the suit but to all employees affected by the Labor Code violation.”  (Iskanian, supra, 59 Cal.4th at p. 382.)

 

Based on these authorities, Defendant’s motion in limine no. 5 is GRANTED.

[1] Second Amended Complaint (“SAC”) ¶ 7.

[2] SAC ¶¶ 8, 22.

[3] SAC ¶ 49.

[4] SAC ¶ 35.

[5] SAC ¶ 40.

[6] SAC ¶¶ 41-44.

[7] SAC ¶ 45.

[8] “If an employee of a temporary services employer is assigned to work for a client for over 90 consecutive calendar days, this section shall not apply unless the temporary services employer pays the employee weekly in compliance with paragraph (1) of subdivision (b).”  (Cal. Lab. Code, § 201.3, subd. (b)(6).)

[9] There was also a remedial report issued by the California Department of Health Services that concluded the waste materials at issue did not pose any significant threat to the health of the residents living at the subdivision.  (See Cottle, supra, 3 Cal.App.4th at p. 1372.)  However, it is not clear from the Cottle opinion whether this “draft” report issued in “November 1990” preceded or informed the trial court’s November 7, 1990 case management order setting forth the prima facie process.

[10] See Def’s Memo. Pts. & Auth. ISO MIL #2 at p. 5:16-17.

[11] Defendant’s reference to multiple “client sites” is unclear.  The statute only discusses working for “a client”, not at various client sites.  Working at multiple sites for the same client for more than 90 consecutive calendar days would be sufficient for purposes of section 201.3(b)(6); working at multiple sites for different clients, where none of those assignments is for 90 consecutive calendar says, would not.

[12] Defendant submits the Declaration of Lisette Valdes, Vice President of Human Resources for SUSA.  The Valdes declaration attaches the DRA distributed to current employees in June 2011 (Valdes Exh. 1), a second version of the DRA that Defendant began to require new hires to sign (Valdes Exh. 2), a copy of the DRA for new hires that was revised in February 2013 (Valdes Exh. 3), and an employee acknowledgment form (Valdes Exh. 4).  It appears that only the first version of the DRA for current employees in June of 2011 contained a provision for opting out of the DRA by calling a toll-free telephone number.  (See Valdes Exh. 1 at ¶ 8.)  Ms. Valdes generally states on information and belief “that most (but not all) SUSA employees in California did not opt out of the DRA.”  (Valdes ¶ 4.)  However, nothing in Defendant’s papers indicates how many of the employees who were current in June 2011 are still potentially represented in the PAGA action today, versus new hires after June 2011 who signed revised versions of the DRA that did not contain the voluntary opt-out provision.