Alonzo v. Maximus, Inc.

832 F.Supp.2d 1122

Blanco ALONZO, et al., individually and on behalf of others similarly situated, Plaintiffs,

v.MAXIMUS, INC., et al., Defendants.

Case No. CV 08–6755–JST (MANx).

United States District Court, C.D. California.

Dec. 5, 2011.

Ira R. Spiro, Justian Jusuf, Linh Hua, Spiro Moss LLP, Los Angeles, CA, for Plaintiffs.

Michael S. Kun, Aaron F. Olsen, Epstein Becker and Green PC, Los Angeles, CA, for Defendants.

ORDER (1) GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT, AND (2) GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT

JOSEPHINE STATON TUCKER, District Judge.

Before the Court are (1) a Motion for Summary Judgment filed by Defendant Maximus, Inc. (“Defendant”) (Doc. 127), and (2) a Motion for Partial Summary Judgment filed by the Plaintiff Class and individual named Plaintiffs (collectively, “Plaintiffs”) (Doc. 126). The Court heard oral argument on both motions on October 31, 2011. Having considered the briefs and evidence submitted by the parties, and the positions advanced during oral argument, the Court GRANTS in part and DENIES in part Defendant's Motion for Summary Judgment, and GRANTS in part and DENIES in part Plaintiffs' Motion for Partial Summary Judgment.

I. BACKGROUND

“Defendant operates health and human services programs throughout the country, primarily for state and local government agencies.” (Doc. 127–1 ¶ 1.) Among these programs are “welfare-to-work employment services, assisting welfare recipients in their efforts to return to the workforce and self-sufficiency.” ( Id.)

To staff these programs, Defendant employs Employment Case Managers who assist welfare recipients by providing advice and encouragement, setting goals, monitoring client progress, identifying employment opportunities, and helping clients overcome obstacles to employment. (Doc. 127–11 ¶ 8.) ¹ At issue in this case are Defendant's employee compensation practices for Employment Case Managers in Defendant's welfare-to-work programs for Los Angeles County, Orange County, and San Diego County. ( Id. ¶ 3.) ²

Employment Case Managers are hourly employees. Pursuant to Defendant's time reporting policies, Employment Case Managers in each of Defendant's San Diego County, Los Angeles County, and Orange County locations self-report their time on a daily basis by rounding their hours worked to the nearest quarter hour and inputting that total into either paper timecards or electronic time sheets. (Doc. 127–1 ¶¶ 4–6.) Defendant does not round Employment Case Managers' time. ( Id. ¶ 7.) Employment Case Managers are compensated semi-monthly according to their self-reported and self-rounded hours. (Doc. 127–13, Ex. R at 109–10.)

Defendant also offers bonuses to its San Diego, Los Angeles, and Orange County Employment Case Managers, including: (1) individual bonus awards, which are calculated and awarded pursuant to specific criteria set forth in written bonus policies for each program; and (2) MaxDollar bonuses, which are spot bonuses paid to employees who make unique or extraordinary contributions to clients or to the workplace. (Doc. 127–11 ¶¶ 10–11, 14.) Defendant does not include either type of bonus payment when calculating the regular rate of pay for overtime compensation. ( Id. ¶ 16.)

On November 26, 2007, the named plaintiffs in this action—Blanco Alonzo, Jodi Valdes, and Michelle Daubet (collectively, the “Named Plaintiffs”)—filed this case as a putative class action in Los Angeles County Superior Court, asserting claims against Defendant related to the above-enumerated employee compensation practices. Defendant removed the action to federal court on October 14, 2008. (Doc. 1.)

On June 13, 2011, the Court granted in part, and denied in part the Named Plaintiffs' Motion for Class Certification. (Doc. 106.) The Court issued an amended certification order on June 17, 2011, 275 F.R.D. 513 (C.D.Cal.2011) (the “Certification Order”). (Doc. 107.) Pursuant to the Certification Order, the Court certified a class under Rule 23(b)(3) with respect to Plaintiffs' Off–the–Clock (rounding) Claim (“Rounding Claim”), Bonus/Overtime Claim, Paystub Claim, and Unfair Competition Law (“UCL”) Claim, consisting of:

All persons employed in California by defendant Maximus, Inc. as Employment Case Managers, and Lead Employment Case Managers, Case Manager, or Lead Case Manager, or in positions with substantially similar duties, during any [time] from November 26, 2003 until the time of final judgment in this action. The class includes the following positions: Manager/Facilitator, Specialist Case Management, Sanctions Specialist, Counselor–Case Management, Counselor–Enrollment/Eligibility, and Specialist–Work Force Analyst.

( Id. at 22.) The Court denied certification as to the Named Plaintiff's Off–the–Clock (working off-the-clock) Claim (“Off–the–Clock Claim”). ( Id. at 17.)

On September 26, 2011, Defendant filed a Motion for Summary Judgment as to each of Plaintiffs' certified claims, including their derivative claim for waiting time penalties, and the Named Plaintiffs' individual Off–the–Clock Claims. (Doc. 127.) On that same date, Plaintiffs filed a Motion for Partial Summary Judgment as to their Bonus/Overtime Claim, including derivative waiting time penalties, Paystub Claim, and UCL Claim. (Doc. 126.)

II. LEGAL STANDARD

In deciding a motion for summary judgment, the Court must view the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is proper “if the [moving party] shows that there is no genuine dispute as to any material fact and the [moving party] is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. A factual issue is “genuine” when there is sufficient evidence such that a reasonable trier of fact could resolve the issue in the non-movant's favor, and an issue is “material” when its resolution might affect the outcome of the suit under the governing law. Anderson, 477 U.S. at 248, 106 S.Ct. 2505.

The moving party bears the initial burden of demonstrating the absence of a genuine issue of fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir.2000) (citation and quotation marks omitted). The burden then shifts to the non-moving party to “cit[e] to particular parts of materials in the record” supporting its assertion that a fact is “genuinely disputed.” Fed.R.Civ.P. 56(c)(1); see also In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir.2010) (“non-moving party must come forth with evidence from which a jury could reasonably render a verdict in the non-moving party's favor”).

III. DISCUSSION

A. Rounding Claim

Defendant moves for summary judgment on Plaintiffs' Rounding Claim on the basis that Defendant's time rounding policy is facially neutral, and, therefore, permissible under California law. For the reasons set forth below, Defendant's Motion is GRANTED.

While no California statute or regulation expressly addresses the permissibility of using a rounding policy to calculate employee work time, the United States Department of Labor has adopted a regulation regarding rounding pursuant to the Fair Labor Standards Act (the “FLSA”) that permits employers to use time rounding policies under certain circumstances:

It has been found that in some industries, particularly where time clocks are used, there has been the practice for many years of recording the employees' starting time and stopping time to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work. For enforcement purposes this practice of computing working time will be accepted, provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.

29 C.F.R. § 785.48(b) (2011).

While few Courts have interpreted this regulation, those that have recognize that the regulation permits employers to use a rounding policy for recording and compensating employee time as long as the employer's rounding policy does not “consistently result[ ] in a failure to pay employees for time worked.” See, e.g., Sloan v. Renzenberger, Inc., No. 10–2508–CM–JPO, 2011 WL 1457368, at *3 (D.Kan. Apr. 15, 2011).

That is, an employer's rounding practices comply with § 785.48(b) if the employer applies a consistent rounding policy that, on average, favors neither overpayment nor underpayment. East v. Bullock's, Inc., 34 F.Supp.2d 1176, 1184 (D.Ariz.1998) (granting summary judgment in employer's favor where “evidence show[ed] that [employer's] rounding system may not credit employees for all the time actually worked, but it also credits employees for time not actually worked” so that the employer's “rounding practices average[d] out sufficiently to comply with § 785.48(b)”); see also Adair v. Wis. Bell, Inc., No. 08–C–280, 2008 WL 4224360, at *11 (E.D.Wis. Sept. 11, 2008) (approving policy where there was no evidence to suggest it systematically favored employer); Contini v. United Trophy Mfg., No. 6:06–cv–432–Orl–18UAM, 2007 WL 1696030, at *3 (M.D.Fla. June 12, 2007) (granting employer's motion for summary judgment where the “[employer], throughout [the employee's] employment, [used] a consistent policy as to the rounding of clocking-in and clocking-out, which [was] both fair and evenly applied to all employees.”).

An employer's rounding practices violate § 785.48(b) if they syst...