Castillo v. Glenair, Inc.

23 Cal.App.5th 262

232 Cal.Rptr.3d 844

Andrew CASTILLO et al., Plaintiffs and Appellants,

v.GLENAIR, INC., Defendant and Respondent.

B278239

Court of Appeal, Second District, Division 2, California.

Filed April 16, 2018

As Modified on Denial of Rehearing May 14, 2018

Matern Law Group, Matthew J. Matern, Andrew Sokolowski, Tagore Subramaniam, Debra J. Tauger ; Altshuler Berzon, Stacey Leyton, Eve H. Cervantez and Rebecca C. Lee, for Plaintiffs and Appellants.

Gibson, Dunn & Crutcher, Jesse A. Cripps, Los Angeles, Sarah Zenewicz and Elizabeth A. Dooley, San Francisco, for Defendant and Respondent.

LUI, P.J.

In a joint employer arrangement, can a class of workers bring a lawsuit against a staffing company, settle that lawsuit, and then bring identical claims against the company where they had been placed to work. We answer no.

This wage and hour putative class action involves the relationship between a temporary staffing company (GCA Services Group, Inc. (GCA) ), its employees (appellants Andrew and David Castillo), and its client company (respondent Glenair, Inc.). The Castillos were employed and paid by GCA to perform work on site at Glenair. Glenair was authorized to and did record, review, and report the Castillos' time records to GCA so that the Castillos could be paid. The Castillos characterize GCA and Glenair as joint employers. As explained below, the undisputed facts of this case demonstrate both that Glenair and GCA are in privity with one another for purposes of the Castillos' wage and hour claims, and that Glenair is an agent of GCA with respect to GCA's payment of wages to its employees who performed services at Glenair.

These findings of privity and agency are significant. While this case was pending, a separate class action brought against, among others, GCA resulted in a final, court-approved settlement agreement. (Gomez v. GCA Production Services, Inc. (Super. Ct. San Bernardino County, 2014, No. CIVRS1205657 (Gomez ) ).) The Gomez settlement agreement contains a broad release barring settlement class members from asserting wage and hour claims such as those alleged here against GCA and its agents. The Castillos are members of the Gomez settlement class and did not opt out of that settlement.

The Castillos' present claims against Glenair involve the same wage and hour claims, for the same work done, covering the same time period as the claims asserted in Gomez . Thus, because Glenair is in privity with GCA (a defendant in Gomez ) and is an agent of GCA, the Gomez settlement bars the Castillos' claims against Glenair as a matter of law.

The Castillos appeal the trial court's grant of summary judgment. As discussed below, however, we conclude summary judgment was proper.

FACTUAL AND PROCEDURAL BACKGROUND

Unless otherwise indicated, the following facts are undisputed. Beginning on an unknown date and until sometime in 2011, the Castillos performed work for Glenair. The Castillos were placed at Glenair by GCA, a temporary staffing service that supplies workers to third party companies. Although the Castillos performed work for Glenair under Glenair's general oversight and direction, GCA hired, fired and paid the Castillos. GCA made payments to the Castillos based on time records provided by Glenair. Glenair collected and reviewed for accuracy the Castillos' time records for services they provided at Glenair. When Glenair no longer needed the Castillos' services, Glenair so advised GCA and the Castillos stopped performing work for Glenair.

1. The Gomez Settled Class Action

a. The Complaint

In July 2012, Judith Gomez and Ernesto Briseno filed the Gomez action, a putative class action against GCA, GCA Production Services, Inc., and GCA Services Group of Texas, L.P. The Gomez complaint alleged claims for unpaid minimum wages, unpaid overtime wages, meal and rest break violations, Labor Code sections 203 and 226 violations, and unfair business practices under Business and Professions Code section 17200 et seq. Glenair was not a named defendant in Gomez .

b. The Gomez Settlement Agreement and Release

In May 2014, the Gomez parties settled the class action and executed a stipulation of class action settlement (settlement agreement). The settlement agreement defined the settlement class as "[a]ll current and former hourly-paid, non-exempt persons employed in California by Defendants GCA Production Services, Inc., GCA Services Group, Inc., and GCA Services Group of Texas, L.P., at hourly wages during the Covered Period." The covered period was defined as July 19, 2008 through May 5, 2014. It is undisputed the Castillos were Gomez settlement class members and did not opt out of the settlement agreement.

The settlement agreement included a broad release which provided: "in exchange for the Maximum Settlement Amount, Plaintiffs and the Settlement Class Members release the Released Parties from the Released Claims for the Covered Period. With respect to the Released Claims, the Plaintiffs and Settlement Class Members stipulate and agree that, upon the Effective Date, the Plaintiffs and Settlement Class Members shall be deemed to have, and by operation of the final judgment shall have, expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights and benefits of Section 1542 of the California Civil Code, or any other similar provision under federal or state law, which Section provides: [¶] A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. [¶] Plaintiffs and the Settlement Class Members may hereafter discover facts in addition to or different from those they now know or believe to be true with respect to the subject matter of the Released Claims, but upon the Effective Date, shall be deemed to have, and by operation of the final judgment shall have, fully, finally, and forever settled and released any and all of the Released Claims, whether known or unknown, suspected or unsuspected, contingent or non-contingent, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct that is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts."

The settlement agreement defined "Released Claims" as "all disputes, claims, and/or causes of action pleaded in the operative complaint for the Covered Period, namely: (a) failure to pay minimum wages, including Living Wage and Prevailing Wage rates; (b) failure to pay overtime wages; (c) failure to provide meal periods; (d) failure to provide rest periods; (e) breach of contract for failure to pay wages regarding (a) thru (d) above; (f) failure to timely pay all wages earned each pay period; (g) failure to timely pay final wages; (h) failure to reimburse business expenses; (i) failure to provide accurate itemized wage statements; and (j) all damages, penalties, interest and other amounts recoverable under said causes of action under California law, to the extent permissible, including but not limited to the California Labor Code, the applicable Wage Order, California Unfair Competition Law, and Private Attorneys General Act of 2004. The res judicata claim preclusion effect of any judgment pursuant to this settlement shall be the same as the claim preclusion effect of the above Release."

And the settlement agreement defined "Released Parties" as "Defendants GCA Services Group, Inc., GCA Production Services, Inc. and GCA Services Group of Texas, LP, together with their parent company(ies), subsidiaries, if any, together with their respective current and former officers, directors, agents, attorneys, successors, and/or assigns, and Defendants' present and current employees who are not Class Members."

On December 1, 2014, the trial court in Gomez entered its order of final approval of the class action settlement. In its order, the court ruled "that class members who did not timely exclude themselves from the Settlement have released their claims against Defendant [GCA] and other released parties as set forth in the Settlement Agreement."

2. The Instant Action

a. The Complaints

On April 11, 2013, less than a year after the Gomez complaint was filed and more than a year and a half before entry of the Gomez settlement agreement, counsel for the Castillos filed the instant putative class action against Glenair. Plaintiffs' counsel in this action was not class counsel in Gomez . At the time the original complaint was filed, however, the named plaintiff was in bankruptcy proceedings and, therefore, did not have standing to bring the lawsuit. The trial court granted leave to amend the complaint and, on February 14, 2014, counsel filed a first amended complaint naming Roxana Rojas as the new plaintiff. However, the court later granted defendants' demurrer to the first amended complaint because Rojas lacked standing as to all but one of the alleged causes of action (because her claims were time-barred). The court again granted leave to amend and, on September 12, 2014, counsel filed a second amended complaint adding the Castillos as plaintiffs.¹ The parties then stipulated, and the court granted leave, to allow plaintiffs' counsel to file a third amended complaint.

The third amended complaint was filed on January 7, 2015 (one month after final approval of the Gomez settlement agreement) and is the operable complaint (complaint). According to the complaint, the plaintiffs filed the lawsuit on behalf of themselves and all current and former non-exempt employees of Glenair (and Doe defendants 1 through 100) from April 11, 2009 through the conclusion of the lawsuit. GCA was not named as a defendant in the complaint.

Paragraph nine of the complaint ...