Eisele v. Home Depot U.S.A., Inc.

643 F.Supp.3d 1166

Kathleen EISELE, Plaintiff, v. HOME DEPOT U.S.A., INC., a Delaware corporation, Defendant.

No. 3:20-cv-01740-HZ

United States District Court, D. Oregon

Signed November 29, 2022

Jon M. Egan, Jon M. Egan, PC, 547 Fifth Street, Lake Oswego, OR 97034-3009, Attorney for Plaintiff.

David G. Hosenpud, Erin M. Wilson, Hank Stebbins, Lane Powell PC, 601 S.W. Second Avenue, Suite 2100, Portland, OR 97204, Donna Marie Mezias, Akin Gump Strauss Hauer & Feld LLP, 580 California Street, Suite 1500, San Francisco, CA 94104, Attorneys for Defendant.

OPINION & ORDER

HERNÁNDEZ, District Judge:

This matter is before the Court on Defendant Home Depot's Motion for Partial Summary Judgment [ECF 52] and Plaintiff Kathleen Eisele's Cross-motion for Partial Summary Judgment on the Illegality of Home Depot's Rounding Policy [EFC 56]. For the following reasons the Court grants in part and denies in part Defendant's Motion and grants in part and denies in part Plaintiff's Cross-Motion.

BACKGROUND

The following facts are taken from the parties' filings on summary judgment and are undisputed unless otherwise noted.

Defendant Home Depot uses a timekeeping software system, Kronos, to track the time worked by non-exempt employees (associates) for payroll purposes in Oregon and elsewhere. Associates use Kronos to punch in and out at the beginning and end of their shifts and to punch in and out for meal breaks. Kronos precisely records the time the associates work based on these punches, but is programmed to round each associate's total shift time either up or down to the nearest quarter of an hour for pay purposes. Specifically, minutes 0-7 round to zero minutes; minutes 8-22 round to 15 minutes; minutes 23-37 round to 30 minutes; minutes 38-52 round to 45 minutes; and minutes 53-60 round to 60 minutes.

On August 28, 2020, Plaintiff Kathleen Eisele filed a class action complaint against Defendant in Multnomah County Circuit Court bringing claims for failure to pay wages when due in violation of Oregon Revised Statute § 652.120 and for failure to pay wages on termination in violation of Oregon Revised Statute § 652.140. Plaintiff alleges Defendant "rounded plaintiff's and other class members' time punches, resulting in a consistent net underpayment to them" and "failed to pay plaintiff and the class members all earned and unpaid wages (including vacation pay) within the statutory deadline to do so upon termination of their employment." Compl. ¶¶ 5-6. Plaintiff alleges two classes of putative plaintiffs: (1) the rounding class "consisting of all current and former Oregon Home Depot employees who lost time due to [Defendant's] rounding policies" and (2) the final paycheck class "consisting of all former Home Depot employees who did not receive all wages due in their final paycheck . . . within the statutory deadline." Id. at ¶ 7(1) and (2).

On October 8, 2020, Defendant removed the matter to this Court pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2)(A).

On July 22, 2022, Defendant filed a Motion for Partial Summary Judgment in which it seeks an "order determining that Plaintiff's claim for failure to provide wages due on behalf of herself and the 'Rounding Class' fails as a matter of law" and the Defendant is not liable for penalty wages on Plaintiff's claims based on rounding.

On July 22, 2022, Plaintiff filed a Cross-Motion for Summary Judgment in which she seeks an order holding Defendant's rounding policy is not authorized by Oregon law and, therefore, Plaintiff and the class members are entitled to recover unpaid wages and penalties as a result of time lost to the rounding policy.

The Court heard oral argument and took the Motions under advisement on September 28, 2022.

STANDARDS

Summary judgment is appropriate if 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). The moving party bears the initial responsibility of informing the court of the basis of its motion, and identifying those portions of " 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting former Fed. R. Civ. P. 56(c)).

Once the moving party meets its initial burden of demonstrating the absence of a genuine issue of material fact, the burden then shifts to the nonmoving party to present "specific facts" showing a "genuine issue for trial." Fed. Trade Comm'n v. Stefanchik, 559 F.3d 924, 927-28 (9th Cir. 2009) (internal quotation marks omitted). The nonmoving party must go beyond the pleadings and designate facts showing an issue for trial. Bias v. Moynihan, 508 F.3d 1212, 1218 (9th Cir. 2007) (citing Celotex, 477 U.S. at 324, 106 S.Ct. 2548).

The substantive law governing a claim determines whether a fact is material. Suever v. Connell, 579 F.3d 1047, 1056 (9th Cir. 2009). The court draws inferences from the facts in the light most favorable to the nonmoving party. Earl v. Nielsen Media Rsch., Inc., 658 F.3d 1108, 1112 (9th Cir. 2011). If the factual context makes the nonmoving party's claim as to the existence of a material issue of fact implausible, that party must come forward with more persuasive evidence to support its claim than would otherwise be necessary. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

DISCUSSION

Plaintiff asserts rounding is not permissible under Oregon law and, even if it is permissible, Defendant's system does not meet the applicable standard. Defendant, on the other hand, asserts rounding is permissible under Oregon law and its rounding system satisfies the requirements.

I. Oregon Wage-and-Hour Law Generally

Oregon statute requires "[e]very employer" to "establish and maintain a regular payday, at which date the employer shall pay all employees the wages due and owing to them." Or. Rev. Stat. § 652.120(1). Wages are defined as "compensation due to an employee by reason of employment."¹ Or. Rev. Stat. § 653.010 (10). Oregon's administrative code related to wage-and-hour statutes defines "hours worked" as

all hours for which an employee is employed by and required to give to the employer and includes all time during which an employee is necessarily required to be on the employer's premises, on duty or at a prescribed work place and all time the employee is suffered or permitted to work. 'Hours worked' includes 'work time' as defined in ORS 653.010(11).

O.A.R. § 839-020-0004(19). "[W]ork time includes both time worked and time of authorized attendance." O.R.S. § 653.010(11).

"Any employer who pays an employee less than the wages to which the employee is entitled . . . is liable to the employee affected: (a) For the full amount of the wages, less any amount actually paid to the employee by the employer; and (b) For civil penalties provided in ORS 652.150." Or. Rev. Stat. § 653.055(1).

II. Rounding

Plaintiff contends "[n]o Oregon statute, administrative rule, or appellate case allows an employer to underpay an employee as long as they overpay a different employee" (i.e., there is no authority for rounding under Oregon law). Pl. Motion for Summ. J. at 11. Defendant concedes there is not any Oregon statute, rule, or appellate case that permits rounding. Defendant, however, asserts that because Oregon statutes and regulations do not explicitly prohibit rounding, the Court should borrow the rounding standard found in 29 C.F.R. § 785.48(b), which provides:

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.

Defendant notes this district applied § 785.48(b) and found rounding was permissible under Oregon law when the rounding policy complied with the parameters of § 785.48(b) in Du Ju v. Kelly Servs. Inc., No. CIV. 3:08-1213-HA, 2011 WL 4625669 (D. Or. Sept. 28, 2011). In that case the plaintiff alleged, among other things, that the defendant failed to pay her all of her wages on termination in violation of O.R.S. § 652.140 because plaintiff's final paycheck included wages for 1.25 hours of work, rather than the 1.3564 hours that plaintiff actually worked. Id. at *11. The defendant asserted the plaintiff was paid appropriately because it "lawfully rounded plaintiff's wages to the nearest quarter hour." Id. The court agreed with the defendant noting although "Oregon does not have a regulation or statute regarding rounding," the Oregon Bureau of Labor and Industry (BOLI) "relies on federal regulations for guidance," including the regulation that permits rounding under specific circumstances. Id. (citing BOLI, Employer Can "Round" Hours, But Must ensure that All Time is Actually Paid, www.oregon.gov/BOLI/TA/ TA COL 012307 Rounding Hours.pdf (2007)). Ultimately, the court granted the defendant's motion for summary judgment on the plaintiff's claim for $1.17 in unpaid wages "[b]ecause there is no evidence to suggest that defendant's rounding policy was not applied fairly, or resulted in unpaid wages over time." Id. This Court notes, however, that the BOLI guidance statement on which the Du Ju court relied is no longer on BOLI's website. When Defendant asked BOLI for a copy of the statement on which the Du Ju court relied, BOLI provided the statement but noted:

While [BOL

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