Stoetzl v. State

14 Cal.App.5th 1256

222 Cal.Rptr.3d 728

Kurt STOETZL et al., Plaintiffs and Appellants,

v.STATE of California et al., Defendants and Respondents.

A142832

Court of Appeal, First District, Division 4, California.

Filed August 31, 2017

Carroll, Burdick & McDonough LLP, Jack T. Friedman, Jonathan D. Yank, Laurie J. Hepler, and David M. Rice, San Francisco; Messing Adam & Jasmine LLP, San Francisco, Gregg McLean Adam ; and Goyette and Associates, Inc., Gary G. Goyette, Gold River.

Kronick, Moskovitz, Tiedemann & Girard, David W. Tyra, Sacramento, and Kristianne T. Seargeant ; California Department of Human Resources, Joan A. Markoff, Chief Counsel, Frolan R. Aguiling, Deputy Chief Counsel, Christopher E. Thomas, Labor Relations Counsel, and David D. King, Labor Relations Counsel.

Rivera, J.Plaintiffs are current and former correctional peace officers who work or worked at various state correctional facilities. They brought these coordinated class actions alleging they were improperly denied pay for time they spent under their employer's control before and after their work shifts. Ruling that plaintiffs' entitlement to overtime pay is controlled by federal, rather than California, law, the trial court entered judgment for defendants.¹ We shall reverse the judgment in part as to the subclass of unrepresented employees and affirm as to the subclass of represented employees.

I. BACKGROUND

A. The Actions

Plaintiffs alleged they were not paid for all the time they spent at the correctional institutions under defendants' control. Specifically, they were expected to sign in and sign out on time sheets that reflected only their officially assigned work day. Plaintiffs were required to be at their assigned posts at the beginning of their official shifts. However, the sign-in and sign-out locations were often significantly removed from plaintiffs' actual work posts, and they were not compensated for the time it took to travel from those locations to their work posts after signing in or to return to those locations to sign out at the end of a shift. Second, plaintiffs alleged that they were required to spend time before checking in and after checking out on such activities as being briefed before a shift, briefing relief staff at work posts after a shift, checking out and checking in mandated safety equipment, putting on and removing mandated safety equipment, waiting in lines, submitting to searches at security checkpoints, and taking inventories of weapons, ammunition, and other equipment. Plaintiffs were either not allowed to or were discouraged from adjusting their time logs to reflect these additional tasks. Plaintiffs alleged causes of action for failure to pay contractual overtime ( Lab. Code,² §§ 222, 223 ) (first cause of action), failure to pay the California minimum wage (§§ 1182.11, 1182.12, 1194; 8 Cal. Code Regs. § 11000 et seq. ) (second cause of action), failure to keep accurate records of hours worked (§ 1174) (third cause of action), and failure to pay overtime in breach of common law contractual obligations (fourth cause of action). They sought unpaid overtime wages, unpaid California minimum wages, liquidated damages, and injunctive relief.

In the Stoetzl action, the trial court certified a class of "[a]ll persons who are or who have been employed as Correctional Officers, Correctional Sergeants, Correctional Lieutenants, Medical Technical Assistants, Senior Medical Technical Assistants, Correctional Counselors I, Correctional Counselors II, Youth Correctional Officers, and/or Youth Correctional Counselors to work at adult and/or youth correctional institutions within the [CDCR] in the period commencing April 9, 2005 until the notice of pendency of this class action is given." The Stoetzl , Shaw , and Kuhn actions were later coordinated. ( Code Civ. Proc., § 404 et seq. ; rule 3.501 et seq.) The court granted class certification in the Shaw and Kuhn actions and, by stipulation, certified two subclasses for the three coordinated cases, one of unrepresented supervisory employees (consisting of Senior Medical Technical Assistants, some subclassifications of Correctional Officer II's, Correctional Sergeants, and Correctional Lieutenants) and one of represented employees (consisting of the remaining job classifications).³

B. Judgment on the Pleadings

The State moved for judgment on the pleadings. The trial court granted the motion without leave to amend as to the causes of action for failure to pay overtime in violation of sections 222 and 223 and failure to keep accurate records of hours worked, and denied the motion as to the remaining causes of action.

C. Trial

1. Threshold Legal Issues

The parties stipulated that the trial would be bifurcated into multiple phases. In Phase I, several threshold legal issues would be tried to the court. The issues were: "Compensability[¶] (a) Whether the California state law standard of compensability (the 'control standard') or the [federal Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq. (FLSA) ] standard of compensability ('first principal activity of the day') establishes the standard for determining plaintiffs' compensable hours worked; as to Represented Employees: During the relevant time period, did the parties agree the FLSA would constitute the controlling legal standard for determining represented employees' compensable hours worked? [¶] Minimum Wage[¶] (b) Whether Labor Code sections 1182.11, 1182.12, 1194 and 8 CCR section 11000 et seq. and/or the Wage Orders apply to the state employer for purposes of establishing the minimum wage applicable to plaintiffs. [¶] (c) Represented Employees: During the relevant time period, did the parties contractually agree to apply the federal minimum wage instead of the California minimum wage and, if so, is such an agreement enforceable? [¶] Breach of Contract Claims[¶] (d) Is there any legal prohibition, including but not limited to, the Ralph C. Dills Act ( Govt. Code § 3512, et seq. ) for represented employees and the Bill of Rights for State Excluded Employees ( Govt. Code § 3525, et seq. ) for unrepresented employees, against stating a claim for breach of common law contract regarding the terms and conditions of employment against the state, or against an employee receiving overtime for hours worked beyond their regular work schedules? [¶] (e) For represented employees, what contractually enforceable overtime policies existed when (1) the 2001-2006 MOU was in effect, including by operation of Government Code § 3517.8 until September 18, 2007, (2) the State's Implemented Terms were in effect, and (3) once the 2011-2013 MOU took effect? [¶] (f) Assuming represented employees can state a common law contract claim, were represented employees required to exhaust contractual grievance procedures and/or other administrative remedies prior to bringing a civil breach of contract action? [¶] (g) Assuming unrepresented employees can state a common law contract claim, what contractually enforceable overtime policies existed during the class period?"

2. Stipulations and Evidence at Trial⁴

a. Represented Employees

The California Correctional Peace Officers' Association (CCPOA) is the exclusive collective bargaining representative for members of the subclass of represented employees. Labor relations between CCPOA and the State are governed by the Ralph C. Dills Act ( Gov. Code, § 3512 et seq. ) (the Dills Act), which provides for collective bargaining over wages, hours, and other terms and conditions of employment. The Department of Human Resources (CalHR, formerly known as the Department of Personnel Administration or DPA) represents the Governor of California as the state employer for purposes of collective bargaining with the CCPOA. The Dills Act allows parties to agree to a memorandum of understanding (MOU) to supersede certain provisions of law. ( Gov. Code, § 3517.61.) After the parties reach an agreement, they submit a joint MOU to the Legislature, when appropriate, for approval. ( Gov. Code, § 3517.5.)

The FLSA establishes overtime pay requirements for hours worked in excess of 40 per week. ( 29 U.S.C. § 207(a).) An exemption from this requirement exists for peace officers: An employer may establish a regular work period of up to 171 hours in a 28-day period, and must pay overtime only after the employee works more than 171 hours in the work period. This is known as the "7k Exemption." (See 29 U.S.C. § 207(k) ; see also 29 C.F.R. §§ 553.201, 553.230.)

The State, through CalHR, and CCPOA have negotiated multiple MOU's since 1982 on behalf of the represented plaintiffs' collective bargaining unit, State Bargaining Unit 6. Before 1998, the MOU's generally provided for a 40-hour workweek. The MOU in effect from July 1, 1998 to June 30, 1999 contained a section entitled "7k Exemption," which began, "CCPOA and the State agree that the employees listed below are working under the provisions of Section 207k of the Fair Labor Standards Act (FLSA) and the parties acknowledge that the employer is declaring a specific exemption for these employees under the provisions specified herein." It provided for a "7k schedule" of 168 hours in a 28-day work period for certain job classifications and defined "overtime" as hours worked in excess of 168 hours. For Correctional Officers, Medical Technical Assistants, Youth Correctional Officers, and Youth Correctional Counselors, the 168 compensated hours consisted of 160 hours of regular posted duty, four hours for pre- and post-work activities, and four hours for training. Section 11.12 of the 1998-1999 MOU stated that "CCPOA agrees that generally this is sufficient time for all pre and post work activities during each work period, and that the compensation allotted for these activities under this provision is full compensation for all of these activities," that "[t]he State and CCPOA agree that they have made a good faith attempt to comply with all requirements of the FLSA in negotiating this provision. If...