Wheeler v. Safeway, Inc.

1

RICHARD WHEELER, et al., Plaintiff and Appellant, v. SAFEWAY, INC., Defendant and Respondent

C095601

California Court of Appeals, Third District, San Joaquin

January 27, 2023

NOT TO BE PUBLISHED

Super Ct. No. STK-CV-UBT-2016-0000176

Duarte, Acting P. J.

This is a wage and hour class action lawsuit brought by truck drivers employed by defendant Safeway, Inc. (Safeway). Plaintiff Richard Wheeler and others filed suit in 2016 following the settlement of two related wage and hour lawsuits in 2015. In this action, plaintiffs allege, among other things, that Safeway continued to provide its drivers inadequate wage statements in violation of Labor Code section 226 subdivision (a).^[1] After the trial court issued two in limine rulings limiting Safeway's exposure to liability on the wage statement claim, including a ruling regarding the scope of the release provision in the settlement agreement encompassing the two related cases, the parties settled the remaining claims. Plaintiffs timely appeal, challenging the trial court's in limine rulings. We conclude the trial court erred and therefore reverse.

BACKGROUND

This case has a lengthy history involving the settlement of two related wage and hour lawsuits following years of litigation which began in 2001 and includes two prior appeals. In view of the limited issues raised on appeal, we briefly summarize the pertinent facts and proceedings, which are largely set forth in our prior opinions: Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 955-956 (Cicairos) and Bluford v. Safeway Inc. (2013) 216 Cal.App.4th 864, 866-867 (Bluford). Additional information is set forth as necessary post in the Discussion section.

Relevant Facts Prior to June 2015

Since 2003, Safeway has managed the operations of a distribution center in Tracy. (Bluford, supra, 216 Cal.App.4th at p. 866.) The plaintiffs in this case, like the plaintiffs in Cicairos and Bluford, are truck drivers who worked out of that distribution center, delivering goods to Safeway stores in Northern California and Nevada. (Id. at pp. 866867.) Prior to 2003, the distribution center was operated by a third party, Summit Logistics, Inc. (Summit), for Safeway's benefit. (Id. at p. 867 fn. 1.)

The terms of the drivers' employment were governed by successive collective bargaining agreements, which provided for meal periods and rest breaks and specified the manner in which wages were calculated. (Bluford, supra, 216 Cal.App.4th at p. 867.) Safeway utilized an activity-based compensation system to determine the drivers' wages, which were calculated based on: (1) mileage rates applied according to the number of miles driven, the time of day the trips were taken, and the locations where the trips began and ended; (2) fixed rates for certain tasks (e.g., rates for the number of pallets delivered and picked up); (3) an hourly rate for a predetermined amount of minutes for certain tasks (e.g., paid for 10 minutes at an hourly rate for set-up time at each store); and (4) an hourly rate for delays (e.g., breakdowns, impassable highways, time spent at scales, or other causes beyond the driver's control). (Id. at p. 867.) This compensation system is known as a piece-rate or incentive-based compensation system. (Id. at p. 871.) The only component of this system for which drivers are paid according to the "actual time" they spend on a task is delay time.

Drivers logged their mileage and activities for each trip manually on documents known as trip sheets. (Bluford, supra, 216 Cal.App.4th at p. 867.) They also logged their activities into an onboard computer system, which allowed Safeway to track their movement, including their stops. (Id. at pp. 867-868.) The drivers inputted codes into the system to record specific reasons for delays. (Id. at p. 868.)

As for wage statements, Safeway provided its drivers with a" 'driver trip summary-report of earnings'" (ROE)^[2] and an" 'earnings statement'" with each paycheck. (Bluford, supra, 216 Cal.App.4th at p. 868.) The ROE listed each component of the driver's pay and the quantity of each component for which they were being paid. (Ibid.) The components and quantities were paid based on the rates set in the collective bargaining agreements. (Ibid.) The earnings statement itemized the actual components, and it expressed them in an equivalent hourly pay. (Ibid.) The delay time, paid at the driver's hourly rate, is also listed in the ROE.

The trip sheets were used to generate the drivers' earning statements and ROEs. Neither the earnings statements nor the ROEs stated the rates at which drivers were compensated for their mileage. (Bluford, supra, 216 Cal.App.4th at p. 868.)

The documents setting forth the rates (hourly, mileage, and activity) used to calculate the drivers' compensation were not included with the wage statements supplied to the drivers.^[3] Safeway instructed the drivers to compare their earning statement and ROE with their trip sheets to ensure that they were paid the correct amount, and to speak with the transportation manager or a payroll clerk if they believed their pay was incorrect.

Itemized Wage Statements

Section 226, subdivision (a) requires an employer to provide its employees with an accurate itemized wage statement containing nine specified items. Among the items that must be in a wage statement include gross wages earned, total hours worked by the employee, the number of piece-rate units earned, and any applicable piece rate if the employee is paid on a piece-rate basis, all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee. (§ 226, subd. (a).)

An employer must provide a wage statement to its employees "semimonthly or at the time of each payment of wages" and furnish the statement "either as a detachable part of the check . . . paying the employee's wages, or separately if wages are paid by personal check or cash." (§ 226, subd. (a).) The wage statement must contain the information specified in the statute. (Soto v. Motel 6 Operating, L.P. (2016) 4 Cal.App.5th 385, 390 (Soto).)^[4] "The core purpose of section 226 is 'to ensure an employer "document[s] the basis of the employee compensation payments" to assist the employee in determining whether he or she has been compensated properly.'" (Ward v. United Airlines, Inc. (2020) 9 Cal.5th 732, 752 (Ward); see Maldonado v. Epsilon Plastics, Inc. (2018) 22 Cal.App.5th 1308, 1337 [" '" 'The purpose of requiring greater wage stub information is to insure that employees are adequately informed of compensation received and are not shortchanged by their employers'"' "].) "Section 226 is part of a matrix of laws intended to ensure workers are correctly and adequately compensated for their work." (Ward, at p. 752.)

An employee may obtain the greater of actual damages or statutory penalties if he or she suffers injury as a result of a knowing and intentional failure by their employer to comply with section 226, subdivision (a). (§ 226, subd. (e)(1).) An employee is deemed to suffer injury if the employer fails to provide accurate and complete information as required by section 226, subdivision (a) and the employee cannot "promptly and easily determine from the wage statement alone" any of the enumerated items (e.g., piece-rate units earned, total hours worked). (Id., subd. (e)(2)(B)(i).) A knowing and intentional violation occurs "if the employer 'knew that facts existed that brought its actions or omissions within the provisions of [the statute]' [citation] or, in other words, 'was aware of the factual predicate underlying the violation.'" (Kao v. Holiday (2017) 12 Cal.App.5th 947, 961.) "The employee is not required to demonstrate that the employer knew its conduct was unlawful." (Furry v. East Bay Publishing, LLC (2018) 30 Cal.App.5th 1072, 1085.)

"An actual injury is shown where 'there is a need for both additional documentation and additional mathematical calculations in order to determine whether Plaintiffs were correctly paid and what they may be owed.' [Citation.] In contrast, where the deficiency in the wage statement could be corrected by 'simple math,' there is no actual injury." (Raines v. Coastal Pacific Food Distributors, Inc. (2018) 23 Cal.App.5th 667, 676 (Raines).)

Related Cases

The plaintiffs in Cicairos and the plaintiff in Bluford brought suit against their former/current employer (Summit/Safeway), alleging violations of statutory and regulatory laws related to meal and rest periods and itemized wage statements. (See Cicairos, supra, 133 Cal.App.4th at p. 952; Bluford, supra, 216 Cal.App.4th at pp. 866, 868.) Both Cicairos and Bluford involved the same wage and hour claims which were predicated on similar allegations of wrongdoing.

In 2005, we issued a published opinion in Cicairos reversing the trial court's grant of summary judgment in favor of Summit. We concluded the evidence did not establish that Summit provided the plaintiffs with their required meal periods, paid rest periods, and adequately itemized wage statements. (Cicairos, supra, 133 Cal.App.4th at pp. 960963.) In 2003, when Safeway took over control of the distribution center, it continued to utilize the same compensation structure and policies we subsequently disapproved in Cicairos until after Cicairos was issued. (Bluford, supra, 216 Cal.App.4th at p. 867, fn. 1.)

In May 2013, we reversed the trial court's order denying plaintiff's motion for class certification. (Bluford supra, 216 Cal.App.4th at pp. 866, 874.) We concluded insufficient evidence supported the trial court's determination that individual issues predominated over common issues on the plaintiff's rest and meal period claims, and that plaintiff alleged a...