WILLHITE, Acting P. J.
Plaintiffs Teresa Bustamante and Margarita Correa appeal from a summary judgment in favor of defendant Team One Employment Specialists, LLC (Team One) in their wage and hour lawsuit. Plaintiffs contend the trial court erred by finding that Team One was immune from plaintiffs' claims under a "derived immunity" theory — i.e., that Team One was entitled to the same immunity afforded the public entity with which it contracted to provide temporary employees — and, alternatively, that the time for which plaintiffs seek recovery is not compensable under a de minimus rule. We conclude there are disputed issues of fact regarding whether the immunity Team One asserts or the de minimus rule applies here. Accordingly, we reverse the summary judgment.
Team One is a temporary staffing company, engaged in the business of placing temporary employees with various clients in Southern California. In December 2002, Team One entered into an agreement with a confederation of Sanitation Districts in Los Angeles County (collectively, the District) to provide certain categories of employees to work at a materials recovery (i.e., recycling) and transfer facility, known as DART, owned by the District. Plaintiffs were hired by Team One to work as belt sorters at DART.
Originally, DART was jointly owned and operated by the District and DART, Inc., a private company. DART, Inc. was responsible for the materials recovery aspect of the facility (i.e., sorting recycling and green material), and the District was responsible for the transfer side (i.e., receiving and transferring rubbish and the recycling and green materials). At some point, the District took over complete ownership of DART, and it sent out a request for proposal for another entity to run the materials recovery operation.
That request for proposal (the 2002 RFP) described the operation, the classes of workers needed, the minimum qualifications for those workers, and the minimum benefits to be provided to them. It provided specific requirements regarding work hours — it specified that a work week consisted of five consecutive eight-hour days (exclusive of meal periods), with two paid 15-minute breaks and a half-hour unpaid lunch period — and required the contractor, at its own expense, to conduct background checks on prospective employees, arrange for pre-employment physical exams for all employees, provide health and safety training programs and protective gear, have in place a program to ensure a workplace free of drugs and alcohol, and have general liability and workers' compensation insurance policies. To ensure a smooth transition in the operation of the facility, it also required the contractor to provide job applications and extend job offers to existing DART, Inc. workers who met the standards and requirements of employment described in the 2002 RFP and the standards and requirements of the contractor, and provided seniority rules to be applied in the event there were more qualified existing employees than available positions. It stated, however, that "[t]he continued employment by the Contractor to the Existing Employees is at the sole discretion of the Contractor."
The 2002 RFP emphasized that management and direction of the workforce "are vested solely and exclusively with and retained by the Contractor," and that the contractor would be the "sole judge of the qualifications and competency of its workers at the facility." To that end, it required that the contractor have on-site a "Contractor's Representative," who would be responsible for providing administrative and technical guidance to the contractor's employees, including interviewing and evaluating prospective employees, arranging for medical, drug, and background testing, maintaining employee time keeping, safety, and discipline records, daily staffing, and coordinating onsite training for safety and job skills. The Contractor's Representative would have no direct supervision over the District's employees or agents, and would be the sole point of contact between the District and the contractor.
Finally, the 2002 RFP stated that the contractor must "at all times comply with all applicable federal and state laws, rules and regulations, and all applicable local ordinances, specifically including, but not limited to, environmental, labor, and safety laws, rules, regulations and ordinances."
Companies responding to the 2002 RFP were required to submit a proposal that included the hourly rate for furnishing labor for each class of employees, using existing or new employees. The winning contractor would be paid based upon the hours each employee worked.
Team One was awarded the contract in December 2002, and conducted the materials recovery operations under the terms of the 2002 RFP until December 2004. In 2004, the District sent out another request for proposal (the 2004 RFP) that sought proposals for supplying the labor to run the materials recovery operations at DART and another facility in Puente Hills. The 2004 RFP was identical in many respects to the 2002 RFP — including the provisions stating that the contractor has the sole responsibility for managing and directing its employees and is the sole judge of the qualifications and competency of its employees, and the provision requiring the contractor to comply with all applicable laws, rules, regulations and ordinances, including labor laws. But unlike the 2002 RFP, the 2004 RFP provided a pay schedule setting out the base hourly beginning wage for each job category and provisions for pay increases, seniority, holidays, vacation, sick leave, and medical insurance. Team One was awarded the contract, and provided labor for both facilities under the terms of the 2004 RFP until July 31, 2007, when it lost the contract to another temporary services provider.
Plaintiff Correa had been working as a belt sorter for DART, Inc. for four years when Team One was awarded its first contract. A Team One representative came to DART and told the DART, Inc. employees that if they wanted to continue working there, they would have to apply to Team One. She applied and was hired by Team One. Plaintiff Bustamante was hired as a belt sorter by Team One in November 2003.
Belt sorters stood along a conveyor belt and hand-sorted the recycled material that was loaded onto the belt by District employees. Team One required each belt sorter to wear several items of protective gear, which Team One provided to them. The protective gear was kept at the employees' workstations, which was a few minutes walk from the location of the time clock, where all employees were required to clock in. It took several minutes to put on or take off the gear.
Team One expected its employees to be at their workstations with their protective gear on at the start of their scheduled eight-hour work shift and when the belt resumed operation after the half-hour lunch break. Therefore, Team One supervisors instructed employees to clock in five minutes before the start of their work shift and before the end of their lunch break. Once they clocked in, the employees were required to proceed directly to their workstations; they were not allowed to stop to use the rest room or go to their lockers. At least once a month, Team One employees were required to attend a mandatory safety meeting after clocking out; the meetings lasted 30 minutes to an hour, and the employees were not compensated for that time.
In 2006, plaintiffs and several other Team One employees went to an employee of the District, a man named Salvador, to complain that Team One did not pay them for the five minutes they were required to clock in before the start of their shifts and before the end of their lunch period, or for the time they attended mandatory meetings. Salvador told them that he could not do anything about their complaints because he was not in charge of the belt sorters. Later, the employees who talked to Salvador were given a warning by Team One for violating company policies. The written employee warning notice issued to Bustamante stated: "EE was speaking to client about overtime issues. EE was in violation of company policies. EE should address any issues with on-site manager."
In January 2008, plaintiffs filed the instant lawsuit, as a class action, against Team One and another defendant, AB/T1, alleging causes of action for failure to provide adequate meal periods (first cause of action), failure to pay minimum wages and overtime (second cause of action), failure to pay vested vacation wages upon termination (third cause of action), waiting time penalties (fourth cause of action), and violation of Business and Professions Code section 17200 et seq. (fifth cause of action). Plaintiffs moved to certify the class, and Team One moved for summary judgment as to the individual named plaintiffs. Both motions were scheduled to be heard on the same day, but the trial court continued the summary judgment motion and took the class certification motion under submission. Later that day, the trial court issued its ruling on the certification motion, denying certification as to AB/T1 on all causes of action and as to Team One on the third cause of action (failure to pay vested vacation wages), and granting certification as to the remaining causes of action against Team One.
The summary motion was heard three weeks later. Team One argued that the first and second causes of action (inadequate meal periods and failure to pay overtime) failed to state claims because the amounts involved were de minimus and because Team One had derived immunity from the District. It also argued that the third and fourth causes of action failed to state claims because plaintiffs were not discharged or terminated from employment with Team One, and that the fifth cause of action failed because it was merely derivative of the other causes of action. The trial court granted the motion "for the reasons articulated in [Team One's] papers." Plaintiffs timely filed a notice of appeal from the resulting judgment.
On appeal, plaintiffs challenge the trial court's ruling only to the extent the court accepted Team One's arguments that the first and second causes of action failed to state a claim because Team One was entitled to derived immunity and because the amounts of time involved in those claims were de minimus.
On appeal from a summary judgment, we make "an independent assessment of the correctness of the trial court's ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law." (Iverson v. Muroc Unified School Dist. (1995) 32 Cal.App.4th 218, 222.) The court strictly construes declarations of the moving party, liberally construes those of the opposing party, and it resolves all doubts as to whether a summary judgment should be granted in favor of the opposing party. The court focuses on issue finding; it does not resolve issues of fact. The court seeks to find contradictions in the evidence, or inferences reasonably deducible from the evidence, that raise a triable issue of material fact. (Michael J. v. Los Angeles County Dept. of Adoptions (1988) 201 Cal.App.3d 859, 865-866.)
Plaintiffs' overtime and meal period claims are based for the most part upon their allegation that Team One required them to clock in five minutes before the start time for their eight-hour shifts and five minutes before the end of their unpaid 30-minute lunch period every day.
In their overtime claim (the second cause of action), they allege that, because of this requirement, they worked more than eight hours every day but were not paid for the 10 additional minutes they worked every day. They also allege that they were not paid for the mandatory meetings they attended, at least once a month, after their eight-hour shifts. They contend Team One's failure to pay overtime compensation for the time they worked in excess of eight hours in a day violated the applicable IWC Wage Order (Cal. Code Regs., tit. 8, § 11010),
In their meal period claim (the first cause of action), plaintiffs allege that, because Team One required them to clock in five minutes before the end of their 30-minute lunch period, they were denied a 30-minute meal period in violation of the applicable IWC Wage Order
Team One's derived immunity theory can be summarized as follows. The District is part of Los Angeles County (the County). As a charter county, the County (and therefore the District) has the right to regulate the compensation of its employees under the "home rule" doctrine and is exempt from IWC Wage Orders. The District controlled the terms of plaintiffs' employment through the 2002 RFP and 2004 RFP. Team One merely performed the terms of the 2002 RFP and 2004 RFP. Therefore, Team One is immune from liability for alleged violations of state labor laws, including the applicable IWC Wage Order, to the extent the violations arise from the performance of those RFPs. The validity of this theory turns on two factual issues: (1) whether the District controlled the terms of plaintiffs' employment such that it was plaintiffs' employer, and (2) whether plaintiffs' claims arise from Team One's performance of the terms of the 2002 RFP and 2004 RFP. As we discuss, even if plaintiffs were employees of the District, disputed issues remain as to whether Team One properly performed under the 2002 RFP and 2004 RFP.
The County is a charter county. (L.A. County Charter, art. I, § 1; see also Dimon v. County of Los Angeles (2008) 166 Cal.App.4th 1276, 1281 (Dimon).) The California Constitution expressly grants to charter counties the authority to regulate the compensation of its employees. (Cal. Const., art. XI, § 4, subd. (f); see also Dimon, supra, 166 Cal.App.4th at p. 1281.) "The state Constitution's express grant of authority to charter counties necessarily implies that the Legislature lacks the authority to provide for compensation of the County employees. [Citation.] In other words, the determination of wages to be paid to employees of charter counties `is a matter of local rather than statewide concern.' [Citation.] Consequently, `[w]hen a California County [such as Los Angeles County] adopts a charter, its provisions "are the law of the State and have the force and effect of legislative enactments." [Citations.] Under the "home rule" doctrine, county charter provisions concerning the operation of the county, and specifically including the county's right to provide "for the number, compensation, tenure and appointment of employees" (that is, a county's core operations) trump conflicting state laws. [Citations.]' [Citations.]" (Dimon, supra, 166 Cal.App.4th at pp. 1281-1282.)
The County's charter provides that the Board of Supervisors shall appoint the County's employees and fix their compensation. (L.A. County Charter, art. III, § 11.) But the charter also provides that, when the Board of Supervisors determines that work can more economically or feasibly be performed by independent contractors, the County may enter into contracts with those independent contractors to perform that work. (L.A. County Charter, art. IX, § 44.7; see also Holmgren v. County of Los Angeles (2008) 159 Cal.App.4th 593, 601 ["The county's charter . . . expressly permits the county to either hire its own employees or outsource work to independent contractors"].) Team One argues that, even though the District entered into a contract with it to provide the labor to perform the materials recovery work at DART, the District nevertheless retained sufficient control over the wages, hours, and working conditions of Team One employees to be deemed their employer for purposes of the home rule doctrine.
In 1913, the California Legislature "created the IWC and delegated to it the power to fix minimum wages, maximum hours and standard conditions of labor for workers in California." (Martinez v. Combs (2010) 49 Cal.4th 35, 52 (Martinez).) Over the years, the IWC issued a series of wage orders covering different industries and occupations, and "[t]oday 18 wage orders are in effect, 16 covering specific industries and occupations, one covering all employees not covered by an industry or occupation order, and a general minimum wage order amending all others to conform to the amount of the minimum wage currently set by statute." (Id. at p. 57, fns. omitted.) Most of the wage orders, including the wage order at issue in this case, exempts from its coverage (for the most part) "any employees directly employed by the State or any political subdivision thereof, including any city, county, or special district." (See, e.g., Cal. Code Regs., tit. 8, § 11010, subd. (1)(B).)
All 16 wage orders covering specific industries and occupations (including the wage order at issue here) use the same language to define "employ" and "employer." (Martinez, supra, 49 Cal.4th at p. 59.) The California Supreme Court interpreted that language for the first time in Martinez (id. at p. 50), and concluded that "employer" as used in the wage orders includes any entity that controls an employee's wages, hours, and working conditions, or any one of those aspects of the employment relationship. (Id. at p. 59.) Thus, the definition "reach[es] situations in which multiple entities control different aspects of the employment relationship, as when one entity, which hires and pays workers, places them with other entities that supervise the work. Consistently with this observation, the IWC has explained its decision to include the language in one modern wage order as `specifically intended to include both temporary employment agencies and employers who contract with such agencies to obtain employees within the definition of `employer.'" (Ibid.) Team One argues that the District exercised control over all three aspects of the employment relationship — wages, hours, and working conditions — and therefore is an employer under the IWC wage order, but it is exempt from the wage order because it is a political subdivision of the State. Although Team One admits that it was plaintiffs' employer of record, it contends it should be afforded the same immunity as the District in light of the District's control over all aspects of the employment relationship through the 2002 RFP and the 2004 RFP.
"`The question of whether an employment relationship exists "`is generally a question reserved for the trier of fact.'" . . . This remains true "[w]here the evidence, though not in conflict, permits conflicting inferences." . . . However, if neither the evidence nor inferences are in conflict, then the question of whether an employment relationship exists becomes a question of law which may be resolved by summary judgment.'" (Brassinga v. City of Mountain View (1998) 66 Cal.App.4th 195, 210.)
Team One argues the evidence that the District was an employer in this case is undisputed, pointing to several provisions of the 2002 RFP or the 2004 RFP that, it contends, shows that the District exercised control over the wages, hours, and working conditions of Team One's employees. While there is no question that those provisions addressed wages, hours, and working conditions, conflicting inferences could be drawn regarding whether those provisions gave the District sufficient control over those issues to be deemed an employer.
For example, a reasonable trier of fact could conclude that some of the provisions Team One cites simply reflect the fact that Team One employees would be working in a facility owned by the District, at which District employees also would be working, and that the work done by each set of employees had to be coordinated. Thus, the RFP provided the general work hours for the facility and the dates it would be closed, required Team One to provide safety training for its employees and to provide them with safety equipment, required Team One to have a contractor's representative on-site to oversee Team One's operations, and required Team One to conduct criminal background checks on its employees and gave the District the right to reject any worker with felony convictions. A reasonable trier of fact also could conclude that another provision Team One cites — the section requiring Team One to hire existing employees under certain conditions — fails to show the District's control because one of those conditions is that the employee meets Team One's standards and requirements of employment. Still other provisions Team One relies upon — such as the sections governing performance requirements (i.e., efficiency levels for the entire sorting operation) and giving the District the right to terminate its agreement with Team One — do not evidence any control by the District over Team One's employees; instead, those provisions relate to Team One's (rather than its employees') performance of its obligations under the contract.
The remaining provisions Team One cites (1) define the work week, work day, meal periods, and overtime pay for the employees (although those definitions simply mirror applicable law); (2) provide minimum benefits to be provided to the employees; and (3) provide the base hourly beginning wage to be paid to the various categories of employees, and rules governing pay increases.
But the District exercised only limited control compared to the control Team One was given: the 2002 RFP provided that "[t]he management of the workforce, direction of the workforce, right to assign work, schedule production, hiring, transferring, promoting, demoting, disciplining, suspending, discharging for cause, and determining qualifications of any employees, to relieve employees from duty because of lack of work or for other legitimate reasons and to establish, amend, and enforce the necessary rules and regulations for conduct and safety, are vested solely and exclusively with and retained by the Contractor.") Thus, a question remains about the scope of the District's immunity (from which Team One's alleged immunity derives), and whether it is immune only to the extent it exercises control. The parties have not addressed this issue, and we need not decide that question in this appeal, because we conclude that disputed issues of fact regarding Team One's performance of the 2002 RFP and 2004 RFP preclude summary judgment under a derived immunity theory.
In Gruner v. Barber (1962) 207 Cal.App.2d 54, the court described how derived immunity arises: "`One who contracts with a public body for the performance of public work is entitled to share the immunity of the public from liability for incidental injuries necessarily involved in performance of the contract, where he is not guilty of negligence.'" (Id. at p. 59.) Immunity is not applicable, however, for acts not provided for by the contract. (Id. at p. 60.)
Team One's derived immunity argument is premised upon its assertion that any damages plaintiffs suffered were the result of Team One's performance of its contract with the District. Plaintiffs argue that derived immunity does not apply to the kind of contract and claims alleged here, but even if it did, Team One's argument fails because the alleged injuries resulted from Team One's failure to perform the 2002 RFP and 2004 RFP according to their terms. We conclude that plaintiffs submitted sufficient evidence to raise a disputed issue of fact regarding whether Team One's performance conformed to the terms of the 2002 RFP and 2004 RFP.
Both RFPs state that "[a] work day consists of eight (8) hours, exclusive of meal periods," and the 2004 RFP states that the contractor must pay an overtime rate of one and one half times the regular rate "when the Employees work more than eight (8) hours in a workday or more than forty (40) hours in a workweek." In addition, both RFPs state that employees must have a half-hour meal period every work day and must be paid each week for all hours worked the previous week. Finally, both RFPs state that the contractor must "at all times comply with all applicable federal and state laws, rules and regulations, and all applicable local ordinances, specifically including, but not limited to, environmental, labor, and safety laws, rules, regulations and ordinances," and must submit a signed statement certifying that the contractor will do so. Labor Code section 510 requires that any hours worked in excess of eight hours in one workday or 40 hours in one workweek be compensated at a rate of no less than one and one-half times the regular rate of pay, and Labor Code section 512 requires employers to provide a meal period of not less than 30 minutes if an employee works for more than five hours per day (with an exception not applicable here).
Team One argued that it complied with these provisions. It presented deposition testimony from Navnit Padival (a senior engineer for the District, who was the lead person responsible for drafting the RFPs) that the District expected the Team One employees to be at their workstations, prepared to work, from the designated start time to eight and a half hours later, with a half-hour lunch break. He testified that the District expected that the employees would be paid only for productive work hours, which the District defined as the time the employees are at their workstation.
Team One also submitted the declaration of Michael Anderson, who was the Team One manager for DART and who participated in the contract negotiations in 2002. Anderson stated that "[t]he District dictated that the belt sorters were required to be standing at their spot on the conveyor belt by the scheduled start time of the day," that there was no requirement that employees clock in at a certain time, and that the conveyor belt stopped five minutes before the scheduled lunch break to give employees time to remove their safety gear and clock out, and was re-started at the scheduled end of the lunch break (i.e., 35 minutes after the belt stopped). Team One's evidence did not address plaintiffs' allegation that Team One required them to attend mandatory safety meetings, for which they received no compensation, at least once every month.
In opposition, plaintiffs presented evidence that Team One required them to wear certain safety gear, that they were required to have that safety gear on and be at their workstations at the scheduled start of their shift and at the scheduled end of their lunch break, that Team One supervisors told them they were required to clock in five minutes before the scheduled start of their shift and before the scheduled end of their lunch break, and that they were not allowed to go to the restroom or to their lockers once they clocked in. They also presented evidence that Team One required them to attend mandatory safety meetings at least once every month after their eight-hour workday, but they were required to clock out before attending the meeting, and were not compensated for their time while at the meeting. Plaintiffs argued that these extra 10 minutes every day and the time they spent at mandatory safety meetings constituted time during which they were subject to Team One's control, and therefore Team One was required by law to compensate them for that time. (Citing Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 583.) And they presented deposition testimony by Padival in which he admitted that, under the term of the RFPs that required Team One to comply with state labor laws, the District would expect the employees to be paid for that time if the law required it.
Plaintiffs are correct that compensable hours worked include all time during which an employee is subject to the employer's control. (Morillion v. Royal Packing Co., supra, 22 Cal.4th at pp. 587-588 [by requiring employees to meet at departure points at a certain time to ride the employer's buses to work and prohibiting them from using their own cars, the employer exercised sufficient control over employees, therefore the travel time was compensable as hours worked].) Thus, plaintiffs' evidence, if accepted by the trier of fact, would establish that Team One did not comply with the terms of the 2002 RFP and 2004 RFP, the injuries alleged were caused by Team One's violations of those terms, and therefore Team One was not entitled to derived immunity.
Because plaintiffs' evidence creates a triable issue as to whether Team One performed the contracts according to their terms, the trial court erred in granting summary judgment under a derived immunity theory.
In its motion for summary judgment, Team One argued, and the trial court agreed, that it was entitled to judgment on plaintiffs' overtime and meal period claims because plaintiffs clocked in only five minutes or less before their shifts started or their lunch period ended, and as a matter of law, overtime and meal period claims based upon such small amounts of time are not actionable under the de minimus rule. The de minimus rule, as articulated by the United States Supreme Court, provides that "[w]hen the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act. It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved." (Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, 692; accord, Lindow v. United States (9th Cir. 1984) 738 F.2d 1057, 1062 (Lindow).)
Plaintiffs argue that the de minimus rule is a federal rule, and there are significant differences between federal and California labor law — not the least of which is language in the California statutes that requires overtime compensation for "[a]ny work in excess of eight hours in one workday" (Lab. Code, § 510, subd. (a)) and requires employers to provide employees with a meal period "of not less than 30 minutes" (Lab. Code, § 512, subd. (a)) — that preclude application of the federal rule to cases under California law. We need not determine whether the de minimus rule applies to California wage and hour cases because, even if it does apply, disputed issues of fact preclude summary judgment in this case.
The court in Lindow explained that, when determining whether otherwise compensable time is de minimus, the court should consider "(1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work." (Lindow, supra, 738 F.2d at p. 1063.) But the court emphasized that "[t]he de minimus rule is concerned with the practical administrative difficulty of recording small amounts of time for payroll purposes." (Id. at p. 1062.) Seizing on this, Team One focuses on the fact that the DART facility was large, with numerous employees who had to clock in, so the time clock was placed in a central location to make it readily available. Because of this, the employees clocked in a few minutes before their shifts so they could get to their workstations by the start of the shift. Team One argues that plaintiffs' work consisted only of sorting materials on the conveyor belt and that they could only work while the conveyor belt was operating, which was eight hours per day. They contend that the few extra minutes recorded on their time cards "were simply the time lag between clocking in and the actual start of their shift, both at the beginning of their day and then again after lunch, as well as the time lag between the end of their shift (when they actually stopped working) and then clocking out."
Plaintiffs presented evidence in opposition the summary judgment motion, however, that Team One told its employees that they were required to clock in five minutes early at the start of their shifts and before the end of the meal period every day, and that they were required to go directly to their workstations and put on their safety gear.
Because plaintiffs' evidence created a triable issue of fact, summary judgment on the ground that the amounts at issue were not compensable under the de minimus rule was improper.
The judgment is reversed. Plaintiffs shall recover their costs on appeal.
We concur:
MANELLA, J.
SUZUKAWA, J.
