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IN RE UNITED PARCEL SERVICE WAGE AND HOUR CASES, 4606. (2010)

Court: Court of Appeals of California Number: incaco20101209035 Visitors: 7
Filed: Dec. 09, 2010
Latest Update: Dec. 09, 2010
Summary: NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS GRIMES, J. Plaintiff and appellant Reginald Quinteros (Quinteros) brought an action against his employer, defendant and respondent United Parcel Service, Inc. (UPS), seeking recovery of unpaid overtime compensation, penalties for missed meal and rest periods, and other related claims. 1 UPS successfully moved for summary judgment on the grounds Quinteros was an exempt executive and administrative employee and therefore not entitled to overtime payme
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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

GRIMES, J.

Plaintiff and appellant Reginald Quinteros (Quinteros) brought an action against his employer, defendant and respondent United Parcel Service, Inc. (UPS), seeking recovery of unpaid overtime compensation, penalties for missed meal and rest periods, and other related claims.1 UPS successfully moved for summary judgment on the grounds Quinteros was an exempt executive and administrative employee and therefore not entitled to overtime payments and the related benefits afforded nonexempt employees. Quinteros appeals, contending there are material triable issues as to whether he was misclassified as exempt. Because we conclude the trial court correctly granted summary judgment, we affirm.

DISCUSSION

1. Standard of review.

The standard of review of an order granting summary judgment is well-established. Our review is de novo. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) We independently review the entire record, except as to evidence to which objections were timely made and sustained, in the same manner as the trial court. (Ibid.) First, we review the issues framed by the operative pleadings to determine the scope of material issues. We then determine if the moving party has discharged its initial movant's burden of production. If we determine the moving party made the requisite prima facie showing of the nonexistence of a triable issue of fact, we then review the opposing party's submissions to determine if a material triable issue exists. (See Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851 (Aguilar); Todd v. Dow (1993) 19 Cal.App.4th 253, 258.) "In performing our de novo review, we must view the evidence in a light favorable to plaintiff as the losing party [citation], liberally construing [his or] her evidentiary submission while strictly scrutinizing [defendant's] own showing, and resolving any evidentiary doubts or ambiguities in plaintiff's favor." (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768; accord, Aguilar, supra, 25 Cal.4th at p. 843.) "The trial judge's stated reason for granting summary judgment is not binding on us because we review its ruling, not its rationale." (Reliance Nat. Indemnity Co. v. General Star Indemnity Co. (1999) 72 Cal.App.4th 1063, 1074.)

2. Statutory and regulatory background.

California law governing wages, hours, and working conditions is embodied, to a large extent, in Labor Code section 1171 et seq. and the regulations (wage orders) promulgated by the Industrial Welfare Commission (IWC).2 The Fair Labor Standards Act of 1938 (FLSA) is the federal counterpart. Both state and federal wage and hour laws reflect the strong public policy favoring protection of workers' general welfare and "society's interest in a stable job market." (Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1148; see also Tony & Susan Alamo Foundation v. Sec'y of Labor (1985) 471 U.S. 290, 296 [FLSA to be interpreted liberally to accomplish purpose]; Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 702 [because of remedial nature of legislative enactments concerning wages and working conditions statutory provisions should be broadly construed to promote protection of employees].)

The FLSA does not preempt state law and "explicitly permits greater employee protection under state law." (Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 795 (Ramirez).) In many respects, California law provides broader protection of employee rights, and in such instances, California law controls. (Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 567 (Tidewater Marine);Pacific Merchant Shipping Ass'n v. Aubry (9th Cir. 1990) 918 F.2d 1409, 1422, 1426; 29 U.S.C. § 218; 29 C.F.R. § 778.5 (2010).)

Generally speaking, California workers are statutorily entitled to overtime compensation for working in excess of a 40-hour work week or in excess of an eight-hour work day, unless they are properly classified as falling within one of the narrow exemption categories. (See Lab. Code, §§ 510, 515, subd. (a).) The IWC has promulgated numerous wage orders — one concerning the state minimum wage and the balance covering workers employed in various industries. (See Cal. Code Regs., tit. 8, §§ 11000-11170.) IWC Wage Order No. 9-2001, codified at California Code of Regulations, title 8, section 11090 (Wage Order 9), governs workers employed in the transportation industry. Workers employed in an executive, administrative or professional capacity are exempt from sections 3 through 12 of Wage Order 9, which include provisions concerning overtime compensation, meal and rest periods, and related record-keeping requirements, among other things. (Cal. Code Regs., tit. 8, § 11090, subd. 1(A).)3

"[U]nder California law, exemptions from statutory mandatory overtime provisions are narrowly construed." (Ramirez, supra, 20 Cal.4th at p. 794.) They are applied only to those employees "`plainly and [unmistakably] within their terms and spirit.'" (Bothell v. Phase Metrics, Inc. (9th Cir. 2002) 299 F.3d 1120, 1125 (Bothell); accord, Nordquist v. McGraw-Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 562 (Nordquist).) Moreover, exemptions are affirmative defenses, and therefore, the employer bears the burden of proving an employee is properly designated as exempt. (Ramirez, at pp. 794-795; accord, Corning Glass Works v. Brennan (1974) 417 U.S. 188, 196-197.)

3. The summary judgment motion.

UPS brought its motion contending the executive and administrative exemptions set forth in Wage Order 9 were a complete defense to all of Quinteros's claims, as well as arguing several alternative bases for adjudication of individual causes of action.4 A moving defendant may properly meet its burden on summary judgment by conclusively establishing a complete defense to the claim. (Code Civ. Proc. § 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at p. 849.) The evidence in support of, and in opposition to, UPS's motion for summary judgment consisted primarily of Quinteros's testimony. In its moving papers, UPS relied extensively on excerpts from Quinteros's deposition. UPS also offered Quinteros's responses to requests for admissions and declarations from several other UPS personnel.

In opposition, Quinteros offered only his own declaration. He also requested the court take judicial notice of portions of the California Division of Labor Standards Enforcement (DLSE) manual, as well as two opinion letters, orders from the underlying federal class action, and a federal regulation. The trial court denied the request, except for the federal court orders. UPS responded with evidentiary objections to Quinteros's declaration.5 Quinteros did not submit any written objections to UPS's moving or reply papers.

A majority of the material facts were undisputed, Quinteros conceding their accuracy but arguing they were not relevant to the evaluation of the exemption defenses. We summarize here the most pertinent facts relevant to an understanding of the issues, keeping in mind our standard of review and accepting Quinteros's evidence and UPS's undisputed evidence as true. (Raghavan v. Boeing Co. (2005) 133 Cal.App.4th 1120, 1125.) We reserve a more detailed discussion of the relevant evidence to the analysis of the disputed exemption elements below.

UPS is an international shipping company providing transportation of packages throughout California, the United States and the world. UPS is certified as a motor carrier by the United States Department of Transportation. Quinteros works in the Southeast California District, one of UPS's designated geographic districts in California. UPS districts contain "facilities," which in turn have one or more "package centers," depending on the size of the facility and the geographic area it serves. Facilities are also referred to as "hubs" which derives from UPS's identification of its sorting system as a series of "hubs" and "spokes" through which packages travel until finally reaching their destination. Each package center serves a specific geographic region.

UPS drivers operate "package cars," which are the ubiquitous brown delivery trucks. Drivers are part of designated driver teams that service a particular geographic region for a specific package center. Various hourly employees sort and process packages as they are transported through the UPS hub-and-spoke system until they reach their destination package center for final delivery. At the destination package center, employees called "preloaders" sort the packages and load them onto package cars for the drivers in that center to deliver. Drivers, preloaders and sorters are all hourly nonexempt job positions at UPS.

Quinteros has worked for UPS for many years. During the time period relevant to this action (May 1999 to the present),6 Quinteros has held two different job positions. He was a full-time preload supervisor (Preload Supervisor) from 1999 to approximately February 2001. Quinteros then became a full-time on-road supervisor (ORS), the position he still presently holds. As a Preload Supervisor, Quinteros worked in the Valley package center of UPS's San Gabriel facility. He was responsible for the preload operation of the Valley package center. His first assignment as an ORS was in the San Gabriel facility until his lateral transfer to the Ontario facility. Quinteros is presently an ORS in the Victorville facility, in charge of a specific driver team serving the Apple Valley/Hesperia region. As an ORS, Quinteros is, and has been, responsible for a specific driver team serving a specific geographic region.

As both a Preload Supervisor and an ORS, Quinteros has regularly worked in excess of eight hours a day, often as many as 12 hours. He also has often felt compelled, due to the press of business, to skip meal and rest breaks. Both job positions have been salaried positions paying more than double the state minimum wage, starting at approximately $5050 per month as a Preload Supervisor up to his current salary as an ORS of approximately $6810 per month. Since 1999, Quinteros has received Management Incentive Program awards consisting of stock. His annual stock "awards" ranged in value from $8,255 to $20,230. During that same time period, Quinteros has also received annual monetary bonuses equal to a half-month's salary. Nonexempt hourly employees at UPS are not eligible to receive stock awards through the Management Incentive Program or the half-month bonuses. Quinteros has supervised numerous hourly employees and lower-level supervisors while holding both disputed job positions.

In granting summary judgment in favor of UPS, the court ruled UPS established as a matter of law that Quinteros was an exempt executive employee and an exempt administrative employee while working as a Preload Supervisor and as an ORS. Because the gravamen of the complaint was based on the claimed misclassification of Quinteros as exempt, all six claims were based on the alleged failure to pay overtime and other benefits that accrue to nonexempt employees, as well as civil penalties related thereto. As such, the trial court's determination that Quinteros was properly classified as exempt was dispositive of the entire complaint.

Quinteros raises two issues on appeal: He contends there are triable issues of material fact as to whether he was misclassified as an exempt executive employee and whether he was misclassified as an exempt administrative employee. We conclude the trial court correctly granted judgment in favor of UPS on the grounds that Quinteros was an exempt administrative employee and affirm on that basis.

4. There is no material triable issue concerning applicability of the administrative exemption.

In order to establish that Quinteros was exempt as an administrative employee, UPS was required to show the following: (1) his duties and responsibilities involve the performance of office or nonmanual work directly related to management policies or general business operations of UPS; (2) he customarily and regularly exercises discretion and independent judgment; (3) he performs work requiring special training, experience, or knowledge under general supervision only (the two alternative prongs of the general supervision element are not pertinent to our discussion); (4) he is primarily engaged in duties that meet the test of exemption; and (5) his monthly salary is equivalent to no less than two times the state minimum wage for full-time employment. (Cal. Code Regs., tit. 8, § 11090, subd. 1(A)(2).) Because the exemption uses conjunctive language, UPS was required to establish all of the elements. (Eicher v. Advanced Business Integrators, Inc. (2007) 151 Cal.App.4th 1363, 1372; accord, Bothell, supra, 299 F.3d at p. 1125; see also Kobzoff v. Los Angeles County Harbor/UCLA Medical Center (1998) 19 Cal.4th 851, 861.)

Determining whether all of the elements of the exemption have been established is a fact-intensive inquiry. The appropriateness of any employee's classification as exempt must be based on a review of the actual job duties performed by that employee. Wage Order 9 expressly provides that "[t]he work actually performed by the employee during the course of the workweek must, first and foremost, be examined and the amount of time the employee spends on such work, together with the employer's realistic expectations and the realistic requirements of the job shall be considered . . . ." (Cal. Code Regs., tit. 8, § 11090, subd. 1(A)(2)(f), italics added; see also Ramirez, supra, 20 Cal.4th at p. 802.) No bright-line rule can be established classifying everyone with a particular job title as per se exempt or nonexempt — the regulations identify job duties, not job titles. "A job title alone is insufficient to establish the exempt status of an employee. The exempt or nonexempt status of any particular employee must be determined on the basis of whether the employee's salary and duties meet the requirements of the regulations . . . ." (29 C.F.R. § 541.2 (2010); see also Ramirez, supra, at p. 802 [determination based on job title alone would allow employer to improperly exempt employees by creating idealized job title or job description not reflective of actual work performed].)

Moreover, federal law is relevant to this inquiry. Quinteros argues the trial court, in rendering its decision, incorrectly relied on UPS's improper citation to federal law. It is true that "`federal authorities are of little if any assistance in construing state regulations which provide greater protection to workers.' [Citation.] Indeed, `federal law does not control unless it is more beneficial to employees than the state law.' [Citations.]" (Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 594, italics added.) However, simply because federal cases are not controlling does not mean they are irrelevant.

Federal law interpreting similar components of the FLSA exemptions is properly considered as persuasive authority, even if not binding on this court. (Alcala v. Western Ag Enterprises (1986) 182 Cal.App.3d 546, 550; Bell v. Farmers Ins. Exchange (2001) 87 Cal.App.4th 805, 814-815 (Bell II.) Indeed, Wage Order 9 expressly states that "activities constituting exempt work and non-exempt work shall be construed in the same manner as such items are construed in the following regulations under the [FLSA] effective as of the date of this order: 29 C.F.R. Sections 541.201-205, 541.207-208, 541.210, and 541.215." (Cal. Code Regs., tit. 8, § 11090, subd. 1(A)(2)(f), italics added.)7 The effective date of Wage Order 9 was January 1, 2001. As such, we may properly consider federal decisions interpreting the FLSA and the federal Department of Labor's implementing regulations as set forth in the Code of Federal Regulations that were in effect as of January 1, 2001 (prior to the 2004 amendments to the federal provisions). (Combs v. Skyriver Communications, Inc. (2008) 159 Cal.App.4th 1242, 1253-1255 (Combs) [discussing use of federal law as persuasive authority in interpreting administrative exemption under California Wage Order No. 4-2001].) With the foregoing in mind, we turn to the individual elements of the administrative exemption, remaining mindful that the exemption must be separately analyzed for both of Quinteros's job positions.

a. There is no dispute as to the salary and general supervision elements.

Quinteros does not dispute that he made the requisite salary as both a Preload Supervisor and an ORS. Therefore, we need not discuss that element. Quinteros also does not raise any argument on appeal that the court incorrectly analyzed the general supervision element. He has therefore forfeited any claim of error on this ground. (Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852.) In any event, we note for the record that our review of the evidence supports the conclusion it was undisputed Quinteros worked under minimal, general supervision in both job positions. However, Quinteros contends that under California law interpreting Wage Order 9 and applying the appropriate deference to his evidence as the opposing party, there are triable issues as to the remaining elements: (1) whether Quinteros was primarily engaged in the performance of office or nonmanual work directly related to the management policies or general business operations of UPS, and (2) whether Quinteros customarily and regularly exercised discretion and independent judgment in the discharge of his duties. We now turn to an examination of the evidence as to these elements.

b. Primarily engaged in work directly related to the management policies or general business operations of UPS.

Quinteros raises two basic arguments: First, UPS did not discharge its movant's burden in showing he spent more than half of his work time engaged in exempt duties. Second, the evidence showed Quinteros was a "production" level employee and not engaged in the requisite administrative duties. We disagree.

Under California law, the phrase "primarily engaged" means "more than one-half of the employee's worktime" is spent performing duties that qualify as exempt. (Lab. Code, § 515, subd. (e); Cal. Code Regs., tit. 8, § 11090, subd. 2(J).) To discharge its burden on this element, UPS relied almost exclusively on Quinteros's own testimony. In his deposition, Quinteros admitted, without qualification, that essentially all of the job duties identified in the job descriptions for Preload Supervisor and ORS were accurate and reflective of the work he regularly performed in those capacities and that he was unable to articulate any other major job responsibilities.8 A review of the job descriptions reveals that virtually all of the job duties are unambiguously administrative in nature.9 We need not enumerate in detail each category of work set forth in the job descriptions, but rather set forth a representative sample of the job duties which Quinteros expressly acknowledged to be an accurate reflection of the work he actually performed as a Preload Supervisor and as an ORS.

For instance, as a Preload Supervisor, Quinteros conceded his regular duties entailed: supervising the preload operation, including executing the dispatch plan, troubleshooting for system inefficiencies and resolving delivery problems with missed or late packages; supervising the preload employees, including performing regular performance audits, assessing training needs, imposing discipline, and ensuring adherence to UPS procedures to promote a safe work environment and to promote efficiency and quality of performance; assessing and altering work schedules and work loads based on changes in package volume; coordinating with the human resources department to ensure implementation of the health and safety plan; planning the preload operation, including development and implementation of action plans to improve efficiency and achieve business goals; and developing good relations with union officials to promote positive labor relations.

As an ORS, he admitted his regular duties are: preparing performance reviews, accident reports and other administrative reports; auditing unit and employee performance to promote efficiency and ensure performance is in line with business goals and UPS policies; determining employee training needs and training employees to improve performance and maintain certification; developing and implementing unit action plans to promote efficiency and ensure a safe working environment; administering discipline and involving upper management and union officials as needed; fostering positive relations with union officials; coordinating with the human resource department to implement the health and safety plan; and communicating with customers, resolving complaints and uncovering business development areas.

Quinteros nevertheless argues UPS failed to discharge its movant's burden by submitting declarations from only two of his supervisors attesting to his responsibilities, thus failing to address the majority of the relevant time period from 1999 to the present. The argument is unpersuasive because it ignores the fact UPS relied on Quinteros's deposition testimony as to the nature of his regular job duties. There is nothing about the manner of deposition questions to which Quinteros responded limiting the scope of the questions concerning job duties to only certain periods of time when he was acting in each capacity. Quinteros's unqualified responses affirming the various job duties can only reasonably be construed as representative of the entire period of time he worked in each position.

Further, the supervisor declarations UPS offered corroborated Quinteros's deposition testimony. The expectation of supervisors is relevant to the "primarily engaged" inquiry. Wage Order 9 expressly provides that the employer's "realistic expectations" of what work will be performed is part of the analysis. (Cal. Code Regs., tit. 8, § 11090, subd. 1(A)(2)(f).) Therefore, the declarations of supervisors Calvin Sweeney and Raul Caro provided adequate corroborative support to the testimony elicited from Quinteros as to the nature of his regular work duties and the amount of time spent engaged in those duties.

It was Quinteros's opposition that lacked material evidence to demonstrate a triable dispute. Quinteros relied primarily on his largely conclusory declaration and failed to present material evidence raising a triable issue that he primarily engaged in nonexempt duties. He relied on argument and recitation of a litany of job duties he did not perform (e.g., financial planning, negotiating or setting salary or pay rates, making significant purchasing decisions, entering into vendor contracts). This evidence does not raise a triable issue that Quinteros is not regularly performing exempt duties. There is no requirement that in order to be properly classified, an administrative employee must carry out every conceivable function that can be classified as an exempt duty. The fact that Quinteros does not perform some traditional management duties does not in any way discredit his own admissions that the work he does actually perform, and has performed in the past, qualifies as administrative work directly related to UPS's general business operations.

The undisputed record reflects Quinteros's principle job duties as both a Preload Supervisor and an ORS were to manage and supervise a defined unit of employees and to execute or carry out UPS's management policies in the units he supervised in order to ensure the smooth functioning of UPS's integrated package delivery system — classic nonmanual management or administrative duties. (Lott v. Howard Wilson Chrysler-Plymouth, Inc. (5th Cir. 2000) 203 F.3d 326, 331-332 [office manager of auto dealership acted in administrative capacity where primary duties included general accounting work, reconciling bank statements, preparing payrolls, preparing financial statements and monthly sales tax returns, as well as supervising small office staff].) Given that the only reasonable inference from this record is that virtually all of the work performed by Quinteros is properly deemed exempt work, there can be no dispute that exempt duties, and duties directly related thereto, occupied more than 50 percent of his work time.

As for Quinteros's argument he was a production-level nonexempt worker, he relies on an unduly rigid application of the analytical tool known as the "administrative/production worker dichotomy" as described in Bell II, supra, 87 Cal.App.4th 805. In simple terms, the administrative/production dichotomy defines administrative employees primarily engaged in servicing or "`administering the business affairs of the enterprise'" (id. at p. 821) as distinct from production-level employees whose "`primary duty is producing the commodity or commodities, whether goods or services, that the enterprise exists to produce and market.' [Citation.]" (Ibid.) Quinteros contends that, using this analytical framework, he cannot be deemed anything other than a production-level employee because he participated directly in the running of the package delivery system — the primary function of UPS as a business enterprise.

We reject the suggestion that every enterprise can be subjected to a simplistic parsing of its "primary" business function for purposes of labeling administrative versus production-level, rank-and-file workers. Instead, we agree with both state and federal courts that have held the administrative/production dichotomy is "but one analytical tool, to be used only to the extent it clarifies the analysis." (Bothell, supra, 299 F.3d at p. 1127, italics added; accord, Combs, supra, 159 Cal.App.4th at pp. 1259-1260.) Even Bell II warns against over-reliance on the dichotomy, stating that many employees cannot be properly characterized in terms of the dichotomy and, of particular relevance here, that some "employees perform jobs involving wide variations in responsibility that may call for finer distinctions than the administrative/production worker dichotomy provides." (Bell II, supra, 87 Cal.App.4th at pp. 826-827.)

The facts and law simply do not support Quinteros's contention he was a production-level employee. Wage Order 9 expressly incorporates 29 Code of Federal Regulations section 541.205 (1988),10 the federal regulation providing some explication of the phrase "directly related to management policies or general business operations." (Cal. Code Regs., tit. 8, § 11090, subd. 1(2)(f).) That section provides, in pertinent part, that an employee acting in an administrative capacity directly related to the management policies or business operations of the employer need not directly participate in "the formulation of management policies or in the operation of the business" enterprise as a whole. (29 C.F.R. § 541.205(c).) An employee whose responsibility it is to "execute or carry" out management policies may also be considered within the scope of the exemption, even though his or her responsibilities are limited to only "a particular segment of the business." (Ibid.)11

Considering Quinteros's deposition testimony and the other evidence in the light most favorable to him, we conclude that much more than a simple majority of Quinteros's regular job functions were administrative in nature. By Quinteros's own admission, he was not regularly engaged at the production-level of the UPS system as he did not engage in the loading, unloading, sorting and delivery of packages. Instead, he executed UPS policy in the units he supervised to promote efficiency so that his units smoothly interfaced with other UPS departments; developed action plans to increase system efficiency and ferret out problems that needed correction; trained, audited and supervised his employees to promote workplace safety and timely package delivery; and interfaced with customers and union officials to promote positive customer and employee relations with management, among other similar duties. All of these job functions can only reasonably be characterized as related to the running of UPS's general business operations or otherwise executing and carrying out UPS management policies. (29 C.F.R. § 541.205(c).) In sum, the evidence presented unambiguously points to Quinteros's status as a management level employee "primarily engaged" in exempt duties with respect to both job positions within the meaning of Wage Order 9.

c. Exercise of discretion and independent judgment.

Quinteros further contends the trial court erred in concluding as a matter of law that he customarily exercised discretion and independent judgment in performing his job duties. Once again, we disagree.

In the pertinent federal regulations, the phrase "exercise of discretion and independent judgment" is defined as generally involving "the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. The term . . . implies that the person has the authority or power to make an independent choice, free from immediate direction or supervision and with respect to matters of significance." (29 C.F.R. § 541.207(a).) The requirement that discretion be exercised with respect to "matters of significance" means the decision being made must be relevant to something consequential and not merely trivial. (29 C.F.R. § 541.207(d).) For instance, a bookkeeper who determines which accounts to post first is technically exercising some level of discretion as to the appropriate discharge of his or her job duties, but not as to matters of significance within the meaning of the exemption. (Ibid.) And, the exercise of discretion must be more than occasional. The "phrase `customarily and regularly' signifies a frequency which must be greater than occasional but which, of course, may be less than constant." (29 C.F.R. § 541.207(g).)

The only reasonable conclusion arising from the evidentiary record is that Quinteros was regularly called upon to exercise his discretion and judgment on consequential matters. As set forth in part 4b, ante, at pages 10 through 15, Quinteros admitted to the accuracy of the written job descriptions of his two positions. The majority of those job responsibilities necessarily includes the exercise of discretion and judgment on matters of significance to UPS operations, including developing and implementing action plans to promote efficiency and accomplish UPS business goals; auditing employee performance and administering disciplinary measures to improve workplace safety and improve quality of employee performance; resolving conflicts between supervised employees; and troubleshooting for system inefficiencies and resolving problems on a daily basis.

The undisputed evidence established that Quinteros was responsible for making numerous discretionary decisions on a daily basis, with little or no supervision, and usually under time-sensitive, pressure-filled conditions given the nature of the service UPS provides — decisions that impacted how numerous employees under his supervision performed their jobs, including timely responding to problems that developed over the course of the workday. Because each unit at UPS is dependent on the smooth functioning of the other units, poor decisionmaking or lack of operational discipline in one unit can have real consequences to UPS's business and general good will with its customers. Quinteros admitted that because of UPS's integrated package delivery system "[o]ne late operation naturally affects the next step in the operation, which could cause a snowball effect." We perceive no obstacle in concluding as a matter of law that Quinteros was customarily and regularly called upon to exercise discretion and judgment in matters of significance to UPS. (Combs, supra, 159 Cal.App.4th at p. 1267 [employee primarily responsible for troubleshooting network issues for internet service provider engaged in discretionary work of significance to entity]; Perine v. ABF Freight Systems, Inc. (C.D.Cal. 2006) 457 F.Supp.2d 1004, 1016 [dispatcher at one facility of shipping company responsible for assigning and coordinating drivers engaged in discretionary work significant to overall operations]; Piscione v. Ernst & Young, L.L.P. (7th Cir. 1999) 171 F.3d 527, 537 [staff consultant analyzing benefit plans and also responsible for supervising and developing junior employees exercised requisite level of discretion significant to company].)

Quinteros nevertheless argues there is a triable issue on this element because all of his decisionmaking was dictated by stringent UPS procedures and methods. He contends the evidence showed he merely applied his skill and knowledge of UPS methods and procedures in discharging his duties and was otherwise constrained from deviating from them. The federal regulations warn of misclassifying employees on this basis. "Perhaps the most frequent cause of misapplication of the term `discretion and independent judgment' is the failure to distinguish it from the use of skill in various respects. An employee who merely applies his knowledge in following prescribed procedures or determining which procedure to follow, or who determines whether specified standards are met or whether an object falls into one or another of a number of definite grades, classes, or other categories, with or without the use of testing or measuring devices, is not exercising discretion and independent judgment . . . . This is true even if there is some leeway in reaching a conclusion, as when an acceptable standard includes a range or a tolerance above or below a specific standard." (29 C.F.R. § 541.207(c)(1).)

The federal regulations provide various examples of workers who do not exercise the requisite level of discretion and independent judgment, such as inspectors, graders and examiners. (29 C.F.R. § 541.207(c).) These types of employees will generally perform specialized work applying "well-established techniques" (often set forth in manuals or other sources) and "may have some leeway in the performance of their work but only within closely prescribed limits." (Id., § 541.207(c)(2).) For example, a lumber grader relies on skill, experience and familiarity with various grades of lumber in performing his or her duties, but does not exercise independent judgment or discretion in assessing the lumber. (Id., § 541.207(c)(4).) However, where the grader is responsible for assessing a commodity for which there are no recognized quality standards, then such a grader could, on appropriate facts, be deemed to satisfy this element. (Ibid.)

While we agree an employee constrained by stringent protocols mandating a particular outcome to routine tasks would not be exercising discretion of the type contemplated by Wage Order 9, merely because an employer requires adherence to regulations, guidelines or procedures does not mean an administrative employee is foreclosed from exercising discretion or judgment. The modern workplace is a regulated workplace (e.g., safety and health provisions pursuant to the Occupational Safety and Health Act [Lab. Code, § 6300 et seq.], antidiscrimination provisions pursuant to the Fair Employment and Housing Act [Gov. Code, § 12900 et seq.]), often overlayed by numerous internal policies or procedures as well (e.g., personnel policies, union contracts, quality control guidelines). We cannot interpret Wage Order 9 in a vacuum, ignoring this reality.

We conclude that where government regulations or internal employer policies and procedures simply channel the exercise of discretion and judgment, as opposed to eliminating it entirely or otherwise constraining it to a degree where any discretion is largely inconsequential, an administrative exemption may still apply. Supervisors and managers are not rendered mere automatons because they must navigate each workday mindful of regulations and internal policies governing their work environment and the employees they oversee. Such an interpretation of the language of Wage Order 9 would render the exemptions virtually nugatory — inapplicable to any employee save for the uppermost tier of corporate officers or high-level management. Our charge to construe exemptions narrowly is not a directive to render them nonexistent.

In any event, despite arguing he was required to follow detailed methods and procedures which eliminated any discretion in the discharge of his duties, Quinteros's evidence showed the opposite. Quinteros actually admitted the UPS "methods" and procedures only pertain to and cover UPS drivers and preloaders — the hourly employees. Quinteros did not offer as evidence any written procedures or methods he was required to use in discharging his duties as a Preload Supervisor or as an ORS. He testified in conclusory fashion in his declaration that he follows the Daily Operating Plan (daily plan) issued by the Industrial Engineering Department, that he looks to UPS "loop principles" in adjusting loads among package cars, and also looks to UPS "decision trees" in making some decisions. However, there are no evidentiary facts in his declaration, beyond simply naming those guidelines or policies, that raise a triable issue as to whether or not his discretion was constrained in utilizing those guidelines.

The declaration stands in contrast to his deposition testimony where he admitted to exercising discretion and judgment. For instance, he conceded there is no handbook or any rigid procedures to follow when a driver has an accident, and numerous decisions must be made about documenting the accident, getting the driver medical aid if necessary, reassigning the remaining packages for timely delivery, and the like. Quinteros also acknowledged that he has authority as a supervisor to make appropriate decisions within the framework of UPS policies. He confirmed his supervisory roles require regular troubleshooting to resolve problems and inefficiencies requiring him to make on-the-spot decisions. He described the job as requiring a lot of "fire fighting."

Quinteros admitted his superiors have described him as "results oriented" and he discharges his duties without waiting to be told how to do them. He further explained he has to mediate conflicts between his employees and come up with solutions. He often uses his experience and "common sense" in identifying problems and developing action plans to correct them. Quinteros has had to make adjustments in work assignments based on his assessment of his employees' skills. He must respond to various customer situations, including dealing with a customer who is upset and needs to be calmed down, and provide a solution to the problem. In none of this testimony may it be inferred that Quinteros consulted some rigid encyclopedia of UPS procedures that dictated how he handled these regular occurrences in his workday.

Quinteros's opposing evidence showed only that he was required to adhere to some internal guidelines in discharging some of his duties, like the daily plan. His conclusory declaration did not provide any material facts indicating, for instance, that in adhering to the daily plan or following a "decision tree" as a supervisor, he was thereby constrained or limited to one course of action in his decisionmaking. (6 Witkin, Cal. Procedure (5th ed. 2008) Proceedings Without Trial, § 227, p. 668 [common defect of "declarations is the recital of legal conclusions or ultimate facts, instead of statements of evidentiary facts"].) Given the nature of the duties that Quinteros admitted he regularly performed in each of his job positions, it belies logic and common sense to equate those duties with rote, mechanical work or the more mundane tasks of the lumber grader or inspector as set forth in the federal regulations as representative examples of employees lacking the requisite degree of discretion. At best, Quinteros established there are some internal guidelines and methods that guide his work, but no material evidence raising an evidentiary dispute as to whether his discretion is eliminated or materially constrained. (Haywood v. North American Van Lines, Inc. (7th Cir. 1997) 121 F.3d 1066, 1073 [customer service representative for shipping company exercised discretion despite having to use company guidelines to resolve damage claims and other complaints by customers].)12

Finally, simply because Quinteros reported to a higher-level manager in both of his supervisory jobs does not mean he did not exercise the requisite discretion. There is nothing evident from the plain language of Wage Order 9 that the exemption was intended to apply only to the most senior manager of an enterprise or the person with whom the proverbial "buck" stops. To the contrary, the federal regulations instruct that an exempt administrative employee need not be a final decisionmaker. The requirement that an exempt employee exercise discretion and independent judgment "does not necessarily imply that the decisions made by the employee must have a finality that goes with unlimited authority and a complete absence of review. The decisions made as a result of the exercise of discretion and independent judgment may consist of recommendations for action rather than the actual taking of action. The fact that an employee's decision may be subject to review and that upon occasion the decisions are revised or reversed after review does not mean that the employee is not exercising discretion and independent judgment . . . ." (29 C.F.R. § 541.207(e).)

Based on the undisputed evidence in the record, Quinteros was clearly and unmistakably acting in an administrative capacity within the meaning of Wage Order 9 and, as such, properly classified as an exempt administrative employee. The minimal opposition evidence did not have preponderant weight which would support a jury finding in Quinteros's favor and therefore cannot be deemed to raise a triable issue requiring the weighing procedures of trial. (Aguilar, supra, 25 Cal.4th at p. 857 [where opposing evidence showed plaintiff's claim of unlawful conspiracy was less likely than defense claim of permissible competition or at best in equipoise with moving evidence, summary judgment properly granted because reasonable trier of fact could not find for plaintiff on such evidence].) Summary judgment was therefore correctly granted on that basis in favor of UPS.

DISPOSITION

The judgment is affirmed. Respondent UPS shall recover its costs on appeal.

WE CONCUR.

FLIER, Acting P. J.

O'CONNELL, J. *

FootNotes


1. Quinteros is a former class member of the federal class action entitled Marlo v. United Parcel Service, Inc., case No. CV 03-04336-DDP (RZx), which was decertified. (See Marlo v. United Parcel Service, Inc. (C.D.Cal. 2008) 251 F.R.D. 476.) This individual action was then filed in San Bernardino Superior Court. By order dated November 25, 2009, the action was deemed an "included action" in the coordinated proceeding entitled United Parcel Service Wage and Hour Cases, Judicial Council Coordination No. 4606. The Second District was designated the court having jurisdiction for intermediate appellate review of the coordinated proceeding. This appeal was subsequently transferred from the Fourth District. Coordinated appeals currently pending before this court are B225089, B225090, B225092, B220250 and B221709.
2. The Legislature stopped funding the IWC in 2004, but its wage orders remain in full force and effect. (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1102, fn. 4.)
3. Additional exemptions to Wage Order 9, not pertinent to our discussion, are set forth at California Code of Regulations, title 8, section 11090, subdivision 1(B) through (F).
4. The operative original complaint stated six causes of action: failure to pay overtime (Lab. Code, §§ 510, 1194), failure to provide meal and rest breaks (id., §§ 226.7, 512), failure to maintain wage statements (id., §§ 226, 226.3), conversion, injunctive relief, and unfair competition (Bus. & Prof. Code, § 17200).
5. The court sustained only one objection, striking one sentence from paragraph 3 of Quinteros's declaration, and overruling the balance. Quinteros does not contend on appeal that the court's evidentiary rulings were erroneous.
6. Quinteros alleged an expanded period of potential liability based on tolling of the statute of limitations due to the pendency of the federal class action.
7. Prior versions of Wage Order 9 did not incorporate the FLSA provisions.
8. Quinteros denied performing only two of the job duties listed: reviewing cost statements to ensure compliance with budget, and coordinating with sorting units.
9. A written job description, like a job title, may not be adequate evidence standing alone to establish this element. However, Quinteros expressly conceded the accuracy of the job descriptions here, and therefore we find his testimony validating those job duties compelling.
10. Our reference is to the pre-2004 version of the Code of Federal Regulations, revised as of July 1, 1988, as are all subsequent references and citations to that code unless otherwise specified.
11. Quinteros's citation to 29 C.F.R. § 541.102 defining certain terms relevant to the executive exemption is inapposite.
12. Quinteros's citation to Nordquist, supra, 32 Cal.App.4th 555 does not assist him as the case is factually distinct. The television sportscaster there simply lifted sports information from other sources and arranged them in preset station formats for presentation on the air. (Id. at pp. 572-573.) There was no evidence of his using discretion or judgment and his employer had even designated him as nonexempt in its own internal paperwork. The appellate court therefore correctly affirmed the trial court's determination, following a bench trial, that the sportscaster did not qualify as an administrative employee.
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Source:  Leagle

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