STANLEY A. BOONE, Magistrate Judge.
On August 27, 2014, Plaintiff Bernardina Rodriguez ("Plaintiff") and Defendant Taco Bell Corp. ("Defendant") filed cross motions for summary judgment. (ECF Nos. 59, 60.) Both Plaintiff and Defendant have consented to the jurisdiction of a United States Magistrate Judge for all purposes. (ECF No. 27.)
The hearing on the motions took place on October 22, 2014. Chaim Shaun Setareh and Tuvia Korobkin appeared on behalf of Plaintiff. Tracey Kennedy and John Makarewich appeared on behalf of Defendant. For the reasons set forth below, the Court denies Plaintiff's motion for summary judgment and grants Defendant's motion for summary judgment.
This action was removed from the Superior Court of California for the County of Solano on June 12, 2013. (ECF No. 1.) The operative complaint is the First Amended Complaint filed on June 25, 2013. (ECF No. 12.)
The First Amended Complaint raises causes of action under California law for failure to provide meal breaks, failure to provide rest breaks, failure to pay hourly wages, failure to provide accurate written wage statements, failure to timely pay final wages, unfair competition, and for civil penalties under California's Private Attorney's General Act. Plaintiff brings these claims on behalf of herself as well as on behalf of a class.
Plaintiff's claims arise from Defendant's discounted meal policy. Plaintiff alleges that Defendant's discounted meal policy states that employees who purchase a discounted meal must stay on premises. Plaintiff further contends that California law requires employers to relinquish all control over employees during meal breaks and rest breaks. Plaintiff argues that employees who purchase a discounted meal during meal breaks and rest breaks are thus deprived of proper meal breaks and rest breaks because they are required by Defendant to stay on premises. As a result, Defendant failed to pay employees wages owed during those defective meal breaks and rest breaks. Moreover, the inclusion of these wages and hours worked caused some employees to accrue overtime which was unpaid. Further, overtime wages for employees who purchased discounted meals was miscalculated because it failed to take into account the value of these discounted meals in determining overtime rates of pay. Additionally, the wage statements provided by Defendant to its employees were inaccurate as a result of the above and employees who ceased working for Defendant were not paid final wages owed on a timely basis as a result of the above.
Defendant now seeks summary judgment as to Plaintiff's claim that Defendant failed to provide proper meal breaks and as to Plaintiff's claim that Defendant failed to pay hourly wages. Defendant contends that their policy requiring discounted meal items to be consumed on premises does not render a meal break or rest break to be defective.
Plaintiff seeks summary judgment as to the issue of whether Defendant miscalculated overtime rates of pay by failing to account for the value of discounted meals in determining employees' "regular rate" of pay. Plaintiff also seeks summary judgment as to the issue of whether Defendant's policy of requiring discounted meals to be consumed on premises renders a meal break and rest break defective. Finally, Plaintiff seeks summary judgment with respect to her claims based upon inaccurate wage statements and waiting time penalties.
Plaintiff worked for Defendant Taco Bell Corp. from approximately August 2005 to December 2012. (Def.'s Resp. to Pl. Bernardina Rodriguez's Sep. Statement of Uncontroverted Facts ("Def.'s Resp. to Pl.'s SSUF") ¶ 1.) Throughout her employment, Plaintiff worked at the Suisun City, California location. (Def.'s Resp. to Pl.'s SSUF ¶ 2.) Plaintiff's job title was "Team Member." (Def.'s Resp. to Pl.'s SSUF ¶ 3.) Plaintiff's job duties included making steam, preparing food, cooking food, cooking, making tacos, and cleaning. (Def.'s Resp. to Pl.'s SSUF ¶ 4.) At the beginning of her employment, Plaintiff was provided with an employee handbook titled "Restaurant Orientation Handbook" (hereinafter referred to as "the Handbook"). (Def.'s Resp. to Pl.'s SSUF ¶ 5.)
Regarding discounted meals, the Handbook states:
(Def.'s Resp. to Pl.'s SSUF ¶ 6.) In 2012, the meal policy was changed, in that discounted meals must only be eaten in the restaurant if it was after dark. (Def.'s Resp. to Pl.'s SSUF ¶ 9.) The discount for meals was generally 50% off. (Def.'s Resp. to Pl.'s SSUF ¶ 14.) The purpose of the discounted meal program's requirement that employees eat their food on the premises is to avoid theft and abuse, such as employees buying discounted food and sharing it with friends or family. (Pl.'s Resp. to Def.'s SSUF ¶ 5.)
Regarding free beverages, the Handbook states:
(Def.'s Resp. to Pl.'s SSUF ¶ 7.)
Taco Bell allows employees who are scheduled to work a shift of two or more hours to purchase discounted menu items before, during, or after their shift, including during meal or rest breaks. (Def.'s Resp. to Pl.'s SSUF ¶ 10; Pl.'s Resp. to Def.'s Sep. Statement of Undisputed Facts in Supp. of Mot. for Part. Summ. J. ("Pl.'s Resp. to Def.'s SSUF") ¶ 1.) The policy does not permit employees to purchase discounted meals on their day off. (Def.'s Resp. Pl.'s SSUF ¶ 11.) However, Plaintiff has observed her manager permitting some employees to purchase discounted food on their day off. (Def.'s Resp. to Pl.'s SSUF ¶ 11.) The policy only permits employees to purchase one meal per day. (Def.'s Resp. to Pl.'s SSUF ¶ 12.)
All discounted food purchases are voluntary. (Pl.'s Resp. to Def.'s SSUF ¶ 2.) Employees are not required to purchase Taco Bell products. (Pl.'s Resp. to Def.'s SSUF ¶ 3.)
Under Federal Rule of Civil Procedure 56, "[a] party may move for summary judgment . . . if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case. . ."
Plaintiff seeks summary judgment with respect to three claims: A) her "regular rate" claim, B) her claim for improper meal periods, and C) her claims for inaccurate wage statements and waiting time penalties. Defendant seeks summary judgment with respect to Plaintiff's improper meal period claim.
Plaintiff seeks summary judgment with respect to her "regular rate" claim. Plaintiff contends that Defendant systematically miscalculates the proper rate for overtime work because the overtime rate does not factor in the fact that employees receive additional remuneration in the form of discounted meals during certain shifts. Plaintiff argues that the value of the employee discount must be factored into the "regular rate" by adding the value of the discount to the compensation paid and dividing the sum by the total hours worked to establish the "regular rate" for a given pay period.
As an initial matter, the Court notes that the evidence submitted by Plaintiff in support of its motion for summary judgment is sparse. Plaintiff submitted a declaration vaguely indicating that she purchased discounted meals on most weeks and worked overtime during some pay periods, but there is no evidence pinpointing a specific pay period or shift where Plaintiff purchased a discounted meal and worked overtime. Nor is there any evidence of how much she purchased with her meal discount or how much was discounted. Even more critically, there is no evidence of how much Plaintiff got paid during any given pay period, how much she normally earned per hour during any given pay period, or how much she earned in overtime during any given pay period.
Plaintiff argues that it is Defendant's burden to establish certain facts supporting Plaintiff's claims. In wage and hour claims, courts recognize that where the employer has a statutory obligation to maintain wage records and those records are inadequate, employees should not be penalized in litigation. In
However, Plaintiff has not demonstrated that Defendant failed to maintain statutorily required records. At the hearing, the parties disputed whether Defendant's records were inadequate. The evidence submitted by Plaintiff in support of her motion does not establish that Defendant's records were inadequate. The excerpts of the deposition of Todd Allen Bisbocci cited by Plaintiff only state that Defendant "may or may not have the documentation" and Defendant "may or may not" be able to decipher the signatures from the employees relating to discounted meals. (Decl. of Shaun Setareh in Sup. of Pl.'s Mot. for Summ. Adj., Ex. D, at pg. 24:22-25.) Mr. Bisbocci's deposition testimony suggests that the records exist, but Mr. Bisbocci is not personally familiar with them enough to speak to Plaintiff's specific discounted meal habits. Mr. Bisbocci also acknowledged the possibility that the records may be incomplete for a variety of hypothetical reasons. However, there is no definitive proof that Defendant's records concerning Plaintiff's discounted meal purchases are, in fact, incomplete or inadequate.
Here, Plaintiff has not met his burden of demonstrating that Defendant's records were inaccurate or inadequate. Accordingly, Plaintiff has not demonstrated that the burden should shift to Defendant to come forward with evidence regarding Plaintiff's claims or rebutting the inferences to be drawn from Plaintiff's evidence.
In order to prevail on a motion for summary judgment, Plaintiff must demonstrate that there is no genuine dispute of material fact that in some particular pay period she worked overtime, purchased discounted meals, and Defendant did not factor the value of the discount in calculating the regular rate. As noted above, Plaintiff has offered no evidence of how much she was paid, her hourly rate, or how much she should have been paid. This in itself is fatal to Plaintiff's request for summary judgment.
Plaintiff submits no evidence as to how Plaintiff's employee discount should be valued for purposes of calculating the regular rate. Plaintiff assumes, with no citation to any legal authority and no citation to any admissible evidence, that the "value" of her employee discount for regular rate purposes is the amount of the discount. In other words, if she received 50% off a $3 meal, Plaintiff contends that her discount should be valued at $1.50 for purposes of calculating the regular rate.
Defendant cites authority that suggests that this is not the case. Defendant argues that the amount of the discount is not the correct standard for valuing non-cash remuneration. Defendant cites 29 C.F.R. § 778.116 for support:
Plaintiff has not submitted any evidence regarding the "reasonable cost" or the "fair value" of the employee discount offered by Defendant. For that reason alone, Plaintiff is not entitled to summary judgment on her regular rate claim.
Plaintiff argues that her failure to establish "reasonable cost" or "fair value" would not preclude summary judgment as to liability. The Court disagrees. Hypothetically speaking, if the "reasonable cost" or "fair value" of the employee discount is zero, Plaintiff's regular rate was calculated correctly and Plaintiff suffered no underpayment in overtime under her regular rate theory. This could be the case if Defendant's cost to produce discounted food products is equal to or less than 50% of the retail price, meaning Defendant breaks even or makes a smaller profit when selling food items with the employee discount. Therefore, to establish liability, Plaintiff must submit evidence that the net cost to Defendant is greater than zero.
Since Plaintiff has not met her burden on her motion for summary judgment, the Court need not address the other arguments raised by the parties. The Court will deny Plaintiff's motion for summary judgment with respect to her regular rate claim.
Both Plaintiff and Defendant seek summary judgment with respect to Plaintiff's meal break claim. Plaintiff contends that employees were denied proper meal breaks when they purchased discounted meals because they were required to stay on premises while eating the discounted meal. Plaintiff argues that, because Defendant required employees to stay on premises to eat discounted meals, Defendant failed to relinquish all control over its employees. Defendant argues that since purchasing a discounted meal is voluntary, an employee's voluntary decision to partake in a discounted meal does not render a meal break noncompliant with California law requirements.
Under California law, "[a]n employer shall not require an employee to work during a meal or rest or recovery period. . . ." Cal. Labor Code § 226.7(b). "If an employer fails to provide an employee a meal or rest or recovery period in accordance with a state law . . . the employer shall pay the employee one additional hour of pay at the employee's regular rate of compensation for each workday that the meal or recovery period is not provided." Cal. Labor Code § 226.7(c). An employee who works for a period of more than five hours a day is entitled to a meal period of 30 minutes. Cal. Labor Code § 512.
With respect to meal breaks, Wage Order No. 5 states:
Cal. Code of Regulations § 11050. Consistent with the California Labor Code, Wage Order No. 5 also states that an employer must pay employees one hour of pay at the employee's regular rate for each workday that a meal period is not provided.
In
Plaintiff argues that her meal breaks were defective because she was not free to leave to premises if she purchased a discounted meal. Although not in the context of a Section 226.7 claim, in
Even if it were assumed that Defendant's restrictions on off-duty time were primarily to Defendant's benefit, the restrictions imposed here are not so substantially that they interfere with employees' ability to engage in private pursuits. Here, the requirement to remain on premises is only triggered if the employee voluntarily chooses to purchase a discounted meal. Thus, the conditional requirement did not prevent employees from using their time effectively for their own purposes.
Plaintiff also argues that Defendant's discounted meal policy created invalid, on-duty meal breaks because by discounting meals, Defendant created an incentive for Plaintiff to "forfeit" her meal break, purchase a discounted meal and remain on premises during her meal break. While
In
None of these examples are comparable to the allegations in this case. This is not a case where employees were encouraged or compelled to skip their meal breaks entirely. There is no allegation that Plaintiff worked through her meal break. Plaintiff simply was required to stay on premises while eating a discounted meal. Pressuring an employee to skip a meal break entirely and work during a meal break is substantially different from providing an employee with a
At the hearing, Plaintiff argued that any employer-created incentive to remain on premises during breaks constitutes a missed meal break under the California Labor Code. The Court is unaware of any court opinion that would have such sweeping implications. Under Plaintiff's theory, an employer who furnishes an employee break room with a television, couch, kitchen, or other amenity would be liable under the California Labor Code for creating an attractive "incentive" for employees to remain on premises during their breaks.
Given that there is no material dispute regarding the facts related to this claim and issue, the Court finds that, as a matter of law, Defendant is entitled to summary judgment on Plaintiff's claim that Defendant's discounted meal policy deprived Plaintiff of compliant meal breaks. Defendant's policy gave its employees the choice as to whether to stay on premises or to leave the premises. Plaintiff's off-duty time was not so substantially restricted that she was unable to engage in private pursuits. Plaintiff was not subjected to substantial pressure and was not asked to work through her break. The Court finds that a 50% employee discount on food products conditioned upon the employee staying on premises does not transform a compliant meal or rest break into one that does not comply with the California Labor Code. Defendant is entitled to summary judgment with respect to the claim for failure to provide meal periods and as well as all claims derivative of that claim.
Plaintiff seeks summary judgment with respect to her claims for inaccurate wage statements and for waiting time penalties. These claims are derivative of her regular rate claim and her meal break claim, as Plaintiff contends that her wage statements were inaccurate because they failed to reflect wages and time worked due to the inaccurate regular rate and the improper meal breaks. Similarly, Plaintiff contends that since she was not paid wages owed at separation related to the regular rate and meal break issues, she is owed waiting time penalties. As set forth above, Plaintiff is not entitled to summary judgment with respect to her regular rate claim or her meal break claim. Consequently, Plaintiff is not entitled to summary judgment with respect to her derivative claims for inaccurate wage statements and waiting time penalties.
For the foregoing reasons, the Court finds that Plaintiff is not entitled to summary judgment with respect to her regular rate claim, her inaccurate wage statements claim, or her waiting time penalties claim. The Court further finds that Defendant is entitled to summary judgment with respect to Plaintiff's meal break claim.
Accordingly, it is HEREBY ORDERED that:
IT IS SO ORDERED.
