Carrillo v. Schneider Logistics, Inc.

Citations: 823 F. Supp. 2d 1040; 2011 U.S. Dist. LEXIS 126167; 2011 WL 5190050Docket: Case No. CV 11-8557 CAS (DTBx)

Court: District Court, C.D. California; October 31, 2011; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Plaintiffs Everardo Carrillo and others initiated a class action against Schneider Logistics and associated defendants, alleging multiple labor law violations, including failure to pay minimum wage, overtime, and accurate recordkeeping as mandated by the Fair Labor Standards Act and California labor laws. Specific claims include violations related to meal and rest periods, reporting time pay, wage statements, workplace retaliation, and fraudulent misrepresentation. The plaintiffs contend that Schneider Logistics is concealing the identity of the entity responsible for the operation of the Mira Loma warehouse. On October 24, 2011, the plaintiffs requested a temporary restraining order (TRO) and an order to show cause for a preliminary injunction, compelling defendants to comply with federal and state recordkeeping laws. Defendant Impact Logistics opposed this application. The court is evaluating the arguments presented by both parties.

The legal standard for issuing a Temporary Restraining Order (TRO) and a preliminary injunction is substantially identical, as established by Stuhlbarg Int'l Sales Co. v. John D. Brushy Co. A preliminary injunction is considered an extraordinary remedy, requiring the plaintiff to demonstrate: (1) a likelihood of success on the merits, (2) likely irreparable harm without relief, (3) a favorable balance of equities, and (4) that the injunction serves the public interest. The Ninth Circuit allows for an alternative showing of “serious questions” regarding the merits and a sharply favorable hardship balance for the plaintiff if the other two criteria are met.

The Court concludes that a TRO and order to show cause for a preliminary injunction should be issued, as the plaintiffs have demonstrated a likelihood of success on their claims, potential for irreparable harm, a favorable balance of equities, and public interest in the injunction. Impact Logistics contends that plaintiffs cannot show a likelihood of success without a trial and claims that plaintiffs have not proven injury as required under Labor Code § 226(e). They argue that plaintiffs have not substantiated their claims of record-keeping deficiencies or injuries warranting preliminary relief, asserting compliance with California law regarding pay statements.

Despite these arguments, the Court finds that the plaintiffs are likely to prevail on their claims for three requested categories of relief, particularly the requirement for defendants to provide itemized wage statements under California Labor Code § 226(a), which mandates that employers include all legally-required information in wage statements. Labor Code § 226(g) further supports that employees may seek injunctive relief to enforce compliance with these requirements.

Plaintiffs have presented itemized wage statements from defendants that are legally inadequate. The statements from 'Premier Warehousing Services' and 'Impact Logistics' lack essential details like hours worked, hourly pay rate, piece count, and piece rate formulas. Plaintiffs assert that the information on these statements is inaccurate, supporting their claims under California Labor Code § 226(a). They seek a court order for defendants to accurately document actual hours worked, including time spent on both piece rate and non-piece rate tasks, and to account for instances when employees were required to report but sent home unpaid. Both federal and California laws mandate employers to maintain precise records of employees' working hours, meal periods, and any unpaid reporting time. California defines "hours worked" broadly, encompassing all time employees are allowed to work, and prohibits uncompensated time. Plaintiffs are likely to succeed in their claims regarding recordkeeping, minimum wage, and reporting time. Additionally, plaintiffs request that the Court compel defendants to maintain and provide access to required payroll and production records, including details on piece rates and employee participation in incentive plans, as mandated by California and federal law. Evidence suggests that defendants have failed to keep or provide the necessary records for employee inspection, violating legal obligations.

Defendants have denied employee requests for payroll and production records and retaliated against those making such requests, supporting plaintiffs' claims of violations of Labor Code sections 226 and 1174, IWC Wage Order 9-2001, and 29 C.F.R. 516.2(a). Impact Logistics argues that plaintiffs will not suffer irreparable harm without preliminary relief, asserting that they have provided necessary information and will supply an integrated document. However, the Court finds that plaintiffs are likely to suffer irreparable harm due to potential issues such as unpaid overtime, confusion over wages, and difficulties in reconstructing pay records. The economic vulnerability of low-wage workers exacerbates these harms, which are deemed irreparable. Without compliance, critical pay information may be concealed, obstructing the Court's ability to assess wage violations effectively. 

Regarding the balance of equities and public interest, Impact Logistics claims that the issues are not fully adjudicated and that its record-keeping efforts negate plaintiffs' assertions of wage deprivation. Nonetheless, the Court concludes that the balance favors plaintiffs, who seek merely compliance with existing record-keeping laws. The defendants would face only standard costs of compliance, which they should already be managing.

Compliance costs for defendants are expected to be minimal, as they already possess systems for recording employee hours, such as electronic timekeeping and payroll systems. The injunction sought is in the public interest, as California courts have established that wage and hour laws impact not just workers’ welfare but also public health. Immediate adherence to recordkeeping and disclosure requirements aligns with public policy aimed at protecting employees from exploitation and aids government enforcement of labor laws. 

Plaintiffs' motion for provisional class certification is denied without prejudice, allowing for renewal through a formal motion. 

The court orders defendants—Premier Warehousing Ventures, Rogers-Premier Unloading Services, and Impact Logistics—to: 

A. Provide employees with itemized wage statements at each pay period that accurately detail gross wages, total hours worked, piece-rate information (if applicable), deductions, net wages, pay period dates, employee name and social security number, employer's name and address, and applicable hourly rates with corresponding hours.

B. If paying on a piece-rate basis, defendants must include the piece rate formula and necessary calculation details, itemizing rates for each truck loaded or unloaded, including identifying numbers, dates, total payments, and names of employees sharing piece rates with their respective shares.

C. Begin electronically recording actual employee working hours, including start and end times, meal break timings, and split shifts, ensuring accurate reporting from the time employees are required to report to work.

Defendants are required to start documenting instances when employees report to work but are not assigned tasks or receive less than half of their scheduled work hours. They must also track daily hours spent on non-loading/unloading duties, such as cleaning, attending meetings, waiting for trucks, and taking mandated breaks. Defendant SCHNEIDER LOGISTICS must identify the Schneider entity responsible for the Mira Loma warehouse within five days of this order's service. Defendants, including PREMIER WAREHOUSING VENTURES and others, are ordered to appear on November 9, 2011, to explain why they should not be restrained pending trial. The Court waives the plaintiffs' bond requirement under Fed. R.Civ. P. 65(c), citing plaintiffs' indigence and the public interest in granting a preliminary injunction, despite the minimal bond of $100 being imposed due to the hardship it would cause. The plaintiffs are deemed likely to succeed on the merits. The Order to Show Cause must be served on defendants at least seven days before the hearing, and any responses must be filed and served three court days prior. The Court dismisses Impact Logistics' argument regarding improper service, noting they had adequate notice to respond.