Ricaldai v. US Investigations Services, LLC

Citations: 878 F. Supp. 2d 1038; 2012 U.S. Dist. LEXIS 73279; 2012 WL 2930474Docket: Case No. CV 10-07388 DDP (PLAx)

Court: District Court, C.D. California; May 25, 2012; Federal District Court

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The court partially grants and partially denies Defendant U.S. Investigations Services, LLC's (USIS) Motion for Partial Summary Judgment concerning Plaintiff Catalina Ricaldai's claims related to meal period violations under California law. Ricaldai worked as a field investigator for USIS from July 2003 to November 2008, primarily conducting background investigations for federal employment. USIS's expectations required investigators to work 40 hours per week, maintain strict time management, and complete investigations within designated timeframes.

California law mandates a 30-minute duty-free meal period for employees working five or more hours, which must start no later than the fifth hour. Although USIS's employee handbook instructed against unauthorized work during meal breaks, Ricaldai contends that company policies and training pressured her to work through these breaks. Specifically, she asserts that during her training, she was advised to eat while working and was discouraged from attending to personal matters during work hours. Additionally, USIS did not properly record meal periods, violating applicable wage orders. Ricaldai claims she never took the required meal breaks due to these pressures, citing instances during her training and regular work duties where meal periods were not observed.

Ricaldai and her supervisor conducted review sessions on check ride days, discussing her interviews while working through a checklist. Ricaldai asserts she could not take 30 minutes off-duty due to workplace culture prioritizing maximum testimony collection, with any time off deemed a failure. She managed her schedule around witness availability, often working through lunch to complete reports without engaging in personal activities unless she requested time off. Alleging violations related to meal periods and overtime, Ricaldai filed a class action suit against USIS in California state court on August 26, 2010, which was removed to federal court on October 4, 2010, under the Class Action Fairness Act. On June 9, 2011, she filed a Second Amended Class Action Complaint, asserting six causes of action: 1) failure to provide meal periods per California Labor Code; 2) improper overtime calculations; 3) untimely wage payments; 4) failure to maintain accurate itemized statements; 5) enforcement of the Private Attorneys General Act; and 6) unlawful business practices. Claims three through six rely on the meal period and overtime allegations. USIS filed a Motion for Partial Summary Judgment on September 9, 2011, arguing Ricaldai had the autonomy to schedule breaks, which would invalidate her meal period claim and subsequently affect claims three through six. USIS also contended that Ricaldai's PAGA and Labor Code section 226 claims are time-barred and that her section 226 claim lacks necessary allegations. Summary judgment standards dictate that the evidence is viewed favorably for the non-moving party, and a genuine issue of material fact exists if a reasonable jury could find for that party. Mere allegations are insufficient to oppose summary judgment.

The non-moving party in a summary judgment motion must present specific facts demonstrating a genuine issue for trial, rather than relying solely on allegations in the pleadings. A mere scintilla of evidence is insufficient to counter a summary judgment motion. Credibility assessments, evidence weighing, and drawing legitimate inferences are responsibilities of the jury, not the judge.

Regarding California meal period law as clarified in *Brinker Restaurant Corp. v. Superior Court*, employers must relieve employees of all duty during designated meal periods, but they are not required to ensure that employees do not perform work during these times. Employees must have at least 30 minutes uninterrupted, be allowed to leave the premises, and be completely relieved of duty. Employers cannot undermine meal break policies by pressuring employees to work through breaks or creating an environment where taking breaks is discouraged. 

The court emphasized that employers are responsible for maintaining accurate records of meal periods. If an employer fails to record a meal period for a shift exceeding five hours, a rebuttable presumption arises that the employee was not relieved of duty. In such cases, it is the employer's responsibility to prove that the employee waived their right to a work-free break, positioning this assertion as an affirmative defense rather than a burden on the plaintiff to disprove.

The Division of Labor Standards Enforcement (DLSE) emphasizes that employers bear the burden of proving that agricultural employees were informed of their right to take meal periods and voluntarily chose not to do so. This principle helps prevent employers from evading their recording obligations regarding meal periods, which could lead to unjust advantages for them. In the case at hand, USIS argues that Ricaldai's claim regarding meal periods is baseless because she had control over her schedule and was adequately informed of her rights through postings and the employee handbook. Conversely, Ricaldai contends there is a genuine dispute, citing USIS's failure to record meal periods and alleging that the company pressured her not to take breaks.

The court acknowledges that while USIS presents valid arguments for compliance, Ricaldai has raised significant factual disputes, particularly regarding USIS's policies that may have discouraged her from taking breaks. The court agrees with the position that when an employer fails to maintain required meal period records, the burden to disprove adequacy falls on the employer. In this case, USIS's lack of recording meal periods is undisputed, and even if Ricaldai bore the burden of proof, evidence suggests she was trained not to take duty-free breaks. Notably, during her initial training sessions, Ricaldai was told there wouldn’t be time for meals, leading to working lunches where she was not relieved of duties. Although some violations may fall outside the statute of limitations, they indicate a potential implicit training against taking breaks. Lastly, the court finds ambiguities regarding the duration of training sessions, which complicates the assessment of whether meal period requirements were met.

USIS' practice of allowing Ricaldai to take working lunches suggests employer pressure to work through meal periods, supported by evidence that USIS prohibited personal time during work hours without permission. Ricaldai's trainer allegedly instructed her that personal activities were not permitted during the workday unless time off was requested, indicating a potential violation of labor law, as meal breaks should be available for personal use. The Brinker case affirms that employees are entitled to a full thirty-minute break for personal matters. USIS’s policy of filling workdays with job duties and deeming time off as wasteful further implies discouragement of duty-free meal periods. A reasonable factfinder could conclude that USIS pressured Ricaldai to forgo her entitled meal periods, contrary to California law. USIS's arguments regarding Ricaldai's ability to schedule her workday or her deposition admission about the employee handbook do not negate this inference. The deposition revealed that Ricaldai felt pressured to work through breaks despite her awareness of policies, highlighting the ambiguity of whether she could exercise her rights against employer pressure. Therefore, the issue of USIS's pressure and its impact on meal period rights remains for factual determination. Additionally, since USIS is not entitled to summary judgment on the meal period claim, Ricaldai's derivative claims also stand.

Ricaldai's PAGA claim is barred by California's one-year statute of limitations for penalty-seeking statutory claims, allowing USIS to secure summary judgment on this issue. However, her Labor Code section 226 claim remains viable due to her pursuit of actual damages, which fall under a three-year statute of limitations. Ricaldai references a district court case, Singer v. Becton, Dickinson and Co., to support her argument, and the court agrees with its reasoning without further elaboration.

USIS contends that Ricaldai has not demonstrated an injury from any violations of Section 226 or that any violations were intentional, but the court disagrees. While establishing injury requires proof beyond mere deprivation of information, mathematical injury resulting from inaccurate wage statements can suffice. Citing relevant case law, the court notes that challenges in reconstructing time and pay records can indicate injury. Ricaldai asserts that USIS failed to provide her correct overtime rates, particularly regarding a 'Spanish Incentive' that she believes was not included in overtime calculations. This situation necessitated her to perform calculations to verify her paycheck accuracy, which could substantiate actual injury. Furthermore, any perceived inconsistencies in Ricaldai's deposition testimony do not definitively negate her claims about the inaccuracies in her wage statements. Thus, a genuine issue of material fact exists regarding the injury requirement for her Section 226 claim.

USIS argues that it cannot be held liable for knowingly violating wage statement obligations under Section 226(e) because it does not believe it owes Ricaldai for alleged meal period violations, and thus, Ricaldai cannot demonstrate that USIS acted with the required knowledge and intent. However, the court disagrees, stating that the determination of USIS's good faith belief regarding compliance with Section 226 is a factual question for a jury to resolve. Even if USIS acted in good faith regarding meal period omissions, doubts remain about its good faith concerning alleged overtime errors. The court concludes that a reasonable jury could find that USIS knowingly failed to provide accurate wage statements to Ricaldai, potentially to conceal its liability. Consequently, the court denies USIS' Motion for Partial Summary Judgment on Ricaldai’s first, third, fourth, and sixth causes of action related to meal period violations, wage payment delays, Section 226 violations, and unfair business practices. Conversely, the court grants the motion concerning Ricaldai's fifth cause of action under the Private Attorneys General Act. The court reiterates that if an employee works no more than six hours in a day, meal breaks can be waived by mutual consent, but if an employee works during a meal period without coercion, the employer may still owe regular wages for that time if it knew or should have known about the work. Injuries suffered by Ricaldai and Class Members due to USIS's violations include confusion over wages, difficulties in reconstructing pay records, and the need for calculations to verify proper compensation. Under California Labor Code Section 226(e), Ricaldai and Class Members are entitled to recover actual damages, including potential recovery for unpaid premium pay associated with missed meal periods if her claim succeeds.