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Naranjo v. Spectrum Security Services

March 24, 2009

GUSTAVO NARANJO, PLAINTIFF AND APPELLANT,
v.
SPECTRUM SECURITY SERVICES, INC., DEFENDANT AND RESPONDENT.



APPEAL from a judgment of the Superior Court of Los Angeles County, Elizabeth A. Grimes, Judge. Affirmed in part and reversed in part with directions. (Los Angeles County Super. Ct. No. BC372146).

The opinion of the court was delivered by: Manella, J.

CERTIFIED FOR PUBLICATION

In appellant Gustavo Naranjo's action against respondent Spectrum Security Services, Inc. (Spectrum) for violations of the Labor Code, the trial court granted summary judgment in Spectrum's favor. We affirm in part and reverse in part.

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

Naranjo worked as a detention officer for Spectrum, which provides security services in holding facilities and detention centers throughout Los Angeles County under a contract with Immigration and Customs Enforcement (ICE), a federal agency. The terms of Spectrum's contract with ICE rely on wage and fringe benefit determinations by the Secretary of the United States Department of Labor (Secretary) pursuant to the McNamara-O'Hara Service Contract Act of 1965 (SCA) (41 U.S.C. § 351 et seq.).

On June 4, 2007, Naranjo filed a class action against Spectrum on behalf of himself and other employees who had resigned or been discharged from their employment. The complaint asserted claims under the California Labor Code (§§ 203, 226, subd. (e), 226.7), as well as claims for unfair business practices (Bus. & Prof. Code, § 17200), conversion, and injunctive relief. Spectrum sought summary judgment, or in the alternative, summary adjudication, contending that the SCA provided Naranjo with his exclusive remedies for these claims. On February 11, 2008, the trial court granted summary judgment, concluding that it lacked jurisdiction over Naranjo's claims.

DISCUSSION

A. Standard Of Review

We review the ruling on Spectrum's motion for summary judgment de novo. (Lunardi v. Great-West Life Assurance Co. (1995) 37 Cal.App.4th 807, 819.) "A defendant is entitled to summary judgment if the record establishes as a matter of law that none of the plaintiff's asserted causes of action can prevail. [Citation.]" (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.)

As Naranjo's briefs on appeal focus exclusively on the propriety of summary judgment on his claims under the Labor Code, we limit our inquiry to these claims. (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1177.) Naranjo's first and second causes of action alleged that Spectrum regularly denied its employees meal and rest periods, and failed to compensate them in accordance with Labor Code section 226.7, which obliges an employer to pay an employee "one additional hour of pay at the employee's regular rate of compensation for each work day that the meal or rest period is not provided." His third and fourth causes of action sought penalties for Spectrum's failure to pay the additional compensation upon the resignation or discharge of the plaintiffs (Lab. Code, § 203), and failure to provide the plaintiffs with itemized records of their wages and deductions (Lab. Code, § 226).

In seeking summary judgment, Spectrum neither disputed nor conceded Naranjo's factual allegations, but contended that the court lacked jurisdiction over his claims. Specifically, Spectrum alleged that Naranjo's wage claims were preempted by federal law, and that any claim for unpaid wages must be pursued through the administrative process afforded by the SCA. The trial court concluded that it lacked jurisdiction over Naranjo's claims. The court determined that Naranjo had no right to file a private action to recover unpaid wages, and that his sole remedy lay in the administrative process of the SCA. Accordingly, the key questions here are legal, and concern whether the SCA preempts the remedies available to Naranjo in state court regarding the denial of meal and rest breaks and denial of itemized records.

B. SCA

The SCA requires government contractors to pay service employees "minimum wages and benefits determined by the Secretary of Labor." (U.S. ex rel. Sutton v. Double Day Office Services (9th Cir. 1997) 121 F.3d 531, 533.) "Its purpose is to protect employees of government contractors. Before the [SCA], the federal government had been 'subsidizing' substandard levels of compensation by awarding contracts to those who were able to bid low by paying less. [Citation.]" (Saavedra v. Donovan (9th Cir. 1983) 700 F.2d 496, 497.)

The SCA requires each federal service contract in excess of $2,500 to contain clauses specifying the minimum wage and fringe benefits to be paid the employees under the contract. (41 U.S.C. §§ 351(a)(1), (a)(2).) The wages and benefits are determined by the Secretary in accordance with "prevailing rates for such employees in the locality," or when the employees are covered by a collective bargaining agreement, "in accordance with the rates for such employees provided for in [the] agreement." (Ibid.) The SCA specifies that no service contract may pay less than the minimum wage described in the Fair Labor Standards Act (FLSA) (29 U.S.C. § 201 et seq.). Here, there is no dispute that Spectrum's ...


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