The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court
Order Granting in Part and Denying in Part the Parties' Cross-Motions for Summary Judgment [Doc. No. 159, 160.]
In this wage-and-hour class action, the parties submit cross-motions for summary judgment. Plaintiffs seek judgment regarding: (1) the unfair competition claims; (2) the availability of waiting time penalties; and (3) the availability of civil penalties under California law.*fn1 Defendant Laidlaw Transit filed a cross-motion for summary judgment. Having considered the parties' submissions, and for the reasons set forth below, the Court enters the following memorandum and order.
Plaintiffs Ronald Duncan, Michele Boswell, and John Taylor (collectively "Plaintiffs") represent the following class:
All bus operator employees of Defendant Laidlaw, driving bus routes associated with San Diego Metropolitan Transit System in or around the City of El Cajon, California, at anytime between October 1, 2001 and January 27, 2007, in a unit presently represented for purposes of collective bargaining by Amalgamated Transit Union Local 1309.
Laidlaw contracted with San Diego Metropolitan Transit System ("MTS") to operate fixed route bus services for the City of El Cajon, California.*fn2 MTS established both the path and schedule for each route. Every three to six months, MTS created a new set of bus route schedules for the El Cajon facility. The schedules determined the number of routes Laidlaw serviced, the number of buses operated on each route, and the number of drivers employed. During the class period, Laidlaw employed more than 400 drivers.
Laidlaw used the MTS schedules to create driver shifts, which it incorporated into driver bid packages. Each bid package included specific days, times, and routes the driver would work. The bid packages included either "split shifts" or "straight shifts." A driver working a split shift worked one paid shift, followed by an unpaid period, followed by a second paid shift. A driver working a straight shift drove continuously without breaks. Drivers bid on the packages based on seniority. Most routes included scheduled "recovery time," which is time built into the schedule to accommodate delays such as passengers with wheelchairs.*fn3 Scheduled recovery time varied between five minutes and twenty minutes, but did not necessarily reflect actual recovery time on a given day.
As part of the bidding process, drivers signed "on-duty" meal period agreements in which they agreed to take their meals on the job in exchange for compensation. Laidlaw presented the agreements minutes before bidding commenced.
The extent of Laidlaw's rest period policy is unclear. Laidlaw's written policy, issued in September 2004, described the right to rest periods, explained drivers were responsible for taking their breaks, and requested drivers contact management if rest periods proved unavailable. However, the parties dispute whether Laidlaw made rest periods available in practice. Plaintiffs cite a letter in which a Laidlaw employee discusses the rest period policy:
Project Manager stated that he spoke with Operations Manager yesterday and believes that he can put mandated break periods in almost every schedule & verified that this will be done within two weeks. Project Manager stated that he was aware that he needed to start paying the penalty for any routes that did not have breaks as soon as administratively possible. (Lunch Decl., Ex. E., p. LL 753.) Laidlaw asserts drivers had a variety of opportunities to take breaks: during recovery time, calling in a "10-6 break," during bus breakdowns, and during transition periods.*fn4 Plaintiffs dispute the actual availability of these types of breaks.
Laidlaw removed this action from California state court on June 9, 2005. Plaintiffs' complaint alleges Laidlaw violated various provisions of the California Labor Code and Wage Order 9 by failing to provide compliant meal or rest periods to its drivers.*fn5 (Compl. ¶¶ 16-33.) Further, Plaintiffs allege violations of California's Unfair Competition Law. (Compl. ¶¶ 34-36.) Plaintiffs seek unpaid wages, penalties pursuant to the Labor Code § 558 and Wage Order 9, penalties pursuant to Labor Code § 203, and restitution pursuant to the Unfair Competition Law.
On February 2, 2009, the Court certified the class, appointed a class representative, and appointed class counsel. On July 29, 2009, upon joint motion from the parties, the Court substituted named plaintiffs Ronald Duncan, Michele Boswell, and John Taylor in place of Amalgamated Transit Union Local 1309 as class representatives in the action.
Presently, Plaintiffs seek judgment as a matter of law regarding: (1) the unfair competition claims for unpaid meal periods and rest periods; (2) the availability of waiting time penalties; and (3) the class's entitlement to civil penalties under California law. Laidlaw seeks partial summary judgment on six issues that roughly correspond to Plaintiffs' motion: (1) whether Laidlaw was responsible for the time points and route requirements reflected in the MTS bus schedules; (2) whether Laidlaw's rest period system complied with California law; (3) whether Laidlaw's meal period system complied with California law; (4) whether Plaintiff is entitled to wages under Labor Code section 226.7; (5) whether Plaintiff is entitled to wages under Labor Code section 558(a)(2); and (6) whether Laidlaw is liable for waiting time penalties.
Summary judgment is proper where the pleadings and materials demonstrate "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A material issue of fact is a question a trier of fact must answer to determine the rights of the parties under the applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. Summary judgment may be granted where the moving party shows "an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325; see Nissan Fire & Marine Ins. Co., v. Fritz Cos., 210 F.3d 1099, 1106 (9th Cir. 2000).
The moving party bears "the initial responsibility of informing the district court of the basis for its motion." Celotex, 477 U.S. at 323. To satisfy this burden, the movant must demonstrate that no genuine issue of material fact exists for trial. Id. at 322. However, the moving party is not required to negate those portions of the non-moving party's claim on which the non-moving party bears the burden of proof. Id. at 323. To withstand a motion for summary judgment, the non-movant must then show that there are genuine factual issues which can only be resolved by the trier of fact. Reese v. Jefferson School Dist. No. 14J, 208 F.3d 736, 738 (9th Cir.2000) (citing Fed. R. Civ. P. 56; Celotex, 477 U.S. at 323). The nonmoving party may not rely on the pleadings but must present specific facts creating a genuine issue of material fact. Nissan, 210 F.3d at 1103. The inferences to be drawn from the facts must be viewed in a light most favorable to the party opposing the motion, but conclusory allegations as to ultimate facts are not adequate to defeat summary judgment. Gibson v. County of Washoe, Nev., 290 F.3d 1175, 1180 (9th Cir. 2002). The court is not required "to scour the record in search of a genuine issue of triable fact," Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir.1996), but rather "may limit its review to the documents submitted for purposes of summary judgment and those parts of the record specifically referenced therein." Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1030 (9th Cir. 2001).
Laidlaw believes it is not liable for any class-wide violations of California's rest period requirements because MTS designed the bus schedules. Plaintiffs argue Laidlaw expressly assumed liability for meal and rest period violations. In their papers, Plaintiffs include a contract between Laidlaw and San Diego MTS, which states, "CONTRACTOR shall be responsible for complying with any federal, state, or local laws regarding employee lunch periods or required breaks." (Lunch Decl., Exhibit A at A-5.) The contract identifies Laidlaw as the "contractor." Id.
The contract's above-quoted language has only one reasonable interpretation: Laidlaw assumed sole responsibility for complying with meal and rest period requirements. Given this uncontroverted evidence, the Court rejects Laidlaw's argument.
In the transportation industry, an employee working more than five hours in a workday must be given at least a 30-minute meal period. Cal. Code. Regs. tit. 8, § 11090. An employer who requires an employee to work during this mandatory meal period must pay the employee an additional hour of pay. Cal. Labor Code § 226.7(b). However, the Industrial Welfare Commission ("IWC") allows parties to contract around the meal period requirement in certain circumstances. Parties may treat the meal break as a compensated "on duty" meal period if they satisfy three conditions: (1) "the nature of the work prevents an employee from being relieved of all duty"; (2) the parties agree in writing to treat the period as "an on-the-job paid meal period"; and (3) the written agreement states, "the employee may, in writing, revoke the agreement at any time." Cal. Code. Regs. tit. 8, § 11090, subsec. 11(C). An "on-duty meal period" agreement is not a waiver of a meal period, but instead represents a type of meal period under California law. McFarland v. Guardsmark, LLC, 538 F. Supp. 2d 1209 (N.D. Cal. 2008).
Plaintiffs believe Laidlaw failed to provide meal periods, in violation of California law.
Specifically, Plaintiffs assert Laidlaw and class members entered into on-duty meal period agreements that are invalid for four reasons. First, Plaintiffs believe the nature of the work did not preclude off-duty breaks. Plaintiffs assert two relief driver programs could have provided breaks: (1) a relief driver operating a second bus during the meal period or (2) a relief driver who met the bus mid-route. Second, Plaintiffs assert the drivers lacked the opportunity to eat, thereby invalidating the agreements. Third, Plaintiffs assert the meal break agreements are contracts of adhesion. Fourth, Plaintiffs assert the meal break agreements are unconscionable, both procedurally and substantively.
Laidlaw argues "split-shift" drivers received off-duty meal breaks. As for straight shift drivers, Laidlaw believes the signed meal-break agreements are valid: the nature of the work precluded off-duty meal periods and drivers had the option to sign the agreement or work split ...