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David Taylor v. United Parcel Service

December 9, 2010


APPEAL from the judgment of the Superior Court of San Bernardino County. (San Bernardino County Sup. Ct. No. CIVRS 807429) Barry L. Plotkin, Judge.

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


JCCP No. 4606


Plaintiff and appellant David Taylor (Taylor) brought an action against his employer, defendant and respondent United Parcel Service, Inc. (UPS), seeking recovery of unpaid overtime compensation, penalties for missed meal and rest periods, and other related claims.*fn1 UPS successfully moved for summary judgment on the grounds Taylor was an exempt executive and administrative employee and therefore not entitled to overtime payments and the related benefits afforded nonexempt employees. Taylor appeals, contending there are material triable issues as to whether he was misclassified as exempt. Because we conclude the trial court correctly granted summary judgment, we affirm.


1. Standard of review.

The standard of review of an order granting summary judgment is well-established. Our review is de novo. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) We independently review the entire record, except as to evidence to which objections were timely made and sustained, in the same manner as the trial court. (Ibid.) First, we review the issues framed by the operative pleadings to determine the scope of material issues. We then determine if the moving party has discharged its initial movant's burden of production. If we determine the moving party made the requisite prima facie showing of the nonexistence of a triable issue of fact, we then review the opposing party's submissions to determine if a material triable issue exists. (See Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851 (Aguilar); Todd v. Dow (1993) 19 Cal.App.4th 253, 258.) "In performing our de novo review, we must view the evidence in a light favorable to plaintiff as the losing party [citation], liberally construing [his or] her evidentiary submission while strictly scrutinizing [defendant's] own showing, and resolving any evidentiary doubts or ambiguities in plaintiff's favor." (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768; accord, Aguilar, supra, 25 Cal.4th at p. 843.) "The trial judge's stated reason for granting summary judgment is not binding on us because we review its ruling, not its rationale." (Reliance Nat. Indemnity Co. v. General Star Indemnity Co. (1999) 72 Cal.App.4th 1063, 1074.)

2. Statutory and regulatory background.

California law governing wages, hours, and working conditions is embodied, to a large extent, in Labor Code section 1171 et seq. and the regulations (wage orders) promulgated by the Industrial Welfare Commission (IWC).*fn2 The Fair Labor Standards Act of 1938 (FLSA) is the federal counterpart. Both state and federal wage and hour laws reflect the strong public policy favoring protection of workers' general welfare and "society's interest in a stable job market." (Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1148; see also Tony & Susan Alamo Foundation v. Sec'y of Labor (1985) 471 U.S. 290, 296 [FLSA to be interpreted liberally to accomplish purpose]; Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 702 [because of remedial nature of legislative enactments concerning wages and working conditions, statutory provisions should be broadly construed to promote protection of employees].)

The FLSA does not preempt state law and "explicitly permits greater employee protection under state law." (Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 795 (Ramirez).) In many respects, California law provides broader protection of employee rights, and in such instances, California law controls. (Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 567 (Tidewater Marine); Pacific Merchant Shipping Ass'n v. Aubry (9th Cir. 1990) 918 F.2d 1409, 1422, 1426; 29 U.S.C. § 218; 29 C.F.R. § 778.5 (2010).)

Generally speaking, California workers are statutorily entitled to overtime compensation for working in excess of a 40-hour work week or in excess of an eight-hour work day, unless they are properly classified as falling within one of the narrow exemption categories. (See Lab. Code, §§ 510, 515, subd. (a).) The IWC has promulgated numerous wage orders -- one concerning the state minimum wage and the balance covering workers employed in various industries. (See Cal. Code Regs., tit. 8, §§ 11000-11170.) IWC Wage Order No. 9-2001, codified at California Code of Regulations, title 8, section 11090 (Wage Order 9), governs workers employed in the transportation industry. Workers employed in an executive, administrative or professional capacity are exempt from sections 3 through 12 of Wage Order 9, which include provisions concerning overtime compensation, meal and rest periods, and related record-keeping requirements, among other things. (Cal. Code Regs., tit. 8, § 11090, subd. 1(A).)*fn3

"[U]nder California law, exemptions from statutory mandatory overtime provisions are narrowly construed." (Ramirez, supra, 20 Cal.4th at p. 794.) They are applied only to those employees " 'plainly and [unmistakably] within their terms and spirit.' " (Bothell v. Phase Metrics, Inc. (9th Cir. 2002) 299 F.3d 1120, 1125 (Bothell); accord, Nordquist v. McGraw-Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 562.) Moreover, exemptions are affirmative defenses, and therefore, the employer bears the burden of proving an employee is properly designated as exempt. (Ramirez, at pp. 794-795; accord, Corning Glass Works v. Brennan (1974) 417 U.S. 188, 196-197.)

3. The summary judgment motion.

UPS brought its motion contending the executive and administrative exemptions set forth in Wage Order 9 were a complete defense to all of Taylor's claims, as well as arguing several alternative bases for adjudication of individual causes of action.*fn4 A moving defendant may properly meet its burden on summary judgment by conclusively establishing a complete defense to the claim. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at p. 849.) The evidence in support of, and in opposition to, UPS's motion for summary judgment consisted primarily of Taylor's testimony. In its moving papers, UPS relied extensively on excerpts from Taylor's deposition. UPS also offered declarations from several other UPS personnel.

In opposition, Taylor offered only his own declaration, which included two one-page exhibits. Taylor also requested the court take judicial notice of portions of the California Division of Labor Standards Enforcement (DLSE) manual, as well as two opinion letters. The trial court granted Taylor's request. DLSE manuals have been declared void by the Supreme Court for failing to comply with the Administrative Procedures Act (APA) (Gov. Code, § 11340 et seq.) and are therefore entitled to no weight or deference in any judicial interpretation of a wage order. (Tidewater Marine, supra, 14 Cal.4th at p. 576.) Nevertheless, a court called upon to consider the applicability of a wage order may still independently determine whether a DLSE interpretation contains persuasive logic. (Id. at p. 577.) Agency advice or opinion letters are not characterized as underground regulations violative of the APA and therefore may properly be considered. (Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 584 (Morillion).)

UPS responded with evidentiary objections to Taylor's declaration, along with resubmitted excerpts of Taylor's deposition testimony and copies of deposition exhibits discussed in the testimony presented with the original moving papers, but apparently inadvertently omitted from the initial papers.*fn5 Taylor did not submit any written objections to UPS's moving or reply papers.

A majority of the material facts were undisputed, with Taylor conceding their accuracy but arguing they were not relevant to the evaluation of the exemption defenses. We summarize here the most pertinent facts relevant to an understanding of the issues, keeping in mind our standard of review and accepting Taylor's evidence and UPS's undisputed evidence as true. (Raghavan v. Boeing Co. (2005) 133 Cal.App.4th 1120, 1125.) We reserve a more detailed discussion of the relevant evidence to the analysis of the disputed exemption elements below.

UPS is an international shipping company providing transportation of packages throughout California, the United States and the world. UPS is certified as a motor carrier by the United States Department of Transportation. In California, UPS has five designated "districts," one of which is the Southeast California District in which Taylor works. Each district contains multiple "facilities" which, in turn, have one or more "package centers," depending on the size of the facility and the geographic area it serves. Smaller facilities may have just one package center. Facilities are also referred to as "hubs" or, if one of the smaller facilities, a "local sort." The hub terminology derives from UPS's identification of its sorting system as a series of "hubs" and "spokes" through which packages travel until finally reaching their destination. Each package center serves a specific geographic region. Some package centers also house additional functions, like car wash operations and customer counters.

UPS drivers operate "package cars," which are the ubiquitous brown delivery trucks. There are drivers with assigned routes, as well as "cover" or "utility" drivers that fill in when necessary. Drivers are part of designated driver teams that service a particular geographic region for a specific package center. When packages arrive at a UPS facility, employees called "unloaders" unload the packages, and then employees called "sorters" sort the packages to start them through the UPS system. Employees called "loaders" load the packages based on whether the next leg of the journey is by ground or by air. If by ground, the packages are placed onto large tractor trailers called "feeders," and if by air, the packages are loaded into "containers." The packages are then transported through the UPS hub-and-spoke system until they reach their destination package center for final delivery. At the destination package center, employees called "preloaders" sort the packages and load them onto package cars for the drivers in that center to deliver. Drivers, unloaders, loaders, preloaders and sorters are all hourly, nonexempt job positions at UPS. Package centers have additional support staff, including administrative clerks, who check incorrect addresses and perform other similar tasks, as well as seasonal staff to assist units during higher volume periods, like the holiday season.

Taylor has worked for UPS since 1979. During the time period relevant to this action (May 1999 to the present),*fn6 Taylor has held three different job positions. He was an air hub full-time supervisor (Hub Supervisor) from 1998 to August 2000 in the Ontario facility. He was an on-road supervisor (ORS) from August 2000 through October 2005 in the Riverside facility. His current job position is "Center Manager," also sometimes referred to as a business manager. He has held this position since November 1, 2005, first in the Ontario facility and presently in the San Bernardino facility.

As a Hub Supervisor in the Ontario facility, Taylor was responsible for the Day Sort Air Unload Operation (Day Sort Operation), which included supervision of the container unload, feeder unload, sort aisle, small sort and irregular parcel operations. While an ORS in the Riverside facility, which had just one package center, Taylor was responsible for a specific driver team, plus the local sort and car wash operations. In the Ontario facility, there are four package centers, one of which is the Corona center. When Taylor first became a Center Manager, he was put in charge of the Corona package center. In 2009, Taylor was transferred to oversee one of two package centers in the San Bernardino facility, the San Bernardino West package center. As a Center Manager, Taylor is in charge of all of the operations housed in that package center.

In all three job positions, Taylor has regularly worked in excess of eight hours a day, often as many as 10 to 12 hours. He also has often felt compelled, due to the press of business, to skip breaks and take a "working lunch," eating a sandwich at his desk and continuing to work. All three job positions have been salaried positions paying more than double the state minimum wage, starting at approximately $4800 per month as a Hub Supervisor up to his current salary as Center Manager of approximately $7115 per month. Since 1999, Taylor has received Management Incentive Program awards consisting of stock. His annual stock "awards" ranged in value from $9385.59 to $18,506. During that same time period, Taylor has also received annual monetary bonuses equal to a half-month's salary. Nonexempt hourly employees at UPS are not eligible to receive stock awards through the Management Incentive Program. Taylor has supervised numerous hourly employees and lower-level full- and part-time supervisors while holding each of the three job positions.

In granting summary judgment in favor of UPS, the court ruled UPS established as a matter of law that Taylor was an exempt executive employee and an exempt administrative employee while working as a Hub Supervisor, an ORS, and a Center Manager. Because the gravamen of the complaint was based on the claimed misclassification of Taylor as exempt, all six claims were based on the alleged failure to pay overtime and other benefits that accrue to nonexempt employees, as well as civil penalties related thereto. As such, the trial court's determination that Taylor was properly classified as exempt was dispositive of the entire complaint. The court's ruling therefore did not specifically rule on the alternative bases for adjudication of individual causes of action separately noticed by UPS.*fn7

Taylor raises two issues on appeal: He contends there are triable issues of material fact as to whether he was misclassified as an exempt executive employee and whether he was misclassified as an exempt administrative employee. We conclude the trial court correctly ruled as a matter of law that Taylor was an exempt employee.

4.There is no material triable issue concerning applicability of the executive exemption.

In order to discharge its burden to show Taylor was exempt as an executive employee pursuant to Wage Order 9, UPS was required to demonstrate the following: (1) his duties and responsibilities involve management of the enterprise or a "customarily recognized department or subdivision thereof"; (2) he customarily and regularly directs the work of two or more employees; (3) he has the authority to hire or terminate employees, or his suggestions as to hiring, firing, promotion or other changes in status are given "particular weight"; (4) he customarily and regularly exercises discretion and independent judgment; (5) he is primarily engaged in duties that meet the test of the exemption; and (6) his monthly salary is equivalent to no less than two times the state minimum wage for full-time employment. (Cal. Code Regs., tit. 8, ยง 11090, subd. 1(A)(1).) Because the exemption uses conjunctive language, UPS was required to establish all of the ...

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