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Jesse Drenckhahn v. Costco Wholesale Corp. et al

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA


August 24, 2011

JESSE DRENCKHAHN, PLAINTIFF,
v.
COSTCO WHOLESALE CORP. ET AL, DEFENDANTS.

The opinion of the court was delivered by: Judge: Honorable Jacqueline H. Nguyen

FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING THE UCL CLAIM

Before the Court is Plaintiff Jesse Drenckhahn's ("Plaintiff") only remaining cause of action, the Unfair Competition Law Claim (hereinafter, "UCL Claim"), an equitable claim to be decided by the Court. From January 4 through 13, 2011, all of Plaintiff's claims, with the exception of the UCL Claim, were tried before a jury. (Docket Nos. 198, 204, 206, 212, 216, and 223 [minutes of the jury trial].) The non-UCL claims covered the period of December 26, 2004 through October 23, 2005. The remaining UCL claim covers the year preceding December 26, 2004-- i.e., December 26, 2003 through December 26, 2004. (Pl.'s Trial Br. UCL Claim at 1.)*fn1

I. INTRODUCTION

Plaintiff filed this lawsuit alleging the following causes of action: (1) failure to pay overtime compensation in violation of Cal. Lab. Code §§ 510, 515, 1194 and 1198; (2) failure to provide accurate itemized wage statements in violation of Cal. Lab. Code § 226(e); (3) failure to pay overtime compensation in violation of the Federal Labor Standards Act ("FLSA"), 29 U.S.C. § 207; (4) failure to provide adequate meal periods in violation of Cal. Lab. Code § 226.7; (5) failure to provide adequate rest periods in violation of Cal. Lab. Code § 226.7; (6) "continuing wages" due to failure to pay unpaid wages upon termination (Cal. Lab. Code § 203); and (7) violations of the UCL, Cal. Bus. & Prof. Code § 17200. (See Notice of Removal, Ex. A [Compl.].)

The suit arises from Defendant Costco Wholesale Corporation's ("Costco") alleged failure to provide Plaintiff with overtime compensation and adequate meal and rest breaks during his tenure as a Costco receiving manager ("RM") from December 26, 2003 through October 23, 2005. On January 13, 2011, the jury returned a verdict with respect to the Labor Code- and FLSA-based claims. (Docket No. 226 [Redacted Verdict Form].) The jury found that, although Costco had "prove[n] it more probably true than not that Plaintiff . . . was exempt under federal law as a salaried manager," Costco had failed in proving that he was an exempt employee under the Labor Code. (Id.) In phase two, the jury awarded Plaintiff damages for eleven hours of overtime compensation per workweek, as well as two hours of meal-break premium compensation per workweek. (Docket No. 227 [Phase-Two Verdict Forms Redacted] at 2-3.) However, the jury also found that Plaintiff failed to prove that Costco denied Plaintiff any rest breaks. (Id. at 4.) Given the verdict, the central issue now remaining is Plaintiff's equitable UCL Claim covering the period of December 26, 2003 through December 26, 2004.

II. FINDINGS OF FACT*fn2

The evidence necessary to rule on the UCL Claim has already been introduced during the jury trial. While the Court recognizes that the jury's factual findings do not cover the period at issue, the evidence presented at trial leads the Court to the same conclusion reached by the jury with respect to the year prior to December 26, 2004.

Plaintiff was employed by Costco from approximately 1995 to 2006. (1/4/2011 Tr. [docket no. 240] at 5:19-21.) Between February 2002 and late 2005, he held the position of RM at stores in Culver City and Hawthorne, California. (Id. at 6:25-7:1-3; 10:11-13.)*fn3 While employed as an RM, Plaintiff took some time off from work between the period of May to November 2004 because of a knee injury. (Id. at 10:15-18.)

During his tenure as an RM, Costco misclassified Plaintiff as "exempt" from state overtime laws to avoid paying overtime wages and other benefits. (Id. at 13:1-7.) RMs like Plaintiff were scheduled to work for 9.5 hours per day, 47.5 hours per week. (1/5/2011 Tr. at 12:12-13 [docket no. 242].) However, on some occasions, to "get the job done," RMs "might have to put in some extra hours." (Id. at 12:14-15.) Plaintiff's "managerial" duties comprised a small portion of his total work time, which often totaled more than forty-five hours per week. In fact, as Greg Gardner*fn4 testified at trial, during the course of the day, an RM's "primary responsibility is to ensure that . . . the merchandise that comes in, comes in in a timely manner and that it's . . . being received in the proper fashion, primarily accurately." (Id. at 17:23-18:4.) Plaintiff's assertion that he primarily engaged in non-exempt work while employed as an RM is bolstered by Greg Carter's*fn5 own admission that Plaintiff "[led] by example and literally walk[ed] the talk on a daily basis." (1/5/2011 Tr. at 99:16-19 [docket no. 241].) Plaintiff was neither afforded overtime pay nor adequate meal breaks, although he often worked at least ten, and often as many as twelve, hours per day.*fn6

III. CONCLUSIONS OF LAW

The issue presented is the amount of restitution that should be awarded to Plaintiff for his UCL Claim. Costco asks the Court to rule that Plaintiff may not recover section 226.7 pay for missed meal and rest breaks as restitution under the UCL. On the other hand, Plaintiff seeks to recover restitution based on UCL claim in the sum of $38,459.27. Based on the evidence highlighted above, the Court concludes that during the relevant period, Costco misclassified Plaintiff as "exempt" from state overtime laws.*fn7 Therefore, the question now is the amount of restitution that should be awarded to Plaintiff.

A. Plaintiff's Unpaid Overtime Wages for the Period of December 26, 2003 Through December 26, 2004 Overtime wages may be recovered as restitution under UCL. Cortez v.

Purolator Air Filtration Products Co., 23 Cal. 4th 163, 177 (2000) (holding that court-issued "orders for payment of wages unlawfully withheld from an employee are also a restitutionary remedy authorized by section 17203"). Here, Plaintiff seeks to recover overtime wages in the sum of $31,594.40 ($6,609.37 (pre-medical leave) plus $24,985.03 (post-medical leave)). (Pl.'s Trial Br. UCL Claim at 25.) The amount sought is based on 2.2 hours of overtime per day, which tracks the jury's finding that Plaintiff worked an average of 11 hours of overtime per week. The jury's finding as to the number of overtime hours Plaintiff worked per week is supported by evidence presented at the trial. Therefore, while the Court recognizes that it is not bound by the jury's findings with regard to the period at issue, the Court finds that the jury's finding is reasonable. The Court likewise finds that Plaintiff has sustained his burden of proof and his issue, and that he is entitled to recover 2.2 hours of overtime per day for a total of $31,594.40.

B. Whether Plaintiff is Entitled to § 226.7 Pay

Plaintiff asserts that he is entitled to recover § 226.7 pay for missed meal breaks. Although employers must provide employees with meal and rest breaks under Cal. Lab. Code § 512(a), they need not guarantee that employees take breaks. White v. Starbucks Corp, 497 F. Supp. 2d 1080, 1088-1089 (N.D. Cal. 2007) (concluding that "the California Supreme Court, if faced with this issue, would require only that an employer offer meal breaks, without forcing employers actively to ensure that workers are taking these breaks"); see also, Hernandez v. Chipotle Mexican Grill, Inc., 189 Cal. App. 4th 751, 754 (Cal. App. 2d Dist. 2010) (holding that employers must provide employees with breaks, but need not ensure employees take breaks), review granted, 246 P.3d 612 (Cal. 2011).

Here, there is sufficient evidence that Costco provided Plaintiff with meal breaks. Plaintiff admitted at the trial that no one told him he could not take a meal break as an RM. (1/13/2011 Tr. at 17:8-10). Plaintiff also admitted that during the course of the day, he was able to leave the receiving department. (1/13/2011 Tr. at 17:17-20.) Indeed, Plaintiff testified that he was responsible for deciding when other employees in his department could take breaks (1/4/2011 Tr. 61:22-24), and it is reasonable to assume that he was in-charge of his own breaks (1/13/2011 Tr. at 17:14-16). Based on Plaintiff's own testimony, he was completely in control of his own schedule, and Costco did not deprive him of the ability to take his meal breaks. Therefore, the Court finds that Plaintiff is not entitled to recover § 226.7 pay for missed meal breaks as there was no § 512 violation.

Since the Court has concluded that there was no § 512 violation, it need not reach the issue of whether § 226.7 payments for missed meal breaks are recoverable as restitution under the UCL.

IV. CONCLUSION

For the reasons stated above, the Court awards Plaintiff overtime wages in the sum of $31,594.40 pursuant to the UCL Claim. The Court denies Plaintiff's request for § 226.7 pay for missed meal and rest breaks.

Plaintiff is ordered to lodge a proposed judgment within 10 days from the date of this order.

IT IS SO ORDERED.

Honorable Jacqueline H. Nguyen UNITED STATES DISTRICT COURT


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