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Michael Aleman et al v. Airtouch Cellular

September 20, 2012


(Los Angeles County Super. Ct. No. BC369372) APPEALS from judgments and an order of the Superior Court of Los Angeles County. William F. Highberger, Judge.

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

Opinion on transfer from Supreme Court


Affirmed in part, reversed and remanded in part, and dismissed in part.

Two members of a putative class--Daniel Krofta and Mary Katz (appellants)--appeal from a trial court order granting summary judgment against them. In this opinion, we examine the application of two provisions from the Industrial Welfare Commission's Wage Order No. 4-2001 (Cal. Code Regs., tit. 8, § 11040).

First, we find that appellant Krofta was not entitled to receive "reporting time pay"*fn1 for attending meetings at work, because all the meetings were scheduled and appellant worked at least half the scheduled time. Second, we find that appellant Krofta was not owed additional compensation for working "split shifts,"*fn2 because, on each occasion he worked a split shift, he earned more than the minimum amount required by the wage order. Third, we determine that the trial court properly found that appellant Katz released all claims against respondent AirTouch Cellular (doing business as Verizon Wireless) (AirTouch).

Next, we turn to the matter of attorney fees, which were awarded by the trial court in favor of AirTouch. In an earlier opinion, we reversed the trial court's fees award. We found that both appellants' claims were subject to Labor Code section 1194, a "plaintiffs only" fees shifting statute. Subsequently, the Supreme Court granted review, as a similar attorney fees-related issue was then pending in another case. Following issuance of Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244 (Kirby), the Supreme Court transferred this case back to us for reconsideration in light of Kirby. Now, reconsidering the matter, we determine that the split shift claim is subject to Labor Code section 1194, because the claim seeks to recover unpaid minimum wage compensation. However, a reporting time claim is brought to recover unpaid wages, and is therefore subject to Labor Code section 218.5, which allows a prevailing defendant to recover attorney fees.*fn3 We conclude that the trial court must allocate the reasonable fees incurred by AirTouch in defending the reporting time claim and award those fees.

Finally, we decline to consider the putative class members' appeal of the trial court's denial of a motion for class certification, since the motion was denied without prejudice and the matter has not been finally decided.


This case was brought by former employees of AirTouch. The plaintiffs worked mostly as "retail sales representatives" or "customer service representatives" at AirTouch stores and kiosks, selling cell phones, accessories, and cell phone service plans. Plaintiffs filed a putative class action against AirTouch in April 2007, alleging that AirTouch did not properly pay its nonexempt employees for attending mandatory store meetings.

The thrust of plaintiffs' claims was that AirTouch violated two separate provisions of the Industrial Welfare Commission's (IWC) Wage Order No. 4-2001 (Cal. Code Regs., tit. 8, § 11040), commonly known as Wage Order 4. Plaintiffs claimed that AirTouch improperly failed to pay "reporting time pay" for days when employees were required to report to work just to attend work-related meetings. Plaintiffs also contended they were owed "split shift" compensation for days on which they attended a meeting in the morning and worked another shift later the same day. AirTouch contended that it did not violate the reporting time or split shift provisions of Wage Order 4, and that plaintiffs received all compensation to which they were entitled.

Krofta Motion

In July 2010, AirTouch moved for summary judgment against Daniel Krofta, one of the 17 named plaintiffs and putative class action representatives. AirTouch argued that because Krofta's salary was not at or near minimum wage, he was not entitled to additional compensation for working a split shift; and, because all meetings Krofta attended were scheduled and Krofta was paid for working the scheduled time, he was not owed reporting time pay.

In support of its motion, AirTouch presented evidence that Krofta worked at its stores from October 2005 to October 2006, and that his salary ranged from $10.58 to $11.11 per hour, not including commissions. During his time at AirTouch, Krofta learned what his schedule would be for the following week from the store work schedule, which was posted by the store manager at least four days before the work week began, and which laid out the days and hours that each employee would work.

Like other employees, Krofta was required to attend occasional work-related meetings. Most of these were "store meetings," which would be held once or twice a month on Saturday or Sunday morning, before the store opened, and which would last an hour to an hour and a half. The meetings were scheduled in advance and listed on employees' work schedules, and they were recorded in AirTouch's electronic timekeeping system.

Krofta's timesheets from AirTouch showed that there were five occasions on which he was scheduled to work, and did work, less than four hours (possibly to attend meetings). Separately, the AirTouch timesheets showed there were five times when Krofta worked a split shift--described by the parties for purposes of this litigation as a short shift (generally a meeting) in the morning followed by a longer shift later the same day.

The bulk of the relevant facts was not disputed by Krofta, and Krofta acknowledged that he received payment for all hours reflected on his timesheets. Krofta contended, however, that he was owed additional compensation as reporting time pay for the five instances he worked less than four hours, and split shift premiums for the five times he worked a split shift. AirTouch contended that, as a matter of law, Krofta was not owed additional compensation. The summary judgment motion thus hinged on a legal determination of whether Wage Order 4 mandated reporting time and split shift pay for these 10 shifts.

The trial court agreed with AirTouch and found that under the clear meaning of Wage Order 4's reporting time and split shift provisions, given the evidence presented, Krofta was not entitled to either reporting time or split shift pay. The court entered summary judgment against Krofta and in favor of AirTouch.

Katz Motion

AirTouch also moved for summary judgment against Mary Katz in July 2010. Although Katz brought the same claims as Krofta, the motion against Katz was not directly premised on the inapplicability of reporting time and split shift pay requirements. Instead, AirTouch argued that an agreement signed by Katz while the lawsuit was pending released all of her claims. The agreement was titled Release of Claims Agreement and included extensive language releasing AirTouch from "any and all claims."

In its separate statement of undisputed material facts, AirTouch stated that Katz signed the agreement in April 2008 in exchange for the right to exercise long-term incentive awards. After signing the release and exercising this right, she received a payment of $25,796.28.

In her opposition, Katz did not dispute any of the moving papers' material facts. Instead, Katz simply argued that she was owed reporting time and split shift pay, and that the release was "patently invalid as it cannot bar [Katz] from proceeding in an action to collect split shift premiums and reporting time pay to which she was undisputedly entitled."

The trial court found that Katz was not undisputedly owed reporting time and split shift compensation. Further, Katz received the incentive award payment, which she otherwise would not have been owed, by signing the release agreement. On this basis the court found that the release was valid and supported by consideration, and the court granted the summary judgment motion.

Attorney Fees

After summary judgment was granted against Krofta and Katz, AirTouch brought motions to recover attorney fees from both plaintiffs. AirTouch moved pursuant to section 218.5, which allows a prevailing party to recover reasonable fees "[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions." Krofta and Katz opposed the motions by arguing that the actions were covered not by section 218.5, but instead by section 1194, which provides for recovery of fees only by the plaintiff in an action to recover unpaid minimum wage or overtime compensation. The trial court disagreed with Krofta and Katz and awarded AirTouch $146,000 in fees against Krofta and $140,000 in fees against Katz.

Denial of Class Certification

In September 2010, after AirTouch moved for summary judgment but prior to the court's rulings, all plaintiffs moved for class certification pursuant to Code of Civil Procedure section 382. The trial court heard the matter on January 18, 2011, at the same time it heard AirTouch's motions for attorney fees against Krofta and Katz (and well after it had granted summary judgment against them). At the hearing, the trial court noted that the claims asserted by plaintiffs had already been judged meritless with respect to Krofta. The court suggested to the parties' counsel that the motion for class certification be heard after the issues of split shift and reporting time liability were resolved on appeal, since appeal was imminent and could potentially alter the posture of the case. Although it seems the suggestion was completely reasonable, counsel did not agree to delay resolution of the class certification motion. The trial court then stated it was denying the motion without prejudice. The court made clear that it did not view this ruling as a "death knell" appropriate for appellate review, however, because plaintiffs would be allowed to bring a new motion to certify the class.

The court's subsequent order denied the motion without prejudice on the basis that the court was not "satisfied that any of the named representatives have made an adequate showing that he or she is an adequate class representative." The court found that the putative class representatives had not shown they understood the possible risks of proceeding as named plaintiffs, including potentially being subject to large fees and costs awards. The order also held that plaintiffs had failed to fully address concerns of potential intra-class conflict.


All plaintiffs filed a notice of appeal from the order denying the motion for class certification. Separately, Krofta and Katz filed notices of appeal from the judgments entered against them.

We initially issued our opinion in this matter on December 21, 2011. In June 2012, the Supreme Court directed us to reconsider the matter in light of Kirby, supra, 53 Cal.4th 1244, which we address in Section III of this opinion, below.


Our review begins with the judgments against Krofta and Katz. Summary judgment must be granted if the papers show an absence of triable issues of material fact and that the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) A defendant meets its initial burden on summary judgment by showing that one or more elements of the plaintiff's causes of action cannot be established, or that the causes of action are subject to a complete defense. (Code Civ. Proc., § 437c, subd. (p)(2).) The burden then shifts to the plaintiff to set forth specific facts showing a triable issue of material fact exists. (Ibid.)

"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." (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.) We review the trial court's decision de novo, determining independently whether the facts not subject to dispute support summary judgment. (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1348.) Doubts are resolved in favor of the party opposing the judgment, and we are not bound by the trial court's reasons for the summary judgment ruling. (Conte v. Wyeth, Inc. (2008) 168 Cal.App.4th 89, 97; M.B. v. City of San Diego (1991) 233 Cal.App.3d 699, 703-704; Knapp v. Doherty (2004) 123 Cal.App.4th 76, 85.)

I. Summary Judgment Was Proper as to Krofta

The facts relevant to the motion for summary judgment against Krofta were largely undisputed. The issue that was in dispute was the proper interpretation of Wage Order 4. AirTouch argued, and the trial agreed, that under the plain language of Wage Order 4, Krofta was not entitled to additional compensation for reporting time or split shift pay.

No published California case has substantively examined the exact issues presented here. Nevertheless, our inquiry is relatively straightforward, since the pertinent language of Wage Order 4 is sufficiently clear. We find that the trial court properly determined that Krofta was not entitled to ...

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