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Dietrick v. Securitas Security Servs. USA, Inc.

United States District Court, N.D. California

June 23, 2014

MICHAEL DIETRICK, Plaintiff,
v.
SECURITAS SECURITY SERVICES USA, INC., Defendant

For Michael Dietrick, individually and on behalf of all others similarly situated, Plaintiff: John R. Hurley, LEAD ATTORNEY, Eduardo Gregory Roy, Prometheus Partners L.L.P., San Francisco, CA.

For Securitas Security Services USA, Inc., Defendant: Sherry Beth Shavit, LEAD ATTORNEY, Barri Lyn Friedland, Brian Ray Tinkham, Tharpe & Howell, LLP, Sherman Oaks, CA.

Page 1266

ORDER DENYING MOTION FOR SUMMARY JUDGMENT

JON S. TIGAR, United States District Judge.

In this action for claims of alleged violations of federal and California labor laws, Defendant Securitas moves for summary judgment or, in the alternative, partial summary judgment on all claims asserted in Plaintiff Michael Deatrick's [1] Amended Complaint. For the reasons set forth below, the motion is DENIED.

I. BACKGROUND

A. The Parties and Claims

Plaintiff Michael Deatrick is a former employee of Defendant Securitas Services USA, Inc. (" Securitas" ), a national provider of security services. Deatrick worked for Securitas as a security guard for several years prior to being laid off. Deatrick alleges that Securitas failed to pay him and other security guards the full overtime compensation they were owed, because Securitas failed to take into account in the overtime calculation the payments that security guards received in connection with Securitas' " Vacation Pay Plan" (" the Plan" ). Am. Compl. ¶ ¶ 1-6. Deatrick alleges that Securitas improperly treated these payments (" the payments at issue" ) as vacation payments under the FLSA, even though such payments were, in practice, retention or productivity bonuses.

Deatrick has asserted a claim under the Fair Labor Standards Act (" FLSA" ) for

Page 1267

failure to pay overtime wages against Securitas on his own behalf and on behalf of a putative class of Securitas employees who were subject to the Plan.[2] Additionally, Deatrick has asserted the following claims under California law on his own behalf and on behalf of two putative classes of Securitas employees who were employed by Securitas in California: (1) a claim for failure to pay overtime wages in violation of California Labor Code sections 510 and 1198; (2) a claim for inaccurate wage statements in violation of California Labor Code sections 226 and 1174; (3) a claim for waiting time penalties under California Labor Code section 203 for failure to pay the wages owed upon termination; (4) a claim under California's Unfair Competition Law (" UCL" ); and (5) a claim under California's Private Attorneys General Act.

B. Facts

The Plan is set forth in the Security Officer Handbook given to security officers upon being hired and each time it is updated. Walsh Decl. ¶ 9 & Ex. T, U, V. Security officers also receive a summary of the Plan's Summary Plan Description. Id. ¶ 10 & Ex. W. The Plan's stated purpose is to provide eligible employees with " funded vacation pay benefits." Walsh Decl., Ex. A at SUSA 0041.

Under the terms of the Plan, eligible " Contract Services Employees" do not receive any pay while on vacation.[3] The Plan provides that:

Payment of Vacation Pay. A Contract Services Employee shall not receive any pay during his vacation. Rather, all vacation pay benefits shall be paid annually in a lump sum as soon as possible following the Contract Services Employee's Anniversary Date.

Walsh Decl., Ex. A at SUSA 0042-45 (emphasis added); Walsh Decl. Ex. T at 2, Ex. U at 2, Ex. V at 2.

The payments that Deatrick and other employees received under the Plan on a yearly basis were calculated based on (1) years of service; (2) the number of hours worked in the immediately preceding year; and (3) the most frequent rate of pay during the year:

Determination of Vacation Pay. Vacation pay shall be calculated with respect to the total hours paid to the [CAS] during the year ending in the month of the [CAS] Anniversary Date. The number of hours of vacation pay benefits to which such a [CAS] shall be entitled shall be the number of hours of vacation set forth on Schedule A based on the [CAS]'s Years of Service multiplied by a fraction, the numerator of which is the actual number of hours that the [CAS] was paid during the year and the denominator of which is 2080. A [CAS] whose actual hours paid during the year are less than 2080, but equal 1560 or more, shall be entitled to receive a pro rata portion of the benefits listed on Schedule A attached hereto. In determining his actual hours paid during the year, a [CAS] shall receive credit for . . . up to a maximum of 40 hours per week . . .

Page 1268

Walsh Decl. Ex. A at SUSA 0042-45; Walsh Decl. Ex. T at 2, Ex. U at 3, Ex. V at 3.

To be eligible for annual payments under the Plan, an employee must have worked at least 1560 hours in the preceding year. Walsh Decl. Ex. A at SUSA 0042-45. Payments were issued on the employee's anniversary date, unless the employment was terminated, in which case the employee did not receive any payments under the Plan for that year:

Accrual of Benefits. A Contract Services Employee's right to receive benefits under the Plan shall accrue on his Anniversary Date. A Contract Services Employee who terminates employment for any reason, voluntarily or involuntarily, prior to his Anniversary Date shall not be entitled to any benefits under the Plan for the period of service since his last Anniversary Date[.]

Walsh Decl., Ex. A at 5; Walsh Decl., Ex. T at 2, Ex. U at 3, Ex. V at 3.

These terms could vary depending on the existence of a client contract or a collective bargaining agreement. Walsh Decl., Ex. T at SUSA 0297; Walsh Decl., Ex. U at SUSA 000301; Walsh Decl., Ex. V at SUSA 000304.

Securitas admits that it excluded payments under the Plan from its overtime calculations. Answer ¶ 65. Deatrick received payments under the Plan from 2009 to 2012. Kaczke Decl. ¶ 2 & Ex. X.

The Plan provides that it " is intended to qualify as an employee welfare benefit plan within the meaning of Section 3(1) of [ERISA]." Walsh Decl., Ex. A at SUSA 0041. Benefits payable under the Plan are funded by Securita's Voluntary Employee Beneficiary Association Trust (" VEBA Trust" ). Walsh Decl. ¶ 5; Walsh Decl., Ex. A § 2.18, 5.1. Securitas is required to make contributions to the VEBA Trust so that benefits " will be paid from amounts set aside in the Trust rather than from the general assets of [Securitas]." Walsh Decl., Ex. A § 2.18, 5.1. A Plan Administrator supervises the execution of the Plan. Id. ยง 6.1. To ...


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