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Bargas v. Rite Aid Corporation

United States District Court, C.D. California

March 28, 2017

MARINE BARGAS, Plaintiff,
v.
RITE AID CORPORATION, and DOES 1 through 50, inclusive, Defendant.

          AMENDED FINDINGS OF FACT AND CONCLUSIONS OF LAW

          MICHAEL W. FITZGERALD United States District Judge

         This matter came on for trial before the Court sitting without a jury on November 1 through November 10, 2016. Following the presentation of evidence and the parties' closing arguments, the matter was taken under submission.

         Having carefully reviewed the record and the arguments of counsel, as presented at the trial and in their written submissions, the Court now makes the following findings of fact and reaches the following conclusions of law under Rule 52 of the Federal Rules of Civil Procedure. Any finding of fact that constitutes a conclusion of law is also hereby adopted as a conclusion of law, and any conclusion of law that constitutes a finding of fact is also hereby adopted as a finding of fact.

         The Court awards a modest verdict to Plaintiff Marine Bargas based on certain weeks in which she was classified improperly as an exempt employee. That sentence encompasses why this action was unusual. The dispute was not whether overtime hours were worked, although the Court concludes that Plaintiff overstated her hours to a degree. Ultimately, the dispute was not even whether the job itself could properly be classified as exempt or not. Defendant Rite Aid Corporation (“Rite Aid”) acknowledged that the job included a mix of exempt and nonexempt duties, and that managers of smaller stores are not exempt employees.

         The real dispute then was, week by week, whether this Plaintiff's nonexempt work as actually performed constituted more than 50% of her time. The Court finds that, in general, Plaintiff did not spend most of her time on nonexempt work. In other words, Rite Aid largely proved its affirmative defense of the executive exemption. However, the parties do not really dispute that Plaintiff is entitled to a week by week determination of her correct classification. As for those weeks in which Plaintiff was assigned to other stores for remodeling or inventory, her work as performed was primarily nonexempt.

         The following witnesses were called and examined by the parties in the order recited below:

         On November 1, 2016, Michael Righetti appeared on behalf of Plaintiff Marine Bargas and gave an opening statement. Elena R. Baca and Justin M. Scott appeared on behalf of Defendant Rite Aid Corporation (“Rite Aid”) and gave an opening statement.

         On November 2, 2016, Mr. Righetti examined Kandice Valdivia, a former Rite Aid store employee who worked for Plaintiff. Ms. Baca cross-examined Ms. Valdivia; Mr. Righetti conducted a redirect examination; and Ms. Baca conducted a recross examination. Mr. Righetti next examined Mauricio Quintanilla, a former Rite Aid store employee who worked for Plaintiff. Ms. Baca cross-examined Mr. Quintanilla. Finally, Mr. Scott examined Paul Bennie, a former Senior Director of Human Resources for Rite Aid. Mr. Righetti cross-examined Mr. Bennie.

         On November 3, 2016, Mr. Righetti examined Carlos Aguila, a Rite Aid store employee who worked on a remodeling project with the Plaintiff. Mr. Scott cross-examined Mr. Aguila; and Mr. Righetti conducted a redirect examination. Next, Mr. Righetti examined Marilyn Contreras, a current District Manager for Rite Aid and Plaintiff's former District Manager, as a hostile witness. Ms. Baca cross-examined Ms. Contreras; Mr. Righetti conducted a redirect examination; and Ms. Baca conducted a recross examination.

         On November 4, 2016, Mr. Righetti examined Rebecca Yam, a former Store Manager for Rite Aid. Ms. Baca cross-examined Ms. Yam; Mr. Righetti conducted a redirect examination; and Ms. Baca conducted a recross examination. Next, Mr. Righetti examined Plaintiff Marine Bargas. Plaintiff was not cross-examined on November 4. Finally, Ms. Baca examined David Markley, the current Vice President of Financial and Labor Analysis for Rite Aid. Mr. Righetti cross-examined Mr. Markley.

         On November 8, 2016, Mr. Righetti examined Roger Ceballos, a current Senior Director of Human Resources for Rite Aid, as a hostile witness. Mr. Scott cross-examined Mr. Ceballos; and Mr. Righetti conducted a redirect examination. Mr. Scott next examined Imelda Fernandez, a current Rite Aid store employee who previously worked for Plaintiff. Mr. Righetti cross-examined Ms. Fernandez. Ms. Baca then examined Maria Garcia, a current Rite Aid store employee who previously worked for Plaintiff. Mr. Righetti cross-examined Ms. Garcia; Ms. Baca conducted a redirect examination; and Mr. Righetti conducted a recross examination. Finally, Mr. Scott examined Cynthia Pena, a current Rite Aid store employee who previously worked for Plaintiff. Mr. Righetti cross-examined Ms. Pena; Mr. Scott conducted a redirect examination.

         On November 9, 2016, Ms. Baca cross-examined Plaintiff. Mr. Righetti began a redirect examination of Plaintiff.

         On November 10, 2016, Mr. Righetti concluded his redirect examination of Plaintiff; Ms. Baca conducted a recross examination. Next, Mr. Scott examined Lisa Angulo, a current Rite Aid store employee who previously worked for Plaintiff. Mr. Righetti cross-examined Ms. Angulo. Mr. Scott next examined Leodoro Rodriguez and Robyn Brouillette, both current Rite Aid store employees who previously worked for Plaintiff. Mr. Righetti cross-examined Ms. Brouillette but did not cross-examine Mr. Rodriguez. Mr. Scott then examined Bonnie Reyes, a current Rite Aid store employee who previously worked for Plaintiff. Mr. Righetti cross-examined Ms. Reyes. Finally, Mr. Scott examined Kellie Reyes, a former Rite Aid store employee who worked for Plaintiff. Mr. Righetti cross-examined the second Ms. Reyes.

         At the end of the day on November 10, Mr. Righetti made his closing argument for Plaintiff. Ms. Baca made her closing argument for Rite Aid.

         An appendix listing all exhibits admitted into evidence during trial is attached.

         I. FINDINGS OF FACT

         A. Background

         1. Plaintiff Marine Bargas is an individual and citizen of the State of California.

         2. Defendant Rite Aid is a corporation duly organized and existing under the laws of the State of Delaware with its principal place of business in the Commonwealth of Pennsylvania.

         3. Rite Aid runs a national chain of drugstores. Each store is split between the pharmacy side and the retail side. Pharmacy and retail each have separate, independent management structures, labor budgets, corporate mandates, and so on. Plaintiff worked on the retail side of the business.

         4. Corporate oversight of stores is divided by region. The western region, encompassing all of the stores where Plaintiff worked, includes California, Oregon, Idaho, Washington, and Colorado. Regions are further subdivided into states and districts within states. Each district is run by a team of managers: a Loss Prevention Manager, a Human Resources Manager, a District Manager for pharmacy, and a District Manager for retail.

         5. In California, each store within a district typically is staffed with a Store Manager, an Assistant Manager, two Shift Supervisors (sometimes divided between a Merchandising Supervisor and a Service Supervisor), a Price Accuracy Coordinator (“PAC”), and regular non-management staff, typically referred to as clerk/cashiers.

         6. The duties of clerk/cashiers include carrying out day-to-day tasks on the sales floor. Clerk/cashiers complete merchandising, unload stock when shipments come in (what witnesses commonly referred to as “breaking down truck”), price changes, keeping stock and the sales floor clean, neat, and orderly, and ringing up customers.

         7. In training materials, Rite Aid describes the duties of the remaining staff positions as follows (see Ex. 183):

a. Store Managers are expected to provide leadership and development opportunities to associates (i.e., every other store employee), to hire and train new associates (which includes ensuring the store team is properly trained and adheres to regulations, legislation, and Rite Aid policies), and to implement the annual corporate plan. Store Managers are responsible for meeting store retail sales budgets, labor and expense budgets, and generally ensuring that operating earnings before interest, tax, depreciation and amortization (“EBITDA”) targets are achieved. Store Managers are also responsible for store inventory, including ordering and loss prevention.
b. Assistant Managers are expected to assist the Store Manager with all store operations. Assistant Managers must be able to complete all Store Manager duties in the Store Manager's absence, ensure Rite Aid policies and procedures are enforced among associates, and oversee merchandizing and stocking. Those duties include overseeing the stocking of regular store aisles and those aisles dedicated to seasonally-available merchandise (the “seasonal aisles”), the stocking of aisle end caps, and generally ensuring that all merchandise is arranged according to the corporate plan (the “planogram”). Like Store Managers, Assistant Managers must interact with vendors to order seasonal and promotional inventory, request store maintenance when required, process returned, recalled, damaged, and outdated merchandise, and help keep track of vendors' accounts payable.
c. Shift Supervisors assist Store Managers and Assistant Managers in executing corporate plans, and supervising clerk/cashiers in their floor tasks and in the provision of customer service. Shift Supervisors focus on working with the front line retail cashiers and clerks on a daily basis.
d. PACs implement weekly price changes, ad sale pricing, and generally ensure that items are priced correctly based on corporate directives. PACs conduct audits; additionally, PACS report the results of third party and government audits to the proper corporate entities. The PAC role is particularly circumscribed, as PACs are forbidden from helping with the other day-to-day tasks of running the store.

         B. The Store Manager Position

         8. Of all the in-store employees on the retail side of the business, only the Store Manager is classified as exempt from California's overtime law. (The Court discusses California's overtime law and the relevant exemptions thereto in greater detail below.)

         9. The Store Manager job description for California lists the following “Essential Duties and Responsibilities” for the position (see Ex. 4), which the Court has lightly paraphrased for readability:

a. Implement company business plans and objectives to drive sales, be profitable and provide a superior customer and associate experience.
b. Attend to opening and closing the store and maintaining proper accountability for cash handling and company banking.
c. Manage an individual store while meeting store retail budgeted sales, margin, labor, expenses and overall [profit and loss] monthly results.
d. Interview, hire, train, direct, reward, and discipline associates; evaluate associate performance; and resolve complaints.
e. Provide leadership and development opportunities for associates by communicating career opportunities, providing regular performance feedback, and demonstrating good customer service behaviors to both external and internal customers and associates.
f. Ensure the store complies with regulations, legislation, and policies.
g. Direct and assist store associates by providing a clean, safe, and pleasing environment to customers and associates. Follow company standards for safety regulations and overall store appearance, including keeping the store clutter free.
h. Maintain merchandise as required by the various tools provided by Rite Aid, including the profit planner, corporate planograms, and other regularly updated corporate mandates.
i. Supervise store inventory, and develop plans for loss prevention.
j. Manage the store's vendor relationships.
k. Ensure price accuracy of merchandise.

         10. However, not every store in California is staffed the same; Rite Aid may expand or contract the management staff depending on the sales volume of the store. (See Ex. 183). Each store always has a PAC and some number of clerk/cashiers.

a. In stores with a “front end volume” (that is, the sales volume of the retail side of the business) of $750, 000 to $1.5 million, the Store Manager position is nonexempt. The Store Manager does not have an Assistant Manager, but is afforded three Shift Supervisors, two full time and one part time.
b. In stores with a front end volume higher than $1.5 million, the Store Manager position is exempt.
c. Stores with a front end volume between $1.25 million and $2.5 million are staffed with an Assistant Manager, and two full-time Shift Supervisors, in addition to the Store Manager.
d. Stores with a front end volume greater than $2.5 million are staffed with a Store Manager, an Assistant Manager, and three full-time Shift Supervisors.

         11. Accordingly, at least in some limited circumstances, Rite Aid itself recognizes that the Store Manager position may necessarily be classified as nonexempt. That is, the duties a Store Manager must perform require a mixture of exempt and nonexempt work; and, in some circumstances, the volume of nonexempt duties exceeds more than half of the workload, requiring those Store Managers to be officially classified as nonexempt.

         12. In its training materials, Rite Aid further recognizes that even Store Managers who are classified as exempt may at times find themselves performing more nonexempt duties than exempt duties.

a. In a training program in 2005, Rite Aid handed out a “self-audit” to Store Managers, asking them to report whether they spent more than 50% of their time on nonexempt, nonmanagerial tasks.
b. In 2006, Rite Aid distributed a “Front End Manager Audit” to California Store Managers via Rite Aid's electronic communications system. Store Managers were again asked to evaluate how much time they spent each day performing managerial and nonmanagerial tasks.
c. Rite Aid stopped asking Store Managers to report how they divided their time between managerial and nonmanagerial tasks after 2006.

         13. Paul Bennie, former Senior Director of Human Resources for Rite Aid, testified that Store Managers are informed, via computer based training modules, of Rite Aid's expectations that Store Managers will spend more than 50% of their time on managerial tasks. Rite Aid presented evidence that Plaintiff completed these computer based trainings.

         14. However, Plaintiff testified that it was easy for Store Managers to skip through the computer based training without paying close attention. Indeed, to some extent it was incentivized: the trainings themselves were two, sometimes three hours long, and employees could access them from cash registers. Many Store Managers and other Rite Aid associates completed their computer based trainings while checking out customers.

         15. Plaintiff explained that, while clicking through the slides, “I'm going back and forth. I'm not really paying attention. We're just trying to get [the computer based trainings (“CBT”)] done because we have a lot of work to do. And that takes - some of these take two hours, three hours.” Later, Plaintiff testified “I don't remember really going through them. I'm just trying to get them out of the way to get back to what I'm supposed to be doing in the store.” And later still, Plaintiff illustrated:

[S]ay, for instance, if I'm in the register and I'm doing my CBT, I could be helping a customer here, and then over here, I'm doing my CBT training. And I let it run so I could go faster. And then I come back again, take care of [a] customer. I would just skip to the next page. And then come back to my-to my customer. And then I'll go back. And I'm looking at it. I'm just trying to skip, next, next. Because I'm just trying to get it out of the way because we already have so many things to do. We didn't care-not that we didn't care. But everybody just wanted to get the CBTs out of the way.

         C. Marine Bargas' Employment with Rite Aid

         16. In about June 2001, Plaintiff Marine Bargas applied for a cashier/clerk position at Rite Aid. She was hired to work at a store located in downtown Los Angeles. Plaintiff worked at that store for about three years. During that time, Plaintiff was promoted from cashier/clerk to PAC.

         17. After about three years, Plaintiff's husband (then, her boyfriend), with whom she had been working, received a promotion. As a result, Plaintiff was transferred to a different downtown store. In about 2003 or 2004, after a few months working in the new downtown location, Plaintiff received a promotion to Shift Supervisor. This promotion elevated Plaintiff to the management team for the first time.

         18. As a Shift Supervisor, Plaintiff received a set of keys to the store and the office, and access to the safe. Plaintiff was authorized to open and close the store, and to do most other tasks associated with management outside of hiring, firing, and scheduling store associates.

         19. After about six or seven months, Plaintiff was transferred to another Rite Aid store in downtown Los Angeles. Soon after the transfer, Plaintiff was promoted to Assistant Manager. Plaintiff worked as an Assistant Manager at the third downtown store for about two to three years.

         20. After about three years, Plaintiff's District Manager asked to her to take on a new role traveling between stores in southern California to help Store Managers stay caught up with their obligations. Often, Plaintiff was asked to help with some of the physical labor in the stores in order to free up trainee Store Managers to focus on learning their management duties.

         21. Plaintiff estimated that, in her new role, she worked at a new store about every three months. Plaintiff worked at stores in Alhambra, Rosemead, Pico Rivera, Compton, Commerce, and others.

         22. Eventually, Plaintiff was promoted to Store Manager. Rite Aid employed Plaintiff as a Store Manager from June 14, 2009 to April 5, 2013. The whole time Rite Aid employed Plaintiff as a Store Manager, it classified her as an exempt employee under California's labor laws.

         23. In June 2009, Plaintiff was assigned to a store in the city of Downey, California. Plaintiff worked at the Downey store for about a year.

         24. Near the end of June 2010, Plaintiff went on maternity leave. When she returned to Rite Aid in October 2010, she was assigned to a different store in the city of Commerce, California. Plaintiff managed the Commerce store for a little over two years.

         25. In September 2012, Plaintiff was transferred to a store in the city of Maywood, California. Plaintiff remained a Store Manager at the Maywood store until she left Rite Aid in April 2013.

         26. For the pay periods between June 14, 2009 and April 24, 2010, Plaintiff's weekly salary as a Rite Aid Store Manager was $1, 038.46. For the pay periods between April 24, 2010 and April 24, 2011, Plaintiff's weekly salary was $1, 064.42. For the pay periods between April 24, 2011 and May 5, 2012, Plaintiff's weekly salary was $1, 080.38. For the pay periods between May 5, 2012 and April 5, 2013, Plaintiff's weekly salary was $1, 107.39. Plaintiff's salary as a Store Manager was at least twice the state minimum wage for full time employment.

         27. Rite Aid required that a member of the management team with keys (that is, a Store Manager, an Assistant Manager, or a Shift Supervisor) be present in the store at all times during open business hours.

         28. During her employment as a Store Manager, Rite Aid did not pay Plaintiff premium overtime wages when Plaintiff worked more than 40 hours per week. Rite Aid also did not pay Plaintiff premium overtime wages when she worked more than eight hours per day.

         29. Rite Aid did not keep records of the actual hours Plaintiff worked.

         30. Rite Aid did not keep records of when Plaintiff's meal periods began and ended, or whether Plaintiff was afforded rest breaks.

         31. As a Store Manager, Plaintiff never received an additional hour of pay on days when she did not receive an uninterrupted, off-duty meal period lasting at least 30 minutes before the end of the fifth hour of work (i.e. meal period premium wages).

         32. As a Store Manager, Plaintiff never received an additional hour of pay on days when she did not receive an uninterrupted, off-duty rest break lasting at least ten minutes for every four hours of work (i.e. rest break premium wages).

         D. Marine Bargas' Schedule

         33. DOWNEY: Plaintiff testified that she worked 12 hour days five days per week for the first three months she managed the Downey store. Plaintiff testified that she worked 10-12 hour days about three days per week thereafter, until she went on maternity leave. Plaintiff testified that she worked a sixth day per week about twice per month and said that she worked a 24 hour shift between four and seven times while managing the Downey store.

         34. COMMERCE: Plaintiff testified that for about the first three months she managed the Commerce store, she worked 12 hour days five days per week. Plaintiff did not testify to her typical schedule thereafter at Commerce.

         35. MAYWOOD: Plaintiff testified that she worked 12 hour days six days per week for about the first six months that she worked there. She estimated that there was only about one week per month during that time that she did not work six days per week. Plaintiff did not testify to her typical schedule thereafter at Maywood.

         1. Schedule Data

         36. Rite Aid kept a record of the times that Plaintiff was scheduled to work between December 2009 (about six months after Plaintiff became a store manager at Downey) and March 2013 (about a month before Plaintiff left Rite Aid, on April 4, 2013). These records were admitted into evidence as a Microsoft Excel file. (See Exhibit 185A). In total, Exhibit 185A includes 741 time entries for Plaintiff.

         37. Plaintiff testified that a typical shift lasted nine hours, comprised of an eight hour workday plus one hour for lunch. Of the 741 entries, 205 (or about 28%) recorded a scheduled shift of greater than nine hours. Eighty six entries (or about 12%) recorded a scheduled shift of less than nine hours. Plaintiff was thus scheduled to work a regular nine hour shift about 60% of the time.

         38. Exhibit 185A also records that Plaintiff was scheduled to work six days per week for 20 out of 144 total weeks. She was scheduled to work seven days per week for three weeks. In sum, Plaintiff was scheduled to work more than five days per week about 16% of the time.

         39. At the Downey store, Plaintiff was typically scheduled to work a 9:00 a.m. to 6:00 p.m. shift, although she was not infrequently scheduled to work 9:00 a.m. to 7:00 p.m. or 8:00 a.m. to 5:00 p.m.

         40. At the Commerce store, Plaintiff was typically scheduled to work from 7:00 or 8:00 a.m. to 5:00 p.m. Near the end of her time at Commerce, Plaintiff typically was scheduled to work from 7:30 a.m. to 4:30 p.m.

         41. At the Maywood store, Plaintiff was typically scheduled to work either 6:00 a.m. to 3:00 p.m. or 7:00 a.m. to 4:00 p.m. Plaintiff was also occasionally scheduled to work from 5:00 a.m. to 2:00 p.m. or 6:30 a.m. to 3:30 p.m.

         2. Testimony re Actual Hours Worked

         42. Plaintiff testified that the schedule was not an accurate representation of the amount of time she actually worked. Plaintiff testified that she occasionally arrived to work later than she was scheduled or left earlier than she was scheduled to leave. Plaintiff testified that on other occasions, she would arrive to work one or two hours earlier than she was scheduled and often stayed several hours later than she was scheduled. Plaintiff further testified that she often was asked to attend meetings or take part in inventories on days when she was scheduled to be off.

         43. Mauricio Quintanilla, who was a shift supervisor with Plaintiff at the Downey store, testified that his shift overlapped with Plaintiff's about four out of five days per week. Quintanilla typically worked from 3:00 p.m. until 11:00 p.m. Quintanilla testified that he believed Plaintiff usually started work at 7:00 a.m. He typically saw Plaintiff leave work at 6:30 or 7:00 p.m.

         44. Bonnie Ray Reyes, who was a cashier/clerk for Plaintiff in the Downey Store, testified that Plaintiff typically left work at 6:00 or 7:00 p.m.

         45. Kandice Valdivia, who was first a shift supervisor and later an assistant manager with Plaintiff at the Commerce store, testified that on days when the store received stock (“load days”), Valdivia would arrive at 5:00 a.m. to unload the truck. Load days occurred about once per week. On those days, Plaintiff would arrive at 7:00 a.m. to open the store. Sometimes, this pattern was reversed: Plaintiff would arrive at 5:00 a.m. to help with the load, while Valdivia would arrive at 7:00 a.m. to open the store. Valdivia testified that on load days Plaintiff would typically leave around 6:00 or 7:00 p.m.

         46. Valdivia testified that she typically observed Plaintiff leave work at 5:00 or 6:00 p.m., but also remembered seeing Plaintiff stay until the store closed at 9:00 or 10:00 p.m. a few times per month.

         47. Imelda Fernandez, who occasionally worked the opening shift at the Commerce store with Plaintiff, testified that she would sometimes arrive half an hour to an hour later than she was scheduled. Fernandez testified that when she worked the closing shift she would typically arrive at 3:30 or 4:30 p.m., at which time Plaintiff typically would have already left for the day. Fernandez testified that she never saw Plaintiff stay for a full eight hour shift.

         48. Maria Garcia, who regularly worked the opening shift at the Commerce store with Plaintiff, testified that Plaintiff would arrive half an hour later than she was scheduled about 80% of the time. Garcia further testified that it was her understanding that Store Managers were expected by their District Managers to work ten hours per day, at least five days per week, and that Store Managers were expected to be in the store until at least 5:00 p.m.

         49. Cynthia Pena, who often worked the opening shift at the Commerce store with Plaintiff, testified that Plaintiff would usually arrive between ten minutes and half an hour later than she was scheduled.

         50. Carlos Aguila was an assistant store manager at the Maywood store with Plaintiff starting in October of 2012. He testified that Plaintiff typically worked the morning shift, whereas he typically worked either the mid or closing shift. Aguila testified that his shift would overlap with Plaintiff's about three or four times per week.

         51. Aguila testified that he typically saw Plaintiff leave work at 6:00 or 7:00 p.m. He remembered that she would stay late stocking, building displays, and so on. Aguila never saw Plaintiff leave earlier than 5:00 p.m.

         52. Aguila testified that Plaintiff frequently came in to work on her day off; that is, he frequently saw her working a sixth, unscheduled day.

         53. Lisa Angulo, who was an assistant manager for Plaintiff for three months at the Maywood store, testified that she sometimes observed Plaintiff leave early; typically, Plaintiff would explain ...


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