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Bush v. Vaco Technology Services, LLC

United States District Court, N.D. California, San Jose Division

May 2, 2018

CHRISTIANA BUSH, Plaintiff,
v.
VACO TECHNOLOGY SERVICES, LLC et al., Defendants.

          ORDER (1) GRANTING WITH LEAVE TO AMEND IN PART AND WITHOUT LEAVE TO AMEND IN PART DEFENDANT GOOGLE'S MOTION TO DISMISS THE FAC; (2) DENYING WITHOUT PREJUDICE VACO DEFENDANTS' MOTION TO STAY PENDING ADJUDICATION OF TRUJILLO ACTION [RE: ECF 21, 23]

          BETH LABSON FREEMAN, United States District Judge.

         It is no secret that technology companies employing anyone from chefs to engineers to salespersons in order to keep up with the fast pace of Silicon Valley outsource some of their staffing decisions. In this case, Plaintiff Christiana Bush (“Bush”) alleges that Defendants Google LLC (“Google”) and staffing company Vaco Technology Services, LLC, Vaco San Francisco, LLC, Vaco LaJolla, LLC, Vaco Orange County, LLC, and Vaco Los Angeles, LLC (collectively, the “Vaco Defendants” or “Vaco”) (together with Google, “Defendants”) misclassified her as an exempt employee when she worked as a Google Expedition Team Lead, when in fact she was non-exempt. See First Amended Complaint (“FAC”), ECF 20. Bush seeks to represent several proposed classes and subclasses encompassing all persons employed by Google through any staffing agency, including Vaco, or any other third parties in California since May 2011. See generally FAC.

         Google moves to dismiss the FAC, arguing that Bush's factually deficient individual allegations and overbroad claims on behalf of a highly disparate class amount to pleading abuse and fail to satisfy the requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2000). See ECF 21 (“MTD”). Google also specifically moves to dismiss Bush's ninth cause of action for civil penalties pursuant to the California Labor Code Private Attorneys General Act of 2004 (“PAGA”), Cal. Lab. Code § 2698 et seq., as time-barred. MTD at 12. Meanwhile, the Vaco Defendants move to stay this action pending adjudication of a previously filed class action pending in California Superior Court, County of Santa Clara, Daniel Trujillo, et al., v. Vaco Technology Services, LLC, et al., Case No. 1-15-CV-280846 (“Trujillo Action”). See Motion to Stay, ECF 23.

         The Court held a hearing on Google's motion to dismiss the FAC and the Vaco Defendants' motion to stay on February 22, 2018. For the reasons that follow, as well as those stated on the record at the hearing, Google's motion to dismiss the FAC is GRANTED WITH LEAVE TO AMEND with the exception of Bush's PAGA claim, which is time-barred and thus DISMISSED WITHOUT LEAVE TO AMEND. The Vaco Defendants' motion to stay this entire action, or the claims of the Vaco employees, pending adjudication of Trujillo is DENIED WITHOUT PREJUDICE.

         I. BACKGROUND[1]

         A. Bush's Role at Google

         Bush alleges that on or about May 2014, Defendants hired her as a non-exempt employee for a position primarily involving data entry with a job title of Order Audit Operation Specialist. FAC ¶ 25.[2] In August 2014, Bush was promoted to another non-exempt, hourly position at Google with the title Content Bug Technician, a position primarily involving software quality assurance. Id. ¶ 26. Bush was transferred to the Google Expedition Team in or around September 2015, and was given the title of Google Expedition Team Lead. Id. ¶ 27. At that point, Bush alleges that Defendants classified her as an outside salesperson even though she did not spend more than half of her working hours engaged in exempt sales activity away from the employer's place of business. Id.

         During her first week as a Google Expedition Team Lead, Bush alleges that she was required to report to Google's headquarters to set up the necessary equipment, which required her to travel to arrive as early as 8:00 A.M., and to work as late as 9:00 P.M. from Monday through Friday. Id. ¶ 28. Once the equipment-in this case, new cellphones-was set up and repackaged, Bush and the putative class drove their vehicles to various schools in Northern California to deliver cellphones to the end user. Id. ¶ 29. Bush's responsibilities of bringing cellphones to schools and training teachers on how to use them required her to spend several hours at the beginning and end of the day driving to and from the schools and giving orientations. Id. Bush alleges that she demonstrated and provided a virtual reality experience to students in schools but was not engaged in any kind of exempt sales activity. Id. ¶ 30.

         In her role as Expedition Team Lead at Google, Bush alleges that she regularly worked more than ten hours each workday and over sixty hours each workweek. Id. ¶ 31. Because she was classified as exempt, she was paid a fixed salary regardless of the hours she worked, was not provided with designated meal or rest periods, was not paid overtime or double time wages, and was not reimbursed for expenses such as driving her personal vehicle to various job sites and charging approximately seventy-five cellphones at home for use by staff. Id. In sum, Bush alleges that she and others similarly situated were harmed as a result of Defendants' “policy or practice” of violating various Labor Code provisions and the FLSA, including misclassification, which deprived plaintiffs of the protections they were entitled to under these labor laws.

         B. The Trujillo Action[3]

         On May 19, 2015, counsel for Bush filed a nearly identical lawsuit against Google and certain Vaco entities in the Trujillo Action in Santa Clara Superior Court. See Declaration of Daniel B. Chammas (“Chammas Decl.”), ECF 23-1. The named plaintiff in that putative wage-and-hour class action, Daniel Trujillo, sought unpaid wages and compensation for allegedly missed meal and rest breaks. Id. ¶ 2. The putative class was limited to Vaco California non-exempt employees, and sought to hold Google liable only to the extent that Vaco assigned employees to Google. Id. Trujillo filed a First Amended Complaint on June 18, 2015, adding a claim under PAGA. Id. ¶ 3.

         Trujillo himself was incarcerated for an unrelated criminal matter, and his counsel (the same attorneys representing Bush in the instant action) sought replacement representatives for the Trujillo Action. Id. ¶ 4. Thereafter, counsel filed a Second Amended Complaint to replace Trujillo with new representative plaintiffs Megan Carroll (“Carroll”) and Sierra Robinson (“Robinson”). Id. Carroll and Robinson filed a Third Amended Complaint on September 19, 2016. Id. ¶ 5. After Google and the Vaco Defendants demurred and moved to strike the class allegations, Carroll and Robinson filed the operative Fourth Amended Complaint in the Trujillo Action on November 7, 2016. Id. ¶ 6; see also Chammas Decl. Exh. A.

         The parties engaged in private mediation in the Trujillo Action, which resulted in settlement of Carroll's claims on an individual basis and a release of her PAGA and class claims against all Defendants. Chammas Decl. ¶ 8. Because the only remaining representative in the Trujillo Action, Robinson, never worked for Google, the settlement agreement dismissed Google as a defendant. Id. Robinson did not settle her claims against the Vaco Defendants, and continues to pursue her claims in the Trujillo Action. Id. ¶ 9. However, putative class counsel represented at the hearing that they have experienced a breakdown in communications with Robinson and the future of the Trujillo action is uncertain.

         C. The Bush Action

         On August 24, 2017, represented by the same counsel as plaintiffs in the Trujillo Action, Bush initiated this lawsuit on behalf of herself and others similarly situated against Google and the Vaco Defendants in the Superior Court of California, County of Santa Clara. See Declaration of Alexandria M. Witte (“Witte Decl.”) Exh. A (“Compl.”), ECF 1-1. The Vaco Defendants filed an Answer to the original Complaint on September 26, 2017. See Witte Decl. Exh. J. On September 27, 2017, the Vaco Defendants, joined by Google, removed the Bush action to this Court pursuant to federal question jurisdiction because Bush's eighth cause of action asserts a violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., for Defendants' alleged failure to pay wages for all hours worked. See ECF 1. Thus, unlike the Trujillo Action which remains in state court and seeks relief exclusively under state law, the Bush Action arises under federal law.

         The Vaco Defendants then filed a motion to stay the Bush action pending adjudication of the Trujillo action, and Google filed a motion to dismiss the original complaint. See ECF 8, 16. On October 31, 2017, Bush filed a First Amended Complaint as of right against Defendants, which became the operative complaint and rendered the pending motions moot. See generally FAC. Bush brings nine causes of action against Defendants, six of which are for violations of the California Labor Code including (1) failure to provide meal periods; (2) failure to provide rest periods; (3) failure to pay hourly and overtime wages; (4) failure to indemnify; (5) failure to provide accurate written wage statements; and (6) failure to timely pay all final wages. Bush also alleges (7) unfair competition in violation of California Business & Professions Code §§ 17200 et seq.; (8) failure to pay employees for all hours worked in violation of the FLSA; and (9) civil penalties under PAGA. See FAC ¶¶ 47-155. Google filed a motion to dismiss all causes of action in the FAC, or in the alternative, to strike class allegations, and the Vaco Defendants filed a renewed motion to stay based on the FAC. See ECF 21, 23. The Court held a hearing on both motions as well as an initial Case Management Conference on February 22, 2018.

         At the hearing, the Court indicated that it would grant Google's motion to dismiss and require Plaintiff to amend significantly in order to proceed with this putative class action, including narrowing the class allegations substantially. The Court agreed with Google that as currently pled, the allegations in the FAC beg discovery abuse. Accordingly, the Court STAYED discovery in its entirety until Defendants are ordered to answer the complaint, or such earlier time as ordered by the Court. See ECF 38. The Court also DENIED WITHOUT PREJDUICE the Vaco Defendants' motion to stay this case pending the outcome of the Trujillo Action. The Court's reasoning on Google's motion to dismiss and the Vaco Defendants' motion to stay is set forth below.

         II. REQUEST FOR JUDICIAL NOTICE

         Ordinarily, a district court's inquiry on a Rule 12(b)(6) motion to dismiss is limited to the pleadings. “A court may, however, consider certain materials-documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice- without converting the motion to dismiss into a motion for summary judgment.” U.S. v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Courts may take judicial notice of facts that are “not subject to reasonable dispute.” Fed.R.Evid. 201(b). Indisputable facts are those that are “generally known” or that “can be accurately and readily determined from sources whose accuracy cannot be reasonably questioned.” Id.

         Google requests this Court to take judicial notice of two records: (1) Bush's Amended and Supplemental PAGA Notice, dated July 19, 2017, sent by Bush to the California Labor and Workforce Development Agency (“LWDA”) and Google pursuant to the California Labor Code Private Attorneys General Act of 2004 (“PAGA”), Cal. Lab. Code § 2698 et seq. See Google's Request for Judicial Notice (“RJN”), Exh. A (“PAGA Notice”), ECF 22; and (2) a joint stipulation and signed order filed in the Trujillo Action entered October 17, 2017, dismissing Plaintiff Carroll's claims and Defendant Google from the action pursuant to settlement. See RJN Exh. B.

         Bush did not file an opposition to Google's request for judicial notice, and the arguments in her opposition to Google's motion to dismiss her PAGA claim also rely on these documents. The Court finds that both Exhibits A and B are proper subjects of judicial notice. The PAGA Notice is incorporated by reference into the FAC. See FAC ¶ 153 (“Plaintiff has complied with the procedures for bringing suit specified in Labor Code § 2699.3.”). The “incorporation by reference” doctrine permits the Court to take into account documents “whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading.” Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (internal citations omitted). Courts routinely take judicial notice of PAGA notices at the motion to dismiss stage. See, e.g., Gunn v. Family Dollar Stores, Inc., No. 3:14-CV-1916-GPC-BGS, 2016 WL 7030363, at *2 (S.D. Cal. Dec. 2, 2016) (granting defendant's request for judicial notice “[b]ecause Plaintiff's PAGA claim depends upon the sufficiency of the letter's content and because Plaintiff does not dispute the authenticity of the document.”)

         With respect to the October 17, 2017 Order in the Trujillo Action dismissing Carroll's claims, including her PAGA claim, the Court “may take judicial notice of undisputed matters of public record, including documents on file in federal or state courts.” Harris v. County of Orange, 682 F.3d 1126, 1132 (9th Cir. 2012). The Trujillo Order attached as Exhibit B is a document filed in Santa Clara Superior Court, and is properly subject to judicial notice. For these reasons, the Court GRANTS Google's request for judicial notice of Exhibits A and B.

         III. MOTION TO DISMISS

         A. Legal Standard

         “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted ‘tests the legal sufficiency of a claim.'” Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts as true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court need not “accept as true allegations that contradict matters properly subject to judicial notice” or “allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation marks and citations omitted). While a complaint need not contain detailed factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         On a motion to dismiss, the Court's review is limited to the face of the complaint and matters judicially noticeable. MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986); N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). However, under the “incorporation by reference” doctrine, the Court also may consider documents which are referenced extensively in the complaint and which are accepted by all parties as authentic. In re Silicon Graphics, Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999), abrogated on other grounds by S. Ferry LP, No. 2 v. Killinger, 542 F.3d 776, 784 (9th Cir. 2008).

         In deciding whether to grant leave to amend, the Court must consider the factors set forth by the Supreme Court in Foman v. Davis, 371 U.S. 178 (1962), and discussed at length by the Ninth Circuit in Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2009). A district court ordinarily must grant leave to amend unless one or more of the Foman factors is present: (1) undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure deficiencies by amendment, (4) undue prejudice to the opposing party, and (5) futility of amendment. Eminence Capital, 316 F.3d at 1052. “[I]t is the consideration of prejudice to the opposing party that carries the greatest weight.” Id. However a strong showing with respect to one of the other factors may warrant denial of leave to amend. Id.

         B. Failure to State a Claim

         Google argues that all of the claims in Bush's FAC are fatally deficient under Twombly and Iqbal. MTD at 3.[4] The Court will require significant amendment before Bush is permitted to move forward with her own claims against Google, as well as her claims on behalf of a class of Google employees. The Court addresses each of the nine causes of action in the FAC as follows.

         1. Failure to Provide Meal and Rest Periods (Claims 1 and 2)

         With respect to her own experience as a Google Expedition Team Lead, Bush fails to allege facts to support the wide swath of Labor Code violations that she asserts against Defendants. In the first two causes of action, the FAC contains only conclusory allegations that Bush was entitled to-and that Defendants failed to provide-required meal and rest periods. See FAC ¶¶ 36-39. Not only does Bush fail to differentiate between Google and the Vaco Defendants anywhere in her pleading, she also does not allege any facts to support her claims that Google violated the California Labor Code with respect to her or any other individual regardless of that individual's employer, classification as exempt or non-exempt, duties, position, or type of engagement. See MTD at 5-6.

         California Labor Code § 226.7(b) provides that “[a]n employer shall not require an employee to work during a meal or rest or recovery period mandated pursuant to an applicable statute, or applicable regulation, standard, or order of the Industrial Welfare Commission, the Occupational Safety and Health Standards Board, or the Division of Occupational Safety and Health.” Cal. Lab. Code § 226.7(b). Further, § 226.7(c) provides that “[i]f an employer fails to provide an employee a meal or rest or recovery period in accordance with a state law ... the employer shall pay the employee one additional hour of pay at the employee's regular rate of compensation for each workday that the meal or rest or recovery period is not provided.” Cal. Lab. Code § 226.7(c). Under California Labor Code § 512(a), “[a]n employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes…” Cal. Lab. Code § 512(a).

         The only factual allegation in the FAC about Bush's own meal and rest periods is that when she was a Google Expedition Team Lead, Bush was “not provided with any designated meal and/or rest periods as she regularly worked through her meal and/or rest periods.” FAC ¶ 31. This allegation is partly a conclusion (that Defendants failed to provide designated meal and/or rest periods) and otherwise insufficiently pled because under the applicable law it is irrelevant whether Bush worked through meal or rest periods if they were made available to her. Rather, “[a]n employer's duty with respect to meal breaks under both section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.” Brinker Rest. Corp. v. Superior Court, 53 Cal.4th 1004, 1040 (2012). Moreover, “the employer is not obligated to police meal breaks and ensure no work thereafter is performed.” Id. The Court cannot infer that Bush has stated a claim against Google merely because she alleges that she regularly worked through her meal and/or rest periods. More facts are needed to raise Bush's claims above a speculative level. See Twombly, 550 U.S. at 570 (“Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed.”)

         It is also key to Bush's claims that she plausibly alleges which company (or companies) employed her. Yet Bush's factual allegations are fatally vague on this point. She asserts only that she was “initially hired by Defendants” as a non-exempt employee but eventually “promoted” and “transferred” to other positions at Google. See FAC ¶¶ 25-27. She provides no factual support that would enable the Court to presume that she had an employment relationship with Google rather than Vaco. This is in part because Bush never differentiates between any of the Defendants. In fact, after she defines the Vaco Defendants in the beginning of the FAC, the remainder of the pleading fails to distinguish between the conduct by the Vaco Defendants (including between one another) and Google's conduct. The Court cannot draw an inference that “Defendants” employed Bush or misclassified her, and therefore cannot infer that Google employed any of the putative class members. See Lopez v. Wendy's Int'l, Inc., No. CV 11-00275 MMM JCX, 2011 WL 6967932, at *2 (C.D. Cal. Sept. 19, 2011) (A plaintiff asserting claims on behalf of a class “does not lower the pleading requirements for the named plaintiff's claims, or in any way blunt the impact of the Supreme Court's holdings in Twombly and Iqbal.”)

         The class allegations in the FAC are even more troubling than Bush's individual claims. Bush seeks to represent two proposed classes, a “Google Staffing Class” and a “Google Expedition Class, ” each of which is composed of several sub-classes. See FAC ¶ 17. The Google Staffing Class consists of “[a]ll persons employed by Google through any staffing agencies and/or any other third parties who worked in hourly or non-exempt positions in California during the Relevant Time Period.” Id. The Google Expedition Class allegedly includes “[a]ll persons employed directly by Google and/or ...


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