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Shine v. Williams-Sonoma, Inc.

California Court of Appeals, Second District, Fourth Division

May 29, 2018

HARLEY SHINE, Plaintiff and Appellant,
v.
WILLIAMS-SONOMA, INC., et al., Defendants and Respondents.

          APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC598805 John Shepard Wiley, Jr., Judge. Affirmed.

          McNicholas & McNicholas, Patrick McNicholas and Michael J. Kent; Bridgford, Gleason & Artinian and Michael H. Artinian; Frank Sims & Stolper and Scott H. Sims; Esner, Chang & Boyer and Holly N. Boyer for Plaintiff and Appellant.

          Orrick, Herrington & Sutcliffe, Melanie L. Bostwick, Randall C. Smith, Jessica R. Perry, and Allison Riechert Giese for Defendants and Respondents.

          EPSTEIN, P.J.

         In this putative class action against defendants and respondents Williams-Sonoma, Inc., and Williams-Sonoma Stores, Inc. (jointly, Williams-Sonoma), plaintiff and appellant Harley Shine appeals from an order of dismissal following the sustaining of a demurrer without leave to amend. Concluding the demurrer was properly sustained on res judicata grounds, we affirm.

         FACTUAL AND PROCEDURAL BACKGROUND

         In a previous wage and hour class action lawsuit, Morales v. Williams-Sonoma, Inc. et al. (Super. Ct. S.F. County, 2015, No. CGC532344) (Morales), plaintiff Elizabeth Morales sued the same defendants (Williams-Sonoma) on behalf of “all current and former California-based hourly-paid or non-exempt individuals employed by Williams-Sonoma Stores, Inc. at a Pottery Barn, Pottery Barn Kids, Williams-Sonoma, or West Elm store in California since June 24, 2009.” The operative first amended complaint in Morales alleged causes of action for overtime pay (Lab. Code, §§ 510, 1198), [1] meal period premiums (§§ 226.7, 512, subd. (a)), rest period premiums (§ 226.7), minimum wages (§§ 1194, 1197, 1197.1), final wages (§§ 201, 202), payment of all wages earned (§ 204), failure to provide proper wage statements (§ 226, subd. (a)), failure to keep proper payroll records (§ 1174, subd. (d)), failure to reimburse business expenses (§§ 2800, 2802), relief under the Labor Code Private Attorneys General Act of 2004 (PAGA) (§ 2698 et seq.), and relief under the Unfair Competition Law (Bus. & Prof. Code, § 17200 (UCL)).

         The Morales class action was resolved by a settlement agreement. The superior court approved the agreement and entered a stipulated order of dismissal on September 23, 2015. Mr. Shine, who worked at a Pottery Barn retail store in Beverly Hills from January to March 2013, was a member of the Morales settlement class and received a share of the settlement proceeds.

         A short while later, Mr. Shine filed the present putative class action complaint against Williams-Sonoma. He brought this action on behalf of himself and all “non-exempt employees of Williams-Sonoma who worked at Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, and or/Rejuvenation retail stores in California at any time from October 21, 2011 up to and continuing until the time that judgment is entered in this case....”

         The allegations in this case are based on the purported failure by Williams-Sonoma to pay the prospective class members reporting-time pay as required under Wage Order 7-2001 of the Industrial Welfare Commission (IWC) (Cal. Code Regs., tit. 8, § 11070). This wage order, which applies to mercantile companies, [2] provides that for “[e]ach workday an employee is required to report for work and does report, but is not put to work or is furnished less than half of said employee's usual or scheduled day's work, the employee shall be paid for half the usual or scheduled day's work, but in no event less than two (2) hours nor more than four (4) hours, at the employee's regular rate of pay, which shall not be less than the minimum wage.” (Cal. Code Regs., tit. 8, § 11070, subd. (5)(A).)

         Mr. Shine contends that reporting-time pay is required when an employee's on-call shift is canceled shortly before the scheduled start time. The complaint alleges that Williams-Sonoma required employees who “were scheduled for a regular shift immediately followed by an on-call shift that same day” (or vice-versa) to physically report or phone their employer shortly before the scheduled start of the on-call shift, but did not pay reporting-time pay for a canceled on-call shift. It alleges this is a violation of Wage Order 7-2001.

         Based on this alleged violation, which was the first cause of action in the complaint, Mr. Shine also alleged related claims for failure to pay all wages earned at termination (§§ 200-203, second cause of action), failure to provide accurate wage statements (§§ 226, 226.3, third cause of action), and violation of the UCL (Bus. & Prof. Code, § 17200, fourth cause of action).

         Williams-Sonoma demurred to the entire complaint, arguing that all the claims were based on the same theory: that Wage Order 7-2001 requires an employer in the mercantile industry to provide “reporting-time pay, a type of wage, when it asks an employee to remain available for a so-called ‘on-call' shift, but then ultimately tells the employee that [he or] she does not need to work the shift.” It raised three independent grounds to sustain the demurrer. First, by participating in the Morales settlement agreement and receiving damages for failure to pay wages due, Mr. Shine is barred under the doctrine of res judicata from bringing a second suit against the same defendants for failure to pay reporting-time pay, which also is a form of wages. Second, Williams-Sonoma requested that the court take judicial notice of employment records, which allegedly showed that Mr. Shine was not told that his on-call shift had been canceled, and because he did not suffer the injury alleged in the complaint he lacks standing to bring this action. Third, Williams-Sonoma contended the plain language of Wage Order 7-2001 requires reporting-time pay only where an employee physically reports to the job site, ready to work. It claimed that Mr. Shine's attempt to extend reporting-time pay to situations where an employee does not physically report to work exceeds what is required by law for on-call shifts.

         The trial court sustained the demurrer solely on res judicata grounds, and did not decide the other issues raised in the demurrer. Based on the order sustaining the demurrer without leave to amend, the court entered a ...


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