California Court of Appeals, Second District, Fifth Division
FOR PARTIAL PUBLICATION [**]
from a judgment of the Superior Court of Los Angeles County,
Super. Ct. No. BC502826 John Shepard Wiley, Jr., Judge.
Offices of Sherry Jung and Larry W. Lee; Hyun Legal, Dennis
S. Hyun for Plaintiffs and Appellants.
Briggs, Glenn L. Briggs, Theresa A. Kading and Nisha Verma,
for Defendant and Respondent.
Fabio Canales and Andy Cortes, on behalf of themselves and
class members, appeal from a summary judgment. Plaintiffs
were former or current non-exempt employees of defendant
Wells Fargo Bank, N.A. Plaintiffs alleged that their wage
statements failed to include information required under Labor
Code section 226, subdivision (a)(9).
Specifically, plaintiffs argued that a line on the wage
statement, “OverTimePay-Override, ” should, but
did not, include hourly rates and hours worked. Plaintiffs
also alleged defendant violated section 226 by failing to
provide a wage statement concurrently with the terminated
employees' final wages paid in-store. Plaintiffs moved
for summary adjudication on the section 226 cause of action.
in its summary judgment motion argued that
OverTimePay-Override reflected additional overtime pay that
was owed for work performed on a previous pay period, but
could not be calculated because it was based on a
nondiscretionary bonus not yet earned. Under subdivision
(a)(9), defendant contended OverTimePay-Override did not have
corresponding hourly rates or hours worked for the current
pay period. As to plaintiffs' second theory, defendant
asserted it complied with the statute by furnishing the wage
statement by mail. The trial court found in favor of
defendant and against plaintiffs.
contend the trial court erred by denying their summary
adjudication motion and by granting defendant's motion.
are current or former non-exempt California employees of
defendant. Defendant would in some instances issue a paycheck
and wage statement that contained nondiscretionary incentive
compensation (the bonus) to employees who worked
during the period covered by the incentive compensation.
These bonus periods would be monthly, quarterly, or annually.
For employees who worked overtime during those bonus periods,
the wage statements contained a line item called
“OverTimePay-Override, ” formerly called
“OT-Flat.” OverTimePay-Override listed
incremental additional overtime paid to the employee for
overtime hours worked during the bonus period under the
“Earnings” column. For the
OverTimePay-Override line on the wage statements, no hourly
rates or hours worked was identified.
certain situations, defendant issued final wages to employees
at the time of their termination through “in-store
payments” made by cashier's check. Defendant's
payroll department would then create the wage statement
either the same day or the next day and mail it to the
terminated employee by United States mail. During their
employment, employees had online access to their itemized
wage statements. Employees lost such online access the day
First Amended Complaint
filed their first amended complaint, the operative pleading,
on June 20, 2013. Plaintiffs sued on behalf of themselves and
a class composed of (1) current or former non-exempt
California employees of defendant who received
OverTimePay-Override from March 13, 2012 to present and (2)
all former California employees of defendant who were
terminated from March 13, 2012 to present and were paid their
final wages through the “in-store payment”
procedure. In their first cause of action, plaintiffs alleged
defendant violated section 226 by failing to identify
the hourly rates and the hours worked that corresponded to
OverTimePay-Override. Plaintiffs also alleged defendant
violated section 226 by failing to provide terminated
employees with wage statements immediately upon termination.
Plaintiffs alleged a second cause of action pursuant to the
Private Attorneys General Act (§ 2698 et seq.) (PAGA)
for violation of section 226.
Summary Adjudication/Judgment Motions
December 15, 2015, plaintiffs moved for summary
adjudication. Much like the allegations in their
amended complaint, plaintiffs argued that defendant violated
section 226, subdivision (a)(9) by failing to specify the
hourly rates and number of hours worked for the
OverTimePay-Override adjustment on the itemized wage
statements. Plaintiffs also argued defendant violated section
226 by failing to provide to terminated employees an itemized
wage statement concurrently with their final wages that were
paid in-store by cashier's check.
filed its own summary judgment motion on December 15, 2015.
Defendant asserted it did not violate section 226,
subdivision (a)(9) because OverTimePay-Override represented
an increase in overtime pay, based on a periodic bonus, for
overtime hours worked in previous pay periods. Defendant
argued there were no “applicable hourly
rates in effect during the pay
period” that corresponded to OverTimePay-Override
and thus defendant did not have to provide such information
on the wage statement. As to plaintiffs' second theory,
defendant contended it furnished the itemized statement as
required under section 226 by mailing it to the terminated
employee's last known address either the same day or the
next day. Finally, defendant argued plaintiffs' PAGA
cause of action failed because it was wholly derivative of a
violation based on section 226 and because plaintiffs failed
to exhaust administrative remedies. Plaintiffs do not dispute
their PAGA cause of action is derivative of the section 226
26, 2016, the trial court issued its order granting
defendant's motion and denying that of plaintiffs. As to
defendant's first argument, the trial court agreed that
section 226, subdivision (a)(9) did not apply to
OverTimePay-Override because there was no applicable hourly
rate for the pay period reflected in the wage statement. For
defendant's second argument, the trial court found ...