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Sansone v. Charter Communications, Inc.

United States District Court, S.D. California

September 18, 2019

JENNIFER M. SANSONE, and BALDEMAR ORDUNO, Jr., Individually and on Behalf of Other Members of the Public Similarly Situated, Plaintiffs
v.
CHARTER COMMUNICATIONS, INC.; TWC ADMINISTRATION LLC; CHARTER COMMUNICATIONS, LLC; and DOES 1-25, inclusive, Defendants

          ORDER

          HON. WILLIAM Q. HAYES, UNITED STATES DISTRICT COURT JUDGE.

         The following matters are pending before the Court: 1) the Motion to Certify Class (ECF No. 61) filed by Plaintiffs Jennifer M. Sansone and Baldemar Orduno, Jr.; 2) the Motion to File Documents Under Seal (ECF No. 68) filed by Defendants Charter Communications, Inc., Charter Communications, LLC, and TWC Administration LLC; 3) the Motion for Summary Judgment (ECF No. 71) filed by Defendants; and 4) the Motion to File Documents Under Seal (ECF No. 72) filed by Defendants.

         I. PROCEDURAL BACKGROUND

         On December 6, 2017, Plaintiffs Jennifer M. Sansone and Baldemar Orduno, Jr., individually and on behalf of members of the public similarly situated, filed the first Amended Complaint, the operative complaint in this action against Defendants Charter Communications, Inc. (CCI); Charter Communications, LLC (CCL); and TWC Administration LLC (TWCA). (ECF No. 19). Plaintiffs bring claims for: (1) violation of California Labor Code § 227.3 (failure to pay at termination); (2) violation of California Labor Code § 227.3 (valuation); (3) failure to timely pay wages due in violation of California Labor Code §§ 201 and 203; (4) breach of contract (base compensation); (5) breach of contract (commissions); and (6) unfair competition. Id. Plaintiffs allege that their employment with TWCA was terminated when Time Warner Cable, Inc. (TWCI) and the Legacy Charter Communications, Inc. (L-CCL) merged.[1] Plaintiffs allege they did not consent to a carryover of the accrued unused vacation wages and that they were not paid for the accrued unused vacation wages. Plaintiffs allege that CCL calculated vacation wages in a manner that reduced employee compensation. Plaintiffs allege that CCL reduced employee base compensation after promising not to reduce base compensation.

         On July 6, 2018, the Court denied a Motion to Dismiss filed by Defendants CCI, CCL, and TWCA. (ECF No. 27).

         On February 27, 2019, Plaintiffs filed the Motion to Certify Class supported by a request for judicial notice and declarations. (ECF No. 61). Plaintiffs seek to certify two classes of employees based upon allegations of unpaid accrued vacation wages and reduced base salaries following the merger of TWCI and the former CCI. On April 19, 2019, Defendants filed a Response in Opposition to the Motion to Certify Class supported by declarations (ECF No. 66) and the Motion to File Documents Under Seal (ECF No. 68).

         On May 17, 2019, Plaintiffs filed a Reply in Support of the Motion to Certify Class. (ECF No. 70).

         On May 31, 2019, Defendants filed the Motion for Summary Judgment. (ECF No. 71). Defendants also filed supporting declarations and a second Motion to File Documents Under Seal. (ECF No. 72).

         On May 31, 2019, Defendants filed a Motion requesting that the Court resolve Defendants’ Motion for Summary Judgment before considering Plaintiffs’ Motion to Certify Class. (ECF No. 74).

         On June 4, 2019, Plaintiffs filed a Motion requesting that the Court resolve the Motion to Certify before the Motion for Summary Judgment, vacate the July 1, 2019 hearing date for Defendants’ Motion for Summary Judgment, order a briefing schedule for class-wide Cross-Motions for Summary Judgment after the ruling on class certification, and vacate Defendants’ Motion for Priority. (ECF No. 76). Plaintiffs alternatively requested that the Court continue the July 1, 2019 hearing date for the Motion for Summary Judgment for 120 days so that Plaintiffs could conduct merits-based discovery to support a Response in Opposition to the Motion for Summary Judgment.

         On June 17, 2019, the Court issued an Order denying Plaintiffs’ request to consider class certification before summary judgment and denying as moot Defendants’ Motion for Priority Consideration. (ECF No. 81). In addition, the Court stated,

The Court defers ruling on Plaintiffs’ alternative request to continue the July 1, 2019 summary judgment hearing date for 120 days so that Plaintiffs can conduct merits-based discovery. Plaintiffs may make any arguments regarding inadequate discovery in the response in opposition to the Motion for Summary Judgment. See Fed. R. Civ. P. 56(d) (“If a nonmovant shows . . . it cannot present facts essential to justify its opposition . . . .”).

Id. at 4.

         On June 17, 2019, Plaintiffs filed a Response in Opposition to the Motion for Summary Judgment supported by a request for judicial notice, declarations, and evidentiary objections. (ECF No. 82).

         On June 24, 2019, Defendants filed a Reply in Support of the Motion for Summary Judgment supported by declarations and a Response in Opposition to Plaintiffs’ Evidentiary Objections. (ECF No. 83).

         On June 27, 2019, Defendants filed a Corrected Response in Opposition to Plaintiffs’ Objections to Summary Judgment Evidence. (ECF No. 84).

         On September 5, 2019, the Court heard oral argument on the Motion for Summary Judgment. (ECF No. 86).

         II. FACTS

         Plaintiffs were at-will employees of TWCA and CCL. (Pls.’ Resp. to Defs.’ Separate Statement of Undisputed Material Facts ¶ 11, ECF No. 82-2). On May 26, 2015, Plaintiff Jennifer Sansone and Plaintiff Baldemar Orduno, Jr. were at will employees of Defendant TWCA, a subsidiary of TWCI, not a party in this action. (Sansone Decl. ¶ 2, ECF No. 82-5 at 179; Orduno Decl. ¶ 2, ECF No. 82-5 at 214). Sansone worked as a manager supervising employees including Orduno, who sold TWCI services to California businesses. (Defs.’ Resp. to Pls.’ Separate Statement of Material Fact ¶¶ 3–4, ECF No. 83-3).

         On May 25, 2015, L-CCI and TWCI announced a merger agreement. (Pls.’ Resp. to Defs.’ Separate Statement of Undisputed Material Facts ¶ 12, ECF No. 82-2). The same day, Peter Stern, a Time Warner Cable Executive Vice President, sent the following email:

To TWC Employees Below Directors Job Level (AIP and SPP eligible) Today’s announcement of the merger of Time Warner Cable and Charter marks a momentous event in the history of our industry. With the addition of Bright House Networks, this new company will unite industry leaders in innovation, operations and customer service. . . .
This transaction comes after 14 months of preparations to execute a seamless handoff of TWC to Comcast, and for our Midwest operations, to Charter. . . . We’ve taken some additional steps this time around to ensure you feel confident and trust that we are looking out for your future. . . .
Your compensation is and will be protected. In the merger agreement, Charter has committed that for legacy TWC employees who continue in employment following the close, for 12 months, it will (i) not negatively impact current base salaries or annual bonus/AIP target and (ii) maintain other TWC short-term incentives or move them to the same programs as similarly situated Charter employees. Also, through December 31, 2016, the value of your pre-close health and welfare benefits will carry forward. . . .
Most TWC people who want to work at Charter will get a chance to. Charter is significantly smaller than Time Warner Cable, and they will need our employees. For most people, the period following the merger close will be very similar to the days before, just with more opportunities for growth, development and impact. But of course that won’t be true for everyone. . . .
It is inevitable that some people will be displaced as part of the merger, but if that happens to you, we will provide great support. As in any merger like this, there will be some duplication of roles. Looking at other cable mergers and based on our recent experience, this is likely to be a pretty small fraction of our overall workforce. If that happens, however, we and Charter are committed to providing you with top flight outplacement counseling so you can focus on your job knowing that you will receive the advice and support you need.
If you become eligible for severance, recall, we previously strengthened this benefit. We previously put in place an enhanced severance program for employees who may be impacted as a result of a merger. Employees who are involuntary terminated without cause or Good Reason termination during the 12 month period following the closing of the merger will receive a minimum of 12 weeks of severance and possibly more (not to exceed 52 weeks) depending on your period of service. . . .
Our commitment is to tell you all we can, as soon as we can. Despite all the points above, there’s a lot we don’t know and won’t know for some time. For example, we don’t know what will happen with individual jobs at this time. . . .
Please note that your receipt of this communication does not mean that you are eligible for all of the benefits discussed in this document. This communication is for informational purposes only and in all instances, the terms and conditions of the applicable plan and agreements govern. Please consult the applicable documents for specific eligibility and participation requirements. . . .

(Exs. to Morello Decl., ECF No. 82-5 at 11, 171, 190, 225; Ex. 1 to Biggs Decl., ECF No. 66-2 at 6).

         On May 18, 2016, the transaction between TWCI and L-CCI closed and resulted in a new entity, Charter Communications, Inc. (CCI). (Pls.’ Resp. to Defs.’ Separate Statement of Undisputed Material Facts ¶ 20, ECF No. 82-2). TWCA became an indirect subsidiary of CCI as a result of the transaction. Id. ¶ 21. Plaintiffs continued working for TWCA with the same compensation, job duties, work location, and customer base after the May 18, 2016 transaction until December of 2016. Id. ¶¶22–26. Plaintiffs continued to receive credit for service time with TWCA for purposes of vacation accrual after the May 18, 2016 transaction. Id. ¶ 28. In the months after May 18, 2016, the operations of L-CCI and TWCI began to integrate. Id. ¶ 30.

         In late December 2016, Charter Communications, LLC (CCL), another subsidiary of CCI, became the entity that employed Plaintiffs. (Defs.’ Resp. to Pls.’ Separate Statement of Material Fact ¶ 40, 44, ECF No. 83-3; Defs.’ Statement of Admitted Facts ¶ 13, ECF No. 82-5 at 7).

         In her deposition, Plaintiff Sansone provided the following information regarding her employment after December of 2016:

Q And after the transition from TWC Administration to Charter Communications, LLC, you still worked out of the same location?
A Yes.
Q Your salary stayed the same?
A My base salary, yes.
Q You kept the same physical office that you worked out of?
A Yes.
Q Kept the same insurance?
A The insurance changed, the plan changed, yes.
Q Right. You had continuous -- I guess you had continuous insurance?
A Yes.
Q You never had to go on COBRA?
A No.
Q And your -- you continued to get your paycheck every two weeks?
A Base salary, yes.
Q There was never a time where you went without a paycheck as a result of the move from Time Warner Cable Administration to Charter Communications, LLC, was there?
A Without base salary, no. There was an extensive delay on commission payouts during the transition of the plan.
Q And I'm just asking right now about whether there was ever a time you went without a paycheck.
A No.

(Sansone Dep., ECF No. 71-3 at 20–21).

         In his deposition, Plaintiff Orduno provided the following information regarding his employment before and after December of 2016:

Q. . . . [A]round December of 2013 you moved to an account manager two position, is that correct?
A. Yes.
Q. All right. All right. The account manager two position, what were your job duties?
A. Sales.
Q. Sales of what?
A. Of our products and services to a hospitality group.
Q. All right. What give me some examples of what kind of products you were selling.
A. Internet, phone, data, video.
Q. -- and then you moved, your next position was a strategic account manager of hospitality that you moved to at the end of the fiscal year 2016, correct?
A. Yes.
Q. Okay. What were your job duties as a strategic account manager in hospitality?
A. The same exact duties as an account manager two.
Q. All right. When you were an account manager two, what office did you work out of?
A. Indio, California.
Q. Okay. And when you became the strategic account manager of hospitality, where was your office?
A. Same location, Indio, California.
Q. All right. And then physically within the building did your office change?
A. Cubicle, same cubicle.
Q. Okay. And when you were -- became the strategic account manager of hospitality, who did you sell those -- those products to?
A. Same customers that are within my area.
Q. Did you have, like, a list of customers that you sell to routinely?
A. Yes.
Q. And in the list of customers that you had as an account manager two, was that essentially the same list you had when you moved over to a ...

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