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Suarez v. Bank of America Corp.

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

October 31, 2019

ARIANNA SUAREZ, on behalf of herself and all others similarly situated, Plaintiff,
v.
BANK OF AMERICA CORPORATION, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART BANK OF AMERICA'S MOTION FOR PARTIAL SUMMARY JUDGMENT RE: ECF NO. 68

          LAUREL BEELER United States Magistrate Judge.

         INTRODUCTION

         In this putative class action, named plaintiff Arianna Suarez sued her former employer, Bank of America, for state-law wage-and-hour violations.[1] Bank of America moved for partial summary judgment on two of the class claims (claim six, charging a failure to pay final wages on time, and claim eight, charging a failure to furnish accurate wage-and-hour statements), on the grounds that it paid the plaintiff's wages on time (for claim 6) and the accuracy challenge to the wage statements fails as a matter of law (for claim 8).[2] The court grants the motion in part (1) for claim six, to the extent that it is predicated on vacation pay that Bank of America undisputedly paid, and (2) for claim eight, to the extent that the one-year statute of limitations bars the claim for statutory penalties. The court otherwise denies the motion.

         STATEMENT

         1. The Plaintiff's Wage Statements

         Bank of America paid Ms. Suarez biweekly and issued electronic wage statements for each biweekly pay period.[3] Ms. Suarez had access to her wage statements but never identified any inaccuracies in them.[4]

         Ms. Suarez began working for Bank of America in April 2003 as a teller.[5] Bank of America terminated her employment on September 27, 2017.[6] By that time, she was a Financial Center Operations Manager, or Assistant Manager, at Bank of America's Albany, California branch.[7] Ms. Suarez did not review her final pay check or wage statements and was unaware that her final paycheck included a sum equivalent to 124.17 hours of vacation pay.[8] She concedes that she was paid her unused accrued wages when she was terminated.[9]

         As the parties' briefs recount, Ms. Suarez had many approved leaves of absences, generally for medical reasons.[10] In relevant part for Bank of America's statute-of-limitations defense to claim eight, Ms. Suarez found out that she was pregnant in June 2016 and was on approved leaves of absence starting on October 20, 2016.[11] Her last official day of work before her leave was October 21, 2016.[12] Her absences were extended through at least June 2017.[13] While not relevant to this motion, a change in third-party leave administrators (from Aetna to MetLife) led to confusion about Ms. Suarez's approved-to-return-to-work date (which was scheduled for some time between June and July 2017)[14] and whether she had submitted documentation to extend her leave of absence beyond that date.[15] But it is undisputed that her last day in the office - before she went on an approved medical leave - was October 21, 2016.[16]

         2. Relevant Procedural History

         The FAC has the following class claims: (1) claim one, charging a failure to compensate for all hours worked (including work “off the clock” and overtime wages), in violation of the California Labor Code; (2) claim two, charging a failure to pay minimum wage, in violation of the California Labor Code; (3) claim three, charging a failure to provide meal-and-rest breaks, in violation of the California Labor Code; (4) claim five, charging a failure to pay vacation time at termination, in violation of the California Labor Code; (5) claim six, charging a failure to pay final wages on time, in violation of the California Labor Code; (5) claim eight, charging a failure to provide accurate wage-and-hour statements, in violation of the California Labor Code; and (6) claim twenty, charging unfair business practices, in violation of California's Unfair Competition Law.[17] Bank of America moved for summary judgment on claims six and eight. The court held a hearing on September 26, 2019.[18]

         STANDARD OF REVIEW

         The court must grant a motion for summary judgment if the movant shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Material facts are those that may affect the outcome of the case. Anderson, 477 U.S. at 248. A dispute about a material fact is genuine if there is enough evidence for a reasonable jury to return a verdict for the non-moving party. Id. at 248-49.

         The party moving for summary judgment has the initial burden of informing the court of the basis for the motion, and identifying portions of the pleadings, depositions, answers to interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To meet its burden, “the moving party must either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000); see Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (“When the nonmoving party has the burden of proof at trial, the moving party need only point out ‘that there is an absence of evidence to support the nonmoving party's case.'”) (quoting Celotex, 477 U.S. at 325).

         If the moving party meets its initial burden, the burden shifts to the non-moving party to produce evidence supporting its claims or defenses. Nissan Fire & Marine, 210 F.3d at 1103. The non-moving party may not rest upon mere allegations or denials of the adverse party's evidence, but instead must produce admissible evidence that shows there is a genuine issue of material fact for trial. See Devereaux, 263 F.3d at 1076. If the non-moving party does not produce evidence to show a genuine issue of material fact, the moving party is entitled to summary judgment. See Celotex, 477 U.S. at 323.

         In ruling on a motion for summary judgment, inferences drawn from the underlying facts are viewed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         ANALYSIS

         Bank of America moves for partial summary judgment on claim six, charging a failure to pay final wages on time, and claim eight, charging a failure to furnish accurate wage-and-hour statements.[19] The court grants the motion in part for (1) claim six, to the extent that it is predicated on vacation pay that Bank of America undisputedly paid, and (2) claim eight claim, to the extent that the one-year statute of limitations precludes the plaintiff's claim for statutory penalties. The court otherwise denies the motion.

         1. Claim Six: Failure to Pay Final Wages on Time

         In claim six, the plaintiff claimed that Bank of America willfully failed to pay her final wages when it terminated her, in violation of sections 201-203 of the California Labor Code.[20] Bank of America moved for summary judgment on the ground that the claim is predicated on the plaintiff's claim for unpaid vacation wages (individual claim five), which she now concedes were paid fully, and because she has not produced admissible evidence that shows there is a genuine issue of material fact that Bank of America acted willfully when it did not pay her for the meal-and-rest breaks (class claim three).[21] The plaintiff does not dispute the unpaid-vacation-wages argument but counters that there are material fact disputes about whether Bank of America acted intentionally when it did not pay for her meal-and-rest breaks.[22] The court grants the motion to the extent that it is predicated on unpaid vacation leave and otherwise denies the motion.

         Under the California Labor Code, “[i]f an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.” Cal. Labor Code § 201(a). “If an employer willfully fails to pay, without abatement or deduction, . . . any wages of any employee who is discharged or who quits, ” the employee's wages continue as a penalty until paid, for up to 30 days. Cal. Labor Code § 203(a); Mamika v. Barka, 68 Cal.App.4th 487, 492 (1998); see McLean v. State of Calif., 1 Cal. 5th 615, 619 (2016) (applying rule to employees who retire).

         “Willfully” means that the employer intentionally failed or refused to pay a wage obligation. Baker v. American Horticultural Supply, Inc., 186 Cal.App.4th 1059, 1076 (2010); see Woods v. Vector Mktg. Corp., No. C-14-0264 EMC, 2015 WL 2453202, at *4 (N.D. Cal. May 22, 2015) (citing Amaral v. Cintas Corp. No. 2, 163 Cal.App.4th 1157, 1201 (2008) (“The settled meaning of willful, as used in section 203, is that an employer has intentionally failed or refused to perform an act which was required to be done.”)). The term “willful” does not require a plaintiff to show that an employer knew its obligation and then intentionally refused to act. Baker, 186 Cal.App.4th at 1075 (“The knowledge requirement would be difficult to prove and would encourage [employers] to remain ignorant of their obligations” if “willful” were defined to require a knowing and intentional refusal to act). That said, a good-faith defense that wages are due “will preclude imposition of waiting time penalties under Section 203.” 8 Cal. Code. Regs. tit. 8 § 13520.

         Bank of America contends that it has a good-faith belief that meal-and-rest-period payments under Cal. Labor Code § 226.7 are not “wages earned” under Cal. Labor Code § 203.[23] In support of its argument, it cites Ling v. P.F. Chang's China Bistro, Inc., 245 Cal.App.4th 1242, 1261 (2016). In denying Bank of America's earlier motion to dismiss, the court previously rejected this argument at the pleadings stage. Suarez v. Bank of America Corp., No. 18-cv-01202-MEH, 2018 WL 3659302, at *9-10 (N.D. Cal. Aug. 2, 2018).

         The earlier order reviews two California Supreme Court cases that address whether section 226.7 payments are wages. Id. at *10 (citing Murphy v. Kenneth Cole Products, Inc., 40 Cal.4th 1094, 1102, 1110-11, 113 (2007) (section 226.7 meal-and-rest-break premiums are wages for statute-of-limitations purposes); Kirby v. Immoos Fire Protection, 53 Cal.4th 1244, 1248, 1257 (2012)). The order acknowledges Ling, but follows the weight of authority - including many cases in this district - where courts have found that premiums for unpaid rest breaks are “wages” entitling plaintiffs to waiting-time penalties under section 203 of the Labor Code. Id. (collecting cases).[24]

         In this early summary-judgment motion, before the close of fact discovery, with no illumination about the predicate violations, and with less than a page of briefing and no new cited authority, the court does not revisit its earlier decision.

         2. Claim Eight: Inaccurate Wage Statements

         In claim eight, the plaintiff claimed that Bank of America did not provide an accurate itemized statement for each pay period that reflected actual hours worked, in violation of Cal. Labor Code § 226.[25] Bank of America moved for summary judgment on four grounds: (1) the plaintiff's claim for statutory penalties is barred by a one-year statute of limitations; (2) she did not suffer injury, which is a necessary element for any claim for damages under section 226(e); (3) the reporting requirement in section 226(a) of the Labor Code applies only to wages that were actually paid (not wages that a suing party thinks should be paid), and the wage statements here are accurate; and (4) Bank of America's violations were not “knowing and intentional, ” which is a necessary element under section 226(e).[26] The court grants the motion only on the ground that the plaintiff's claim for statutory penalties is barred by the one-year statute of limitations and otherwise denies the motion.

         The California Labor Code requires employers to provide to employees - semimonthly or at the time of each payment of wages - “an accurate itemized statement in writing” showing nine specific items, including “the inclusive dates of the pay period for which the employee is paid, ” gross wages earned, the applicable hourly rate and total hours worked for non-exempt employees, all deductions, and net wages earned. Cal. Labor Code § 226(a). The plaintiff alleges that Bank of America's pay stubs fail to list these items.[27]

         If an employer's violation is knowing and intentional, an employee is entitled to damages:

An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with [section 226](a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4, 000), and is entitled to an award of costs and reasonable attorney's fees.

Cal. Labor Code § 226(e)(1).

         Thus, in addition to proving the element that an employer failed to provide an accurate itemized statement, a plaintiff must prove that (1) the employer's failure to provide the statement was knowing and intentional and (2) the employee suffered injury. Iljas v. Ripley Entm't Inc., ___F.Supp.3d___, No.18-cv-00136-JST, 2019 WL 3817847, at *5 (N.D. Cal. Aug. 14, 2019) (citing Willner v. Manpower Inc., 35 F.Supp.3d 1116, 1128 (N.D. Cal. 2014)).

         2.1 Statute of Limitations

         An action to recover a statutory penalty or forfeiture must be brought one year from the date of accrual. Cal. Civ. Code P. § 340(a-b). Section 226(e) authorizes recovery of either actual damages or a penalty. Cal. Labor Code § 226(e)(1). “The penalty provision of section 226 is subject to a one-year statute of limitations.” Maravilla v. Rosas Bros. Constr., Inc., ___F.Supp.3d___, No.16- cv-06117-JST, 2019 WL 3820051, at *7 (N.D. Cal. Aug. 14, 2019); accord Ridgeway v. Wal-Mart Stores, Inc., No. C 08-05221 SI, 2014 WL 2600326, at *8 (N.D. Cal. June 10, 2014).

         Bank of America first contends that the plaintiff's claim is barred by the one-year statute of limitations for penalties.[28] To the extent that the plaintiff seeks statutory damages, the one-year statute of limitations bars the claim.[29]

         On January 10, 2018, the plaintiff filed her administrative charge with the California Department of Fair Employment complaint, and on January 25, 2018, she filed her complaint initiating this lawsuit.[30] Her claim accrued on January 10, 2018, and the one-year look-back period under the statute of limitations thus began on January 11, 2017.[31] The plaintiff did not address the plaintiff's statute-of-limitations argument in her opposition and - in response to the court's questions at the hearing - said that she submitted the issue on the papers (essentially conceding it). Thus, the court grants the motion on the ground that the statute of limitations bars any claim for liquidated damages predicated on wage statements received before the one-year statutory period. Cal. Code Civ. P. 340; Ridgeway, 2014 WL 2600326, at *8 (granting summary judgment in favor of Wal-Mart on the plaintiff's liquidated damages claim because the plaintiff's employment ended more than one year before the filing of her complaint and the plaintiff did not respond to Wal-Mart's argument and “appear[ed] to concede the issue”).

         This holding appears to dispose of the plaintiff's entire claim for statutory damages. Her last day at work was October 21, 2016, and her termination date was September 27, 2017.[32] Her statutory-damages claim is predicated on a failure to include meal-and-rest breaks, which necessarily is not an issue for an employee on medical leave.

         2.2 Injury

         Under the Labor Code,

(2)(A) An employee is deemed to suffer injury for purposes of this subdivision if the employer fails to provide a wage statement.
(B) An employee is deemed to suffer injury for purposes of this statute if the employer fails to provide accurate and complete information [for the nine items specified in section 226(a)], and the employee cannot promptly and easily determine from the wage statement alone one or more of the following: [specified items that include the amount of gross wages or net wages paid, specified deductions, and all applicable hourly rates and the corresponding hours worked].
(C) For purposes of this paragraph, “promptly and easily determine” means a reasonable person would be able to ascertain the information without reference ...

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