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8 United States District Court 9 Central District of California
11 IN RE CITY OF REDONDO BEACH Case № 2:17-cv-09097-ODW (SKx) 12 FLSA LITIGATION ORDER GRANTING IN PART AND 13 DENYING IN PART DEFENDANT’S 14 MOTION FOR SUMMARY JUDGMENT [32] AND 15 DENYING PLAINTIFFS’ MOTION 16 FOR SUMMARY JUDGMENT [38] 17 18 I. INTRODUCTION 19 One hundred and fifteen police officers and fire fighters (“Plaintiffs”) sued the 20 City of Redondo Beach (“City”) in a collective action under the Fair Labor Standards 21 Act (“FLSA”) for alleged miscalculation of overtime compensation. Now before the 22 Court are the City’s and Plaintiffs’ Cross-Motions for Summary Judgment or Partial 23 Summary Judgment (“Motions”). (City’s Mot. for Summ. J. (“City Mot.”), ECF 24 No. 32; Pls.’ Mot. for Summ. J. (“Pls.’ Mot.”), ECF No. 38.) For the reasons that 25 follow, the Court GRANTS IN PART and DENIES IN PART the City’s Motion and 26 DENIES Plaintiffs’ Motion.1 27
28 1 After carefully considering the papers filed in connection with the Motions, the Court deemed the matters appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 II. BACKGROUND 2 Plaintiffs are fifty-eight police officers and fifty-seven firefighters employed by 3 the City. Plaintiffs contend that the City miscalculated their overtime compensation, 4 in violation of the FLSA. The undisputed facts are as follows. 5 A. MEMORANDA OF UNDERSTANDING 6 The City negotiated Memoranda of Understandings (“MOU”) with the Redondo 7 Beach Police Officers Association (“POA”) and the Redondo Beach Firefighters 8 Association (“Firefighters Association” or “FA”), applicable to full-time employees. 9 (City’s Statement of Uncontroverted Facts in Supp. City Mot. (“City SUF”) 2, 8, 9, 10 12, ECF No. 32-2.) 11 The MOUs between the City and Firefighters Association from July 1, 2014, to 12 present (“FA MOUs”) define “regular rate of pay” as “base rate of pay plus bonus 13 pays, as defined by the [FLSA].” (See City SUF 13.) “[O]vertime pay” is defined as 14 “one and one-half (1.5) times an employee’s regular hourly rate of pay.” (City SUF 15 14.) The FA MOUs define “work period” or “FLSA cycle” as “a period between 16 seven and 24 consecutive days long.” (City SUF 15.) The City established and 17 maintained a 24-day work period for firefighters, for calculation of overtime, and the 18 FA MOUs state that “[e]mployees shall be paid overtime pay for all hours worked 19 above 182 hours in a 24-day work period . . . in accordance with the [FLSA].” (City 20 SUF 11; Decl. of Diane Strickfaden (“Strickfaden Decl.”) Ex. 6 (“FA MOUs”), art. 2 21 § 4.02, ECF No. 33-3.) 22 The MOUs between the City and the POA from July 1, 2014, to present (“POA 23 MOUs”) define “regular rate of pay” as “the base rate of pay and special pays as listed 24 in Article III” of the POA MOUs. (See City SUF 4.) “[O]vertime” is defined as 25 “work performed in excess of a regular scheduled work day or work week, paid at a 26 rate of one and one-half times the employee’s regular rate of pay.” (City SUF 5.) 27 “[W]ork period” is defined as “a period between seven and 28 consecutive days long 28 as set by the City Manager.” (City SUF 6.) 1 B. MEDICAL BENEFIT PLANS 2 Beginning in 2014, the City allocated a monthly allowance to Officers and 3 Firefighters who enrolled in and purchased health insurance benefits. (City SUF 18– 4 19, 24.) Employees were permitted to opt out of the City’s health insurance plan by 5 providing proof of alternative coverage. (City SUF 22, 27.) Those employees who 6 opted out received 50% of the value of their premium as cash-in-lieu. (City SUF 22, 7 27.) 8 In 2015, the City paid 13.63% of total plan contributions directly to employees. 9 (City SUF 29.) In 2016, that number was 19.01%; in 2017, it was 22.49%; and in 10 2018, it was 21.57%. (City SUF 30–32.) The average amount of total contributions 11 paid directly to employees from 2015 to 2018 was 19.18%. (City SUF 28.) 12 C. PROCEDURAL BACKGROUND 13 On December 19, 2017, fifty-eight law enforcement officers (“Officers”) sued 14 the City in a collective action under the FLSA for failure to correctly calculate and 15 pay overtime compensation. (See Compl. ¶ 5, ECF No. 1.) On February 23, 2018, 16 fifty-seven firefighters (“Firefighters”) brought a similar action against the City. See 17 Compl., Allen v. Redondo Beach, No. 2:18-cv-1533-ODW (SKx) (filed Feb. 23, 18 2018). The Court consolidate the two actions on May 15, 2018 under the caption In 19 re City of Redondo Beach FLSA Litigation. (Order to Consolidate Cases 2, ECF 20 No. 25.) 21 The City and Plaintiffs each move for summary judgment. (See City Mot. 1–3; 22 Pls.’ Mot 1.) The City moves for summary judgment or partial summary judgment on 23 the grounds that: the City’s medical plan is bona fide such that contributions to third 24 parties are excludable from Plaintiffs’ regular rate of pay; the City established work 25 periods for Officers and Firefighters under 29 U.S.C § 207(k) triggering a partial 26 overtime exemption; certain Officers are not entitled to or are exempt from overtime 27 compensation; the City owes no damages due to offset; and a two-year statute of 28 1 limitation applies. (City MSJ 1.)2 Plaintiffs move for summary judgment or partial 2 summary judgment on the grounds that: the City’s failure to include bilingual pay and 3 cash-in-lieu payments in Plaintiffs’ regular rate of pay was a violation of the FLSA; a 4 three-year statute of limitations applies; and Plaintiffs’ are entitled to liquidated 5 damages. (Pls.’ Mot.)3 6 III. LEGAL STANDARD 7 A court “shall grant summary judgment if the movant shows that there is no 8 genuine dispute as to any material fact and the movant is entitled to judgment as a 9 matter of law.” Fed. R. Civ. P. 56(a). Courts must view the facts and draw reasonable 10 inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 11 U.S. 372, 378 (2007); Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 12 2000). A disputed fact is “material” where the resolution of that fact might affect the 13 outcome of the suit under the governing law, and the dispute is “genuine” where “the 14 evidence is such that a reasonable jury could return a verdict for the nonmoving 15 party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Conclusory or 16 speculative testimony in affidavits is insufficient to raise genuine issues of fact and 17 defeat summary judgment. Thornhill Publ’g Co. v. GTE Corp., 594 F.2d 730, 738 18 (9th Cir. 1979). Moreover, though the Court may not weigh conflicting evidence or 19 make credibility determinations, there must be more than a mere scintilla of 20 contradictory evidence to survive summary judgment. Addisu, 198 F.3d at 1134.
21 2 The City also argues that the decision in Texas v. United States, 340 F. Supp. 3d 579 (N.D. Tex. 22 2018), holding that portions of the Medicaid Act as amended by the Affordable Care Act are unconstitutional, precludes Plaintiffs from pursuing their claims under the Fair Labor Standards Act. 23 (City Mot. 1, 11.) However, nothing in the Texas decision is relevant to this opinion. 3 The Parties each object to certain evidence offered by the other party. (See Pls.’ Evid. Obj., ECF 24 No. 43; City’s Evid. Obj., ECF No. 45-2.) The Court OVERRULES all boilerplate objections. (See 25 Scheduling and Case Management Order 9, ECF No. 18.) To the extent the Court relies without discussion on evidence to which the parties have objected, the Court OVERRULES the relevant 26 objections. See Burch v. Regents of Univ. of Cal., 433 F. Supp. 2d 1110, 1118–19 (E.D. Cal. 2006) (“[O]bjections to evidence on the ground that it is irrelevant, speculative, and/or argumentative, or 27 that it constitutes an improper legal conclusion are all duplicative of the summary judgment standard 28 itself.”). As to the remaining objections, the Court finds it unnecessary to rule on them because the Court does not rely on the disputed evidence. 1 Once the moving party satisfies its burden, the nonmoving party cannot simply 2 rest on the pleadings or argue that any disagreement or “metaphysical doubt” about a 3 material issue of fact precludes summary judgment. See Celotex Corp. v. Catrett, 477 4 U.S. 317, 322–23 (1986); Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 5 574, 586 (1986); Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 6 818 F.2d 1466, 1468 (9th Cir. 1987). A “non-moving party must show that there are 7 ‘genuine factual issues that properly can be resolved only by a finder of fact because 8 they may reasonably be resolved in favor of either party.’” Cal. Architectural Bldg. 9 Prods., 818 F.2d at 1468 (quoting Anderson, 477 U.S. at 250). “[I]f the factual 10 context makes the non-moving party’s claim implausible, that party must come 11 forward with more persuasive evidence than would otherwise be necessary to show 12 that there is a genuine issue for trial.” Id. (citing Matsushita Elec. Indus., 475 U.S. at 13 586–87). “[U]ncorroborated and self-serving” testimony will not create a genuine 14 issue of material fact. Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th 15 Cir. 2002). The court should grant summary judgment against a party who fails to 16 demonstrate facts sufficient to establish an element essential to his case when that 17 party will ultimately bear the burden of proof at trial. See Celotex, 477 U.S. at 322. 18 Pursuant to the Local Rules, parties moving for summary judgment must file a 19 proposed “Statement of Uncontroverted Facts and Conclusions of Law” that should 20 set out “the material facts as to which the moving party contends there is no genuine 21 dispute.” C.D. Cal. L.R. 56-1. A party opposing the motion must file a “Statement of 22 Genuine Disputes” setting forth all material facts as to which it contends there exists a 23 genuine dispute. C.D. Cal. L.R. 56-2. “[T]he Court may assume that the material 24 facts as claimed and adequately supported by the moving party are admitted to exist 25 without controversy except to the extent that such material facts are (a) included in the 26 ‘Statement of Genuine Disputes’ and (b) controverted by declaration or other written 27 evidence filed in opposition to the motion.” C.D. Cal. L.R. 56-3. 28 1 IV. DISCUSSION 2 The FLSA is meant to protect workers from “substandard wages and oppressive 3 working hours.” Adair v. City of Kirkland, 185 F.3d 1055, 1059 (9th Cir. 1999) 4 (quoting Barrentine v. Arkansas–Best Freight Sys., Inc., 450 U.S. 728, 739 (1981)). 5 “Under the FLSA, an employer must pay its employees premium overtime 6 compensation of one and one-half times the regular rate of payment for any hours 7 worked in excess of forty in a seven-day work week. The ‘regular rate’ is defined as 8 ‘all remuneration for employment paid to, or on behalf of, the employee,’ subject to a 9 number of exclusions set forth in the Act.” Flores v. City of San Gabriel, 824 F.3d 10 890, 895 (9th Cir. 2016) (citations omitted). 11 Courts are to construe the FLSA liberally in favor of employees and its 12 exemptions “narrowly . . . against the employers seeking to assert them.” Alvarez v. 13 IBP, Inc., 339 F.3d 894, 905 (9th Cir. 2003), aff’d, 546 U.S. 21 (2005) (quoting 14 Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960)). “The employer bears the 15 burden of establishing that it qualifies for an exemption under the Act” and courts 16 should not find a FLSA exemption applicable “except in contexts plainly and 17 unmistakably within the given exemption’s terms and spirit.” Flores, 824 F.3d at 897 18 (alterations omitted). 19 A. REGULAR RATE OF PAY 20 Plaintiffs move for partial summary judgment on the grounds that the City 21 failed to include bilingual pay in Officers’ regular rate of pay, and cash-in-lieu of 22 benefits in Plaintiffs’ regular rate of pay. (Pls.’ Mot. 5–8.) The City moves on an 23 overlapping issue, that contributions made to the medical benefits plan are excludable 24 from Plaintiffs’ regular rate of pay because the plan is “bona fide.” (City Mot. 14–16.) 25 Under the FLSA, the overtime rate is calculated based on the regular rate, 26 which, “by its very nature must reflect all payments which the parties have agreed 27 shall be received regularly during the workweek, exclusive of overtime payments.” 28 Local 246 Util. Workers Union v. S. Cal. Edison Co., 83 F.3d 292, 297 (9th Cir. 1996). 1 1. Bilingual Pay 2 Plaintiffs argue that the City failed to include bilingual pay in Officers’ regular 3 rate of pay. (See Pls.’ Mot 5–6.) However, Plaintiffs point the Court to no factual or 4 evidentiary support for this assertion. (See Pls.’ Mot 5–6; Pls.’ Statement of 5 Uncontroverted Facts (“Pls.’ SUF”), ECF No. 40-1.) The only relevant statement of 6 uncontroverted fact Plaintiffs offer states “[t]he bilingual rate of pay that is the subject 7 of this lawsuit should have been included in the overtime rate of pay.” (Pls.’ SUF 6.) 8 Even if this statement were not disputed,4 for support Plaintiffs cite only “Plaintiff 9 [sic] Index of Exhibit 1–6, 8, 9, and 10.” Such a vague citation is useless and warrants 10 exclusion of the evidence. See Orr v. Bank of Am., NT & SA, 285 F.3d 764, 774–75 11 (9th Cir. 2002) (finding failure to provide specific citations to deposition testimony 12 and affidavits warrants exclusion of the evidence). The parties bear the burden to lay 13 out their support clearly. Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1030 (9th 14 Cir. 2001) (discussing that the district court may limit its review to those parts of the 15 record specifically referenced). Plaintiffs have failed to establish that the City 16 excluded bilingual pay from any Officers’ regular rate of pay. Accordingly, the Court 17 DENIES Plaintiffs’ Motion on this issue. 18 2. Bona Fide Medical Benefits Plan 19 The City moves for partial summary judgment on the grounds that the City’s 20 medical benefits plan is a “bona fide” plan under 29 U.S.C. § 207(e)(4), cash 21 payments to Plaintiffs were merely incidental to the total plan contributions, and thus 22 payments to the plan on behalf of Plaintiffs are therefore excludable from the regular 23 rate. (City Mot. 4, 14.) Plaintiffs oppose and also move for partial summary 24 judgment on the grounds that the plan is not a “bona fide” plan, so the City should 25 4 The City contends the statement is unsupported and calls for a legal conclusion. (City’s Separate 26 Statement of Uncontroverted Facts in Opp’n 6, ECF No. 45-1.) The City also asserts with support that it included bilingual pay in eligible Officers’ regular rate of pay. (See City Opp’n to Pls.’ Mot. 27 (“City Opp’n”) 20, ECF No. 45; Suppl. Decl. of Diane Strickfaden in Supp. of City’s Reply (“Suppl. 28 Strickfaden Decl.”) ¶ 8, ECF No. 44-1.) Accordingly, even had Plaintiffs supported their claim, the City raises a genuine dispute of fact that precludes summary judgment. 1 have included the value of direct cash payments to Plaintiffs in their regular rate. 2 (Pls.’ Mot. 6–7; Pls.’ Opp’n to City Mot. (“Pls.’ Opp’n”) 7–9, ECF No. 42.) 3 Like ships passing in the night, the parties each forward their own destination 4 and unhelpfully persist in misreading or misconstruing the opposing arguments. 5 Accordingly, the Court distills the parties’ contentions to the following issues: 6 (1) whether the undisputed facts establish that cash payments to employees were 7 merely incidental such that the medical benefits plan is bona fide under 29 U.S.C. 8 § 207(e)(4) and contributions to the plan are excludable from the regular rate; and 9 (2) whether the undisputed facts establish that the City failed to include the value of 10 cash-in-lieu payments to Plaintiffs in the regular rate. 11 Bona Fide Plan 12 Contributions made “to a trustee or third person pursuant to a bona fide plan” 13 for providing health insurance to employees are excludable from the regular rate under 14 29 U.S.C. § 207(e)(4). Flores, 824 F.3d at 901. In contrast, unused benefits paid 15 directly to an employee “cannot be excluded under § 207(e)(4).” Id. Although the 16 statute does not define “bona fide,” regulations interpreting the FLSA state that a plan 17 that otherwise qualifies as “bona fide” under § 207(e)(4) may still be regarded as 18 “bona fide” even though it provides “incidental” cash payments to employees. Id. at 19 902 (quoting 29 C.F.R. § 778.215(a)(5)5). Here, the parties do not address whether the 20 City’s benefits plan otherwise qualifies as a bona fide plan6; they dispute only whether 21 direct payments to employees are more than “an incidental part” of the plan. 22
23 5 29 C.F.R. § 778.215(a)(5) provides: The plan must not give an employee the . . . option to receive any part of the 24 employer’s contributions in cash instead of the benefits under the plan: Provided, 25 however, That if a plan otherwise qualified as a bona fide benefit plan under section 7(e)(4) of the Act, it will still be regarded as a bona fide plan even though it 26 provides, as an incidental part thereof, for the payment to an employee in cash of all or a part of the amount standing to his credit . . . . 27 29 C.F.R. § 778.215(a)(5) (emphasis added). 28 6 In addition to subsection (a)(5), a plan is bona fide pursuant to 29 C.F.R. § 778.215(a) when: (1) Contributions are made pursuant to a specific plan adopted by the employer; 1 In Flores v. San Gabriel, the Ninth Circuit considered an Opinion Letter by the 2 Department of Labor (“DOL”) interpreting the regulation, in which the DOL proposed 3 a bright line rule that “incidental” contributions must not exceed 20% of total 4 contributions. 824 F.3d at 902–03. The court rejected the DOL’s opinion as 5 unpersuasive and lacking any rationale for a 20% ceiling. Id. at 903. Even without a 6 ceiling, the court found the City’s direct payments (42%–46% of its total 7 contributions) too great, “simply not an ‘incidental’ part of its [benefits plan] under 8 any fair reading of that term.” Id. 9 In this case, the parties do not dispute that the City’s direct cash-in-lieu 10 payments constitute between 13.63% and 22.49% of its total contributions, depending 11 on the year. Even considering each year individually, the direct cash-in-lieu payments 12 are not more than incidental to the total contributions for that year. (City SUF 29–32 13 (noting the years and direct payment percentages as 2015, 13.63%; 2016, 19.01%; 14 2017, 22.49%; and 2018, 21.57%).) Plaintiffs focus on 2017 and 2018 as exceeding 15 20% and argue that the City’s plan consequently cannot be bona fide in those years. 16 (Pls.’ Opp’n 8.) However, the court in Flores unambiguously rejected this precise 17 bright line rule. Further, unlike Flores where the direct payments comprised 42%– 18 46% of the total contributions each year, here direct payments to employees were half 19 that, hovering around or below 20%. Thus, benefit payments to the plan here 20 constitute between 77% and 86% of all contributions for each year at issue. This 21 balance indicates the cash payments were merely an incidental part of the City’s 22 benefits plan. 23
24 (2) The primary purpose of the plan is to provide systematically for the payment to 25 employees of benefits for death, disability, retirement, and health expenses; (3) The benefit must be specified or definitively determinable on an actuarial basis, or there 26 must be a formula pursuant to the regulation for determining the amount of contributions by the employer and the employee; [and] 27 (4) The employer’s contributions must be paid irrevocably to a trustee or a third person 28 pursuant to an insurance agreement, trust or other funded arrangement. 29 C.F.R. § 778.215(a). 1 Accordingly, the Court GRANTS the City’s Motion to the extent the Court 2 finds the City’s cash-in lieu payments to employees for the years 2015–18 to be an 3 incidental part of the City’s benefits plan. Accordingly, payments to the plan on 4 behalf of Plaintiffs in those years may be properly excluded under § 207(e)(4). 5 However, the parties fail to address whether the plan otherwise qualifies as a bona fide 6 plan under § 207(e)(4). Accordingly, the Court DENIES the City’s Motion and the 7 Plaintiffs’ Motion to the extent they seek a finding that the benefits plan is or is not a 8 bona fide plan. 9 Cash-in-Lieu Payments 10 As noted, unused benefits paid directly to an employee “cannot be excluded 11 [from the regular rate] under § 207(e)(4).” See Flores, 824 F.3d at 901. Plaintiffs 12 move for partial summary judgment on the grounds that the City failed to include 13 cash-in-lieu payments in Plaintiffs’ regular rate. (Pls.’ Mot. 6–8.) However, as with 14 Plaintiffs’ contentions regarding bilingual pay, Plaintiffs have failed to provide any 15 factual or evidentiary support for such a finding. (See generally Pls.’ Mot. 6–8; Pls.’ 16 SUF 10–12.) As Plaintiffs fail to support that any Plaintiff opted out of the benefits 17 plan or received cash-in-lieu, or that the City failed to include any such cash payments 18 in any Plaintiff’s regular rate, the Court DENIES Plaintiffs’ Motion as to this issue. 19 B. SECTION 207(K) WORK PERIODS 20 The City moves for partial summary judgment on the grounds that it 21 implemented and maintained alternative work periods for all Plaintiffs, triggering the 22 partial overtime exemption under 29 U.S.C. § 207(k). (City Mot. 2, 11–13.) 23 The FLSA provides a limited exemption from the forty hour per week overtime 24 requirement for public employers of fire protection or law enforcement personnel. 25 See 29 U.S.C. § 207(k); 29 C.F.R. § 553.201(a); Adair, 185 F.3d 1059. “The partial 26 overtime exemption in § 207(k) ‘increases the overtime limit slightly and it gives the 27 employer greater flexibility to select the work period over which the overtime limit 28 will be calculated.’” Flores, 824 F.3d at 895–96 (quoting Adair, 185 F.3d at 1060). 1 The employer must show that “it established a § 207(k) work period and that the 2 § 207(k) work period was regularly recurring.” Id. at 904. The employer bears the 3 burden of establishing that it qualifies for the exemption. Adair, 185 F.3d at 1060. 4 “Whether an employer meets this burden is normally a question of fact.” Id. 5 1. 24-day Work- Period for Firefighters 6 The City moves for partial summary judgment on the grounds that it 7 implemented and maintained a 24-day work period for all Firefighters, triggering 8 § 207(k)’s exemption, and therefore Firefighters are not entitled to overtime 9 compensation unless they worked more than 182 hours in a 24-day work period. (City 10 Mot. 2, 11–14.) Plaintiffs do not oppose the City’s Motion as to the § 207(k) 11 exemption for Firefighters. (See Pls.’ Opp’n 3–7.) 12 The facts regarding the § 207(k) exemption for Firefighters are undisputed. 13 (See City SUF 11–16; Pls.’ Resp. to City SUF (“PRSUF”) 11–16, ECF No. 42-1.) 14 The FA MOUs define “work period” or “FLSA cycle” as “a period between seven and 15 24 consecutive days long,” and state that “[e]mployees shall be paid overtime pay for 16 all hours worked above 182 hours in a 24-day work period . . . in accordance with the 17 [FLSA].” (City SUF 15; FA MOUs art. 2 § 4.02; PRSUF 16.) The City established 18 and maintained a 24-day work period for firefighters, for calculation of overtime. 19 (City SUF 11, 16; PRSUF 11, 16.) The City supports these undisputed facts with the 20 FA MOUs and the Declaration of Diane Strickfaden, the City’s Director of Human 21 Resources. (See Strickfaden Decl., ¶¶ 10–14, Ex. 6–8.) As Plaintiffs do not dispute 22 that the City established and maintained a regularly recurring 24-day work period for 23 firefighters, the Court GRANTS the City’s Motion on this issue and finds that the 24 City established and maintained a 24-day § 207(k) work period for Firefighters. 25 2. 28-day Work-Period for Officers 26 The City also moves for partial summary judgment on the grounds that it 27 implemented and maintained a § 207(k) work period for all police officers, and 28 therefore Officers are not entitled to overtime compensation unless they worked more 1 than 171 hours in a 28-day work period. (City Mot. 2, 11–14.) However, the 2 undisputed facts do not support a finding that the City established a § 207(k) work 3 period for Officers. 4 The City argues that the POA MOUs demonstrate it established a 28-day work 5 period and that the Chief of Police stated in a 1979 memorandum that “‘[w]ork 6 periods are twenty eight (28) days each’ for law enforcement officers.” (City SUF 7; 7 City Mot. 13.) While it is undisputed that the POA MOUs define “work period” as “a 8 period between seven and 28 consecutive days long as set by the City Manager,” this 9 definition encompasses the possibility of a 28-day work period, but does not establish 10 one. (City SUF 6; PRSUF 6.) Further, this undisputed fact establishes that the City 11 Manager, not the Chief of Police, sets the work period. 12 Even assuming without finding that the asserted 1979 memorandum could have 13 established a § 207(k) work period, the City provides no support for the 14 memorandum’s existence. The City does not mention the memorandum in its 15 statement of uncontroverted facts or otherwise point the Court to supporting evidence. 16 (See generally City SUF 2–6.) Instead the City cites broadly to the POA MOUs to 17 prove that it established a 28-day work period. (See City SUF 7 (citing Strickfaden 18 Decl. Exs. 1–3 (MOU POAs 2014–2018)).) However, as noted above, the parties bear 19 the burden to lay out their support clearly and the City’s sweeping citation to 20 140 pages of material, without specificity, fails to provide the requisite support to 21 warrant judgment as a matter of law. See Carmen, 237 F.3d at 1030; see also 22 Christian Legal Soc. Chapter of Univ. of Cal. v. Wu, 626 F.3d 483, 488 (9th Cir. 23 2010) (“Judges are not like pigs, hunting for truffles in briefs.”). The Court declines 24 to identify and interpret the City’s evidence for it. Thus, the Court finds that the City 25 fails to meet its burden to show that it established a 28-day work period for police 26 officers to trigger § 207(k)’s partial overtime exemption. 27 28 1 Thus, the Court DENIES the City’s Motion on this issue because the City has 2 not shown that it established or maintained a § 207(k) work period for Officers.7 3 Certain Officers 4 The City moves for partial summary judgment on the grounds that certain 5 Officers are not entitled to any overtime compensation. (See City Mot. 1, 6–9, 19–20, 6 23.) Specifically, the City seeks findings that: “the [§ 207(k)] exemption applies and 7 prevents three [O]fficers (Ian Miesen, Todd Heywood[,] and Yesenia Contreras) from 8 receiving any overtime compensation since they did not work overtime under 9 [§ 207(k)]” and “thirty-six Officers are not entitled to any damages under [§ 207(k)] 10 since they were all compensated properly every work period.” (City Mot. 1.) 11 However, the City reaches these conclusions by assuming the § 207(k) exemption 12 applies to Officers, which it has failed to establish. Accordingly, the Court DENIES 13 the City’s Motion on these issues. 14 C. CUMULATIVE OFFSET 15 The City seeks a finding that, under a cumulative offset, Officers have not been 16 harmed and are owed no overtime compensation. (City Mot. 1, 21–22.) 17 “Under the FLSA, 29 U.S.C. § 207(h)(2), an employer may credit overtime 18 payments already made to employees against overtime payments owed to them under 19 the FLSA.” Haro v. City of Los Angeles, 745 F.3d 1249, 1259–60 (9th Cir. 2014) 20 (citing 29 U.S.C. § 207(h)(2)). “The statute, however, does not specify the method to 21 be used to calculate these overtime payments. The statute simply states that ‘[e]xtra 22 compensation . . . shall be creditable toward overtime compensation payable pursuant 23 to this section.’” Id. The Ninth Circuit has held that the correct calculation is a week- 24 25
26 7 Even had the City supported that it established a 28-day work period for police officers, the City fails to establish that any such work period was “regularly recurring.” See Flores, 185 F.3d at 904 27 (“[T]he employer [must] show that it established a § 207(k) work period and that the § 207(k) work 28 period was regularly recurring.”). This is an additional reason to deny the City’s Motion on this issue. 1 by-week approach. Id. Accordingly, the City may not use a cumulative offset in 2 calculating damages. 3 The City argues that failing to apply cumulative credits and mandating backpay 4 will create an undeserved windfall for Officers. (City Mot. 22.) However, the Ninth 5 Circuit in Haro rejected this very argument: 6 [I]f the City were able to use premium payments [in a cumulative fashion], the City would be the recipient of the windfall, and in fact 7 would be placed in a substantially better position than if it had complied 8 with the overtime requirements of the FLSA all along. . . . It is contrary 9 to the language and the purpose of the statute. 10 Id. at 1260 (quoting Howard v. City of Springfield, 274 F.3d 1141 (7th Cir. 2001)). 11 The City alternatively argues for an offset calculated per “FLSA Work Period.” 12 (City Mot. 22.) However, as noted, the City fails to establish that it implemented and 13 maintained an alternative FLSA work period for Officers and, accordingly, may not 14 calculate its potential offset on such basis. Accordingly, the Court DENIES the City’s 15 Motion on this issue. 16 D. FAILURE OF PROOF 17 The parties move for partial summary judgment as to several additional issues, 18 each of which fails as to proof. 19 1. Executive/Administrative Exemption 20 The City moves for partial summary judgment on the grounds that five Officers 21 are exempt from overtime compensation under 29 U.S.C. § 213(a)(1) as executives 22 and administrators. (City Mot. 1, 16–18.) 23 Employees who are employed in executive or administrative capacities are 24 exempt from overtime pay. See 29 U.S.C. § 213(a)(1). The executive exemption 25 depends on the employee’s salary, primary duty to manage, and authority to supervise 26 or hire and fire other employees. 29 C.F.R. § 541.100(a). Similarly, the 27 administrative exemption depends on the employee’s salary, primary duty to perform 28 office work related to management, and exercise of discretion and independent 1 judgment. Id. § 541.200(a). To determine the “primary duty” of a particular 2 employee, a court must make a determination “based on all the facts in a particular 3 case, with the major emphasis on the character of the employee’s job as a whole,” 4 considering several factors, including the ratio of time and importance of exempt 5 versus non-exempt work. Id. § 541.700(a).8 6 As noted above, courts construe FLSA exemptions “narrowly . . . against the 7 employers seeking to assert them,” Alvarez, 339 F.3d at 905, and the employer bears 8 the burden of proving by a preponderance of the evidence that the employee “plainly 9 and unmistakably” fits within the claimed exemption, Flores, 824 F.3d at 897. See 10 also Duff-Brown v. City & Cty. of San Francisco, No. C11-3917 TEH, 2013 WL 11 163530, at *4 (N.D. Cal. Jan. 15, 2013) (noting the preponderance standard). 12 The City contends that five Officers are police lieutenants or police captains 13 who each come within the executive and/or administrative exemptions. (City 14 Mot. 16–18.) The City argues that these five Officers are subject to the executive 15 exemption because their “primary duties are managing and directing the law 16 enforcement officers under their command.” (City Mot. 18.) The City argues they are 17 also subject to the administrative exemption because “their primary duties are related 18 to the general business operations of the police department [and] they exercise 19 discretion and independent judgment as to daily operations, emergency situations, and 20 staffing decisions.” (City Mot. 18.) However, the only support the City offers other 21 than conclusory assertions are the job descriptions of Police Lieutenants and Police 22 Captains generally, together with Ms. Strickfaden’s statement that “the duties set forth 23 [in the applicable job description] have always been this individual’s job duties during 24 25
26 8 Factors to consider when determining the primary duty of an employee include, but are not limited to: (1) “the relative importance of the exempt duties as compared with other types of duties”; 27 (2) “the amount of time spent performing exempt work”; (3) “the employee’s relative freedom from 28 direct supervision”; and (4) “the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.” Id. § 541.700(a). 1 his time as [a Police Lieutenant or Captain, as applicable]. (Suppl. Strickfaden Decl. 2 ¶¶ 3–7, Exs. 1–2.) 3 Even accepting without finding that the job descriptions accurately describe 4 these five Officers’ job duties, the City provides no information regarding the 5 Officers’ performance of those duties or what portion of the Officers’ duties constitute 6 exempt work. See Carson v. City of Los Angeles, No. CV 15-7057-JFW (KLSx), 2016 7 WL 7647681, at *6–8 (C.D. Cal. Sept. 22, 2016) (discussing facts specific to the 8 plaintiffs’ performance of their duties and the portion of time spent performing 9 non-exempt work). Nor does the City address the factors for consideration to 10 determine an employee’s primary duty, or the exemption factors other than primary 11 duty. See 29 C.F.R. §§ 541.200(a), 541.700(a). 12 The employer bears the burden of proving that the employee “plainly and 13 unmistakably” fits within the claimed exemption. Flores, 824 F.3d at 897. The 14 determination of an employee’s primary duties must be based on all the facts in a 15 particular case and the City has failed to provide sufficient support for the facts 16 concerning the five Officers’ primary duties.9 Accordingly, the Court DENIES the 17 City’s Motion on this issue. 18 2. Statute of Limitations 19 The City moves for partial summary judgment seeking a two-year statute of 20 limitations. (City Mot. 18–19.) In contrast, Plaintiffs move for partial summary 21 judgment seeking a three-year statute of limitations. (Pls.’ Mot. 8.) 22 “The [FLSA] has a two-year statute of limitations for claims unless the 23 employer’s violation was ‘willful,’ in which case the statute of limitations is extended 24 to three years.” Flores, 824 F.3d at 895–96 (citing 29 U.S.C. § 255(a)). To prove 25 willfulness, a plaintiff must demonstrate that the employer was “on notice of its FLSA 26
9 Plaintiffs argue that the City fails to establish these five Officers are not subject to the First 27 Responder exemption from the executive/administrative exemptions. (Pls.’ Opp’n 9–10 (discussing 28 29 C.F.R. § 541.3).) As the Court finds the City fails to establish that the executive or administrative exemptions apply, the Court does not reach the question. 1 requirements, yet took no affirmative action to assure compliance with them.” 2 Alvarez, 339 F.3d at 909; see also Carson, 2016 WL 7647681, at *9. “To prove a 3 particular FLSA violation willful under § 255, the Supreme Court has, in general, 4 required evidence of an employer’s ‘kn[owing] or [ ] reckless disregard for the matter 5 of whether its conduct was prohibited by the statute.’” Alvarez, 339 F.3d at 909. “An 6 employer need not violate the statute knowingly for its violation to be considered 7 ‘willful’ under § 255(a), although ‘merely negligent’ conduct will not suffice.” Flores, 8 824 F.3d at 906 (quoting Alvarez, 339 F.3d at 908 and McLaughlin v. Richland Shoe 9 Co., 486 U.S. 128, 133 (1988).) Courts “will not presume that conduct was willful in 10 the absence of evidence.” Id. at 906. 11 Plaintiffs argue the City was on notice of its FLSA obligations and failed to act 12 to ensure its compliance. (Pls.’ Mot. 8; Pls.’ Opp’n 11–13.) Plaintiffs contend the 13 City had notice of the obligation to include cash-in-lieu value in the regular rate 14 because the Ninth Circuit’s 2016 decision in Flores v. City of San Gabriel “garnered 15 national attention.” (Pls.’ Opp’n 12.) Further, Plaintiffs argue that the City took no 16 affirmative action in light of this notice to ensure its compliance, referencing the 17 deposition of Diane Strickfaden wherein she testified that she did not know if the City 18 consulted with anyone following the Flores decision. (Pls.’ Mot. 8.) However, 19 Plaintiffs cite to absolutely no factual or evidentiary support for these arguments. (See 20 Pls.’ Mot. 1–3, 8; Pls.’ Opp’n 11–13; see generally Pls.’ SUF.10) Plaintiffs fail to 21 provide any support whatsoever for the notion that the City had notice of the FLSA 22 requirement under the Flores decision to include cash-in-lieu value in the regular rate 23 and yet recklessly disregarded those obligations. As such, the Court finds Plaintiffs 24 25 10 Plaintiffs’ statement of uncontroverted facts cites to a “30(b)(6) Deposition.” (See Pls.’ SUF 8– 26 12.) First, these citations do not concern the issue of willfulness, and second, they lack any specificity regarding the referenced deposition, warranting exclusion. See Orr, 285 F.3d at 774–75 27 (excluding deposition evidence for lack of specific citations). Finally, Plaintiffs submit the entire 28 deposition as an attachment to an index (ECF No. 41), in contravention of the Court’s Standing and Scheduling Orders. For all of these reasons, the Court excludes the deposition of Diane Strickfaden. 1 have failed to establish that the City’s alleged violations were willful and a two-year 2 statute of limitations applies. 3 Accordingly, the Court DENIES Plaintiffs’ Motion for a three-year statute of 4 limitations and GRANTS the City’s Motion for a two-year statute of limitations. 5 3. Liquidated Damages 6 The City and Plaintiffs each move for partial summary judgment on the issue of 7 liquidated damages. (City Mot. 23; Pls.’ Mot. 9.) 8 “For violations of the FLSA’s minimum and overtime wage provisions, 9 employers ‘shall be liable to the . . . employees affected in the amount of . . . overtime 10 compensation, as the case may be, and in an additional equal amount as liquidated 11 damages.’” Alvarez, 339 F.3d at 909 (quoting 29 U.S.C. § 216(b)). “The FLSA 12 provides a defense to liquidated damages for an employer who establishes that it acted 13 in good faith and had reasonable grounds to believe that its actions did not violate the 14 FLSA.” Flores, 824 F.3d at 895–96 (citing 20 U.S.C. § 260). However, this is a 15 “difficult burden” and “[a]n employer who ‘failed to take the steps necessary to ensure 16 its practices complied with FLSA’ and who ‘offers no evidence to show that it actively 17 endeavored to ensure such compliance’ has not satisfied § 260’s heavy burden.” Id. at 18 905 (original alterations omitted) (quoting Alvarez, 339 F.3d at 910); see also Haro, 19 745 F.3d at 1259. Where the employer “fails to carry that burden,” the Ninth Circuit 20 has noted, “liquidated damages are mandatory.” Local 246, 83 F.3d at 297. 21 Plaintiffs seek liquidated damages, contending the City cannot show it acted in 22 good faith or had reasonable grounds to believe there was no violation. (Pls.’ Mot. 9.) 23 The City seeks a finding that Plaintiffs are not entitled to liquidated damages because 24 the City acted in subjective good faith and had objective reasonable grounds for 25 believing there was no violation. (City Mot. 23–24.) The City offers only argument, 26 and no factual or evidentiary support, for its purported subjective “good faith” or 27 objective “reasonable grounds” for the conduct at issue. (See generally City Mot. 23– 28 24; City SUF.) Thus, the Court is inclined, based on the record at this time, to find the 1 || City failed to carry its “difficult burden.” However, no party moves the Court for 2 || summary judgment as to the City’s liability. As the Court does not reach a finding as 3 || to liability, it need not rule on damages at this time. Accordingly, the Court DENIES 4 || the City’s Motion and Plaintiffs’ Motion on this issue. 5 Vv. CONCLUSION 6 For the reasons discussed above, the Court GRANTS IN PART and DENIES 7| IN PART the City’s Motion for Partial Summary Judgment (ECF No. 32) and 8 | DENIES Plaintiffs’ Motion for Partial Summary Judgment (ECF No. 38). 9 || Specifically, the Court GRANTS the City’s Motion IN PART and finds that: the 10 || City’s cash-in-lieu payments constitute an incidental part of the City’s benefits plan; 11 || the City established a § 207(k) 24-day work period for Firefighters; and a two-year 12 | statute of limitations applies. (ECF No. 32.) The Court DENIES the City’s Motion 13 || as to all other issues. The Court DENIES Plaintiffs’ Motion as to all issues. (ECF 14 || No. 38.) 15 16 IT IS SO ORDERED. 17 18 November 25, 2019 19 SH og
1 OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE
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