General Atomics v. Super. Ct.

CourtCalifornia Court of Appeal
DecidedMay 28, 2021
DocketD078211
StatusPublished

This text of General Atomics v. Super. Ct. (General Atomics v. Super. Ct.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
General Atomics v. Super. Ct., (Cal. Ct. App. 2021).

Opinion

Filed 5/28/21

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

GENERAL ATOMICS, D078211

Petitioner,

v. (San Diego County Super. Ct. No. 37-2019-00028571- THE SUPERIOR COURT OF SAN CU-OE-CTL) DIEGO COUNTY,

Respondent,

TRACY GREEN,

Real Party in Interest.

ORIGINAL PROCEEDINGS in mandate. Ronald L. Styn, Judge. Petition granted. Paul Hastings, Paul W. Cane, Jr. and Zachary P. Hutton, for Petitioner. Seyfarth Shaw, Jeffrey A. Berman and Sheryl L. Skibbe, for the California Employment Law Council and the Employers Group, as Amici Curiae on behalf of Petitioner. No appearance for Respondent. Diversity Law Group, Larry W. Lee, Max W. Gavron; Polaris Law Group and William L. Marder for Real Party in Interest. Tracy Green sued her employer, General Atomics, based on its alleged failure to provide accurate, itemized wage statements showing “all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.” (Lab. Code, § 226,

subd. (a)(9).)1 Green maintained that General Atomics “failed to identify the correct rate of pay for overtime wages” because its wage statements showed “0.5 times the regular rate of pay rather than 1.5.” General Atomics moved for summary adjudication, challenging Green’s theory of liability. It contended that its wage statements complied with the statute because they showed the total hours worked, with their standard rate or rates, and the overtime hours worked, with their additional premium rate. The trial court issued an order denying the motion. General Atomics challenges that order by petition for writ of mandate. We conclude the trial court erred by determining that General Atomics’ wage statements violate section 226. The wage statements show the applicable hourly rates in effect and the corresponding number of hours worked at each rate. In the wage statements provided by General Atomics, the applicable hourly rates are (1) the standard hourly rate determined by contract or other agreement between the employee and the employer and (2) the overtime premium hourly rate, determined by statute, that must be added to the employee’s standard wages to compensate the employee for working overtime. These rates are plainly shown, along with the hours worked at each rate.

1 Further statutory references are to the Labor Code unless otherwise specified.

2 While other formats may also be acceptable, given the complexities of determining overtime compensation in various contexts, the format adopted by General Atomics adequately conveys the information required by statute. It also allows employees to readily determine whether their wages were correctly calculated, which is the central purpose of section 226. Indeed, the alternative format Green proposes would make such a determination more difficult, rather than less. We therefore grant the petition for writ of mandate. FACTUAL AND PROCEDURAL BACKGROUND Green’s operative complaint contains two causes of action. The first is a putative class action. The second is a representative action under the Labor Code Private Attorneys General Act (PAGA; § 2698 et seq.). Both causes of action are based on the same theory of liability, that General Atomics violated section 226, subdivision (a) by providing wage statements that do not identify the correct rate of pay for overtime wages. Green maintained that the correct rate was 1.5 times (1.5x) the regular rate of pay, and the wage statements provided by General Atomics showed only 0.5 times (0.5x) the regular rate. To test Green’s theory of liability, the parties appear to have agreed that General Atomics would file an early motion for summary adjudication directed at Green’s PAGA claim. In that motion, General Atomics contended that its wage statements were lawful. It argued that its wage statements complied with section 226 because they showed the applicable hourly rates—i.e., the standard contractual hourly rate and the overtime premium rate—and the hours worked at each. General Atomics supported its argument with, among other things, a sample wage statement from the Division of Labor Standards Enforcement (DLSE) showing the overtime

3 hourly rate as a 0.5x overtime premium. General Atomics asserted that showing a 1.5x overtime rate would produce noncompliant wage statements in many common scenarios, including when an employee is paid at multiple standard hourly rates during a single pay period. In opposition, Green cited the statutory requirement that overtime be paid “at the rate of no less than one and one-half times the regular rate of pay for an employee.” (§ 510, subd. (a).) Thus, Green argued, a wage statement that showed an overtime hourly rate other than 1.5x was not compliant because it did not show the correct, statutory hourly rate. Green did not contend that General Atomics had incorrectly calculated overtime pay (or failed to pay the correct amounts), only that it did not provide compliant wage statements showing the correct hourly rate of pay. Green claimed that the wage statements provided by General Atomics were confusing because they do not separately show overtime hours that were compensated at 1.5x the regular rate of pay. Instead, they show the overtime rate as 0.5x the regular rate. They also list overtime hours twice, once for the standard contractual rate and once for the overtime premium. Green maintained that the DLSE sample wage statement was inapplicable because it covered a worker compensated on a piece-rate basis, rather than an hourly basis. The DLSE sample for workers earning a single standard hourly rate showed a 1.5x overtime rate. After hearing argument, the trial court asked Green to submit examples of wage statements showing a 1.5x overtime rate for employees who earned multiple standard hourly rates during a single pay period. Green filed a supplemental brief attaching various examples. General Atomics responded that Green’s examples either did not reflect multiple standard hourly rates or did not comply with section 226 themselves.

4 After another hearing, the court issued a written order denying General Atomics’ motion for summary adjudication. The court noted that the material facts were undisputed. General Atomics admitted its wage statements show a 0.5x overtime premium, rather than a 1.5x overtime rate. The court found that the wage statements provided by General Atomics should have shown the nonovertime hours and overtime hours separately, with their applicable hourly rates. By combining nonovertime hours and overtime hours, and listing the overtime hours a second time with the 0.5x overtime premium, the wage statements did not show the 1.5x overtime rate or allow an employee to easily calculate it. The court was unpersuaded that showing the 1.5x overtime rate would be impractical or cause confusion when an employee earns multiple standard hourly rates during a single pay period. It wrote, “Defendant argues an employee never works at the regular rate or at 1.5 times the regular rate, rather the employee works at the base rate or rates, then a calculation is done which determines the regular rate and only then is the overtime premium added. While this may be the method of calculation, the overtime hours are worked at 1.5 times the regular rate and that is the rate that needs to be displayed in order to comply with the law and so that the employee can

determine the overtime hours worked and the overtime rate.” 2 General Atomics filed a petition for writ of mandate in this court challenging the trial court’s order denying its motion for summary

2 In its order, the trial court provided an example it believed reflected multiple standard hourly rates.

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