Quinonez v. Payless 4 Plumbing CA4/2

• Court: California Court of Appeal
• Decided: October 7, 2021
• Docket: E074467
• Status: Unpublished

Opinion

Filed 10/7/21 Quinonez v. Payless 4 Plumbing CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

ROBERT QUINONEZ,

Plaintiff and Appellant, E074467

v. (Super.Ct.No. CIVDS1912898)

PAYLESS 4 PLUMBING, INC. et al., OPINION

Defendants and Respondents.

APPEAL from the Superior Court of San Bernardino County. John M. Tomberlin,

Judge. Reversed.

Loyr, Young W. Ryu, Alexander D. Wallin, Britanie A. Martinez, Elizabeth M.

Votra, and Sarah H. Cohen for Plaintiff and Appellant.

Law Offices of Alan G. Novodor and Alan G. Novodor for Defendants and

Respondents.

1 Appellant Robert Quinonez brought a lawsuit under the Private Attorneys General

Act (PAGA), Labor Code section 2698 et seq., alleging his employer had committed

several wage and hour violations. Specifically, Quinonez alleged respondents Payless 4

Plumbing, Inc. and Alex Beltran denied him and other employees meal and rest breaks,

failed to pay overtime compensation, deducted wages illegally, failed to properly itemize

wage statements, failed to reimburse for business expenses, and failed to pay unpaid

wages after the termination of employment.

Quinonez brought the suit after exhausting the administrative process required by

Labor Code section 2699.3, subdivision (a). However, respondents filed a general

demurrer arguing the lawsuit should be dismissed because they had taken advantage of a

safe harbor provision in Labor Code section 2699.3, subdivision (c) by sending Quinonez

a “cure letter” stating the violations he complained about had ceased and been corrected.

According to respondents, after receiving the cure letter, Quinonez was required to

respond and couldn’t sue them. The trial judge accepted this argument and dismissed the

lawsuit with prejudice on the ground that Quinonez hadn’t exhausted his administrative

remedies.

Quinonez argues the trial judge erred because the safe harbor provision of Labor

Code section 2699.3, subdivision (c) doesn’t apply to the violations which were the basis

of his complaint. He says the administrative remedies that apply to his cause of action are

in section 2699.3, subdivision (a), and he exhausted those remedies before filing suit.

We agree and therefore reverse and remand for further proceedings.

2 I

FACTS

A. The Alleged PAGA Violations 1 According to Quinonez, Payless 4 Plumbing, Inc. and Alex Beltran (together

“Payless”) employed him as a plumber in San Bernardino County from July 3, 2015 to

November 20, 2018.

Quinonez alleged Payless committed a string of Labor Code violations during the

term of his employment, which affected himself and other employees. On December 21,

2018, he sent a notice of these violations and his intent to file a PAGA claim to his

employers and the Labor Workforce and Development Agency (LWDA), as required by

statute, and mailed out a check of $75 to the LWDA as a fee for filing the notice.

What follows is a list of the violations and the Labor Code provisions Quinonez

alleges his employers transgressed.

• Failure to relieve employees of all duties during meal breaks, pay them for the

break time during which they worked, or pay the statutory penalty for missed

breaks. (Lab. Code, §§ 226, 226.7, 512, 558, & 1198.)

• Failure to pay employees for all hours worked. (Lab. Code, §§ 200, 203, 218.5,

226, 558, 1194, & 1198; Industrial Welfare Commission Order 9.)

• Failure to pay overtime. (Lab. Code, §§ 500, 510, & 1194.)

1 Quinonez alleged Beltran owned or controlled the Payless 4 Plumbing business and “exercised control over the labor practices of each and every one of the employees . . . and caused the violations at issue in this Complaint.”

3 • Failure to maintain accurate payroll records and issuing inaccurate wage

statements. (Lab. Code, § 226(a).)

• Failure to reimburse employees for tools they were required to purchase for

work. (Lab. Code, § 2802.)

• Failure to pay employees wages owed at the time of separation from

employment. (Lab. Code, §§ 201, 202, & 203.)

On April 26, 2019, Quinonez sued Payless under PAGA as a representative of all

current or former non-exempt employees who worked for Payless between July 3, 2015

and the present. Quinonez claimed to act “in the public interest as a private attorney

general, seek[ing] assessment and collection of unpaid wages and civil penalties for

[himself], all other aggrieved employees, and the State of California against [Payless], in

addition to other remedies, for violations of California Labor Code sections 201-203.”

The prayer for relief specified the provisions that formed the basis of the suit. He

sought a decree that Payless had violated Labor Code sections “226.7, and 512(a) (by

failing to provide meal and rest periods or compensation in lieu thereof); 500, 510 and

1194, et seq. (by failing to pay overtime compensation); 226(a) (by failing to provide

accurate wage statements); and 201-203 (by failing to pay compensation upon

termination).” He sought to recover civil penalties and unpaid wages under “Labor Code

sections 2699(a) and/or 2699(f) and (g), 203, 226(e), and 558, plus costs and attorneys’

fees, for violations of California Labor Code sections 201-203, 218.5, 226(a) 226.7, 510,

512(a); 1174, 1194, 1197, and 1198.”

4 B. Payless’s Motion for a General Demurrer

Payless responded to the complaint by filing a general demurrer. The sole ground

for dismissal was “plaintiff Robert Quinonez failed to exhaust his administrative

remedies under California Labor Code Section 2699.3(c)(3) when such action, as a

precondition for bringing [a] civil suit under the Private Attorneys General Act, was

statutorily required by the PAGA claim’s allegation of provision violations other than

those listed in Section 2699.5 or Division 5 (commencing with section 6300) of the

California Labor Code, and defendants’ Notice of Cure filing pursuant to the safe harbor

provisions of California Labor Code Section 2699.3(c)(2)(A).”

The notice of cure refers to Payless’s response to Quinonez’s allegations when he

filed them with the LWDA on December 21, 2018 as part of his obligation to exhaust

administrative remedies. On January 16, 2019, Payless informed Quinonez they would

“be taking advantage of the safe harbor provisions of [PAGA] by filing a Notice of Cure

and Response to [his] PAGA claim with the [LWDA].” On January 22, 2019, they filed

the cure notice, which they claimed to include “a description of all actions taken” to

remedy the violations Quinonez alleged.

Payless represented they had remedied the violations Quinonez alleged. They said

they had “conducted interviews with all current employees and all former employees they

have been able to locate who have worked for [Payless] within the last four years to

obtain information from them about the average number of total hours actually worked

per week.” They claimed to have “paid and satisfied—with the sole exception of Robert

5 E. Quinonez—all claims of non-exempt employees for minimum wages for all hours

worked, including overtime wages and the difference between the regular pay and all

claims for unpaid penalty premium for missed meal and rest period[s], and claims for un-

reimbursed business expenses for work performed within the past four years, including

interest and waiting time penalties.” They also claimed to have corrected any problems

with granting breaks by distributing written copies of their policy to all employees.

They attached numerous copies of the signed meal and rest break policy and

acknowledgement as exhibits. The policy, which is addressed to “All Payless 4

Plumbing, Inc. employees,” begins with a paragraph defining the term “non-exempt

employee,” which they said “refers to a category of employees entitled to overtime pay

and minimum wage as described in the Fair Labor Standards Act (FLSA). . . . Employees

who earn less than twice the current California state minimum wage and those who do

not use personal discretion and independent judgment at least 50% of the time are

considered non-exempt.” The policy says non-exempt employees “must be paid for each

hour that they work and 1.5x their hourly wage for any hours worked over 8 hours per

day and 40 hours per week” and also lays out the rest and meal break periods non-exempt

employees are entitled to receive. Though the policy has a signature line for the

employee, the policy does not provide guidance as to whether the person signing is

exempt or non-exempt.

Payless’s response to the LWDA does have some guidance on that point. They

told the agency many of Quinonez’s allegations are “demonstrably false and inaccurate”

6 and represented their plumbers, whether they work on a commission or salary basis, are

in fact exempt employees. Thus, according to this filing and the policy Payless circulated

to their employees, none of the employees Quinonez seeks to represent are non-exempt

employees to whom overtime laws or the meal and rest break policy would apply.

Payless also denied any employee had ever had job related expenses deducted from

wages or ever incurred unreimbursed business expenses. Finally, they represented their

employees had “always been encouraged and given ample opportunity to take their meal

and rest breaks.”

Quinonez didn’t file a response to the cure notice, but instead filed this lawsuit

after the period allotted for a response from the LWDA to his notice of violations under

section 2699.3, subdivision (a). Payless argued the trial court should sustain their general

demurrer and strike the complaint because he was required by a different provision—

section 2699.3, subdivision (c)(3)—to respond and wait for the LWDA’s response to the

cure notice before filing the lawsuit. They pointed to the language of section 2699.3,

subdivision (c)(2)(A), which provides “[t]he employer may cure the alleged violation

within 33 calendar days of the postmark date of the notice” sent by the aggrieved

employee or representative, must give notice of the claim of a cure, and that “no civil

action pursuant to Section 2699 may commence.” They also pointed out that the safe

harbor provision says, “[i]f the aggrieved employee disputes that the alleged violation has

been cured, the aggrieved employee or representative shall provide written notice . . .

including specified grounds to support that dispute, to the employer and the agency.”

7 (Lab. Code, § 2699.3, subd. (c)(3), emphases in Payless’s motion.) If the agency receives

a notice of dispute from the employee, it has 17 days to “review the actions taken by the

employer to cure the alleged violation and provide written notice of its decision by

certified mail to the aggrieved employee and the employer.” “If the agency determines

that the alleged violation has not been cured or if the agency fails to provide timely or

any notification, the employee may proceed with the civil action.” (Italics omitted.) Since

Quinonez didn’t provide notice to the agency that he was disputing the cure notice, the

agency didn’t decide whether Payless had cured the violations and, Payless argued in the

trial court, he was not permitted to file the lawsuit.

Quinonez responded that the administrative safe harbor provision in section

2699.3, subdivision (c) doesn’t apply to the types of violations he’s alleging. For the kind

of wage and hour violations he’s alleging, the administrative remedies are set out in

section 2699.3, subdivision (a), which doesn’t allow the employer to cure the alleged

violations and allows the plaintiff to file a civil action if the agency hasn’t responded

within a specified period of the filing of the employee’s notice of the complaint. He

argued that means he was entitled to file a PAGA lawsuit in April 2019.

At a hearing on November 5, 2019, the trial judge, superior court Judge John M.

Tomberlin, sustained Payless’s demurrer. The minute order records that the judge found

Quinonez “has failed to properly exhaust his administrative remedies.” The judge ordered

the complaint dismissed with prejudice and entered judgment on November 5, 2019.

Quinonez filed a timely notice of appeal.

8 II

ANALYSIS

Quinonez’s primary argument is one we find persuasive and dispositive. He argues

the trial court erred as a matter of law by interpreting the statutory safe harbor in Labor

Code section 2699.3, subdivision (c) as applying to his PAGA claim. He argues the

statute’s plain language establishes the administrative remedies in Labor Code section

2699.3, subdivision (a) apply to the violations he alleges Payless committed, and those

administrative remedies don’t include a safe harbor. We agree.

“On appeal from a judgment dismissing an action after sustaining a demurrer

without leave to amend, the standard of review is well settled. We give the complaint a

reasonable interpretation, reading it as a whole and its parts in their context. Further, we

treat the demurrer as admitting all material facts properly pleaded, but do not assume the

truth of contentions, deductions or conclusions of law. When a demurrer is sustained, we

determine whether the complaint states facts sufficient to constitute a cause of action.”

(City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865.) It is not proper on a

general demurrer, as Payless filed, to dismiss a part of a cause of action; a general

demurrer challenges only the sufficiency of the cause of action pleaded and must be

overruled if any valid cause of action is pleaded. (Venice Town Council, Inc. v. City of

Los Angeles (1996) 47 Cal.App.4th 1547, 1561-1562.) We review the trial judge’s order

sustaining a demurrer and dismissing a cause of action de novo. (People ex rel. Harris v.

Pac Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 777.)

9 Labor Code Section 2699.3 provides three different sets of obligations for a

plaintiff bringing PAGA claims under Labor Code section 2699, subdivisions (a) or (f).

(Unlabeled statutory citations refer to the Labor code.) The statutory provisions make

clear that the required administrative process differs depending on the kind of violations

the employee alleges.

Under subdivision (a), “[a] civil action by an aggrieved employee . . . alleging a

violation of any provision listed in Section 2699.5 shall commence only after” the

employee has given the LDWA and the employer notice (in the approved form) “of the

specific provisions of this code alleged to have been violated, including the facts and

theories to support the alleged violation.” The agency then decides whether to investigate

the violations on its own and must provide notice of its decision to the employee and the

employer. If the agency doesn’t intend to investigate or doesn’t provide the employee any

notice within a specified period, the employee may file a PAGA action under section 2 2699. (§ 2699.3, subd. (a), italics added.)

Under subdivision (b), “[a] civil action by an aggrieved employee . . . alleging a

violation of any provision of Division 5 (commencing with Section 6300) other than those

listed in Section 2699.5 shall commence only after” the employee has given the Division

of Occupational Safety and Health (division) and the employer notice (in the approved

form) of the specific provisions of Division 5 alleged to have been violated, “including

2 The employee may also sue on a different timetable if the agency investigates but decides not to issue a citation. (§ 2699.3, subd. (a).) That provision isn’t relevant to this appeal.

10 the facts and theories to support the alleged violation.” (§ 2699.3, subd. (b), italics

added.) The division is then required to investigate or inspect the violation and decide

whether to issue a citation. (§ 2699.3, subd. (b)(2)(A).) “If the division issues a citation,

the employee may not commence an action pursuant to Section 2699. The division shall

notify the aggrieved employee and employer in writing within 14 calendar days of

certifying that the employer has corrected the violation.” (§ 2699.3, subd. (b)(2)(A)(i).)

The employee may file a lawsuit if the agency doesn’t issue a citation in the proscribed

period. (§ 2699.3, subd. (b)(2)(A)(ii).) However, the division may permit long-term

abatement periods and the employee may not bring a civil lawsuit “during the period that

an employer has voluntarily entered into consultation with the division to ameliorate a

condition.” (§ 2699.3, subd. (b)(3)(A) & (B).)

Under subdivision (c)—which Payless argues is the governing provision in this

case—the process is different because it includes a short safe harbor period for the

employer to cure any violations. First, this provision applies explicitly to claims of

“violation of any provision other than those listed in Section 2699.5”—to which

subdivision (a) applies—“or Division 5 (commencing with Section 6300)”—to which

subdivision (b) applies. (§ 2699.3, subd. (c), italics added.) As with subdivision (a), an

employee may commence a PAGA claim under subdivision (c) only after giving the

LDWA and the employer notice “of the specific provisions of this code alleged to have

been violated, including the facts and theories to support the alleged violation.”

(§ 2699.3, subd. (c)(1)(A).)

11 However, for this kind of violation, the employer has a right to cure any alleged

defects. “The employer may cure the alleged violation within 33 calendar days of the

postmark date of the notice sent by the aggrieved employee or representative. The

employer shall give written notice within that period of time by certified mail to the

aggrieved employee or representative and by online filing with the agency if the alleged

violation is cured, including a description of actions taken, and no civil action pursuant to

Section 2699 may commence. If the alleged violation is not cured within the 33-day

period, the employee may commence a civil action pursuant to Section 2699.” (§ 2699.3,

subd. (c)(2)(A).)

If the employer files a cure notice, the employee is required to respond and allow

the LWDA a period of time to decide whether the employer has in fact cured the alleged

violations. “If the aggrieved employee disputes that the alleged violation has been cured,

the aggrieved employee or representative shall provide written notice by online filing

with the agency and by certified mail to the employer, including specified grounds to

support that dispute, to the employer and the agency. Within 17 calendar days of the

receipt of that notice, the agency shall review the actions taken by the employer to cure

the alleged violation and provide written notice of its decision by certified mail to the

aggrieved employee and the employer.” (§ 2699.3, subd. (c)(3), italics added.) “If the

agency determines that the alleged violation has not been cured or if the agency fails to

provide timely or any notification, the employee may proceed with the civil action.”

12 (Ibid.) The employee may challenge the agency’s determination that the alleged violation

has been cured by appealing to the superior court. (Ibid.)

This appeal comes down to deciding which of these administrative remedy

provisions Quinonez was required to exhaust. There’s no dispute he satisfied the

administrative remedies set out in subdivision (a), which apply to violation of any

provision listed in section 2699.5. And there’s no dispute that he did not satisfy the

administrative remedies set out in subdivision (c), which apply to violation of any

provision not listed in section 2699.5 or Division 5. There’s also no dispute that his

PAGA claim was not based on allegations that Payless violated the provisions of

Division 5. We’re left, then, with the question whether the conduct Quinonez complained

about violated provisions listed in section 2699.5 or provisions not listed in section

2699.5.

The answer is fairly straightforward, even if it does require some digging into the

weeds. Omitting irrelevant statutory references, section 2699.5 says “[t]he provisions of

subdivision (a) of Section 2699.3 apply to any alleged violation of the following [Labor

Code] provisions: . . . Sections . . . 201, . . . 202, 203, . . . paragraphs (1) to (5), inclusive,

(7), and (9) of subdivision (a) of Section 226, Sections 226.7, . . . 510, . . . 512, . . . 1194,

1197, . . . 1198, . . . [and] 2802.” Those provisions have to do with an employer’s

obligations concerning wages and hours—to make timely payment of wages earned on

termination of employment (§§ 201-203), provide accurate wage statements containing

certain required information (§ 226), provide meal and rest periods (§§ 226.7, 512), pay

13 overtime wages (§§ 510, 1194, 1198), pay the minimum wage (§§ 1194, 1197), and

compensate employees for business expenses (§ 2802).

The statutory provisions we identified in section 2699.5 all form the basis of

Quinonez’s PAGA cause of action. As we spelled out above, Quinonez alleged Payless

(i) failed to pay employees wages owed at the time of separation from employment in

violation of sections 201, 202, and 203, (ii) didn’t maintain accurate payroll records and

issued inaccurate wage statements in violation of section 226(a), (iii) didn’t relieve

employees of all duties during meal breaks, didn’t pay them for the break time during

which they worked, and didn’t pay the statutory penalty for missed breaks in violation of

sections 226, 226.7, 512, and 1198, (iv) didn’t pay employees for all hours worked in

violation of sections 203, 226, 1194, and 1198, (v) didn’t pay overtime in violation of

sections 510 and 1194, and (vi) didn’t reimburse employees for tools they were required

to purchase for work in violation of section 2802. The plain language of sections 2699.5

and 2699.3, subdivision (a) establishes that PAGA claims alleging violations of these

statutory provisions are governed by section 2699.3, subdivision (a) and not by section

2699.3, subdivision (c).

It follows that Quinonez exhausted the administrative remedies required to bring

his action in superior court. The safe harbor under section 2699.3, subdivision (c) simply

doesn’t apply to allegations of this kind of wage and hour violation. The trial court erred

in determining otherwise as a matter of law.

14 Payless points to a few additional statutory citations in Quinonez’s complaint, but

they don’t bring the complaint under the safe harbor provision. Quinonez refers to

sections 200, 500, and 218.5. But section 200 defines the terms wages and labor as

they’re used in related provisions. Section 500 defines the terms workday and workweek.

Section 218.5 allows for an employee to recover reasonable attorney fees “[i]n any action

brought for the nonpayment of wages, fringe benefits, or health and welfare or pension

fund contributions.” None of these provisions sets out a cause of action or otherwise

establishes a duty for the employer enforceable by a civil suit under section 2699. Thus

section 2699.3 doesn’t apply to them at all, because it governs “civil action[s] by an

aggrieved employee pursuant to subdivision (a) or (f) of Section 2699.”

Nor does Quinonez’s request for unpaid wages under section 558 bring the safe

harbor provision into play. Section 558, which preceded the passage of PAGA, sets out

civil penalties for “[a]ny employer or other person acting on behalf of an employer who

violates, or causes to be violated, a section of this chapter or any provision regulating

hours and days of work in any order of the Industrial Welfare Commission.” (§ 558,

subd. (a).) It specifies a civil penalty of “fifty dollars ($50) for each underpaid employee

for each pay period for which the employee was underpaid in addition to an amount

sufficient to recover underpaid wages.” (§ 558, subd. (a)(1).) The civil penalty increases

to $100 for subsequent violations. (§ 555, subd. (a)(2).) Wages recovered are to be paid

to the affected employee. (§558, subd. (a)(3).) Our Supreme Court has held section 558

does not provide for a private right of action and the unpaid wages which may be

15 recovered are compensatory damages, not civil penalties which can be collected in a

PAGA lawsuit. (ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 197-198.) Thus, to the

extent Quinonez’s complaint seeks unpaid wages under section 558, the provisions of

PAGA, including the administrative remedy provisions governing claims under section

2699, do not apply.

Moreover, including a request for remedies available under section 558 does not

provide a basis for dismissing Quinonez’s entire complaint on a general demurrer. (Olson

v. Hornbrook Community Services Dist. (2019) 33 Cal.App.5th 502, 522, fn. 9 [“‘a

general demurrer may not be sustained, nor a motion for judgment on the pleadings

granted, as to a portion of a cause of action,’ but that portion may be attacked by filing a

motion to strike”].) If a portion of the pleading is deficient under the holding of ZB, the

parties may address the deficiency by a motion to strike that portion of the pleadings or

by amending the pleadings on remand, the same remedy the Supreme Court approved in

ZB. (ZB, N.A. v. Superior Court, supra, 8 Cal.5th at p. 198.)

We therefore conclude the trial judge erred by applying the safe harbor provision

of section 2699.3, subdivision (c) to Quinonez’s cause of action. Quinonez exhausted the

administrative remedies required by section 2699.3, subdivision (a) and is entitled to

proceed with his PAGA lawsuit.

16 III

DISPOSITION

We reverse the judgment of the trial court and remand for further proceedings.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

SLOUGH J.

We concur:

McKINSTER Acting P. J.

MILLER J.