Key California Employment Law Case Summaries: July 2023
Kuciemba v. Victory Woodworks Inc., 14 Cal. 4th 993 (2023)
See our in-depth analysis HERE.
Adolph v. Uber Technologies Inc., 14 Cal. 5th 1104 (2023)
See our in-depth analysis HERE.
Woodworth v. Loma Linda University Medical Center, No. E072704, 2023 WL 4701976 (Cal. Ct. App. July 24, 2023)
Summary: Employers may not round time punches, even if the rounding is neutral, if the employer can, and has, accurately recorded employee time.
PAGA actions should not be stricken because they are unmanageable.
Facts: Plaintiff Nicole Woodworth was a registered nurse at Defendant Loma Linda University Medical Center. Plaintiff filed a class and Private Attorneys General Act (PAGA) action against Defendant after her employment ended alleging, among several other wage-and-hour violations, a claim for failure to pay overtime wages partially premised on the employer’s time rounding practice. Defendant had a neutral rounding policy that rounded employee time punches to the nearest tenth of an hour. This resulted in slightly over half of employees being paid for more time than they were on the clock and slightly less than half of employees being paid for less; the remaining employees were unaffected. Defendant filed, among other motions, a motion for summary adjudication as to the rounding claim based on Defendant’s neutral rounding practice, which was granted. Defendant also filed a motion to strike the PAGA claim as unmanageable, which was denied as moot. The parties filed cross-appeals.
Court’s Decision: The California Court of Appeal reversed the summary adjudication of the overtime claim and rejected the Defendant’s argument that alternative grounds for affirmance rested in the trial court’s order denying the motion to strike the PAGA claim. With respect to the overtime claim, the court explained that when an employer can capture, and has captured, the exact amount of time an employee has worked during a shift, the employer must pay the employee for all the time worked. The court rejected prior decisions that had adopted the neutral rounding standard under federal regulations and instead adopted the reasoning in Camp v. Home Depot U.S.A., Inc., 84 Cal. App. 5th 638 (2022), which held that when an employer can and has captured the exact amount of time an employee worked during a shift, the employer must pay the employee for all the time worked. Although the court dismissed Defendant’s cross-appeal, it addressed and rejected Defendant’s argument that an alternative ground for affirmance could be found in the trial court’s order denying its motion to strike the PAGA claim. The court noted that after the trial court’s ruling, a split in authority had developed in the court of appeal on the question of a court’s power to strike a PAGA claim on the grounds of manageability. The court evaluated the decisions in Wesson v. Staples the Office Superstore, LLC,68 Cal. App. 5th 746 (2021)and Estrada v. Royalty Carpet Mills, Inc., 76 Cal. App. 5th 685 (2022)and agreed with Estrada, holding that allowing Defendant to strike the PAGA action on manageability grounds would impermissibly impose class action requirements on PAGA claims. The court also agreed with Estrada in its reasoning that, if a PAGA claim is unmanageable the court can, within reason, limit witness testimony and other forms of evidence to make a PAGA case more manageable.
Practical Implications: This case deepens two splits in the California court of appeal, both of which will be resolved in the coming months by the California Supreme Court. On the topic of time rounding, as we have said before, we encourage employers that have time rounding policies to review them and to consider eliminating them. The California Supreme Court is set to settle the issue of time rounding in its review of Camp, which is currently still in the briefing stage on appeal. On the topic of PAGA manageability, we expect to get a decision from the California Supreme Court in its review of Estrada sometime next year; the case is fully briefed and awaiting a scheduled oral argument date. In the meantime, we encourage employers to continue to press the argument that manageability is, and should be, a valid basis for striking PAGA claims.