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This case was last updated from Los Angeles County Superior Courts on 06/14/2019 at 09:30:05 (UTC).

ROSALYN TWOMEY VS CALIFORNIA REHABILITATION INSTITUTE LLC ET

Case Summary

On 10/12/2017 ROSALYN TWOMEY filed a Labor - Other Labor lawsuit against CALIFORNIA REHABILITATION INSTITUTE LLC ET. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is ERNEST HIROSHIGE. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****9469

  • Filing Date:

    10/12/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Labor - Other Labor

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

ERNEST HIROSHIGE

 

Party Details

Plaintiffs and Petitioners

TWOMEY ROSALYN

ZELENAK DENISE

Defendants and Respondents

CALIFORNIA REHABILITATION INSTITUTE LLC

JAWAHARJIAN ALEX

SELECT EMPLOYMENT SERVICES INC

DOES 1 TO 25

CRI ES INC.

SELECT MEDICAL CORPORATION

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

JB TWOMEY LAW

TWOMEY J.B.

JAIN KUNAL

Defendant and Respondent Attorneys

TUCKER ELLIS LLP

EZEOLU NDUBISI ANTHONY

TAYLOR RAVEN N.

RACEK EDWARD WILLIAM

 

Court Documents

AMENDMENT TO COMPLAINT

4/17/2018: AMENDMENT TO COMPLAINT

Unknown

9/4/2018: Unknown

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF'S MOTION FOR LEAVE TO AMEND AND FILE PLAINTIFF'S FIRST AMENDED COMPLAINT

9/12/2018: MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF'S MOTION FOR LEAVE TO AMEND AND FILE PLAINTIFF'S FIRST AMENDED COMPLAINT

Case Management Order

10/11/2018: Case Management Order

Summons

10/12/2018: Summons

Unknown

10/12/2018: Unknown

Case Management Statement

2/6/2019: Case Management Statement

Unknown

2/15/2019: Unknown

Declaration

5/31/2019: Declaration

Declaration

5/31/2019: Declaration

Declaration

5/31/2019: Declaration

Declaration

5/31/2019: Declaration

Declaration

5/31/2019: Declaration

Declaration

5/31/2019: Declaration

Motion for Summary Judgment

5/31/2019: Motion for Summary Judgment

Motion for Summary Judgment

5/31/2019: Motion for Summary Judgment

Proof of Service (not Summons and Complaint)

5/31/2019: Proof of Service (not Summons and Complaint)

Memorandum of Points & Authorities

5/31/2019: Memorandum of Points & Authorities

80 More Documents Available

 

Docket Entries

  • 05/31/2019
  • Declaration (OF KENNETH ROSENBERG); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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  • 05/31/2019
  • Proof of Service (not Summons and Complaint); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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  • 05/31/2019
  • Declaration (APPENDIX OF EVIDENCE/ EXHIBITS IN SUPPORT OF DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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  • 05/31/2019
  • Declaration (of Mayra Molina); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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  • 05/31/2019
  • Declaration (of Milton Scott); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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  • 05/31/2019
  • Declaration (of Bedros Alex Jawharjian); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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  • 05/31/2019
  • Declaration (of Kenneth Rosenberg); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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  • 05/31/2019
  • Declaration (of Rubie Allan); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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  • 05/31/2019
  • Declaration (OF ANDREA GUNTHER); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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  • 05/31/2019
  • Proof of Service (not Summons and Complaint); Filed by CALIFORNIA REHABILITATION INSTITUTE LLC (Defendant); ALEX JAWAHARJIAN (Defendant); SELECT EMPLOYMENT SERVICES, INC (Defendant) et al.

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115 More Docket Entries
  • 11/03/2017
  • NOTICE OF CASE MANAGEMENT CONFERENCE

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  • 10/31/2017
  • at 4:00 PM in Department 54; Unknown Event Type - Held

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  • 10/31/2017
  • Minute order entered: 2017-10-31 00:00:00; Filed by Clerk

    Read MoreRead Less
  • 10/31/2017
  • Minute Order

    Read MoreRead Less
  • 10/17/2017
  • Challenge To Judicial Officer - Peremptory (170.6); Filed by Plaintiff/Petitioner

    Read MoreRead Less
  • 10/12/2017
  • COMPLAINT FOR DAMAGES FOR: 1. VIOLATIONS OF CAL. LABOR CODE 512, ETC

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  • 10/12/2017
  • Complaint; Filed by ROSALYN TWOMEY (Plaintiff)

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  • 10/12/2017
  • CIVIL DEPOSIT

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  • 10/12/2017
  • SUMMONS

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  • 10/10/2017
  • PEREMPTORY CHALLENGE TO JUDICIAL OFFICER (CODE CIV. PROC., 170.6)

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Tentative Rulings

Case Number: BC679469    Hearing Date: April 30, 2021    Dept: 39

Rosalyn Twomey, et al. v. California Rehabilitation Institute, LLC

Case No. BC679469

Ruling on Defendants’ Motion for Summary Adjudication of Issue #8

Order #1 of 3

BACKGROUND

Plaintiffs Rosalyn Twomey and Denise Zelenak (“Plaintiffs”) filed this wage and hours action on behalf of themselves, other current and former aggrieved employees, and the State of California, per the Labor Code Private Attorney General Act of 2004 (“PAGA”), against their alleged employers: (1) The California Rehabilitation Institute, LLC (“Cal Rehab”); (2) Select Employment Services, Inc. (“Select Employment”); (3) Select Medical Corporation (“Select Medical”); and (4) CRI ES, Inc. (“CRI”) (collectively, “Defendants”). Among other claims, Plaintiffs asserts violations of Labor Code section 2699, the Labor Code Private Attorney General Act of 2004 (“PAGA”) as the tenth cause of action.

On February 11, 2021, following a hearing, the Court granted Defendant Alex Jawharjian’s motion for summary judgment, finding that Plaintiffs proffered insufficient evidence to establish that he was a “managing agent” for purposes of liability. The Court held a hearing on the parties’ remaining motions for summary adjudication on Friday, February 19, 2021, following which the Court took the motions under submission. On Monday, February 22, 2021, the Court issued orders as follows: (1) The Court granted summary adjudication with respect to Select Employment and denied summary adjudication with respect to Select Medical; (2) The Court denied Plaintiffs’ motion for summary adjudication; (3) The Court granted Defendants’ motion for summary adjudication of the first, second, and sixth causes of action; (4) The Court granted Defendants’ motion for summary adjudication of the fifth cause of action with respect to Defendant Zelenak but denied summary adjudication of the fifth cause of action with respect to Plaintiff Twomey; and (5) The Court denied Defendants’ motion for summary adjudication with respect to the remaining causes of action except the PAGA claim.

The Court did not address Defendant’s motion for summary adjudication with respect to the PAGA claim in its orders of February 22, 2021, because it lacked sufficient information to do so. Specifically, in order to resolve Defendants’ arguments, the Court first must define the scope of the PAGA class for purposes of this case. The Court (Feffer, J.) issued an order on January 8, 2020, suggesting that the group of similarly aggrieved employees for purposes of Plaintiffs’ PAGA claims is limited to “all non-exempt employees that are or were part of Defendants’ Pharmacy Department during the relevant time period,” i.e., “pharmacy technicians.” Defendants agree with this interpretation, and Plaintiffs dispute this interpretation. Because the parties could not agree on the interpretation of Judge Feffer’s prior order, the Court removed Defendants’ motion for summary adjudication from being under submission and reset the hearing. In order to afford proper notice, the Court issued an Order to Show Cause why the Court should not limit the PAGA class to “all non-exempt employees that are or were part of Defendants’ Pharmacy Department during the relevant time period.” The Court afforded the parties an opportunity to brief the issue and posted a tentative order several days in advance of the hearing. The Court’s tentative order limited the PAGA class to “all current or former non-exempt pharmacy technicians in the Pharmacy Department of the California Rehabilitation Institute during the relevant time period.” At the hearing, Plaintiffs’ counsel indicated that he did not wish to be heard on the Court’s tentative order.

The parties indicated that they wished the Court to resolve a related issue, viz., what time period does the PAGA claim lawfully cover. The Court agreed that this issue must be resolved in order to rule on Defendant’s motion for summary adjudication of Issue #8. Specifically, the Court needs to determine the time frame of the PAGA action to determine whether Defendants proffer sufficient declarations of similarly aggrieved employees to determine whether to grant their motion for summary adjudication of that claim. To ensure that all parties received proper notice and opportunity to be heard, with the consent of the parties, the Court issued an Order to Show Cause why the Court should not limit the PAGA claim to a specific time period.

LEGAL STANDARD

In September 2003, the Legislature enacted the Labor Code Private Attorneys General Act of 2004. (Lab. Code § 2698 et seq.) The act permits a civil action “by an aggrieved employee on behalf of himself or herself and other current or former employees” to recover civil penalties for violations of other provisions of the Labor Code. (Lab. Code § 2699(a).) It defines an “aggrieved employee” as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” (Lab. Code § 2699(c).)

DISCUSSION

Plaintiffs argue that the PAGA period covers one year and sixty-five days before the date of each plaintiff’s initial complaint until the time each of their PAGA claims are resolved. Specifically, Plaintiffs argue that Twomey’s PAGA claims begin on August 6, 2016, and Zelenak’s PAGA claims begin on August 8, 2017. By contrast, Defendants argue that the PAGA period begins no earlier than one year before the date of filing of a timely complaint, and ends upon the earlier of Plaintiffs’ terminations or one year after the filing of the complaint.

The starting point is relatively easy to determine, and the parties do not substantially disagree on this issue. A PAGA action is subject to a one-year statute of limitations. (Esparza v. Safeway, Inc. (2019) 26 Cal.App.5th 42, 59-60.) Each wage and hour violation triggers a new limitations period. (Id., p. 60.) This action was filed on October 12, 2017, and one year prior is October 12, 2016. However, the limitations period is tolled while Plaintiffs exhaust their administrative remedies. (Lab. Code § 2699.3(d).) Plaintiffs represent that they did not receive notice of any intention to investigation from the Labor and Workforce Development Agency, so they filed their action within 65 days of the notice. Therefore, the proposed PAGA class would begin on August 8, 2016.

The larger question is when the PAGA claims period ends for purposes of the Labor Code Private Attorney General Act of 2004. In interpreting this statute, the case law generally refers to Plaintiffs suing on behalf of “similarly situated aggrieved employees.” (See, e.g., Provost v. YourMechanic, Inc. (2020) 55 Cal.App.5th 982, 997; Williams v. Superior Court (2015) 237 Cal.App. 642, 465.) However, the underlying purpose of the statute is to permit individual employees to file suit on behalf of aggrieved employees, acting as a “private attorney general.” Therefore, the Court does not agree with Defendants that, as a matter of law, the period ends upon Plaintiffs’ terminations. Rather, the permissible scope of a PAGA claim depends on the evidence. If Plaintiffs have evidence of violations following their terminations, then they can recover for those violations as part of a PAGA claim, since they are suing on behalf of other employees. If not, they can’t. Defendants ultimately may be correct as a matter of practicality, since it is more difficult for plaintiffs to develop evidence of violations after their terminations/resignations, i.e., they cannot testify based upon personal experience. But the Court hesitates to rule as a matter of law that plaintiffs cannot present evidence of wage and hour violations on behalf of other employees following their own departures. Simply, the jury—not the Court—must decide when the time period concludes. However, the Court would be willing to consider using a special verdict form delineating damages for different potential time periods.

Even if the Court adopted Defendant’s argument, however, it still could not grant summary adjudication of the PAGA claim. Even though the PAGA class is relatively limited—and, in theory, may be limited in time—Defendants still proffer insufficient evidence to establish as a matter of law that Plaintiffs’ claims are purely individualized claim and that there are no other aggrieved employees.

CONCLUSION AND ORDER

The Court acknowledges that this is not the strongest PAGA claim pending in the Los Angeles County Superior Court given the limited number of potentially aggrieved employees—pharmacy technicians in the Pharmacy Department of Cal Rehab between August 8, 2016 and the last date of a provable violation—and the number of potentially aggrieved employees who have repudiated Plaintiffs’ claims. Nevertheless, the Court must deny Defendants’ motion for summary adjudication because Plaintiffs have satisfied the deferential standard of proffering sufficient evidence that other employees suffered the same alleged violations. Therefore, Defendants’ motion for summary adjudication of Issue #8 is denied. Defendants’ counsel shall provide notice and file proof of such with the Court.

Rosalyn Twomey v. California Rehabilitation Institute, LLC, et al.

Case No. BC679469

Plaintiff’s Motion for Reconsideration

Order #2 of 3

Plaintiffs Rosalyn Twomey and Denise Zelenak filed this wage and hours action on behalf of themselves, other current and former aggrieved employees, and the State of California, per the Labor Code Private Attorney General Act of 2004, against their alleged employers: (1) The California Rehabilitation Institute, LLC (“Cal Rehab”); (2) Select Employment Services, Inc. (“Select Employment”); (3) Select Medical Corporation (“Select Medical”); and (4) CRI ES, Inc. (“CRI”) (collectively, “Defendants”). Plaintiffs also named the Director of Pharmacy, Defendant Alex Jawharjian, as a defendant. The Court previously granted Defendant Alex Jawharian’s motion for summary judgment, finding that Plaintiffs proffered insufficient evidence to establish that he was a “managing agent” for purposes of liability.

Plaintiffs assert the following causes of action against Defendants: (1) Failure to pay minimum wage in violation of Labor Code sections 1182.12, 1197, and 1194; (2) Failure to pay minimum wage liquidated damages in violation of Labor Code section 1194.2; (3) Failure to pay overtime wages in violation of Labor Code section 510; (4) Failure to allow meal periods in violation of Labor Code section 512; (5) Failure to allow rest breaks in violation of Labor Code section 226.7; (6) Failure to provide accurate wage statements in violation of Labor Code section 226; (7) Failure to indemnify in violation of Labor Code section 2802; (8) Waiting time penalties in violation of Labor Code sections 201, 203, and 208; (9) Violations of Business and Professions Code section 17200; and (10) Violations of Labor Code section 2699, the Labor Code Private Attorney General Act of 2004.

Plaintiff Rosalyn Twomey (“Plaintiff”) moved for summary adjudication of nine separate issues, including Issue #5: Whether Defendants violated Labor Code section 512 by failing to make meal periods available to their employees. The Court denied the motion:

The mere fact that Plaintiffs received penalty pay does not necessarily mean that she missed her meal breaks. Plaintiff’s claim relies heavily on her own testimony, and Defendants proffer sufficient evidence giving rise to a credibility issue. Defendants also proffer an explanation why penalty pay does not necessarily mean Plaintiff missed her breaks. Therefore, there is a triable issue whether Plaintiff Twomey was denied meal breaks.

(Court’s Order, dated February 22, 2021.)

Plaintiff filed a motion for reconsideration of that order on March 8, 2021, relying on the case Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58, which was decided three days after the Court issued its order. The Supreme Court’s decision does not compel a different outcome. Since Plaintiffs filed the motion for summary adjudication, it was their burden to proffer sufficient evidence to establish that they did not receive their meal breaks. They did so by, among other things, arguing that their timesheets reflected penalty pay, suggesting that they did not receive their meal breaks. The Court found that Plaintiffs proffered sufficient evidence, shifting the burden to Defendants to proffer evidence that Plaintiffs did, in fact, receive their meal periods.

Plaintiff argues that because their timesheets reflect penalty pay for missed meal periods, they necessarily are entitled to a judgment in their favor. That is not what the California Supreme Court held in Donohue. The Court held that “time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations at summary judgment.” (Id., p. 74.) The Court made abundantly clear that this is a rebuttal presumption:

Applying the presumption does not mean that time records showing missed, short, or delayed meal periods result in “automatic liability” for the employers. If time records show missed, short, or delayed meal periods with no indication of proper compensation, then a rebuttable presumption arises. Employers can rebut the presumption by presenting evidence that employees were compensated for noncompliant meal periods or that they had in fact been provided compliant meal periods during which they chose to work.

(Id., p. 77.)

Defendants proffer sufficient evidence to rebut that presumption, giving rise to a triable issue. Specifically, Defendants proffer evidence that: (1) Plaintiff was provided with meal breaks every day she worked at Cal Rehab; (2) Plaintiff sometimes clocked out for her meal break but continued to work; (3) When Plaintiff did so, she was admonished; and (4) Plaintiff was required to complete a form for a missed meal break but never did so. (See Defendants’ Brief in Opposition to Plaintiff’s Motion for Reconsideration, p. 10, citations omitted.) This is sufficient to rebut the presumption and give rise to a triable issue whether Plaintiff actually missed her meal breaks and/or voluntarily worked through her meal breaks.

CONCLUSION AND ORDER

Plaintiff seeks summary adjudication on the issue whether she missed her meal breaks by virtue of her timesheets reflecting penalty pay. While that creates a rebuttable presumption in her favor—both on her own motion and her opposition to Defendants’ motions—it does not result in “automatic liability.” (Donohue, supra, 11 Cal.5th at p. 77.) In this case, Defendants proffer sufficient evidence to give rise to a triable issue whether Plaintiff actually missed her meal breaks or voluntarily abdicated her meal breaks. The jury must resolve this issue. Therefore, Plaintiff’s motion for reconsideration is denied.

Rosalyn Twomey v. California Rehabilitation Institute, LLC, et al.

Case No. BC679469

Order re: Mandatory Settlement Conference

Order #3 of 3

The Court orders the parties to participate in a mandatory settlement conference (“MSC”). Per Department One, the MSC shall be conducted by the Honorable ________, Superior Court Judge, who sits in Department ____ of the _____Courthouse. The parties shall meet-and-confer concerning potential dates/times and contact the MSC Judge’s judicial assistant, _________, at ___________, forthwith to schedule the MSC.

The Court stays this case, including all discovery and motions practice, pending the MSC. This time period shall not count against the deadline by which this case must proceed to trial, per Code of Civil Procedure section 583.310. The Court sets a post-MSC status conference and an Order to Show Cause why the stay should not be lifted for _______, 2021. Defendants’ counsel shall provide notice and file proof of such with the Court.

Case Number: BC679469    Hearing Date: March 17, 2021    Dept: 39

Rosalyn Twomey, et al. v. California Rehabilitation Institute, LLC

Case No. BC679469

Court’s Order on Plaintiff Twomey’s Motion for Reconsideration

Order #1 of 2

BACKGROUND

Plaintiffs Rosalyn Twomey and Denise Zelenak filed this wage and hours action on behalf of themselves, other current and former aggrieved employees, and the State of California, per the Labor Code Private Attorney General Act of 2004, against their alleged employers: (1) The California Rehabilitation Institute, LLC (“Cal Rehab”); (2) Select Employment Services, Inc. (“Select Employment”); (3) Select Medical Corporation (“Select Medical”); and (4) CRI ES, Inc. (“CRI”) (collectively, “Defendants”). Plaintiffs also named the Director of Pharmacy, Defendant Alex Jawharjian, as a defendant. The Court previously granted Defendant Alex Jawharian’s motion for summary judgment, finding that Plaintiffs proffered insufficient evidence to establish that he was a “managing agent” for purposes of liability.

Plaintiffs assert the following causes of action against Defendants: (1) Failure to pay minimum wage in violation of Labor Code sections 1182.12, 1197, and 1194; (2) Failure to pay minimum wage liquidated damages in violation of Labor Code section 1194.2; (3) Failure to pay overtime wages in violation of Labor Code section 510; (4) Failure to allow meal periods in violation of Labor Code section 512; (5) Failure to allow rest breaks in violation of Labor Code section 226.7; (6) Failure to provide accurate wage statements in violation of Labor Code section 226; (7) Failure to indemnify in violation of Labor Code section 2802; (8) Waiting time penalties in violation of Labor Code sections 201, 203, and 208; (9) Violations of Business and Professions Code section 17200; and (10) Violations of Labor Code section 2699, the Labor Code Private Attorney General Act of 2004.

Plaintiff Rosalyn Twomey (“Plaintiff”) moved for summary adjudication of nine separate issues, including Issue #5: Whether Defendants violated Labor Code section 512 by failing to make meal periods available to their employees. The Court denied the motion:

The mere fact that Plaintiffs received penalty pay does not necessarily mean that she missed her meal breaks. Plaintiff’s claim relies heavily on her own testimony, and Defendants proffer sufficient evidence giving rise to a credibility issue. Defendants also proffer an explanation why penalty pay does not necessarily mean Plaintiff missed her breaks. Therefore, there is a triable issue whether Plaintiff Twomey was denied meal breaks.

(Court’s Order, dated February 22, 2021.) Plaintiff filed a motion for reconsideration of that order on March 8, 2021.

LEGAL STANDARD

A party may seek reconsideration of a Court’s order under limited circumstances. Code of Civil Procedure section 1008 requires a party seeking reconsideration to “state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown” in the current motion.  (Code Civ. Proc., 1008, subd. (b).) The moving party on a motion for reconsideration “must provide not only new evidence but also a satisfactory explanation for the failure to produce that evidence at an earlier time . . . .” (Mink v. Superior Court (1992) 2 Cal.App.4th 1338, 1342, internal quotations and citations omitted.)

DISCUSSION

Plaintiff relies on Donohue v. AMN Services, LLC (2021) --- P.3d ---, 2021 WL 728871, which was decided three days after the Court issued its order on the parties’ motions for summary adjudication. Plaintiffs rely on the California Supreme Court’s holding that “time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage.” (Id., p. *1.)

The Court reviewed the motion in hopes of resolving the issue at the upcoming hearing on March 17, 2021. However, the Court cannot conclude that the motion necessarily lacks merit. To the contrary, it appears that the Court must reconsider its ruling in light of this holding. Therefore, it would be helpful if the parties addressed in their upcoming briefs whether the time sheets necessarily reflect missed meal periods (e.g., whether there is an alternative explanation, etc.) and whether there is evidence rebutting any such presumption (e.g., whether there is evidence that Plaintiff falsified the time cards, etc.). Of course, the parties are free to address any other issues they believe are relevant to the Court’s decision.

Since Plaintiff seeks reconsideration of a motion for summary adjudication, the Court must consider Defendants’ evidence to determine whether there is a triable issue, i.e., whether any presumption has been rebutted. Therefore, the Court orders the parties to provide clear citations to the evidence in the record. The parties are free to file declarations with their opposition and reply briefs and attach relevant evidence for the Court’s review. Simply, the Court orders the parties to make it easy for the Court to locate and review the relevant evidence in this voluminous record, which consumes 29 separate pages on the Court’s docket.

CONCLUSION AND ORDER

The Court advances the hearing on the motion for reconsideration to April 16, 2021, at 1:30 p.m. The opposition and reply brief shall be due based upon statutory time periods. Defendants’ counsel shall provide notice and file proof of such with the Court.

Rosalyn Twomey, et al. v. California Rehabilitation Institute, LLC

Case No. BC679469

Order to Show Cause re: Scope of PAGA Class Defendants’ Second Amended Motion for Summary Adjudication re: PAGA Claim

Order #2 of 2

BACKGROUND

Plaintiffs Rosalyn Twomey and Denise Zelenak (“Plaintiffs”) filed this wage and hours action on behalf of themselves, other current and former aggrieved employees, and the State of California, per the Labor Code Private Attorney General Act of 2004 (“PAGA”), against their alleged employers: (1) The California Rehabilitation Institute, LLC (“Cal Rehab”); (2) Select Employment Services, Inc. (“Select Employment”); (3) Select Medical Corporation (“Select Medical”); and (4) CRI ES, Inc. (“CRI”) (collectively, “Defendants”). Among other claims, Plaintiffs asserts violations of Labor Code section 2699, the Labor Code Private Attorney General Act of 2004 (“PAGA”) as the tenth cause of action.

On February 11, 2021, following a hearing, the Court granted Defendant Alex Jawharjian’s motion for summary judgment, finding that Plaintiffs proffered insufficient evidence to establish that he was a “managing agent” for purposes of liability. The Court held a hearing on the parties’ remaining motions for summary adjudication on Friday, February 19, 2021, following which the Court took the motions under submission. On Monday, February 22, 2021, the Court issued orders as follows: (1) The Court granted summary adjudication with respect to Select Employment and denied summary adjudication with respect to Select Medical; (2) The Court denied Plaintiffs’ motion for summary adjudication; (3) The Court granted Defendants’ motion for summary adjudication of the first, second, and sixth causes of action; (4) The Court granted Defendants’ motion for summary adjudication of the fifth cause of action with respect to Defendant Zelenak but denied summary adjudication of the fifth cause of action with respect to Plaintiff Twomey; and (5) The Court denied Defendants’ motion for summary adjudication with respect to the remaining causes of action except the PAGA claim.

The Court did not address Defendant’s motion for summary adjudication with respect to the PAGA claim in its orders of February 22, 2021, because it lacked sufficient information to do so. Specifically, in order to resolve Defendants’ arguments, the Court first must define the scope of the PAGA class for purposes of this case. The Court (Feffer, J.) issued an order on January 8, 2020, suggesting that the group of similarly aggrieved employees for purposes of Plaintiffs’ PAGA claims is limited to “all non-exempt employees that are or were part of Defendants’ Pharmacy Department during the relevant time period,” i.e., pharmacy technicians. Defendants agree with this interpretation, and Plaintiffs dispute this interpretation. Therefore, the Court issued an Order to Show Cause why the Court should not limit the PAGA class to “all non-exempt employees that are or were part of Defendants’ Pharmacy Department during the relevant time period.” The Court afforded the parties an opportunity to brief the issue and held a hearing on this issue. Based upon the discovery limitations in this case, for purposes of deciding the motion for summary adjudication, the Court defines the class of aggrieved employees to all current or former non-exempt pharmacy technicians in the Pharmacy Department of the California Rehabilitation Institute during the relevant time period.

LEGAL STANDARD

In September 2003, the Legislature enacted the Labor Code Private Attorneys General Act of 2004. (Lab. Code § 2698 et seq.) The act permits a civil action “by an aggreieved employee on behalf of himself or herself and other current or former employees” to recover civil penalties for violations of other provisions of the Labor Code. (Lab. Code § 2699(a).) It defines an “aggrieved employee” as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” (Lab. Code § 2699(c).)

DISCUSSION

In interpreting this statute, the case law generally refers to Plaintiffs suing on behalf of “similarly situated aggrieved employees.” (See, e.g., Provost v. YourMechanic, Inc. (2020) 55 Cal.App.5th 982, 997; Williams v. Superior Court (2015) 237 Cal.App. 642, 465.) This begs the question: Who are “aggrieved employees” for purposes of this action? Challenges and ambiguity arise whenever a new judge assumes responsibility for a case, especially one that is so old. Nevertheless, this Court will not accept invitations from the parties to revisit decisions made by its predecessor except as permissible under Code of Civil Procedure section 1008.

On August 15, 2019, Judge Feffer issued an order concerning Plaintiffs’ motion to compel. Unfortunately, there was no court reporter present, and the minute order was prepared by a judicial assistant trainee. (Declaration of Ndubisi A. Ezeolu, Exh. #4 (Transcript of Hearing of January 8, 2020), p. 22-24.) Judge Feffer ruled on August 15, 2019, that discovery was limited to “pharmacy technicians.” (Id., p. 23.) Judge Feffer considered the dictates of Williams v. Superior Court (2017) 3 Cal.5th 531, which holds that the scope of discovery in a PAGA action is determined by the allegations in the complaint, and not merely the facts an theories of the PAGA notice. (Id., p. 26.) However, the minute order did not reflect Judge Feffer’s ruling. (Ibid.)

The next day, Defendants’ counsel sent a draft Belaire-West notice to Plaintiff’s counsel stating: “You are receiving this notice because Defendants’ records indicate that you are a current or former non-exempt Pharmacy Technician in the Pharmacy Department of California Rehabilitation Institute.” (Declaration of Ndubisi A. Ezeolu, ¶ 14 & Exh. #8.) Plaintiff followed-up on August 30, 2019, and on September 5, 2019, Plaintiffs approved the Belaire-West notice without any objection to the scope limitation “pharmacy technicians in the Pharmacy Department of California Rehabilitation Institute.” (Id., ¶ 16 & Exh. #10.)

The issue would appear to have been settled. Inexplicably, after Plaintiffs’ counsel agreed to the limitation of “pharmacy technicians” in the Belaire-West notices, Plaintiffs’ counsel filed a writ with the District Court of Appeal for the Second District, arguing that Judge Feffer had not, in fact, properly considered Williams v. Superior Court (2017) 3 Cal.5th 531. Plaintiffs’ counsel filed this writ, even though he had been present at the hearing on August 15, 2019. Because there was no reference in the minute order, Division Four issued an alternative writ of mandate.

Judge Feffer conducted a new hearing on January 8, 2020, at which a court reporter was present. Judge Feffer stated:

I don’t have a detailed memory of what happened on August 15. I have notes. So if there’s a notice of ruling weeks later, again, the Rules of Professional Conduct require lawyers to be honest and candid with the Court and not to mislead the Court. And I’m not saying the Court was misled. And further minute orders are to be accurate. Again, I could see right there the minute order is not accurate. So I don’t know. . . . But it’s curious that somehow the Court of Appeal was led to believe that this Court didn’t consider Williams. . . . This Court was ordered by the Court of Appeal to do, among other things, consider Williams. This Court already considered Williams.

(Declaration of Ndubisi A. Ezeolu, Exh. #4, pp. 27-28.) Judge Feffer again ruled on the motions and ruled that discovery is limited to “all nonexempt employees that are or were part of Defendants’ Pharmacy Department during the relevant time period with respect to the Labor Code violations set forth in the First Amended Complaint.” (Id., p. 28.)

This limitation appears to be correct. The first amended complaint, which is the operative pleading in this case, defines this case in terms of non-exempt employees who worked in the Pharmacy Department of the hospital. The first amended complaint alleges that the Pharmacy Department was “grossly understaffed,” which gave rise to the Labor Code violations in this case. The first amended complaint, and Plaintiffs’ theory of the case, is that the Pharmacy Department’s manager, Alex Jawaharkian, was responsible for the violations, as were other pharmacists and pharmacy technicians, who are characterized as managers. Similarly, the Belaire-West notices were sent to pharmacy technicians, and Plaintiffs’ counsel agreed to that limitation. In short, this entire case to date has been about pharmacy technicians. Further, the PAGA notice to the Labor and Workforce Development Agency focus on the Pharmacy Department. (Plaintiffs’ Exhibits re: Motions for Summary Judgment, Exh. #34.) Now, inexplicably, Plaintiffs are attempting to make this case about all non-exempt employees at the entire hospital. The only thing that has changed in this case is the judge, following Judge Feffer’s retirement. This is not a basis to revisit this issue.

Plaintiffs argue that Judge Feffer merely limited discovery to non-exempt employees at the Pharmacy Department, i.e., pharmacy technicians and that she did not intend to limit the scope of the PAGA class. Plaintiff’s argument makes no sense. If Judge Feffer limited discovery to pharmacy technicians but intended to allow Plaintiffs to introduce evidence concerning all non-exempt employees in all other departments at the hospital, how would Plaintiffs be able to develop the evidence given the discovery limitation? The limitation on discovery necessarily shapes the PAGA class because the limitation reflects Judge Feffer’s view of what is likely to be relevant for purposes of trial (which is why Plaintiffs have fought so hard before the District Court of Appeal and this Court to overturn Judge Feffer’s orders). Judge Feffer’s limitation also makes sense because, as discussed, Plaintiffs’ allegations are specific to the Pharmacy Department. Other departments have different staffing levels, different duties, and different supervisors.

The only ambiguity concerns Judge Feffer’s conflicting references to “non-exempt employees at the Pharmacy Department” and “pharmacy technicians.” It appears that there may have been non-exempt pharmacists, meaning that these two terms—used interchangeably by Judge Feffer—are distinct. It is clear to the Court that Judge Feffer intended to limit discovery, and therefore the PAGA class, to pharmacy technicians. Again, the first amended complaint and the PAGA notice focus on pharmacy technicians, especially since Plaintiffs’ theory of the case is that “pharmacists” were the supervisors who violated the rights of the pharmacy technicians. The transcript of the hearing on January 8, 2020, makes clear that Judge Feffer intended to limit discovery to pharmacy technicians. Therefore, the Court defines the PAGA class as all current or former non-exempt pharmacy technicians in the Pharmacy Department of the California Rehabilitation Institute during the relevant time period for purposes of deciding Defendants’ motion for summary adjudication.

Having resolved this issue, the Court now turns to Defendants’ motion for summary adjudication of the PAGA claim. The Court sought additional briefing because Defendants proffered declarations from six other pharmacy technicians repudiating Plaintiffs’ allegations. Given how the PAGA class was defined—pharmacy technicians—it was unclear to the Court whether there were in fact any other similarly situated aggrieved employees. In other words, if there were only eight pharmacy technicians during the relevant time period, and Defendant proffered declarations from the other six pharmacy technicians stating that there were no Labor Code violations, a grant of summary adjudication of the PAGA claim might have been appropraite, as there would appear to be no other aggrieved employees.

However, the record does not support that analysis. It appears that there were at least 15 pharmacy technicians during the relevant time period. (Declaration of Ndubisi A. Ezeolu, Exh. #4, p. 14.) Plaintiffs proffer employment records from some of these pharmacy technicians showing “penalty pay,” which Plaintiffs argue is evidence that they did not receive appropriate meal periods and rest breaks. (Declaration of J.B. Twomey, Exhs. #2-27.) Therefore, the Court cannot conclude that the declarations proffered demonstrate as a matter of law that there are no other similarly situated aggrieved employees.

Defendants argue that Plaintiffs’ claims necessarily are individualized claims. The Court understands Defendants’ arguments that they are only required to provide breaks and not to ensure that employees take the breaks; the timekeeping system may impose a penalty even if employees received their breaks; and Plaintiffs were committing time-card fraud and manipulating the system to receive extra pay. If the Court could conclude there were no disputed issues on these points, Defendants would have a stronger argument. However, these are issues for the jury.

The Court questions exactly how many pharmacy technicians will be at issue during the trial, since the universe of “similarly situated aggrieved employees” is limited, and six have already stated that there were no Labor Code violations. However, the Court cannot interpret the Labor Code Private Attorney General Act of 2004 as excluding PAGA causes of action under such circumstances, because such an interpretation would mean that PAGA does not apply to small businesses with limited numbers of employees. That was not the intent of the Legislature in enacting the statute. Therefore, notwithstanding that Defendants have developed persuasive evidence that many pharmacy technicians did not suffer the same alleged violations as Plaintiffs, this is a damages issue to be resolved by the jury.

CONCLUSION AND ORDER

The Court adopts Judge Feffer’s limitations on discovery, meaning that discovery is limited to all current or former non-exempt pharmacy technicians in the Pharmacy Department of the California Rehabilitation Institute during the relevant time period. The Court adopts this definition for purposes of deciding Defendants’ motion for summary adjudication. The Court denies Defendants’ motion for summary adjudication of Issue #8, which would resolve the PAGA claim. Defendants’ counsel shall provide notice and file proof of such with the Court.

Case Number: BC679469    Hearing Date: February 19, 2021    Dept: 39

Rosalyn Twomey v. California Rehabilitation Institute, LLC

Case No. BC679469

Defendants’ Second Amended Motion for Summary Judgment

Issue #10 – Plaintiffs’ Claims against Select Medical and Select Employment

ORDER #1 of 3

INTRODUCTION

Plaintiffs Rosalyn Twomey and Denise Zelenak filed this wage and hours action on behalf of themselves, other current and former aggrieved employees, and the State of California, per the Labor Code Private Attorney General Act of 2004, against their alleged employers: (1) The California Rehabilitation Institute, LLC (“Cal Rehab”); (2) Select Employment Services, Inc. (“Select Employment”); (3) Select Medical Corporation (“Select Medical”); and (4) CRI ES, Inc. (“CRI”) (collectively, “Defendants”). Plaintiffs also named the Director of Pharmacy, Defendant Alex Jawharjian, as a defendant. The Court previously granted Defendant Alex Jawharian’s motion for summary judgment, finding that Plaintiffs proffered insufficient evidence to establish that he was a “managing agent” for purposes of liability.

Plaintiffs assert the following causes of action against Defendants: (1) Failure to pay minimum wage in violation of Labor Code sections 1182.12, 1197, and 1194; (2) Failure to pay minimum wage liquidated damages in violation of Labor Code section 1194.2; (3) Failure to pay overtime wages in violation of Labor Code section 510; (4) Failure to allow meal periods in violation of Labor Code section 512; (5) Failure to allow rest breaks in violation of Labor Code section 226.7; (6) Failure to provide accurate wage statements in violation of Labor Code section 226; (7) Failure to indemnity in violation of Labor Code section 2802; (8) Waiting time penalties in violation of Labor Code sections 201, 203, and 208; (9) Violations of Business and Professions Code section 17200; and (10) Violations of Labor Code section 2699, the Labor Code Private Attorney General Act of 2004. Now, the Court decides a series of motions relating to claims asserted by Plaintiff Rosalyn Twomey (“Plaintiff”). Defendants move for summary adjudication on the issue whether Select Employment and Select Medical were Plaintiffs’ employers. Plaintiffs oppose the motion, which is granted in part and denied in part.

FACTUAL BACKGROUND

Plaintiffs worked in the Pharmacy Department of Cal Rehab. Cal Rehab owns and operates a full service rehabilitation hospital in Los Angeles, which provides inpatient care to patients recovering from strokes, spinal cord injuries, brain injuries, orthopedic injuries, neuromuscular illness, cancer, and other medical conditions. (Plaintiffs’ Response to Defendants’ Separate Statement of Material Facts, ¶¶ 1-2.) Cal Rehab is a Delaware limited liability company whose membership consists of Cedars Sinai Medical Center, UCLA Health Care, and Select Hospital Investors, Inc. (“Select Hospital”). (Id., ¶ 2.) Cal Rehab is governed through a Joint Venture Board consisting of representatives of its members. (Id., ¶ 3.) Cal Rehab also is governed through a Governing Board, consisting of Cal Rehab executive and representatives of joint ventures. (Ibid.)

Neither Select Medical nor Select Employment is a member of the Joint Venture Board, though Select Medical’s subsidiary, Select Hospital, is a member. (Id., ¶¶ 2, 4.) Select Medical owns two wholly-owned subsidiaries of relevance to this dispute, CRI and Select Hospital Investors, Inc. (Declaration of Kenneth Rosenberg, Exh. JJ; Plaintiffs’ Response to Defendants’ Separate Statement of Undisputed Material Facts, ¶ 2.) Select Medical is a Delaware corporation headquartered in Mechanicsburg, Pennsylvania. (Plaintiffs’ Response to Defendants’ Separate Statement of Undisputed Material Facts, ¶ 8.) Select Employment is a Delaware corporation that is a wholly-owned subsidiary of Select Medical, which provides outside payroll and payroll tax services to various companies, including Cal Rehab. (Id., ¶ 9.) Plaintiffs do not dispute that Select Employment does not supervise any of Cal-Rehab’s employees or day-to-day operations or management of Cal Rehab. (Id., ¶ 10.) However, Plaintiffs argue that Select Medical “helped manage and control the day-to-day operation of Rosalyn [sic] all Defendants’ current and former California employees – it was Select Medical Corporation’s policies and procedures they were/are operating under.” (Ibid.) Six pharmacy technicians and four pharmacists at Cal Rehab stated that their employer was Cal Rehab. (Id., ¶¶ 14-15.)

Defendants proffer a declaration from Kenneth Rosenberg, the Director of Human Resources at Cal Rehab, who states that Plaintiffs were employed by CRI and leased to Cal Rehab. (Declaration of Kenneth Rosenberg, ¶ 6.) Plaintiffs argue that “CRI ES, Inc. is a subsidiary of Select Medical Corporation.” (Plaintiffs’ Response to Defendants’ Separate Statement of Undisputed Material Facts, ¶ 2.)

LEGAL STANDARD

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law[.]  There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)  “[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.”  (Ibid.)  In ruling on the motion, “the court may not weigh the plaintiff's evidence or inferences against the defendant[’s] as though it were sitting as the trier of fact.”  (Id. at 856.)  However, the court “must . . . determine what any evidence or inference could show or imply to a reasonable trier of fact.”  (Ibid., emphasis original.)  

DISCUSSION

Plaintiffs argue that Select Employment and Select Medical were their employers, i.e., joint employers. In order to determine whether either entity as an employer, the Court must consider whether either exercised control over the wages, hours, or working conditions, or allowed Plaintiffs to suffer work or permitted them to work, or engaged them, creating a common law employment relationship. (Futrell v. Payday California, Inc. (2010) 190 Cal.App.4th 1419, 1429, citing Martinez v. Combs (2010) 49 Cal.4th 35, 64.)

A. Select Employment

Defendants proffer sufficient evidence to establish that Select Employment was not Plaintiffs’ employer. It is undisputed that Select Employment was not a member of the Joint Venture Board or the Governing Board. It is undisputed that Select Employment provides payroll and tax services and does not supervise any of Cal Rehab’s employees or control the day-to-day operations or management of Cal Rehab. Plaintiff Rosalyn Twomey admitted that Select Employment did not hire or fire her. (Plaintiff Rosalyn Twomey’s Response to Defendants’ Separate Statement of Undisputed Material Facts, ¶¶ 113, 117.) Plaintiff Denise Zelenak admitted the same. (Plaintiff Denise Zelenak’s Response to Defendants’ Separate Statement of Undisputed Material Facts, ¶¶ 120, 121.) Finally, Defendants rely on the declaration of Andrea Gunther, who states that Select Employment merely provides payroll services. (Declaration of Andrea Gunther, ¶ 3.) This evidence is sufficient to satisfy Defendants’ burden, shifting the burden to Plaintiffs to proffer sufficient evidence to create a triable issue that Select Employment was their employer. Plaintiffs fail to do so. Their opposition does not address this issue except for a single reference to the fact that Select Employment is listed as the employer on the payroll documents. (See Defendants’ Memorandum of Points and Authorities in Opposition to Second Amended Motion for Summary Judgment, pp. 24-28.) The mere fact that Select Employment’s name is reflected on Plaintiffs’ payroll documents is not sufficient to prove that they were employees of Select Employment. (Futrell, 190 Cal.App.4th at 1429.) Therefore, the Court grants Defendants’ motion for summary judgment as it pertains to Select Employment.

B. Select Medical

Defendants rely on the following undisputed facts to demonstrate that Select Medical was not Plaintiffs’ employer: (1) Select Medical was not a member of the Joint Venture or Governing Board of Cal Rehab; (2) Six other pharmacy technicians and four pharmacists stated that they are employed by Cal Rehab; and (3) The Joint Venture Board hired Kessler to provide off-site operational, clinical, financial, legal, IT, and other services necessary to run the hospital. Defendants also proffer evidence that Select Medical does not exercise control, supervision, or management of the employees at Cal Rehab. (Declaration of Andrea Gunther, ¶ 3; Declaration of Kenneth Rosenberg, ¶ 5.) Defendants rely on a declaration of Kenneth Rosenberg, the Director of Human Resources at Cal Rehab, who states that Plaintiffs were employed by CRI and leased to Cal Rehab. (Declaration of Kenneth Rosenberg, ¶ 6.) This evidence is sufficient to satisfy Defendants’ burden of demonstrating that Select Medical was not Plaintiffs’ employer, shifting the burden to Plaintiffs to proffer sufficient evidence to give rise to a triable issue.

Plaintiffs focus on the relationship between Cal Rehab, CRI, and Select Medical. It is undisputed that Select Medical owns two wholly-owned subsidiaries, CRI and Select Hospital, and that Select Hospital is one of three entities that sits on Cal Rehab’s Joint Venture Board. Plaintiffs suggest that they are employees of Select Medical because they worked for one of Select Medical’s wholly-owned subsidiaries, CRI. Standing alone, this relationship does not transform Select Medical into an employer for purposes of the Labor Code. “Corporate entities are presumed to have separate existences, and the corporate form will be disregarded only when the ends of justice require this result.” (Laird v. Capital Cities/ABC, Inc. (1998) 68 Cal.App.4th 727, 737, overruled on other grounds by Reid v. Google, Inc. (1998) 68 Cal.App.4th 727.) “An employee who seeks to hold a parent corporation liable for the acts or omissions of its subsidiary on the theory that the two corporate entities constitute a single employer has a heavy burden to meet under both California and federal law.” (Ibid.) Common ownership or control is never enough to establish parent liability. (Id., p.738.) Rather, Plaintiffs must establish that Select Medical controlled the working conditions at CRI. “Multiple entities may be employers where they control different aspects of the employment relationship.” (Castaneda v. The Ensign Group (2014) 229 Cal.App.4th 1015, 1020.) However, control over how services are performed is a “principal” test showing an employment relationship. (Ibid.)

Plaintiffs rely on the Human Resources handbook that was provided to Cal Rehab employees. (Plaintiffs’ Exhibits, Exh. #1.) This handbook is fatal to Defendants’ motion because it governs employees at Cal Rehab but suggests that these employees work for Select Medical. For example, the handbook states that “Select Medical & CRI is an equal opportunity employer . . . .” (Id., p. PA00011.) The handbook also expressly refers to Cal Rehab employees as working for Select Medical. The handbook states that “Select Medical encourages employees to speak directly to their supervisor should they have a question, suggestion, concern, or complaint.” (Id., p. PA00009.) This alone precludes summary adjudication for Select Medical.

The handbook applies Select Medical’s policies to Cal Rehab employees. For example, the handbook states that that Select Medical’s social media policy applies to Cal Rehab employees, e.g., “[e]mployees are prohibited from using company computers or personal devices . . . to participate in or view social networking sites for purposes other than official Select business.” (Id., p. PA00043.) The handbook states that “CRI and Select Medical have a Zero Tolerance for disruptive and intimidating behaviors at work.” (Id., p. PA00044.)

The handbook makes clear that Select Medical provides support services for Cal Rehab employees. For example, the handbook states that computer training would be provided by “Kevin Spaan,” who was a “Training and Education Specialist” in the “Compliance Department” of “Select Medical Corporation.” (Id., p. PA00050.) Mr. Spann has an email address with a designation “SelectMedicalCorp.com.” (Ibid.)

The handbook states that Select Medical provides certain benefits to Cal Rehab employees. The handbook states that certain benefits, like life insurance and retirement plans, are provided by Select Medical. (Id., p. PA00061.) The handbook states that Select Medical controls Cal Rehab employees’ paid time-off. (Id., p. PA00063.) Specifically, Select Medical determines whether employees receive paid vacation, holidays, and “extended illness days.” (Ibid.)

Plaintiffs rely on Cal Rehab’s “Meal and Rest Breaks Policy.” (Plaintiffs’ Exhibits, Exh. #43.) The policy comes from Select Medical, evidenced by the attachments, which all bear the name “Select Medical” and the company’s logo. Indeed, Cal Rehab employees—like Plaintiffs—used Select Medical’s “Meal Period Waiver” and “Time Clock Adjustment” forms. (Id., Exhs. #43 & #44.) In other words, there is a triable issue whether the policies at issue in this litigation were controlled by Select Medical. Plaintiffs also rely on evidence that Cal Rehab used Select Medical’s “expense reports,” and that Select Medical reimbursed expenses through an employee portal. (Id., Exh. #45.)

Finally, there is evidence that Select Medical controlled Plaintiffs’ duties and performance. Plaintiffs rely on the job description of a “Pharmacy Technician.” (Id., Exh. #46.) This document outlines the “standards of performance” and the “job-specific duties/competencies.” (Ibid.) This document is titled “Select Medical-Rehab Division.” (Ibid.) Similarly, Plaintiffs rely on “coaching/counseling” and “disciplinary action” forms that bear the name “Select Medical” and the company’s logo.

In sum, Plaintiffs proffer sufficient evidence to give rise to a triable issue whether Select Medical exercised sufficient control over the working conditions of CRI’s employees to be deemed the employer for purposes of this litigation. The Cal Rehab human resources manual makes no distinction between Select Medical and CRI, and refers to Cal Rehab employees as working for Select Medical. Select Medical defined the job duties and requirements of the pharmacy technicians at Cal Rehab. Select Medical provided training to Cal Rehab employees, like the computer training. Select Medical set the policies at Cal Rehab concerning meal and rest break periods and required use of Select Medical’s forms. Select Medical set the policies concerning social media usage and workplace harassment at Cal Rehab. Select Medical sets the policy concerning paid time-off. Select Medical provided certain benefits to Cal Rehab employees and reimbursed their expenses. All of this evidence is sufficient to demonstrate that Select Medical controlled the job functions of those employed at Cal Rehab.

Defendants do not address these issues sufficiently in their reply brief. Defendants merely argue that:

Cal Rehab’s use of Select Medical’s preexisting forms does not make Plaintiff an employee of Select Medical, nor does Cal Rehab’s or Select Medical’s shorthand references to their affiliation in marketing materials obviate their distinct existences. Select Medical is a publicly traded company, with many subsidiaries and affiliated companies that operate independently from it.

(Defendants’ Reply Brief, p.10:14-18.) If this simply was a matter of CRI “recycling” its parent company’s forms, Defendants might have a more persuasive argument. But the evidence in this case suggests that CRI goes beyond simply using forms from its parent company. The materials in this case suggest that Select Medical sets the policies, controls the job duties and requirements, and provides benefits with respect to employees of Cal Rehab. In that respect, this case is similar enough to Castaneda v. The Ensign Group (2014) 229 Cal.App.4th 1015 to preclude summary adjudication. This is an issue for the trier of fact to resolve. The Court agrees with Defendants that corporate formalities must be observed, and a parent employee is not necessarily a defendant for an employment violation at a wholly-owned subsidiary. In this case, however, Select Medical has so badly muddled corporate formalities as to preclude summary adjudication.

CONCLUSION AND ORDER

The Court grants in part and denies in part Defendants’ motion for summary adjudication with respect to Issue #10, whether Select Employment and Select Medical were employers for purposes of this litigation. The Court grants summary judgment to Select Employment. The Court denies summary judgment with respect to Select Medical. Defendants’ counsel shall provide notice and file proof of such with the Court.

Rosalyn Twomey v. California Rehabilitation Institute, LLC

Case No. BC679469

Defendants’ Second Amended Motion for Summary Judgment

All Issues except Issue #10

Order #2 of 3

INTRODUCTION

Plaintiffs Rosalyn Twomey and Denise Zelenak filed this wage and hours action on behalf of themselves, other current and former aggrieved employees, and the State of California, per the Labor Code Private Attorney General Act of 2004, against their alleged employers: (1) The California Rehabilitation Institute, LLC (“Cal Rehab”); (2) Select Employment Services, Inc. (“Select Employment”); (3) Select Medical Corporation (“Select Medical”); and (4) CRI ES, Inc. (“CRI”) (collectively, “Defendants”). Plaintiffs also named the Director of Pharmacy, Defendant Alex Jawharjian, as a defendant. The Court previously granted Defendant Alex Jawharian’s motion for summary judgment, finding that Plaintiffs proffered insufficient evidence to establish that he was a “managing agent” for purposes of liability.

Plaintiffs assert the following causes of action against Defendants: (1) Failure to pay minimum wage in violation of Labor Code sections 1182.12, 1197, and 1194; (2) Failure to pay minimum wage liquidated damages in violation of Labor Code section 1194.2; (3) Failure to pay overtime wages in violation of Labor Code section 510; (4) Failure to allow meal periods in violation of Labor Code section 512; (5) Failure to allow rest breaks in violation of Labor Code section 226.7; (6) Failure to provide accurate wage statements in violation of Labor Code section 226; (7) Failure to indemnify in violation of Labor Code section 2802; (8) Waiting time penalties in violation of Labor Code sections 201, 203, and 208; (9) Violations of Business and Professions Code section 17200; and (10) Violations of Labor Code section 2699, the Labor Code Private Attorney General Act of 2004. Defendants move for summary adjudication of a series of issues that would resolve the causes of action in the first amended complaint with respect to Plaintiff Rosalyn Twomey (“Plaintiff Twomey”) and Plaintiff Denise Zelenak (“Plaintiff Zekenak”) (collectively, “Plaintiffs”). The Court addressed the issue of whether Select Employment and Select Medical were Plaintiff’s employers in a separate order. The Court now addresses the remaining issues raised by Defendants. Defendants’ motion is granted in part and denied in part. Specifically, the Court grants summary adjudication of the first, second, and sixth causes of action. The Court grants Defendants’ motion with respect to Plaintiff Zelenak’s fifth cause of action and denies the motion with respect to Plaintiff Twomey’s fifth cause of action. The Court denies the motion is all other respects.

FACTUAL BACKGROUND

Plaintiffs worked in the Pharmacy Department of Cal Rehab. Cal Rehab owns and operates a full service rehabilitation hospital in Los Angeles, which provides inpatient care to patients recovering from strokes, spinal cord injuries, brain injuries, orthopedic injuries, neuromuscular illness, cancer, and other medical conditions. (Plaintiffs’ Response to Defendants’ Separate Statement of Material Facts, ¶¶ 1-2.) Cal Rehab is a Delaware limited liability company whose membership consists of Cedars Sinai Medical Center, UCLA Health Care, and Select Hospital Investors, Inc. (“Select Hospital”). (Id., ¶ 2.) Cal Rehab is governed through a Joint Venture Board consisting of representatives of its members. (Id., ¶ 3.) Cal Rehab also is governed through a Governing Board, consisting of Cal Rehab executive and representatives of joint ventures. (Ibid.)

Neither Select Medical nor Select Employment is a member of the Joint Venture Board, though Select Medical’s subsidiary, Select Hospital, is a member. (Id., ¶¶ 2, 4.) Select Medical owns two wholly-owned subsidiaries of relevance to this dispute, CRI and Select Hospital Investors, Inc. (Declaration of Kenneth Rosenberg, Exh. JJ; Plaintiffs’ Response to Defendants’ Separate Statement of Undisputed Material Facts, ¶ 2.) Select Medical is a Delaware corporation headquartered in Mechanicsburg, Pennsylvania. (Plaintiffs’ Response to Defendants’ Separate Statement of Undisputed Material Facts, ¶ 8.) Select Employment is a Delaware corporation that is a wholly-owned subsidiary of Select Medical, which provides outside payroll and payroll tax services to various companies, including Cal Rehab. (Id., ¶ 9.) Plaintiffs do not dispute that Select Employment does not supervise any of Cal-Rehab’s employees or day-to-day operations or management of Cal Rehab. (Id., ¶ 10.) However, Plaintiffs argue that Select Medical “helped manage and control the day-to-day operation of Rosalyn [sic] all Defendants’ current and former California employees – it was Select Medical Corporation’s policies and procedures they were/are operating under.” (Ibid.) Six pharmacy technicians and four pharmacists at Cal Rehab stated that their employer was Cal Rehab. (Id., ¶¶ 14-15.)

Defendants proffer a declaration from Kenneth Rosenberg, the Director of Human Resources at Cal Rehab, who states that Plaintiffs were employed by CRI and leased to Cal Rehab. (Declaration of Kenneth Rosenberg, ¶ 6.) Plaintiffs argue that “CRI ES, Inc. is a subsidiary of Select Medical Corporation.” (Plaintiffs’ Response to Defendants’ Separate Statement of Undisputed Material Facts, ¶ 2.)

LEGAL STANDARD

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law[.]  There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)  “[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.”  (Ibid.)  In ruling on the motion, “the court may not weigh the plaintiff's evidence or inferences against the defendant[’s] as though it were sitting as the trier of fact.”  (Id. at 856.)  However, the court “must . . . determine what any evidence or inference could show or imply to a reasonable trier of fact.”  (Ibid., emphasis original.)  

DISCUSSION

A. Issue #1 – Meal Periods (Fourth Claim)

Defendants first move for summary adjudication, arguing that Plaintiffs received their meal periods. An employer satisfies its objection to provide breaks “if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.” (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1040.) However, “the employer is not obligated to police . . . breaks and ensure no work thereafter is performed.” (Ibid.; see also Bradley v. Networkers International, LLC (2012) 211 Cal.App.4th 1129, 1149.) In other words, the employer has an obligation to provide breaks but it is up to the employee to take them.

Assuming Defendants satisfied their burden on this issue, Plaintiffs proffer sufficient evidence to give rise to a triable issue. As an initial matter, there appears to be no dispute that Defendants required Plaintiffs to miss their meal on occasion. Defendants’ policy states:

There may be occasions when a meal break is not permitted or interrupted due to disruption in staffing, patient care needs, or operational needs. For non-exempt employees, if any portion of the meal break is interrupted by work responsibilities, the entire 30 minutes of the meal break will be paid, or the employee will be given another uninterrupted 30 minutes for a meal break.

(Defendants’ Exhibits, Exh. I, p. 8.) Defendants’ Person Most Qualified, Andrea Gunther, states that both Plaintiffs missed required meal breaks and received premium pay, which is supported by the employment records proffered by both parties. (Declaration of Andrea Gunther, ¶¶ 10-11.) The policy is phrased as requiring payment “or” another meal break, so the provision of payment suggests that no make-up meal break was provided. Defendants proffer no evidence that Plaintiffs received make-up meal breaks.

Standing alone, this evidence precludes summary adjudication. Defendants seem to take the position that they were entitled to deny Plaintiffs their meal breaks if they paid for the missed time. The California Supreme Court recently make clear: “[E]mployers can pay an additional hour of wages as a remedy for failing to provide meal and rest breaks. (§ 226.7, subd. (c).) But we have held that payment of this statutory remedy does not excuse a section 226.7 violation.” Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 84 (citing Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1256.) Put another way, “section 226.7 does not give employers a lawful choice between providing either meal and rest breaks or an additional hour of pay.” (Kirby, supra, 53 Cal.4th at 1256.)

Defendants argue that Plaintiffs were provided and received their meal breaks, but they were not required to ensure that Plaintiffs took them. That argument fails on multiple fronts. First, Defendants ignore their own policy, as well as evidence that Defendants paid Plaintiffs for missed meal breaks, suggesting that Defendants required Plaintiffs to miss their breaks. Second, Defendants ignore evidence that their supervisors prevented and discouraged Plaintiffs from taking their breaks. For example, Plaintiff Twomey testified that her supervisor discouraged her from taking meal breaks.

Q: [D]id anyone at California Rehab ever tell you that you should clock out for lunch but still remain on duty?

A: Yes.

Q: Who told you that?

A: The pharmacist at night that I worked with, Lynh, he would say, “You know, so we don’t get in trouble, make sure you clock in and out.”

. . .

Q: Did you tell him that was against protocol when he suggested that you do that?

A: No.

Q: You just did it?

A: He was my supervisor at the time, so I just did what he said, because he did it too.

Q: Who told you that the pharmacists were your supervisors?

A: Alex [Jawaharjian].

Q: When did Alex tell you that?

A: During several of our meetings, he said that if he’s not in the pharmacy, which is quite often, he’s usually either in his office or his meetings, he said if he’s not there, then the pharmacists are your supervisors.

(Plaintiff’s Exhibits, Exh. #77, pp. 148-149.) Plaintiff Twomey testified that Defendants’ policies prevented her from taking her breaks. Plaintiff Twomey testified that she was required to finish all of her work during her shift, but she could not do so if she took breaks and would get “written up” for failing to complete her work. (Id., pp. 193-201.) She testified that Alex Jawaharjian told her that she was not allowed to work overtime unless it was an “emergency.” (Id., pp. 201-202.) Plaintiff Twomey testified that she generally missed her meal breaks when she worked the night shift because the pharmacy could not remain unattended. (Id., pp. 140, 201.) Finally, Plaintiff Twomey testified that she reported her concerns to her supervisors to no avail. (Id., pp. 28-29.)

Defendants appear to analogize Plaintiffs to emergency workers, like first responders or emergency room staff, who may be required to interrupt or miss breaks to address immediate situations. The record does not support this comparison. Plaintiffs were pharmacy technicians, and Plaintiffs proffer evidence that their missed meal periods and rest breaks stemmed from staffing issues rather than emergency situations. In sum, there is a triable issue whether Plaintiffs received statutory meal breaks. Therefore, Defendants’ motion is denied with respect to Plaintiffs’ fourth cause of action.

B. Issue #1 – Rest Breaks (Fifth Claim)

Defendants also move for summary adjudication on whether Plaintiffs received their statutory rest breaks. For the reasons discussed above, the motion is denied with respect to Plaintiff Twomey. However, Plaintiff Zelenak presents insufficient evidence that any supervisor prevented her or discouraged her from taking her rest breaks. Plaintiff Zelenak referenced one pharmacist, Sherwit Harieg, who she interpreted as discouraging her from taking breaks. However, Plaintiff Zelenak identifies no statement or action to that effect. Plaintiff Zelenak’s fifth cause of action is based entirely on assumption and speculation, which is insufficient to give rise to a triable issue. Therefore, the motion is granted with respect to Plaintiff Zelenak’s fifth cause of action.

C. Issue #2 – Meal Periods and Rest Breaks (Remaining Claims)

For the reasons discussed above, Defendants’ motion for summary adjudication is denied with respect to Issue #2. The Court denies summary adjudication of the first, second, third, sixth, seventh, eighth, and ninth causes of action on this basis.

D. Issue #3 – Failure to Pay Minimum Wage (First and Second Claims)

There is no dispute that Plaintiff Twomey was paid between $23 and $24 per hour. (Declaration of Kenneth Rosenberg, ¶ 21.) There is no dispute that Plaintiff Zelenak was paid between $24 and $24.10 per hour. (Ibid.) Plaintiffs do not oppose summary adjudication on this issue. Therefore, Defendants’ motion is granted with respect to the first and second causes of action.

E. Issue #4 – Failure to Pay Overtime Compensation (Third Claim)

Plaintiffs’ third cause of action is one for failure to pay overtime wages in violation of California Labor Code section 510. In their first amended complaint, Plaintiffs advance three different theories. First, Defendants failed to pay Plaintiffs for work during rest and meal breaks. Second, Defendants failed to pay Plaintiffs all of the overtime wages they actually earned. Third, Defendants required Plaintiffs to work at home while off-the-clock and without payment.

Plaintiffs’ first theory—that she was not paid for missed rest and meal breaks—is not a sufficient basis to raise a claim under Labor Code section 510. Section 510 states that “[a]ny work in excess of eight hours in one workday and any work in excess of 40 hours in any workweek . . . shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee.” (Lab. Code § 510(a).) This section does not apply to missed breaks within the eight hour workday. Indeed, that issue is addressed by Labor Code section 512 and 226.7, which Plaintiffs raise in her fourth and fifth causes of action. The California Supreme Court recognized this principle when it held that a plaintiff who prevails on an action for missed rest breaks, in violation of section 22.7, is not entitled to attorney’s fees under section 218.5 because a claim under section 226.7 is not an action for nonpayment of wages. (Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1255.)

The Court focuses instead on Plaintiffs’ second theory, viz., Defendants failed to pay all of the overtime wages she actually earned. Plaintiffs argue that because they were paid different rates of pay each week based upon the shift she worked, Defendants were required to calculate her overtime pay using “the weighted average of these rates over any given workweek.” (Plaintiff’s Opposition, p.4.) The Court agrees with Defendants that this theory was not pled sufficiently in the first amended complaint. The first amended complaint phrases the overtime claim as one for missing hours, including the missed rest and meal breaks. It is only now that Plaintiffs clarify that the claim is not based exclusively on missed hours, but rather on underpayment of overtime based upon how the rate is calculated. The first amended complaint does not place Defendants sufficiently on notice of this potential theory. The first amended complaint defines the scope of the case, and Plaintiff cannot raise new, un-pleaded issues in her opposition. (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1253.)

Putting that aside, even if the Court considered this new theory, there still would not be a triable issue. Plaintiff cites Alvarado v. Dart Container Corp. of California (2018) 4 Cal.5th 542, 533 for the proposition that Defendants were required to determine her overtime pay by using a weighted average of her different rates of pay per week rather than per pay period (in this case, bi-weekly). Alvarado does not stand for that proposition. The California Supreme Court expressly stated: “The opinion follows the lead of the parties in using pay period as the basis for calculating regular rate of pay, but we did not grant review to decide whether, under California law, regular rate of pay is properly calculated on a pay-period basis or a workweek basis, and nothing in this opinion should be interpreted as deciding that question.” (Id., p.551 fn. 2.)

There appears to be no dispute in this case that Defendants calculated Plaintiffs’ overtime pay using a weighted average of different rates of pay during the pay period, which is bi-weekly. Plaintiff cites no persuasive authority requiring this calculation to be based upon the week rather than the pay period. Labor Code section 510 requires “time and a half” for more than 40 hours per week, but the statute is silent with respect to how to calculate this amount of differential shift employees. Plaintiffs rely on regulations promulgated under the Fair Labor Standards Act, which state that an employee’s “regular hourly rate of pay” for purposes of overtime is determined by dividing his total remuneration “in any workweek but the total number of hours actually worked by him in that workweek for which such compensation was paid.” (29 C.F.R. § 778.109 (2004).) This regulation is not dispositive. This issue is governed by Labor Code section 510, not regulations interpreting federal statutes. But more important, this regulation was not intended to address this issue. Section 778.109 addresses how to calculate an employee’s hourly wage for overtime purposes when they are due overtime but not paid on an hourly rate, viz., “piece-rate, salary, commission, or other basis.” In this case, Plaintiff was compensated hourly throughout a bi-weekly pay period, and the Court does not interpret section 778.109 as taking precedence over that calculation. In other words, section 778.109 applies only when there is ambiguity as to an employee’s hourly salary, and there is none in this case.

In sum, Plaintiffs cite no persuasive authority requiring the overtime calculation in this case to have been done based upon a weekly (or even daily) average. In the absence of authority to the contrary, the Court believes it is appropriate to calculate overtime premiums using the average of different pay rates throughout the pay period, which is bi-weekly. This view is supported by Labor Code section 204, which states that, with some exceptions that do not apply in this case, wages are due twice during each calendar month. (Lab. Code § 204.) It would appear to contradict section 204 to require pay on a bi-weekly basis but to require the calculation of overtime pay to be based upon a weekly average. Finally, Plaintiffs suggesta radical change in how California employers calculate overtime pay for shift differential employees. The Court declines to issue an order requiring such a drastic change in the absence of clear authority. Plaintiffs provide none.

Nevertheless, the Court must deny summary adjudication and allow the claim to proceed based upon Plaintiffs’ argument that Defendants required them to respond to inquiries via cell phone and text while they were at home and off-the-clock. Plaintiff Twomey relies on her own declaration to this effect: “Defendants, including Alex Jawharjian, required me to use my personal cellular phone service to carry out duties for Defendants’ business when I was at work (i.e., clocked-in) and when I was not scheduled to work and not at work for Defendants (i.e., not clocked-in).” (Declaration of Rosalyn Twomey, ¶ 3.) Plaintiff Zelenek testified that she was required to respond to inquiries while she was home and off-the-clock:

Q: Okay. Were you also -- were you ever contacted on your cellular phone when you were not at work?

A: Yes.

Q: And when you were not clocked in?

A: Yes.

Q: And when you were not being paid?

Q: Yes.

(Plaintiffs’ Exhibits, Exh. #52, pp. 167:5-168:1.) Plaintiffs also rely on cellular telephone records. These records are not admissible, as they are not accompanied by declarations from the respective custodians of records, and even if the Court considered them, they do not establish that the calls and text messages occurred while Plaintiffs were off-duty. Nevertheless, Plaintiffs’ testimony is enough to give rise to a triable issue whether they worked overtime and whether they were paid for all work that occurred while they were off-the-clock. Therefore, the motion for summary adjudication on the third cause of action is denied.

F. Issue #5 – Failure to Provide Accurate, Itemized Wage Statements (Sixth Claim)

Plaintiffs’ sixth cause of action is one for failure to provide accurate, itemized wage statements.

An employer, semimonthly or at the time of each payment of wages, shall furnish to his or her employee, either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately if wages are paid by personal check or cash, an accurate itemized statement in writing showing (1) gross wages earned, (2) total hours worked by the employee, except as provided in subdivision (j), (3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis, (4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item, (5) net wages earned, (6) the inclusive dates of the period for which the employee is paid, (7) the name of the employee and only the last four digits of his or her social security number or an employee identification number other than a social security number, (8) the name and address of the legal entity that is the employer . . . and (9) 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(a).) Plaintiffs argue that their wage statements did not properly depict all applicable rates during the relevant time period. There is no dispute that Plaintiffs received a pay slip and a “Rate Details” document, which are two separate documents through two separate links. The mere fact that the electronic documents were provided through two separate links rather than one link is not sufficient to give rise to a triable issue. Regardless, Plaintiffs cannot establish any injury. Plaintiffs argue that they were injured because they could not discover that they were paid overtime. As discussed, Plaintiff’s theory that Defendants miscalculated their overtime wages is not tenable.

It is unclear whether the Defendants correctly listed the employer. The statement states that the employer is “Select Employment Services, Inc.” and “California Rehabilitation Institute.” The former is not correct, as Defendants argued that Select Employment merely provided payroll services (and the Court granted summary judgment on that basis). It also is unclear to the Court whether Cal Rehab is the employer, as Defendants have represented that Plaintiffs were employed by CRI and leased to Cal Rehab. As discussed, Defendants have so badly muddied their corporate formalities as to create confusion on this issue. Nevertheless, Plaintiffs proffer no evidence of any injury, which is required to assert such a claim. (Price v. Starbucks Corp. (2011) 192 Cal.App.4th 1136, 1142.) Therefore, the motion is granted with respect to the sixth cause of action.

G. Issue #6 – Failure to Reimburse Expense Claim (Seventh Claim)

Plaintiffs’ seventh cause of action asserts that Defendants required her to use her personal cell phone for work but failed to reimburse her for that expense. Pursuant to Labor Code section 2802(a), “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” Plaintiff’s testimony is sufficient to give rise to a triable issue whether Defendants required her to use her own cell phone and whether they were aware of this usage (since they were the ones calling and/or texting her). As discussed above, Plaintiff Twomey stated in her declaration, and Plaintiff Zelenak testified during her deposition, that Defendants required them to keep and use their personal cellular telephones while on duty. That is sufficient to give rise to a triable issue.

Defendants argue that Plaintiffs never requested reimbursement. Plaintiffs’ alleged failure to request reimbursement does not waive Plaintiff’s right to be reimbursed. (See ABM Industries Overtime Cases (2017) 19 Cal.App.5th 277, 286 (“This right to reimbursement cannot be waived.”); Stuart v. RadioShack Corp. (N.D. Cal. 2009) 641 F.Supp.2d 901, 904 (“Once the employer has such knowledge, then it has the duty to exercise due diligence and take any and all reasonable steps to ensure that the employee is paid for the expense.”).) Putting that aside, according to Plaintiffs’ evidence, Defendants knew that Plaintiffs were using their cell phones for work after hours, because Defendants’ employees were the ones contacting them about work. Finally, Defendants also argue that Plaintiffs proffer no evidence that they incurred any expenses associated with this usage. If Defendants required Plaintiffs to maintain cell phones for work, they were required to pay the bills. In other words, this is an issue for the trier of fact vis-à-vis damages. Therefore, Defendants’ motion is denied with respect to the seventh cause of action.

H. Issue #7 – Termination Pay and Waiting Penalties (Eighth Claim)

Plaintiffs’ eight cause of action asserts that Defendants failed to pay all of her wages timely upon her termination. The claim is predicated on Defendants’ alleged failure to pay minimum wage and overtime. Therefore, the Court denies summary adjudication on the eight cause of action for the same reasons.

I. Issue #8 – Business & Professions Code section 17200 (Ninth Claim)

Plaintiffs’ ninth cause of action asserts an unfair competition claim under Business and Professions Code section 17200. This claim is predicated upon the Labor Code violations raised in the First Amended Complaint. Therefore, the Court denies summary adjudication for the reasons stated in this order. To the extent Defendants seek to limit the claim at trial based upon the Court’s ruling on the motion, the Court cannot resolve the issue on a motion for summary adjudication.

J. Issue #9 – Plaintiff’s PAGA Claim (Tenth Claim)

Plaintiffs’ tenth cause of action asserts a Private Attorney General Act claim, per Labor Code section 2699. This claim is predicated upon the Labor Code violations raised in the First Amended Complaint. Therefore, the Court denies summary adjudication for the reasons stated in this order. To the extent Defendants seek to limit the claim at trial based upon the Court’s ruling on the motion, the Court cannot resolve the issue on a motion for summary adjudication. The Court is not persuaded by Defendants’ argument that allowing Plaintiffs to proceed as a representative party would be unmanageable. The group of aggrieved employees—pharmacy technicians in the Pharmacy Department at Cal Rehab—is not so voluminous as to require the Court to grant this motion. Therefore, Defendants’ motion is denied with respect to the tenth cause of action.

K. Issue #11 – Unclean Hands

Finally, Defendants argue that Plaintiffs acted with unclean hands, so the Court should grant summary judgment. The Court need not address the merits of this argument because principles of equity cannot be used to avoid a statutory mandate. (Ghory v. Al-Lahham (1989) 209 Cal.App.3d 1487, 1492.) Defendants’ citations to Fibreboard Paper Products Corp. v. East Bay Union of Machinists, Local 1304, United Steelworkers of America, AFL-CIO (1964) 227 Cal.App.2d 675 and Jeong Soon v. Beckman (1965) 234 Cal.App.2d 33 are not persuasive as these cases sounded in tort, and did not seek redress for statutory violations under the Labor Code. Defendants argue, among other things, that Plaintiff Twomey lied on her employment application and spent worktime on personal matters, and that Plaintiff Zelenak falsified her time cards. These are matters for the jury to resolve.

CONCLUSION AND ORDER

Defendants’ motion for summary adjudication is granted in part and denied in part. The Court grants summary adjudication of the first, second, and sixth causes of action. The Court grants Defendants’ motion for summary adjudication of Plaintiff Zelenak’s fifth cause of action and denies the motion with respect to Plaintiff Twomey’s fifth cause of action. The Court denies summary adjudication on the remaining causes of action. Defendants’ counsel shall provide notice and file proof of such with the Court.

Rosalyn Twomey v. California Rehabilitation Institute, LLC

Case No. BC679469

Plaintiff Twomey’s Motion for Summary Adjudication

Order #3 of 3

Plaintiffs Rosalyn Twomey and Denise Zelenak filed this wage and hours action on behalf of themselves, other current and former aggrieved employees, and the State of California, per the Labor Code Private Attorney General Act of 2004, against their alleged employers: (1) The California Rehabilitation Institute, LLC (“Cal Rehab”); (2) Select Employment Services, Inc. (“Select Employment”); (3) Select Medical Corporation (“Select Medical”); and (4) CRI ES, Inc. (“CRI”) (collectively, “Defendants”). Plaintiffs also named the Director of Pharmacy, Defendant Alex Jawharjian, as a defendant. The Court previously granted Defendant Alex Jawharian’s motion for summary judgment, finding that Plaintiffs proffered insufficient evidence to establish that he was a “managing agent” for purposes of liability.

Plaintiffs assert the following causes of action against Defendants: (1) Failure to pay minimum wage in violation of Labor Code sections 1182.12, 1197, and 1194; (2) Failure to pay minimum wage liquidated damages in violation of Labor Code section 1194.2; (3) Failure to pay overtime wages in violation of Labor Code section 510; (4) Failure to allow meal periods in violation of Labor Code section 512; (5) Failure to allow rest breaks in violation of Labor Code section 226.7; (6) Failure to provide accurate wage statements in violation of Labor Code section 226; (7) Failure to indemnify in violation of Labor Code section 2802; (8) Waiting time penalties in violation of Labor Code sections 201, 203, and 208; (9) Violations of Business and Professions Code section 17200; and (10) Violations of Labor Code section 2699, the Labor Code Private Attorney General Act of 2004. Plaintiff Rosalyn Twomey (“Plaintiff”) now moves for summary adjudication of nine separate issues.

The Court incorporates by reference its order on Defendants’ motion for summary adjudication and rules as follows:

A. Issue #1 – Whether Defendants violated Labor Code section 510 by failing to pay lawful overtime wages – The Court denies Plaintiff’s motion. As discussed in the Court’s order on Defendants’ motion for summary adjudication, Plaintiff’s only viable theory is whether they were paid for receiving and responding to calls and text messages while off-the-clock. Defendants proffer sufficient evidence to give rise to a triable issue, so the motion is denied.

B. Issue #2 – Whether Defendants violated Labor Code section 226(a)(9) by issuing wage statements that fail to depict all applicable rates in effect during a pay period and the corresponding number of hours worked at each rate – Denied for the reasons stated in the Court’s order on Defendants’ motion for summary adjudication.

C. Issue #3 and Issue #4 – Whether Defendants violated Labor Code section 226(a)(8) by issuing wage statements that do not correctly identify Plaintiffs’ employer – Denied for the reasons stated in the Court’s order on Defendants’ motion for summary adjudication.

D. Issue #5 – Whether Defendants violated Labor Code section 512 by failing to make meal periods available to their employees – GRANTED.

There appears to be no dispute that Defendants deprived Plaintiffs and similarly aggrieved employees of their meal breaks. Defendants’ policy states:

There may be occasions when a meal break is not permitted or interrupted due to disruption in staffing, patient care needs, or operational needs. For non-exempt employees, if any portion of the meal break is interrupted by work responsibilities, the entire 30 minutes of the meal break will be paid, or the employee will be given another uninterrupted 30 minutes for a meal break.

(Defendants’ Exhibits, Exh. I, p. 8.) Defendants’ Person Most Qualified, Andrea Gunther, states that both Plaintiffs missed required meal breaks and received premium pay, which is supported by the employment records proffered by both parties. (Declaration of Andrea Gunther, ¶¶ 10-11.) The policy is phrased as requiring payment “or” another meal break, so the provision of payment suggests that no make-up meal break was provided. Defendants proffer no evidence that Plaintiffs received make-up meal breaks. Defendants seem to take the position that they were entitled to deny Plaintiffs their meal breaks if they paid for the missed time. The California Supreme Court recently make clear: “[E]mployers can pay an additional hour of wages as a remedy for failing to provide meal and rest breaks. (§ 226.7, subd. (c).) But we have held that payment of this statutory remedy does not excuse a section 226.7 violation.” Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 84 (citing Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1256.) Put another way, “section 226.7 does not give employers a lawful choice between providing either meal and rest breaks or an additional hour of pay.” (Kirby, supra, 53 Cal.4th at 1256.) Therefore, the Court grants Plaintiff’s motion for summary adjudication with respect to the fourth cause of action.

E. Issue #6 – Whether Defendants violated Labor Code section 226.7 by failing to make rest periods available to employees – Denied for the reasons stated in the Court’s order on Defendants’ motion for summary adjudication. There is no evidence that Plaintiff Zelenak was denied any rest period breaks. There is a triable issue whether Plaintiff Twomey was denied rest period breaks.

F. Issue #7 – Whether Defendants violated Labor Code section 2802 by failing to reimburse employees for use of their personal cellular telephones – Denied for the reasons stated in the Court’s order on Defendants’ motion for summary adjudication.

G. Issue #8 – Whether Defendants are integrated entities – Denied because the resolution of this issue would not resolve an entire cause of action, affirmative defense, issue of duty, or claim for punitive damages. Moreover, there is a triable issue anyway for the reasons stated in the Court’s order on Defendants’ motion for summary adjudication of Issue #10.

H. Issue #9 – Whether Defendant Jawharjian violated and/or caused violations of Labor Code sections 2802, 510, and 203 by requiring Plaintiff to use her personal cellular telephone for work – Denied as moot, as the Court granted Defendant Jawharjian’s motion for summary judgment. In the alternative, the motion is denied for the reasons stated in the Court’s order on Defendants’ motion for summary adjudication.

Defendants’ counsel shall provide notice and file proof of such with the Court.

Case Number: BC679469    Hearing Date: February 11, 2021    Dept: 39

Rosalyn Twomey v. California Rehabilitation Institute, LLC, et al.

Case No. BC679469

Defendant Alex Jawharjian’s Motion for Summary Judgment

NOTICE

The Court intends to continue all pending motions for summary judgment and summary adjudication except for Defendant Alex Jawharjian’s motion for summary judgment. The Court will discuss scheduling with the parties at the hearing.

BACKGROUND

Plaintiffs Rosalyn Twomey and Denise Zelenak filed this wage and hours action on behalf of themselves, other current and former aggrieved employees, and the State of California, per the Labor Code Private Attorney General Act of 2004, against their alleged employers: The California Rehabilitation Institute, LLC; Select Employment Services, Inc.; Select Medical Corporation; CRI ES, Inc.; and Alex Jawaharjian. Now, Defendant Alex Jawaharjian (“Defendant”) moves for summary judgment, arguing that he is not liable because he is not Plaintiffs’ employer, or an owner, officer, director, or managing agent of Plaintiffs’ employer. Defendant also argues that he is not liable, because he did not cause the alleged wage and hours violations that form the basis of the complaint. Plaintiffs oppose the motion, which is granted.

UNDISPUTED FACTS

The California Rehabilitation Institute, LLC (“Cal Rehab”) owns and operates a full service rehabilitation hospital in Los Angeles, which provides inpatient care to patients recovering from strokes, spinal cord injuries, brain injuries, orthopedic injuries, neuromuscular illness, cancer, and other medical conditions. (Plaintiffs’ Response to Defendant’s Separate Statement of Material Facts, ¶¶ 1-2.) Cal Rehab is governed through a joint venture board consisting of five natural persons who are representatives from each of the University of California Regents, Cedars Sinai Medical Center, and Select Hospital Investors, Inc., and a governing board, consisting of Cal Rehab executives and representatives of the joint venture. (Id., ¶ 3.) Pursuant to the joint venture agreement, the board has the exclusive power to participate in the management or control of the business and to transact business on behalf of te company. (Id., ¶ 4.)

During the operative time period, Defendant was the Director of Pharmacy at Cal Rehab. (Id., ¶ 18.) Defendant has worked at Cal Rehab since it opened in 2015. (Id., ¶ 19.) As Director of Pharmacy, Defendant oversees the day-to-day pharmacy operations at Cal Rehab, including ensuring medication safety and optimizing medication therapies. (Id., ¶ 20.) In his role as Director of Pharmacy, Defendant also manages the employees of the Pharmacy Department, which consists of pharmacists, pharmacy technicians, and pharmacy interns. (Id., ¶ 21.) Defendant has never been a member of the joint venture board or the governing board. (Id., ¶ 23.)

LEGAL STANDARD

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law[.]  There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)  “[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.”  (Ibid.)  In ruling on the motion, “the court may not weigh the plaintiff's evidence or inferences against the defendant[’s] as though it were sitting as the trier of fact.”  (Id. at 856.)  However, the court “must . . . determine what any evidence or inference could show or imply to a reasonable trier of fact.”  (Ibid., emphasis original.)  

DISCUSSION

Defendant argues that he was not Plaintiffs’ employer, or an owner, officer, director or managing agent of Plaintiffs’ employer. Labor Code section 558.1(a) provides that:

Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wage or hours and days of work in an order of the Industrial Welfare Commission, or violates, or causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation.

(Lab. Code § 558.1(a).) However, liability is not boundless to every employee:

For purposes of this section, the term “other person acting on behalf of an employer” is limited to a natural person who is an owner, director, officer, or managing agent of the employer, and the term “managing agent” has the same meaning as in subdivision (b) of Section 3294 of the Civil Code.

(Lab. Code § 558.1(b).)

“[T]he determination of whether certain employees are managing agents does not necessarily hinge on their level in the corporate hierarchy. Rather, the critical inquiry is the degree of discretion the employees possess in making decisions.” (Powerhouse Motorsports Group, Inc. v. Yamaha Motor Corp., U.S.A. (2013) 221 Cal.App.4th 867, 886 (quotations omitted).) Specifically, a managing agent is someone who is “more than a mere supervisory employee.” (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 573.) A managing agent is someone “who exercises substantial discretionary authority over decisions that ultimately determine corporate policy.” (Ibid.) In this context, a “corporate policy” refers to “formal policies that affect a substantial portion of the company and that are of the type likely to come to the attention of corporation leadership.” (Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 715; see also Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 167-168.)

Defendant relies on his own declaration, in which he states: (1) He is an employee of CRI ES, Inc. and is “leased” to Cal Rehab; (2) He is not an employee of Select Medical or Select Employment and does not report to either agency; (3) He does not own Cal Rehab and is not an officer or director; (4) He has never been a member of the board for Cal Rehab or a member of the hospital’s governing board; (5) He did not, and does not, have policy-making authority with respect to meal periods, rest breaks, overtime, payment or calculation of wages, minimum wage, or expense reimbursement; and (6) He did not, and does not, have authority to unilaterally hire, fire, demote, or promote employees he supervises. (Declaration of Bedros Alex Jawharjian, ¶ 3.) Defendant also relies on his job description, which focuses on running the Pharmacy Department but does not contain any references to formulating corporate policies. (Defendants’ Exhibits, Exh. Z, p.1.) This is sufficient to satisfy Defendant’s burden, shifting the burden to Plaintiffs to proffer sufficient evidence giving rise to a triable issue.

Plaintiffs fail to do so. Plaintiffs spend less than one page in their opposition arguing that Defendant exercised significant independent authority over the Pharmacy Division at the hospital. Plaintiffs rely upon Defendant’s title—Director of Pharmacy—but that is not sufficient to transform him from a supervisory employee to a managing agent. Plaintiffs also cite to Defendant’s job duties and responsibilities, which require him to “[r]eview and evaluate operating procedures, methods, and techniques and implement change to increase quality of service, productivity and cost effectiveness.” (Plaintiffs’ Opposition, p.7:14-17.) Plaintiffs mischaracterize the record. In fact, Defendant’s job duties and responsibilities state that he: “Works with supervisors to review and evaluate operating procedures, policies, methods and techniques and implement change to increase quality of service, productivity and cost effectiveness.” (Defendants’ Exhibits, Exh. Z, p.1.) By selectively quoting this document, Plaintiffs omit critical language that Defendant “works with supervisors,” meaning that he does not have authority to set these policies independently. Putting that aside, this reference pertains to procedures relating to the functions of the Pharmacy Department, not the hospital or corporation as a whole.

Plaintiffs also make a series of assertions that Defendant is in charge of reviewing time records for all employees in the Pharmacy Department before he personally submits payroll; Defendant is in charge of resolving discrepancies and further coordinating with Human Resources; Defendant is in charge of approving time card adjustments. None of these assertions are supported by citations to the record. “Judges are not like pigs, hunting for truffles buried in [the record].” (See United States v. Dunkel (1991) 927 F.2d 955, 956.) Regardless, none of these duties transform a supervisory employee into a managing agent, as they do not relate to corporate policy.

Finally, Plaintiffs argue that Defendant is in charge of performance evaluations, disciplinary actions, and hiring and firing employees. Again, Plaintiffs mischaracterize the record, as Defendant “selects qualified candidates who fit the culture and have the most potential to contribute to accomplishment of established objectives.” (Defendants’ Exhibits, Exh. Z, p.1.) Defendant does not unilaterally hire or fire employees. But even if he did, this is not sufficient to convert a supervisory employee into a managing agent of the corporation. (See White, supra, 32 Cal.4th at 566-567, 573.)

In sum, Plaintiffs proffers insufficient evidence establishing that Defendant was a “managing agent” for purposes of their claims. Therefore, Defendant has no liability pursuant to Labor Code section 558.1. The Court need not address Defendant’s remaining arguments.

CONCLUSION AND ORDER

Defendant’s motion for summary judgment is granted. Defendant shall provide notice and file proof of such with the Court.

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