Banda v. Bagdasarian

Filed 6/8/06 Banda v. Bagdasarian CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of Riverside County. Christopher J. Sheldon, Judge. Affirmed in part, reversed in part and remanded with directions.

California Rural Legal Assistance, Inc., Arturo Rodriguez, Cristina Guerrero, Cynthia L. Rice; Talamantes/Villegas/Carrera and Mark Talamantes for Plaintiffs and Appellants.

Law Office of Joseph E. Herman, Joseph E. Herman, Bruce Carroll; Swajian & Swajian, Dawn Swajian and Gregory A. Swajian for Defendant and Respondent.

Law Offices of Steven Drapkin and Steven Drapkin for the Employers Group, the California Chamber of Commerce, the California Employment Law Council, the California Restaurant Association, and the Alliance of Motion Picture & Television Producers as Amicus Curiae on behalf of Defendant and Respondent.

Western Growers Law Group and Jason E. Resnick for Western Growers, California Grape and Tree Fruit League, California Citrus Mutual and Nisei Farmers League as Amicus Curiae on behalf of Defendant and Respondent.

Plaintiffs and appellants, Maria Banda, Cecilio Banda, and Mercedes Moreno, (hereafter plaintiffs) are farm workers. Defendant and respondent, Richard Bagdasarian, Inc. (hereafter defendant) is a table grape grower who has employed plaintiffs on a seasonal basis to harvest grapes. In June 2002, plaintiffs filed a complaint against defendant seeking injunctive relief and restitution for defendant's alleged unfair competition in violation of Business and Professions Code sections 17200, 17202, and 17203. In their complaint,^[1] comprised of four purported causes of action or theories of recovery, plaintiffs alleged that defendant failed to authorize, permit, and provide rest and meal periods in accordance with Wage Order No. 14 promulgated by the Industrial Welfare Commission (IWC) and thereby violated Labor Code section 226.7.^[2] Plaintiffs further alleged that defendant required field workers such as plaintiffs to taste unwashed grapes to determine their ripeness and thereby violated various Labor Code provisions related to worker and workplace safety. Based on the statutory violations, plaintiffs alleged that defendant engaged in unfair and unlawful business practices in violation of Business and Professions Code section 17200 et seq., commonly referred to as the Unfair Competition Law (UCL). As a result of those unfair and unlawful business practices, plaintiffs alleged they were entitled to restitution under Business and Professions Code section 17203 in the amount of an hour's pay, as specified in Labor Code section 226.7, and were also entitled to injunctive relief under Business and Professions Code section 17203 to prohibit defendant from requiring plaintiffs to taste unwashed grapes.

Defendant demurred to plaintiffs' complaint on various grounds, and the trial court sustained the demurrer without leave to amend as to the second and fourth causes of action, both of which alleged claims for so-called waiting time penalties under Labor Code section 203. Those penalties apply when an employer fails to pay wages when payment is due. In particular, plaintiffs alleged that defendant was required under Labor Code section 226.7 to pay workers for the rest and meal periods that defendant failed to provide and that such pay constituted wages. Plaintiffs further alleged that defendant did not pay those wages when an employee terminated employment or defendant laid off an employee, and therefore defendant was required to pay the penalty specified in Labor Code section 203.

Defendant asserted in its demurrer that the pay specified in Labor Code section 226.7 is a penalty rather than wages or compensation for work performed, and that Labor Code section 203, as alleged in the second and fourth causes of action, applies only when an employer fails to pay wages. The trial court agreed with defendant. Therefore, the trial court found that plaintiffs' second and fourth causes of action failed, as a matter of law, to allege facts sufficient to state a cause of action under Labor Code section 203.

After prevailing on its demurrer to the second and fourth causes of action, defendant moved for summary judgment, or in the alternative, summary adjudication, on the first and third causes of action of plaintiffs' complaint. In its summary judgment motion defendant asserted, as it had in its demurrer, that the pay set out in Labor Code section 226.7 is a penalty and, therefore, plaintiffs did not have a property interest in that pay that would support restitution in a UCL action, as alleged in the first cause of action, nor did plaintiffs have a private right to recover that penalty under Labor Code section 226.7, as alleged in the third cause of action. Defendant further asserted that plaintiffs' grape-tasting claims, also alleged in the first cause of action, either were within the exclusive jurisdiction of workers' compensation or were within the purview of the California Occupational Safety and Health Act (Cal-OSHA) such that the trial court should abstain from adjudicating the workplace safety issue, or should invoke the doctrine of primary jurisdiction and refer the issue to the Division of Occupational Safety and Health.

In their opposition, plaintiffs contended that the pay defendant owed them under Labor Code section 226.7 is wages, and as such can be recovered as restitution in an action under the UCL. Plaintiffs also asserted that they were not seeking damages for personal injury resulting from defendant's practice of requiring employees to taste unwashed grapes, and therefore the grape-tasting claim is not preempted by the workers' compensation law. Plaintiffs further contended that the safety issues are not covered by Cal-OSHA, but instead arise under the general duties of an employer to provide safe employment for its employees set out in Labor Code sections 6400, 6401, 6403, and 6401.7.

The trial court agreed with defendant and granted summary judgment in defendant's favor on plaintiffs' first and third causes of action.

Plaintiffs appeal from the subsequently entered judgment contending, as they did in the trial court, that the pay specified in Labor Code section 226.7 is wages, and therefore is properly the subject of a claim for restitution under Business and Professions Code section 17203. Likewise, plaintiffs contend that they have a private right of action to recover that pay under Labor Code section 226.7. Plaintiffs further contend that the trial court incorrectly granted summary judgment on the first cause of action because the grape-tasting allegations do not state a claim within the exclusive jurisdiction of workers' compensation or within the purview of Cal-OSHA but, rather, properly state a UCL claim under Business and Professions Code section 17200.

We conclude, for reasons we now explain, that the pay specified in Labor Code section 226.7 is a penalty, and as such cannot be recovered in a UCL action. We further conclude, however, that plaintiffs have a private right of action under Labor Code section 226.7 to recover that penalty. Therefore, the trial court erred in granting summary judgment on plaintiffs' third cause of action. We also agree with plaintiffs' contention that the trial court's findings on the grape-tasting allegations are incorrect, and therefore the trial court improperly granted summary judgment on the first cause of action.

DISCUSSION

In their first cause of action, as previously noted, plaintiffs alleged that defendant engaged in unfair competition by failing to provide meal and rest breaks in accordance with IWC Wage Order No. 14, and also by requiring plaintiffs to taste grapes without providing plaintiffs a means to wash their hands and to wash the grapes. Based on those allegations, plaintiffs sought to enjoin the allegedly unfair and unlawful business practices and to obtain restitution of wages owed to them and members of the public under Labor Code section 226.7 as compensation for defendant's alleged failure to provide meal and rest breaks, all allegedly in accordance with Business and Professions Code section 17203.^[3]

In its summary judgment motion, defendant asserted that the payment authorized in Labor Code section 226.7 is a penalty, not wages, and because it is a penalty, plaintiffs do not have any property or monetary interest in the payment. Defendant further asserted that without a property or monetary interest, plaintiffs are not persons in interest and, therefore, are not entitled to restitution under Business and Professions Code section 17203. That assertion raises a question of law, not fact, and, therefore, does not depend on defendant's showing in support of its summary judgment motion. Defendant also claimed that under the pertinent IWC wage order, defendant was only required to authorize and permit meal and rest breaks, not to actually provide them. Therefore, defendant asserted in its summary judgment motion that plaintiffs were not entitled to payment under Labor Code section 226.7 for the missed meal and rest breaks allegedly denied, regardless of the nature of the statutory payment. Whether defendant was required under the pertinent wage order to provide rest and meal breaks to plaintiffs, and if so whether a private right of action exists to enforce that obligation, are also questions of law.^[4]

Similarly, the dispositive issues with regard to plaintiffs' allegation that they were required to taste grapes to determine their ripeness are whether that claim is one within the exclusive jurisdiction of workers' compensation, and whether Cal-OSHA has primary jurisdiction over the claim such that the trial court properly abstained from addressing it. Those are issues of law, not fact. In short, although defendant styled its motion in the trial court as one for summary judgment, and included the required statement of undisputed material facts and supporting declarations, the issues defendant raised in that motion did not turn on the facts but rather are all issues of law. An order sustaining a demurrer also raises only questions of law, namely the sufficiency of the pleading to state a cause of action. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

1.

STANDARD OF REVIEW

The dispositive issues in this appeal, whether raised by demurrer or summary judgment motion, are ones of law and include the following:

(1) Does IWC Wage Order No. 14 require defendant to provide meal and rest breaks to its employees?

(2) If so, does the one hour of pay specified in Labor Code section 226.7 constitute wages such that plaintiffs have a property interest in that pay which they then may recover as restitution under Business and Professions Code section 17203, or is the pay a penalty?

(3) If the pay is a penalty, do plaintiffs have a private right of action to recover that penalty under Labor Code section 226.7?

(4) Do plaintiffs' allegations regarding mandatory grape tasting state a claim within the exclusive jurisdiction of workers' compensation?

(5) If not, does Cal-OSHA control resolution of the grape-tasting claim such that the trial court properly abstained from resolving the safety issue?

(6) If not, did the trial court abuse its discretion in invoking the doctrine of primary jurisdiction and dismissing the grape-tasting allegations set out in plaintiffs' complaint?

Because these issues all are ones of law, we review them de novo. (Orange County Employees Assn. v. County of Orange (1991) 234 Cal.App.3d 833, 840 [â€