California Court of Appeal Deals Another Blow to Class Action Plaintiffs

The California Court of Appeal, Second District, affirmed yet another ruling in favor of employers in the state. In Price v. Starbucks, case number B219501, the court upheld the lower court’s orders striking the plaintiff’s itemized wage statement claim for failure to show injury and his reporting time pay claim finding no violation of law.

Plaintiff Drake Price was employed by Starbucks as a barista for a brief period in late 2007. When Price failed to show up for a shift he was taken off the work schedule for the week, and was told to come in to “have a talk” with the manager five days later. When Price reported to Starbucks on the designated date, he was told his employment was being terminated in a “45 second” meeting. On the day of his termination, Price was paid his final wages and also paid two hours of “reporting time pay” for the termination meeting, as required by Cal. Code Regs., tit. 8, § 11050, subd. 5(A). He thereafter sued on behalf of himself and all others similarly situated, asserting claims for reporting time pay pursuant to the California Wage Orders, inaccurate wage statements in violation of California Labor Code section 226, and for various other Labor Code violations, as well as unfair business practices under the California Business and Professions Code.

Starbucks initially demurred and moved to strike Price’s allegations related to his claim for improper wage statements under California Labor Code section 226. The demurrer was sustained, thereby dismissing Price’s claim on the basis that he had not alleged sufficient injury as required by the statute.

The Court of Appeal agreed, noting that in order to recover under section 226, “an employee must suffer injury as a result of a knowing and intentional failure by an employer to comply with the statute,” and the injury required by this section “cannot be satisfied simply if one of the nine itemized requirements in section 226, subdivision (a) is missing from a wage statement.” Citing, Jaimez v. Daiohs USA, Inc., 181 Cal. App. 4th 1286, 1306 (2010); see also Elliot v. Spherion Pacific Work, LLC, 572 F. Supp. 2d 1169, 1181 (C.D.Cal. 2008). Although Price alleged a “mathematical injury,” the court found that because no computations were required in order for him to analyze whether the wages paid in fact compensated him for all hours worked, such allegations were insufficient. Moreover, Price’s “speculation” regarding possible underpayment was, according to the Court of Appeal, not sufficient to state a section 226 claim.

Following the successful initial ruling, Starbucks also moved for summary judgment on the remaining claims, arguing that Price had been appropriately paid reporting time pay when he was provided with two hours of pay for the termination meeting and that all remaining claims were derivative of the reporting time pay claim. California’s Wage Orders provide:

Each workday an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which shall not be less than the minimum wage. Cal. Wage Order 5-2001, Section 5(A) (2007).

Both the trial court and Court of Appeal agreed with Starbucks, holding that an employee who comes in for a meeting, as opposed to a regular work shift, is owed only two hours of pay at his or her regular rate. Thus, even though Price regularly worked more than four hours per shift, and thus may have been owed more pay if he had been sent home early on a regular workday, he had no expectation of working a full shift on the day he reported for the “talk.” Accordingly, only the minimum payment rules applied and Starbucks appropriately compensated Price for the meeting.

This entry was written by Michelle Heverly.

Photo credit: Matthew John Hollinshead

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.