Judge: Gregory Keosian, Case: 23STCV22706, Date: 2024-02-22 Tentative Ruling
Case Number: 23STCV22706 Hearing Date: February 22, 2024 Dept: 61
Defendant
Sheraton Operating, LLC’s Demurrer to the First Amended Complaint is SUSTAINED
with leave to amend as to the Labor Code § 226 claim, and without leave to
amend as to the Labor Code § 2810.5 claim. The motion to strike, which is
addressed entirely to the claim under Labor Code § 2810.5, is DENIED as moot..
Defendant to give notice.
I.
DEMURRER
A demurrer should be sustained only where the defects appear
on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§
430.30, et seq.) In particular, as is
relevant here, a court should sustain a demurrer if a complaint does not allege
facts that are legally sufficient to constitute a cause of action. (See
id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) 39 Cal.3d 311:
“We treat the demurrer as admitting all material facts properly pleaded, but
not contentions, deductions or conclusions of fact or law. . . . Further, we
give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context.” (Id. at
p. 318; see also Hahn. v. Mirda
(2007) 147 Cal.App.4th 740, 747 [“A demurrer tests the pleadings alone and not
the evidence or other extrinsic matters. Therefore, it lies only where the
defects appear on the face of the pleading or are judicially noticed.
[Citation.]”)
“In determining whether the complaint is sufficient as
against the demurrer … if on consideration of all the facts stated it appears
the plaintiff is entitled to any relief at the hands of the court against the
defendants the complaint will be held good although the facts may not be
clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)
“A demurrer
for uncertainty is strictly construed, even where a complaint is in some
respects uncertain, because ambiguities can be clarified under modern discovery
procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612,
616.) Such demurrers “are disfavored,
and are granted only if the pleading is so incomprehensible that a defendant
cannot reasonably respond.” (Mahan v.
Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)
A demurrer should not be sustained without leave to amend if
the complaint, liberally construed, can state a cause of action under any
theory or if there is a reasonable possibility the defect can be cured by
amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p.
1081.) The demurrer also may be sustained without leave to amend where the
nature of the defects and previous unsuccessful attempts to plead render it
probable plaintiff cannot state a cause of action. (Krawitz v. Rusch
(1989) 209 Cal.App.3d 957, 967.)
Defendant Sheraton Operating LLC (Defendant) demurrers to
Plaintiff’s PAGA claims for violations of Labor Code § 226 (for inaccurate wage
statements) and Labor Code § 2810.5 (for falling to list the accurate name of
the employer). Defendant argues that the name offered on Plaintiff’s wage
statements — listing Sheraton Operating, Corporation, instead of Sheraton
Operating, LLC — is not an alteration of sufficient gravity to cause a
violation under Labor Code § 226. (Demurrer at pp. 12–15.) Defendant also argues
that liability for violating Labor Code § 2810.5, a provision requiring certain
“notice[s],” cannot arise under PAGA, which expressly disclaims actions for
violation of “notice” requirements. (Demurrer at pp. 15–16.; citing Lab. Code §
2699, subd. (g)(2).)
Labor Code § 226
requires wage statements to list, among other things, “the name and address of the legal entity that is the employer.” (Lab.
Code § 226, subd. (a)(8).)
Section 226 does not expressly
require that the name registered with the California Secretary of State be
included on the wage statement. Nor must the company's complete name be
included. Instead, section 226 subdivision (a)(8) only requires the employer to
state “the name and address of the legal entity that is the employer.”
It does not expressly require that the employer state its complete or
registered name.
(Noori v. Countrywide Payroll
& HR Solutions, Inc. (2019) 43 Cal.App.5th 957, 964, internal quotation
marks and citations omitted.) As explained in the Noori decision, “minor
truncations of an employer's name have been found to comply with the statute,”
as when an employer listed “Spherion Pacific Work, LLC” instead of “Spherion
Pacific Workforce, LLC” (Id. at p. 964, citing Elliot v.
Spherion Pacific Work, LLC (C.D. Cal. 2008) 572 F.Supp.2d 1169, 1179), or
when an employer listed “Farmland Mutual Insurance Co.” instead of “Farmland
Mutual Insurance Company.” (Noori, supra, 43 Cal.App.5th
at p. 964, citing Mejia v. Farmland
Mutual Insurance Company (E.D. Cal., June 26, 2018, No. 217CV00570TLNKJN)
2018 WL 3198006, at *5.) Likewise, an employer may list its “actual, recorded
fictitious business name.” (Savea v. YRC Inc. (2019) 34 Cal.App.5th 173,
179.)
“But more severe truncations or
alterations of the employer's name can violate the statute, particularly where
confusion might ensue.” (Noori, supra, 43 Cal.App.5th
at p. 965.) A listing of the word “SUMMIT” with a company logo was held
inadequate for an employer named “Summit Logistics Inc.” (Ibid., citing Cicairos
v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 961.) Using
“Frist Transit” instead of “First Transit Transportation, LLC” was held
insufficient where a different entity called “First Transit, Inc.” existed (Clarke
v. First Transit, Inc. (C.D. Cal., Nov. 4, 2010, No. CV076476GAFMANX) 2010
WL 11459323, at *4.) And the use of “Wal-Mart Associates, Inc.” was held
insufficient where the actual employer was “Wal Mart Stores, Inc.” and three
other entities (as well as those named and sued) shared the same address. (Mays
v. Wal-Mart Stores, Inc. (C.D. Cal. 2019) 354 F.Supp.3d 1136, 1144.)
Plaintiff here alleges that her
wage statements after January 2023 listed “Sheraton Operating Corporation,” a
Delaware corporation, as the employer. (FAC ¶ 11.) A business search with the
California Secretary of State, however, lists Sheraton Operating Corporation’s
status as “terminated” beginning on January 24, 2023. (FAC ¶ 12.) On the same
date, Defendant Sheraton Operating, LLC registered in California to do business
as an out-of-state LLC. (FAC ¶ 14.)
Defendant in the present
demurrer presents a certificate of conversion dated December 7, 2022, by which
Sheraton Operating Corporation was converted or merged into Sheraton Operating
LLC. (RJN Exh. 1.) Defendant argues that under Delaware law, “When a
corporation has been converted to another entity or business form pursuant to
this section, the other entity or business form shall, for all purposes of the
laws of the State of Delaware, be deemed to be the same entity as the
corporation.” (Demurrer at p. 12, citing 8 Del. Code § 266, subd. (h).) Defendant
thus argues that the continued use of Sheraton Operating Corporation instead of
Sheraton Operating LLC does not amount to a violation of Labor Code § 226,
because the wage statements refer to the same “the legal entity that is the
employer.” (Lab. Code § 226, subd. (a)(8).)
Defendant’s argument is
persuasive. References to Sheraton Operating Corporation refer to the same
legal entity as Defendant Sheraton Operating LLC by virtue of the certificate
of conversion. Although Plaintiff argues that Delaware law concerning continued
corporate existence does not preempt application of Labor Code § 226
(Opposition at pp. 5–7), this mistakes the nature of the argument. The fact
that the names “Sheraton Operating Corporation” and “Sheraton Operating LLC” do
not refer to different corporate entities does not mean that Delaware law
“preempts” the California Labor Code; it simply vitiates the claim that the
wage statements do not refer to “the legal entity that is the employer,” or
that the wage statements otherwise obscure this fact. Per the authority
discussed above, continuing use of an employer’s former name could result in
violations of Labor Code § 226 if “confusion might ensue” from the practice. (Noori,
supra, 43 Cal.App.5th at p. 965.) Such confusion might result
if multiple different entities used the same name and address as given on the
wage statement. (See Clarke, supra, 2010 WL 11459323 at *4; Mays,
supra, 354, F.Supp.3d at p. 1144.) Plaintiff does not allege any such
confusion here.
Plaintiff offers no opposition
to Defendant’s argument that the claim for violations of Labor Code § 2810.5 is
barred by Labor Code § 2699, subd. (g)(2).
The demurrer is therefore
SUSTAINED with leave to amend as to the Labor Code § 226 claim, and without
leave to amend as to the Labor Code § 2810.5 claim. The motion to strike, which
is addressed entirely to the claim under Labor Code § 2810.5, is DENIED as
moot.