Department 78, Stanley Mosk Courthouse

April 16, 2024

23STCV18868

Default Judgment

DECISION

Plaintiff’s request for entry of default judgment will be granted in the modified amounts reflected in the chart below.

Damages $162,601.50

Interest $14,274.79

Attorney Fees $3,506.02

Costs $726.91

Total $181,109.22

The Court will revise and sign the proposed JUD-100 received on 4/5/2024.

Moving party to provide notice.

Discussion

This is an action for violations of the Labor Code, wrongful termination, and unfair competition. Plaintiff alleges that while working as a server, Defendants failed to pay him an hourly wage, only paid him a stipend, and failed to permit statutory breaks. When Plaintiff complained, Defendants retaliated by constructively terminating Plaintiff’s employment.

10/31/2023 Default Entered

4/5/2024 Doe Dismissal Entered

Plaintiff seeks damages and statutory penalties for unpaid overtime, compensation for rest and meal breaks, inaccurate wage statements and waiting time penalties, failure to produce records, and misclassification.

 

Damages

Unpaid Wages: Plaintiff testifies he was not paid for his last four weeks of work for which he should have received $1,000. 

Unpaid minimum wage: Plaintiff testifies that he was not paid minimum wage under between January 2018 and January 2023. (Andrade Decl., ¶10.) Labor Code, section 1194.2 provides that an employee is entitled to recover liquidated damages in an amount equal to the wages unlawfully unpaid and interest. However, Plaintiff seeks damages for periods exceeding the statute of limitations. In Aubry v. Goldhor (1988) 201 Cal. App. 3d 399, 404 the court there ruled that claims based on unpaid overtime and unpaid prevailing wage rates (minimum wage), which are statutory wages claims under the Labor Code, are governed by the 3-year limitations period in Code Civ. Proc., section 338(a). Thus, the Court will only award damages for unpaid minimum wage for the period between August 9, 2020, three years before Plaintiff filed his Complaint and January 2023, the date he was constructively terminated.

Plaintiff was paid $6.92 for 40 hours a week. Plaintiff alleges he should have been paid $15 per hour. However, the minimum wage between 2020 and just before January 2023 was $13 in 2020, $14 in 2021, and $15 in 2022 for any employer who employed 26 or more employees. Minimum wage was $12 in 2020, $13 in 2021, and $14 in 2022 for any employer who employed 25 or fewer employees. There is no evidence of the number of employees Defendant employed. Therefore, the Court will use the lower numbers. Damages are as follows for this portion of the requested damages.

Time Period Minimum Wage Hours Total

August 2020-December 2020 $12 1,440 $17,280

January 2021-December 2021 $13 3,456 $44,928

January 2022-December 2022 $14 3,456 $48,384

January 2023 $15.50 288 $4,464

Total $115,056

Overtime: Plaintiff testifies that Defendants failed to pay him overtime despite working for more than 40 hours a week. (Andrade decl., ¶17.) (See Lab. Code, section 510 [work in excess of 40 hours in one week or 8 hours in one day must be paid at an overtime rate of time-and-a-half].) Because this is again an action upon a liability created by statute, the statute of limitations applies. The same statute of limitations will also apply to each cause of action for liability created by statute. The damages are as follows:

Time Period Overtime Hours Overtime Rate Total

August 2020-December 2020 480 $6 $2,880

January 2021-December 2021 1152 $6.50 $7,488

January 2022-December 2022 1152 $7 $8,064

January 2023 96 $7.75 $744

Total $19,176

Missed meal and rest periods: Plaintiff testifies that Defendants never provided meal or rest breaks. (Andrade Decl., ¶3.) Labor Code, section 226.7 provides that if an employer fails to provide an employee a meal or rest or recovery period in accordance with a state law, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided. Although Plaintiff seeks damages for both meal and rest breaks, the courts have ruled that the legislature intended section 226.7 to limit the remedy to a single payment per work day regardless of the number or type of break period not provided. (United Parcel Service Wage & Hour Cases (2011) 196 Cal.App.4th 57, 69.) Therefore, the Court will limit the damages to one additional hour of pay per day a meal or rest period was missed. The damages are as follows:

Time Period Missed meal breaks Rate Total

August 2020-December 2020 152 $12 $1,824

January 2021-December 2021 365 $13 $4,745

January 2022-December 2022 365 $14 $5,110

January 2023 31 $15.50 $480.50

Total $12,159.50 

Waiting time penalties: Plaintiff testifies that Defendants failed to pay all wages and other compensation within 72 hours of his resignation. (Andrade Decl., ¶19.) Labor Code, section 203 provides that if an employer willfully fails to pay wages within 72 hours after an employee quits, the employee shall continue at the same rate of pay until he is paid or an action commences, but not for more than 30 days. Here, Plaintiff’s daily wage was $217 ($15.50 minimum wage for 12 hours plus 4 hours of overtime pay at a rate of $7.75.) The total penalty for 30 days of unpaid wages after Plaintiff’s termination is $6,510.

Inaccurate wage statements: Plaintiff testifies he never received wage statements. Labor Code, section 226(e)(1) provides that “an employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney's fees.”

Because Plaintiff was paid on a monthly basis, Plaintiff did not receive wage statements a total of 30 times within the limitations period. Plaintiff’s damages are $2,950.

Failure to permit inspection of personnel and payroll records: Plaintiff testifies that Defendant failed to comply with Plaintiff’s written request for personnel and payroll records. (Andrade Decl., ¶24.) Labor Code, section 1198.5 provides that an employer must produce an employee’s personnel and payroll records within 30 days of a written request. An employer who fails to timely produce the records must pay a penalty of $750. Here, Plaintiff is entitled to $750 for Defendant’s failure to produce the records.

Misclassification: Plaintiff testifies he was misclassified as an independent contractor despite repeatedly asking Defendants to reclassify him as an employee. (Andrade Decl., ¶26.) Plaintiff seeks a penalty under Labor Code, section 226.8, which provides that it is unlawful to willfully misclassify an individual as an independent contractor and that an employer found by a court to have engaged in this violation is subject to a penalty of not less than $5,000 and not more than $15,000 per violation. Here, because Defendants refused to reclassify Plaintiff as an employee, Plaintiff’s request for a $5,000 penalty is granted.

Plaintiff’s total damages for violations of the Labor Code is $162,601.50 consisting of $135,232 in unpaid wages, $12,159.50 in unpaid meal breaks, and $15,210 in penalties.

Interest

Plaintiff requests $41,026 in interest. However, this number is based on Plaintiff’s request for damages including damages incurred beyond the limitations period. Additionally, Plaintiff’s counsel’s calculation is based on Civ. Code, section 3289(b), which concerns actions for breach of contract. Plaintiff does not allege a breach of contract, but violations of the labor code. 

Lab. Code, section 218.6 provides that “the court shall award interest on all due and unpaid wages at the rate of interest specified in subdivision (b) of section 3289 of the Civil Code, which shall accrue from the date that the wages were due and payable[.]” That rate is 10%.

Meal and rest break premiums also accrue interest, but at a 7% rate, not 10%.  (See Estrada v. Royalty Carpet Mills, Inc. (2022) 76 Cal.App.5th 685, 727.) 

Here, Plaintiff’s daily interest on unpaid wages is ($134,232 X.1)/281 = $47.77. Total interest on the unpaid interest is $13,423.37.

Plaintiff’s daily interest on unpaid meal and rest breaks is ($12,159.50 x.07)/281 = $3.03. Total interest on the unpaid meal and rest breaks is $851.42.

Total interest to be awarded is $14,274.79

Attorney’s Fees

Plaintiff seeks $7,500 in attorney’s fees. Attorney’s fees may be awarded pursuant to Labor Code, sections 203, 218.5, 226, 1194, and 1198.5.

Local Rule of the Court, rule 3.214(a) provides, in relevant part: 

When a promissory note, contract, or statute provides for the recovery of reasonable attorneys’ fees, the following schedule will apply to the amount of the new judgement unless otherwise determined by the court. Default case: 

$0.01 to $1,000, 15% with a minimum of $75.00; 

$1,000.01 to $10,000, $150 plus 6% of the excess over $1,000; 

$10,000.01 to $50,000, $690 plus 3% of the excess over $10,000; 

$50,000.01 to $100,000, $1,890 plus 2% of the excess over $50,000; 

Over $100,000, $2,890 plus 1% of the excess over $100,000.

An application for a fee greater than listed in the schedule because of extraordinary services must include an itemized statement of the services rendered or to be rendered. (Local Rule of Court, rule 3.214(d).)

Here, Plaintiff seeks $7,500 in attorney’s fees. The amount allowed under rule 3.214(a) is $3,506.02. Plaintiff’s counsel testifies that he spent 15 hours on this case but fails to provide an itemized statement of the services rendered. This was a routine employment law case and Defendants defaulted shortly after it commenced. A greater award of attorney’s fees is not justified.

Costs 

 

Plaintiff requests $726.91 for filing fees, jury fees, and process server’s fees. These fees are allowable.