Judge: Loren G. Freestone, Case: 37-2022-00028715-CU-OE-CTL, Date: 2024-06-07 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - June 06, 2024

06/07/2024  10:30:00 AM  C-64 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Loren G. Freestone

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Civil - Unlimited  Other employment Summary Judgment / Summary Adjudication (Civil) 37-2022-00028715-CU-OE-CTL BOGDAS VS COXCOM LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING Defendants Coxcom LLC, Cox California Telecom LLC, and Cox Communications California LLC's (collectively, Cox) motion for summary judgment, or in the alternative summary adjudication, as to the first amended complaint filed by Plaintiffs Jonathan Bogdas and Francisco Gonzalez is DENIED.

Preliminary Matters Plaintiffs' evidentiary objections (ROA #166, 174): Sustained as to Paragraph 9 of the Wilson Declaration and otherwise overruled.

Cox's evidentiary objections (ROA #182): Overruled. The objections also fail to quote or set forth the purportedly objectionable statements, which is an independent basis for overruling them. (Cal. Rules of Court, rule 3.1354(b)(3); Schmidt v. Citibank, N.A. (2018) 28 Cal.App.5th 1109, 1118.) First Cause of Action (Lab. Code § 227.3) Plaintiffs' first cause of action is for failure to payout vested paid-time-off as required by Labor Code section 227.3.

Prior to 2019, Cox had a traditional paid time off policy whereby employees accrued a set number of hours each month up to a certain cap. The amount of time accrued each month, and the maximum accrual, were based on an employee's tenure with the company and whether they were fulltime or parttime.

In 2019, Cox shifted to a new 'Flexible Vacation Policy' for fulltime exempt employees. The policy states that Cox 'offers eligible employees the opportunity to take as much vacation with pay as you deem consistent with your duties, the Company's need, and its obligations.' The policy requires employees to first utilize any PTO accrued under the old policy before taking vacation under the new policy. The policy further states that the 'Company generally leaves to your discretion how to manage your time, including scheduling time away from the work place,' but that there 'may be times when your request for vacation conflicts with business needs and cannot be approved.' The policy states that the 'Company trusts you to use your best judgment when deciding how much vacation time to use,' and that although 'you are not limited in the amount of vacation time you may take under this policy, you are expected to work on a full-time basis and to spend as much time as necessary in the work place and Calendar No.: Event ID:  TENTATIVE RULINGS

3087552  25 CASE NUMBER: CASE TITLE:  BOGDAS VS COXCOM LLC [IMAGED]  37-2022-00028715-CU-OE-CTL away from the work place to meet business requirements and obligations,' and that 'failure to do so may subject you to performance counseling and/or discipline.' The policy additional states that vacation under the policy 'is not earned or accrued at any time, and you will not be paid for any vacation time if your employment with the Company ends, except for PTO that has already been accrued prior to the effective date of this policy, or that you accrued prior to your promotion into an eligible position, and which remains unused at the time of separation.' Plaintiffs premise their claims on three arguments: (1) the new policy unlawfully forfeits accrued vacation by preventing employees from taking advantage of it until after exhausting hours accrued under the old policy, (2) the new policy inequitably creates two classes of employees-those with previously accrued vacation and those without, and (3) the new policy is not a lawful unlimited policy, and therefore employees continued to accrue vacation that was not paid out upon their separation from employment.

There are triable issues on the third argument, and therefore it is unnecessary to address the other two arguments.

'California law does not require employers to provide employees with paid vacation. Whenever an employer does have a policy of providing its employees with paid vacation, however, [Labor Code] section 227.3 requires the employer to pay as wages any 'vested' vacation time a terminated employee has not used.' (McPherson v. EF Intercultural Foundation, Inc. (2020) 47 Cal.App.5th 243, 259.) Some employers have recently started implementing 'unlimited' time off policies. (See McPherson, supra, 47 Cal.App.5th at pp. 268–269.) The benefit and appeal of this type of policy is illustrated by the following example that those who have worked in law firms may appreciate: '[A] hypothetical unlimited-leave policy where attorneys in a law firm can take unlimited time off during the year as long as they bill 2,000 hours. . . . [O]ne associate-devoted to skiing and surfing-averages nine hours of work a day, six days a week. At that pace, the attorney can take 15 weeks of paid time off to ski and surf, and still meet his billable-hour budget. At the other end of the spectrum, another attorney-a parent with family demands-averages eight hours of work on weekdays and does not work weekends. Because he chooses to work fewer hours to spend time with his family, it will take him 50 weeks to bill 2,000 hours, so he takes just two weeks of vacation. The attorneys obviously benefit from the described unlimited-leave policy: the surfer-skier can take more than three months of vacation every year-an amount unheard of in a traditional accrual policy-and the parent can work fewer hours each week, freeing up evenings and weekends, in lieu of taking more vacation that he most likely would have accrued under a traditional policy.' (Id. at p. 268, fn. 23.) 'Such a policy may not trigger section 227.3 where, for example, in writing it (1) clearly provides that employees' ability to take paid time off is not a form of additional wages for services performed, but perhaps part of the employer's promise to provide a flexible work schedule-including employees' ability to decide when and how much time to take off; (2) spells out the rights and obligations of both employee and employer and the consequences of failing to schedule time off; (3) in practice allows sufficient opportunity for employees to take time off, or work fewer hours in lieu of taking time off; and (4) is administered fairly so that it neither becomes a de factor 'use it or lose it policy' nor results in inequities, such as where one employee works many hours, taking minimal time off, and another works fewer hours and takes more time off.' (Ibid.) However, when a purportedly 'unlimited' policy has an implied limit, section 227.3 may apply such that employees accrue time off that must be paid out upon separation from employment. (See McPherson, supra, 47 Cal.App.5th at pp. 263–265.) An 'employer cannot avoid section 227.3 by leaving the amount of vacation time undefined in its policy while impliedly limiting the time actually available for approval.' (Id. at p. 265.) The policy need not permit employees 'to take vacation 365 days a year,' but it should at least 'afford employees the ability to take longer or more frequent periods of time off than a traditional accrual policy or allow employees to work fewer hours in lieu of having more vacation days.' (Id. at p. 263, fn. 16.) Calendar No.: Event ID:  TENTATIVE RULINGS

3087552  25 CASE NUMBER: CASE TITLE:  BOGDAS VS COXCOM LLC [IMAGED]  37-2022-00028715-CU-OE-CTL In McPherson, for example, the employer argued that the employees ('area managers') did not accrue vacation because it had a lawful 'unlimited' policy. (McPherson, supra, 47 Cal.App.5th at p. 258.) It was undisputed that the plaintiffs were able to take some vacations under the policy, such as a one week cruise to Alaska to celebrate a wedding anniversary. (Id. at pp. 263, 266, fn. 20.) One of the plaintiffs had even been approved 4 weeks of vacation before she retired. (Id. at p. 263.) However, the plaintiffs were expected to take vacation in the range typically available to other employees at the company who were subject to a different, more traditional accrual policy. (Id. at p. 263.) The plaintiffs only took about two weeks of vacation each year on average, and that they never sought or received more than four weeks of vacation. (Id. at pp. 263–264 & fn. 17.) Employees were also only able to take as much vacation as they wanted 'within reason to be able to still perform the duties of the job, so as to not fall totally behind on their workload.' (Id. at p. 266, fn. 21.) The plaintiffs' schedules and job duties made it very difficult to take significant time off. (Id. at p. 264.) Even during the nonpeak season, there was no evidence that the plaintiffs took extended vacations or substantially reduced their hours during that time. (Ibid.) There was also no evidence that their employer would have approved 10 or 15 weeks off, or even 3 or 4 weeks at a time. (Id. at p. 265.) The plaintiffs were therefore worse off under the 'unlimited' time off policy because they could neither take off more vacation nor cash out unused vacation. (Id. at p. 265, fn. 18.) The court held this was substantial evidence supporting the trial court's finding that the purportedly 'unlimited' policy was subject to an implied limit, and therefore the employees continued to accrue vacation that should have been paid upon their separation from employment. (Ibid.) Here, Cox presents evidence that employees 'have certain job obligations that vary from job to job, such as the requirement for a salesperson [like Plaintiffs] to satisfy the sales quota assigned to him or her.

Once employees meet their job requirements, however, they can take off as much time as they want with pay. To put oneself in a position to take a large block of vacation, an employee might need to work extra hours to effectively 'get ahead' on one's workload, but the new policy left it to an employee and his or her manager to work out the employment requirements, and then the employee was free to schedule vacation time at the employee's discretion consistent with meeting the job requirements as set forth by the manager.' Cox also submits evidence that Plaintiffs took various vacations, it never denied any of their requests for a vacation, one of their high-performing co-workers was able to take off every other Friday, paid out all unused vacation that Plaintiffs had accrued under the old policy, and as a result of various errors, overpaid Plaintiffs additional vacation hours.

However, Plaintiffs present evidence that time off under the new policy was in fact limited. The terms of the policy itself indicate several vague limitations (e.g., the 'Company's need, and its obligations,' 'business needs,' 'business requirements and obligations'). Whereas Cox referred to the new policy as an 'unlimited vacation policy' in its moving papers (Mot. at 10:20–21), it seemingly backtracks from that description in its reply and acknowledges that the policy enables it to deny time off 'where the employee taking off work would be inconsistent with Cox's business needs' (Reply at 8:12–9:13). Plaintiffs present evidence that they were not guaranteed any vacation time nor did Cox ensure they took a minimum amount of vacation time each year. Plaintiffs present evidence that they took less vacation under the new policy than they would have accrued under the old policy. Plaintiffs present evidence that they and other sales employees were subject to quotas that made it very difficult to take an appreciable amount of time off under the new policy. Plaintiffs present evidence that their managers discouraged them and other employees with sales quotas from taking time off under the new policy. Plaintiffs present evidence that it would be difficult for a sales professional to take 3-4 weeks off and hit their monthly quotas. Plaintiffs present evidence that Cox would deny time off as excessive even if employees were meeting their performance goals, and in evaluating whether an employee had taken too much time off, Cox would look to the old accrual-based vacation policy as a gauge for what was reasonable. Plaintiffs present evidence that Cox would not have approved 2 months of time off under the new policy, and that employees were not allowed to utilize the policy as a flexible work arrangement (e.g., every Friday off).

Cox argues that much of this evidence is 'immaterial' and that Plaintiffs personal claims fail because it never denied any of their requests for time off. The issue is not simply whether Cox approved Plaintiffs time-off requests, but whether there was a limit to the amount of time off Cox would have approved. If Calendar No.: Event ID:  TENTATIVE RULINGS

3087552  25 CASE NUMBER: CASE TITLE:  BOGDAS VS COXCOM LLC [IMAGED]  37-2022-00028715-CU-OE-CTL so, then Plaintiffs accrued and should have been paid out the difference.

For the reasons set forth above, there are triable issues as to whether there was an implied limit on the amount of time off available under the 'Flexible Vacation Policy,' and therefore whether Plaintiffs should have continued to accrue vacation that was not paid out upon their separation from employment as required by Labor Code section 227.3. The motion for summary adjudication as to the first cause of action is therefore denied.

Second Cause of Action Plaintiffs' second cause of action is for failure to furnish accurate itemized wage statements as required by Labor Code section 226.

Section 226 does not require employers to include the monetary amount of accrued vacation pay on every wage statement an employee receives. (See generally Soto v. Motel 6 Operating L.P. (2016) 4 Cal.App.5th 385.) However, such information must be included on an employees' final wage statement.

(Ibid.) As set forth above, there are triable issues as to whether Plaintiffs accrued more vacation hours than they were ultimately paid out when their employment ended. As such, there are triable issues as to the derivative claim based on inaccurate final wage statements. The motion for summary adjudication as to the second cause of action is therefore denied.

Third Cause of Action Plaintiffs' third cause of action is for failure to timely pay final wages upon discharge as required by Labor Code sections 201 and 202. Plaintiffs also seek a waiting time penalty on the ground that violation was 'willful' under Labor Code section 203.

As with other types of wages, employers must promptly pay employees all accrued vacation upon their separation from employment-immediately upon termination, and within 72-hours upon resignation. (Lab.

Code, §§ 201–202; Singh v. Southland Stone U.S.A., Inc. (2010) 186 Cal.App.4th 338, 363.) Again, as there are triable issues as to whether Plaintiffs accrued more vacation hours than they were ultimately paid out when their employment ended, there are triable issues as to the derivative claim based on the failure to timely pay wages upon separation.

Cox argues that there is no evidence any failure to pay was 'willful' as required for waiting time penalties because 'there is no case law that holds that Cox's Flexible Vacation Policy was unlawful.' 'To act 'willfully' an employer need not act with a deliberate evil purpose. Rather, the employer need only intentionally fail or refuse to perform an act which was required to be done. However, an employer's reasonable, good faith belief that wages are not owed may negate a finding of willfulness.' (Choate v. Celite Corp. (2013) 215 Cal.App.4th 1460, 1468.) In Choate, an employer refused to pay the plaintiffs vacation time on the ground their collective bargaining agreements waived their statutory right to that pay. Although the court of appeal agreed with the plaintiffs that there was no such waiver, it held they could not state a claim for waiting time penalties because the employer's failure to pay was not willful. The court noted that it was 'the first case to define the standard for waiver under section 227.3,' and therefore the employer's reliance on a different standard that found some support in existing law was reasonable. (Ibid.) Here, when Cox implemented the 'Flexible Vacation Policy' in 2019, there was no case law whether employees accrue vacation under a purportedly 'unlimited' time off policy that is in fact subject to an implied limit. (See McPherson, supra, 47 Cal.App.5th at p. 258 ['No California authority has addressed whether a nonaccrual, unlimited paid time off policy is subject to section 227.3'].) However, that issue was addressed in 2020. (Id. at p. 249 ['When an employer's policy allows an employee to take an Calendar No.: Event ID:  TENTATIVE RULINGS

3087552  25 CASE NUMBER: CASE TITLE:  BOGDAS VS COXCOM LLC [IMAGED]  37-2022-00028715-CU-OE-CTL unspecified amount of paid time off without accruing vacation time, does the employee's right to that paid time off vest so the employer must pay her for unused vacation under Labor Code section 227.3 when her employment ends? Or does section 227.3 apply only to policies providing a fixed amount of vacation that accrues over time?'].) Thus, at the time Plaintiffs' employment with Cox ended in 2021, there was case law on this issue. Cox does not cite to any evidence showing that it considered McPherson in evaluating whether Plaintiffs were continuing to accrue vacation under the new policy that needed to be paid out when their employment ended. Nor does Cox cite to any other evidence bearing on the issue of whether, as of 2021, it held a reasonable and good faith belief that no additional vacation was owed.

There are triable issues as to whether Cox's failure to pay out additional vacation upon Plaintiffs' separation from employment was willful. The motion for summary adjudication as to the third cause of action is therefore denied.

Fourth Cause of Action Plaintiffs' fourth cause of action is for restitution under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.).

Conduct that violates the Labor Code also violates the UCL. (See Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 173–178; Safeway, Inc. v. Superior Court (2015) 238 Cal.App.4th 1138, 1154–1158; Countrywide Financial Corp. v. Bundy (2010) 187 Cal.App.4th 234, 254–258; Hudgins v. Neiman Marcus Group, Inc. (1995) 34 Cal.App.4th 1109, 1126–1127.) As set forth above, there are triable issues as to whether Cox's failure to pay additional accrued vacation upon Plaintiffs' separation from employment violated the Labor Code. As such, there are triable issues as to the derivative claim brought under the UCL. The motion for summary adjudication as to the fourth cause of action is therefore denied.

Fifth Cause of Action Plaintiffs' fifth cause of action is for civil penalties under the Private Attorneys General Act of 2004 (Lab.

Code § 2698 et seq.).

An employee who has suffered a Labor Code violation is an 'aggrieved employee' with standing to pursue a representative action on behalf of the state under PAGA. (See Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 83–84; see, e.g., Meda v. Autozone, Inc. (2022) 81 Cal.App.5th 366.) As set forth above, there are triable issues as to whether Cox's failure to pay additional accrued vacation upon Plaintiffs' separation from employment violated the Labor Code. As such, there are triable issues as to the derivative claim brought under PAGA. The motion for summary adjudication as to the fourth cause of action is therefore denied.

Cox California Telcom LLC Cox California Telcom LLC argues it is separately entitled to summary judgment because it did not employ Plaintiffs.

To 'employ' has multiple alternate definitions, and a worker may have more than one employer. (See Castaneda v. Ensign Group, Inc. (2014) 229 Cal.App.4th 1015, 1019.) 'The question of whether an employment relationship exists is generally a question reserved for the trier of fact.' (Taylor v. Financial Casualty & Surety Inc. (2021) 67 Cal.App.5th 966, 993.) A defendant moving for summary judgment on based on the lack of an employment relationship bears an initial burden of submitting evidence showing it did not 'employ' the plaintiff under any of the Calendar No.: Event ID:  TENTATIVE RULINGS

3087552  25 CASE NUMBER: CASE TITLE:  BOGDAS VS COXCOM LLC [IMAGED]  37-2022-00028715-CU-OE-CTL alternate definitions (i.e., '(a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship').

(See Taylor, supra, 67 Cal.App.5th at pp. 985, 991–993.) To meet that burden, supporting declarations 'must cite evidentiary facts, not legal conclusions or ultimate facts.' (Id. at p. 994.) A naked claim that no employment relationship existed is an 'inadmissible conclusion' and therefore not sufficient. (Ibid.) Here, the only evidence Cox submitted on this issue is a declaration by Keith Wilson (Vice President, Employee Relations & Compliance at CCI Corporate Services LLC). That declaration states, in pertinent part: 'I am aware of facts that demonstrate that Cox California Telcom, LLC is not a proper defendant in this action. On or about January 1, 2012, Cox's California operations were organized under Cox Communications California, LLC. Cox Communications California, LLC is a limited liability company organized under the laws of Delaware. Its sole member is Cox Communications, Inc. Cox California Telecom, LLC is a wholly owned subsidiary of Cox Communications California, LLC. It is a regulatory entity with no employees. As such, it never employed either of the two named Plaintiffs in this action nor did it employ anyone else subject to the vacation policy at issue in this lawsuit.' Although Wilson declares that Cox California Telcom LLC has no employees and did not employe Plaintiff or anyone else, that is a legal conclusion. Wilson does not set forth sufficient evidentiary facts bearing on the three alternate definitions of 'employ.' Thus, as noted above, Plaintiffs' objections to this paragraph of the Wilson declaration are sustained.

The 'Flexible Vacation Policy' at issue states that it applies to employees of 'the Company.' Although it is capitalized, the term 'Company' is not defined in the policy. Wilson also confirms that Cox California Telcom LLC is part of Cox's 'California operations.' Cox California Telcom LLC failed to meet its initial burden of showing that it did not employ Plaintiffs. Its motion for summary judgment based on the lack of an employment relationship is therefore denied.

Conclusion There are triable issues on Plaintiffs' claim for failure to pay accrued vacation under Labor Code section 227.3, as well as triable issues on Plaintiffs' derivative claims under other sections of the Labor Code, the UCL, and PAGA. Cox California Telcom LLC also failed to meet its initial burden of showing that it was not Plaintiffs' employer. The motion for summary judgment, or in the alternative summary adjudication, is therefore denied.

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