Judge Robert B. Broadbelt, Case Number: 24STCV18842, Date: 2025-03-07 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 24STCV18842, Date: 2025-03-07 Tentative Ruling

The court considered the moving, opposition, and reply papers filed in connection with (1) the demurrer filed by defendant Super Center Concepts, Inc., (2) the demurrer filed by defendant Chedraui USA, Inc., and (3) the motion to strike filed by defendant Chedraui USA, Inc.

The court considered the moving and opposition papers filed in connection with the motion to strike filed by defendant Super Center Concepts, Inc. No reply papers were filed.

The court grants defendant Super Center Concepts, Inc.’s request for judicial notice. (Evid. Code, § 452, subd. (c).)

The court grants plaintiff The People of the State of California’s request for judicial notice. (Evid. Code, § 452, subd. (c).)

The court grants defendant Chedraui USA, Inc.’s request for judicial notice. (Evid. Code, § 452, subd. (c).)

Plaintiff The People of the State of California (“Plaintiff”) filed the operative Amended Complaint in this action on September 3, 2024. The Amended Complaint alleges eight causes of action for (1) failure to pay minimum and overtime wages; (2) failure to provide meal periods; (3) failure to provide paid sick leave; (4) failure to provide wage statements and maintain wage records; (5) failure to pay all wages due upon separation; (6) improper requirement of releases; (7) unlawful contracts for janitorial services; and (8) unlawful or unfair business practices.

First, defendant Super Center Concepts, Inc., d/b/a Superior Grocers (“Superior”) moves the court for an order (1) sustaining its demurrer to the first through fifth and seventh and eighth causes of action, and (2) striking from Amended Complaint the requests for restitution.

Second, defendant Chedraui USA, Inc. (“Chedraui”) moves the court for an order (1) sustaining its demurrer to Plaintiff’s first through fifth and seventh and eighth causes of action, and (2) striking from the Amended Complaint the references to Labor Code section 2810.3 and various requests for remedies.

The court overrules defendant Superior’s demurrer to the first through fifth and eighth causes of action on the ground that they do not state facts sufficient to constitute causes of action because Labor Code section 2810.3 does not apply to Superior. (Code Civ. Proc., § 430.10, subd. (e).)

“A client employer shall share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by that labor contract for both of the following: [¶] (1) The payment of wages. [¶] (2) Failure to secure valid workers’ compensation coverage as required by Section 3700.” (Lab. Code, § 2810.3, subd. (b).) A client employer is defined to mean “a business entity, regardless of its form, that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.” (Lab. Code, § 2810.3, subd. (a)(1)(A).) “‘Usual course of business’ means the regular and customary work of a business, performed within or upon the premises or worksite of the client employer.” (Lab. Code, § 2810.3, subd. (a)(6).)

Superior contends that Labor Code section 2810.3 does not apply here because janitorial work is not within its usual course of business, such that Superior cannot be held liable for Plaintiff’s wage and hour claims as a client employer. The court disagrees. Plaintiff has alleged that (1) nonmoving defendants Modern Floor and Clean Solution Experts, Inc. (the “Janitorial Defendants”) provided workers who performed janitorial services, such that they are labor contractors (FAC ¶ 41), (2) Superior was provided workers to perform janitorial labor on the premises of Superior’s stores by Janitorial Defendants (FAC ¶ 41), (3) the daily cleaning of its stores is a regular and customary part of the supermarket business (FAC ¶ 41), and (4) Superior has a total workforce of at least 25 persons and has at least 6 workers supplied by labor contractors at any given time (FAC ¶ 42). Thus, the court finds that Plaintiff has alleged sufficient facts, for purposes of demurrer, to establish that Superior was provided workers to perform labor within its usual course of business from a labor contractor (i.e., Janitorial Defendants) and therefore is a client employer within the meaning of Labor Code section 2810.3. (Lab. Code, § 2810.3, subds. (a)(1)(A), (a)(1)(B)(i), (a)(1)(B)(ii).)

The court overrules defendant Superior’s demurrer to the first through fifth causes of action on the ground that they do not state facts sufficient to constitute causes of action because Plaintiff cannot recover penalties from Superior. (Code Civ. Proc., § 430.10, subd. (e).)

First, the first through third causes of action request remedies in addition to penalties, such that even if the court were to agree that Plaintiff cannot recover penalties, it would not establish that the court should sustain the demurrer to those causes of action, in their entirety.[1] (FAC ¶¶ 121 and 123 [seeking unpaid wages], 135-136 [seeking unpaid balance of wages], 144-145 [seeking backpay].)

Second, the court acknowledges that the fourth and fifth causes of action appear to only seek damages and penalties under the Labor Code. (FAC ¶¶ 158, 167-168.) The court, however, finds that Superior has not shown that Plaintiff is precluded from seeking civil penalties in connection with these causes of action pursuant to section 2810.3.

As set forth above, a client employer shares civil legal responsibility and liability with a labor contractor for “[t]he payment of wages.” (Lab. Code, § 2810.3, subd. (b)(1).) As used in this statute, wages “has the same meaning provided by Section 200[2] and [includes] all sums payable to an employee or the state based upon any failure to pay wages, as provided by law.” (Lab. Code, § 2810.3, subd. (a)(4) [emphasis added].) Here, Plaintiff appears to seek penalties in connection with these causes of action based on the failure to pay the janitorial workers all wages owed, such that they fall within the definition of “wages” in section 2810.3. (FAC ¶¶ 158 [seeking penalties for failing to provide compliant statements,], 168 [seeking penalties for failure to make final wage payments]; Holtegaard v. Howroyd-Wright Employment Agency, Inc. (C.D. Cal. 2020) 2020 WL 6051328 [the plaintiff could not recover derivative penalties, including waiting time penalties, “‘when the underlying claim is not an action for wages’”] [emphasis added].)

The court also notes that Superior has argued that the regulation issued by the Department of Labor Standards Enforcement to define wages for the purposes of section 2810.3 is unenforceable because it conflicts with section 2810.3. (Gov. Code, § 11342.2 [“no regulation adopted is valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose of the statute”].) The court finds that Superior has not met its burden to show that 8 C.C.R. 13830’s definition of wages conflicts with section 2810.3 and is therefore invalid because (1) as noted by Plaintiff, section 2810.3’s definition of wages includes “all sums payable to an employee or the state based upon any failure to pay wages, as provided by law[,]” and (2) regulation 13830 appears to specifically define that provision and therefore does not conflict therewith. Further, the penalties expressly permitted by that regulation are consistent with section 2810.3 because they include sums payable upon a failure to pay wages. For example, section 1194.2—referenced in subdivision (b) of regulation section 13830—allows for the recovery of liquidated damages in an action to recover wages because of the payment of a wage less than the minimum wage. (Lab. Code, § 1194.2, subd. (a).) Similarly, section 203, which is also referenced in subdivision (b) of regulation 13830, allows for the recovery penalties if an employer fails to pay any wages of an employee who is discharged or quits. (Lab. Code, § 203, subd. (a).)

Thus, the court finds that Superior has not shown that the regulation on which Plaintiff relies is invalid and unenforceable. (In re Gadlin (2020) 10 Cal.5th 915, 926 [“The burden lies with the party challenging the regulation to show its invalidity”].)

The court overrules defendant Superior’s demurrer to the first through fifth causes of action on the ground that they do not state facts sufficient to constitute causes of action because Plaintiff did not allege that it provided Superior with 30-days’ notice of violations before filing this action. (Code Civ. Proc., § 430.10, subd. (e).)

“At least 30 days prior to filing a civil action against a client employer for violations covered by this section, a worker or the worker’s representative shall notify the client employer of violations under subdivision (b).” (Lab. Code, § 2810.3, subd. (d).) Superior has not shown that Plaintiff is “the worker’s representative” within the meaning of this requirement. The court acknowledges, as raised by Superior, that Plaintiff has brought this action as a public prosecutor pursuant to Labor Code section 181. However, Plaintiff has not asserted that this is a representative action, and Superior has not cited binding authority establishing that a public prosecutor is considered a worker’s representative within the meaning of this statute.

The court overrules Superior’s demurrer to the seventh cause of action for violation for unlawful contracts for janitorial services because it states facts sufficient to constitute a cause of action since Plaintiff has alleged that (1) Superior entered into a contract for the provision of janitorial services with Janitorial Defendants (FAC ¶ 175), and (2) Superior knew or should have known that the contract did not include funds sufficient to allow the contractor to comply with all applicable laws governing the services to be provided based on (i) its knowledge that janitorial services were increasing significantly and that wage theft is rampant in the business (FAC ¶ 178), but it agreed to only a 4.4 percent higher rate on its stores, which was far less than the 52 percent increase in minimum wage (FAC ¶ 102), and (ii) the contracts’ not including the total number of workers to be employed, the total amount of wages to be paid, and the date(s) on which the wages are to be paid (FAC ¶ 176). (Code Civ. Proc., § 430.10, subd. (e); Lab. Code, § 2810, subd. (a).) Plaintiff has also alleged that the Superior’s unlawful contracts caused the janitorial workers to suffer damages (FAC ¶ 181).

The court overrules Superior’s demurrer to the eighth cause of action for unlawful or unfair business practices because (1) Superior requests that the court sustain its demurrer to this cause of action “to the extent they seek restitution for unpaid wages and penalties” and therefore seeks an order sustaining a demurrer to a portion of a cause of action, which is improper, and (2) Plaintiff has alleged that Superior is a client employer of the janitorial workers, thereby alleging that Superior is also legally responsible for the nonpayment of their wages under section 2810.3, such that Plaintiff has alleged facts establishing that Superior improperly withheld wages from the workers and therefore engaged in conduct that constitutes unlawful and unfair business practices under the unfair competition law. (Code Civ. Proc., § 430.10, subd. (e); Munoz v. Patel (2022) 81 Cal.App.5th 761, 780, n. 9 [a demurrer does not lie to a portion of a cause of action]; FAC ¶¶ 7, 184.)

Superior moves for an order striking the following paragraphs of Plaintiff’s Amended Complaint to the extent that Plaintiff requests restitution therein: (1) paragraph 184, subdivisions (a) through (g), (2) paragraph 185, (3) paragraph 210, and (4) paragraph 211.

The court denies Superior’s motion to strike paragraphs 184, subdivisions (a) through (g), 185, 210, and 211 because those allegations are not false, improper, irrelevant, or not drawn in conformity with the laws of this state. (Code Civ. Proc., § 436.)

The court agrees that it appears that Plaintiff is not permitted to recover certain penalties available under the Labor Code as restitution under the unfair competition law. (Pineda v. Bank of America, N.A. (2010) 50 Cal.4th 1389, 1402 [“We thus hold section 203 penalties cannot be recovered as restitution under the UCL”].) However, plaintiffs may seek restitution of unpaid wages under the unfair competition law, and it appears that is what Plaintiff is seeking to recover, which is proper.[3] (Id. at p. 1401 [court previously “held the plaintiff could seek restitution of unpaid overtime wages via the UCL”]; FAC ¶ 8 [alleging that Plaintiff seeks, inter alia, “restitution for wages owed to employees”].) Further, as set forth above, Plaintiff has adequately alleged that Superior may be liable for the wages owed to the janitorial workers pursuant to Labor Code section 2810.3.

The court overrules defendant Chedraui’s demurrer to the first through fifth causes of action on the ground that they do not state facts sufficient to constitute causes of action because section 2810.3 does not apply to services contracts since (1) “‘[l]abor’” is defined to have the same meaning as provided in section 200, which defines labor to include work “or service” rendered or performed under a contract or agreement if the labor is performed personally by the person demanding payment, and therefore (2) may apply to the agreement at issue here because Plaintiff has alleged that Chedraui was provided workers to perform janitorial services, which would encompass “labor” under section 200 (FAC ¶ 41). (Code Civ. Proc., § 430.10, subd. (e); Lab. Code, §§ 2810.3, subd. (a)(1)(A), 200.)

The court overrules defendant Chedraui’s demurrer to the first through fifth causes of action on the ground that they do not state facts sufficient to constitute causes of action because overnight janitorial services is not within Chedraui’s usual course of business since Plaintiff has sufficiently alleged that “[t]he daily cleaning of [Chedraui’s stores] is a regular and customary part of the supermarket business” (FAC ¶ 41). (Code Civ. Proc., § 430.10, subd. (e); Lab. Code, § 2810.3, subd. (a)(1)(A).)

The court overrules defendant Chedraui’s demurrer to the first through fifth causes of action on the ground that they do not state facts sufficient to constitute causes of action because Plaintiff did not allege that it provided Chedraui with 30-days’ notice of violations before filing this action since the court finds, as set forth in connection with the court’s ruling on Superior’s demurrer, that Plaintiff is not a worker’s representative within the meaning of section 2810.3 and therefore was not required to comply with this notice requirement. (Code Civ. Proc., § 430.10, subd. (e); Lab. Code, § 2810.3, (d).)

The court overrules defendant Chedraui’s demurrer to the seventh cause of action for violation for unlawful contracts for janitorial services because it states facts sufficient to constitute a cause of action since Plaintiff has sufficiently alleged that Chedraui “kn[e]w[] or should [have] know[n] that the contract or agreement [did] not include funds sufficient to allow the contractor to comply with all applicable” laws governing the labor or services to be provided to Chedraui based on Plaintiff’s allegations that (1) Chedraui never agreed to a rate increase on any of the stores maintained by the Janitorial Defendants despite knowing that the state minimum wage (and therefore labor costs) rose by 52 percent over the relevant timeframe (FAC ¶ 99), such that (2) Chedraui should have known that the contracts could not have provided sufficient funds for the lawful compensation of employees (FAC ¶ 99). (Code Civ. Proc., § 430.10, subd. (e); Lab. Code, § 2810, subd. (a).) The court also disagrees with Chedraui’s position that Plaintiff was required to allege the date(s) on which any such agreements were executed.

The court overrules defendant Chedraui’s demurrer to the eighth cause of action for unlawful or unfair business practices because it states facts sufficient to constitute a cause of action against it since (1) Plaintiff has alleged facts establishing that Chedraui is a client employer, thereby establishing that Chedraui “shall share with” Janitorial Defendants the “legal responsibility” for the payment of the janitorial workers’ wages, such that (2) Plaintiff has sufficiently alleged that Chedraui engaged in acts that are unlawful or unfair by failing to pay the janitorial workers all wages owed (FAC ¶ 184). (Code Civ. Proc., § 430.10, subd. (e); Lab. Code, § 2810.3, subd. (b)(1).)

Defendant Chedraui moves to strike from Plaintiff’s Amended Complaint (1) all references to Labor Code section 2810.3, (2) any requests for relief that are made but are unavailable under Labor Code section 2810.3, (3) the request for penalties in connection with the seventh cause of action, (4) each paragraph alleged in support of the eighth cause of action, and (5) the requests for restitution in connection with the eighth cause of action.

First, the court denies Chedraui’s motion to strike the references to Labor Code section 2810.3 because the court has found, for the reasons set forth above, that Plaintiff has alleged facts establishing its applicability. (Code Civ. Proc., § 436.)

Second, the court denies Chedraui’s motion to strike paragraphs 187-203 in Plaintiff’s prayer because the court finds that Chedraui has not met its burden to show that those paragraphs request relief that is unavailable under Labor Code section 2810.3. (Notice of Mot., p. 2:18; Mot. pp. 13:19-14:25.)

Paragraphs 189-190, 192-193, 195-196, 199-200, and 202-203 request injunctive relief and attorney’s fees and costs. However, Chedraui did not present adequate argument, authority, and analysis establishing that Plaintiff may not recover such relief.

As to the requests for damages and penalties in paragraphs 187-188, 191, 194, 197-198, and 201, Chedraui has not shown that Plaintiff may not recover those remedies because Plaintiff appears to properly request the payment of wages within the meaning of section 2810.3.

Specifically, and as set forth above, recoverable wages include amounts for labor performed and “all sums payable to an employee or the state based upon any failure to pay wages, as provided by law.” (Lab. Code, §§ 2810.3, subd. (a)(4), 200.) The request for liquidated damages under Labor Code section 1194.2 (FAC ¶ 187) is a sum payable to the employee based on a failure to pay wages and is therefore recoverable. (Lab. Code, § 1194.2, subd. (a) [an employee shall be entitled to recover liquidated damages in an action to recover wages].) Similarly, penalties under Labor Code section 1197.1 (FAC ¶ 188) are available if an employer pays a wage less than the minimum wage fixed by applicable or state law and therefore are recoverable. (Lab. Code, § 1197.1, subd. (a).) The request for meal period premium wages owed (FAC ¶ 191) appears to seek the recovery of wages that are required to be paid to an employee for missed meal or rest period, and are therefore recoverable. (Lab. Code, § 226.7, subd. (c); Naranjo v. Spectrum Security Services, Inc. (2009) 172 Cal.App.4th 654, 666 [“the additional compensation identified . . . is not a penalty, but a form of ‘premium wage’ paid to employees to compensate them for an adverse condition they have encountered during their work hours, namely, the potential hazard to their health and welfare from the denial of rest and meal breaks”].)

Further, the request for backpay and sick days unlawfully held (FAC ¶ 194) appears to seek the recovery of damages for wages that should have been paid for work performed but were not, thereby constituting wages. (Lab. Code, § 248.5, subd. (b); 8 C.C.R. § 13830, subd. (b).) The requests for penalties under Labor Code sections 226, 226.3, and 203 (FAC ¶¶ 197, 198, 201) also appear to seek wages within the meaning of section 2810.3 because (1) the requests for penalties under sections 226 and 226.3 are derivative of and caused by the claims for nonpayment of wages, and (2) the request for penalties under section 203 is based on the alleged failure to pay wages of an employee who is discharged or quits. (Lab. Code, §§ 226, subd. (e)(1), 226.3, 203; 8 C.C.R. § 13830, subd. (b) [including as wages under 2810.3 damages or penalties due to the worker or state based on failure to pay wages, including under sections 203, 226, and 226.3.) Further, to the extent that Chedraui has argued that these remedies are not recoverable because regulation 13830 is in conflict with section 2810.3, the court disagrees for the reasons set forth above.

Third, the court grants Chedraui’s motion to strike the term “and penalties” from paragraph 182, alleged in support of the seventh cause of action for violation for unlawful contracts under Labor Code section 2810, because section 2810 does not provide for the recovery of penalties. (Code Civ. Proc., § 436; Lab. Code, § 2810, subd. (g)(1) [authorizing recovery of damages].)

Fourth, the court denies Chedraui’s motion to strike all the allegations in the eighth cause of action for the reasons set forth in connection with the court’s ruling on Chedraui’s demurrer to this cause of action. (Code Civ. Proc., § 436.)

Fifth, the court denies Chedraui’s motion to strike the request for restitution in support of the eighth cause of action (FAC ¶ 210) because Plaintiff has sufficiently alleged that Chedraui is a client employer and therefore jointly responsible for the janitorial workers’ nonpayment of wages, such that Plaintiff has alleged that it may recover from Chedraui restitution for those wages. (Code Civ. Proc., § 436.)

The court overrules defendant Super Center Concepts, Inc.’s demurrer to plaintiff The People of the State of California’s Amended Complaint.

The court denies defendant Super Center Concepts, Inc.’s motion to strike plaintiff The People of the State of California’s Amended Complaint.

The court overrules defendant Chedraui USA, Inc.’s demurrer to plaintiff The People of the State of California’s Amended Complaint.

The court grants in part defendant Chedraui USA, Inc.’s motion to strike as follows.

The court orders that the term “and penalties” from paragraph 182 of plaintiff The People of the State of California’s Amended Complaint is stricken without leave to amend.

The court denies all other relief requested in defendant Chedraui USA, Inc.’s motion to strike.

The court orders defendant Super Center Concepts, Inc. to file an answer to plaintiff The People of the State of California’s Amended Complaint within 20 days of the date of this order.

The court orders defendant Chedraui USA, Inc. to file an answer to plaintiff The People of the State of California’s Amended Complaint within 20 days of the date of this order.

The court orders plaintiff The People of the State of California to give notice of this ruling.

[1] The proper procedure would be to move to strike the requests for penalties in connection with these causes of action. (Venice Town Council, Inc. v. City of Los Angeles (1996) 47 Cal.App.4th 1547, 1562 [“a demurrer tests the sufficiency of the factual allegations of the complaint rather than the relief suggested in the prayer of the complaint”].)

[2] Section 200 defines wages to include “all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation.”

[3] Paragraph 211 of the prayer seeks penalties not under the Labor Code, but under Business and Professions Code section 17206.

the people of the state of california ; Plaintiff, vs. modern floor specialists, inc. , et al.; Defendants.	Case No.:	24STCV18842

	Hearing Date:	March 7, 2025

	Time:	10:00 a.m.

	[tentative] Order RE: (1) defendant’s demurrer to amended complaint (2) defendant’s motion to strike amended complaint (3) defendant’s demurrer to amended complaint (4) defendant’s motion to strike amended complaint