Zhou v. Chai

Background

Yue Zhou, Yiwei Zeng, Tianmao Zhu, and Guohuo Zheng moved for summary judgment against Sin Kiong Chai and Huei Chu Chai. Their claims alleged violations of the federal Fair Labor Standards Act, California wage laws, California’s Unfair Competition Law, and the Private Attorneys General Act. They also sought summary judgment on the defendants’ affirmative defenses.

The opinion states that the plaintiffs worked as cooks and generally worked more than eight hours per day. They were paid fixed monthly or daily amounts as net pay, using a combination of cash and checks. The cash payments were not included in their itemized wage statements, which also did not accurately report hours or include the required last four digits of a Social Security number or another employee identification number. The defendants admitted that the plaintiffs were nonexempt employees. The defendants filed a late, two-page opposition arguing that material factual disputes existed over whether the salaries were fixed and included overtime.

Rulings on the Claims

Federal and California overtime

The court denied summary judgment on the plaintiffs’ federal overtime claim. The plaintiffs’ reconstructed schedules did not identify the beginning of each workweek, provide final overtime-hour totals, or connect the calculations to the supporting exhibits. Their proposed regular-rate calculations also failed to account for changing weekly hours, omitted part of Zheng’s salary history, and included an unsupported adjustment for taxes and withholdings.

The court granted summary judgment on the plaintiffs’ California overtime claim to the extent it sought compensation for work exceeding eight hours in a day. The court found that the undisputed evidence showed the plaintiffs received fixed salaries for regular, non-overtime work, so they were entitled to daily overtime under California law. The court denied summary judgment on the California claim for weekly overtime for the same calculation deficiencies. It did not decide the amount of state-law overtime damages.

Minimum wage

The court denied summary judgment on the minimum-wage claim. The plaintiffs’ calculations did not explain how the claimed totals were derived, how they matched the evidence, or whether they accounted for changing work schedules. The court also found that the plaintiffs did not explain the basis for the minimum-wage rates they used under the San Jose ordinance.

Waiting-time penalties

The court granted summary judgment on the waiting-time-penalty claim to the extent it was based on unpaid daily overtime remaining due when the plaintiffs’ employment ended. The court did not decide the amount of the penalties or damages because of the deficiencies in the plaintiffs’ calculations.

Wage statements

The court granted summary judgment on the wage-statement claim. It found that the defendants’ statements did not accurately show hours worked, cash compensation, gross or net wages, deductions, applicable hourly rates, or the required identifying information. The court also found that the violations were knowing and intentional and that the plaintiffs suffered the type of injury required for statutory penalties because they could not determine the required information from the statements alone.

The court awarded statutory penalties of $3,750 to Zhou, $2,650 to Zeng, $1,050 to Zhu, and $4,000 to Zheng, the statutory maximum stated in the opinion for Zheng. The court also stated that the plaintiffs were entitled to recover reasonable attorney fees and costs under the wage-statement statute.

Private Attorneys General Act

The court denied summary judgment on the claim for civil penalties under the Private Attorneys General Act. It gave two reasons. First, the plaintiffs said that the cooks did not suffer the split-shift violations for which they sought penalties on behalf of non-cook employees, so they were not aggrieved employees who could represent those employees for that claim. Second, the plaintiffs did not adequately support the proposed penalty amounts, including the number of pay periods and the applicable employment periods. Their showing concerning the underlying overtime and minimum-wage violations also had the deficiencies discussed earlier.

Unfair Competition Law

The court denied summary judgment on the unfair-competition claim insofar as the plaintiffs sought restitution because they had not shown that restitution was available when an adequate legal remedy existed. The court also denied summary judgment on the request for injunctive relief. The plaintiffs stated that the defendants had sold the restaurant and ceased operations, but did not clarify whether they still sought an injunction or whether the request had become moot.

Rest and meal breaks

The court granted the plaintiffs’ request to dismiss their fifth cause of action for rest and meal-break violations. The opinion states that this cause of action was dismissed, without adding a “with prejudice” or “without prejudice” designation.

Affirmative Defenses

The defendants asserted laches, waiver, estoppel, failure to state a claim, unjust enrichment, and unclean hands. The court granted the plaintiffs’ motion for summary judgment as to those affirmative defenses. It explained that the defendants, who bore the burden of proving the defenses, submitted no supporting evidence and did not respond to the plaintiffs’ arguments concerning them.

Disposition

The court ordered that the plaintiffs’ motion for summary judgment was granted in part and denied in part. The fifth cause of action was dismissed. The court scheduled a case-management conference for September 26, 2024, and required a joint conference statement by noon on September 19, 2024.