Frausto v. Bank of America N A

Background

Irma Frausto sued Bank of America, National Association, her former employer, in a putative class action. The complaint asserted six class claims under California law and one representative claim under California’s Private Attorneys General Act. The claims alleged that Bank of America: (1) calculated overtime without including certain bonuses; (2) failed to provide meal breaks; (3) failed to provide rest breaks; (4) paid final wages late; (5) provided inaccurate wage statements; (6) engaged in unfair business practices; and (7) owed civil penalties based on the overtime and meal-and-rest-break allegations.

Bank of America moved for summary judgment on all claims. Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law.

Overtime bonuses

Frausto argued that Recognition Points awarded through Bank of America’s Global Recognition Program had to be included when calculating her overtime rate. The court applied the Fair Labor Standards Act’s treatment of discretionary bonuses because the parties agreed that standard applied to the California overtime claim.

The court held that the bonuses were discretionary. Employees could nominate coworkers, but nominations were voluntary; managers could approve or reject nominations and change the number of points; and the awards were not tied to hours worked, completion of a defined task, or performance metrics. The court granted summary judgment on claim one because there was no genuine dispute of material fact supporting a contrary conclusion.

Meal and rest breaks

Bank of America maintained written policies requiring meal and rest breaks, trained employees on those policies, and instructed Frausto to log out of the phone system before breaks. Frausto testified, however, that a technical problem sometimes prevented her from stopping incoming calls. She said she had to answer calls even when that caused her to miss breaks, that missed calls could affect her performance ratings, that she was told to handle calls when possible, and that managers responded to reports of missed breaks by telling her to do the best she could. She also identified an email instructing employees not to go to break and to stay on the phone during high call volume.

The court found genuine disputes of material fact about whether Bank of America’s actions and workplace conditions denied Frausto meal and rest breaks. It therefore denied summary judgment on those claims. The court explained that a written break policy alone does not resolve whether an employer pressured employees to work through breaks or otherwise made taking them difficult.

Final wages

Frausto claimed that Bank of America willfully failed to pay all wages due when it terminated her. Bank of America sent her final paycheck four days after termination and included four days of penalty pay. The court granted the motion in part as to the portion of the claim based on the discretionary-bonus claim and the four days of penalties that Bank of America had already paid. It otherwise denied the motion. The court determined that factual disputes remained about whether Bank of America intentionally failed to pay amounts allegedly owed for missed meal and rest breaks and whether it had a good-faith defense.

Wage statements

Frausto alleged that Bank of America’s wage statements did not accurately reflect wages owed for overtime and meal-and-rest-break premiums. Bank of America argued that the statements accurately reported the wages it actually paid, that Frausto suffered no legally recognized injury, and that any violation was not knowing and intentional.

The court denied summary judgment on this claim except to the extent it was based on the discretionary-bonus claim. The court held that an employee may show injury in several ways, including confusion about whether all wages were paid or difficulty reconstructing pay records. Frausto testified that she lacked a way to determine what she was owed and what had been paid. The court also declined to revisit its earlier rejection of Bank of America’s arguments about the accuracy and intentionality of the wage-statement violations.

Unfair business practices and civil penalties

The unfair-business-practices claim and the Private Attorneys General Act claim depended on underlying Labor Code violations. The court granted summary judgment on both claims to the extent they were based on the discretionary-bonus claim. It otherwise denied summary judgment, and stated that those claims survived to the extent they were based on the meal-and-rest-break claims.

Disposition

The court granted Bank of America’s motion for summary judgment on claim one and on claims four through seven to the extent they were predicated on claim one. It otherwise denied the motion. The order disposed of the summary-judgment motion, ECF No. 99.