Barajas v. Carriage Cemetery Services of California, Inc.

Background

Yoshira Barajas, Grant, and Nachae Williams brought a wage-and-hour class action against Carriage Services, Inc. (CSI), which the opinion says provides funeral and burial-related services. The court had previously dismissed most claims in the first amended complaint, leaving Barajas’s overtime claim as the only surviving claim at that stage. The plaintiffs filed a second amended complaint, and CSI moved to dismiss it under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient and plausible claim.

Minimum-wage claim

The court granted in part and denied in part the motion to dismiss the minimum-wage claim. Barajas did not plausibly allege a minimum-wage violation for her hourly Consultant work because, based on the hours and pay alleged, her effective hourly wage exceeded the applicable minimum wage. Her claim based on work as a commission-only salesperson was viable because she alleged that she received no compensation for hours worked.

Grant’s claim based on his hourly Advanced Planning Counselor work was not plausible because he did not allege his hourly pay or provide enough detail about the additional hours worked. His claim based on work as an Outside Sales Representative was viable because he alleged that he received no compensation despite working in an effort to make sales.

Williams’s minimum-wage claim was not plausible for either her Pre-Planning Counselor work or her Outside Sales Representative work. For the first theory, the opinion found insufficient detail about how many hours she worked beyond 40 per week. For the second, she did not allege that she received no money at all for her work. The court allowed amendment where these claims were deficient.

Overtime claim

The court granted in part and denied in part the motion to dismiss the overtime claim. Barajas’s overtime theories were viable for both her Consultant work and her commission-only salesperson work. Williams’s overtime theory was viable for her Pre-Planning Counselor work because she alleged an average workweek exceeding 40 hours, pay of $17 per hour for up to 40 hours, and no payment for additional hours. Her theory based on Outside Sales Representative work was too conclusory.

Grant’s overtime claim based on Advanced Planning Counselor work was not viable because he did not allege his hourly pay or facts identifying a week in which he worked more than 40 hours without overtime pay. His Outside Sales Representative theory was viable because he alleged that he worked more than 40 hours per week and was not paid at all. The court allowed amendment of the deficient overtime theories and described this as the plaintiffs’ final opportunity to cure the pleading problems.

Breach of contract

The court granted the motion to dismiss the breach-of-contract claim with prejudice. The plaintiffs described oral promises, employee-handbook provisions, and employment practices, but did not identify the specific promises or contract terms that CSI allegedly breached. The court found that the alleged promises concerning a return to hourly work or an unspecified commission percentage were too vague, and concluded that further amendment would be futile.

Fraud claims

The plaintiffs asserted intentional-misrepresentation and false-promise claims based on alleged promises that they would be returned to hourly pay after becoming commission-only workers or Outside Sales Representatives. The court found that the allegations did not satisfy Rule 9(b), which requires fraud to be pleaded with particularity, including the identity of the speaker, what was said, when and where it was said, how it was false, and why it was false. The court also stated that later nonperformance alone did not establish that CSI never intended to perform the promise.

In the discussion, the court dismissed the fraud claims but allowed amendment if the plaintiffs could plead the required facts in good faith. However, the order’s conclusion says that the motion to dismiss the fraud claims was granted with prejudice. The opinion therefore contains an apparent inconsistency about whether amendment of those claims was allowed.

PAGA claim

The court dismissed the Private Attorneys General Act (PAGA) claim. PAGA allows an aggrieved employee to seek civil penalties on behalf of the state and other affected employees after meeting specified notice and administrative-exhaustion requirements.

The court found that the notice was deficient regarding alleged meal-break and vacation violations. It also found that the notice identified only Barajas, not Grant or Williams, and attributed misconduct to entities other than CSI. The court dismissed the PAGA claims as to Grant and Williams with prejudice because their claims were time barred. As to Barajas, the court dismissed the PAGA claim without prejudice. It permitted her to submit a new letter to the state labor agency identifying CSI and providing more detail about alleged meal-break or vacation violations, complete the administrative-exhaustion process, and then seek leave to amend. The court stated that only Barajas could pursue a new PAGA claim because she was the only plaintiff whose claim was not time barred.

California Labor Code section 2751 claim

The plaintiffs alleged that CSI violated California Labor Code section 2751, which requires a written contract stating how commissions will be calculated and paid when an employee is paid by commissions. The court did not decide whether section 2751 provides a standalone private right of action. Instead, it held that any PAGA claim based on section 2751 failed because the plaintiffs did not specifically identify that provision in their notice to the labor agency and because the claim was time barred. The court granted the motion to dismiss the section 2751 claim, or a PAGA claim based on it, with prejudice.

California Labor Code sections 203 and 201 claim

The section 203/201 claim sought penalties for allegedly unpaid final wages. The plaintiffs did not dispute that this claim depended on their minimum-wage and overtime claims. The court granted in part and denied in part the motion to dismiss this claim and allowed amendment consistent with the amendment of the minimum-wage and overtime claims.

Business and Professions Code section 17200 claim

The plaintiffs also asserted a claim under California Business and Professions Code section 17200, alleging unlawful and unfair business practices. The court held that this claim generally rose or fell with the underlying claims, but that a section 2751 violation could potentially support it because the section 17200 limitations period is longer. The court granted in part and denied in part the motion to dismiss the section 17200 claim, allowed amendment consistent with the other claims, and stated that non-restitutionary relief would not be permitted. The court explained that restitution may restore money or property to plaintiffs, while penalties and money based only on CSI’s alleged gains are not restitution.

Disposition

The court granted in part and denied in part CSI’s motion to dismiss. The plaintiffs were directed to file a third amended complaint by January 6, 2020. The order states that the contract claim and section 2751 claim were dismissed with prejudice; the PAGA claims of Grant and Williams were dismissed with prejudice; Barajas’s PAGA claim was dismissed without prejudice; and the wage-related and section 17200 claims were subject to the specified partial dismissals and amendment opportunities. The order was signed by Judge Edward M. Chen.