Carter v. JAI-PUT Enterprise Inc.

Background

Decatuer Carter worked as a navigator for JAI-PUT Enterprise Inc., doing business as Junk King, from November 30, 2016, through August 14, 2017. He was paired with a driver, helped complete junk-removal routes, contacted customers, and recorded information about removed and discarded items. Krishna Vepa was Junk King’s president and chief executive officer.

Carter asserted claims under the Fair Labor Standards Act (FLSA), the California Labor Code, California’s Unfair Competition Law (UCL), and California common law. His claims included missed meal and rest breaks, unpaid overtime, untimely and inaccurate wage payments and statements, unlawful wage deductions, unreimbursed business expenses, retaliation, wrongful termination, and civil penalties under California’s Private Attorneys General Act (PAGA).

Junk King used an on-duty meal-period agreement under which employees could remain on duty during meal periods and receive their regular hourly pay. Carter signed the agreement, but the parties disputed whether the work actually prevented off-duty meal periods and whether employees could freely revoke the agreement. Carter also signed a telephone policy under which employees paid through payroll deductions for a company phone and related charges. Carter said the phone was required as a condition of employment; defendants said the arrangement was voluntary and that Carter was reimbursed after termination.

Summary-judgment standard

Summary judgment is appropriate only when there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. On cross-motions, the court considered each motion separately and could not weigh conflicting evidence or decide which witnesses were credible.

Meal and rest breaks

California generally requires employers to provide a 30-minute meal period after no more than five hours of work and another after no more than ten hours. An on-duty meal period is permitted only when the nature of the work prevents relieving the employee of all duties, the parties agree in writing, and the agreement states that the employee may revoke it in writing at any time.

The court held that a factual dispute existed about whether Carter’s work made off-duty meal periods impractical within the required time. Carter’s motion was denied on the meal-break claim, and defendants’ motion was denied to the extent it depended on the validity of the on-duty meal-period agreement.

The court also found a genuine factual dispute about whether defendants prevented Carter from taking rest breaks. Carter testified that Vepa repeatedly called to check on the work, pressured employees to keep working, and refused a request for a break. Defendants presented contrary evidence that employees had opportunities to take breaks and were allowed to do so. Defendants’ motion was denied on the rest-break claim.

Overtime

Carter testified that he sometimes worked more than eight hours per day after being told to clock out, and that he was not paid for that additional work. The court held that this evidence created a factual dispute for trial, so defendants’ motion was denied on that issue.

The court granted Carter’s motion on the separate issue of overtime for on-duty meal periods. California law requires payment at one-and-one-half times the regular rate for all work exceeding eight hours in a day. The court held that an on-duty meal period counts as time worked for overtime purposes. A valid on-duty meal agreement could limit a separate meal-period premium, but it could not change the number of hours worked or eliminate overtime owed after eight hours. The court did not decide the amount of damages because the parties had not shown how many days were affected.

PAGA and wage claims

The court granted Carter’s motion on his PAGA claims under California Labor Code sections 201 and 226(a), to the extent those claims were based on the unpaid overtime for on-duty meal periods. Section 201 concerns payment of earned wages when employment ends, and section 226(a) requires accurate wage statements. The court did not decide damages, waiting-time penalties, or civil penalties.

The court denied Carter’s motion on his claim under Labor Code section 204. That section governs the timing of wage payments but does not itself create a right to additional wages; Carter argued only that he was underpaid, not that his regular paychecks were untimely.

Unfair competition, retaliation, and wrongful termination

The court denied defendants’ motion on Carter’s UCL claim because his wage-and-hour claims could serve as the basis for that claim, and defendants offered no other reason for summary judgment on it.

The court also denied defendants’ motion on Carter’s retaliation and wrongful-termination claims. The evidence created factual disputes about whether Carter made protected complaints, whether he received less desirable routes because of those complaints, and whether his termination was retaliatory. The court could not resolve those disputes on summary judgment.

Individual liability

Defendants sought summary judgment on Carter’s wage-and-hour claims against Vepa, arguing that an individual corporate agent could not be liable. The court rejected the argument at that stage because defendants had not shown that Vepa was merely an agent rather than an employer and had not addressed California Labor Code section 558.1. Defendants’ motion was denied as to those claims against Vepa.

FLSA coverage

The court rejected Carter’s theory that he personally was covered by the FLSA merely because he sometimes hauled items that may have originated outside California. Junk King operated only in the Bay Area, its trucks did not cross state lines, and Carter performed no out-of-state services.

The court did not decide whether Junk King was covered under the separate enterprise-coverage theory. The parties had not presented relevant arguments and authority on that issue. Defendants’ motion was denied as to the FLSA claim without prejudice to raising the issue again in pretrial proceedings.

Telephone expenses and wage deductions

The court denied defendants’ motion on Carter’s claims for unlawful wage deductions and failure to reimburse business expenses. It found factual disputes about whether the telephone plan was truly voluntary, whether the phone expenses were necessary business expenses, and whether Carter was reimbursed after termination.

Punitive damages and final disposition

The court held that punitive damages were unavailable for Carter’s Labor Code and UCL claims, so defendants’ motion was granted to that extent. The court stated that Carter could still pursue punitive damages on his wrongful-termination claim because that claim was based on a tort theory.

Overall, Carter’s motion was granted in part and denied in part. Defendants’ motion was granted only to the extent Carter sought punitive damages for his Labor Code and UCL claims; it was otherwise denied. Judge Donna M. Ryu did not decide the damages or penalties associated with the claims on which Carter obtained summary judgment.