Skilled Laborers May Proceed In Class Action Lawsuit For Alleged Overtime And Meal And Rest Break Violations

A group of skilled laborers brought a class action lawsuit claiming that they had been wrongfully classified as independent contractors and denied overtime pay and meal and rest breaks.  The court of appeal held that the trial court improperly refused to certify the class with respect to the class representatives’ claims of violations of wage and hour laws for overtime pay and meal and rest breaks.  (Bradley v. Networks International, LLC, (--- Cal.Rptr.3d ----, Cal.App. 4 Dist., December 12, 2012).

Note

For a discussion of the referenced Brinker decision, please see our Legal Alert entitled, “Employers are Required to Provide Meal and Rest Periods but Not Required to Ensure That Employees Utilize the Meal and Rest Periods”, April 12, 2012.

Facts

Les Bradley (“Bradley”), Edwin Jennings (“Jennings”), and Versil Milton (“Milton”) filed a class action lawsuit against Networkers International, LLC (“Networkers”) alleging violations of the wage and hour laws that govern rest breaks, meal breaks, and overtime pay.  Bradley, Jennings, and Milton (collectively, “Plaintiffs”) asked the trial court to certify a class of 140 technical support personnel who worked for Networkers.  Networkers provides technical personnel services to the telecommunications industries, including EXi Parsons Telecom LLC (“EXi”), Ericsson, Inc. (“Ericsson”), and Telecom Network Specialists.  The laborers installed and serviced cell sites in Southern California.  The companies set the qualifications for the laborers and directed the work they performed, but Networkers recruited and managed the workers and warranted their work.

Networkers retained Plaintiffs to work on cell sites.  Milton and Bradley worked at Ericsson/T-Mobile sites and Jennings worked at EXi sites.  Each worker signed a contract titled “Independent Contractor Agreement,” which provided that the worker was an independent contractor, not an employee.  Networkers did not pay the workers premium wages for overtime, compensate them for travel or waiting times, or require meal or rest breaks.  Bradley, Jennings, and numerous other workers terminated their relationship with Networkers in late 2005 and early 2006.  Shortly thereafter, Networkers replaced the “Independent Contractor Agreement” with an “Employment” agreement and began to pay overtime wages.  It did not implement a rest or meal break policy.  Milton left the company soon after signing the employment agreement. 

In their class action lawsuit, Plaintiffs claim that although they signed the “Independent Contractor Agreement,” their relationship with Networkers was an employer-employee relationship that was governed by California wage and hour laws.  Plaintiffs sought to represent a class of 140 technical support personnel who worked in California for Networkers.

Milton submitted a declaration stating that although he signed the “Independent Contractor Agreement,” he did not understand that he was not an employee of Networkers and that he was not entitled to the protections provided to employees by state law.  Milton did not have liability, errors and omissions, or workers’ compensation insurance as required by the terms of the “Independent Contractor Agreement.”  He was not permitted to delegate work and he was required to follow specific direction regarding the scheduling and priority of work. 

Networkers paid Milton by the hour, he did not negotiate the hourly rate, he did not bid for his employment, and he was required to buy and use a specific set of tools from Networkers.  Networkers gave Milton introductory training and he worked exclusively at cell sites owned by T-Mobile that contained equipment made by Ericsson.  He received daily assignments through emails or his cell phone that originated from T-Mobile customer service or Networkers.  He could not leave a job site until a problem was fully resolved, which meant he could not stop for lunch or leave after an eight hour shift unless the problem was resolved.  He thought he would be fired if he took a rest break.  After Networkers reclassified Milton as an employee, it reduced his hourly pay but paid him for overtime hours.  After he signed the new contract, the work remained the same.  Networkers did not change its policies regarding rest breaks or time reporting requirements.  Bradley’s and Jennings’ declarations were substantially similar to Milton’s declaration except for the information regarding the employment agreement.  

The trial court denied Plaintiffs’ motion for class certification.  The court of appeal affirmed the trial court’s decision.  However, the Supreme Court granted Plaintiffs’ petition for review.  After the Supreme Court issued its decision Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, it remanded the case to the court of appeal for reconsideration.

Decision

The court of appeal concluded that the evidence relevant to the factual question of whether the class members were independent contractors or employees is common among all class members.  Although each class member signed an “Independent Contractor Agreement,” the Plaintiffs brought forth evidence to support their claim that they should have been classified as employees.  Each class member was engaged in a similar occupation, was required to work full time and be available every working day plus assigned “on call” times, was paid by the hour rather than by the job, was required to submit his or her time sheet to Networkers and its clients for approval, and was required to buy and use a specific tool set from Networkers.  Although the agreement provided that the workers had the right to control the manner and means of their work, including the right to subcontract the work, Networkers had specific requirements as to the time and place of the work and the workers could not deviate from these requirements or delegate the work.

These common facts would be the focus of proof on the employee/independent contractor issue even if some workers engaged in repair work and other engaged in installation work, or if there were different pay grades or work schedules.  “The undisputed evidence showed Networkers had consistent companywide policies applicable to all employees regarding work schedules, payments, and work requirements.”  The question of whether those policies created an employer-employee relationship was not before the court of appeal.  The critical fact was whether the evidence on which the parties were likely to rely would be largely uniform throughout the class. 

As a general rule, an employer must provide an employee a 30-minute break for a work period of more than 5 hours and a second break of 30 minutes for a work period of more than ten hours per day.  Employers must also provide a certain number of rest breaks depending on the length of a worker’s shift.  Employers are required to keep accurate records of meal breaks.  Plaintiffs presented undisputed evidence that Networkers did not have a policy which permitted or authorized rest or meal breaks, it did not know whether workers took the required breaks, and it did not maintain records that reflected whether workers took the required breaks.  The court concluded that “[t]he lack of a meal/rest break policy and the uniform failure to authorize such breaks are matters of common proof.” 

The court found that “when an employer has not authorized and not provided legally-required meal and/or rest breaks, the employer has violated the law and the fact that an employee may have actually taken a break or was able to eat food during the work day does not show that individual issues will predominate in the litigation.”  The fact the evidence may show that not all employees missed a rest or meal break does not mean that individual issues will predominate on the issue of liability.  Also, a class may be certified even if each worker must individually prove his or her damages. 

An employer is required to pay its employees 1.5 times their hourly wage for work in excess of eight hours per day or 40 hours per week and two times their hourly wage for work in excess of 12 hours.  Networkers paid no overtime wages to class members from December 2004 through December 2005.  The class can be certified despite the fact that the amount of overtime damages due each class member would require individual analysis.  “The existence of time records showing the amount of hours worked by each employee could provide a reasonable and straightforward basis for a court to award damages for failure to pay overtime wages.” 

The court, however, found that the issue of whether a class should be certified for the workers’ claim that they were required to work “off-the-clock” must be reconsidered by the trial court.  The factual record does not show whether Networkers had a uniform policy that required each employee to work off the clock.

Topics:  Appeals, Class Action, Class Certification, Commonality, Independent Contractors, Misclassification, Over-Time, Rest and Meal Break, Skilled Laborers, Wage and Hour

Published In: Civil Procedure Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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