Seyfarth Synopsis: Second Appellate District affirmed the ruling in a PAGA bench trial finding that the employer’s pay plan was lawful and that the PAGA notice did not include the facts and theories that plaintiffs pursued at trial.
The bench trial focused on the pay plan by which the employer car dealership paid its mechanics. Plaintiffs were paid minimum wage for all hours worked but also received a “flag bonus” if they performed certain jobs or tasks quicker than average. The plaintiffs argued that the “flag bonus” amounted to piece rate pay and therefore violated Labor Code section 226.2. Following a bench trial, the trial court found that the employer’s pay plan was lawful and did not violate the “no borrowing rule” and issued a decision in the employer’s favor.
The Second District affirmed the trial court’s decision and held there was an independent basis for affirming the decision on the PAGA claim. The Second District noted that the plaintiffs’ primary theory of liability was not included in the PAGA notice submitted to the LWDA which provided an independent basis to find in favor of the employer on the PAGA claim. The Second District also emphasized that while the plaintiffs introduced pay records as evidence at trial, they did not meet their evidentiary burden to demonstrate any Labor Code violations.
