Juarez v. Ali

Full title: MARTIN JUAREZ et al., Plaintiffs and Appellants, v. SYED ALI et al.…

Court: COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT

Date published: Jan 8, 2018

No. H041348 (Cal. Ct. App. Jan. 8, 2018)

Opinion

H041348 H042112

01-08-2018

MARTIN JUAREZ et al., Plaintiffs and Appellants, v. SYED ALI et al., Defendants and Respondents. MARTIN JUAREZ et al., Plaintiffs and Respondents, v. SYED ALI et al., Defendants and Appellants.

Mihara, J.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 1-08-CV-121859)

After a court trial, the trial court rejected a wage and hour action brought by plaintiffs Martin Juarez and Adrian Ramirez against defendant MB Body Shop and its principals. The court subsequently denied defendants' request for attorney's fees pursuant to Labor Code section 218.5.¹ On appeal, plaintiffs contend that the court (1) erred in concluding that MB Body Shop complied with state minimum wage and overtime requirements; (2) abused its discretion in refusing to vacate its ruling granting defendants' motion for judgment (Code Civ. Proc., § 631.8) on plaintiffs' cause of action for failure to provide rest breaks; (3) erred in concluding that MB Body Shop was not liable for restitution under Business and Professions Code section 17203 or for penalties under sections 203, 226, and 2698 et seq.; and (4) erred in rejecting Juarez's cause of action for violation of the Ralph Civil Rights Act (Civ. Code, § 51.7; the Ralph Act). Defendants challenge the trial court's denial of their motion for attorney's fees. They contend that the trial court applied the wrong standard of "bad faith" under section 218.5. We reject all of their contentions and affirm both the judgment and the attorney's fees order.

1 Subsequent statutory references are to the Labor Code unless otherwise specified.

I. Factual Background

MB Body Shop was an auto collision repair shop that specialized in the repair of Mercedes-Benz vehicles. Bobby Ali bought and incorporated the business from Mercedes-Benz of San Francisco in 2002. He and his brother Syed "Rick" Ali were shareholders in the corporation. Another brother, Syed Iqbal "Ali" Ali, worked as a manager at the shop.

Juarez was hired as a metal technician or "body man" at MB Body Shop in April 2007. He was fired five months later, primarily because "[h]e wasn't very reliable." According to shop general manager Robert Salvo, Juarez would "disappear from the shop quite a bit" without telling anyone, which caused problems because the other body men had to pick up the slack when Juarez's work had to be redone because of quality issues or because he had not done everything listed on a work order.

Ramirez joined MB Body Shop as a body man in December 2007 and worked there until the shop was sold in May 2009. Ramirez and Juarez never worked together. They met during this litigation.

MB Body Shop used an industry-standard software program created by Mitchell International Inc. (Mitchell) to estimate the cost of repairing collision-damaged vehicles. Mitchell's software generated suggested labor times expressed in hours and tenths of hours for the different segments of a repair job. Wayne Krause, a manager at Mitchell who testified as an expert at trial, explained that the company derives the suggested labor times from videotaped field studies that Mitchell conducts continuously throughout the United States and Canada to determine how long the average body shop worker in North America takes to do the particular repair. These suggested labor times were variously referred to below as "flat rate hours," "flag rate hours," "flag hours," and "flag time."

The Mitchell software generated a work order for each vehicle that came in for repairs. Production manager Jaime Ruiz explained that a work order tells the technicians (the body men, the preppers, and the painters) "what needs to be done . . . what needs to be replaced and repaired, what operations are included to do the repairs or replacements . . . ." A work order also identifies "a certain amount of repair and refinish time." Those tasks and associated flag times are listed as line items on a work order, which might for example assign 3.9 hours to overhaul a front bumper cover assembly, 3.5 hours to repair a hood panel, and 0.6 hours to replace a left front combination lamp assembly. As expert Krause pointed out however, Mitchell's assigned flag times include more than the specific line items listed in the work order. This is because the field studies look at "how long it takes to do the entire job." Consequently, the software factors in the time required to get a car and put it in the bay. It also "factors in the time it might take a technician to walk across the shop, go in the front, and ask questions." It factors in time to speak with a manager or coworker about a repair. For body men specifically, the software factors in time to select the necessary tools, to clean them once a repair is completed, and to put debris in the trash receptacle. For painters, the software factors in time to put on protective gear, to mask the vehicle, to mix the paint, and to clean the equipment. Thus, the work order is "merely an outline of the work to be done." "[It is] not an instruction sheet." In Krause's opinion, the Mitchell flag times were "more than sufficient" to complete the various tasks. He explained that not every technician could complete 40 flag hours in 30 clock hours, but "[t]echnicians have always managed to beat our labor times."

A body man generally knew at the beginning of a week what cars he would be working on that week. Insurance approvals were obtained and parts were ordered and verified before any repair work began. Copies of the work order were placed on the dashboard of the car to be repaired so everybody knew what they needed to do as the car was passed between the body man, the painter, and the detail workers. Once the body man completed his work on one car, he would advise the production manager "and there would be another car that would roll in . . . ." Sometimes, if the body man knew what his next job was, "he would just go get the car and move it in." He would either be starting work on a new car "or, perhaps, beginning the assembly process of the car that had just been sent back from the paint shop." Meanwhile, the paint department was working on the other car, "and then the car comes back to the body man to finish . . . ." "From there it goes to the detail." "So everything is very intraconnected [sic]. One piece is missing, the other department can't go."

MB Body Shop's technicians were not required to remain at the shop if they had no work. "They had the option to leave if they wanted," provided they informed their supervisor. The notification rule was imposed for OSHA and workers' compensation compliance purposes. Some technicians preferred to stay, if they needed to wait for a ride for example. Ramirez acknowledged that he could leave early if there was no work.

The Mitchell software kept track of a body man's flag hours on each work order. MB Body Shop paid its body men an hourly rate multiplied by the number of flag hours assigned to the jobs they completed. Juarez's hourly rate was $24. Ramirez's hourly rate was $26.

If a work order allocated 1.5 flag rate hours to a task, the technician would be paid for an hour and a half whether it took him 45 minutes or two hours to complete the task. Thus, an efficient worker could accumulate many more flag rate hours in a day than he actually spent at the shop. Ramirez testified that he took the job at MB Body Shop for that reason. He "wanted to earn more, and a way to do that [was to go to] a place that could pay me by a flat rate." Ramirez reported that he could generally perform repair tasks in fewer than the assigned flag hours and that he "never" took more than the flag time to complete a job. For example, Ramirez worked 41.8 clock hours during the week ending May 30, 2008 and accrued 74.4 flat rate hours that week. Juarez worked 40.27 clock hours during the week ending July 20, 2007 and was paid for 84.6 flag rate hours that week. Technicians signed weekly time card summaries confirming their hours and certifying that they were permitted to and in fact took "all legally required rest periods and meal breaks."

MB Body Shop had a separate computerized time-tracking system to record technicians' clock or " 'shop hours.' " A written policy required "[a]ll employees" to clock in on that computer at the beginning of the work shift whether or not there were cars immediately available for repair. The policy also required all employees to clock out and in at lunchtime and to clock out at the end of the work shift. Each shift lasted eight hours.

If a technician had clock hours but no flag hours, he would be paid his hourly rate multiplied by his clock hours. If a technician showed up for work and was sent home because there was no work, he would be paid so-called show-up pay of at least four hours.

Emily Nguyen was the corporate secretary and treasurer for MB Body Shop. She also acted as the shop's Human Resources (HR) manager. Nguyen "didn't do the payroll" for MB Body Shop. Instead, she served as an auditor. Nguyen and her staff reviewed MB Body Shop workers' flag and clock hour totals every week. They did so to ensure that workers were paid at least minimum wage for all clock hours and "[t]o make sure we paid correctly if there's any overtime." They performed these quality control checks using a base pay rate of $16 per hour, the minimum wage for workers (like technicians at MB Body Shop) required to supply their own tools. At some point, they began doing the calculations using the technicians' flag rates. The weekly payroll was not processed by MB Body Shop until this quality control analysis was done.

For many years, MB Body Shop had an exclusive referral relationship with Mercedes-Benz. That contract kept MB Body Shop "extremely busy" and workers "[v]ery seldom" waited for work. When the Mercedes contract ended in August 2007, the shop continued to get work from Mercedes but the relationship was no longer exclusive. However, the shop continued to get referrals from other shops. There was "plenty of work to do" in August and September of 2007, enough that the shop still needed to use the second building it leased for parking overflow cars. The work flow diminished by as much as half sometime in 2008. But the shop picked up new contracts with Enterprise Rent-a-Car and a Subaru dealership in San Francisco, and it also became a "direct repair" shop for Progressive Insurance. Salvo stated that it was fair to say that the lost Mercedes-Benz work was replaced with other work. According to production manager Ruiz, there was still enough work for the two remaining body men to do.

MB Bodyshop was an ongoing business when Bobby Ali sold the company for $550,000 in 2009. Work that had not been completed was transferred to the new owner.

II. Procedural Background

Juarez filed his original complaint in 2008 on behalf of a putative class of current and former auto body technicians employed by MB Body Shop and other entities allegedly controlled by Bobby Ali. The complaint named MB Body Shop as a defendant. Bobby Ali was erroneously sued as "Syed Ali (dba 'Autowest Collision Repairs, Inc.' ").² (Capitalization omitted.) "Autowest Collision Group (form unknown)" (capitalization omitted) was also named as a defendant.³ The complaint purported to allege causes of action for failure to pay minimum, overtime, and reporting time wages, failure to comply with state law meal and rest period requirements, failure to pay timely wages after termination or resignation, failure to provide accurate itemized wage statements, "[u]nlawful [k]ickback [p]ayments" (that defendants improperly required plaintiffs "to kickback [sic] a significant portion of their wages to pay for DEFENDANTS' 'detail' employees"), and violation of Business and Professions Code section 17200 et seq. (the UCL). The complaint also included an individual cause of action under Civil Code section 51.7 based on allegations that Juarez "suffered verbal and physical violence, and threats of violence" because he "led an effort to enforce his and his co-workers' right to be paid for all hours worked."

2 Autowest Collision Repairs, Inc. is the fictitious business name of Autovest Collision Repairs, Inc. (Autowest), a separate California corporation owned by Bobby Ali and headquartered in San Jose. Autowest is not a defendant in this case.

3 "Autowest Collision Group" is a nonexistent entity, as Bobby Ali explained at deposition in 2010 and reiterated in a sworn declaration in January 2012.

Juarez's first amended complaint added a representative cause of action for penalties under the Labor Code Private Attorneys General Act of 2004 (§ 2698 et seq.; PAGA) "on behalf of [Juarez], the State and current or former employees . . . ." Juarez filed a second amended complaint that erroneously identified MB Body Shop as "dba 'Autowest Collision Group.' " (Capitalization omitted.) In September 2012, the third amended complaint added Ramirez as a plaintiff. The third amended complaint continued to erroneously identify Bobby Ali as "Syed Ali (dba 'Autowest Collision Repairs, Inc.' and dba 'Autowest Collision Group.' " (Capitalization omitted.) It also continued to misidentify MB Body Shop as "dba 'Autowest Collision Group.' " (Capitalization omitted.) The third amended complaint was the operative pleading.

Bobby Ali and MB Body Shop filed an answer that generally denied each and every allegation in the third amended complaint. The answer declared that MB Body Shop and Bobby Ali, who was erroneously sued as doing business as Autowest Collision Repairs, Inc. and Autowest Collision Group, were appearing in the action "alone and for no other Defendants."

The trial court denied plaintiffs' motion for class certification before trial. The court granted defendants' motion for summary adjudication of plaintiffs' fourth cause of action for failure to provide meal breaks. Plaintiffs do not challenge either ruling on appeal.

The case proceeded to trial on the remaining causes of action. Plaintiffs' witnesses testified that they were not paid overtime. They also stated that they were not paid separately for rest breaks, although they were permitted to and in fact did take them. Plaintiffs' witnesses testified that they were also not paid a separate hourly rate for time spent waiting for jobs or for performing work-related activities (such as attending meetings or training sessions) that were not associated with a particular repair job. Painter Eddie Sifuentes said that he and the other technicians spent time waiting for work "because we were not allowed to go home." Sifuentes estimated that he spent three to seven hours a day between June 2007 and the end of 2008 waiting for work. Juarez's "best estimate" was that he spent about "four hours" a day waiting for work between July and September 2007. When he was asked how he was able to accumulate 84.6 flat rate hours in one such week "if [he was] waiting around [for] 20 hours a week for work," Juarez gave a nonresponsive answer. Ramirez testified that he once waited two weeks for a special tool. He conceded on cross-examination that he could work on several different work orders in the same day and could therefore work on another car if he was waiting for a part or for an insurance authorization on one work order.

Defendants moved for judgment at the close of plaintiffs' case-in-chief. (Code Civ. Proc., § 631.8.) The trial court granted the motion as to plaintiffs' third cause of action for failure to provide rest breaks, their sixth cause of action for failure to provide accurate itemized wage statements, and their ninth cause of action for violation of the UCL.

Defense witnesses described MB Body Shop's company policies and procedures and how its technicians were paid. Expert Krause testified about the Mitchell software and the time studies on which it was based.

After both sides rested but before closing arguments, plaintiffs moved to vacate the judgment on their third cause of action for failure to provide rest breaks. On June 17, 2014, the trial court issued an 18-page "Statement of Decision and Denial of Motion to Vacate Judgment." (Capitalization omitted.) The court denied plaintiffs' motion "for the reasons stated in the Defendants' brief." The court then addressed each of plaintiffs' seven remaining causes of action. The court concluded that "Plaintiffs' claims against Defendants fail. The Court enters a Defense verdict as to all causes of action."

Defendants filed a posttrial motion to recover their attorney's fees pursuant to section 218.5, which provides that an employer who prevails on certain wage claims can recover reasonable attorney's fees if the employee brought the action in bad faith. The trial court denied the motion. The court concluded that plaintiffs' seventh cause of action for failure to pay California reporting time wages and their eighth cause of action for alleged unlawful kickback payments were within the scope of section 218.5, but that a fees award was not warranted because none of defendants' theories supported a finding that plaintiffs brought either cause of action in bad faith.

Plaintiffs filed a notice of appeal challenging the court's rejection of their claims. Defendants filed a timely notice of appeal from the trial court's order denying their motion for attorney's fees. This court denied plaintiffs' motion to consolidate the two appeals and on its own motion ordered them considered together for purposes of oral argument and disposition.

III. Plaintiffs' Appeal

A. Appealability

The trial court did not enter a separately denominated judgment. Thus, we must determine whether the trial court's statement of decision was an appealable judgment or order in this case.

"The general rule is that a statement or memorandum of decision is not appealable. [Citations.] The rule's practical justification is that courts typically embody their final rulings not in statements of decision but in orders or judgments. Reviewing courts have discretion to treat statements of decision as appealable when they must, as when a statement of decision is signed and filed and does, in fact, constitute the court's final decision on the merits." (Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th 894, 901 (Alan).)

The statement of decision in this case is signed and filed. It addresses every cause of action that plaintiffs asserted, and it concludes with the statement that "[f]or all of the reasons discussed herein, Plaintiffs' claims against Defendants fail. The Court enters a Defense verdict as to all causes of action." It is clear from this wording that the trial court intended the statement of decision to constitute its final decision on the merits. (Alan, supra, 40 Cal.4th at p. 901.) No party argues otherwise. Under these circumstances, we will exercise our discretion to treat the statement of decision as an appealable final judgment in this case. (Pangilinan v. Palisoc (2014) 227 Cal.App.4th 765, 769.) It follows that the trial court's subsequent order denying defendants' motion for attorney's fees is appealable as an order after an appealable judgment. (Code Civ. Proc., § 904.1, subd. (a)(2).)

B. Minimum Wage

Plaintiffs contend that MB Body Shop failed to comply with California's minimum wage requirements because its flat rate compensation system paid them for time spent incident to the repair of vehicles only, and not for nonproductive time spent waiting for vehicles to repair, performing non-incidental cleaning activities, attending meetings and training sessions, and taking rest breaks. Defendants respond that the issue is academic where resolution of the minimum wage issue turned on the trial court's findings that plaintiffs had little if any nonproductive time. Defendants argue that substantial evidence supported those findings, which alone justifies the trial court's rejection of plaintiffs' minimum wage claims. We agree with defendants.

"Wage and hour claims . . . are governed by two complementary and sometimes overlapping sources of authority: the provisions of the Labor Code . . . and a series of 18 wage orders, adopted by the [Industrial Welfare Commission]." (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1026 (Brinker).) Wage Order No. 9-2001 (Wage Order 9) governs the transportation industry, which includes "the repairing. . . , maintenance, or cleaning of vehicles."⁴ (Cal. Code Regs., tit. 8, § 11090, subd. (2)(N).)⁵ It provides that "[e]very employer shall pay to each employee, on the established payday for the period involved, not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise." (Regs., § 11090, subd. (4)(B).) Employees who are required to supply and maintain their own hand tools and equipment (as plaintiffs were here) must be paid "at least two (2) times the minimum wage." (Regs., § 11090, subd. (9)(B).) " 'Hours worked' means the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so." (Regs., § 11090, subd. (2)(G).)

4 Plaintiffs instead rely on Wage Order 4-2001, which applies to "all persons employed in professional, technical, clerical, mechanical, and similar occupations . . . ." (Cal. Code Regs., § 11040, subds. (1), (2)(O).) The parties agree that the relevant provisions in both wage orders are the same.

5 Subsequent references to the California Code of Regulations (Regs.) will be to this title.

Plaintiffs' primary argument is that the trial court misallocated the burden of proof by requiring them to establish "that they worked a certain number of hours without being paid for them." Relying on Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680 (Mt. Clemens), superseded by statute on other grounds, 29 U.S.C. § 254 and Hernandez v. Mendoza (1988) 199 Cal.App.3d 721 (Hernandez), plaintiffs claim that MB Body Shop failed to maintain records required by law. They contend that this shifted the burden to defendants to produce evidence " 'of the precise amount of work performed' " or sufficient evidence to negate the reasonableness of inferences to be drawn from plaintiffs' estimates of their downtime. We disagree.

"An employee who brings suit . . . for unpaid minimum wages . . . has the burden of proving that he performed work for which he was not properly compensated." (Mt. Clemens, supra, 328 U.S. at pp. 686-687; see Hernandez, supra, 199 Cal.App.3d at p. 727.)⁶ An exception to this general rule applies where an employer fails "to keep proper records in conformity with his statutory duty." (Mt. Clemens, at p. 687; Hernandez, at p. 727.) In such cases, "the consequences for such failure should fall on the employer, not the employee," and an employee carries his burden "if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference." (Hernandez, at p. 727.) "The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate." (Ibid.; Mt. Clemens, at pp. 687-688.)

6 Mt. Clemens was a Fair Labor Standards Act (FLSA) case, but "[t]he Mt. Clemens rule is not limited to FLSA cases. It has also been invoked in cases involving state law wage and hour claims involving the same reasoning that was applied to FLSA claims in Mt. Clemens, namely, that it would unfairly penalize employees to deny recovery because of the employer's failure to keep proper records." (Senne v. Kansas City Royals Baseball Corp. (2016) 315 F.R.D. 523, 582; see Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 40-41.)

At all relevant times here, MB Body Shop was required to "[k]eep . . . payroll records showing the hours worked daily by and the wages paid to, and the number of piece-rate units earned by and any applicable piece rate paid to, employees . . . ." (§ 1174, subd. (d).) Wage Order 9 more specifically required the company to keep "[t]ime records showing when the employee begins and ends each work period . . . , [m]eal periods, . . . and total daily hours worked . . . ." (Regs., § 11090, subd. (7)(A)(3).) MB Body Shop was also required to record "[t]otal hours worked in the payroll period and applicable rates of pay." (Regs., § 11090, subd. (7)(A)(5).) And because it used "a piece rate or incentive plan," it was required to maintain "[a]n accurate production record." (Regs., § 11090, subd. (7)(A)(6).) Wage Order 9 specifically provided that employers were not required to record "[m]eal periods during which operations cease and authorized rest periods." (Regs., § 11090, subd. (7)(A)(3).)

The trial court found that MB Body Shop complied with these recordkeeping obligations. The court concluded that plaintiffs "ha[d] not carried their burden to demonstrate that [MB Body Shop] did not retain those records it was legally required to retain or that [p]laintiffs cannot calculate their damages as a result."

The parties dispute what standard of review applies to the trial court's finding that MB Body Shop complied with its recordkeeping obligations. Defendants argue that substantial evidence supported the finding. Plaintiffs assert that "[t]he record-keeping [requirement] in wage orders and statutes is reviewed independently." We agree with defendants.

The cases on which plaintiffs rely are inapposite. The court in Coombs v. Skyriver Communications, Inc. (2008) 159 Cal.App.4th 1242 (Coombs) was called upon to interpret provisions in a wage order. (Id. at p. 1253.) In this case by contrast, the trial court did not need to engage in interpretation. It simply applied the straightforward requirements of Wage Order 9 to the facts before it. Thus, plaintiffs' reliance on Coombs is misplaced. Their reliance on Crocker National Bank v. City and County of San Francisco (1989) 49 Cal.3d 881 (Crocker) is similarly misplaced. The Crocker court held that the classification of data processing equipment as fixtures for tax purposes turned on whether a reasonable person would consider the equipment a permanent part of the host real property. (Id. at pp. 887-889.) That was a predominantly legal question that the court reviewed de novo. (Ibid.) By contrast here, no reasonable person analysis was required. The question before the trial court was one of fact: whether MB Body Shop maintained the records that Wage Order 9 required it to maintain. Accordingly, we review the record to determine whether the trial court's finding was supported by substantial evidence, that is, "evidence of ponderable legal significance that is reasonable, credible, and of solid value." (Quigley v. McClellan (2013) 214 Cal.App.4th 1276, 1282-1283.)

The trial court found that trial exhibits 217 through 220 and 226 through 229 established defendants' compliance with all relevant recordkeeping requirements. Substantial evidence supported that finding. Plaintiffs themselves described exhibits 217 and 226 as "Flag Piece Rate Production Records." Those computer-generated records detailed plaintiffs' hourly rates of pay, the specific jobs that they worked on each week, the flag hours that they accrued for each job, and their total flag hours for the week. This satisfied the requirement that MB Body Shop maintain "[a]n accurate production record." (Regs., § 11090, subd. (7)(A)(6).) Exhibits 218, 219, 227, and 228 were computer time clock records reflecting the hours that plaintiffs actually spent at the shop. Plaintiffs described these records as "Employee Time Cards from MB Bodyshop [sic]." These records satisfied defendants' obligation to track "when the employee begins and ends each work period . . . , [m]eal periods . . . and total daily hours worked . . . ." (Regs., § 11090, subd. (7)(A)(3).) Exhibits 220 and 229 were ADP payroll records reflecting plaintiffs' hourly rates and their weekly earnings. These records satisfied the requirement that MB Body Shop maintain records of "[t]otal hours worked in the payroll period and applicable rates of pay." (Regs., § 11090, subd. (7)(A)(5).) Thus, substantial evidence supported the trial court's finding that the shop complied with its recordkeeping requirements. It follows that no burden-shifting was required here. The trial court properly allocated the burden to plaintiffs to establish that they worked a certain number of hours without being paid for them.

Plaintiffs suggest that MB Body Shop was also required to track the time that technicians spent waiting for vehicles to repair, performing cleaning activities not incidental to repairs, attending meetings and training sessions, and taking rest breaks. They cite no authority for this additional record-keeping requirement. The issue is in any event irrelevant given the trial court's findings that there was little if any waiting time, that body men did not perform work not incident to the repair of vehicles, and that plaintiffs' claims about having to spend unpaid time in meetings or training sessions were unsupported. Defendants argue that substantial evidence supported these factual findings, which alone justify the trial court's rejection of plaintiffs' minimum wage claims. We agree with defendants.

It plainly appears from the statement of decision that the trial court did not credit plaintiffs' testimony that technicians spent substantial amounts of time waiting for repair work. The court described that testimony as "little more than a guessing game." It quoted from the contemporaneous notes it took during Ramirez's testimony: " 'This witness is looking at job numbers and guesstimating how fast he could do flat rate hours and then subtracting [them] from 40 because he was always at the shop for 40 hours.' " "Ramirez could not recall in the afternoon estimates he gave earlier that day about the amount of waiting time he had previously testified to for a particular week." "[H]e testified that he was 'guessing' as to how many hours each job took him to complete." "He further testified . . . that some of his guesstimates were off or could be wrong." Juarez for his part "did not put on any evidence of how much he worked day by day. He testified that he always worked more than 8 hours in a day. However, Jaime Ruiz and Bob Salvo testified that Mr. Juarez was often absent from work, was going through a divorce, disappeared for extended periods throughout the day, [and] that they could see him on the cameras in the back talking on his cell phone."

There was ample affirmative evidence to support the finding that plaintiffs did not spend time waiting for repair work. Shop manager Salvo testified that at no time during his tenure at MB Body Shop were employees "just sitting around with nothing to do." Salvo and production manager Ruiz both disputed the assertion that body men had to wait for insurance approvals or for parts to arrive. Those things were done before repair work on a car began, and technicians had other cars to work on in the meantime. Even if a particular repair was not fully approved, "there could be preliminary work on a car that was not approved," such as tearing it down to "see what was going on." It was Ruiz's job "to make sure that the production was running." If additional insurance approvals were required, "I would have to try and find [the technician] something else. Or if he had something else pending, he would move on."

Ruiz explained that although the work flow diminished after the loss of the Mercedes contract, the shop also had half as many body men as before, so there was still sufficient work to keep them busy. Painter Oscar Davila, who worked at MB Body Shop from March 2008 through May 2009, could not recall ever having nothing to do. He testified that he typically worked a full eight hours every day. Bobby Ali explained that no customer brought a car to MB Body Shop just to be painted, so if the painters had a lot of work, that indicated that the body men were also busy.

Ample evidence also supported the finding that body men were not required to attend meetings, clean the paint spray booths, or do other non-piece-rate work. HR Manager Nguyen testified that she was not aware of any mandatory meetings or training sessions for technicians. Ruiz testified that technicians did not "ever spend long hours cleaning the spray booth." An outside company did the major cleaning and maintained the sprinklers in the paint booths. Painters and preppers, not body men, cleaned the windows and changed the filters in the paint booths. That task took "20, 30 minutes." Davila testified that changing the filters once a month was "[o]f course" part of his job as a painter because "[a]nybody that works in a body shop knows that their work area has to be clean." The court properly concluded from all of this evidence that plaintiffs failed to satisfy their burden of proving that they spent unpaid time waiting for work or performing other tasks not incident to the repair of vehicles.

Plaintiffs' reliance on Gonzalez v. Downtown Motors, LP (2013) 215 Cal.App.4th 36 (Gonzalez) is misplaced. In contrast to the trial court's findings here, the plaintiffs in Gonzalez "regularly did not have enough repair work to do because there were not enough vehicles to service." (Id. at p. 42.) Unlike plaintiffs here, the plaintiffs in Gonzalez "had to remain at work" for the entirety of their eight-hour shifts, "and those who asked to leave early were told that they needed to stay because customers might come in." (Ibid.) "While waiting for repair work" moreover, the Gonzalez technicians "were expected to perform various nonrepair [sic] tasks, including obtaining parts, cleaning their work stations, attending meetings, traveling to other locations to pick up and return cars, reviewing service bulletins, and participating in online training." (Ibid.) Here, by contrast, the trial court found on substantial evidence that MB Body Shop's technicians were regularly permitted to leave early if no work was available, that parts were ordered and distributed before a repair job began, that tasks like putting a car into the bay for repair and cleaning the work station after the repair were generally performed by others and were in any event included in the technicians' flag times, and that body men were not required to attend meetings or training sessions.

The most important distinction between Gonzalez and this case is that the technicians in Gonzalez were paid exclusively according to their flag hours. (See Gonzalez, supra, 215 Cal.App.4th at pp. 41-42.) In Gonzalez, if a technician spent eight hours at the shop but accrued no flag hours, he was not paid for the time he spent at the shop that day. Instead, the employer "averaged" his total earnings over his total clock hours for the pay period to ensure that his pay for "hours 'on the clock' " never fell below what the employer called the " 'minimum wage floor.' " (Id. at p. 41.) That is not what happened here. Nguyen testified that if a technician accrued clock hours but no flag hours on a given day, he would be paid at least twice the minimum wage (which at the time was $8) for those clock hours. The trial court interjected, "Just a second. If a person goes home, though, they're not -- say they show up on Monday and they have no work, and on Tuesday they have no work. They stay there eight hours each day. On Wednesday they go home at noon and never show up for the rest of the week. They get paid for 20 hours?" [¶] "THE WITNESS: Yes." [¶] THE COURT: Or they get paid for 40 hours?" [¶] "THE WITNESS: No, they only get paid for 20 hours." [¶] "THE COURT: Because they were only there 20 hours?" [¶] "THE WITNESS: Yes." Thus, the "averaging" that the Gonzalez court condemned did not occur in this case. Gonzalez is factually inapposite.

C. Overtime

Plaintiffs contend that they were not properly compensated for overtime and that the trial court erred when it concluded otherwise. They complain that defendants were required to use one of the calculation methods described in the California Department of Labor Standards Enforcement's⁷ 2002 Enforcement Policies and Interpretations Manual (DLSE Manual) but "did not bother to follow either one of those overtime formulas." Instead, defendants used a quality control method that "assume[d] technicians are hourly employees." Plaintiffs assert that "[w]hile the QC serves to determine in a hypothetical sense what the technician would have earned if paid an hourly rate instead of a piece rate, it is clear that it has no merit as a means to compensate overtime in a piece-rate system."

7 Wage and hour laws are subject to enforcement by the Department of Labor Standards Enforcement (the DLSE). (Brinker, supra, 53 Cal.4th at p. 1029, fn. 11.) The DLSE is a division of California's Department of Industrial Relations. (Vaquero v. Stoneledge Furniture LLC (2017) 9 Cal.App.5th 98, 106, fn. 4.)

Defendants respond that the DLSE Manual is not entitled to deference because it was not adopted in compliance with the Administrative Procedure Act. (See Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 581-582.) Nonetheless, the second overtime formula it describes permits an employer to use the employee's assigned rate of pay when determining if overtime wages are owed, and "[t]hat is just what MB Bodyshop did" at trial, as illustrated by the exemplar overtime calculations that Nguyen performed. Those calculations demonstrated that MB Body Shop's technicians were in fact properly paid for overtime. Defendants argue that because plaintiffs on appeal point to no evidence that they worked any overtime hours that were not properly compensated, there is no reason to conclude that they are owed anything. We agree with defendants.

" 'Perhaps the most fundamental rule of appellate law is that the judgment challenged on appeal is presumed correct, and it is the appellant's burden to affirmatively demonstrate error.' [Citation.]" (People v. Sullivan (2007) 151 Cal.App.4th 524, 549.) "Error will never be presumed . . . ." (People v. $17,522.08 United States Currency (2006) 142 Cal.App.4th 1076, 1084.) An appellant must also show prejudice resulting from the alleged error. "There shall be no presumption that error is prejudicial, or that injury was done if error is shown." (Code Civ. Proc., § 475.)

Section 510 provides in relevant part that "[e]ight hours of labor constitutes a day's work. Any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee." (§ 510, subd. (a), see also Regs., § 11090, subd. (3)(A)(1)(a).).) Section 49.2.1.2 of the DLSE Manual describes two methods for determining the regular rate of pay for purposes of computing overtime compensation for piece workers, production bonus workers, or commission workers. "1. Compute the regular rate by dividing the total earnings for the week, including earnings during overtime hours, by the total hours worked during the week, including the overtime hours. For each overtime hour worked, the employee is entitled to an additional one-half the regular rate for hours requiring time and one-half and to an additional full rate for hours requiring double time. This is the most commonly used method of calculation. [¶] 2. Using the piece or commission rate as the regular rate and paying one and one-half times that rate for production during overtime hours. This method is rarely used."

Nguyen testified that in 2007 and 2008, she and her staff performed their overtime quality control analysis using the minimum wage for workers who supplied their own tools ($16/hour) as the base pay amount and $24/hour as the overtime amount. At some point she began using the technicians' regular rates as the base amount and one and a half times that rate as the overtime amount. The former method was contrary to the requirement that overtime be compensated based on the employee's regular rate of pay. (§ 510, subd. (a).) At trial therefore, Nguyen used actual time and payroll records for Juarez, Ramirez, and painter Davila to illustrate, with three examples, that MB Body Shop's technicians were properly compensated for overtime based on their regular rates, notwithstanding that the original quality control analysis used the minimum wage as the base amount.

One set of calculations used Juarez's records for the week ending July 20, 2007. The records showed that he spent 40.27 clock hours at the shop that week and accrued 84.6 flat rate hours. Section 510 therefore required that he be paid at his regular rate of pay ($24/hour) for 40 hours (40 × $24 = $960) and at one and a half times his regular rate of pay ($36) for 0.27 hours (0.27 × $36 = $9.72) for a total of $969.72. Payroll records showed that Juarez was in fact paid $1,928.88 that week.⁸ Nguyen thus concluded that he had been fully compensated for all hours worked.

8 This amount was calculated by multiplying Juarez's regular rate of pay by his flat rate hours ($24 × 84.6 = $2,030.40). Juarez was entitled to only 95% of the $2,030.40 result because neither he nor Ramirez washed, vacuumed, or detailed the cars that they worked on. That work was done by others, and the portion of Juarez's and Ramirez's flat rate pay representing that work was paid to the workers who actually did the detail work.

Nguyen performed a similar calculation using Ramirez's records for the week ending May 30, 2008. Ramirez spent 41.87 clock hours at the shop that week and accrued 71.10 flat rate hours. Section 510 therefore required that he be paid at his regular rate of pay ($26/hour) for 40 hours (40 × $26 = $1,040) and at one and a half times his regular rate of pay ($39) for 1.87 hours (1.87 × $39 = $72.93) for a total of $1,112.93. Payroll records showed that Ramirez was in fact paid $1,756.17 that week. Nguyen concluded that he was fully compensated for all hours worked.

Nguyen also performed a calculation using Davila's records for the week ending April 18, 2008. Davila was at the shop for 44.7 clock hours that week and he accrued 61.10 flat rate hours. Section 510 therefore required that he be paid at his regular rate of pay ($27/hour) for 40 hours (40 × $27 = $1,080) and at one and a half times his regular rate of pay ($40.50) for 4.7 hours (4.7 × $40.50 = $190.35) for a total of $1,270.35. Payroll records showed that Davila was in fact paid $1,410.49 that week.⁹ He was therefore fully compensated for all hours worked.

9 Multiplying Davila's flat rate hours for the week by $27 yields $1,649.70. But some percentage of that was shared with workers who did the prep and detail work that Davila himself did not do. The painters at MB Body Shop hired their own teams of helpers, who worked for the painter but were paid through the shop. Each team's members decided among themselves how the painter's flat rate pay would be shared.

Nguyen's exemplar calculations were consistent with the second formula listed in section 49.2.1.2 of the DLSE Manual. Plaintiffs did not challenge the accuracy of those calculations or the conclusions Nguyen drew from them at trial. Plaintiffs did not use any of the voluminous time and payroll records in evidence to establish that any technician at MB Body Shop was not properly compensated for overtime hours worked during any pay period. On this record, we cannot conclude that the trial court erred when it ruled against plaintiffs on their overtime cause of action. We reject their challenge to the trial court's ruling on their overtime cause of action.

D. Rest Breaks

Plaintiffs argue that the trial court's denial of their motion to vacate the judgment on their cause of action for failure to provide rest breaks was an abuse of discretion.

1. Background

Defendants noted in their motion for judgment that it was undisputed that MB Body Shop had a policy allowing rest breaks, that no one told plaintiffs they could not take them, and that plaintiffs in fact took them. They argued that where plaintiffs adduced no evidence to support their "theory" that the shop's flat rate system did not compensate technicians for rest breaks, plaintiffs failed to carry their burden of proof on the issue. Plaintiffs argued in opposition that "when someone is working on a piece rate system they are only paid when they are working" and therefore, "one cannot as a matter of law get a paid rest break if rest time necessarily means one is not being paid." The court granted defendants' motion for judgment on the rest breaks cause of action.

Plaintiffs moved to vacate the judgment. They relied on Bluford v. Safeway Stores, Inc. (2013) 216 Cal.App.4th 864 (Bluford), a case they had not previously cited. Defendants opposed the motion on the ground, among others, that Bluford was inapposite. The trial court denied plaintiffs' motion to vacate "for the reasons stated in the Defendants' brief."

2. Analysis

Code of Civil Procedure section 663 authorizes a trial court to vacate a judgment on grounds of "[i]incorrect or erroneous legal basis for the decision, not consistent with or supported by the facts." (Code Civ. Proc., § 663, subd. (1).) "A motion to vacate under section 663 is a remedy to be used when a trial court draws incorrect conclusions of law or renders an erroneous judgment on the basis of uncontroverted evidence." (Simac Design, Inc. v. Alciati (1979) 92 Cal.App.3d 146, 153.)

Wage Order 9 requires "[e]very employer" to "authorize and permit all employees to take rest periods . . . . The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. . . . Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages." (Regs., § 11090, subd. (12)(A).)

Plaintiffs argue that the trial court "should have corrected its order and awarded damages" on their rest breaks cause of action because MB Body Shop "was required to provide technicians with separate hourly compensation for rest periods and failed to do so, a fact that is undisputed." We reject the argument. Nothing in Wage Order 9 requires employers to provide separate compensation for rest breaks. Plaintiffs derive that alleged requirement from Bluford, which they assert "held that a piece-rate formula that does not provide separate compensation for rest breaks is unlawful."¹⁰ They maintain that the trial court's ruling granting defendants' motion for judgment on the rest breaks cause of action was "contrary to the holding in Bluford." We disagree.

10 For the first time in their reply brief on appeal, plaintiffs assert that section 226.2 "require[s] separate hourly compensation for rest breaks." Appellate courts ordinarily do not consider new issues raised for the first time in an appellant's reply brief because to do so " 'would deprive the respondent of an opportunity to counter the argument.' [Citation.] 'Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant.' [Citation.]" (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764.) " ' "Hence the rule is that points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before." ' [Citation.] [¶] . . . [T]he court may properly consider them as waived. . . ." (Id. at pp. 764-765.) Plaintiffs have not provided any explanation. We decline to consider their assertion.

Plaintiffs read Bluford too expansively. Bluford was a wage and hour action brought by truck drivers who alleged that their employer violated statutory and regulatory laws requiring it to provide them with paid rest periods, earned meal periods, and sufficiently itemized wage statements. (Bluford, supra, 216 Cal.App.4th at p. 866.) The case was before the court on appeal from the trial court's denial of class certification and, more particularly, its refusal to certify a rest period subclass. (Id. at p. 866.) The appellate court reversed, holding that common issues predominated over individual issues. (Id. at pp. 872-873.) The issue common to the rest period subclass was the employer's alleged failure to separately compensate its truck drivers for rest periods. (Id. at p. 873.)

Bluford was decided on facts quite different from those presented here. The truck drivers' wages in Bluford were determined under an "activity-based compensation system." (Bluford, supra, 216 Cal.App.4th at p. 867.) Driver pay "was calculated based on (1) mileage rates applied according to the number of miles driven, the time when the trips were taken, and the locations where the trips began and ended." (Id. at pp. 867, 872.) "Driver pay was also based on fixed rates for certain tasks and hourly rates for other tasks and delays." (Id. at p. 872.) There was "no dispute that none of these fixed rates were applied to rest periods." (Ibid.) Nor did any of the components of the mileage rates compensate the drivers for rest periods. (Ibid.) That conclusion is obvious because drivers could not take rest breaks and drive at the same time, and the mileage rates applied only when they were driving. The employer nevertheless argued that the mileage and activity rates were "designed to include payment for expected rest periods." (Bluford, at p. 872.) The Bluford court rejected the argument, observing that "[e]ven if that is so, it is akin to averaging pay to comply with the minimum wage law instead of separately compensating employees for their rest periods at the minimum or contractual hourly rate." (Ibid.) The court explained that such averaging was impermissible under the rule of Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314 (Armenta) that "rest periods must be separately compensated in a piece-rate system." (Bluford, at p. 872, citing Armenta, at p. 323.)

Armenta was also decided on facts quite different from those presented here. Armenta did not hold that rest periods must be separately compensated. The case says nothing about rest periods. The court was called upon to decide "the proper method for determining whether California's minimum wage law has been violated . . . ." (Armenta, supra, 135 Cal.App.4th at p. 316.) The plaintiffs were former employees who maintained standing wood utility poles in rural or extremely remote locations. Their hours were classified as "productive or nonproductive, depending on whether the hours were directly related to maintaining the utility poles in the field." (Id. at p. 317.) They were not paid for nonproductive hours, which included time spent traveling to job sites in company vehicles, maintaining the vehicles, repairing tools needed for field work, and completing paperwork. (Id. at pp. 317-318.) They sued for violation of the state's minimum wage law. The court rejected the employer's argument that it did not violate that law because the workers' average hourly rate in any given pay period was higher than the minimum wage. (Id. at p. 319.) The court concluded that the employer's averaging method, although accepted by federal courts addressing alleged violations of the federal minimum wage law, was "inappropriate" in California because the applicable wage order required that employees be paid not less than the applicable minimum wage " 'for all hours worked in the payroll period.' " (Id. at pp. 323-324.) The court interpreted this language to mean that employees must be compensated at the minimum wage "for each hour worked." (Id. at p. 323.)

Bluford and Armenta are factually distinguishable. Unlike the plaintiffs in those cases, the technicians in this case were not paid only for productive work. Nguyen testified in response to direct questions from the trial court that if a technician had clock hours but no flag hours, he would be paid his hourly rate multiplied by his clock hours. Thus, technicians were paid at least their hourly flag rate for every clock hour that they spent at the shop. The averaging of productive and nonproductive time that the Bluford and Armenta courts condemned did not occur here. Moreover, the trial court found that plaintiffs failed to establish that they experienced any "down time" for which they were not compensated. It was undisputed that plaintiffs were permitted to take rest breaks and in fact took them. There was no claim that the time they spent on rest breaks was deducted from their wages in violation of Wage Order 9. (See Regs., § 11090, subd. (12)(A) [prohibiting such deductions].) On this record, the trial court properly concluded that plaintiffs had not established a basis for vacating the judgment on their rest breaks cause of action. Their motion to vacate was properly denied. (Code Civ. Proc., § 663, subd. (1).)

E. Penalties

Plaintiffs contend that the trial court erred in concluding that MB Body Shop was not liable for restitution under Business and Professions Code section 17203 or for penalties under sections 203, 226, and 2698 et seq. These claims are premised on MB Body Shop's alleged failure to comply with California's wage and hour laws. We have concluded that the trial court properly found no wage and hour violations. As plaintiffs acknowledge, "[i]f no violations are found, penalties are not warranted."

F. Civil Code Section 51.7

Juarez contends that the trial court erred when it concluded that he failed to establish a violation of the Ralph Act, which declares that all persons have the right to be free from violence or intimidation because of (among other things) their position in a labor dispute.

1. Background

Juarez began complaining about his hourly rate shortly after he was hired. He wanted it increased from $24 to $30, and he also wanted a written guarantee of at least 40 flat rate hours per week. Shop manager Salvo testified that no one at the shop had a $30 per hour flat rate or a guarantee of a set number of hours per week. "I don't know how anybody can promise 40 hours. There is no way to be able to guarantee time." It "[d]epends totally on the flow of work."

In September 2007, Juarez told production manager Ruiz that he was "looking for other options" because he did not like working for MB Body Shop. On September 4, 2007, Juarez again asked Salvo to increase his hourly rate to $30 and to guarantee him 40 flat rate hours per week. Salvo testified that "[w]e had gone around so many times. [¶] . . . [¶] . . . And we just decided that this was not going to go anywhere with everything else that was building up, with the disappearing, the come backs, the basic unreliability. . . . I just decided that it was in our best interest to terminate the relationship."

Production manager Ruiz testified that the body men and the paint crew took off "for about an hour, hour and a half" that morning "to go eat . . . ." When they returned, Salvo told Juarez that they had reached an impasse. "I told him 'I'm going to let you go. We're done.' " When Juarez refused to leave the shop, Salvo told him that if he did not do so, the police would be called to escort him out. Ruiz was standing about 15 feet away from Salvo and Juarez. He described the "conversation" as "heated" and said that Juarez "was yelling" and being "very [belligerent]." Salvo testified that there was some "yelling." He stated that he "placed [his] hand on [Juarez's] shoulder, and . . . said, 'Let's just be gentlemen and call it quits.' " He escorted Juarez out of the shop and told him to make arrangements to pick up his toolbox since he needed a truck to transport it. The two shook hands, and Juarez left. He returned later that day with a tow truck to collect his toolbox.

In his Ralph Act cause of action, Juarez alleged that he "led an effort to enforce his and his co-workers' right to be paid for all hours worked, refusing to continue working until they were paid for all hours worked." "As a result of this," he was "violently shoved . . . and physically removed from" the shop premises, "verbally assaulted," "prohibited from entering the premises to retrieve his tools . . . ," and "intimidated by threat of violence to his person and property." Juarez testified at trial that in mid-August 2008, Ali Ali had promised him and some of his coworkers (painter Sifuentes, preppers Hugo Gonzalez and Raul Cisneros, and body man Efigenio Costa) that they would be paid 40 flat rate hours every week "without considering whether there was work or not." The alleged promise was not kept so on September 4, 2008, "[w]e decided not to work until Mr. [Ali] Ali arrived, and he would explain to us what had happened, with what he had promised." The group was "driving around" when production manager Ruiz called and told them to return to the shop. Juarez testified that when they returned, Salvo "came directly to me. He grabbed me by the neck, and he pushed me several times—[¶] . . . [¶]—towards the street." "He fired me. He pushed me and helped me out."

2. Analysis

Juarez argues that the trial court erred when it concluded that he failed as a matter of law to establish a "labor dispute" as Civil Code section 51.7 uses the term. Defendants respond that the "labor dispute" issue is irrelevant where the trial court also found that Juarez failed to prove other required elements of his Ralph Act cause of action, specifically, that Salvo committed a "violent act" and that his perception of Juarez's position in a labor dispute was "a substantial motivating reason" for the claimed violence. Plaintiffs in their reply brief do not challenge or even mention these arguments. We agree with defendants.

The Ralph Act provides in pertinent part that "all persons . . . have the right to be free from any violence, or intimidation by threat of violence, committed against their persons or property because of . . . any . . . position in a labor dispute." (Civ. Code, § 51.7, subd. (a).) The elements of a Ralph Act cause of action are (1) that the defendant committed a violent act against the plaintiff or his or her property; (2) that a motivating reason for the defendant's conduct was his perception of the plaintiff's position in a labor dispute; (3) that the plaintiff was harmed; and (4) that the defendant's conduct was a substantial factor in causing the plaintiff's harm. (Austin B. v. Escondido Union School Dist. (2007) 149 Cal.App.4th 860, 880.) " '[T]he plain meaning of the word "violence" ' . . . 'clearly involves some physical, destructive act.' [Citation.]" (Campbell v. Feld Entertainment, Inc. (2014) 75 F.Supp. 3d 1193, 1205 (Feld); see Winarto v. Toshiba America Electronics Components, Inc. (9th Cir. 2001) 274 F.3d 1276, 1289 (Winarto) ["Birtch committed violence against Winarto. It is established beyond dispute that Birtch kicked Winarto at least once."], disagreed with on a different point in Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) "Violence . . . demands more than 'mere[] application of physical force.' " (Feld at pp. 1205, 1208 [throwing sticks at activist's camera atop a wall not violence where one of the sticks ricocheted off a pillar and hit the activist standing behind the wall.].) Whether a violent act occurred and whether the defendant's perception of the plaintiff's position in a labor dispute was a motivating reason for the defendant's conduct are factual questions that we review under the substantial evidence standard. (See Winarto, at pp. 1288-1290.)

Reversal would not be required here even if we were to assume the existence of a "labor dispute." (Civ. Code, § 51.7.) This is because the trial court also found that Juarez failed to prove a violent act or that Juarez's position in any such labor dispute was a motivating reason for Salvo's conduct that day.

Evidence about the claimed violence was sharply conflicting. Salvo testified that his only physical contact with Juarez occurred when he "placed [his] hand on [Juarez's] shoulder" and left it "resting" there as the two walked out of the shop. Ruiz, who was standing just 15 feet away, corroborated Salvo's account. Ruiz testified that Salvo did not strike Juarez, grab his shirt, shake him, lift him up by his shirt, or otherwise assault him. He also testified that Salvo "never" told Juarez that he could not have his tools. Juarez, on the other hand, said Salvo violently attacked him. Sifuentes, who was "approximately 30 feet away" during the incident, said Salvo grabbed the collar of Juarez's shirt "and pushed him and shoved him outside."

The trial court's statement of decision suggests that the court did not credit Juarez's or Sifuentes's testimony. The court described Juarez's account as "questionable at best." The court emphasized that Sifuentes "admitted that he later had no problem going to work for Bob Salvo, and actually followed him to other businesses even though he had previously described him as 'violent.' " The court also noted that plaintiffs "did not introduce a police report at trial" and that "[f]urther, no charges were filed." Thus, the court implicitly found that Juarez failed to prove that a violent act occurred. That finding was supported by substantial evidence, specifically, the testimony of Salvo and Ruiz.

The statement of decision also reflects a finding that Salvo's perception of Juarez's position in any labor dispute was not a motivating reason for Salvo's conduct that day. The court found instead on "uncontradicted evidence" that Salvo fired Juarez and escorted him out of the shop that day "because he was a poor employee, had a lot of redos, was often absent from work, and was not well-liked." There was ample evidence to support those factual findings. Salvo testified that he did not consider Juarez's request for $30 per hour a labor dispute. Salvo described the quality of Juarez's work as only "fair." Production manager Ruiz testified that Salvo was very demanding from a quality perspective, and Juarez did not like that. Ruiz opined that Juarez's work was "average, at best." "Half of the time," Juarez's work would not be approved on the first look, either because of quality issues or because "he got paid to remove something and it wasn't done." Prepper Hugo Gonzalez recalled times when cars had to be sent back to Juarez because of problems with the quality of his work. Gonzalez testified that Salvo "had issues" with Juarez before that last day "because of the hours, because of the times, and because of the repairs." Salvo testified that a more serious problem was that Juarez would "disappear from the shop quite a bit" without telling anyone that he was leaving. This meant that when there were redos, "oftentimes [Juarez] wasn't there to rework them." Salvo explained that when Juarez could not be found, "[w]e would have to rely on other technicians to step in and take over and conduct his repairs for him. It is a problem when you pay people by the piece rate because [Juarez] had already been paid for something that someone was now having to fix, and they would have to get paid for helping. That was the biggest problem. He wasn't very reliable." Substantial evidence thus supported the trial court's findings that Juarez failed to establish all of the elements of his Ralph Act cause of action. The court did not err when it concluded that he failed to establish a Ralph Act violation.

IV. Defendants' Appeal

Defendants argue that the order denying their motion for attorney's fees must be reversed and the matter remanded because the trial court applied the wrong standard of "bad faith" under section 218.5. Their primary contention is that section 218.5 allows a prevailing defendant to recover its attorney's fees if the plaintiff's action was "brought or maintained in bad faith." (Italics added; capitalization omitted.) In defendants' view, the trial court "abused its discretion in considering only whether Juarez . . . acted in bad faith at the inception of the action, instead of at any point in the five years of litigation prior to and during trial." (Capitalization omitted.)

"In any action brought for the nonpayment of wages . . . , the court shall award reasonable attorney's fees . . . to the prevailing party . . . . However, if the prevailing party in the court action is not an employee, attorney's fees . . . shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith." (§ 218.5, subd. (a).)" " '[A]ny action' in section 218.5 refers to any 'cause of action.' " (Aleman v. AirTouch Cellular (2012) 209 Cal.App.4th 556, 584.)

Section 218.5 expressly "does not apply to any cause of action for which attorney's fees are recoverable under Section 1194." (§ 218.5, subd. (b).) Accordingly, defendants acknowledge at the outset that the statute precludes them from seeking fees in connection with plaintiffs' claims for alleged minimum wage and overtime violations. The parties do not challenge the trial court's conclusion that only two of plaintiffs' causes of action, for alleged reporting time wage violations and for alleged unlawful kickbacks, are within the scope of section 218.5.

Attorney's fees awards are generally reviewed for abuse of discretion, but where the issue involves the interpretation of a statute, our review is de novo. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.) Whether the trial court correctly or incorrectly interpreted section 218.5 as addressing only circumstances where "the employee brought the court action in bad faith" is an issue of statutory interpretation. (Italics added.) " ' "As in any case involving statutory interpretation, our fundamental task is to determine the Legislature's intent so as to effectuate the law's purpose." [Citation.]' " (Olson v. Automobile Club of Southern California (2008) 42 Cal.4th 1142, 1147.) "Statutory interpretation begins with an analysis of the statutory language." (Ibid.) "When the language of a statute . . . is clear and unambiguous, judicial construction is not necessary and the court should not engage in it." (Agnew v. State Bd. of Equalization (1999) 21 Cal.4th 310, 323.)

Here, the statute expressly provides that attorney's fees "shall" be awarded to a prevailing employer "only if" the court finds that the employee "brought" the court action in bad faith. (§ 218.5, subd. (a).) "To 'bring suit' is to initiate legal proceedings in a legal action; '[a] suit is "brought" at the time it is commenced.' [Citation.]" (Straley v. Gamble (2013) 217 Cal.App.4th 533, 538.) To "maintain" a lawsuit means something different. That word "is not synonymous with begin or institute; it embraces the idea of continuing or upholding." (Garner, A Dict. of Modern Legal Usage (2d ed. 1995), p. 541, col. 2.)

We "must assume . . . that the Legislature's choice of words was not an idle act." (County of Alameda v. Workers' Compensation Appeals Board (2013) 213 Cal.App.4th 278, 284-285.) Had the Legislature wanted to expand a prevailing employer's entitlement to attorney's fees to include lawsuits that the employee maintained in bad faith, we presume that the Legislature would have said so. (Regency Outdoor Advertising, Inc. v. City of Los Angeles (2006) 39 Cal.4th 507, 529.) It did not. Therefore, we reject defendants' assertion that section 218.5 entitles them to attorney's fees if plaintiffs maintained their reporting time or unlawful kickback causes of action in bad faith.

Defendants' reliance on Christiansburg Garment Company v. Equal Employment Opportunity Commission (1978) 434 U.S. 412 (Christiansburg) and Williams v. Chino Valley Independent Fire District (2015) 61 Cal.4th 97 (Williams) to support their expansive view of section 218.5 is misplaced. They quote Christiansburg for the proposition that a court may award a prevailing employer its attorney's fees when it finds that the employee's claim "was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so." (Christiansburg, at p. 422, italics added.) Christiansburg is easily distinguished. The attorney's fees statute in that case broadly provided that "[i]n any action or proceeding under [Title VII of the Civil Rights act of 1964] the court, in its discretion, may award the prevailing party . . . a reasonable attorney's fee . . . ." (Id. at pp. 413-414.) Section 218.5 is significantly narrower in scope. It contains an express limitation that fees shall be awarded to a prevailing employer "only if" a court finds that the employee "brought" the action in bad faith. (§ 218.5, subd. (a).) The Christiansburg court's interpretation of different language does not advance defendants' argument that the trial court should have considered the manner in which plaintiffs and their counsel maintained the action.

Williams does not advance defendants' position either. The Williams court construed Government Code section 12965, which governs awards of attorney's fees and costs in actions under the California Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.). That fees provision states that " '[i]n civil actions brought under this section, the court, in its discretion, may award to the prevailing party, including the department, reasonable attorney's fees and costs, including expert witness fees.' " (Williams, supra, 61 Cal.4th at p. 101; Gov. Code, § 12965, subd. (b).) The Williams court concluded that the Legislature intended trial courts applying the FEHA fees statute to use the asymmetrical standard articulated in Christiansburg and to do so with respect to both fees and costs. It therefore concluded that "[a] prevailing defendant [in a FEHA action] should not be awarded fees and costs unless the court finds the action was objectively without foundation when brought, or the plaintiff continued to litigate it after it clearly became so." (Williams, at pp. 114-115.) The FEHA fees statute did not include section 218.5's limitation that fees shall be awarded to a prevailing employer "only if a court finds that the employee "brought" the action in bad faith. (§ 218.5, subd. (a).) The Williams court's interpretation of the broader FEHA statute does not advance defendants' position.

Defendants argue that the legislative history of the 2013 amendment to section 218.5 "makes plain that the Legislature intended to adopt a standard of bad faith closely similar to, if not the same as, the Christiansburg standard." "Under the Christiansburg standard" in defendants' view, "a court may award a prevailing employer its attorneys' fees not when an action has been commenced in bad faith, but when it finds that the plaintiff's lawsuit was 'frivolous, unreasonable, or groundless' [citation] or that the 'plaintiff continued to litigate it after it clearly became so.' " We reject defendants' argument.

This court granted defendants' request for judicial notice of the Assembly Committee on Judiciary's July 2, 2013 analysis of Senate Bill No. 462, which amended the then two-way fee shifting provision in section 218.5 to provide instead for asymmetrical recovery of fees to prevailing parties. The committee analysis does not support defendants' expansive view of the amended statute's scope. On the contrary, it states that the bill "would clarify the existing two-way fee shifting provision of section 218.5 by expressly providing that where the prevailing party is a non-employee (e.g., the employer), fees are to be awarded on a judicial finding that the employee brought the action in bad faith." (Italics added.)

Accordingly, we conclude that the trial court properly determined that defendants' complaints about the manner in which plaintiffs and their attorneys maintained the action (including, for example, their complaint that plaintiffs did not pursue additional discovery about Bobby Ali's alleged alter ego liability after their counsel purportedly "acknowledged . . . before trial" that he had no evidence of commingling of funds) were irrelevant to the section 218.5 analysis, which speaks exclusively in terms of actions "brought" in bad faith. (§ 218.5, subd. (a).)

Defendants next assert that the trial court "followed an incorrect legal standard" by "look[ing] only to whether Juarez and Ramirez had exhibited subjective bad faith." They point out that no court has yet decided what is required to establish bad faith under section 218.5, and they ask us to speak to this issue of first impression. They urge that the proper standard is an objective one that considers whether the plaintiff's claims were "unreasonable, frivolous, or vexatious." This is, in part, the standard the Christiansburg court applied. (See Christiansburg, supra, 434 U.S. at p. 421 [agreeing with the "concept" embodied in language adopted by two federal appellate courts considering fee awards to prevailing defendants in Title VII cases; concluding that "a district court may in its discretion award attorney's fees to a prevailing defendant in a Title VII case upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith."].)

Plaintiffs likewise urge that the proper test for bad faith under section 218.5 is an objective one that considers whether a plaintiff's action or cause of action was "frivolous, unreasonable, or vexatious." In their view, we need not reach the subjective/objective issue, because the record is devoid of facts that would support a conclusion that plaintiffs brought their claims in bad faith even under the less stringent " 'unreasonable, frivolous, or vexatious' " standard that the parties take from Christiansburg. We agree with plaintiffs.

The Christiansburg court articulated its objective bad faith standard with reference to several intermediate federal appellate court cases that defined bad faith in similar terms. (Christiansburg, supra, 434 U.S. at pp. 420-422.) The court pointed out that "the term 'meritless' [as used in some of those decisions] is to be understood as meaning groundless or without foundation, rather than simply that the plaintiff has ultimately lost his case, and . . . the term 'vexatious' in no way implies that the plaintiff's subjective bad faith is a necessary prerequisite to a fee award against him." (Id. at p. 421.) The court also cautioned against engaging in "post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation." (Id. at pp. 421-422.) The court emphasized that "seldom can a prospective plaintiff be sure of ultimate success" and that "no matter how meritorious one's claim may appear at the outset, the course of litigation is rarely predictable. Decisive facts may not emerge until discovery or trial. The law may change or clarify in the midst of litigation. Even when the law or the facts appear questionable or unfavorable at the outset, a party may have an entirely reasonable ground for bringing suit." (Id. at p. 422.) "Hence, a plaintiff should not be assessed his opponent's attorney's fees unless a court finds that his claim was frivolous, unreasonable, or groundless . . . ." (Ibid.)

Defendants assert that the "the trial court's own findings as announced in its statement of decision as well as the evidence before it at trial and at the time of the attorneys' fees motion afford[ed] ample basis on which the trial court could have awarded [them] attorneys' fees" under the objective standard the parties derive from Christiansburg. They argue with respect to plaintiffs' seventh cause of action that plaintiffs did not attribute any damages to lost reporting time in response to discovery requests. They point to Juarez's suggestion at trial that the time records plaintiffs relied upon were unreliable. Defendants also assert (incorrectly) that plaintiffs' counsel "told the trial court that 'there is no show-up pay violation.' " They assert that plaintiffs "seemingly abandoned" that claim after trial because they did not brief it in their closing trial briefs and failed to include it in their final damage analysis. They emphasize that the trial court ultimately found that plaintiffs did not establish a reporting time pay violation. All of these arguments pertain to plaintiffs' maintenance of the litigation. None of them supports a conclusion that plaintiffs' reporting time cause of action was unreasonable or frivolous when it was "brought." (§ 218.5, subd. (a).)

As plaintiffs point out, moreover, the record contains affirmative evidence to support a conclusion that the reporting time cause of action was not unreasonable or frivolous when brought. Wage Order 9 provides that an employee who "is required to report for work and does report, but is not put to work or is furnished less than half said employee's usual or scheduled day's work . . . shall be paid for half the usual or scheduled day's work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee's regular rate of pay, which shall not be less than the minimum wage." (Regs., § 11090, subd. (5)(A).) Time records showed weeks in which MB Body Shop technicians worked fewer than four hours of their regular eight-hour shifts, while corresponding payroll records were silent on reporting pay. Defendants dismiss this evidence as revealing only "a small handful of instances" where plaintiffs' records "show time of less than four hours with no reporting time pay appearing in payroll." They argue that "such evidence is insufficient to establish a reporting time violation." But that argument misses the point. The fact that plaintiffs did not have sufficient proof to "establish" a reporting time pay violation does not mean that the cause of action was unreasonable or frivolous when brought. (See Christiansburg, supra, 434 U.S. at pp 421-422.) An employee who brings a wage and hour violation claim cannot be expected to have abundant documentary evidence to support his claim at the inception of the action. Such documentation is frequently in the possession of the employer and is obtained only through discovery. In our view, defendants' acknowledgment that there were documents suggesting that plaintiffs worked "less than four hours with no reporting time pay appearing in payroll" supports a conclusion that the reporting time claim was not objectively lacking in foundation when brought, even though it ultimately proved unsuccessful. Our conclusion is bolstered by the fact that the reporting time claim survived the motion for judgment (Code Civ. Proc., § 631.8) that defendants filed at the close of plaintiffs' case-in-chief. Thus, the trial court properly concluded that defendants failed to establish that plaintiffs brought the seventh cause of action in bad faith.

Defendants next argue that plaintiffs had no factual or legal basis for their unlawful kickbacks cause of action, which alleged that MB Body Shop improperly withheld 5 percent from plaintiffs' hourly flat rate wages in violation of sections 221 and 223 and kicked back the withheld amounts to compensate the shop's detail employees. Section 221 makes it unlawful for an employer "to collect or receive from an employee any part of wages theretofore paid by said employer to said employee." Section 223 makes it "unlawful to secretly pay a lower wage [than promised] while purporting to pay the wage designated by statute or by contract."

Defendants emphasize that the trial court ultimately found that nothing was deducted from technicians' paychecks and that no Labor Code violation occurred. But this does not compel a conclusion that the cause of action was without legal or factual support when it was brought. (See Christiansburg, supra, 434 U.S. at pp. 421-422.) Plaintiffs' legal theory was that MB Body Shop's piece rate system was similar if not identical to the piece rate system in Gonzalez. Gonzalez held that "[a]veraging piece-rate wages over total hours worked results in underpayment of employee wages required 'by contract' under . . . section 223, as well as an improper collection of wages paid to an employee under . . . section 221." (Gonzalez, supra, 215 Cal.App.4th at p. 50.)

Here, the trial court found Gonzalez factually distinguishable, as have we. But the facts that demonstrated an absence of averaging in this case were not necessarily evident when plaintiffs filed suit. Those facts were instead revealed at trial. Also, there was factual support for plaintiffs' theory, specifically, records showing regular "DETAIL 5%" subtractions from technicians' piece rate earnings. The unlawful kickbacks cause of action survived the motion for judgment (Code Civ. Proc., § 631.8) that defendants filed at the close of plaintiffs' case-in-chief. All of this supported a conclusion that the kickbacks claim was not objectively lacking in foundation when brought, even though it ultimately proved unsuccessful. Thus, the trial court properly concluded that defendants failed to establish that plaintiffs brought the eighth cause of action in bad faith. As the seventh and eighth causes of action were the only ones at issue on the motion for attorney's fees, the trial court also properly determined that defendants were not entitled to recover attorney's fees under section 218.5.

V. Disposition

The judgment and the order are affirmed.

/s/_________

Mihara, J. WE CONCUR: /s/_________
Elia, Acting P. J. /s/_________
Premo, J.