Summary
In McGhee, defendants similarly argued that the court would need to interpret a CBA provision that provides for an "off-duty meal period" in which employees were "free to leave the premises" unless "the needs of the business require otherwise." Id.
Summary of this case from Bradford v. Prof'l Tech. Sec. Servs.Opinion
Case No. 18-cv-05999-JSW
2020-02-21
Derek L. MCGHEE, Plaintiff, v. TESORO REFINING & MARKETING COMPANY LLC, et al., Defendants.
Joseph Lavi, Vincent Charles Granberry, Jordan Domingo Bello, Anwar Dillon-Thomas Burton, Lavi and Ebrahimian LLP, Beverly Hills, CA, for Plaintiff. William James Dritsas, Seyfarth Shaw LLP, San Francisco, CA, Michael Warner Kopp, Seyfarth Shaw LLP, Sacramento, CA, Timothy Mark Fisher, Scopelitis, Garvin, Light, Hanson & Feary, LLP, Pasadena, CA, Zaher Lopez, Reed Smith LLP, Timothy Michael Rusche, Seyfarth Shaw LLP, Los Angeles, CA, for Defendants.
Joseph Lavi, Vincent Charles Granberry, Jordan Domingo Bello, Anwar Dillon-Thomas Burton, Lavi and Ebrahimian LLP, Beverly Hills, CA, for Plaintiff.
William James Dritsas, Seyfarth Shaw LLP, San Francisco, CA, Michael Warner Kopp, Seyfarth Shaw LLP, Sacramento, CA, Timothy Mark Fisher, Scopelitis, Garvin, Light, Hanson & Feary, LLP, Pasadena, CA, Zaher Lopez, Reed Smith LLP, Timothy Michael Rusche, Seyfarth Shaw LLP, Los Angeles, CA, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' PARTIAL MOTION TO DISMISS AND TO STRIKE PLAINTIFF'S FIRST AMENDED COMPLAINT
Re: Dkt. Nos. 35, 73
JEFFREY S. WHITE, United States District Judge
Now before the Court is the partial motion to dismiss and strike Plaintiff's first amended complaint, filed by Defendants Tesoro Refining & Marketing Company LLC, Andeavor, and Andeavor Logistics LP (collectively "Defendants"). The Court has considered the parties' papers, relevant legal authority, and the record in this case, and GRANTS IN PART and DENIES IN PART Defendants' partial motion to dismiss and to strike.
BACKGROUND
Plaintiff Derek McGhee ("McGhee") originally filed suit, on an individual basis, in the Superior Court of the State of California for the County of Contra Costa County. (Dkt. No. 1, Notice of Removal, Ex. A, Complaint.) McGhee asserts claims on behalf of himself and "hourly non-exempt employees working in California for Defendants within the four years prior to the filing of this action." (Dkt. No. 34, First Amended Complaint ("FAC") ¶ 3; see also id. ¶ 36.) McGhee alleges that Defendants employed him as an hourly non-exempt union lab technician, but (1) failed to pay minimum wage for all hours worked, (2) failed to provide legally compliant meal periods and rest breaks, (3) failed to pay unpaid wages upon employment separation, and (4) committed unfair business practices. (Id. ¶¶ 1, 38-72.)
McGhee's wage claims are based on Defendants' payroll policies that allegedly failed to pay employees for all hours that they were under Defendants' control. (Id. ¶ 41.) First, McGhee alleges that Defendants required incoming hourly employees to meet with their outgoing counterparts to "receive information and/or instruction," commonly referred to as "turnover time." (Id. ¶ 14.) Defendants did not compensate outgoing employees for this time. (Id. ) Second, McGhee alleges that Defendants improperly "rounded down or shaved down" hours worked to the nearest quarter of an hour. (Id. ¶ 15.) Third, McGhee alleges that Defendants did not compensate employees for time to put on personal protective equipment ("PPE") before the employees' shifts. (Id. ¶ 16.) Fourth, McGhee alleges that Defendants required hourly employees to be "on-call" for certain periods before and after their shift but did not compensate them for this time. (Id. ¶ 17.) McGhee claims that these practices violated California Labor Code Sections 1194 and 1197 and the Wage Order by the Industrial Welfare Commission, codified at California Code of Regulations Title 8, Section 11010 ("Wage Order").
McGhee's meal period claim stems from Defendants' alleged discouragement of employees taking meal breaks. (FAC ¶ 25.) McGhee alleges that Defendants required hourly employees to work an extra 30 minutes at the end of the workday if they left work premises during their meal break. (Id. ) McGhee also alleges that Defendants failed to pay employees premium wages for missed or on-duty meal periods because they did not include all renumeration (such as bonuses) in calculating the regular rate of pay. (Id. ¶ 26.) McGhee claims that Defendants' practice violated California Labor Code Section 512 and the Wage Order.
McGhee's rest break claim stems from Defendants' alleged failure to provide a third rest break when hourly employees worked more than ten hours. (Id. ¶ 30.) McGhee also claims that Defendants improperly required employees to remain on-site during rest breaks. (Id. ¶ 31.) Last, McGhee alleges that Defendants failed to pay employees one hour of pay for each workday that they did not receive all legally compliant rest breaks. (Id. ¶ 32.) McGhee claims that these practices violated California Labor Code Section 226.7 and the Wage Order.
McGhee does not allege specific facts in relation to the employment separation claims but argues that Defendants failed to pay employees upon termination or resignation, as required by California Labor Sections 201 (termination) and 202 (resignation). (Id. ¶ 33.) McGhee alleges that this failure gives rise to a waiting time penalty under Labor Code Section 203. (Id. ¶ 35.) Finally, McGhee alleges that these collective violations provided Defendants an unfair competitive advantage in violation of Unfair Competition Law ("UCL") codified as California Business and Professions Code Section 17203. (Id. ¶ 69.)
The Court shall address additional facts as necessary in the analysis. ANALYSIS
Defendants request judicial notice of certain documents from the United States Department of Transportation, Federal Motor Carrier Safety Administration ("FMCSA"), which are available on the FMCSA's website, as well as the relevant collective bargaining agreements. (Dkt. No. 37-2 ("RJN").) McGhee does not oppose the motion. The Court takes judicial notice of to the existence of those documents, but not to any disputed fact. See Santa Monica Food Not Bombs v. City of Santa Monica , 450 F.3d 1022, 1025 n.2 (9th Cir. 2006) (allowing judicial notice of public records); Hall v. Live Nation Worldwide, Inc. , 146 F. Supp. 3d 1187, 1192-93 (C.D. Cal. 2015) (granting judicial notice of CBAs to determine preemption). But see Lee v. City of Los Angeles , 250 F.3d 668, 688-90 (9th Cir. 2001) (reversing judicial notice of disputed facts stated in public records). In their Reply, Defendants ask for judicial notice of additional documents. (Dkt. No. 41-1.) Because these documents are not relevant to the Court's conclusions, the Court declines to take judicial notice of the documents.
A. Applicable Legal Standard.
Defendants move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and to strike pursuant to Federal Rule of Civil Procedure 12(f). A motion to dismiss under Rule 12(b)(6) should be granted when the pleadings fail to state a claim upon which relief can be granted. The Court's "inquiry is limited to the allegations in the complaint, which are accepted as true and construed in the light most favorable to the plaintiff." Lazy Y Ranch LTD v. Behrens , 546 F.3d 580, 588 (9th Cir. 2008). Even under the liberal pleading standard of Federal Rule of Civil Procedure 8(a)(2), "a plaintiff's obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citing Papasan v. Allain , 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) ).
Pursuant to Twombly , a plaintiff must not merely allege conduct that is conceivable but must instead allege "enough facts to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). If the allegations are insufficient to state a claim, a court should grant leave to amend, unless amendment would be futile. See, e.g. , Reddy v. Litton Indus., Inc. , 912 F.2d 291, 296 (9th Cir. 1990) ; Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv., Inc. , 911 F.2d 242, 246-47 (9th Cir. 1990).
Rule 12(f) permits a court to strike "any redundant, immaterial, impertinent, or scandalous matter" from a pleading. The purpose of Rule 12(f) is "to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial." Whittlestone, Inc. v. Handi-Craft Co. , 618 F.3d 970, 973 (9th Cir. 2010). Motions to strike are disfavored, in part because of the limited importance of pleadings in federal practice. Capella Photonics, Inc. v. Cisco Sys., Inc. , 77 F. Supp. 3d 850, 858 (N.D. Cal. 2014). Nevertheless, a court should grant a motion to strike "when a defense or a claim is insufficient as a matter of law." Id. (quoting Zep Solar Inc. v. Westinghouse Solar Inc. , No. C-11-6493 JSW, 2012 WL 1293873, at *1 (N.D. Cal. Apr. 16, 2012) ). As with motions to dismiss under Rule 12(b)(6), the court must view the pleadings in light most favorable to the pleader and freely grant leave to amend when necessary. Lee v. Hertz Corp. , 330 F.R.D. 557, 560 (N.D. Cal. 2019).
B. The Court Grants In Part Defendants' Motion to Dismiss.
Defendants move to dismiss McGhee's claims in part on four grounds. First, Defendants argue that preemption under the Labor Management Relations Act ("LMRA") bars McGhee's unpaid on-call time claim, as well as his meal and rest period claims, because their resolution requires interpretation of one or more collective bargaining agreement ("CBA"). Second, Defendants argue that maintenance workers and truck drivers are exempt from the meal period provisions of California Labor Code Section 512(e) and must be dismissed from McGhee's meal period claim. Third, Defendants argue that McGhee lacks standing to pursue "waiting time" penalties because he failed to allege that he resigned or was terminated and cannot pursue a claim for both injuries. Finally, Defendants claim that McGhee's UCL claim fails because McGhee lacks standing for injunctive relief and cannot recover premium meal pay under restitution. The Court addresses each issue in turn.
Defendants do not move to dismiss McGhee's wage claims based on turnover time, time spent donning personal protective equipment, or "rounded off" time. Defendants also do not move to dismiss McGhee's claim that Defendants failed to provide employees with a third rest break.
1. Preemption Under LMRA Section 301.
Section 301 of the LMRA "authorizes federal courts to fashion a body of federal law for the enforcement of [ ] collective bargaining agreements." Textile Workers Union v. Lincoln Mills of Ala. , 353 U.S. 448, 450-56, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). Although it contains no express preemption provision, the Supreme Court held that Section 301 preempts both state contract law claims as well as any state law claim "whose resolution ‘is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract.’ " Cramer v. Consolidated Freightways, Inc. , 255 F.3d 683, 689 (9th Cir. 2001) (quoting Allis-Chalmers Corp. v. Lueck , 471 U.S. 202, 220, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985) ). Preemption has been applied narrowly "only to assure that the purposes animating [Section] 301 will [not] be frustrated" by state law. Livadas v. Bradshaw , 512 U.S. 107, 122-23, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994) (citations omitted). It does not affect "nonnegotiable rights conferred on individual employees as a matter of state law" that are "entirely independent of any understanding embodied in the collective-bargaining agreement." Id. at 125, 114 S.Ct. 2068.
The Ninth Circuit has developed a two-part test to determine if LMRA preemption applies. See Burnside v. Kiewit Pacific Corp. , 491 F.3d 1053, 1059 (9th Cir. 2007). First, the court asks "whether the asserted cause of action involves a right conferred upon an employee by virtue of state law," as opposed to a CBA. Kobold v. Good Samaritan Regional Med. Ctr. , 832 F.3d 1024, 1032 (9th Cir. 2016) (quoting Burnside , 491 F.3d at 1059 ). If the right "exists solely as a result of the CBA," then the claim is preempted. Id. Second, if the right exists independently of the CBA, the court then asks whether it "is nevertheless ‘substantially dependent on analysis of a collective-bargaining agreement.’ " Id. (quotation omitted). A right is dependent on CBA analysis if it requires "interpreting" a CBA, not just "looking" at it. Id. at 1033 ; cf. Balcorta v. Twentieth Century-Fox Film Corp. , 208 F.3d 1102, 1108 (9th Cir. 2000) ("interpreting" means something more than to "consider," "refer to," or "apply"). There must be an "active dispute" over the meaning of the terms, not merely a "hypothetical connection between the claim and the terms of the CBA." Cramer , 255 F.3d at 691. And the dispute must "inhere in the nature of the plaintiff's claim"—raising a CBA in a defense is not enough. Id.
Here, the parties agree that McGhee's claims arise out of California law, not out of a CBA. California law provides that employers must pay employees minimum wage for "the time during which an employee is subject to the control of an employer." Cal. Lab. Code. § 1194 ; Wage Order §§ 2(G), 4(B). California law also provides that employers must provide a duty-free meal period in which the employee is "relieved of all duty." Cal. Lab. Code § 512 ; Wage Order § 11(C). This provision requires employers to "relinquish[ ] control" over employees and "not impede or discourage" them from taking a meal break. Brinker Rest. Corp. v. Superior Court , 53 Cal. 4th 1004, 1040, 139 Cal.Rptr.3d 315, 273 P.3d 513 (2012). Finally, California law requires provision of a duty-free rest break for every four hours worked. Wage Order § 12(A); Augustus v. ABM Sec. Servs., Inc. , 2 Cal. 5th 257, 265-66, 211 Cal.Rptr.3d 634, 385 P.3d 823 (2016). McGhee's claims thus arise directly from rights conferred by California law that exist independently of any CBA.
Defendants nevertheless argue that resolving McGhee's claims requires "interpreting" CBA provisions under the second step of the analysis. Defendants appear to argue that the policies challenged by McGhee are embedded in CBAs and cannot be determined without referencing them. For instance, Defendants argue that that McGhee's "on-call time" claim requires interpretation of CBA provisions that mandate employees "be in such condition that they can satisfactorily perform the assigned work" and be "available for work" during on-call time. (See Dkt. No. 37-3 ("Kawano Decl."), Ex. G. at 124, Ex. L at 6.) Similarly, Defendants argue that McGhee's meal and rest break claims require interpreting CBA provisions that provide for an "off-duty meal period" in which employees are "free to leave the premises" unless "the needs of the business require otherwise." (Id. , Ex. G at 133, Ex. M at 1-2.) Defendants claim that the Court would need to interpret the meaning of "off-duty" and the exceptions to this rule in the CBAs to determine the restrictions Defendants placed on employees during meal periods. McGhee responds that while the Court may look at these provisions, it would not need to interpret them because the claims ultimately depend on the amount of control Defendants exercised over employees—not the CBA provisions.
The Court finds that Defendants have failed to show anything more than a "hypothetical connection between the claim and the terms of the CBA." Cramer , 255 F.3d at 691. Defendants' policies do not appear to be complicated or necessarily disputed. McGhee claims that Defendants exercised control over employees during "on-call" time and further forbid or discouraged them from leaving work premises during meal and rest breaks without compensation. These allegations require determining Defendants actual policies and procedures over the class period, as well as the requirements of California law. Although the Court may "look" at the relevant CBAs as evidence of those procedures, the focus remains on Defendants' actions, not the CBAs' authorizations. Put differently, whether Defendants violated or complied with the CBAs has no import whether they also violated of California law. See Burnside , 491 F.3d at 1060 (finding irrelevant "whether a grievance [under a CBA] arising from ‘precisely the same facts’ could be pursued").
Defendants may, of course, raise compliance with the CBAs in defense to McGhee's claims. But reliance on a such defenses does not create preemption. Cramer , 255 F.3d at 691.
Moreover, even assuming that the Court looked to the CBAs to determine Defendants' policies, Defendants have not shown that any of those terms are "actively disputed." Cramer , 255 F.3d at 691. For example, Defendants appear to agree that under the CBAs, on-premise meal periods were paid, but all other meal breaks were unpaid. (Kawano Decl., Ex. M at 1-2.) Whether this policy represents "discouragement" of duty-free meal periods requires the Court to "consider" the CBA provisions, not to interpret them. See Valles v. Ivy Hill Corp. , 410 F.3d 1071, 1076 (9th Cir. 2005) ("[W]hen the meaning of contract terms is not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished." (quoting Associated Builders & Contractors, Inc. v. Local 302 Int'l Bhd. Of Elec. Workers , 109 F.3d 1353, 1357 (9th Cir. 1997) )). Defendants thus fail to demonstrate that any CBA provision is actively disputed.
Defendants separately argue that McGhee's claim regarding exclusion of bonus pay and other renumeration in meal break premiums requires interpretation of CBAs. Specifically, Defendants argue that the Court would need to wade through a variety of CBA time rates and contingency payments to calculate the meal break premiums to which McGhee was entitled. In response, McGhee states that his claim is based solely on failure to include bonus payments in the meal break premium calculation. Defendants do not dispute that bonus pay was not included in the meal break premium calculation—and, on the contrary, argue that such practice complies with California law independent of any CBA. Accordingly, to resolve McGhee's meal premium claim, the Court must determine only if Defendants' practices comply with state law, not whether Defendants miscalculated the payments under the CBA. The Ninth Circuit has held that when the issue centers on "not [on] how overtime rates are calculated but whether the result of the calculation complies with California law," no preemption applies. Gregory v. SCIE, LLC , 317 F.3d 1050, 1054 (9th Cir. 2003). Similar reasoning dictates that no preemption applies here.
Defendants argue that McGhee failed to state a claim under this theory because at least some courts have found that "regular rate of pay" in the California statute does not include bonus pay. See, e.g. , Van v. Language Line Services , No. 14-CV-03791-LHK, 2016 WL 3143951, at **16-17 (N.D. Cal. June 6, 2016) ; Wert v. U.S. Bancorp , No. 13-cv-3130-BAS (BLM), 2015 WL 3617165 (S.D. Cal. June 9, 2015). McGhee responds that other courts have found that "regular rate of pay" includes additional renumeration. E.g. , Ibarra v. Wells Fargo Bank, N.A. , No. CV 17-4344 PA (ASx), 2018 WL 2146380, at **3-4, 2018 U.S. Dist. LEXIS 78513, at **6-14 (C.D. Cal. May 8, 2018) ; Studley v. Alliance Healthcare Servs. , No. SACV 10-00067-CJC (ANx), 2012 WL 12286522, at *1-4, 2012 U.S. Dist. LEXIS 190964, at **1-14 (C.D. Cal. July 26, 2012). Because Defendants did not expressly move on this ground, the Court does not consider the issue here.
Accordingly, the Court DENIES Defendants' motion to dismiss on this ground. However, because McGhee's complaint also alleges failure to include other types of renumeration—which may raise additional preemption issues—the Court DIRECTS McGhee to amend the complaint to list each type of renumeration that McGhee alleges Defendants improperly failed to include in meal break premium calculations.
2. Maintenance Workers and Commercial Driver Exemption.
Defendants next move on McGhee's meal period claim on the basis that maintenance workers and commercial drivers are exempt from meal period requirements under California law. See Cal. Lab. Code §§ 512(e), 512(f)(1)-(2). Defendants do not contend that McGhee—a former lab technician—worked as a commercial driver or a maintenance worker. Instead, Defendants argue that the putative class includes commercial drivers and maintenance workers as "hourly non-exempt workers" and that the claim must be dismissed or struck for that reason. Defendants further argue that if McGhee disputes that the exemption applies, the claim is preempted because it requires interpretation of one or more CBA. McGhee responds that Defendants failed to show that the class contains any exempted workers, and that even if it did, Defendants failed to satisfy the requirements of Section 512(e). McGhee further argues that the exemption arises at most only as an affirmative defense, which cannot create preemption.
Section 512 of the California Labor Code exempts construction workers and commercial drivers if they are covered by a CBA that provides for meal periods and binding arbitration, among other terms. Cal. Lab. Code. § 512(e). McGhee disputes that the CBAs impose binding arbitration.
The Court finds that Defendants' motion is premature. Whether McGhee's purported class includes commercial drivers and maintenance workers is an issue of fact best decided on class certification. As it currently stands, the complaint alleges no facts that would allow the Court to determine that the exemption applies to any class member. Although Defendants request judicial notice of CBAs that discuss "maintenance" work and transport drivers, these bare mentions are not sufficient to establish that the purported class includes such workers. Moreover, because McGhee himself is not alleged to be a commercial driver or maintenance worker, the meal period claim is undoubtedly proper as to McGhee in his personal capacity. Dismissing or striking the claim at this stage is therefore premature.
Moreover, because Defendants intend to raise the CBA only as part of their affirmative defense (and only in the hypothetical situation where the certified class includes exempted workers), any related dispute over CBA provisions does not create preemption. See Peters v. RFI Entes. , No. 18-cv-02771-BLF, 2018 WL 3869565, at **4-5, 2018 U.S. Dist. LEXIS 138368 at **11-12 (N.D. Cal. Aug. 15, 2018) (finding no preemption based on affirmative defense of CBA-based exemption under Section 514); Vasserman v. Henry Mayo Newhall Memorial Hosp. , 65 F. Supp. 3d 932, 954 (C.D. Cal. 2014) (same); Lopez v. Sysco Corp. , No. 15-cv-04420-JSW, 2016 WL 3078840, at **3-4, 2016 U.S. Dist. LEXIS 38990 at **8-11 (N.D. Cal. Jan. 22, 2016) (same). Defendants' cited authorities, which dealt with a named plaintiff who fell within the scope of the exemption, do not persuade. See, e.g. , Coria v. Recology, Inc. , 63 F. Supp. 3d 1093, 1097 (N.D. Cal. 2014).
Accordingly, the Court DENIES Defendant's motion to dismiss on this ground.
McGhee requests an eight-month extension of the deadline to file a class certification motion, citing the delay related to the motion to dismiss and Defendants' failure to provide substantive discovery responses. (Dkt. No. 73.) McGhee had previously requested—and received—a six-month extension, which he claimed was sufficient to provide five months of discovery following the motion to dismiss. (Dkt. No. 48.) Defendants object in light of McGhee's lack of diligence and prejudice from continuing liability, but indicate that they are amenable to a four-month extension. (Dkt. No. 74.) Accordingly, the Court GRANTS McGhee's request and extends the deadlines for class certification motion by four months, as set forth in the conclusion of this Order.
3. Standing to Pursue Waiting Time Penalties.
Defendants argue that McGhee lacks standing to pursue waiting time penalties because he does not allege whether he resigned or was terminated. California Labor Code provides for waiting time penalties to employees who did not receive all wages earned at the time that they resigned (Section 202) or were discharged (Section 201). Cal. Lab. Code §§ 201, 202. Defendants claim that McGhee cannot pursue claims under both statutory provisions, individually or on behalf of the class, and that he failed to allege his specific injury. McGhee responds that he is willing to amend the complaint to specifically allege that he was terminated. McGhee further suggests that California Labor Code Section 203 gives standing to "an employee who is discharged or who quits" to pursue both types of injuries. Cal. Lab. Code § 203.
A named plaintiff may pursue a claim on behalf of a class only for statutory injuries that he himself suffered. In re Adobe Sys., Inc. Privacy Litig. , 66 F. Supp. 3d 1197, 1211 (N.D. Cal. 2014) (citing Warth v. Seldin , 422 U.S. 490, 502, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ). Sections 201 and 202 of the California Labor Code provide for separate causes of actions. See Segal v. Aquent LLC , No. 18-cv-346-LAB (JLB), 2018 WL 4599754, at *6 (S.D. Cal. Sept. 24, 2018). McGhee therefore cannot pursue a claim for both types of injuries unless he suffered both types of injuries (i.e. , he was both terminated and resigned), which he does not claim to have done. Accordingly, McGhee can only pursue a claim under Section 201 or Section 201, but not both. Section 203, which provides for penalties for violations of sections 201 and 202 does not create a separate cause of action and does not create standing on its face. McGhee cites no authority for the argument that it does.
Accordingly, the Court GRANTS Defendants' motion to dismiss McGhee's waiting time claim to the extent that it relies on an injury that he did not himself suffer.
4. Unfair Competition Law Recovery.
Defendants last contend that McGhee cannot recover meal and rest period premium pay under Section 226.7 for their UCL claim. Section 226.7 of the California Labor Code provides that an employer who fails to provide legally compliant meal and rest breaks must pay the employee one addition hour of pay at the employee's regular rate of compensation. Cal. Lab. Code § 226.7(b). Remedies under the UCL are generally limited to restitution and injunctions. Cel-Tech Comms., Inc. v. Los Angeles Cellular Tel. , 20 Cal 4th 163, 179, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999). Restitution under the UCL includes "earned wages." Cortez v. Purolator Air Filtration Prods. Co. , 23 Cal. 4th 163, 177-78, 96 Cal.Rptr.2d 518, 999 P.2d 706 (2000). The California Supreme Court has not addressed whether Section 226.7 pay is recoverable under the UCL, but it has treated such pay as wages for some purposes. In Murphy v. Kenneth Cole Productions, Inc. , the court held that the "additional hour of pay" required under Section 226.7 is "a premium wage intended to compensate employees, not a penalty," for purposes of statute of limitations. 40 Cal. 4th 1094, 1102-14, 56 Cal.Rptr.3d 880, 155 P.3d 284 (2007). However, in Kirby v. Immoos Fire Protection, Inc. , the court held that a Section 226.7 claim does not represent an action for nonpayment of wages because the legal violation triggering the statute is failure to provide meal and rest breaks, rather than failure to pay wages. 53 Cal. 4th 1244, 1256-57, 140 Cal.Rptr.3d 173, 274 P.3d 1160 (2012). The differing treatment by California's highest court has led to a split among district courts in treatment of Section 226.7 pay under the UCL. See Brewer v. Gen. Nutrition Corp. , No. 11-CV-3587 YGR, 2015 WL 5072039, at *18 (N.D. Cal. Aug. 27, 2015) (listing cases). Defendants now argue that McGhee cannot recover payment under Section 226.7 because they do not constitute "earned wages" under Cortez. As support, they cite Kirby and other cases that found that violations leading to payments Section 226.7 are not for "nonpayment of wages," as well as district court cases that relied on these decisions. E.g. , Jones v. Spherion Staffing LLC , 2012 WL 3264081, at *6 (C.D. Cal. Aug. 7, 2012) ; Guerrero v. Halliburton Energy Servs., Inc. , 231 F. Supp. 3d 797, 808 (E.D. Cal. 2017). In so doing, Defendants entirely ignore Murphy. As Kirby explained, there is no inconsistency between its holding and that of Murphy because they address different questions: Kirby analyzed the action triggering the violation under Section 226.7, while Murphy considered whether the resulting penalty constitutes "wages." 53 Cal. 4th at 1257, 140 Cal.Rptr.3d 173, 274 P.3d 1160. In this regard, Murphy is clear: the additional hour of pay under Section 226.7 is "a premium wage intended to compensate employees." Murphy , 40 Cal. 4th at 1114, 56 Cal.Rptr.3d 880, 155 P.3d 284. Section 226.7 pay is therefore recoverable as restitution because it is "the property of the employee who has given his or her labor" by working without breaks. Cortez , 23 Cal. 4th at 178, 96 Cal.Rptr.2d 518, 999 P.2d 706 ; see also Korea Supply Co. v. Lockheed Martin Corp. , 29 Cal. 4th 1134, 1149, 131 Cal.Rptr.2d 29, 63 P.3d 937 (2003) (restitution "restore[s] the status quo by returning to the plaintiff finds in which he or she has an ownership interest").
Defendants also cite inapposite cases regarding whether meal and rest break penalties are "wages" for purposes other than the UCL. See e.g. , Frieri v. Sysco Corp. , No. 16-CV-1432 JLS (NLS), 2016 WL 7188282, at *6 (S.D. Cal. Dec. 12, 2016) (addressing wage statements requirement); Singletary v. Teavana Corp. , No. 5:13-cv-01163-PSG, 2014 WL 1760884, at *4 (N.D. Cal. May 2, 2014) (addressing waiting time penalties). Because the California Supreme Court treats Section 226.7 pay as wages for some purposes, but not others, these cases fail to persuade. See Singletary , 2014 WL 1760884, at *4 (explaining distinction); Bellinghausen , No. C-13-02377 JSC, 2014 WL 465907, at **6-9 (N.D. Cal. Feb. 3, 2014).
Defendants argue that Section 226.7 pay does not constitute "earned" wages because it results from employers' actions, rather than the employee's labor. Defendants cite Pineda v. Bank of America, N.A. as authority, where the California Supreme Court held that Section 203 waiting time penalties are not recoverable under the UCL because they are "not designed to compensate employees for work performed," but rather to "punish employers" who fail to pay final wages on time. 50 Cal. 4th 1389, 1401, 117 Cal.Rptr.3d 377, 241 P.3d 870 (2010). But extending Pineda in this way plainly conflicts with Murphy , which held that Section 226.7 payments are not a penalty, but a "premium wage." 40 Cal. 4th at 1114, 56 Cal.Rptr.3d 880, 155 P.3d 284. The better interpretation is that Section 226.7 compensates employees for working without breaks, which is properly recoverable as restitution because it is triggered in part by the employee's actions.
Accordingly, the Court DENIES Defendants' motion to dismiss on this ground.
Defendants additionally argue that McGhee has no standing for injunctive relief because he is no longer an employee who stands to benefit from changed policies. McGhee concedes that he does not have standing for an injunction. Accordingly, the Court GRANTS Defendants' motion to dismiss on McGhee's request for injunctive relief.
CONCLUSION
The Court GRANTS IN PART Defendants' motion to dismiss McGhee's injunctive relief request and waiting time claim based on California Labor Code Section 202. The Court DENIES Defendants' motion on all other grounds. The Court GRANTS Defendants' motion to strike from the first amended complaint McGhee's pleading for injunctive relief. The Court further DIRECTS McGhee to amend the complaint to list each type of renumeration that McGhee claims Defendants improperly failed to include in meal break premium calculations. Finally, the Court CONTINUES the deadline to file the motion for class certification to May 29, 2020.