TROESTER v. STARBUCKS CORPORATIONAppellant’s Reply Brief on the MeritsCal.March 17, 2017No. 8234969 Ninth Circuit No. 14-55530 SUPREME COURT FILED MAR 17 2017 Supreme Court of California Jorge Navarrete Clerk Hn the Deputy DOUGLAS TROESTER,etal., aa Plaintiff— Appellant — Petitioner, VS. STARBUCKS CORPORATION,et al., Defendants — Appellees. ON GRANTOF REQUEST TO DECIDE ISSUE PURSUANT TO CALIFORNIA RULES OF COURT, RULE 8.548 ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA HON. GARY ALLEN FEESS, PRESIDING DISTRICT COURT CASE NO.2:12-CV-07677-GAF-PJW PETITIONER’S REPLY BRIEF ON THE MERITS SETAREH LAW GROUP THE SPIVAK LAW FIRM * Shaun Setareh, SBN 204514 David Spivak, SBN 179684 Thomas Segal, SBN 222791 9454 Wilshire Boulevard, Suite 303 H. Scott Leviant, SBN 200834 Beverly Hills, California 90212 9454 Wilshire Boulevard, Suite 907 Telephone: (310) 499-4730 Beverly Hills, California 9212 Facsimile: (310) 499-4739 Telephone: (310) 888-7771 Facsimile: (310) 888-0109 LAW OFFICES OF LOUIS BENOWITZ Louis Benowitz, SBN 262300 Lead Counselfor Plaintiff/Appellant/Petitioner 9454 Wilshire Boulevard, Penthouse on Appeal Beverly Hills, California 90212 Telephone: (310) 844-5141 Facsimile: (310) 492-4056 Attorneysfor Plaintiffs No. 8234969 Ninth Circuit No. 14-55530 Sun the Supreme Court of California DOUGLASTROESTER,etal., Plaintiff— Appellant — Petitioner, VS. STARBUCKS CORPORATION,etal., Defendants — Appellees. ON GRANT OF REQUEST TO DECIDE ISSUE PURSUANT TO CALIFORNIA RULES OF COURT, RULE 8.548 ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA HON. GARYALLEN FEESS, PRESIDING DISTRICT COURT CASENO. 2:12-CV-07677-GAF-PJIW PETITIONER’S REPLY BRIEF ON THE MERITS SETAREH LAW GROUP THE SPIVAK LAW FIRM * Shaun Setareh, SBN 204514 David Spivak, SBN 179684 Thomas Segal, SBN 222791 9454 Wilshire Boulevard, Suite 303 H. Scott Leviant, SBN 200834 Beverly Hills, California 90212 9454 Wilshire Boulevard, Suite 907 Telephone: (310) 499-4730 Beverly Hills, California 9212 Facsimile: (310) 499-4739 Telephone: (310) 888-7771 Facsimile: (310) 888-0109 LAW OFFICES OF LOUIS BENOWITZ Louis Benowitz, SBN 262300 Lead Counselfor Plaintiff/Appellant/Petitioner 9454 Wilshire Boulevard, Penthouse on Appeal Beverly Hills, California 90212 Telephone: (310) 844-5141 Facsimile: (310) 492-4056 Attorneysfor Plaintiffs TABLE OF CONTENTS TABLE OF CONTENTS..o. oes ccsesssssscssecsesnesscacsscsssssessscsenusarsatsasssavavssesesssseseveeverseceee 1 TABLE OF AUTHORITIES|...sesesssessesscesssssessssssecsvessssucsucsusensacataesesessesessevessece il TP. INTRODUCTION0.eececeeccsessssssesssescscecssssssessuenssatsansussssarsssassesssssesevsiseeeecees 1 TT. = DISCUSSION... ceeecsesssessessecsecseecassssssesssusssssatsussarsansussvsssasasussveseesesiseseneeee 7 A. Defendant Failed to Identify Any California Court Decision Applying the De Minimis Excuseto California’s Wage and Hour Laws and Regulations... sessssssessesssescseccsesccssesarsesatesesesarsucacscacacaeresesssaveeseevees7 B. Defendant Incorrectly Suggests That California Follows the FLSA asIts Default Rude oo...ee eseescsesseseseecescscsucsvessesssavsessesatsusatatatseatssessseseveseces 1] 1. The FLSA Is Not Helpful Due to Conflicts Between State and Federal Wage and Hour Laws. ..0.......cccccccscsscseseseesesesesessesesscsvesesees 11 2. The Basis for the Court’s Decision in See’s Candy Is Also a Basis to Reject the De Minimis Defense. ......0..00.c.cccccceccessssescessesceseesesessesees 14 C. Defendant’s Efforts to Explain Away This Court’s Prior Precedent Regarding the IWC Wage Orders Are Unpersuasive........-.cecccsccccsesecesees 16 1. This Court Recognizes That “The IWC Knows How to Expressly Incorporate Federal Law and Regulations WhenIt Desires to Do SOL”ceccccessecesesesestsssesuesssensaesesessesessssssssescarstensassecesesserasstatessasersesenees 16 2. This Court Recognizes That Similarities Between State and Federal Wage and Hour Laws Are Not Groundsto Impair the State’s Stronger Employee Protections .......0..ccccccssscssssesesescseseseeveseseseceeees 17 3. This Court Has Determined ThatIt Is Routinely Erroneousto Interpret IWC Wage Orders with Federal Regulations.........0..0...... 19 D. The De Minimis Excuse Will Permit Systemic Wage Underpaymentsto Low Wage WotKkets ........:.:ccccsssesssesscsessesesseseseescscsscsesesssusesssssvsessceaceateeeas 21 1. This Is Not a Controversy Over Wagesfor “Seconds” Worked..... 21 2. California Law Already Provides Clear and Flexible Rules Defining When an Employer Must Pay for Time Worked. 0.0.0.0... 25 E. This Is Not a Controversy Over Whether to Pay Employees for “Leaving”the Store ......ccceeecccscsscesesesescecseseescscecscssscssssececscsevaccartacsaeneres 27 F. The DLSE’s Conclusions Do Not Supplant California Statutes and Regulations... ececeeeeseseeeseseseseeesssesuenesesesesessseseseecsssesessvscscsstsceceeeeees 28 THT. CONCLUSIONouncecccccscsesesesnsnsesesssssesesseaesesesesesesesesessssscssssssseevavseeseavaes 29 ii TABLE OF AUTHORITIES CASES Augustus v. ABM Sec. Servs., Inc., 2 Cal. Sth 257 (2016) ......cccceccesesescssccseeseeeeeee 2, 26 Auto Equity Sales, Inc. v. Superior Court, 57 Cal. 2d 450 (1962).....cccccccccseesesseseeee 9 Danielson v. Neal, 164 Cal. 748 (1913) ...ceccccccccsssesssscsecscsscsessssessssscesscsensersesevseveaes 10 Gomezv. Lincare, Inc., 173 Cal. App. 4th 508 (2009) .......ccccscccsesssceeeeeeees 4,8,9 Hall v. Park Bank ofLos Angeles, 165 Cal. 356 (1913) ...ccccceccccsssscesestessssestereeeeeeees 10 Indus. Welfare Com. v. Superior Court, 27 Cal. 3d 690 (1980) ....ccccececcesesceseseeeees21 Machado v. Superior Court, 148 Cal.App.4th 875 (2007) ......c.ccccccseeseessessseesesesesseee 9 Mendiola v. CPS Sec. Solutions, Inc., 60 Cal. 4th 833 (2015) w..ecccceeeeeeee passim Morillion v. Royal Packing Company, 22 Cal. 4th 575 (2000)......ccecccceceeeeee passim Ramirez v. Yosemite Water Co., 20 Cal. 4th 785 (1999) oo... 17, 18, 20 See's Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012) ooo ccccccccccsessscssesesetecseeseneeseeecseeesesseeeneenaas 13, 14, 15 Sweet v. Johnson, 169 Cal. App. 2d 630 (1959) ....ccccccccccccccscescssessssessscsssceacsseeaceeenee 10 Tidewater Marine Western Inc. v. Bradshaw, 14 Cal. 4th 557 (1996)..........0.0008. 5,18 FEDERAL CASES Anderson v. Mt Clements Pottery Co., 328 U.S. 680 (1946)......ccccc 11, 12, 13, 14 Apperson v. Exxon Corp., 1979 WL 1979 (E.D. Cal. 1979) wo.eccecscsccseesecsseessenseeees23 Corbin v. Time Warner Entm't-Advance/Newhouse P'ship, 821 F.3d 1069 (Oth Cir, 2016) ..cceecccecsssscscscccssseesesseesesssesssssvsussessssssssivesssusessssssessessstssssessssses 24, 25 iil Farris v. County ofRiverside, 667 F.Supp.2d 1151 (C.D. Cal. 2009)...22 Inre KFDiaries, Inc. & Affiliates, 224 F.3d 922 (9th Cir. 2000)...eeeeeeeeeeeee9 Kenyon v. Western Union Tel. Co., 100 Cal. 454 (1893).......:cceeceesseseeseeeseteesteee 4,10 Perez v. Wells Fargo, 2015 WL 1887534 (N.D. Cal. 2015)... eeeceeeeeseteseeteeeeeees22 Rutti v. Lojack Corp., 596 F.3d 1046 (9th Cir. 2010) 0... eee eeeeeseesseteeecneeseeeeeneeeees22 Waine Golston v. Time Warner Newhouse, 2013 WL 1285535 (S.D.Cal. QO13) cecccccccccccsecssesseeseceecseeserecsescesceseeenseecsessaeeescseaeeeesecsessaecesaeesesaeseeseetssesenetateeeenees23 STATUTES Civil Code § 3533 ....cccccccccsessessescsseesceeeseeeeeneecssesesensesesseeeaeceaeesaesseeeesseeatieeats 4,9, 11, 29 Fair Labor Standards Act, 29 U.S.C. 201, ef S€q. ..cecceesccesceeeseeesceesetsesetseeeneenes passim Labor Code § 1194 00....ccccccccccseesccsssececeeeeeeseecsesseeeeeeeesacecseeessesscessenseeeenesseseneeeeeeenses 7 Labor Code § 1197 .o...cccccccccccsesscceesseeeesesseceseseesensesacecaeeseaeeseeseceecsesaeesesaeenseesaeeeees 1,7 REGULATIONS 29 CLER. § 778.223 oc ceccccceccececeseceececeecssecsceseeeeacsesesesaeaecseececeseeeessaceeecaceeeeeteeeaetess 12 29 CLELR. § 785.47 ooccccccccccccssescsseseecsseecsnecssessaesesseeeeseeaesaececeaesseeaeescaeeeeesasueseesetenaeees 12 Wage Order No. 5 oo. eesesesecsesseneereceessceesesecssscsesssaecsacesecseesscsessenecevaseaesneasseesneseeaes 1 OTHER AUTHORITIES American Heritage Dict. (Sth ed. 2017) ..... ccc ccceceseeeceesseeeseeeesaetsesseeeteeeeeeseeaeeesnes 14 DLSEEnforcement Manual........0....cccccccesscesscssesenseceeseeeeesececsneeseesaeeeeseeseseeseeseeeeeenseetees 5 iv I. INTRODUCTION In his OpeningBrief, Petitioner/Plaintiff Douglas Troester demonstrated that a de minimis excuseto the obligation to pay all wages for all hours worked does not apply to violations of California wage and hourlaw: © California’s statutory and regulatory requirements mandate paymentfor all hours worked, not almost all hours worked. Lab. Code §§ 510, 1197; Wage Order No. 5 §§ 3(A)(1) and (4)(A). The Fair Labor Standards Act, 29 U.S.C.201, et seq. (“FLSA”), in contrast, contains no similarly broad requirement, instead mandating paymentforall hours workedonly in specific instances. e Asthis Court has often held, federal law is only incorporated into California’s wage and hourregulatory framework when the [WC expressly intendsthatresult. See, e.g., Mendiola v. CPS Sec. Solutions, Inc., 60 Cal. 4th 833, 843 (2015). For example, in Wage Order 5’s definition of “hours worked,” the IWCstates, “Within the health care industry, the term ‘hours worked’ means the time during which an employeeis suffered or permitted to work for the employer, whether or not required to do so, as interpreted in accordance with the provisions ofthe Fair Labor Standards Act.” (Emphasis added.) If the [WC wantedto follow the FLSA in other ways, it would havesaidso. e California law already incorporates a clearly-defined mechanism that effectively prevents the risks identified by DefendantStarbucks Corporation (“Starbucks”): It is only when (1) employeesare under an employer’s control or (2) the employer knew or should have knownthat the work was occurring that an employerincurs an obligation to pay. Morillion v. Royal Packing Company, 22 Cal. 4th 575, 585 (2000) (“The words ‘suffer’ and ‘permit’ as used in the statute mean ‘with the knowledge of the employer.’”). e The public policy of the State of California, as declared by the Legislature and the IWC,is the protection of employees. Augustus v. ABMSec. Servs., Inc., 2 Cal. Sth 257, 262 (2016). The California Legislature has, in numerous ways, implemented stronger employee protections than the FLSA’s, precluding importation of federal standards that would weaken California’s employee protections. Defendantfailed to refute these propositions that are dispositive ofthe Question Presented for Review. Lacking any meansto directly address the Legislature’s enactments, the [WC’s regulations, and this Court’s decisions, Defendant, instead, touts federal law, claiming that California Courts look to federal law for guidance where there is no conflict between state andfederal law. Buthere, California has implemented an employee-protection framework that exceeds federal protections and defines the obligation to compensate to negate the need for a judicially created de minimis defense to wage paymentobligations. To support its claim that California Courts look to federal law for guidance, Defendantasserts that the policies embodied by the FLSAare as protective of employeesas those existing under California law. However, Defendant was unable to identify any relevant provision of the FLSA that is not surpassed by protections present under California law, and manyofthe protections existing under California law are nowhere found under federal law. For example, the FLSA, unlike California’s Labor Code, does not contain within its text a blanket requirement of payment for all hours workedin all industries. Rather, the only such obligation found anywhere in the FLSAis explicitly limited to certain employmentcontracts, collective bargaining agreements, and seamen on American vessels. FLSA §§ 206(a)(3), 207(b)(2), and 207(f)(1). Had the United States congress wanted to require paymentfor all hours workedin all industries, it would not have confined such language to such specifically enumerated categories of employees. Moreover, Defendantalso relies on non-binding DOL regulations to make claims about whatthe FLSAprovides, rather than the FLSAitself. The federal de minimis excuse has never been “a backbone”ofCalifornia wage and hour law, and federal wage and hour laws are substantially weaker than those implemented by California. Next, Defendant chastises Plaintiff for arguing that the FLSA’s de minimis defense is a creature of federal law, saying it also existed in California “since at least the adoption of the Civil Code in 1872.” (Respondent’s Answer, at 17-18.) Defendant then recounts California cases decided overthe years that address a de minimis concept without ever noting that the “broad range of cases” mentioned do not include any decision addressing claimsarising under the Labor Code. In short, Defendant misconstrues Plaintiff's argument. The question before this Court is specifically whether the de minimis excuse applies to the wage payment provisions of the California Labor Code — not California law in general, or even the entire Labor o H A g o Code. Defendant does not cite a single California State wage and hourdecision that applies the de minimis excuse to the obligation to pay all wages owed pursuant to the Labor Code or IWC Wage Orders. Even if California law generally acknowledges a concept of “trifles” under Civil Code § 3533, no California case has decidedthat time amounting to hours ofwork in the aggregate is a trifle under the California Labor Code, justas a rule oftrifles is rejected in other contexts under California law. And, fatal to Defendant’s entire argument about California’s treatmentof “trifles,”it has long been recognized that Civil Code § 3533 does not apply in instances where permanentrights are at issue and even nominal damageswill carry costs. Kenyon v. Western Union Tel. Co., 100 Cal. 454, 458-59 (1893). Starbuckspersists, claiming that California Courts have applied the de minimis rule in California wage and hour disputes. Yet, Defendantonlylists one California State appellate decision as proofofthis “backbone”ofthe California Labor Codeto support its premise that California wage and hour law includes the de minimis defense. Defendant’s lone citation, Gomez v. Lincare, considered a de minimis defense to a claim for promissory estoppel, not a claim under the California Labor Code. Gomez v. Lincare, Inc., 173 Cal. App. 4th 508, 526-528 (2009). In short, Defendant would havethis Court hold that a generalized maxim ofjurisprudence, Civil Code § 3533,reflects a Legislative intent to apply the FLSA’s de minimis defense to the unwaivable obligation to pay for all hours worked, supplanting the comprehensive body ofstatutes, regulations, and interpreting Court decisions that make up California’s wage and hour framework. And Defendant would havethis Court so hold, despite the fact that wage and hour-specific defenses and limitations have been enacted as part of various Labor Code provisions whenever the Legislature concludedthat such limitations or defenses are appropriate. Defendantalso argues that the DLSE’s non-controlling opinion about a de minimis excuse should control despite contrary California law. But, as Defendant tacitly acknowledges, the DLSE’s construction cannot supplant clear laws, regulations, and binding constructions ofthem. Tidewater Marine Western Inc. v. Bradshaw, 14 Cal. 4th 557, 574 (1996); Mendiola, 60 Cal. 4th at 848. The DLSE derives its de minimis excuse from Lindow, not from published California State decisions. See DLSE Enforcement Manual §§ 46.6.1, 47.2.1, 47.2.1.1, 48.1.9, and 48.1.9.1. The DLSEfails to offer any reasoning for why it has done so. Thus,it provides noreason for this Court to conjure the de minimis excuse from the contrary express language ofthe Labor Code and the [WC. That the DLSE was wronginthis instance for quite some time does not change the outcome. Even assuming, arguendo, that Defendant wascorrect that the FLSA had the same express requirementto payfor all hours worked,it is understandable that Justice Scalia would question whetherthere is a de minimistest under federal law atall. It is not an absurd result for an employee to expect payment ofwagesfor all time worked that an employer can track, whetherit is a few hours or even a few minutes. In the aggregate, small amounts ofunpaid time every day can add up to a significant sum of money that an employee is entitled to expect from the employer. Defendant does not dispute that Plaintiffmay not have been paid for time aggregating to hours, based on all of time he spent on short tasks over the course ofhis employment. (See Respondent’s Answer, at 10, n. 1.) Plaintiff does not sue over “split second” increments as Defendant suggests. (Respondent’s Answer,at 13.) Thetrial court acknowledgedin the summary judgment proceedings that Troester’s closing tasks took minutes to perform at times. Indeed, Defendant concedes that many of Troester’s closing tasks involved up to 10 minutes to complete. Answering Brief, at 11. On other days, Troester spent less time on closing tasks. However, it makes no difference that the tasks, considered oneat a time, took a relatively small amountoftimeto perform. California law calls for paymentof“all time” worked and does not exempt arguably short periods from this rule. Thetrial court’s finding that Starbucks “could not feasibly capture the timeat issue” wasrefuted by the record. In opposition to Defendant’s summary judgment motion, Plaintiff supplied evidencethat, late in the relevant time period, Starbucks had changedits timekeeping apparatus to capturethe time periods in question, separating out two previously interdependent systems. (3 ER 437, 442-443, 474-475, 503-509; 4 ER 574-575, 577-578, 691, 755-760). As it was possible to capture the time, there is no rational basis for such work periods to go unpaid, whether the periods were “incidental”or “inevitable.” Finally, having no clear way to deny the laws that define California’s wage and hourobligations, Defendant decries the “absurdities” that wouldresultifit actually had to pay its employeesforall of the timeit controlled them or knew that they were working. Defendantjust ignores the cumulative effect of withholding minutes ofpay every day from employees, instead pejoratively characterizing such payments as meretrifles or “seconds,” even after admitting elsewherein its Answering Briefthat more than mere secondsare at issue in this case. California’s “control” or “knew or should have known”standards prevent the nonsensical outcomes that Defendant attempts to conjure. Asexplained in Plaintiffs Opening Brief, and not refuted by Defendant, California’s wage paymentstatutes and Wage Orders are clear. There is no basis for creating an exception to those requirements, undermining the policies embodied by statute and regulation, while injecting needless complexity into an employee’s attempt to ascertain what workis entitled to compensation. The Labor Code and the Wage Orders already include a brightline rule — employers must pay for all hours worked. This Court should hold, consistent with Labor Code §§ 510, 1194, and 1197, consistent with the IWC Wage Orders, and consistent with this Court’s many decisions, that there is no de minimis excuse to claims for unpaid wages under California law. Il. DISCUSSION A. Defendant Failed to Identify Any California Court Decision Applying the De Minimis Excuse to California’s Wage and Hour Lawsand Regulations In its Answering Brief, Starbucks claims that a de minimis ruleexists, fully formed, as part of California’s wage and hourlaw andthat the de minimisrule arising under the FLSAthatis applied by federal courts adjudicating wage and hourclaimsis not a federal rule atall, citing numerous “California” cases that use the term “de minimis.” But, not one ofthe cases identified by Defendant considered wages owed pursuantto California’s Labor Code. Instead, Defendant cites cases concerning jury deliberations (People v. Armstrong), union representation (Claremont Police Offers Ass’n v. City ofClaremont), construction defects (Connell v. Higgins), real property (Wolfv. Prosser), vehicle sales (Bermudez v. Fulton Auto Depot, LLC), community property (In re Marriage ofCrook), damagesarising from opening junk mail (Harris v. Time, Inc.), preyadgmentinterest (Overholser v. Glynn), and commercial contracts for the sale of eggs (Nye & Nisson v. Week Lumber Co.). Missing from Defendant’s list is any decision by a California Court applied to a claim arising under California’s Labor Code. Defendant then builds an argument based upona false premise. First Defendant argues, “Given California’s longstanding adoption of the de minimis rule, it is not surprising that many courts have applied the de minimis rule to wage and hour claims under California law.” (Answering Brief, at 19.) However, as established by Plaintiffs Opening Brief, and not rebutted, there is no omnibus“de minimis rule” under California law. Next, Defendantcites a list of court decisions which purport to be examples of where “many courts have applied the de minimis rule to wage and hour claims under California law.” But, immediately evidentis the fact that all but one ofthe cited cases arefederal court decisions. Andthe only California court decision in Defendant’s list of “many courts” does not apply thefederal de minimis excusearising under the FLSAto any California wage and hour claim. Rather, Gomez v. Lincare rejects a de minimis defense in a discussion entitled, “Seventh Cause ofAction—Promissory Estoppel.” Gomez, 173 Cal. App. 4th 508 at 526. Moreover, the only authority cited within that portion ofthe opinion is the federal decision ofLindow, showingthatthere is no independent de minimis defense under California law that applies to wage and hour claims. Even if Gomez had applied a de minimis defense to a California wage and hour claim, whichit indisputably did not do, Gomezis not controlling for multiple reasons. First, Gomez did not address a contention that California does not recognize a de minimis defense. “Cases are not authority for propositions not decided.” Machadov. Superior Court, 148 Cal.App.4th 875, 881 (2007). Second, other Courts ofAppeal are free to disagree with Gomez and would be boundonly by a decision from this Court. Auto Equity Sales, Inc. v. Superior Court, 57 Cal. 2d 450, 455 (1962). Third, federal courts are not bound by the decisions of intermediate appellate courts if there is reason to believe that the state’s highest court would rule differently. E.g., In re KF Diaries, Inc. & Affiliates, 224 F.3d 922, 924 (9th Cir. 2000): “Our decision is solely guided by California law as we believe the California Supreme Court would apply it.” As the Ninth Circuit noted in the certification order, this Court has repeatedly cautioned against importing less protective federal standards into California wage and hour law. E.g., Mendiola, 60 Cal.4th at 842-43. Where Defendant argues that a de minimis rule already exists under California law, what Defendantreally seeks is a determination that a generalized maxim of Jurisprudence, Civil Code § 3533, reflects a clear Legislative intent to create a defense to the unwaivable obligation to pay for all hours worked and supplants California’s meticulous wage and hour framework. Even if California law generically acknowledges a concept of “trifles” under Civil Code § 3533, no California case has decided that time workedis a trifle under the California Labor Code. This is simply one ofmany specific contexts wherethat rule does not apply. For example, the “maxim that the law will not be concerned withtrifles does not, ordinarily, apply to violation of a contractualright.” Sweet v. Johnson, 169 Cal. App. 2d 630, 632 (1959), citing Kenyon v. Western Union Tel. Co., 100 Cal. 454 (1893). That contract law disregards the general maxim regardingtrifles is particularly instructive, as the payment ofwages has much in commonwith contractual obligations. Another context where the conceptof “trifles” is not controlling is found in the realm of real property. In that context, this Court has recognized for more than a century that small values are not always de minimis to the injured plaintiff: The value of the omitted land, upon the basis of the purchaseprice, respondentpoints out is $83; but we cannot agree with respondent that, because these are thefacts, equity will treat the omitted land as a minute discrepancy ofno material importance. The price or value of omitted landsis, of course, an elementin determining whetheror not equity will take cognizanceofa suit to recover the omitted portion. Backusv.Jeffrey, 47 Mich. 127, 10 N. W. 138. But ina suit for land, it is by no meansthe all-controlling and determinative consideration. The omitted land maybeofgreat importanceto the value ofplaintiff's remaining land. It may have a peculiar value, pretium affectionis, in plaintiff's eyes. Danielson v. Neal, 164 Cal. 748, 750-51 (1913) (emphasis added). And in the realm of taxes, this Court has held that a sale to the State of California for $0.50 more than was owedin taxes wasvoid and did not conveytitle. Hall v. Park Bank ofLos Angeles, 165 Cal. 356, 359 (1913). Beyondjust contractual obligations, Kenyon explains the uniting thread that defeats Defendant’s theory. Kenyon reasonedthat, in addition to the fact that the de minimis concept normally has no application in the arena of contract law, the de miminis concept does not apply where a permanentright is infringed and an award of even nominal damages would carry costs. Kenyon, 100 Cal. at 458-59. In the 10 contexts ofwages, real property transactions, tax obligations, and contractual obligations, permanentrights exist, and even nominal damage awardscarry costs. Thus, in the context of the obligation to pay all wages for all hours worked, the concept oftrifles must similarly be rejected because the Legislature and IWC have concluded that such a conceptis inappropriately applied here, where the prevailing employeeis entitled to recoverfees and costs in any suit to recover an unpaid wage. The very foundations of Defendant’s arguments are faulty; this Court should expressly hold that California’s standard for when employeeactivity constitutes compensable work time is not the sameasfederal law, is not controlled by the federal de minimis excuse, and cannot be controlled by the generic conceptstated in Civil Code § 3533, which doesnot apply in instances where permanentrights are at issue and even nominal damageswill carry costs. B. DefendantIncorrectly Suggests That California Follows the FLSA as Its Default Rule Defendantasserts that this Court must look to federal law for guidance on issues ofstate wage and hourlaw,stating, “[T]here is no conflict between state and federal law, so this Court should look to federal law — Anderson and Lindow — for guidanceon adopting and applying a de minimis rule.” (Answering Brief, at 20.) As explained below, Defendantis simply wrongasto its premise that California and federal law are not in conflict as to the paymentofall wagesfor all hours worked. 1. The FLSAIs Not Helpful Due to Conflicts Between State and Federal Wage and Hour Laws. Defendant incorrectly suggests that the text of the FLSAitselfcontains a broad requirementthatall hours worked must be compensated. (Answering Brief, at 21, 1] citing 29 U.S.C. § 207(b)(2).) In fact, the FLSA, unlike California’s Labor Code, does not contain within its text a blanket requirement ofpaymentfor all hours worked in all industries. Instead, the only instances where the FLSA explicitly requires payment for “all” hours worked are found in clauses concerning certain employmentcontracts, collective bargaining agreements, and seamen on American vessels. FLSA §§ 206(a)(3), 207(b)(2), and 207((1). Had the United States congress wanted to require paymentfor a// hours workedin a// industries, it would not have expressly limited the requirement. The federal wage and hour lawsare substantially weaker than those implemented by California, placing them in conflict with the greater protections imposed under California law. Instead, in support ofits claim that California and federal law are not in conflict as to the payment ofwages, Defendantcites to federal regulations, which are not controlling authority under federal law, to support its argumentthat both the FLSA and California contain identical requirements to pay for“all” hours worked. Citing 29 C.F.R. § 778.223, Defendant quotes from a fragmentofthe regulation in a parenthetical. (Answering Brief, at 21 [tan employee must be compensatedfor ail hours worked”].) But Defendant omits that 29 C.F.R. § 778.223 waseffective on January 23, 1981, as issued in 46 Fed. Reg. 7313, long after Anderson v. Mt Clements Pottery Co., 328 U.S. 680 (1946) was decided, creating a de minimis defense as part of the FLSA. Thus, when 29 C.F.R. § 778.223 wasissued, the Department ofLabor was boundby the Anderson decision and thefederal regulation wasnecessarily constrained. But no such decision constrained the [WC’s implementation ofLabor Code provisions in the Wage Orders. 12 Defendantalso ignores the fact that the de minimis doctrine has been expressly included in federal regulations at 29 C.F.R. § 785.47: In recording working time under the Act, insubstantial or insignificant periods of time beyond the scheduled working hours, which cannot as a practical administrative matter be precisely recorded for payroll purposes, may be disregarded. The courts have held that suchtrifles are de minimis. (Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946)) This rule applies only wherethere are uncertain and indefinite periods of time involved of a few seconds or minutes duration, and wherethe failure to count such time is due to considerationsjustified by industrial realities. An employer may not arbitrarily fail to count as hours worked any part, however small, ofthe employee's fixed or regular working time or practically ascertainable period oftime heis regularly required to spend on duties assigned to him. 29 C.F.R. 785.47 (Emphasis added).' Nothing analogousexists within California’s Labor Codeor the [WC’s Wage Orders. It is therefore incorrect to suggest that“all” means the same thing understate and federal law. Thus,it is necessarily wrong to contendthat there is no conflict between state and federal law in this regard, which renders Defendant’s plea that “this Court should look to federal law — Anderson and Lindow — for guidance on adopting and applying a de minimis rule”a nullity. Even Defendant’s supposedly supportivecitations leave it hoist by its own petard. For example, at page 20 ofits Answering Brief, Defendant quotes See's Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012), from its discussion aboutthe propriety oftimeclock rounding, as saying, “In the absence of controlling or conflicting California law, California courts generally look to federal regulations under the FLSA for guidance.” See’s Candy, at 903 (emphasis added). "In Appellant’s Opening Brief, the regulation was erroneously cited as 24 C.F.R. 785.47. 13 But here, since California law conflicts with the weaker obligation to pay for non-de minimis hours worked under federal law, the FLSA (which imposesa lesser standard of employee protection) must not be consulted for guidance as it has noneto offer. 2. The Basis for the Court’s Decision in See’s Candy Is Also a Basis to Reject the De Minimis Defense. Defendant’s Answering Brief focuses on innocuous excerpts from Anderson and Lindow which,construing the federal standard, concluded that employees could not be paid for time worked work by application of the de minimis excuse even though the time was “otherwise” compensable. (Answering Brief, at 21.) Compensable means:“Being such as to entitle or warrant compensation.” American Heritage Dict. (Sth ed. 2017). Compensation, in turn, means: “Something, such as money,given or received as paymentor reparation, as for a service orloss.” Jd. If time workedis not the sameas time paid by operation of the federal de minimis excuse, then it also seemstrue that the time notpaidis not literally compensable, and the definition of compensablecarries a different meaning under federal law. There is no basis in the Labor Code or the IWC Wage Orders to conclude that such a distinction is appropriate or was intended under California law. Nevertheless, Defendantpersists, arguing that the de minimis excuseis not concerned with whether the time is compensable. Rather, the de minimis excuse is concerned with whether short periods of [otherwise] compensable time must be paid. To buttress this elusive distinction, Defendantrelies on See’s Candy to claim that “time rounding,like the de minimis rule, is groundedin practicality and efficiency, designed to compensate employeehours as precisely as possible without imposing an 14 S Y N E I E U R N o r undue burden on employers, even if that means not every employee will ultimately be paid for every single minute that she works.” (Answering Brief, at 22.) But See’s Candy said: Assuming a rounding-over-timepolicy ts neutral, both facially and as applied, the practice is proper under California law because its net effect is to permit employersto efficiently calculate hours worked without imposing any burden on employees. See’s Candy, at 903 (emphasis added). The Court went on tostate: Fundamentally, the question whether a// wages have beenpaid is different from the issue of how an employercalculates the number of hours worked and thus what wages are owed. See’s Candy, at 905. Clearly, the court was concerned that any rounding system must ensure all wagesare paid “without imposing any burden on employees.” Applying such logic, there is no room for application of the de minimis excuse to paymentof wages for time worked, deny wagesfor “all hours worked,” and as result, lay a burden on workers, howeverslight. In spite ofthe contrary objectives ofthe de minimis excuse and California rounding jurisprudence, Defendant conflates the two concepts to permit an employer to deny wages for compensable time. Such an outcomeflies against the logic of See’s Candy andis nonsensical because, ifworktime need not be paid, it is not compensable And,if it is not compensable, it need not be paid. Rounding, as conceived of by See’s Candyat least, is one practical method to ensure that workers are paid for all of their work (if the rounding system is neutral both facially and as applied). While one policy behind roundingis to pay for all hours worked, the de minimis excuse advocated by Defendantcontravenesit. In fact, Defendant’s de minimis excuse would directly contradict the purpose underlying the See’s Candy court’s analysis of 15 rounding. C. Defendant’s Efforts to Explain Away This Court’s Prior Precedent Regarding the [WC Wage Orders Are Unpersuasive “We have observed‘that where the IWC intended the FLSA to apply to wage orders,it has specifically so stated.’” Mendiola, 60 Cal. 4th at 847 n. 17,citing Morillion, 22 Cal. 4th at 592. 1. This Court Recognizes That “The IWC Knows How to Expressly Incorporate Federal Law and Regulations WhenIt Desires to Do So.” Onthe differences between the degrees ofprotection for employees under federal and state wage and hour law, Mendiola said: Federal regulations provide a level of employee protection that a state may not derogate. Nevertheless, Californiais free to offer greater protection. Mendiola, 60 Cal. 4th at 843. But, Defendant simply dismisses this Court’s repeated recognition that California habitually exceeds federal standards, contendingthat, in Mendiola,this Court only declinedto find a federal standard incorporated into a Wage Order because the IWC “expressly incorporated federal standards in some wage orders but not in Wage Order 4. .. .” (Answering Brief, at 24.) Defendant ignores other reasonsstated by this Court, which also said, “[O]ther language in Wage Order 4 demonstrates that theWC knew howto explicitly incorporate federal law and regulations whenit wished to do so.” Mendiola, 60 Cal. 4th at 843; see also Mendiola, 60 Cal. 4th at 847 n. 17 (“Wage Order 4 itselfdemonstrates that the IWC knowshowto expressly incorporatefederal law and regulations whenit desires to do so.”). In other words, even limited to the Wage Order at issue, Mendiola observed 16 that the IWC did,in fact, expressly indicate whenit intended to incorporate any elementoffederal law as a guiding standard under California wage and hourlaw. Defendant’s attempt to distinguish away Mendiola requires willful blindness towards the clearest of observations — that“the IWC knew howto explicitly incorporate federal law and regulations whenit wished to do so.”Ibid. Concluding the discussion, Mendiola said: The language chosen by the IWC does not support CPS’s argument that a broad importation wasintended. Indeed, it supports the contrary conclusion: The [WC intended to import federal rules only in those circumstances to which the IWC madespecific reference. Ibid. Defendanthasidentified nothing in either the Labor Code or the governing IWC Wage Orderthat suggests the IWC intended to import a defense that would significantly reduce protections provided to employees under California law. No such presumption exists if it would in any way lessen employeeprotection: Because application ofpart 785.22 would “eliminate[ ] substantial protections to employees,” we decline to import it into Wage Order 4 by implication. Mendiola, 60 Cal. 4th at 847. Furthermore, just as Mendiola held, a “contrary result would have a dramatic impact”in California, where periods oftime up to ten minutes or more per day that employers were previously obligated to pay for would suddenly become uncompensated work time. 2. This Court Recognizes That Similarities Between State and Federal Wage and Hour Laws Are Not Grounds to Impair the State’s Stronger Employee Protections Ramirez v. Yosemite Water Co., 20 Cal. 4th 785 (1999) also recognizesthat California wage and hour lawsfrequently provide greater protections than those supplied under the FLSA: 17 The IWC’s wageorders, although at times patterned after federal regulations, also sometimes provide greater protection thanis provided under federal law in the Fair Labor Standards Act (FLSA) and accompanying federal regulations. (See, e.g., Tidewater, supra, 14 Cal.4th at pp. 566-567, 59 Cal.Rptr.2d 186, 927 P.2d 296 [seamen entitled to overtime under wage order despite exemption from FLSA] Ramirez, 20 Cal. 4th at 795. “The FLSA explicitly permits greater employee protection understate law.” Jd., at 795. But, in attempting to distinguish away Ramirez, Defendantagain suggests that federal law defines California’s wage and hourprotections for employees in any instance wherethey do not“substantially differ.” (Answering Brief, at 23.) Defendant again goestoo far. Ramirez thoroughly considered an argumentthat similarity of language in an IWC WageOrder should be construed as adopting the federal construction of a term in commonuse underfederal law (in that case, the “outside salesperson” exemption) —andrejected it. Describing the contention, Ramirez said: Because the term “outside salesperson” was used nowhereelse in California law, Yosemite argues that it is logical to infer that the Legislature intended to fully incorporate the federal definition. Yosemite therefore concludes that the IWC exceededits legislative mandate by adopting a regulation that is narrower than the federal one. Ramirez, 20 Cal. 4th at 798. Ramirez unequivocally rejected that contention: In the absenceof statutory language or legislative history to the contrary, we have no reason to presumethat the Legislature,in delegating broad regulatory authority to the IWC,obliged the agency to follow in each particular a federal regulatory agency’s interpretation of a common term. Ramirez, 20 Cal. 4th at 800. Ramirez did not limit its holding to the term at issue. Rather, Ramirez broadly explained that there is no presumption that, absentstatutory languageorlegislative history to the contrary, the [WC’s Wage Orders should be construed as incorporating federal standards. 18 A similar result in this case is even easier to reach. Unlike in Ramirez, where a term in use under federal law was used, with a different definition, by California law, the de minimis excuse is nowhere mentionedin either the Labor Code or the IWC Wage Orders. The de minimis excuse was notincorporated at all under California wage and hour law. To find otherwise would dilute the protections imposed by California law,a result that must be rejected by this Court. 3. This Court Has Determined That It Is Routinely Erroneous to Interpret IWC Wage Orders with Federal Regulations. Defendant also argues that Morillion cannot apply here because Morillion addresses a conflict between state law and the Portal-to-Portal Act. Defendant’s contention ignores the analysis in Morillion. First, as recognized by Morillion, there are “substantial”differences in the way that employees are compensated for “hours worked” understate and federal law: While one of our lower courts has recognized the “parallel” nature of the federal and state definitions of “hours worked” (Monzon,supra, 224 Cal.App.3d at p. 46, 273 Cal.Rptr. 615), the DLSE has underscored the substantial differences between the federal and state definitions in numerousadviceletters. Morillion, 22 Cal. 4th at 589-90. Defendant overlooksthis difference, arguing that compensation obligations are all but identical, where Morillion identified express differences between federal and state law: The California Labor Code and [WC wageorders do not contain an express exemption for travel time similar to that of the Portal-to— Portal Act. Morillion, 22 Cal. 4th at 590. Here, not only does the “knew or should have known” standard of compensable work time exist under California but not federal law, the de minimis excuse 1s incorporated into DOL regulatory interpretations ofthe FLSA, 19 where no de minimis excuse has ever appeared within the Labor Code or the IWC Wage Orders. And,as discussed above,at Part II.B., the FLSA itself contains no broad requirement to pay for all hours worked, setting aside the divergent approaches to whatconstitutes compensable hours worked.” After recognizing the substantial differences between state and federal law, Morillion required “convincing evidence” of the [WC’s intention to adopta federal standard before a court can presume to import a standard reducing employee protections: Absent convincing evidence of the IWC's intent to adopt the federal standard for determining whether time spent traveling is compensable understate law, we decline to import any federal standard, which expressly eliminates substantial protections to employees, by implication. Accordingly, we do not give much weightto the federal authority on which the Court ofAppealrelied. Morillion, 22 Cal. 4th at 592. Such a rule followssettled principles: Moreover, our departure from the federal authority is entirely consistent with the recognized principle that state law may provide employees greater protection than the FLSA. Morillion, 22 Cal. 4th at 592,citing Ramirez, supra, 20 Cal.4th at 795. A similar rule, applied here, precludes importation of the federal de minimis excuseinto California wage and hour law wherethere is no evidence,let alone convincing evidence, that the Legislature or the [WC intendedto do so. Limiting the use of federal wage and hourlaw asa basis for construing state law is consistent with the goal ofpreventing erosion of the strongly remedial nature of California’s employee protections: Indeed, we have recognizedthat “past decisions additionally teach that 2 See also, discussion at Part II.B.1, above. 20 in light of the remedialnatureof the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection.” Morillion, 22 Cal. 4th at 592, citing Indus. Welfare Com. v. Superior Court, 27 Cal. 3d 690, 702 (1980). Again, the IWC expressly incorporates the FLSA only in those specific instances whereit intended to do so: Finally, we note that where the IWC intended the FLSA to apply to wage orders,it has specifically so stated. Morillion, 22 Cal. 4th at 592 (emphasis added). This observation in Morillion was not limited to the singular wage order involvedin that case. Rather, Morillion referred to “wageorders” in the plural when describing IWCactions, refuting Defendant’s suggestion that Morillion is inapplicable here. Lest there be any doubt, Morillion said: Moreover, werecently disapproved of using federal regulations extensively to interpret a California wage order, without recognizing and appreciating the critical differences in the state scheme. Morillion, 22 Cal. 4th at 593. Given that some federal courts have concludedthat as muchas 20 minutes ofwork per day in two ten-minute segments is non-compensable as de minimis, the federal de minimis excusecritically diverges from California’s strong protections for employees. D. The De Minimis Excuse Will Permit Systemic Wage Underpayments to Low Wage Workers 1. This Is Not a Controversy Over Wagesfor “Seconds” Worked. Defendant peppersits discussion with references to “seconds”ofunpaidtime. The purpose behind the choice of such languageis transparent; Defendant proposes a logicalfallacy to convince this Court to disregard precedent, California statutes, and 21 enabling regulations, holding out of concern alone that a de minimis excuse must be ladled on top ofexisting tests for the compensability oftime worked to avoid the risks that Defendant describes. Either a de minimis excuse exists as a doctrine within California’s wage and hour laws(P), orit does not (Q). According to Defendant, Q is very scary, hence P is true. The argumentis invalid. Defendant’s appeal seeks to exploit unrealistic concerns to create support for it preferred outcome, namely P.3 While Defendant’s repeated retreat to arguments turning on “seconds” of unpaid time is part of a logical fallacy that is invalid becauseit lacks evidentiary support and invokes implausible outcomes,it does suggest a question asto the alternative.Is it reasonable to worry that California Courts might disregard test like the federal test articulated in Lindow, imposinginstead an anti-employee,brightline rule that simply declares ten minutes to be the threshold of compensability? The answerto that question is “yes.” Here, despite Lindow, the district court held that daily time periods of ten minutes are de minimis as a matter of law. And, despite Lindow’s multi-factor approach (and despite Rutti v. Lojack Corp., 596 F.3d 1046 (9th Cir. 2010) having been decided prior to many ofthe caseslisted below), many federal district courts in the Ninth Circuit have effectively ignored Lindow and applied a fixed ten-minute rule. Farris v. County ofRiverside, 667 F.Supp.2d 1151, 1165 (C.D.Cal. 2009) (granting summary judgmentagainst sheriff's deputies on claim for time spent donning and doffing uniforms because “10 minutes is the > Defendant’s argumentalso suffers from the false dilemma fallacy. Defendant pretends that without a de minimis excuse under California law, there is no protection from theoretical absurdities. That, too, is false, as demonstrated by way of example below. 22 standard threshold for determining whether something is de minimis’); Perez v. Wells Fargo, 2015 WL 1887534 *8 (N.D. Cal. 2015) (granting motion to dismiss based on 10 minuterule holding that plaintiff would needto allege he was regularly underpaid 20 minutes of time); Waine Golston v. Time Warner Newhouse, 2013 WL 1285535 *5 (S.D. Cal. 2013): ““ Many courts have found ten minutes per day is de minimis . . . 2 to 15 minutes is negligible and not compensable”; Apperson v. Exxon Corp., 1979 WL1979, *10 (E.D. Cal. 1979) (granting summary judgment where employees worked on average 10 minutes ofuncompensated time each day). These decisions, and mayothers issued within the Ninth Circuit, offer no explanation as to how ten minutes (or more) of free work per day by an employee is consistent with Lindow’s test that the Ninth Circuit describes as reflecting “a balance between requiring an employerto pay for activities it requires of its employees and the need to avoid ‘split- second absurdities’.” Rutti, 596 F.3d at 1057 (emphasis added). There is no balance as the rule is routinely applied by these courts; employees simply lose ten (or more) minutesofpay a day.‘ The record here confirms that more than “split-second absurdities” were at issue. Appellant lost wages while performingthestore close procedure. (3 ER 442— 443, 474-475, 503-505, 508-513, 519-521; 4 ER 574-575, 755-760.) This equates to unpaid hours that Appellant worked in the aggregate. (E.g., 3 ER 443, 475.) Hours, ‘It also bears emphasizingthat, contrary to federal law, California wage and hour law expressly declares ten minutes to be a non-de minimis measure oftime, mandating ten-minute rest breaks for shifts of sufficient length. If a California employer must figure out how to monitor ten-minute rest breaks, even in difficult circumstances, then it can figure out how to compensateall the minutes an employee works each day. 23 or even days, worth ofpayis not a small amount ofwages for any worker, especially workers like Appellant, whose wagerates are near the legal minimum. Forits part, Defendantfails to provide any meaningful number of exemplar casesthat focused on “seconds”oftime andfails to demonstrate that its hypothesized harm is likely to occur, or rise beyond the level of extreme aberration if it does. In fact, the only decision even approaching the concern raised by Defendant is Corbin v. Time Warner Entm't-Advance/Newhouse P’ship, 821 F.3d 1069 (9th Cir. 2016). But, as noted below, the outcome would likely have been the same in Corbinif California’s “knew or should have known”test wasappliedto the facts. Thus, neitherthe record in this case, nor decisions addressing unpaid time, supports the notionthatlitigation over a few seconds ofpay is a substantial problem (or even a minor problem)for California Courts. However, reported decisions do confirm that abuses of employeesare likely to occur if a de minimis excuse like the federal rule applied incorrectly here is imported into California’s wage and hour law. How,then, do we avoid “split-second absurdities” under existing California law? California law providesa two-fold answer.First, under California law,it is only when (1) employees are under an employer’s control or (2) the employer knew or should have knownthat the work wasoccurring that an employer incurs an obligation to pay. Morillion, 22 Cal. 4th at 585. Most ofthe theorized “absurdities” are avoided with this rule alone. Second, under California law,ties go to the employee. Thatis, it is the policy of California to err on the side ofproviding maximum wageand hour protections to employees, andthat policy also dispenses with many arguments about “absurdities.” 24 2. California Law Already Provides Clear and Flexible Rules Defining When an Employer Must Pay for Time Worked. In evaluating whether California’s existing wage and hour framework provides an adequatesolution to the “absurdities” question raised by Defendant, one of Defendant’s authorities showsthat there is no need for another layer of employer protection. In Corbin v. Time Warner Entm't-Advance/Newhouse P'ship, 821 F.3d 1069 (9th Cir. 2016), the plaintiff alleged that on one occasion he worked for one minute before opening the timekeeping software and clocking in for work: One minute represents the total amountoftime for which Corbin alleges he was not compensatedas he once mistakenly opened an auxiliary computer program before clocking into TWEAN's timekeeping software platform. Corbin, 821 F.3d at 1073. The Ninth Circuit affirmed a finding that the one minute of unpaid time was de minimis. But, under California’s approach, and assumingthat the plaintiff was not acting under the employer’s control when he madehis one timeclock error, there is nothing in Corbin that suggests defendant Time Warner “knew or should have knownthat the work was occurring” whenplaintiff Corbin started an auxiliary program before clocking into the timekeeping system. Thus, a California Court could find that, in the absence of evidence that Time Warner“knew or should have knownthat the work wasoccurring,” there was no obligation triggered to compensate the plaintiff for it. Further, and again assumingthattheplaintiffin Corbin was not acting under the employer’s control when he madehis oneerror, there would be no obligation to pay underthe “control”test.5 Under the “control” > Of course, if Time Warnerdirected an employee to start software other than the timekeeping system first, that time, though not captured by the timekeeping system, would be compensable under both the “control”test and the “knew or should have 25 test, since off-the-clock work waslikely prohibited, and there was no evidencecited in Corbin that the employertold him to work before clockingin (thereby circumventing a prohibition on off-the-clock work), Corbin was not under the employer’s control. Thus, the outcome in Corbin would be correct under California law for a reason different than the application ofthe federal de minimis excuse but sufficient nonetheless to avoid an absurdity. Also, in those few hypothetical instances where it is unclear whether the employer should be viewedas having incurred an obligation to compensate employees,it is the policy of California’s labor laws, as repeatedly recognized by this Court, to provide maximum protection for employees: When construing the Labor Code and wageorders, we adoptthe construction that best gives effect to the purpose of the Legislature and the IWC. [Citations.] Time and again, we have characterizedthat purposeas the protection of employees—particularly given the extent of legislative concern about working conditions, wages, and hours whenthe Legislature enacted key portions of the Labor Code. [Citations.] In furtherance of that purpose, we liberally construe the Labor Code and wageorders to favorthe protection of employees. [Citations.| Augustus v. ABM Sec. Servs., Inc., 2 Cal. Sth 257, 262 (2016) (citations omitted). Thus, even in instances ofwork that some might view as very small, California’s declared policy is that such time must be compensated where (1) employees are under an employer’s control or (2) the employer knew or should have knownthat the work was occurring. Morillion, 22 Cal. 4th at 585. Importing the federal de minimis excuse is anathemato that declared policy. known”test. An employer cannot affirmatively direct employee activity to preclude them from receiving compensation for all time worked. 26 It bears repeating that small amounts add up. Assuming there are 261 working days in a year, a ten minute daily de minimis rule would permit employers up to 43 hours of unpaid work per employee every year. That cannot be the law in state which has a fundamental public policy ofpayment ofwagesin full. E. This Is Not a Controversy Over Whether to Pay Employeesfor “Leaving” the Store On several occasions, Defendant describes Plaintiff as seeking to be paid for “Jeaving” the store. (Answering Brief, at 9, 31.) This characterization is unsupported. The Ninth Circuit summarized what actually occurred in its Order Certifying a Question to the Supreme Court of California: Appellant submitted evidence that, during the relevant alleged class period, Starbucks’ computer software required him to clock out on every closing shift before initiating the software’s “close store procedure” on a separate computer terminalin the back office. The close store procedure transmitted daily sales, profit and loss, and store inventory data to Starbucks’ corporate headquarters. After Appellant completed this task, he activated the alarm, exited the store, and locked the front door. Appellant also submitted evidence that, per Starbucks’ policy, he walked his co-workers to their cars. In addition, Appellant submitted evidence that he occasionally reopened the store to allow employeesto retrieve items they left behind, waited with employees for their rides to arrive, or broughtin store patio furniture mistakenly left outside. (June 2, 2016 Order of the Ninth Circuit, at 4.) Working on a computer in the back office and then setting an alarm andlocking the dooris not “leaving” the store; those tasks constitute time under the control of the employer (which created a timekeeping system, /ater changed,that required Plaintiff to clock out before completing additional tasks for his employer). Presumably Plaintiff would have been disciplined and potentially fired if he failed to complete the “close store procedure”or set the 27 alarm or lock the door. Plaintiff was also under Defendant’s control when he walked co-workers to their car. And Plaintiff was under Defendant’s control when he brought in patio furniture, yet another task that that is not “leaving”the store. Thus, Plaintiff remained under Starbuck’s control despite clocking out, Defendant knew it, and that time was time worked for which Plaintiff should have been paid. F. The DLSE’s Conclusions Do Not Supplant California Statutes and Regulations Defendant places inordinate reliance on the DLSE’s view ofwhether the federal de minimis excuse wasincorporated into California’s employee-protective wage and hour framework. As this Court hassaid before, “The DLSE’s past views offer little help in resolving the issue here.” Mendiola, 60 Cal. 4th at 848. Where, as here, there is no evidence suggesting that federal courts’ construction of federal wage and hourlaw wasintendedto be incorporated into California’s wage and hour laws and regulations, the DLSE’sopinion on that front is ofno value: [While the DLSEis charged with administering and enforcing California's labor laws,it is the Legislature and the IWCthat possess the authority to enact laws and promulgate wageorders. (Aguilar, supra, 234 Cal.App.3d at p. 26, 285 Cal.Rptr. 515.) There is no evidence that the IWC intendedto incorporate part 785.22 into Wage Order4. Id. There is nothing within the Labor Code or the IWC’s Wage Orders that even hints at incorporation of the de minimis excuse within California’s wage and hourlaws. Certainly, the DLSEdid nothing other than citefederal law. This Court should take no guidance from the DLSE’s unsupported and unexplained adoption of a federal defenseto a federal law, when every objective measure — including the language of the Labor Code, the language ofthe Wage Orders, the presumptions applied to [WC 28 importation of federal standards, and the substantial differences between federal and state approaches to compensable work time — all points to the contrary result. I. CONCLUSION Based onthe plain language of the applicable statutes and Wage Orders, precedentrejecting the importation of federal standards into California law where federal and California standards conflict, and precedent rejecting application of Civil Code § 3533 in comparable circumstances, this Court should rule that there is no de minimis excuse available to employers in California. Dated: March 15, 2017. Respectfully submitted, SETAREH LAW GROUP wvMAKI Shaun Setareh’” Thomas Segal H. Scott Leviant THE SPIVAK LAW FIRM David Spivak LAW OFFICES OF LOUIS BENOWITZ Louis Benowitz Attomeysfor Plaintiffs 29 TypefaceandSize: Word Count: Dated: March 15, 2017. CERTIFICATIONS The typeface selected for this Brief is 13 point Times New Roman. The fontused in the preparation of this Brief is proportionately spaced. The word countfor this Brief, excluding Table of Contents, Table ofAuthorities, attached Certifications, and the Cover is approximately 8,299 words. This count wascalculated utilizing the word count feature of Microsoft Word 2016. SETAREH LAW GROUP » MikLA H. Scott Leviant CERTIFICATE OF SERVICE I, the undersigned, declare: 1. That declarant is and was,at all times herein mentioned,a citizen of the United States and a resident of the County of Los Angeles, over the age of 18 years, and not a party to or interested party in the within action; that declarant's business address is 9495 Wilshire Blvd., Suite 907, Beverly Hills, CA 90212. 2. That on March 16, 2017 declarant served the PETITIONER’S REPLY BRIEF ON THE MERITSbydepositing a true copy thereof in a United States mail box at Beverly Hills, California in a sealed envelope with postage fully prepaid and addressedto the parties listed as follows: Rex S. Heinke Mark R.Curiel Galit Knotz Gregory W. Knop Jonathan P. Slowik Akin GumpStrauss Hauer & Feld LLP 1999 Avenue of the Stars, Suite 600 Los Angeles, CA 90067-6022 3. That there is a regular communication by mail between the place of mailing and the places so addressed. I declare under penalty ofperjury that the foregoing is true and correct. Executed this 16th day ofMarch 2017 at Beverly Hills, California. mv ASMA H.Scott Leviarit CERTIFICATE OF CONFORMITY WITH ELECTRONIC BRIEF [NOT INCLUDED IN ELECTRONIC COPY] I hereby certify that the Reply Briefto which this Certificate of Conformity is attachedis, aside from the attachmentofthis Certificate, identical in all respects to the electronically filed Reply Brief submitted using the Court’s Electronic upload website. The paper copies of the Reply Briefwere printed from the PDFfile generated by Microsoft Word, the program in which the original Reply Briefwas created. Dated: March 16, 2017. SETAREH LAW GROUP H. Scott Leviant _—
