TROESTER v. STARBUCKS CORPORATION

Appellant’s Response to Amicus Curiae Brief

Cal.July 11, 2017

No. 8234969 ETLED. Ninth Circuit No. 14-55530 JUL 41 2017 In the Jorge Navarrete Clerk Supreme Court of Californta Deputy CRc \ & S(t) DOUGLAS TROESTER,et al., “ee 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 CONSOLIDATED ANSWERINGBRIEF IN REPLY TO BRIEFS OF AMICUS CURIAE FILED IN SUPPORT OF RESPONDENT 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. 8234 969 Ninth Circuit No. 14-55530 In the Supreme Court of California DOUGLAS TROESTER,etal., 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 S‘TATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA HON. GARY ALLEN FEESS, PRESIDING DISTRICT COURT CASE NO. 2:12-CV-07677-GAF-PIW PETITIONER’S CONSOLIDATED ANSWERINGBRIEF IN REPLY TO BRIEFS OF AMICUS CURIAEFILED IN SUPPORT OF RESPONDENT SETAREH LAW GROUP THE SPIVAK LAW FIRM * Shaun Setareh, SBN 204514 David Spivak, SBN 179684 ThomasSegal, SBN 222791 94-54 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 94.54 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...00...cccssscsecsesseesesssssesseseseesesssessscessasesecanesesesssevevevevetscavaen i TABLE OF AUTHORITIES 00.02... ceeeceeeessesessesesseesessssesesessececenesseesesesecevavatsvesecereenes il T. INFRODUCTION 0000. ccececceecsessesssesesssseesescessseensessessesseesseseesucststcevaveveveeveseenees ] Il. ARGUMENTIN RESPONSE TO AMICUSBRIEFS..0....c.ccecceececeeeeeseseseeees 7 A. Wage Theft Remainsa Serious Problem for Low Wage Workers in California, and Imposing a De Minimis Excuse on Those California Employees Would Only Serve to Insulate Certain Forms of Wage Theft from Corrective ACtiOn......ccccccecseseecsescssescsessesssssesscsscsessssssstscsterseeacesasecsasaess7 Despite Arguing That a De Minimis Doctrine Exists Under California Law, Neither Defendant nor Any Amicus Supporting It, Acknowledge That California’s De Minimis Doctrine Does Not Apply to the Types of Permanent, Statutory Rights at Issue Here..u.....c.ceccceesescscesssesssececseseseseeseeee9 It Is Irrelevant to California Wage and Hour Law That Federal Courts Apply a Federal Defense to Wage and Hour Claims.......00.0.000cccececees 10 The Court ofAppeal’s Decision on Rounding in See’s Candy Offers No Succor to Defendantor Its Amicus Filers .......0.ccccecccecccsesesssceseveseceeeeece 14 The Duplicative Assault on This Court’s Prior Decisions Concerning Whether and When Wage Orders Can Be Construed to Have Imported Federal Law into California Regulations ............c.ccccsscecssseseseseseesseeseeees 14 1. Mendiola applies here, holding that “the IWC knows how to expressly incorporate federal law and regulations whenit desiresto 2. Ramirezapplies here, holding that similarity of terminology between state and federal wage andhourlawsis not enough ofa basis upon which to presumethat weaker federal protections were intended to dilute stronger state protections.........0.cccecseesececeecseeees 16 3. Morillion applies here, finding error in the use of federal regulations to interpretWC Wage Orders because of substantial differences between the two SysteMs. ........cccccseccesssssssessesesvecsveverstatsestecereseeseess 17 F. AmicusFilers Wrongly Suggest That the California Legislature Approved of the DLSE Interpretation by Not Acting to CorrectIt ........ 18 G. Lindow Has Not Provided an Adequate Safeguard Against Misuseofthe Federal De Minimis Defense, and There Is No Reason to Believe the Result Would Differ If This Court Changed California’s Compensation Rules to Mirror Those Applied Under Federal Law........c.ecccccsssccscseeseeses 19 H. A Defense That Does Not Exist Under California Law Cannot Be ASSCIMEG oo. eee eeec cece cescseseeeseeseecsesesescsesssssucsssesussevssssuvevscecsessssssasatscassecveneces 20 TT. CONCLUSION ooonciecceeeccccccecsesssssesseeessesccssssecsucssesacsusscsteseassucanenesesatestsseeaeseeess 22 TABLE OF AUTHORITIES CALIFORNIA DECISIONAL AUTHORITY City ofSan Diego v. Hass, 207 Cal. App. 4th 472 (2012) ....c.ccecceccsessessecesseseeeseeeee21 Ghory v. Al Lahham, 209 Cal. App. 3d 1487 (1989) ....cccccccecccccescessessestscssseceees21 Gomezv. Lincare, Inc., 173 Cal. App. 4th 508 (2009)... cccccecccecsceeseseststenenene 2, 10 Kenyon v. Western Union Tel. Co., 100 Cal. 454 (1893).......cccccccccesssstssscsesesseseeveeees 9 Mendiola v. CPS Sec. Solutions, Inc., 60 Cal. 4th 833 (2015) ......ccccceceeeee, 15, 16, 18 Morillion v. Royal Packing Company, 22 Cal. 4th 575 (2000) .......0.cccceeeeseee 15,17 People v. Brown, 54 Cal. 4th 314 (2012), as modified on denial of reh'g (Sept. 12, 2012) eeeeceesecesseeseeseeseeesesssesesesecnessseecscsecsecaesassscsasscateccesscstecseseaes 18 Quinny, State ofCalifornia, 15 Cal. 3d 162 (1975) .ccccccccccsescccessesscesstestsscseerecers 18 Ramirez v. Yosemite Water Co., 20 Cal. 4th 785 (1999) oo... cceceeccceceeetecereeeeees 16 See’s Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012)......6, 7, 14 FEDERAL DECISIONAL AUTHORITY Apperson v. Exxon Corp., 1979 WL 1979 (E.D. Cal. 1979) oo... cecceccsesescseseseneeeeeee20 Farris v. County ofRiverside, 667 F.Supp.2d 1151 (C.D. Cal. 2009) oo... 19 Lindow y. United States, 738 F.2d 1057 (9th Cir. 1982) oo... cccccecetesseseereeseees passim Perez v. Wells Fargo, 2015 WL 1887534 (N.D.Cal. 2015).......0cccececsceeeeseeees20 Rutti v. Lojack Corp., 596 F.3d 1046 (9th Cir. 2010) ....cccccccccecceseeeeeesscstsesssserens 19 Waine Golston v. Time Warner Newhouse, 2013 WL 1285535 (S.D.Cal. QOL) voccccccscssssecsesssssssvsesessssssssssssssscesssuevesssssessesessunsssseesssnanieersessssnanivtesensssssesisssees20 ili CALIFORNIA STATUTES Civil Code § 3533. o.cecccecccesessesesesesesesescsesesesescsesesessesuesesccssscssesseecesessassssnssessveevavanes 1,9 OTHER AUTHORITIES American Heritage Dict. (Sth ed. 2017) o....e.eccccecceeseeseseseseseeecsscsecseesesesesentesessseessass 13 I. INTRODUCTION Four amicuscuriaefiled briefs in support ofDefendant Starbucks Corporation (“Starbucks”or “Defendant”), but they contain nothing that wouldrequire this Court to recognize the federal de minimis excuseas a defense to California’s comprehensive wage and hour laws, whenneither the Labor Code nor the clear Wage Orders issued thereunder recognize such a defense. Since the federal de minimis excusehas noapplication to California wage and hour obligations, amicus curiae Association for Southern California Defense Counsel (“ASCDC”) simply repeats Defendant’s fallback argumentthat this Court should impose a judicial maxim (Civil Code § 3533 [“The law disregardstrifles.”]) to curtail statutory rights under California law that guarantee the paymentofall wages for all hours worked. ASCDC’sstance, that ten minutesof daily labor by an employeeis a “trifle” unworthy of compensation,is a slap in the face to hourly wage workersin California. Significantly, ASCDC offers no authority to dispute Plaintiff's argument that the California “de minimis” concept in Section 3533 does not apply to circumstances where a permanentrightis infringed and an award of even nominal damages would carry costs. A judicial maxim does not supersedestatutory rights, which include statutory rights such as those at issue here. ASCDC unhelpfully arguesthat courts in otherstates have applied a de minimis rule to state wage claims, but California has chosen,as a matter of public policy, to enact someofthe strongest employee-protective laws in the country, a fact repeatedly recognized by this Court. It would be an absurd result to then undermine those protections by importing much weaker, employer-focusedrules from states choosing an alternative approach for their wageand hourlawsandregulations. After repeating Defendant’s unavailing argumentthat California’s de minimis doctrine applies here, ASCDCthen offers other arguments already advanced by Defendant. Those arguments are no more compelling the second time around. First, ASCDC,like Defendant,identifiesfederal court decisions in whichfederal courts decided to apply a de minimis defense to California wage and hourclaims. Second, ASCDCidentified only the decision of Gomezv. Lincare, Inc., 173 Cal. App. 4th 508 (2009) to support its claimsthat “California . . . courts have consistently indicated that the de minimis rule applies to California wage claims.” (ASCDCBrief, at 26.) And, just like Defendant, ASCDCfails to mention that the only discussion ofa de minimis defense in Gomez wasin the context of a promissory estoppel claim, and Gomez mentioned no California authority in the curt discussion, relying, instead, on Lindow, which concernsthe federal de minimis defense available to claims arising under the FLSA. Third, ASCDC repeats the same ineffective attack on this Court’s prior decisions regarding whether and when a WageOrder can be construed to have imported into California regulations any federal defenses to federal wage and hour claims. Asalready explained byPlaintiff, those decisions create a very clear framework for ascertaining whether and whenanyfederal defenseor standard is imported into any of California’s Wage Orders. Fourth, ASCDC arguesthat a defense to a requirement imposed by the Labor Code or the Wage Orderis available unless and until the Wage Orderexplicitly states that it is not available. Under this absurd formulation, the drafters ofthe Wage Orders would have been required to identify all conceivable defenses, creating a list ofpermitted and excluded defenses that included every possiblefederal defense. This Court has heretofore never imposed such a burden onthe drafters of the Wage Orders, and no compelling reason is given for why this Court should suddenly do so now. Fifth, ASCDC utilizes a long-discredited form of argumentthat legislative inactionin the face of erroneous DLSE guidanceconstitutes approval of that erroneous guidance. Noneofthese arguments assist Defendant. Amicuscuriae California Retailers Association (“CRA”) offers only two arguments in support of Defendant. First, CRA, like ASCDC,identifies a number of federal cases applying the federal de minimis defense to wage and hour claims. Using thesefederal cases, CRA argues, for example,that it would be “highly impractical, if not impossible to track” time spent standing in a security checkpointline, and, by implication, that such time should not be compensable. (CRA Brief, at 8-9.) But that time is time for the benefit ofthe employer, where the employees are underits control, andit is time that occurs every day, day after day, allowing the employerto gain at the expense of the employees. Moreover, even CRA must concedethat in the example of security checkpoints, the procedures and timeclock locationsare in every conceivable instance determined by the employer. Simply moving the timeclocks so that they are situated before a security check line would eliminate the issue. And, as in the security checkpoint example, Starbucks devisedits closing procedures, creating a system where employees were required to clock out and then perform additional tasks. How then can CRA orStarbuckscredibly express outrageor surprise that when employer-created proceduresresult in underpaymentofwages, the employees will eventually enforce their rights? Under California law, unlikefederal law, when (1) employeesare under an employer’s control or (2) the employer knew or should have known that the work was occurring, an employerthen incurs an obligation to pay them for that time. Any California de minimis excuse would subvert a clearly defined standardthat identifies when an employerwill incur an obligation to pay its employees. Second, CRA arguesthat, as a matter of policy, this Court should adopt a new standard for determining when California’s clear and employee-protective wage paymentobligationsactually need to be followed. Under CRA’s approach,this Court should create a “totality of the circumstances” exception that would allow a trier of fact to decide that any compensableactivity isn’t really “work”that requires payment of a wage. (CRA Brief, at 13.) Where ASCDC would have this Court declare ten minutes perdayto be a “trifle,” thereby stretching the meaningof“trifle” to an absurd extreme, CRA advocates a different standard that would allow arbitrarily long periods oftime to be declared non-compensable. CRA reveals its real view of California’s wage paymentobligations whenit says, “But employees have no reasonable expectation to be compensated for every split secondortrivial inconvenience associated with having a job.” (CRA Brief, at 14.) Again, CRA simply disregards California’s settled law on wage paymentobligations. When (1) employeesare under an employer’s control or (2) the employer knew or should have known that the work was occurring, the employees do havea reasonable expectation thatall such timewill be compensated. CRA completesits attack on California’s employee-protective public policy by arguing that lunch break interruptions are okay (CRA Brief, at 15), by arguing that SA RK a d R i i e e W R A R R not paying employees whohelp customersafter they clock out is okay (id.), and by describing burdensome outcomes that it cannot support with anything other than vague generalities. For example, CRA arguesthat if security checks must be “on the clock,” the employer would have to compensate employeesfor “non-compensable” time. (CRA Brief, at 16.) But CRA fails to identify how standing in line for a security check is anything other than time under the employer’s control, and thus compensable,particularly given that timeclock placement andsecurity line procedures are always devised by the employer. Employers werealready obligated to compensate employees for time under the employer’s control. That some might not have donesois irrelevant to the existence ofthe obligation. Amicuscuriae California Chamber of Commerce (“CCC”)offers nothing that is not included in the Briefs of CRA and ASCDC,and in the same way. For example, CCCclaims that California has long recognized the de minimis excuse in the wage and hour law context. CCC,like ASCDC (and Defendant), cites Gomez as the only California case that allegedly did so, but, like ASCDC (and Defendant), CCC neglects to mention that Gomez discussed a promissory estoppel claim (not a claim arising under the Labor Code), and applied onlyfederal law,citing Lindow. Then CCCcites to numerousfederal court decisions and decision in other states, not acknowledging thatfederal courts and courts in other states do not have the authority to determine the scope ofobligationsarising under California’s employee-protective wage and hour laws. CCC endsits analysis of inapposite authority by declaring that paying employeesfor a few minutes of workis an “absurd result” that “cannot be whatthe Legislature intended.” (CCC,at 15.) CCC’s conclusionis unsupportable and grossly dismissive of employee labor. The California Legislature has made it abundantly clear over the years thatit fully intended to craft comprehensive, employee-protective policies as the public policy of California, and intended the Wage Ordersto detail and extend those protections further in the form of lawfully implemented regulations. Employers cannot subdivide employee tasks into smaller and smaller increments and then declare that the small increments it has created as so absurdly smallthat they ought not be compensated. And what employee would enthusiastically agree if approached by an employerand asked if he or she would like to work for free for ten minutes every day? It is absurd that CCC would think that anyone other than an employer seeking to shave labor costs on the backs of its employees would think that is okay. Amicus curiae Employers Group and Amicuscuriae California Employment Law Council (“EG & CELC”),in their Brief, also offer nothing different than a repeat of arguments included by the other Amicus Briefs filed in support of Defendant. First, EG & CELC argue, for reasons already addressed by Defendant, that the de minimis rule must be addedto the existing, clear tests under California law that specify when time worked must be compensated by the employer because it would be more convenient for employersif they could simply forego paying employees for some tasks or some time worked. Second, EG & CELCarguethat a de minimis excuse is consistent with California law because (1) the DLSE recognizedthe federal de minimis excuse, and (2) “rounding” was held lawful by a Court of Appeal. But, as this Court has recognized, the DLSE is not empoweredto create regulations. And, as already noted byPlaintiff, the “rounding” decision, See ’s Candy, actually held that any “rounding” system must beneutral, both facially and as applied, ensuring thatal/ wages are paid “without imposing any burden on employees.” Truncation through a de minimis rule application is contrary to that directive, and See ’s Candy supports Plaintiff's construction of California’s employee-protective lawsand regulations. Third, EG & CELCarguethat abuse of a de minimis rule would be addressed by applying the factors discussed in Lindow. In other words,in the face of a comprehensiveset of laws, regulations, and construing authority from this Court defining the employer’s obligation to pay wages, EG & CELC would have this Court create a new paradigm for employer wage payment obligations andalso craft a set of tules basedentirely onfederal law to determine whenthe new paradigm applies. This Court must decline the invitation to serve as a legislative or regulatory bodythat supplants the Labor Code and the Wage Orders andinstead confirm that the declared public policy of the State of California, as embodiedin existing statutory and regulatory requirements, is wholly sufficient to define when employers must compensate employees. Il. ARGUMENT IN RESPONSE TO AMICUS BRIEFS A. Wage Theft Remains a Serious Problem for Low Wage Workers in California, and Imposing a De Minimis Excuse on Those California Employees Would Only Serve to Insulate Certain Formsof Wage Theft from Corrective Action Accordingto a report by the Economic Policy Institute, a nonprofit think tank in Washington, minimum-wageviolations by California employers deprivethe state’s workforce ofnearly $2 billion in earnings, increasing the financial vulnerability of alreadyat-risk populations and creating a drag on the state’s overall economic health. Dominic Fracassa, Wage theft costs low-paid California workers $2 billion per year, San Francisco Chronicle, May 26, 2017, http://www.sfchronicle.com/business/article/Wage-theft-costs-low-paid-California- workers-2-11177052.php (last visited July 5, 2017). The San Francisco Chronicle’s summary continued,saying, “Employees whoare supposed to begetting paid the minimum wagein California are, on average, losing $64 per week and about $3,300 annually — 22 percentoftheir earnings — from employers shortchangingtheir hourly workers.” Jd. An average of 34,000 wageclaimsare filed with the labor commissioner’s office each year, or about one every four minutes, and that figure does notinclude private lawsuits. Jd. Grafting the federal de minimis defense onto California’s existing laws and regulations defining employers’ well-settled compensation obligations will only serve to magnify an existing wagetheft problem that State Labor Commissioner Julie Su recognizes as a perniciousharm./d. With manyfederal courts mechanically holding that 10 minutesperday is de minimis (despite Lindow) a similar treatment by _ California courts would ensure that minimum wage workers lose roughly $10 more dollars per week, or another $500 per year. To a minimum wage worker, that is no “trifle.” B. Despite Arguing That a De Minimis Doctrine Exists Under California Law, Neither Defendant nor Any Amicus Supporting It, Acknowledge That California’s De Minimis Doctrine Does Not Apply to the Types of Permanent, Statutory Rights at Issue Here Amicus ASCDC duplicates Starbucks’ argumentthat California has a de minimis defense. But, even with the benefit of having Plaintiff's Reply Brief to review, ASCDCis unableto dispute that the California de minimis doctrine does not apply to circumstances where a permanentright is infringed and an award of even nominal damages would carry costs, such as here, where non-waivable statutory rights are implicated. Aspreviously explained by Plaintiff, the generalized maxim ofjurisprudence set forth in Civil Code § 3533 has never been applied to the statutory requirements set forth in the California Labor Code, and ASCDCoffered no exampleto refute that observation. Nor did ASCDCrefute the holdings ofthis Court stretchingall the way back to Kenyon v. Western Union Tel. Co., 100 Cal. 454 (1893), which 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. This Court should decline the request to expand a vague maxim of Jurisprudenceinto a license to shave compensable time from employee wages. Ifa defense ofthe sort advocated by Defendant and its Amicuspartnersis to be created,it is the Legislature’s exclusive purview to determine whether that should occur in the context ofthe statutory obligationsset forth in the Labor Code. C. It Is Irrelevant to California Wage and Hour Law ThatFederal Courts Apply a Federal Defense to Wage and Hour Claims As did Defendant, Amicus Briefs from ASCDC, CCC, and CRA take pains to listfederal court decisionsin whichfederal courts decidedto apply a de minimis defense to California wage claims. Setting aside the absence of any reasoned analysis in thosefederal decisions about whatthis Court might do if presented with the question it now considers, federal courts do notissue controlling decisions on questions of California law. Rather, those decisions simply assumeeither that the federal de minimis defense has been imported into California law orthat an identical excuse to full wage payments exists under California law, thoughit is not explainedat all in the cited federal decisions why either condition would betrue. And,as did Defendant, Amicus Briefs from ASCDC and CCC mention Gomez v. Lincare, Inc., 173 Cal. App. 4th 508 (2009)to support the claims ofthe following ilk: “California . . . courts have consistently indicated that the de minimis rule applies to California wage claims.” (ASCDCBrief, at 26.) However, as Plaintiff already explained, the only discussion of a de minimis defense in Gomez wasin the context of a promissory estoppel claim, and Gomez itself mentioned no California authority in the minimal discussion, relying, instead, on Lindow, which concemsthe federal de minimis defenseavailable to claims arising under the FLSA. Gomezfailed to offer any explanation or justification for how a federal defense to a federal law was appropriately transplanted into California law. Tacitly recognizing that federal authority does not govern California law, Amicus CCCretreats to a fallback position, simply asserting that paying employees for a few minutes ofworkis an “absurd result” that “cannot be whatthe Legislature 10 intended.” (CCC, at 15.) And, using the same federal cases, Amicus CRA argues that it would be “highly impractical, if not impossible to track” time spent standing in a security checkpointline, and, by implication, that such time should not be compensable. (CRA Brief, at 8-9.) CRA arguesthat if security checks must be “on the clock,” the employer would have to compensate employeesfor “non-compensable” time. (CRA Brief, at 16.) But CRA fails to identify how standingin line for a security check is anything other than time under the employer’s control, and thus compensable. California’s Legislature has long disagreed with CRA’sview, enacting comprehensive protections for employees. Neither CRA nor the other Amicus Briefs advocating for Starbucks discuss whatis, perhaps, the mostfatal fact here. Employers decided whatprocedures are followed when employeesstart and end shifts. Employers decide how employees will clock in and out for shifts. Employers decide where timeclocksare placed. When employees have no choice but to follow the procedures imposedby their employers, there is no way aroundthe inescapable conclusion that such time is compensable time spent under the employer’s control. Tellingly, the Amicusbriefs supporting Defendant inadvertently expose the true motivations underlying their arguments. For instance, CRA neverexplains why it would be “highly impractical, if not impossible to track” time spent standing ina security checkpointline. This is so because timeclocks can be moved, and employees could clock in before going through a security checkpoint and clock outafter exiting through the checkpoint. What CRA likely intends (as do Defendant, and other AmicusBrieffilers) is that time not directly spent making money for the employer 11 co T R 3 should not be compensable. Amicus CRA viewstime spent going through a security checkpoint, at the employer’s direction and for the employer’s benefit, to be dead time with respect to business operations and thus unworthy of beingtreated like time spent by an employee on core duties. Amicus CRA reveals contemptfor tasks done at the employer’s direction but falling outside an employee’s primary functions. CRA attempts to convince this Court that, as a matter of policy, it should adopt a new standard for wage payment obligations, creating a “totality ofthe circumstances” exception that would allow a trier of fact to decide that any compensableactivity isn’t really “work” that requires payment of a wage. (CRA Brief, at 13.) Seekingto vitiate California’s extant wage paymentobligations, CRA says, “But employees have no reasonable expectation to be compensated for every split second ortrivial inconvenience associated with having a job.” (CRA Brief, at 14.) Ensuring that there is no doubt about the contempt with which it views wage paymentobligations, Amicus CRA takes the time to argue that lunch break interruptions are okay (CRA Brief, at 15) and not paying employees who help customers after they clock out is okay (id.). Ina feeble effort to distract from what permeates its Brief, CRA mentions burdensome outcomesthat would result from this Court’s refusal to import a federal defense into California law, but it cannot provide anything other than vague generalities to describe these “burdens.” Amicusfilers EG & CELC are more transparent, outright arguing that it would be more convenient for employers if they could simply forego paying employeesfor some tasks or some time worked,treating it as a “trifle.” But ten minutes per day is nota “trifle,” which means, as used here, “Something oflittle importance or value. A 12 smal] amount; a jot.” American Heritage Dict. (5th ed. 2017). And, while it mayalso be true thatit would be more convenient to forego all payments to employees, the Legislature did not include a convenience exception to the Labor Code’s requirements that permits the importation into California law of federal wage payment defenses to wage and hourlaws with different standards than the clear and employee-protective standardsthat exist here. Beneath muchof the arguments by Respondent’s Amicusfilers lies an argument designed to erode employeeprotections in California, but it must be identified andrejected as nothing more thana fiction that runs headlong into existing and long-settled California law. CRA saysthat “employees have no reasonable expectation to be compensated for every split secondortrivial inconvenience associated with having a job.” (CRA Brief, at 14.) CCC declares that paying employees for a few minutes of workis an “absurd result” that “cannot be what the Legislature intended.” (CCC,at 15.) What these statements, and the arguments of other Amicusfilers for Respondent, share is the assumption that when a workshift is arbitrarily subdivided into numerousactivities, tasks, or moments of short duration,it is Okay to throw one or more of those events out and not compensate employees for them, even though they occurred with the employer’s knowledge, even though they were for the employer’s benefit, or even though they happenedat the directionofthe employer. Andthere is no limit to the manner in which even short-duration casks can be further subdivided to create the appearance of a demand for a very small amount of compensation. This Court mustreject the invitation to endorse this practice which is M E T On et e nothing more than a request by employers to decline to pay employees for some 13 arbitrarily defined amount of work time eachday. D. The Court of Appeal’s Decision on Rounding in See’s Candy Offers No Succor to Defendant or Its Amicus Filers Amicusfilers EG & CELCargue that a de minimis excuseis consistent with California law because “rounding” was held lawful by a Court of Appeal. In See's Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012), a Court of Appeal addressed the propriety of rounding under California law, but the conclusion ofthat Court supports Plaintiff, not Defendantor its Amicusfilers. Specifically, See’s Candy said: Assuming a rounding-over-timepolicy is neutral, both facially and as applied,the practice is proper under California law becauseits 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 wenton tostate: Fundamentally, the question whether all wages have been paidis different from the issue of how an employercalculates the number of hours worked and thus what wages are owed. See’s Candy, at 905. In sum, See’s Candy held that any “rounding” system must be neutral, both facially and as applied, ensuring that all wagesare paid “without imposing any burden on employees.” Truncation through a de minimis rule application is contrary to that directive. E. The Duplicative Assault on This Court’s Prior Decisions Concerning Whether and When Wage Orders Can Be Construed to Have Imported Federal Law into California Regulations Amicus ASCDCrepeats Defendant’s ineffective attack on this Court’s prior x 14 decisions regarding whether and when a Wage Order can be construed to have imported into California regulations any federal defenses to federal wage and hour claims. As explained morefully in Plaintiff's Reply Brief on the Merits, this Court hasarticulated a clear standard for identifying the infrequent instances where the IWC incorporatedportions ofthe FLSA into any of the Wage Orders. Bluntly stated, elements of the FLSA are incorporated only when the IWCsaysthattheyare: Wehave observed “that where the IWC intended the FLSAto apply to wageorders, it has specifically so stated.” Mendiola v. CPS Sec. Solutions, Inc., 60 Cal. 4th 833, 847 n. 17 (2015), citing Morillion v. Royal Packing Company, 22 Cal. 4th 575, 592 (2000). Beyond that clear rule, this Court has identified additional requirements that must be satisfied before any court can limit employee protections by imposing weaker federal protections, and the decisions of this Court setting forth those requirements are relevanthere. 1. Mendiola applies here, holding that “the IWC knows how to expressly incorporate federal law and regulations whenit desires to do so.” In Mendiola,this Court explained, “[O]ther language in Wage Order 4 demonstrates that the IWC 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 knows how to expressly incorporatefederal law and regulations whenit desires to do so.”). Here, neither Defendant nor any Amicusfiler has identified anything in either the Labor Code or the governing IWC WageOrderthat suggests the IWC intended to import a federal court-created defense to the FLSAthatis, in virtually 15 every way,less protective of employees than California law. No such presumption exists if it would in any way lessen employeeprotection: Because application of part 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. And, just as Mendiola held, a “contrary result would have a dramatic impact” in California, where periods of time up to ten minutes or more per day that employers were previously obligated to pay for would suddenly become uncompensated work time. 2. Ramirez applies here, holding that similarityof terminology between state and federal wage and hour laws is not enough of a basis upon which to presume that weaker federal protections were intended to dilute stronger state protections Ramirez v. Yosemite Water Co., 20 Cal. 4th 785 (1999) thoroughly considered an argumentthat similarity of language in an IWC Wage Ordershould be construed as adopting the federal construction of a term in commonuse under federal law (in that case, the “outside salesperson” exemption). Concluding that no such presumption exists, Ramirez said: In the absenceof statutory languageor 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 commonterm. Ramirez, 20 Cal. 4th at 800. Ramirez did not limit its holding to the term at issue, holding that, absent statutory languageorlegislative history to the contrary, the IWC’s WageOrders should not be construed as incorporating federal standards just because commontermsare used in the Wage Orders. A similar result is even easier to reach here. Unlike in Ramirez, where a term 16 in use under federal law wasused, with a different definition, by California law, the de minimis excuse is nowhere mentionedin either the Labor Code or the IWC Wage Orders. 3. Morillion applies here, finding error in the use of federal regulations to interpret'WC Wage Orders because of substantial differences between the two systems. Morillion also provides a framework for evaluating whether federal regulations offer any guidancein the construction of California law, holding that “substantial” differences betweenprovisions ofstate and federallaw are a sufficient ground for a presumptive rejection of federal law or regulation as a source ofinterpretive guidance. Morillion, 22 Cal. 4th at 589-90. Here, not only doesthe “knew or should have known”standard of compensable work time exist under California but not federal law, the de minimis excuseis incorporated into DOL regulatory interpretations of the FLSA, where no de minimis excuse has ever appeared within the Labor Code orthe IWC Wage Orders. Notably, the FLSAitself contains no broad requirementto pay for all hours worked, setting aside the divergent approaches to whatconstitutes compensable hours worked. Morillion then heldthat “convincing evidence” of the IWC’sintention to adopt a federal standard must be established before a court can presumeto import a standard reducing employeeprotections. Morillion, 22 Cal. 4th at 592. A similarrule, applied here, precludes importation ofthe federal de minimis excuse into California wage and hour law wherethere is no evidence,let alone convincing evidence, that the Legislature or the IWC intendedto doso. The efforts to distinguish Morillion are baseless, given that Morillion defines 17 standards that mustbesatisfied before any court can construe a Wage Order as importing any federal standardthatis less protective of California employees. F. Amicus Filers Wrongly Suggest That the California Legislature Approved of the DLSE Interpretation by Not Acting to Correct It Amicusfilers EG & CELCattach significance to the fact that the DLSE adopted the federal de minimis excuse into its enforcement manual andthen the California Legislature did not act to correctthat unlawful regulation. But, as this Court haslong held,it is a “general principle of statutory construction that legislative inaction is indeed a slim reed upon whichto lean.” Quinn v. State ofCalifornia, 15 Cal. 3d 162, 175 (1975). And noting the limits on the reachofthat “slim reed,” this Court has said that“the ‘proverbial “weak reed”’ of legislative acquiescence (In re Dannenberg (2005) 34 Cal.4th 1061, 1107, 23 Cal.Rptr.3d 417, 104 P.3d 783) cannot reasonably bestretched sofar as to abrogate anotherstatute.” People v. Brown, 54 Cal. 4th 314, 328 (2012), as modified on denial of reh'g (Sept. 12, 2012). Asthis Court hassaid before, “The DLSE’s past viewsofferlittle 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 hour law wasintendedto be incorporatedinto California’s wage and hour lawsand regulations 3 the DLSE’s opinion onthat front is of no value: [While the DLSEis charged with administering and enforcing California's labor laws,it is the Legislature and the IWC thatpossess 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. 18 Id. The DLSE’s viewson the de minimis excuseare not helpful here, in the absence of an intent by the Legislature or the [WC to import those standards, and the Legislature’s silence as to the DLSE unlawful attempt to regulate does not operate as an abrogation of the existing Labor Code provisions and Wage Orders specifying that employers must compensate employeesforall time they are under the employer’s control or that the employer knew or should have knownthat work wasoccurring. G. LindowHas Not Provided an Adequate Safeguard Against Misuse of the Federal De Minimis Defense, and There Is No Reason to Believe the Result Would Differ If This Court Changed California’s Compensation Rules to Mirror Those Applied Under Federal Law Amicusfilers, EG & CELC argue that abuse of a de minimis rule would be addressed by applying the factors discussed in Lindow v. United States, 738 F.2d 1057 (9th Cir. 1982). Assuming that this Court wasinclined to alter California’s compensation laws and regulations to mirror those applied under federal law, decisions subsequent to Lindow demonstratethatits factors are not consistently applied. For instance, Lindow requires a court to consider, among otherthings, the frequency with which an unrecorded measureoftime occurs, but despite that explicit factor in Lindow’s multi-factor approach (and despite Rutti v. Lojack Corp., 596 F.3d 1046 (9th Cir. 2010) having also been decided prior to many of the caseslisted below), many federaldistrict courts in the Ninth Circuit have effectively ignored Lindow and applied a fixed ten-minute rule to decide when a time period is de minimis under federal law, even when it occurs habitually. Farris v. County of Riverside, 667 F.Supp.2d 1151, 1165 (C.D. Cal. 2009) (granting summary judgment 19 againstsheriffs deputies on claim for time spent donning and doffing uniforms because “10 minutes is the 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 minute rule holdingthatplaintiff would need to allege he wasregularly underpaid 20 minutesoftime); Waine Golston v. Time Warner Newhouse, 2013 WL 1285535 *5 (S.D. Cal. 2013): “Many courts have found ten minutesper day is de minimis . . .2 to 15 minutesis negligible and not compensable”; Apperson v. Exxon Corp., 1979 WL 1979, *10 (E.D.Cal. 1979) (granting summary judgment where employees worked on average 10 minutes of uncompensated time each day). These decisions, and may others issued within the Ninth Circuit, offer no explanation as to how ten minutes (or more) offree work per day by an employeeis consistent with Lindow’ s test that the Ninth Circuit describes as reflecting “a balance between requiring an employerto pay foractivitiesit requires of its employees and the need to avoid ‘split-second absurdities’.” Rutti, 596 F.3d at 1057 (emphasis added). Lindowis no panacea;it failed to prevent abuse of the de minimis rule. This Court must decline the invitation to serve as a legislative body and instead confirm that the declaredpublic policy of the State of California, as embodied in existing statutory and regulatory requirements, is wholly sufficient to define when employers must compensate employees. H. A Defense That Does Not Exist Under California Law Cannot Be Asserted Amicusfiler ASCDC argues that a defenseto a requirement imposed by the 20 Labor Code or the Wage Orderis available unless and until the Wage Orderexplicitly states thatit is not available. This assertion presupposes, however,that the defense exists. Neither Defendantnor any ofits supporting Amicusfilers have established that a de minimis defense exists within the boundaries of California wage and hour law. Rather, Plaintiff has shown, and Defendantand its Amicusfilers have been unable to refute, that, under California law, “neither a fiction nor a maxim maynullify a statute.” See, e.g., City ofSan Diego v. Hass, 207 Cal. App. 4th 472, 500 (2012). This rule has been applied within the wage andhour contextto statutory claims for overtime under the Labor Code. Ghory v. Al Lahham, 209 Cal. App. 3d 1487, 1492 (1989) (“Principles of equity cannot be used to avoid a statutory mandate.”). More specifically, Plaintiff established that the sorts of permanentstatutory rights at issue here are not subject to the judicial maxim regarding “trifles.” See, Part ILB., supra. The IWC did not need to expressly state that a de minimis defense was unavailable because express California laws regarding pay obligations negate that defense and existing California law governing judicial maximsprecludesits assertion here. 2] Ii. CONCLUSION Forall of the reasonsstated by Plaintiff herein and in his other Briefs, and because the Amicusfilers supporting Defendant offer no compelling reason to conclude otherwise, this Court should rule that there is no de minimis excuse available to employers in California. Dated: July 9, 2017. Respectfully submitted, SETAREH LAW GROUP » ASK Shaun Setareh 7 Thomas Segal H. Scott Leviant THE SPIVAK LAW FIRM David Spivak LAW OFFICES OF LOUIS BENOWITZ Louis Benowitz Attorneys for Plaintiff 22 Typeface and Size: Word Count: Dated: July 9, 2017. CERTIFICATIONS The typeface selected for this Brief is 13 point Times New Roman. The font used in the preparation of this Briefis proportionately spaced. The word count for this Brief, excluding Table of Contents, Table of Authorities, attached Certifications, and the Coveris approximately 5,906 words. This count wascalculated utilizing the word count feature of Microsoft Word 2016. SETAREH LAW GROUP mw KAKA H. Scott Leviant / CERTIFICATE OF SERVICE I, the undersigned, declare: 1. Thatdeclarant is and was,atall 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 nota party to orinterested party in the within action; that declarant's business address is 9495 Wilshire Blvd., Suite 907, Beverly Hills, CA 90212. 2. That on July 10, 2017 declarant effectuated service of the PETITIONER’S CONSOLIDATED ANSWERINGBRIEF IN REPLY TO BRIEFS OF AMICUS CURIAE FILED IN SUPPORT OF RESPONDENTby causing the deposit of a true copy thereof in a United States mail box at Beverly Hills, California in a sealed envelope with postage fully prepaid and addressed to the parties listed as follows: SEE ATTACHED SERVICE LIST 3. That there is a regular communication by mail between the place of mailing and the places so addressed. I declare underpenalty of perjury that the foregoingis true and correct. Executed this 10th day of July 2017 at Beverly Hills, California. » Ahte H. Scott Leviant/ wee a e SERVICE LIST Rex S. Heinke Mark R. Curiel Galit Knotz Gregory W. Knop Jonathan P. Slowi Akin GumpStrauss Hauer & Feld LLP 1999 Avenueofthe Stars, Suite 600 Los Angeles, CA 90067-6022 Counselfor Defendant Counsel for Amicus Curiae David Ryan Carpenter Sidley Austin LLP 555 WestSth Street, Suite 4000 Los Angeles, CA 90013 California Retailers Association Richard J. Simmons Sheppard Mullin Richter & Hampton, LLP 333 South HopeStreet, 48th Floor Los Angeles, CA 90071 Chamber ofCommerce ofthe United States ofAmerica Justine Lazarus Mitchell Silberberg & Knupp 11377 West Olympic Boulevard Los Angeles, CA 90064 Employers Group California Employment Law Council Lacey L. Estudillo Horvitz & Levy LLP 3601 West Olive Avenue, 8th Floor Burbank, CA 91505 Association ofSouthern California Defense Counsel Ari J. Stiller-Shulman Kingsley & Kingsle 16133 Ventura Boulevard, Suite 1200 Encino, CA 91436 California Employment Lawyers Association Kimberly Ann Kralowec Kralowec Law Group 44 Montgomery Street, Suite 1210 San Francisco, CA 94104 ConsumerAttorneys ofCalifornia - Amicus curiae Anna Helen Kirsch Women's EmploymentRights Clinic of Golden Gate University School ofLaw 536 MissionStreet San Francisco, CA 94105 Women's EmploymentRights Clinic of Golden Gate University School ofLaw Bet Tzedek Centro Legal de la Raza National Employment Law Project Legal Aid At Work