18th Annual Workplace Class Action Report - 2022 Edition

400 Annual Workplace Class Action Litigation Report: 2022 Edition transported goods that were within the flow of interstate commerce. Id . at *8-9. The Court of Appeal ruled that substantial evidence supported the trial court’s finding that Plaintiffs made interstate deliveries for Defendants. For these reasons, the Court of Appeal affirmed the trial court’s order denying Defendant’s motion to compel arbitration. Kaanaana, et al. v. Barrett Business Services, Inc., 2021 Cal. LEXIS 2639 (Cal. March 29, 2021). Plaintiffs, a group of workers who sorted items on conveyor belts at a county sanitation district’s recycling facility, brought a class action alleging that Defendants failed to: (i) pay minimum and/or prevailing wages; (ii) pay overtime at prevailing wage rates; (iii) provide meal periods; and (iv) timely pay all wages owed at the time of termination. Plaintiffs also alleged unfair business practices and sought both civil penalties and restitution of wages. Plaintiffs alleged their work fell under § 1720(a)(2) of the California Labor Code (“CLC”), which entitled them to prevailing wage compensation. California’s prevailing wage law is a minimum wage provision that generally applies to those employed on public works. Different provisions define the term “public works” in various contexts. Id . at *18. At dispute was whether Plaintiffs work fell under the applicable statutory definition of “public works.” Id . Defendants moved to strike Plaintiffs’ prevailing wage allegations on the grounds they were not entitled to those wages because the District did not fall under the statutory definition of a covered district and Plaintiffs’ labor was not the type of work covered by § 1720(a)(2). The trial court granted the motion to strike. On Plaintiffs’ appeal, the California Court of Appeal reversed the trial court’s ruling on the motion to strike. The Court of Appeal held that Plaintiffs’ work of belt sorting fell within the definition of public works in § 1720(a)(2). On petition for further review, the California Supreme Court affirmed the Court of Appeal’s ruling. The Court of Appeal had determined that unlike the construction and installation provision of § 1720(a)(1), the covered district provision of § 1720(a)(2) defined “public work” not in terms of the tasks performed but in terms of the governmental district for which it was done. Id . at *11. The Court of Appeal had found it important that § 1720(a)(2) did not set out an assortment of activities like the construction and installation provision of § 1720(a)(1). Instead, the Court of Appeal had pointed out that the covered district provision at § 1720(a)(2) simply referred to “work.” Id . Standing on its own, the Court of Appeal had determined that this generic term may embrace myriad endeavors that was not limited to construction-type work, but encompassed a broader range of activities. The California Supreme Court agreed. It opined that the most the most reasonable interpretation of “public works” in § 1720(a)(2) was that it is not limited by a different definition set out in § 1720(a)(1). The Supreme Court held that this interpretation gave effect to all parts of the covered district provision and recognized the difference between definitions based on the tasks performed and § 1720(a)(2), whose coverage turned on the governmental entity for which the work was done. Id. at *30-31. Accordingly, the Supreme Court agreed with the Court of Appeal that the belt sorters’ labor qualified as “public works” under § 1720(a)(2). Levanoff, et al. v. Dragas, 2021 Cal. App. LEXIS 633 (Cal. App. 4th Dist. June 25 , 2021). Plaintiffs, a group of restaurant workers who worked at different rates of pay within a single pay period, i.e ., dual rate employees, brought wage & hour action alleging overtime violations pursuant to California Labor Code (“CLC”) as well claims for violations of the Private Attorneys General Act (“PAGA”). Plaintiffs alleged that Defendants violated California law in their method of calculating the regular rate of pay for purposes of compensating overtime hours dual rate employees. Defendants used the rate-in-effect method, by which dual rate employees were paid for overtime hours based on the rate in effect when the overtime hours began. Plaintiffs contended that California law required Defendants to use the weighted average method, by which dual rate employees were paid for overtime based on an hourly rate calculated by adding all hours worked in one pay period and dividing that number into the employee’s total compensation for the pay period. The trial court certified eight classes and two subclasses, including a subclass of dual rate employees who allegedly were underpaid by Defendants for overtime hours worked. A bench trial was conducted on the issue of liability under the PAGA for underpayment of overtime hours worked by dual rate employees. The trial court held that Defendants did not violate California employment law by using the rate-in-effect method for calculating the overtime rate of pay. The trial court then decertified the dual rate overtime subclass and dismissed the PAGA claims. On Plaintiffs’ appeal, the California Court of Appeal affirmed the trial court’s judgment. The Court of Appeal held that Defendants did not violate California law by using the rate-in-effect method for calculating the regular rate of pay for purposes of establishing the overtime rate of pay for dual rate employees. The Court of Appeal pointed out that the method employers must use was not the issue on appeal because California law did not mandate the use of the weighted average method. Because Plaintiffs received more net overtime pay under the rate-in-effect method