Maldonado v. Epsilon Plastics, Inc.
22 Cal. App. 5th 1308
Cal. Ct. App. 5th2018Background
- Epsilon Plastics operated a manufacturing plant using a 12-hour shift Alternative Workweek Schedule ("10/2 AWS") that paid 10 hours at straight time and 2 hours at overtime; plaintiffs alleged the AWS was not properly adopted and sought unpaid overtime, waiting-time penalties, wage-statement penalties, and fees.
- Four discrete periods of 10/2 AWS use were at issue; evidence about proper pre-adoption procedures (written disclosure, 14-day meetings, secret-ballot 2/3 vote, 30-day wait, and reporting) was sparse or defective for each period.
- Key factual disputes included whether a 30-minute paid meal period was actually worked (affecting overtime calculation) and whether employee votes were free and procedurally valid.
- The trial court found the AWS never validly adopted, awarded overtime (including an extra ½ hour per shift), waiting-time penalties (§203) for lack of good faith, wage-statement penalties (§226), interest, and attorneys’ fees.
- On appeal, the court affirmed invalid adoption and lack of good faith but reduced some damages: it reversed the wage-statement penalties and remanded to reduce overtime damages (and recalculate associated waiting-time penalties, interest, and fees).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of AWS adoption (first period & others) | Plaintiffs argued Apple/Epsilon failed to meet wage-order pre-adoption requirements, so AWS invalid. | Epsilon argued AWS predated its ownership, was lawfully adopted at Apple, and later revalidated by votes. | AWS adoption was not proven; substantial evidence supports trial court finding AWS invalid for all four periods. |
| Overtime damages—meal period (whether extra ½ hour per shift is owed) | Plaintiffs argued employees were not paid a duty-free 30‑minute break and thus are owed 2 hours overtime premium per 12‑hr shift. | Epsilon conceded 1.5 hours but argued the paid ½‑hour meal was not worked (employees worked only 11.5 hours), so no extra ½ hour premium. | Plaintiffs bore burden to prove extra time; their sampling/statistical proof was inadequate. Court directed reduction to the midpoint (1 hr 45 min premium per shift) and remanded for recalculation. |
| Waiting-time penalties (§203) / good-faith defense | Plaintiffs argued Epsilon lacked objectively reasonable basis to withhold wages and thus no good-faith defense. | Epsilon argued it acted in subjective good faith: inherited AWS or attempted substantial compliance in later periods. | Substantial evidence supports lack of good faith (no adequate inquiry on acquisition; coercive/defective vote procedures). Good-faith defense rejected for challenged periods. |
| Wage-statement penalties (§226) & attorneys’ fees timeliness | Plaintiffs argued paystubs were inaccurate (showing 10/2 pay) and caused injury; sought fees timely after notice of judgment. | Epsilon argued any inaccuracy did not cause the statutory presumption of injury here and fees motion was untimely. | Wage-statement penalties reversed: paystubs accurately reflected pay actually received (hours worked at given rates), so statutory presumption of injury did not apply. Attorneys’ fee filing found timely; fee award vacated for recalculation after remand. |
Key Cases Cited
- Ramirez v. Yosemite Water Co., 20 Cal.4th 785 (employer bears burden to prove exemption from overtime)
- Duran v. U.S. Bank Nat'l Ass'n, 59 Cal.4th 1 (limits on flawed sampling to prove classwide damages)
- FEI Enterprises, Inc. v. Yoon, 194 Cal.App.4th 790 (objective standard for good‑faith dispute under §203)
- Amaral v. Cintas Corp. No. 2, 163 Cal.App.4th 1157 (good‑faith dispute can preclude waiting‑time penalties where legal duty unclear)
- Silva v. See's Candy Shops, Inc., 7 Cal.App.5th 235 (law on time‑clock rounding)
- Road Sprinkler Fitters Local Union No. 669 v. G & G Fire Sprinklers, Inc., 102 Cal.App.4th 765 (substantial‑evidence review of good‑faith finding)
- Hernandez v. Mendoza, 199 Cal.App.3d 721 (plaintiff bears burden to prove uncompensated work)
- Stewart v. San Luis Ambulance, Inc., 878 F.3d 883 (certification to CA Supreme Court re: wage‑statement/meal‑period interplay)