See's Candy Shops, Inc. v. Superior Court
210 Cal. App. 4th 889
| Cal. Ct. App. | 2012Background
- Silva filed a California wage-and-hour class action against See’s Candy Shops, alleging improper time-stamping and pay practices.
- The trial court certified a California class for non-exempt employees and granted summary adjudication on two rounding defenses and two de minimis defenses.
- The two closest-tenth rounding defenses (39th and 40th) claimed rounding complied with state and federal law; the others denied de minimis wage reductions.
- See’s Candy relied on Dr. Saad’s reports (2010, 2011) showing rounding was neutral over time and did not harm overtime, plus evidence of a grace period policy and employee declarations.
- Silva sought reconsideration and introduced a new expert, Dr. Thompson, who asserted large class-wide underpayment due to rounding and grace-period effects.
- The court ultimately reversed the summary adjudication for 39th and 40th defenses, vacating the prior order and granting consideration to potential factual issues about rounding and grace-period effects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether nearest-tenth rounding is lawful under California law | Silva argues rounding violates California law and deprives full compensation | See’s Candy contends rounding is neutral over time per federal regulation adopted by DLSE | Rounding can be lawful if neutral over time |
| Appropriate standard to evaluate rounding under California law | California law requires full compensation without reliance on federal standard | Adopt the federal rounding standard (DLSE) as guidance | Court adopts the federal/DLSE rounding standard for California law |
| Whether the record shows class-wide undercompensation due to rounding | Evidence shows underpayment from rounding and grace period | Most evidence shows neutral or positive net compensation over time | Disputed factual issues remain; summary adjudication not proper on 39th/40th defenses |
| Effect of the grace period on rounding legality | Grace period time counted as work during which employees were under employer control | Grace period time is not compensable and does not undermine rounding neutrality | Grace period issues are triable; not dispositive for 39th/40th defenses |
| Impact of overtime rules (California 8-hour daily rule) on rounding neutrality | Rounding could underpay daily overtime | Rounding can be neutral with proper application; overtime effect is manageable | Overtime impact fact-dependent; not conclusive on summary adjudication |
Key Cases Cited
- Sullivan v. Oracle Corp., 51 Cal.4th 1191 (Cal. 2011) (overtime applicability to nonresidents clarified; overtime policy context)
- Kirby v. Immoos Fire Protection, Inc., 53 Cal.4th 1244 (Cal. 2012) (statutory interpretation focused on plain meaning and employee protections)
- Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (Cal. 2012) (employer timekeeping and wage-hour duties; deference to wage orders)
- Alonzo v. Maximus, Inc., 832 F.Supp.2d 1122 (C.D.Cal. 2011) (federal rounding regulation adopted; neutrality over time required)
- Huntington Memorial Hospital v. Superior Court, 131 Cal.App.4th 893 (Cal. App. 2005) (guidance on California interpretation with federal law influence)
- Morillion v. Royal Packing Co., 22 Cal.4th 575 (Cal. 2000) (employee protection when time is controlled by employer)