Stoetzl v. Dept. of Human Resources
248 Cal. Rptr. 3d 891
Cal.2019Background
- Class action by California state correctional employees (represented by CCPOA and an unrepresented supervisory subclass) alleging unpaid "walk time" (pre-/postwork activities and travel between outermost gate and posts), minimum wage and overtime violations, recordkeeping claims, and contract claims.
- Trial court bifurcated represented and unrepresented subclasses; trial included threshold issues about which definition of "hours worked" applies (state wage order “control” standard vs. FLSA/Portal-to-Portal "first principal activity" standard) and the effect of MOUs and CalHR’s Pay Scale Manual.
- Represented employees’ MOUs (1998–2013) incorporated a 7(k) FLSA schedule, allocated four hours per 28-day period for "pre and post work activities" (found to mean duty-integrated walk time), included an "Entire Agreement" clause, and were approved or funded by the Legislature.
- Unrepresented employees are governed by CalHR’s Pay Scale Manual (Work Week Group 2), which adopts FLSA-based definitions and overtime schemes; CalHR’s definition tracks the FLSA and, via Portal-to-Portal, excludes entry-exit walk time but includes duty-integrated activities.
- Courts below split: both trial court and Court of Appeal held represented plaintiffs’ claims fail; Court of Appeal allowed unrepresented plaintiffs’ minimum wage claims under IWC Wage Order No. 4’s broader "control" standard — the Supreme Court granted review to resolve conflicts between Wage Order No. 4 and CalHR’s Manual and to apply the effects of collective bargaining approvals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether represented employees can recover additional pay for duty-integrated or entry-exit walk time under California minimum-wage law | Stoetzl: MOUs did not waive state minimum-wage rights; Wage Order No. 4’s broad "control" definition applies post-2001 | State: MOUs (and legislative approval/funding) fix compensation (4 hrs/28 days for pre/post activities) and preclude additional pay; FLSA standard governs | Represented plaintiffs cannot recover: they bargained for specific compensation; MOUs (and legislative approval/funding) supersede general law and preclude entry-exit claims |
| Whether unrepresented employees’ minimum-wage claims can be decided under Wage Order No. 4’s "control" standard or CalHR’s Pay Scale Manual (FLSA-based) | Plaintiffs: Harmonize schemes — Wage Order No. 4 (minimum-wage "hours worked") applies to unrepresented employees; that includes entry-exit walk time | State/CalHR: Pay Scale Manual is a quasi-legislative exercise of delegated authority adopting FLSA definitions (excluding entry-exit time) and governs these employees | Pay Scale Manual controls unrepresented employees’ compensation framework; Wage Order No. 4 does not supply a broader right to minimum-wage pay for entry-exit walk time for these employees |
| Whether duty-integrated walk time is compensable for unrepresented employees (for overtime/contract claims) | Plaintiffs: Duty-integrated walk time is compensable and was not credited; breach of contract claim viable | State: CalHR’s FLSA-based definition governs; duty-integrated time may be compensable but entry-exit is not | Unrepresented employees may pursue breach-of-contract claims for unpaid duty-integrated walk time under the Pay Scale Manual/FLSA standard (entry-exit excluded) |
| Whether Labor Code §§ 222 and 223 provide relief against the State for unpaid walk time | Plaintiffs: These statutes support statutory overtime/withheld-wage theories | State: §§ 222/223 do not apply (no private right or not applicable to public employees / require a wage agreement) | §§ 222 and 223 claims were properly rejected (no applicable wage agreement withholding; not the correct vehicle here) |
Key Cases Cited
- Morillion v. Royal Packing Co., 22 Cal.4th 575 (Cal. 2000) (wage-order "control" standard can render travel time compensable)
- Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (Cal. 2012) (IWC wage orders have statutory dignity and must be harmonized with statutes)
- Tennessee Coal Co. v. Muscoda Local, 321 U.S. 590 (U.S. 1944) (FLSA work-time test: exertion "controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer")
- Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. 27 (U.S. 2014) (FLSA compensability requires activity to be "integral and indispensable" to principal activities)
- Professional Engineers in California Government v. Schwarzenegger, 50 Cal.4th 989 (Cal. 2010) (Dills Act, collective bargaining rules, and effect of legislative funding/approval on MOUs)
- White v. Davis, 30 Cal.4th 528 (Cal. 2003) (public-employee contractual protections: earned legislative benefits may ripen into contractual rights)
- Madera Police Officers Assn. v. City of Madera, 36 Cal.3d 403 (Cal. 1984) (compensation for legislatively authorized overtime vests upon performance)