Vaquero v. Stoneledge Furniture
B269657M
| Cal. Ct. App. | Mar 20, 2017Background
- Plaintiffs Vaquero and Schaefer were sales associates at Stoneledge (Ashley Furniture) paid under a commission/advanced-commission ("draw") plan from Sept. 30, 2009–Mar. 29, 2014. After training they were guaranteed a $12.01 minimum per hour via draws against future commissions.
- Timekeeping recorded hours and authorized 10-minute rest breaks per 4 hours; employees did not clock out for rest periods.
- Under the commission plan the company paid commissions based on sales and advanced draws when commissions fell below the guaranteed minimum; advances were later deducted from future commissions.
- Plaintiffs filed a class action alleging unpaid/underpaid rest periods (Lab. Code §226.7 and Wage Order No. 7), unpaid wages on termination (§203), and UCL violations. The trial court granted summary judgment for Stoneledge, finding the pay system accounted for rest periods.
- The Court of Appeal reversed, holding Wage Order No. 7 requires separate compensation for rest periods where the compensation system does not directly pay for them, and that Stoneledge’s draw/commission scheme did not satisfy that requirement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wage Order No. 7 requires employers to separately compensate employees for rest periods when paid by commission | Wage Order No. 7 counts rest time as "hours worked" and requires separate compensation if the pay system does not directly pay for rest periods | Stoneledge: tracking and guaranteeing a $12.01 minimum per hour (via draws) satisfies the requirement; no separate pay required | Held: Wage Order No. 7 requires separate compensation for rest periods unless the pay system already provides compensation for that time; applies to commissioned employees |
| Whether Stoneledge’s draw/advanced-commission system legally compensated rest periods | Plaintiffs: advances were loans/clawbacks, not true compensation, so rest periods were not separately paid | Stoneledge: advances and timekeeping ensured rest periods were "accounted for" and effectively paid at the guaranteed rate | Held: Draws that are clawed back are not compensation; plan did not separately pay for rest periods and thus violated Wage Order No. 7 |
| Whether Armenta/Bluford principle for piece-rate/nonproductive time extends to commission pay | Plaintiffs: the same logic applies—cannot average or shift compensation across periods; rest periods must be separately paid | Stoneledge: commission pay is different; statutes (e.g., §226.2) addressing piece-rate employees show commissioned workers were intended to be treated differently | Held: The Armenta/Bluford rationale applies to commission plans that do not directly account for rest periods; statutory gaps do not negate wage order language |
| Remedy / procedural outcome | Plaintiffs sought reversal of summary judgment | Stoneledge sought affirmance | Held: Reversed and remanded; trial court must vacate summary judgment and consider remaining claims on the merits |
Key Cases Cited
- Bluford v. Safeway Stores, Inc., 216 Cal.App.4th 864 (Cal. Ct. App.) (piece-rate pay that does not directly compensate for rest periods violates wage order)
- Armenta v. Osmose, Inc., 135 Cal.App.4th 314 (Cal. Ct. App.) (minimum wage requirement applies to each hour worked, including nonproductive time)
- Gonzales v. Downtown LA Motors, LP, 215 Cal.App.4th 36 (Cal. Ct. App.) (wage order language must be applied regardless of method of compensation)
- Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (Cal. 2012) (wage orders construed like statutes; employers must authorize and permit rest periods)
- Augustus v. ABM Security Services, Inc., 2 Cal.5th 257 (Cal. 2016) (liberal construction of wage orders to protect employees; rest periods must be bona fide rest)
- Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4th 1094 (Cal. 2007) (denial of rest periods results in uncompensated work and protective policy favoring rest periods)