192 Cal. App. 4th 567 | Cal. Ct. App. | 2011
Opinion
Carlos Arechiga appeals from the court’s judgment dismissing his complaint seeking payment of additional overtime wages from his former employer, Dolores Press, Inc. We affirm.
FACTS AND PROCEEDINGS
Appellant Carlos Arechiga began working as a janitor for respondent Dolores Press, Inc. (Employer), in January 2000. Arechiga and Employer orally agreed he would work 11 hours a day, six days a week, for a total of 66 hours per week. Because Arechiga was a nonexempt employee under labor law, they agreed his work schedule meant he earned 26 hours of overtime pay each week. By agreement, Employer paid Arechiga $880 a week.
In October 2003, Arechiga and Employer signed a written “Employment Separation Agreement,” followed that same day by a written “Employment
Three years later in September 2006, Employer terminated Arechiga. In November 2007, Arechiga filed a complaint alleging multiple causes of action against Employer. Except for a cause of action for unfair business practices (Bus. & Prof. Code, § 17200 et seq.), Arechiga eventually dismissed, or the court summarily adjudicated and dismissed, all of Arechiga’s causes of action, leaving for trial only his unfair business practice claim.
The court entered judgment for Employer. The court found that an explicit mutual wage agreement existed between Arechiga and Employer under which Arechiga’s fixed salary of $880 lawfully compensated him for both his regular and overtime work based on a regular hourly wage of $11.14 and an hourly overtime wage of $16.71. In finding for Employer, the court rejected Arechiga’s assertion that Labor Code section 515, subdivision (d), outlawed explicit mutual wage agreements. This appeal followed.
1. Substantial Evidence of Explicit Mutual Wage Agreement
The trial court found substantial evidence that Arechiga and Employer had entered into an explicit mutual wage agreement. (See Espinoza v. Classic Pizza, Inc. (2003) 114 Cal.App.4th 968, 974 [8 Cal.Rptr.3d 381]; Ghory v. Al-Lahham (1989) 209 Cal.App.3d 1487, 1491 [257 Cal.Rptr. 924].) An explicit mutual wage agreement “requires an agreement which specifies the basic hourly rate of compensation upon which the guaranteed salary is based before the work is performed, and the employee must be paid at least one and one-half times the agreed-upon rate for hours in excess of forty.” (Ghory, at p. 1491.) The trial court explained in its statement of decision: “Under California law, when there is an explicit mutual wage agreement between the parties,' even a fixed salary like the one [Arechiga] received serves to adequately compensate him for both overtime and regular pay. ... In order to establish an explicit, mutual wage agreement, [Employer] was required to show that the parties entered into an agreement that specified (1) the days that [Arechiga] would work each week; (2) the number of hours [Arechiga] would work each day; (3) that [Arechiga] would be paid a guaranteed salary of a specific amount; (4) that [Arechiga] was told the basic hourly rate upon which his salary was based; (5) that [Arechiga] was told his salary covered both his regular and overtime hours; and (6) the agreement must have been reached before the work was performed. [Employer] has met its burden, [f] The first three elements of the explicit, mutual wage agreement were stipulated to by the parties in their joint trial statement and read into the record as evidence. It was stipulated that an oral agreement was reached between the parties, wherein [Arechiga] would work Monday through Saturday, 11 hours a day, and for these hours he would receive a guaranteed salary of $880 per week. HO The last three elements were overwhelmingly established through [Employer’s] witnesses . . . who proved that [Arechiga] was shown on a piece of paper, in January 2000, that his salary was based upon an hourly rate of $11.14, that [Arechiga] was told that his guaranteed salary covered both his regular and overtime hours, and that this agreement was reached before the work in dispute was performed.”
Arechiga contends insufficient evidence existed to prove he had entered into an explicit mutual wage agreement with Employer. In pressing his contention, Arechiga ignores a fundamental rule of appellate practice obligating him to completely and fairly summarize the evidence supporting the court’s findings and judgment. (Brockey v. Moore (2003) 107 Cal.App.4th 86, 96-97 [131 Cal.Rptr.2d 746]; see also Jhaveri v. Teitelbaum (2009) 176 Cal.App.4th 740, 748-749 [98 Cal.Rptr.3d 268].) For example, he asserts no evidence existed that he, as a Spanish speaker with a purportedly poor grasp
2. Labor Code Section 515 Does Not Outlaw Explicit Mutual Wage Agreements
Arechiga observes that overtime laws advance important public policies that employers and employees cannot waive.
Arechiga contends Labor Code section 515 outlawed explicit mutual wage agreements for nonexempt employees such as himself. Enacted in 2000, section 515 permits labor regulators to exempt executive, administrative, and professional employees from ordinary overtime benefits. (Lab. Code, § 515, subd. (a).) Subdivision (d) of that statute states: “For the purpose of computing the overtime rate of compensation required to be paid to a nonexempt full-time salaried employee, the employee’s regular hourly rate shall be l/40th of the employee’s weekly salary.”
Arechiga contends subdivision (d) required the trial court to divide his weekly pay of $880 by 40 hours without regard to the overtime he worked to derive what he asserts was, under Labor Code section 515’s application, his base pay of $22 per hour.
Arechiga cites no case law supporting his assertion that Labor Code section 515, subdivision (d) abolished explicit mutual wage agreements.
3. Admission of Parol Evidence of Prior Oral Agreement
Arechiga notes that his written employment agreement with Employer circled the word “salary,” not “wage,” in setting his pay at $880. Additionally, the agreement contained an integration clause stating; “This Agreement embodies the complete and entire agreement and understanding between the Parties to the Agreement with respect to the subject matter of this Agreement and supersedes all prior negotiations, agreements, and understandings relating to the subject matter of this Agreement.” Arechiga contends the meaning of the circled term “salary,” when joined to Labor Code section 515, is unambiguous. (Bodle v. Bodle (1978) 76 Cal.App.3d 758, 764 [143 Cal.Rptr. 115] [“Applicable law becomes part of the contract as fully as if incorporated by reference.”].) According to him, the contract unambiguously directed that his hourly base pay was $22, derived by dividing the 40 hours of a standard work week into his salary of $880. Arechiga asserts the evidence Employer submitted to prove the existence of an explicit mutual wage agreement tried to change the meaning of the term “salary” from pay for 40 hours’ work to pay for 66 hours. Because the written contract contained an integration clause, Arechiga contends the court erred in admitting Employer’s parol evidence of the term’s meaning. We disagree.
Parol evidence may not vary or contradict the terms of an integrated contract. (Code Civ. Proc., § 1856 [“(a) Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any
The test for ambiguity is whether the contractual term is reasonably susceptible to more than one meaning. (Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 37 [69 Cal.Rptr. 561, 442 P.2d 641].) “The test of whether parol evidence is admissible to construe an ambiguity is not whether the language appears to the court to be unambiguous, but whether the evidence presented is relevant to prove a meaning to which the language is ‘reasonably susceptible.’ [Citation.] [f] The decision whether to admit parol evidence involves a two-step process. First, the court provisionally receives (without actually admitting) all credible evidence concerning the parties’ intentions to determine ‘ambiguity,’ i.e., whether the language is ‘reasonably susceptible’ to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is ‘reasonably susceptible’ to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step—interpreting the contract. [Citation.]” (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165 [6 Cal.Rptr.2d 554].)
The employment agreement’s use of the word “salary” was ambiguous because the contract did not identify the number of work hours for which
4. Hearsay Testimony Concerning Deceased Supervisor Simms
The court overruled Arechiga’s hearsay objections to testimony by Arechiga’s coworker, Luciano Garcia, that then supervisor Simms offered Arechiga and Garcia an hourly wage of $11.14 when he hired both of them. According to Garcia, Simms wrote the offered hourly wage on a slip of paper and showed it to Arechiga, an offer Arechiga accepted. Arechiga contends the testimony is “hearsay evidence regarding what a deceased person [Simms] allegedly discussed with [appellant] years before the parties signed a fully integrated written Employment Agreement to alter the terms of the written Agreement.” Arechiga does not develop his contention with argument supported by citation to legal authority. Arechiga’s failure to develop any argument is especially problematic here because the offer and acceptance between Simms and Arechiga on the terms of Arechiga’s employment as witnessed by Garcia are arguably operative facts creating a contract. Operative facts draw their significance from having been said or written regardless of whether they are true, and such facts lie outside the hearsay rule.
5. Expert Testimony About Wages in Janitorial Industry
The court admitted the testimony of Employer’s expert economist who submitted evidence of median wages for janitors in several different labor markets. The evidence showed the median wage for janitors in Los Angeles was $7.90, about one-third the rate Arechiga claimed under his interpretation of his employment agreement. The court allowed the evidence because the court deemed it relevant to commercial reasonableness, which assisted the court in interpreting the contract under industry custom and usage. (Code Civ. Proc., § 1856, subd. (c) [exception under parol evidence rule for “course of dealing or usage of trade or by course of performance.”].)
Arechiga contends the court abused its discretion in admitting evidence of wage standards because those standards were irrelevant. According to Arechiga, the employment agreement, governed by Labor Code section 515, as a matter of law set his hourly base pay at $22 per hour. Arechiga’s contention fails, however, because he misapplies Labor Code section 515. Section 515 does not, as we have explained above, prohibit explicit mutual wage agreements of the sort the court found existed here. A set hourly wage being part of such an agreement (Espinoza v. Classic Pizza, Inc., supra, 114 Cal.App.4th at p. 974; Ghory v. Al-Lahham, supra, 209 Cal.App.3d at p. 1491), it follows that section 515 likewise does not bar evidence relevant to establishing that wage.
Arechiga also contends the court erred in admitting industry wage evidence because it went to Employer’s purported affirmative defense of unjust enrichment against Arechiga’s claim for recovery of additional overtime compensation. According to Arechiga, Employer did not plead unjust enrichment in his answer to Arechiga’s complaint, and thus waived the defense. The court did not, however, admit the wage evidence for the purposes of Employer’s purported affirmative defense of unjust enrichment. Hence, Arechiga’s contention fails because it misses the mark.
6. Attorney’s Fees and Costs Contentions Abandoned
After the bench trial, Employer moved for more than $400,000 in attorney’s fees and costs. The trial court denied Employer its attorney’s fees, but
DISPOSITION
The judgment is affirmed. Respondent to recover its costs on appeal.
Bigelow, P. J., and Grimes, J., concurred.
Appellant’s petition for review by the Supreme Court was denied April 27, 2011, S190802.
The dismissed causes of action were unlawful nonpayment of overtime compensation; failure to pay minimum wage; failure to provide required meal periods; failure to provide required rest periods; failure to maintain required records; and failure to pay all earned wages upon separation.
A three-year statute of limitations applied to Arechiga’s claim for unpaid overtime. (Code Civ. Proc., § 338, subd. (a).)
Arechiga’s observation is a red herring because Employer does not deny its obligation to pay him overtime; their dispute is the hourly rate that Employer owed Arechiga for the overtime he worked.
Appellant contends Industrial Welfare Commission wage order No. 5-2001(3)(A)(l)(c), which incorporated the language of Labor Code section 515, stands to the same effect.
Appellant’s reliance on the Enforcement Policies and Interpretations Manual of the Division of Labor Standards Enforcement (DLSE) is unavailing because regulators did not properly adopt it, making it nonbinding on courts. As our Supreme Court stated earlier this year in Martinez v. Combs (2010) 49 Cal.4th 35, 50, fn. 15 [109 Cal.Rptr.3d 514, 231 P.3d 259]: “[W]e give the DLSE’s current enforcement policies [as stated in the DLSE enforcement manual] no deference because they were not adopted in compliance with the Administrative Procedure Act.” Accordingly we give no deference to the following passage from the manual, which Arechiga quotes: “Salaried Non-Exempt—Explicit Written Agreement No Longer Allowed. In the past, California law has been construed to allow the employer and the employee to enter into an explicit mutual wage agreement which, if it met certain conditions, would permit an employer to pay a salary to a non-exempt employee that provided compensation for hours in excess of 40 in a workweek. (See, Ghory v. Al-Lahham[, supra,] 209 Cal.App.3d 1487 [citation]). Such an agreement (backing in the regular rate) is no longer allowed as a result of the specific language adopted by the Legislature at Labor Code § 515(d). To determine the regular hour rate of pay for a non-exempt salaried employee, one must divide the weekly salary paid by no more than forty hours.”
We note the record does not show Arechiga ever complained during the more than six years he worked for Employer that his pay did not compensate him for overtime. His seeming failure to have complained that Employer was not paying him the right amount of overtime pay undercuts his position here. (See Kennecott Corp. v. Union Oil Co. (1987) 196 Cal.App.3d 1179, 1189 [242 Cal.Rptr. 403] [“The conduct of the parties after execution of the contract and before any controversy has arisen as to its effect affords the most reliable evidence of the parties’ intentions.”]; Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal.App.3d 914, 936 [218 Cal.Rptr. 839].)
Arechiga also objected to trial testimony by Simms’s supervisor, Dean Hopkins, that Simms told Hopkins that Simms had hired Arechiga at $11.14 an hour. Although Hopkins’s testimony about a conversation between Simms and Arechiga that Hopkins did not hear was hearsay, the court’s error, if any, in admitting Hopkins’s testimony was harmless given the weight of other evidence establishing Arechiga’s hourly rate.