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concluding that following Kirby section 226.7 payments were not wages
Summary of this case from Calleros v. Rural Metro of San Diego, Inc.Opinion
Case No. LA CV11-06462 JAK (JCx)
08-07-2012
Brittany Jones v. Spherion Staffing LLC, et al.
CIVIL MINUTES - GENERAL
Present: The Honorable JOHN A. KRONSTADT, UNITED STATES DISTRICT JUDGE Andrea Keifer
Deputy Clerk Not Reported
Court Reporter / Recorder Attorneys Present for Plaintiff: Not Present Attorneys Present for Defendants: Not Present
Proceedings: (IN CHAMBERS) ORDER RE DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS (Dkt. 35)
I. INTRODUCTION
Plaintiff Brittany Jones, a former employee of Defendant Spherion Staffing LLC ("Spherion"), brings this putative class action on behalf of herself and other Spherion employees. Plaintiff alleges that Spherion denied its employees the legally mandated meal and rest periods and corresponding premium pay. Defendants Spherion and SFN Group, Inc. ("Defendants") have moved for judgment on the pleadings on each of Plaintiff's four claims: (i) noncompliant wage statements under California Labor Code § 226; (ii) failure to pay wages due upon termination under California Labor Code §§ 201, 202 and 203; (iii) Private Attorney General Act ("PAGA") violations under California Labor Code § 2698 et seq.; and (iv) unfair business practices in violation of California Business and Professions Code § 17200 et seq. The Court held a hearing on this motion on July 16, 2012, at which each side presented oral argument, and then took the matter under submission. Dkt. 43. For the reasons stated in this Order, the Court GRANTS, in part, Defendants' motion for judgment on the pleadings and dismisses Plaintiff's complaint with leave to amend in accordance with this Order.
II. BACKGROUND
Plaintiff was employed by Defendants from May 2008 through October 2010. Compl. ¶ 21. United Parcel Service ("UPS") has an agreement with Defendants under which Defendants provide their employees to work for UPS. Id. Under this agreement, Plaintiff, as an employee of Defendants, was sent to work as a "mail clerk" for UPS. Id. "Plaintiff recorded her hours worked on Defendants' timesheets and then submitted the timesheets to her UPS supervisors for review." Id. "After verifying Plaintiff's hours, UPS sent her timesheets to Defendants for payment. The timesheets submitted by Plaintiff and class members included only the start and end times of their shifts, and did not reflect any meal or rest periods taken by Plaintiff and class members." Id. Thus, based on these timesheets, Plaintiff alleges that Defendants knew, or should have known, that Plaintiff and other putative class members were not being provided with legally compliant meal and rest periods. See id. Despite this imputed knowledge of missed breaks, and Defendants' obligation to pay premium wages for any such missed breaks, the complaint alleges that "Defendants simply calculated the hours worked from the start time to the end time of the work shift, without regard to meal breaks, and paid Plaintiff and class members accordingly." Id.
III. ANALYSIS
A. Legal Standard for Judgment on the Pleadings
Rule 12(c) provides that, "[a]fter the pleadings are closed--but early enough not to delay trial--a party may move for judgment on the pleadings." FED. R. CIV. P. 12(c). "A judgment on the pleadings is properly granted when, taking all the allegations in the non-moving party's pleadings as true, the moving party is entitled to judgment as a matter of law." Fajardo v. County of Los Angeles, 179 F.3d 698, 699 (9th Cir. 1999).
B. Underlying Violation of California Labor Code § 226.7
As a preliminary matter, Defendants contend that Plaintiff has failed to state a claim for meal and rest period violations pursuant to California Labor Code § 226.7 because she has alleged only that employees "missed" meal periods, not that Defendants prevented employees from taking the legally mandated breaks. Defendants are correct that Plaintiff's current allegations are insufficient to state a claim for meal and rest period violations. In Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004, 1040 (2012), the California Supreme Court held that an employer satisfies its obligations with respect to providing meal periods "if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so." Here, Plaintiff has not alleged that Defendants violated this standard, only that she "missed" meal periods. These allegations are insufficient under Brinker.
Although Plaintiff does not advance a distinct claim for violations of section 226.7, at the July 16, 2012 hearing, Plaintiff's counsel represented that, if given the opportunity to amend, Plaintiff would add a separate claim for violations of section 226.7. Thus, the Court dismisses Plaintiff's complaint with leave to amend to afford Plaintiff the opportunity to allege facts sufficient to state a claim pursuant to section 226.7 in accordance with the standards of Brinker.
C. First and Second Causes of Action: Noncompliant Wage Statements and Failure to Pay Wages Due Upon Termination
1. Plaintiff's Claims
Plaintiff's first and second claims are entirely derivative of her allegations that Defendants failed to provide meal and rest periods or to pay the resulting premiums for missed meal and rest periods. Thus, Plaintiff contends that, because premium pay for missed meal and rest periods was not listed on her wage statements, Defendants violated California Labor Code § 226. The issue presented is, therefore, whether failure to pay premiums for meal and rest period violations under section 226.7, and the related failure to list such premium pay on employees' wage statements, is actionable under section 226. Similarly, Plaintiff alleges that, because she was not provided with premium pay for missed meal and rest periods at the time of termination, Defendants are liable for their failure to pay wages due upon termination pursuant to California Labor Code §§ 201, 202 and 203. Thus, the issue presented in connection with this claim is almost identical to that raised by Plaintiff's first claim: Does an employer's failure to provide meal and rest period premium pay at the time of termination create a violation of sections 201, 202 and 203 for failure to pay "wages" due upon termination because meal and rest period premium pay constitutes a "wage" within the meaning of those sections?
2. Legal Standard
California Labor Code § 226(a) requires employers to provide employees with written wage statements showing:
(1) gross wages earned, (2) total hours worked by the employee... (3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis, (4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item, (5) net wages earned, (6) the inclusive dates of the period for which the employee is paid, (7) the name of the employee and his or her social security number or an employee identification number ... (8) the name and address of the legal entity that is the employer, ... and (9) all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.
"When an employee is terminated or resigns from his or her employment, final wages are generally due and payable immediately." Pineda v. Bank of Am., N.A., 50 Cal. 4th 1389, 1392 (2010) (citing CAL. LAB. CODE §§ 201, 202.) "[S]ection 203 provides that, if an employer willfully fails to timely pay final wages, 'the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days.'" Id. (quoting CAL. LAB. CODE § 203).
3. The Parties' Arguments
a) First Claim: Noncompliant Wage Statements
Defendants contend that the plain language of California Civil Code § 226 requires only that a wage statement include wages earned. Defendants define "wages earned" as "amounts for labor performed by employees," citing California Labor Code § 200(a). Defendants contend that meal and rest period premium pay does not constitute earned wages because there is no correlation between time worked and the premium pay owed for a violation of California Labor Code § 226.7(a). Defendants cite Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1094, 1113 (2007), in support of the proposition that premium pay for a violation of section 226.7 is not calculated based on an employee's actual hours worked.
Defendants rely on a recent decision , Nguyen v. Baxter Healthcare Corp., No. 8:10-cv-01436 CJC (SSx), 2011 WL 6018284, at *8 (C.D. Cal. Nov. 28, 2011), in support of their contention that there can be no section 226 claim for noncompliant wage statements based only on meal or rest period violations because section 226(a) does not require a wage statement to include itemized listings of premium payments. Defendants also rely on Driscoll v. Granite Rock Co., County of Santa Clara Superior Court, No. 1-08-CV-103426, at *21 (Sept. 20, 2011), to support their argument that the legislative purpose of section 226 does not support permitting a double recovery for missed meal breaks by adding wage statement violations based on the same failure to provide meal periods. Defendants also cite Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244 (2012), as further support for their contention that premium pay under section 226.7 is not considered an "earned wage" for purposes of employee wage statements. Defendants contend that, in Kirby, the California Supreme Court held that a claim to recover meal and rest period premium pay under section 226.7 is not a claim "for nonpayment of wages." Accordingly, Defendants contend that the failure to include premium pay on a wage statement cannot support a claim for violation of section 226(a).
This opinion is attached as Exhibit A to Defendants' Request for Judicial Notice ("Def. RJN"), Dkt. 35-3.
Plaintiff presents a different interpretation of Murphy. Thus, Plaintiff argues that Murphy holds that the premium pay remedy under section 226.7 is classified as earned wages. Plaintiff argues that Defendants cite no authority for their contention that wages are not considered "earned" due to the absence of a correlation between the time worked and the pay owed. Plaintiff contends that the cases cited by Defendants show only that premium pay has no correlation to the amount of labor performed or time worked. According to Plaintiff, it does not follow that premium pay is not "earned wages." Plaintiff also argues that Defendants' reliance on Kirby is misplaced because Kirby dealt specifically with section 218.5, which permits an award of attorneys' fees to the party who prevails in an action brought for nonpayment of wages. Plaintiff argues that the court's holding that an action to enforce section 226.7 is not a claim for nonpayment of wages was specifically limited to the context of section 218.5. Plaintiff also argues that the court in Kirby expressly confirmed the holding in Murphy, i.e., that premium pay under section 226.7 constitutes a wage.
Plaintiff cites district court opinions for the proposition that premium pay under section 226.7 is a wage within the meaning of section 226(a). See, e.g., Ricaldai v. U.S. Investigations Servs., LLC, No. CV 10-07388 DDP (PLAx), 2012 WL 2930474, at *8 n.4 (C.D. Cal. May 25, 2012) (noting that if the plaintiff were to succeed on her meal period claim under section 226.7, the defendant would have further violated section 226 by failing to include premium pay for each missed meal period on the plaintiff's wage statements). Plaintiff further contends that, because Nguyen is a district court case that is inconsistent with the decisions of the California Supreme Court in Murphy and Kirby, it should not be followed. Plaintiff also argues that Nguyen's reasoning is not persuasive because it relies on dicta from an inapposite case, Brewer v. Premier Golf Properties, LP, 168 Cal. App. 4th 1243 (2008).
b) Second Claim: Failure to Pay Wages Due Upon Termination
Defendants contend that, because California Labor Code §§ 201, 202 and 203 are based on the nonpayment of wages, these statutory provisions do not apply to actions to recover premium pay that results from missed meal and rest periods. Defendants argue that, in Kirby, the court explained that when an employee brings suit for violations of sections 201 and 202, the suit is an "action brought for the nonpayment of wages"; by contrast, when an employee brings suit for an employer's violation of section 226.7, the basis for the lawsuit is the employer's "nonprovision of statutorily required rest breaks or meal breaks." Kirby, 53 Cal. 4th at 1256. Accordingly, Defendants contend that, because Kirby held that an action for meal or rest period premium pay is not an action for failure to pay wages or benefits, the failure to provide premium pay upon termination cannot support a claim for violation of California Labor Code §§ 201 and 202.
Plaintiff responds that sections 201, 202 and 203 apply to more than claims for nonpayment of wages. Plaintiff cites Pulido v. Coco-Cola Enterprises, No. EDCV06-406VAP(OPX), 2006 WL 1699328 (C.D. Cal. May 25, 2006), for the proposition that, if a section 226.7(b) payment is a wage, it must be paid according to the procedures set forth in section 201. Thus, Plaintiff contends that, because the "one hour of pay remedy" under section 226.7 constitutes a wage under Murphy, the failure to provide the meal and rest period premium pay upon discharge or resignation constitutes a violation of sections 201 and 202 and creates a viable claim for wait time penalties under section 203.
4. California Supreme Court Authority
In Murphy, to determine which statute of limitations applied to section 226.7 claims, the California Supreme Court had to determine whether the premium pay remedy for violations of section 226.7 was properly classified as a "penalty." 40 Cal. 4th at 1102. If the remedy was a penalty, a one-year statute of limitations applied; if the payment was a wage or other non-penalty compensation, a three-year statute of limitations applied. Id. The distinction was controlling because the action would have been time-barred under the one-year statutory period. The Murphy court determined that the payments were wages. Id. at 1103. It reasoned that California Labor Code § 200(a) defines "wages" as "all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other methods of calculation." Id. Further, section 226.7 requires that employees be paid one additional hour of pay for each work day on which they are required to work through a meal or rest period. "Pay" is defined as "money [given] in return for goods and services rendered." Id. at 1104. Thus, the California Supreme Court noted that the language of section 226.7 indicates that the "additional hour of pay" is a wage. Id. The court also considered extrinsic sources as part of its statutory interpretation. Id. In evaluating the legislative history of section 226.7, the court noted that, as originally proposed, the section included both a provision requiring that employers pay employees a wage and a separate penalty provision, but that the final version of the bill contained only the former. Similarly, the legislature "eliminated the requirement that an employee file an enforcement action": "Under the amended version of section 226.7, an employee is entitled to the additional hour of pay immediately upon being forced to miss a rest or meal period." Id. at 1108. This feature, too, made it similar to a wage. Finally, the court noted that, although the premium pay is not measured by time spent working, this does not mean that such pay is not a wage. Id. at 1113. For these reasons, the court concluded that "[t]he statute's plain language, the administrative and legislative history, and the compensatory purpose of the remedy compel the conclusion that the 'additional hour of pay' is a premium wage to compensate employees, not a penalty." Id. at 1114.
In Kirby, the plaintiff brought a claim for violations of section 226.7, which was ultimately dismissed with prejudice after the parties entered into a settlement agreement. 53 Cal. 4th at 1248. The Kirby court then had to determine whether the defendants, who had prevailed on the section 226.7 claim, were entitled to attorneys' fees under section 218.5. Id. California Labor Code § 218.5 requires courts to award attorneys' fees to the prevailing party "[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions." The California Supreme Court concluded that a section 226.7 claim does not constitute "an action brought for the nonpayment of wages"; thus, it does not trigger the fee-shifting provision in section 218.5. Id. at 1255. The court observed that "Section 226.7 is not aimed at protecting or providing employees' wages. Instead the statute is primarily concerned with ensuring the health and welfare of employees by requiring that employers provide meal and rest periods." Id. The court distinguished its prior holding in Murphy, as follows: "It is also true that we held in Murphy that this remedy is a 'wage' for purposes of determining what statute of limitations applies to section 226.7 claims. (citation omitted) [The defendant] contends that because the remedy sought by plaintiffs is a wage, the present action is an 'action for nonpayment of wages' within the meaning of section 218.5. We disagree." Id. at 1256. The court emphasized that section 218.5 uses the phrase "action brought for" nonpayment of wages, which does not mean that the action is to obtain wages; rather, it is an action brought on account of nonpayment of wages. Id. The court noted that "[t]he words 'nonpayment of wages' in Section 218.5 refer to an alleged legal violation, not a desired remedy." Id. The court went on to explain that, nonpayment of wages is "not the gravamen of a Section 226.7 violation. Instead [Section 226.7] defines a legal violation solely by reference to an employer's obligation to provide meal and rest breaks." Id. Thus, a section 226.7 claim is not an action brought for nonpayment of wages, but one for a failure to provide meal or rest breaks. Id. at 1257. Accordingly, the court held that an action for violation of section 226.7 is not an action for the nonpayment of wages and that the defendants were not entitled to attorneys' fees pursuant to section 218.5. Id. at 1259.
In comparing section 226.7 and section 203, the Kirby court stated:
When an employee sues for a violation of section 226.7, he or she is suing because an employer has allegedly "require[d] [the] employee to work during [a] meal or rest period mandated by an applicable order of the Industrial Welfare Commission." (§ 226.7, subd. (a).) In other words, a section 226.7 action is brought for the nonprovision of meal and rest periods, not for the "nonpayment of wages."53 Cal. 4th at 1255-1257.
Sections 201 and 202 provide a useful contrast to section 226.7. Section 201 provides that when "an employer discharges an employee, the wages earned and unpaid at the time of the discharge are due and payable immediately"... and section 202 provides that when an "employee has given 72 hours previous notice of his or her intention to quit, ... the employee is entitled to his or her wages at the time of quitting"...When an employee sues on the ground that his or her former employer has violated one of these provisions, the suit is an "action brought for the nonpayment of wages." In other words, the employer's nonpayment of wages is the basis for the lawsuit. By contrast, when an employee sues on the ground that his or her employer has violated section 226.7, the basis for the lawsuit is the employer's nonprovision of statutorily required rest breaks or meal breaks.
...
The failure to provide required meal and rest breaks is what triggers a violation of section 226.7. Accordingly, a section 226.7 claim is not an action brought for nonpayment of wages; it is an action brought for non-provision of meal or rest breaks.
5. Other Authority
Two courts have held that meal and break premium pay is not an "earned wage" within the meaning of section 226(a). Both decisions predate Kirby.
Nguyen held that "the plain language of Section 226(a) does not require that wage statement [sic] include an itemized listing of any premium payments owed to [the plaintiff] for missed meal periods." 2011 WL 6018284, at *8. The court, quoting Driscoll, County of Santa Clara Superior Court, No. 1-08-CV-103426, at *22 (Sept. 20, 2011), stated that the legislative history of section 226(a) "reveals that the purpose of the statute was 'to ensure that employers provide accurate wage statements to employees, not to govern employers' obligations with respect to meal periods.'" Id. The court held that the meal and rest period premium pay is properly considered liquidated damages, not earned wages for purposes of section 226(a). Id. (citing Brewer, 168 Cal. App. 4th at 1254 (remedies for missed meal breaks "include an award in the nature of liquidated damages under Section 226.7")).
In Brewer, the court held that the plaintiff was not entitled to punitive damages from her employer for violations of section 226.7. 168 Cal. App. 4th at 1252. In making this determination, the court relied on the "new right-exclusive remedy" doctrine, which provides that "where a statute creates new rights and obligations not previously existing at common law, the express statutory remedy is deemed to be the exclusive remedy available for statutory violations, unless it is inadequate." Id. (italics in original; internal quotation and alteration omitted). Thus, the plaintiff could receive only the statutory remedy provided in section 226.7 and not the additional remedy of punitive damages.
Similarly, in Driscoll, the plaintiffs claimed that their employer violated section 226(a) by not reporting an additional hour of pay on their wage statements for missed meal periods. No. 1-08-CV-103426, at *21, Def. RJN, Exh. A, Dkt. 35-3. The court stated that the "legislative history shows that the purpose of Section 226 was for transparency, not for double recovery." Id. Further, the court found that "§ 226(a) is intended to ensure that employers provide accurate itemized wage statements to employees, not to govern employers' obligations with respect to meal periods." Id. at *22. Accordingly, the court held that the employer did not violate section 226(a) by failing to include premium pay for missed meal periods on employees' wage statements. Id.
Some courts have assumed, without explanation, that claims under section 226(a) for noncompliant wage statements can be advanced based on violations of section 226.7. For example, one court noted that if a plaintiff succeeded on her meal period claim, her employer "further violated Section 226 by failing to include premium pay for each missed meal period" on the plaintiff's wage statements. Ricaldai, 2012 WL 2930474, at *8 n.4. And, another court noted that the plaintiff's section 226(a) claim for noncompliant wage statements was "derivative of his overtime, meal break, and rest break claims." Porch v. Masterfoods, USA, Inc., 685 F. Supp. 2d 1058, 1075 (C.D. Cal. 2008).
Similarly, with respect to section 203, one district court held that the required premium pay for violations of California Labor Code § 226.7 should be characterized as a penalty that could not support a claim under sections 201, 202 and 203. Pulido, 2006 WL 1699328, at *6. However, the court went on to find that, because the plaintiffs were still employed, they could not advance a claim under section 203, regardless of whether section 226.7 violations could support such a claim. Id. at *2. Pulido predated Murphy, where the court explicitly held that the premium pay remedies available under section 226.7 constitute wages, not penalties. At least one court has assumed, without explaining its reasoning, that section 203 claims can be advanced on the basis of underlying meal and rest period violations pursuant to section 226.7. See Ricaldai, 2012 WL 2930474, at *2 (claim for failure to pay timely wage in violation of California Labor Code § 203 was predicated on the plaintiff's section 226.7 meal period claim).
6. Application
For several reasons, the Court finds that Plaintiff cannot advance a claim for noncompliant wage statements pursuant to section 226(a) or failure to pay wages due upon termination pursuant to section 203 based solely on alleged violations of section 226.7. First, under Kirby, the legal violation underlying a section 226.7 claim is the nonprovision of meal and rest periods and the corresponding failure to "ensur[e] the health and welfare of employees," not the nonpayment of wages. Kirby, 53 Cal. 4th at 1255. Kirby makes clear that, despite Murphy's holding that the premium pay remedy is calculated as a wage, and that the employee is entitled to that remedy immediately, the payment of the remedy does not satisfy section 226.7. "In other words, section 226.7 does not give employers a lawful choice between providing either meal and rest breaks or an additional hour of pay. An employer's failure to provide an additional hour of pay does not form part of a section 226 .7 violation, and an employer's provision of an additional hour of pay does not excuse a section 226.7 violation." Id. at 1256 (italics added). Thus, even if the employee agreed to work through a required break in exchange for one hour of pay, and if the extra pay were provided to the employee and recorded on the employee's wage statement, the employee would nonetheless have a claim pursuant to section 226.7. Accordingly, because the employer cannot remedy a section 226.7 violation by compensating the employee, the wrongdoing by the employer is more than the failure to pay wages; it is a failure to ensure the employee's health and wellbeing through reasonable working conditions.
Second, a finding that section 226.7 violations can form the basis for claims under section 226 and section 203, would result in an improper, multiple recovery by the employee. Defendants provide the following, persuasive example to illustrate this point: "if any employee was forced to return from lunch one minute early and was not paid the meal period premium under Section 226.7(b), then under Plaintiff's theory, an employee who receives $10 per hour would be entitled to: (1) $10 (one hour of pay) under Section 226.7(b); (2) $2,400 (30 days wages) under Section 203[]; and (3) $100 under PAGA.[]" Mot., p. 9, n.3, Dkt. 35. In addition, under Plaintiff's theory, the employee could recover actual damages or $50, whichever is greater, under section 226(e) for the employer's failure to record the $10 in premium pay owed for the meal break violation on the employee's wage statement. CAL. LAB. CODE § 226(e). Thus, instead of simply recovering the statutory remedy of one hour of pay under section 226.7(b), which in this hypothetical is $10, if later the employee were terminated or resigned, the employee would be entitled to at least $2,560. Moreover, if the employer violated section 226.7 again in subsequent pay periods, under Plaintiff's theory that section 226 claims are derivative of section 226.7 claims, the penalty for the subsequent noncompliant wage statements would increase from $50 to $100, up to a maximum of $4,000. CAL. LAB. CODE § 226(e). As the court observed in Driscoll, the "legislative history shows that the purpose of Section 226 was for transparency, not for double recovery." No. 1-08-CV-103426, at *21, Def. RJN, Exh. A, Dkt. 35-3.
Section 203 "mandates a penalty equivalent to the employee's daily wages for each day he or she remained unpaid up to a total of 30 days." Mamika v. Barca, 68 Cal. App. 4th 487, 493 (1998). "The failure to pay wages has nothing to do with the number of days an employee works during the month. If it did, a part time employee who worked two days a month would be entitled to only two day's penalty if he quit and was not paid the wages owed to him. This inconsequential amount would not further the statutes' goals of encouraging prompt payment of wages due upon termination of employment." Id. Thus, under this hypothetical, even if the employer failed to pay the employee only the $10 owed to the employee for being forced to miss one minute of her break, the employee would be entitled to the equivalent of the employee's daily wages for up to a total of 30 days. Assuming that the employee works eight hours per day at a rate of $10 per hour, the maximum penalty under section 203 would total $2,400.
PAGA provides: "If, at the time of the alleged violation, the person employs one or more employees, the civil penalty is one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation." CAL. LAB. CODE § 2699(f)(2). Thus, in this hypothetical, the PAGA penalty would be $100.
Third, the issue presented in Murphy was a narrow one: Whether a claim for violations of section 226.7 is "[a]n action upon a liability created by statute, other than a penalty or forfeiture," CAL. CODE CIV. PROC. § 338(a), or "[a]n action upon a statute for a penalty or forfeiture," CAL. CODE CIV. PROC. § 340(a). Although the holding in Murphy was the result of thorough reasoning with respect to whether the section 226.7 remedy is more akin to a penalty or a wage, and although the Court concluded that the remedy should be classified as a wage, the later decision in Kirby demonstrated that Murphy's holding is limited. Here, where the issue is not whether the ultimate remedy is a wage, but whether the employer had an obligation to include that premium pay remedy on employees' wage statements and pay it upon termination, the facts and reasoning in Kirby apply. Because the underlying violation that gives rise to a section 226.7 claim is not the nonpayment of wages, other claims premised on the nonpayment of wages do not arise.
For these reasons, Plaintiff cannot advance a claim for noncompliant wage statements or failure to pay wages due upon termination based solely on alleged violations of section 226.7. As a result, the Court GRANTS Defendants' motion for judgment on the pleadings in connection with Plaintiff's first and second causes of action, without leave to amend.
D. Third and Fourth Causes of Action for PAGA Violations and Unfair Business Practices
Defendants move for judgment on the pleadings as to Plaintiff's third and fourth claims for PAGA violations and unfair business practices, respectively. The only basis for their motion is that these claims are derivative of Plaintiff's first two causes of action. However, in addition to being derivative of Plaintiff's first and second causes of action, these claims are derivative of the allegations that underlie all of Plaintiff's claims: That Defendants violated section 226.7 by failing to provide meal and rest periods to employees in accordance with the standards announced in Brinker. Because the Court has dismissed Plaintiff's allegations regarding "missed" meal and rest periods with leave to amend, these claims also are dismissed with leave to amend. If Plaintiff can present allegations sufficient to state a claim for violations of section 226.7, then she can also advance these claims for unfair business practices and PAGA violations.
Although "a PAGA claim is, by definition, a claim for civil penalties," and the remedy for violations of section 226.7 is a wage, section 226.7 violations can support a PAGA claim. Thomas v. Home Depot USA Inc., 527 F. Supp. 2d 1003, 1008 (N.D. Cal. 2007) (noting that a PAGA claim can be based on predicate violations that call for wages, including section 226.7 violations). --------
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants' motion for judgment on the pleadings with respect to Plaintiff's first and second claims for noncompliant wage statements and failure to pay wages due upon termination. Plaintiff's third and fourth claims are dismissed with leave to amend, and the Court grants Plaintiff leave to add a distinct claim for violations of section 226.7. Plaintiff shall file an amended complaint on or before August 17, 2012.
IT IS SO ORDERED.
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