Benton v. Telecom Network Specialists, Inc.

Full title: LORENZO BENTON et al., Plaintiffs, Respondents, and Cross-Appellants, v…

Court: California Court of Appeals, Second District, Seventh Division

Date published: Oct 13, 2023

No. B312572 (Cal. Ct. App. Oct. 13, 2023)

Opinion

B312572

10-13-2023

LORENZO BENTON et al., Plaintiffs, Respondents, and Cross-Appellants, v. TELECOM NETWORK SPECIALISTS, INC., Defendant, Appellant and Cross-Respondent.

McDermott Will & Emery, Ronald J. Holland, Pankit J. Doshi, Philip Shecter, Saniya Ahmed, Paul W. Hughes and Andrew A. Lyons-Berg for Defendant, Appellant and Cross-Respondent. Aiman-Smith & Marcy, Randall Aiman-Smith, Reed W.L. Marcy and Hallie Von Rock; Law Offices of Jared E. Peterson and Jared E. Peterson for Plaintiffs, Respondents and Cross-Appellants.

SEGAL, J.

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County, Nos. BC349267, BC351252, BC354230 John Shepard Wiley Jr., Amy D. Hogue, David S. Cunningham III, Judges. Reversed with directions.

McDermott Will & Emery, Ronald J. Holland, Pankit J. Doshi, Philip Shecter, Saniya Ahmed, Paul W. Hughes and Andrew A. Lyons-Berg for Defendant, Appellant and Cross-Respondent.

Aiman-Smith & Marcy, Randall Aiman-Smith, Reed W.L. Marcy and Hallie Von Rock; Law Offices of Jared E. Peterson and Jared E. Peterson for Plaintiffs, Respondents and Cross-Appellants.

SEGAL, J.

INTRODUCTION

This is the second appeal in this class action, which began 18 years ago. Had the parties proceeded to trial, it might well be over. But the parties and the court attempted to resolve pieces of the litigation by way of motions for summary adjudication of various claims and issues. Because the trial court erred in granting all but one of those motions, we must reverse the judgment, and the litigation will continue.

Telecom Network Specialists, Inc. (TNS) performs equipment upgrades at cell sites in California. Lorenzo Benton filed this wage-and-hour class action against TNS on behalf of several hundred technicians who service the sites, including technicians directly hired by TNS and technicians supplied by staffing companies TNS contracted with for labor. Benton asserted causes of action for failure to provide meal and rest breaks and failure to pay overtime compensation, as well as for associated waiting time and wage statement penalties under Labor Code sections 203 and 226.¹

1 Undesignated statutory references are to the Labor Code.

The trial court initially denied Benton's motion for class certification. We reversed that order (Benton v. Telecom Network Specialists, Inc. (2013) 220 Cal.App.4th 701 (Benton I)), and on remand the trial court granted the motion. The trial court subsequently resolved Benton's causes of action through a series of motions for summary adjudication and a court trial, and entered judgment in favor of plaintiffs.

On the causes of action for failure to permit meal and rest breaks and failure to pay overtime compensation, the court granted motions by Benton for summary adjudication and ruled in favor of the class. TNS contends the court erred in granting summary adjudication on each cause of action. For the causes of action for failure to provide meal and rest breaks, we agree. While Benton met his moving burden on these causes of action by presenting evidence TNS did not have a companywide policy authorizing technicians to take legally compliant meal and rest breaks, TNS raised factual issues precluding summary adjudication by presenting evidence at least some TNS supervisors informed technicians of their rights to take breaks and authorized them to do so. TNS also presented evidence that at least some staffing companies authorized technicians to take breaks while working for TNS and that TNS did not impede the technicians from doing so. TNS was therefore entitled to contest the scope of its liability and the class's damages at trial. On the cause of action for failure to pay overtime wages, however, TNS has not shown the court erred in granting summary adjudication in favor of the class.

On the causes of action for waiting time and wage statement penalties under sections 203 and 226, the court separately analyzed the claims based on unpaid and unreported meal and rest break premiums and the claims based on unpaid and unreported overtime compensation. For the first group of claims, the court granted a motion by TNS for summary adjudication, ruling that premium payments for missed breaks are not "wages" under sections 203 or 226 and that an employee therefore may not recover penalties when the employer withholds them or fails to report them on a wage statement. Benton correctly argues (in his cross-appeal) the trial court erred in granting summary adjudication in favor of TNS. As the Supreme Court recently held in Naranjo v. Spectrum Security Services, Inc. (2022) 13 Cal.5th 93 (Naranjo) (decided after the trial court granted the motion for summary adjudication), premium payments for missed break periods are wages under sections 203 and 226.

For the remaining causes of action relevant to this appeal- the claims for waiting time penalties for unpaid overtime compensation-the court found in favor of the class following a court trial. TNS argues the trial court should have found in its favor on its good faith defense. We conclude TNS has not shown it was entitled as a matter of law to a finding in its favor on this defense.

Finally, TNS challenges the court's order denying its motion, after the trial, to decertify the class. We conclude the trial court did not abuse its discretion in denying the motion.

As a result of all this, we reverse the judgment. We direct the trial court to conduct further proceedings on the causes of action for failure to permit meal and rest breaks and the associated claims for waiting time and wage statement penalties.

FACTUAL AND PROCEDURAL BACKGROUND

A. TNS's Technicians Service Cell Sites

TNS installs, provides maintenance for, and repairs electronic and radio equipment at cell sites. TNS directly hires some technicians, but also contracts with staffing companies to locate and provide technicians for certain jobs. The staffing company directly employs and pays the technicians, while TNS pays the staffing company an hourly rate for each hour worked by the technician. TNS supervisors direct the work of all the technicians, those provided by staffing company technicians and those hired directly by TNS. TNS supervisors schedule where and when the technicians work, explain the scope of their tasks, and audit their performance.

B. Benton Files This Class Action Against TNS

In 2006 Benton filed a class action complaint on behalf of the direct-hire technicians and the staffing company technicians. Benton alleged "[a]ll workers hired to perform work for TNS's [c]ustomers, either directly or through [staffing companies], were TNS's employees, regardless of whether they may also have been the employees of the [staffing companies]" because TNS "control[ed] the essential functions of their work ...." Benton also alleged TNS did not pay its employees overtime compensation at the legally required rate or provide workers legally required meal breaks or rest breaks. As relevant here, Benton asserted causes of action for failure to pay overtime, failure to provide meal breaks, failure to provide rest breaks, penalties under section 226 for failure to furnish accurate wage statements, and waiting time penalties under section 203.

C. The Trial Court Denies Benton's Motion for Class Certification, We Reverse, and the Trial Court Grants the Motion

Benton filed a motion for class certification in 2012. Benton argued there were common questions regarding whether TNS was the employer (or coemployer) of all the technicians, issues that could be determined through common proof TNS exerted "exclusive day-to-day control" over all the technicians. (Benton I, supra, 220 Cal.App.4th at p. 707.) Benton also argued TNS's liability for failing to provide meal and rest breaks could be determined through common proof because, under the applicable wage order issued by the Industrial Welfare Commission (IWC), TNS was obligated to adopt a policy authorizing and permitting each of its technicians to take breaks, which it failed to do. (Ibid.) The trial court denied the motion for class certification.

The court ruled that, even if TNS was the employer of all the technicians, the technicians' working conditions were, for two reasons, too diverse for the court to certify the class. First, the court found that at many sites technicians could take rest and meal breaks whenever they wanted. Second, the court found the staffing companies adopted different meal and rest break policies. Therefore, the court ruled, there was "no single way to determine whether TNS is liable to the class for failure to provide breaks."

We reversed. We explained the proper inquiry in ruling on the motion for class certification was whether Benton's theory of recovery-that TNS violated wage and hour laws by failing to "implement procedures ensuring that technicians received notice of their meal and rest period rights and were permitted to exercise those rights"-could be proved through common facts and law. (Benton I, supra, 220 Cal.App.4th at p. 725.) We concluded "the fact that individual inquiry might be necessary to determine whether individual employees were able to take breaks despite the defendant's allegedly unlawful policy (or unlawful lack of a policy) [was] not a proper basis for denying certification." (Ibid.) Nor, we stated, was the fact that the staffing companies may have had diverse meal and rest policies. As we explained, the wage orders impose an affirmative obligation on every employer to authorize and permit meal and rest breaks; therefore, that a technician's staffing company may have adopted a lawful meal and rest break policy would not necessarily show TNS was not liable to the technician. (Id. at p. 728.) We emphasized that the trial court, in focusing on the fact the staffing companies adopted different meal and rest policies, overlooked Benton's theory of liability that TNS could not delegate to staffing companies the responsibility to provide meal and rest breaks because TNS exerted sole control over the technician's worksites. (Id. at p. 729.)

On remand the trial court granted the motion for class certification in part and denied the motion in part, finding common questions predominated over individual issues for most of Benton's claims. The certified class consisted of 112 direct hire technicians and 649 staffing company technicians who worked for TNS from June 2002 until the entry of judgment. For the claims arising from TNS's alleged failure to provide meal and rest breaks, the court certified the entire class of both direct hires and staffing company technicians. For the claims arising from TNS's alleged failure to pay overtime compensation, however, the court found the evidence showed TNS had a companywide policy to pay direct hires overtime wages that complied with the applicable laws. Therefore, for those claims, the court declined to certify a class of direct hire technicians and certified only the class of staffing company technicians (a ruling Benton does not challenge).

D. The Trial Court Grants Motions for Summary Adjudication on Several Causes of Action

1. The Court Grants Benton's Motion for Summary Adjudication on the Causes of Action for Failure To Provide Meal and Rest Breaks and Failure To Provide Overtime Compensation

In 2017 Benton filed a motion for summary adjudication of four issues: (1) whether TNS was the employer of the technicians and therefore had duties to provide meal and rest breaks and to pay overtime compensation; (2) whether TNS breached its duty to provide meal breaks to the technicians; (3) whether TNS breached its duty to provide rest breaks to the technicians; and (4) whether TNS failed to pay overtime compensation to the staffing company technicians. The trial court granted the motion on all issues.² Relying on the Supreme Court's decision in Martinez v. Combs (2010) 49 Cal.4th 35 (Martinez), the trial court ruled TNS was the employer of each of the technicians because it exercised control over the technicians' hours and working conditions. (See id. at p. 64.) Among other evidence, the court relied on the deposition testimony of TNS's program manager, Jeffrey Ellis, that TNS specified when and where technicians worked, audited their work quality, and approved their time sheets.

2 The trial court can grant a motion for summary adjudication "only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty" (Code Civ. Proc., § 437c, subd. (f)(1)), unless the parties submit a "joint stipulation stating the . . . issues to be adjudicated" (id., § 437c, subd. (t)(1)(A)(i)). In granting the motion for summary adjudication on the first issue, the court arguably disposed of an "issue of duty," but the order granting the motion on issues (2), (3), and (4) did not, nor did it completely dispose of any of Benton's causes of action. (See Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 244 [a "plaintiff may seek summary adjudication on the existence or nonexistence of a . . . duty [citation], but there is simply no statutory basis for an order summarily adjudicating that a party breached a duty"].) The record does not reflect whether the parties stipulated to have the court to rule on these issues or whether the court accepted any such stipulation. TNS, however, does not challenge the court's order granting the motion for summary adjudication on the ground it did not comply with Code of Civil Procedure, section 437c, subdivision (f)(1).

The court also ruled TNS breached its duty to provide meal and rest breaks because, "[a]pparently ignorant of the law," TNS "did not undertake to comply with the legal duties employers must follow." The court relied again primarily on Ellis's testimony. When questioned by counsel for the class what TNS did to ensure technicians took meal breaks for every five hours worked, Ellis testified that he was "unaware that was a California law requirement" and that the law was "not common knowledge in the company." Citing our opinion in Benton I, the court ruled TNS was "liable to class members even if a coemployer staffing company adopted lawful meal and rest break policies" because the applicable wage order imposes an affirmative obligation on every employer to authorize and provide breaks. The court further ruled TNS breached its duty to pay overtime wages because it was undisputed some staffing company technicians did not receive overtime compensation.

Benton then filed a motion for summary adjudication on his causes of action for failure to provide meal and rest breaks and failure to pay overtime compensation. Benton contended that, because the trial court had already ruled TNS breached its duties to the class to provide meal and rest breaks and to pay overtime compensation, the court need only determine the class's damages to completely dispose of these causes of action. Benton submitted a declaration from Brian Kriegler, an expert in "statistics, sampling, surveying, econometrics, and data management." Kriegler reviewed TNS's timekeeping records for technicians to determine the hours each technician worked each day and each week. No class member worked for TNS after 2013.

Kriegler assumed TNS did not provide a technician a meal or rest period on any day the technician worked. Thus, for each day a technician worked more than five hours, Kriegler assumed that the technician was entitled to one additional hour of pay and that, for each day a class member worked more than 3.5 hours, the technician was also entitled to an additional hour of pay. Kriegler reviewed wage statements, pay stubs, and other documents to determine each technician's hourly rate. Kriegler calculated each technician's damages by multiplying his or her hourly rate by the additional hours of pay to which Kriegler calculated the technician was entitled.

Kriegler stated that, after 2010, some technicians recorded, in a "Notes" section of TNS's timekeeping records, they received a break. Kriegler provided two alternative damage calculations for meal and rest breaks: one that assumed the technician was still entitled to a premium payment even when he or she recorded a break and one that assumed the technician was not entitled to a premium payment in each instance where the technician recorded a break. Because technicians generally did not record that they received a meal or rest break (even after 2010), there was only a three percent difference between Kriegler's two alternative damage calculations.

Kriegler also reviewed TNS's timekeeping records to determine the number of overtime hours each staffing company technician worked. Kriegler calculated the overtime compensation each technician should have received by multiplying each technician's overtime hours by the technician's hourly rate and the applicable overtime premium. (See, e.g., § 510.) Where available, Kriegler reviewed the wage documents from the staffing companies to determine how much compensation each technician received. To calculate each technician's unpaid overtime compensation, Kriegler subtracted the amount of compensation the technician in fact received from the compensation Kriegler determined the technician should have received. Kriegler explained, however, that for 24 of the 35 staffing companies, there was no documentation indicating how much they actually paid their technicians. For these technicians, Kriegler assumed that the staffing companies paid only the technician's normal hourly rate for all hours worked and that therefore the technician received no overtime compensation.³

3 For the 11 staffing companies Kriegler had documentation for, five paid technicians all the overtime compensation Kriegler calculated the technicians should have received. The other six staffing companies underpaid the earned overtime compensation.

The trial court "granted" the motion for summary adjudication on each cause of action, but did not actually award the class damages in the amount Kriegler calculated. The court explained Kriegler "proposed a fundamentally sound method for approximating reasonable damage figures for the meal and rest break and overtime violations." The court ruled, however, Kriegler had to make two modifications to his damages calculations. First, the court ruled Kriegler had to "stick to his more conservative approach by crediting breaks" where the notes in the timekeeping records indicated a technician "may have taken a break," because otherwise there would be disputed issues of material fact. Second, the court found there were "isolated instances where [TNS] technicians said they knew they could take breaks but they willingly skipped them." The court ruled Kriegler had to exclude from his damages calculations class members who indicated they knew they could take breaks.

Benton filed a new motion for summary adjudication on the same causes of action, submitting a new declaration from Kriegler. In addition to assuming a technician was not entitled to a premium payment in each instance where TNS's timekeeping records reflected the class member received a break, Kriegler identified 13 class members who had submitted declarations stating they either had the opportunity to take, or in fact took, breaks. Kriegler assigned each of those technicians zero dollars in his damages calculations. Kriegler calculated the class's total damages, excluding prejudgment interest, as $1,383,443 for the cause of action for failure to pay meal breaks, $1,488,445 for the cause of action for failure to pay rest breaks, and $424,014 for the cause of action for failure to pay overtime compensation.

The court (again) granted the motion for summary adjudication on the causes of action for failure to pay overtime compensation and failure to provide meal and rest breaks. The court ruled that Kriegler's damages calculations were "proper" and that TNS had not created triable issues of material fact on the damage calculations. In particular, the court rejected TNS's argument there were triable issues of material fact regarding the class's damages because there was evidence certain staffing companies allowed their technicians to take meal and rest breaks.

2. The Court Grants TNS's Motion for Summary Adjudication on the Claims for Penalties for Unpaid and Unreported Meal and Rest Break Premiums

In addition to moving for summary adjudication on the causes of action for failure to provide meal and rest breaks and failure to pay overtime wages, Benton moved for summary adjudication on his causes of action for wage statement penalties under section 226 and waiting time penalties under section 203. The court denied the motion on those causes of action. TNS subsequently filed a motion for summary adjudication on the same causes of action. As relevant here, TNS argued that, because premiums for meal and rest period violations were not wages for purposes of sections 203 and 226, the class could not recover penalties for any unpaid premiums or unreported premiums on wage statements.

The court agreed with TNS that premiums for meal and rest period violations were not wages under sections 203 and 226. The court ruled, however, Benton could still seek penalties for other violations, including waiting time penalties for TNS's failure to pay overtime compensation. The court therefore granted the motion for summary adjudication on Benton's claim for penalties under sections 203 and 226 for unpaid and unreported meal and rest break premiums, but denied the motion on the claims for penalties under sections 203 and 226.

E. The Court Finds in Favor of the Class on the Claim for Waiting Time Penalties for Unpaid Overtime Compensation

In 2020 the court conducted a court trial on the remaining claims for penalties under sections 203 and 226. Kriegler submitted a declaration calculating penalties for the class and testified at trial. Kriegler assumed each staffing company technician's employment with TNS ended on the final day TNS's timekeeping records showed the technician worked on a TNS project. Because no technicians worked for TNS after 2013, Kriegler determined all technicians who had unpaid overtime compensation were entitled to the maximum waiting time penalty of 30 days' pay at their regular hourly rate. (See § 203, subd. (a).) Using his prior determinations of which technicians had unpaid overtime compensation (which the trial court had incorporated into its order granting Benton's motion for summary adjudication), Kriegler calculated waiting time penalties for each technician. The total waiting time penalties for the class was $1,177,943.

TNS argued it was not liable for any waiting time penalties under section 203 because there were good faith disputes whether the staffing company technicians were independent contractors rather than employees and whether TNS therefore had to pay any overtime compensation to the technicians. (See Cal. Code Regs., tit. 6, § 13520 ["a good faith dispute that any wages are due will preclude imposition of waiting time penalties under Section 203"].) TNS also argued there was a good faith dispute whether it was responsible for paying the technician's wages because, under its agreements with the staffing companies, the staffing companies were supposed to pay wages.

The court found in favor of the class on the cause of action for waiting time penalties under section 203 and accepted Kriegler's calculations for penalties. The court ruled TNS failed to meet its burden to establish a good faith dispute for two reasons. First, the evidence showed "TNS took no reasonable action to determine whether it was the employer" of the staffing company technicians, for example, by "seek[ing] attorney advice, seek[ing] guidance from [s]tate agencies," or comparing its practices with similar employers. Second, there was no evidence TNS took any steps to audit the staffing companies to determine whether the companies were paying the technicians legally required overtime wages.⁴

4 Benton also sought penalties for various wage statement violations under section 226. The court found in favor of TNS on this claim, ruling Benton did not meet his burden to prove the class suffered any injury from the asserted wage statement violations. (See Maldonado v. Epsilon Plastics, Inc. (2018) 22 Cal.App.5th 1308, 1334-1335.) While Benton challenges the trial court's order granting TNS's motion for summary adjudication on the claims for wage statement penalties for unreported meal and rest premiums, he does not challenge the finding in favor of TNS on his claim for wage penalties for other violations.

F. The Court Denies TNS's Motion To Decertify the Class and Enters Judgment

Following the trial, TNS filed a motion to decertify the class. TNS argued Assembly Bill No. 5 (2019-2020 Reg. Sess.) clarified the applicable legal standard governing whether the staffing company technicians were TNS's employees or independent contractors. Assembly Bill No. 5, which codified the Supreme Court's holding in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex), established the standard "commonly referred to as the 'ABC' test" (id. at p. 916) as the presumptive test to determine whether workers are employees or independent contractors for purposes of the Labor Code and wage orders. (Assem. Bill No. 5 (2019-2020 Reg. Sess.) § 1, subd. (d); see § 2775.)⁵ The statute also exempted several occupations from the Supreme Court's holding in Dynamex, and instead prescribed the Supreme Court's decision in S. G. Borello &Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello) as the test governing whether workers in those occupations are employees or independent contractors. (Assem. Bill No. 5 (2019-2020 Reg. Sess.) § 2; see § 2775, subd. (b)(3).)

5 "The ABC test presumptively considers all workers to be employees, and permits workers to be classified as independent contractors only if the hiring business demonstrates that the worker in question satisfies each of three conditions: (a) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; and (b) that the worker performs work that is outside the usual course of the hiring entity's business; and (c) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed." (Dynamex, supra, 4 Cal.5th at pp. 955-956.)

TNS argued that one exemption-the exemption for individuals performing work pursuant to a subcontract in the construction industry (see § 2781)-applied to the staffing company technicians. Although unclear from the record,⁶ it appears TNS argued common issues no longer predominated, or the individual issues were no longer manageable, because under Borello individual inquiries were required to determine whether each technician was an employee or independent contractor of TNS.

6 TNS did not include the motion to decertify the class in its appellant's appendix.

The court denied the motion to decertify the class. The court ruled that Assembly Bill No. 5 (and therefore the various statutory exceptions to Dynamex and section 2775) did not apply because the technicians were asserting a joint-employer theory of liability against TNS; that even if the new law applied the statutory exception described in section 2781 did not apply because the technicians were not working in the construction industry; that (even if the technicians were working in the construction industry) TNS did not establish the statutory criteria under the section 2781 exception; and that, even if the exception applied, the technicians would still qualify as employees under Borello.

The court entered judgment in favor of the class for $9,494,585 (including prejudgment interest): $1,029,136 on the cause of action for failure to pay overtime compensation; $3,515,521 on the cause of action for failure to provide meal breaks; $3,772,745 on the cause of action for failure to provide rest breaks; and $1,177,943 on the cause of action for waiting time penalties under section 203. The court entered judgment in favor of TNS on the cause of action for wage statement penalties under section 226. TNS timely appealed from the judgment, and Benton timely filed a cross-appeal.

DISCUSSION

A. Motions for Summary Adjudication

1. Standard of Review

"'A court may grant a motion for summary judgment or summary adjudication "only when 'all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'"' [Citations.] 'A defendant moving for summary adjudication of a cause of action must show that one or more elements cannot be established or that there is a complete defense.' [Citations.] We review an order granting a motion for summary adjudication de novo [citation] and 'decide independently whether the facts not subject to triable dispute warrant judgment for the moving party as a matter of law.'" (Childhelp, Inc. v. City of Los Angeles (2023) 91 Cal.App.5th 224, 241; see Code Civ. Proc., § 437c, subd. (f); Regents of University of California v. Superior Court (2018) 4 Cal.5th 607, 618.)

"[W]hen a plaintiff moves for summary adjudication, the plaintiff meets 'his or her burden of showing that there is no defense to a cause of action' if the plaintiff 'prove[s] each element of the cause of action entitling the party to judgment on the cause of action.'" (Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58, 80 (Donohue); see Code Civ. Proc., § 437c, subd. (p)(1); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853 (Aguilar).) Where, as here, the plaintiff "would bear the burden of proof by a preponderance of evidence at trial . . ., he must present evidence that would require a reasonable trier of fact to find any underlying material fact more likely than not-otherwise, he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact." (Aguilar, at p. 851; see Quidel Corp. v. Superior Court (2020) 57 Cal.App.5th 155, 163.) "If the plaintiff meets its burden, the defendant must set forth specific facts showing a triable issue of material facts exist." (Quidel Corp., at p. 164; see Code Civ. Proc., § 437c, subd. (p)(1).)

In contrast, a "defendant moving for summary [adjudication] has the initial burden of presenting evidence that a cause of action lacks merit because the plaintiff cannot establish an element of the cause of action or there is a complete defense." (Sabetian v. Exxon Mobil Corp. (2020) 57 Cal.App.5th 1054, 1068; see Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, supra, 25 Cal.4th at p. 850; Randle v. Farmers New World Life Ins. Co. (2022) 85 Cal.App.5th 53, 61.) Where the defendant moves for summary adjudication "on the grounds that one or more elements of the plaintiff's [cause of action] cannot be established, the defendant must present evidence that either 'conclusively negate[s] an element of the plaintiff's cause of action' or 'show[s] that the plaintiff does not possess, and cannot reasonably obtain,' evidence needed to establish an element ...." (White v. Smule, Inc. (2022) 75 Cal.App.5th 346, 354; see Aguilar, at pp. 853-855; Doe v. Roman Catholic Archbishop of Los Angeles (2021) 70 Cal.App.5th 657, 668.) "'Only after the defendant carries that initial burden does the burden shift to the plaintiff "to show that a triable issue of one or more material facts exists as to the cause of action ....''''' (Fajardo v. Dailey (2022) 85 Cal.App.5th 221, 225-226; see Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, at pp. 849-850.)

"There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof." (Aguilar, supra, 25 Cal.4th at p. 850; see Lemm v. Ecolab Inc. (2023) 87 Cal.App.5th 159, 169.) "'"'"We review the trial court's decision de novo, considering all the evidence set forth in the moving and opposing papers except that to which objections were made and sustained.'" [Citation.] We liberally construe the evidence in support of the party opposing summary [adjudication] and resolve doubts concerning the evidence in favor of that party."''' (Hampton v. County of San Diego (2015) 62 Cal.4th 340, 347; see Lemm, at pp. 168-169.)

2. The Trial Court Erred in Granting Benton's Motion for Summary Adjudication on the Causes of Action for Failure To Provide Meal and Rest Breaks

a. Relevant Law

"In California, 'wage and hour claims are today governed by two complementary and occasionally overlapping sources of authority: the provisions of the Labor Code, enacted by the Legislature, and a series of 18 wage orders, adopted by the IWC.' . . . [¶] . . . 'The IWC's wage orders are to be accorded the same dignity as statutes. They are "presumptively valid" legislative regulations of the employment relationship [citation], regulations that must be given "independent effect" separate and apart from any statutory enactments.'" (Donohue, supra, 11 Cal.5th at p. 66; see Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1026 (Brinker).)

Both the Labor Code and the wage order covering the technicians prohibit an employer from employing a person "for a work period of more than five hours per day" unless the employer provides the employee "a meal period of not less than 30 minutes ...." (§ 512, subd. (a); see Cal. Code Regs., tit. 8, §§ 11040, subd. 11(A), 11160, subd. 10(A).) Section 512, subdivision (a), also prohibits an employer from "employ[ing] an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes." (See also Cal. Code Regs., tit. 8, § 11160, subd. 10(B).) For rest breaks, the applicable wage order provides: "Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time for every four (4) hours worked, or major fraction thereof." (Cal. Code Regs., tit. 8, §§ 11040, subd. 12(A), 11160, subd. 11(A).)⁷

7 In Benton I we stated wage order No. 4-2001, which applies to "persons employed in professional, technical, clerical, mechanical, and similar occupations" (Cal. Code Regs., tit. 8, § 11040, subd. 1), covered the technicians. (Benton I, supra, 220 Cal.App.4th at p. 716; see Bradley v Networkers Internat., LLC (2012) 211 Cal.App.4th 1129, 1134, 1149 [wage order No. 4 covered class of workers who installed and serviced cell sites, including laborers supplied by TNS].) TNS asserts the applicable wage order is No. 16-2001, which applies to "all persons employed in the on-site occupations of construction, including but not limited to . . . maintenance, improvement, and repair work." For purposes of Benton's claims, Wage Order No. 4 and Wage Order No. 16 impose on employers the same requirements to provide meal and rest break and to pay overtime wages, except that Wage Order No. 4 does not state employers must provide a second meal period to employees after 10 hours of work. (Compare Cal. Code Regs., tit. 8, § 11040, subds. 3(A), 11, 12 with id., § 11160, subds. 3(A), 10, 11.) Section 512, subdivision (a), however, requires employers to provide a second meal period to employees after 10 hours. Therefore, for purposes of the appeal from the order granting the motion for summary adjudication on the meal and rest break claims, it doesn't really matter which wage order governs.

As the Supreme Court has explained, an employer satisfies its obligation to provide a meal (or rest) break under the wage orders "if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted . . . break, and does not impede or discourage them from doing so." (Brinker, supra, 53 Cal.4th at p. 1040; accord, Donohue, supra 11 Cal.5th at p. 67; see Augustus v. ABM Security Services, Inc. (2016) 2 Cal.5th 257, 265 [an "employers' responsibilities are the same for meal and rest periods"].) "If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the [IWC], the employer shall pay the employee one additional hour of pay at the employee's regular rate of compensation for each work day that the meal or rest period is not provided." (§ 226.7, subd. (b); see Cal. Code Regs., tit. 8, §§ 11040, subds. 11(B), 12(B), 11160, subds. 10(F), 11(D); see also Donohue, at p. 67 ["If an employer does not provide an employee with a compliant meal period, then the employer must provide the employee with premium pay for the violation."].)

b. Benton Met His Initial Burden on Summary Adjudication To Show TNS Failed To Provide Meal and Rest Breaks

To meet his moving burden on summary adjudication to prove TNS did not provide meal and rest breaks, Benton presented evidence that TNS did not have a companywide policy of providing meal and rest breaks to technicians and that its managers were not aware of California law's meal and rest break requirements.⁸ As discussed, TNS's program manager, Ellis, testified that he was unaware California law required an employer to provide a meal break during the first five hours of an employee's workday and that those requirements were not common knowledge in the company. Benton also submitted a TNS employee handbook from 2004, which stated that "short rest breaks will usually be paid time and may be interrupted as necessary" and that, "[d]uring exceptionally busy times, it may be necessary to shorten or interrupt scheduled lunch periods." Benton also submitted deposition testimony from several technicians who said that they were never informed of their break rights or that they and other technicians were not able to take breaks because TNS's supervisors pressured them to finish their work while at a job site.

8 As discussed, Benton also presented evidence that TNS was the employer of the technicians and that therefore TNS had a duty to provide meal and rest breaks and pay overtime compensation. In support of its contention the trial court erred in denying its motion to decertify the class (an issue we will discuss), TNS contends Borello, supra, 48 Cal.3d 341 governs whether the technicians were employees or independent contractors (an issue we will also discuss). TNS does not, however, challenge the trial court's order granting the motion for summary adjudication on the ground the court applied the employment relationship standard articulated in Martinez, supra, 49 Cal.4th 35 rather than Borello. Nor does TNS contend Benton failed to meet his moving burden to show TNS was the employer of the technicians under the Martinez standard.

Benton met his burden to show TNS did not provide meal and rest breaks. As we stated in Benton I, the Labor Code and wage orders impose "an affirmative obligation on every employer to authorize and provide legally required meal and rest breaks; if it fails to do so it has violated the law and is liable." (Benton I, supra, 220 Cal.App.5th at p. 729.) TNS could not "discharge its affirmative obligation to authorize and permit meal and rest breaks purely through inaction." (Ibid.) By showing that TNS was not aware of California's meal and rest break requirements and that many technicians confirmed they could not take breaks, Benton showed TNS did not comply with its obligations. In addition, Benton showed TNS's policy did not comply with the wage orders because TNS retained the authority to interrupt a break when it wanted to. (See Brinker, supra, 53 Cal.4th at p. 1033 [employer "has violated the wage order and is liable" if the employer "adopts a uniform policy" that does not comply with its meal and rest break obligations]; Bradley v. Networkers Internat., LLC (2012) 211 Cal.App.4th 1129, 1150 [employer engaged in uniform companywide conduct that violated the law where it "acknowledged it did not have a policy and did not know if the employees took meal or rest breaks"]; see also Donohue, supra, 11 Cal.5th at p. 76 ["Providing employees with short or delayed meal periods is just as much a violation of the meal period provisions as failing to provide employees with a meal period at all."].) c. TNS Created Triable Issues of Material

Fact Regarding Whether It Provided Meal and Rest Breaks to at Least Some Technicians

TNS contends it created triable issues of material fact regarding whether it provided technicians meal and rest breaks. TNS cites evidence it submitted that, even though it did not have a formal, companywide policy, TNS supervisors informed at least some technicians of their meal and rest break rights and that some technicians could and did regularly take breaks. TNS is correct.

In opposing Benton's motion for summary adjudication, TNS submitted declarations from three of its project managers who stated they advised TNS technicians of their break rights. Vincent Gaytan worked for TNS while employed by a staffing company called Orin USA, Inc. from December 2008 to November 2009, and then worked directly for TNS from November 2009 to September 2010. Gaytan stated that, when he was working for TNS through Orin, a TNS manager told him to tell workers about their rights to take breaks under California law. Gaytan said he would "gather [his] team together . . . and explain to them their rights to take a 30 minute duty free meal break for every 5 hours of work and 10 minute rest break for every 4 hours of work." Gaytan stated that, once he "started working for TNS directly," his supervisor at TNS told him the same thing and that he met with members of his team "and made sure they knew of their rights to take breaks."

Brett Martin, who worked as a project manager for TNS from September 2010 to October 2011, similarly stated that, when he started working for TNS, the company "told [him] to make sure to tell [his] workers that they were entitled to a 30 minute meal break if they worked 5 hours or more and a 10 minute rest break for every 8 hours they worked." Martin said that he "made sure to tell [his] workers of these rights" and that he "never had any reason to believe that they weren't" taking breaks. Scott Womack, who started working as a project manager for TNS in June 2011, also stated he "regularly told [his] workers to take their meal and rest breaks."

TNS also submitted declarations from several technicians who stated TNS informed them of their break rights. One of those technicians, Benjamin Martinez, said he started working for TNS in 2002 or 2003, when he was initially hired directly by TNS, and later worked for TNS while employed by a staffing company. Martinez stated: "TNS made it clear to me that I was entitled to a 30 minute meal break for every 5 hours shift and 10 minute rest breaks for every 4 hours I worked.... Sometimes I took 30-minute meal breaks, and sometimes I chose not to, but the opportunity was always there and I knew I had the right to take a 30 minute break.... TNS also always afforded me the opportunity to take rest breaks. I personally chose not to take rest breaks, but that was my choice." Another technician, Lonnie Irwin, who started working directly for TNS in June 2002, stated he knew he was entitled "to take a 30 minute unpaid duty free lunch break after working five hours" and "10 minute paid rest breaks approximately every two hours." He also said TNS "started having discussions about meal and rest breaks right after TNS got sued"-presumably in this action in 2006. In addition, TNS submitted a January 2010 email from TNS's Vice President of Operations to Ellis and other TNS personnel, stating: "Effective immediately, all time sheets for California WILL have notes on the sheet daily that will show the time taken for all required breaks and lunch. Please make sure your guys are doing this and know how it is to be done." The timekeeping records from 2010 to 2013 confirmed technicians recorded both meal and rest breaks, albeit infrequently.

This evidence was sufficient to create triable issues of material fact on whether TNS was liable to the entire class of technicians. To be sure, Benton submitted sufficient evidence to support a finding in favor of the class after a trial. Certainly a judge or jury could find the testimony of the technicians who stated TNS did not inform them of their break rights and did not allow them to take breaks because of work obligations more credible than the testimony of the project managers who stated they informed technicians of break rights. A judge or jury could also give more weight to the testimony of the technicians who said they did not receive breaks than to the testimony of the few technicians who said they did get breaks. Contrary to Benton's assertion, however, it was not "undisputed" that TNS "never relieved the workers of duty or relinquished control." Therefore, the trial court erred in granting summary adjudication in favor of the class. (See Aguilar, supra, 25 Cal.4th at p. 850 ["from commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law"]; Johnson &Johnson v. Superior Court (2011) 192 Cal.App.4th 757, 761 [same]; see also Planet Bingo LLC v. Burlington Ins. Co. (2021) 62 Cal.App.5th 44, 53 ["'Courts deciding motions for . . . summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party.'"].)

d. TNS Raised Triable Issues of Material Fact Regarding Damages for Failure To Provide Meal and Rest Breaks

TNS also contends there were triable issues of material fact on whether some staffing companies permitted the technicians they supplied for TNS to take meal and rest breaks. Each of TNS's service agreements with a staffing company included a provision stating TNS and the company would comply with all "laws relating to labor standards." TNS's service agreements with at least two staffing companies further required the staffing company to notify employees "of any entitlement to meal and rest breaks." TNS does not argue that it "absolves itself of responsibility simply by contractually delegating compliance" with the wage and hour laws to a joint employer; TNS does argue, however, that "when compliance has been delegated, and the co-employer satisfied its obligation to permit compliant breaks, TNS should receive the benefit of that compliance."

We generally agree with TNS that, even if TNS did not directly authorize a technician to take a meal or rest break, TNS would not have to pay a meal or rest break premium to a staffing company technician if the staffing company authorized the technician to take the legally required breaks and the circumstances of the work enabled the technician to take the breaks. In Benton I we explained TNS could not avoid liability to a technician simply because the technician's "staffing company had adopted a lawful meal and rest break policy," absent "evidence showing that TNS took steps to ensure that the staffing company had such a policy in place." (Benton I, supra, 220 Cal.App.4th at pp. 728-729; see Lubin v. The Wackenhut Corp. (2016) 5 Cal.App.5th 926, 948 [security company "could not discharge its affirmative duty to provide lawful meal and rest breaks" to security guards unless the company took precautions to ensure that clients using a guard's services were applying the proper test to determine whether the security guard's work required an on-duty meal period].) We cited with approval the court's statement in Faulkinbury v. Boyd &Associates, Inc. (2013) 216 Cal.App.4th 220, disapproved on another ground in Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 986, fn. 15, that "the employer's liability arises by adopting a uniform policy that violates the wage and hour laws. Whether or not the employee was able to take the required break goes to damages ...." (Benton I, supra, 220 Cal.App.4th at p. 726, quoting Faulkinbury, at p. 235; see Lubin, at p. 942 [also quoting Faulkinbury].)

In reversing the order denying Benton's motion for class certification, we explained the "mere fact that some technicians may have taken breaks (or declined to take breaks) based on information they received from" the staffing companies did not show that common issues did not predominate. (See Benton I, supra, 220 Cal.App.4th at p. 730.) Our analysis, however, was limited to the procedural question at issue in that appeal; namely, whether Benton's theory of class liability could be determined on a classwide basis. (See id. at p. 725 ["[r]ather than focusing on whether plaintiffs' theory of liability-that TNS violated wage and hour requirements by failing to adopt a meal and rest period policy-was susceptible to common proof, the court improperly focused on whether individualized inquiry would be required"].) But we did not hold in Benton I such an inquiry was irrelevant to the issue of the technicians' damages.

The Supreme Court has explained "'the additional hour of pay'" an employer is required to pay an employee for each missed meal and rest period "is a premium wage intended to compensate employees, not a penalty." (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1114; see Sanchez v. Martinez (2020) 54 Cal.App.5th 535, 546 ["[a]llowing plaintiffs to recover" a premium payment "after they have already recovered all their actual losses" would "convert section 226.7's 'additional hour of pay' to nothing more than a penalty-defying Murphy's holding"].) Thus, if a staffing company authorized a technician to take meal or rest break while working for TNS, and the circumstances of the work permitted the technician to take that break, TNS's failure to independently authorize the break (or ensure the staffing company was authorizing breaks) would not have caused the technician any damages. (See Lubin v. The Wackenhut Corp., supra, 5 Cal.App.5th at p. 956 [where the employees demonstrated that the employer "had a policy or practice of not providing off-duty rest breaks, anecdotal evidence that some employees had valid off-duty rest breaks" was "relevant to damages"]; Alberts v. Aurora Behavioral Health Care (2015) 241 Cal.App.4th 388, 408 ["the fact that some employees may have taken some breaks is an issue that goes to damages"]; Hinds v. FedEx Ground Package System, Inc. (N.D.Cal. Aug. 18, 2021, No. 18-cv-01431) 2021 WL 4926980 at p. 10 ["If [a joint employer] paid a putative class member[ ] or provided a class member with rest and meal breaks, that class member would not have suffered harm as a result of [the other joint employer's] failure to do so."].) In such a case, the technician could not recover a premium from TNS.

We also agree TNS raised triable issues of material fact on whether at least some staffing companies authorized technicians to take legally required breaks and whether the circumstances allowed the technician to do so. As discussed, Gaytan stated in his declaration that he worked as a field manager for the staffing company Orin on TNS projects and that he always informed his team-which also included technicians staffed by Orin-of their meal and rest break rights. Two technicians who worked for Orin submitted declarations stating they knew they were entitled to 30-minute meal breaks and 10-minute rest breaks, one of whom stated he "believe[d] Orin informed [him] of [his] right to take breaks ...." That same technician stated that he "always took a 30- to 45-minute lunch break each day" and that he "always took a 10 minute rest break at each cell site." The other technician stated that he "always felt like [he] had the opportunity to take a break whenever [he] needed"; that he "frequently [took] 10-minute smoke breaks"; and that "the nature of telecommunications work leaves it entirely up to the worker to decide when and how to take theses breaks since the workers are not directly supervised ...."

Other staffing company representatives stated they authorized technicians to take breaks. The owner of a staffing company called Accellcomm said he and one other technician worked for TNS. He stated he and the other employee were "aware that California law generally requires employers to provide employees with an unpaid 30-minute duty free meal period for every five hours of work and to provide employees with a paid 10 minute rest break in the middle of every four-hour work period." He also said TNS never prevented them from taking a break. The representative of a staffing company called Datalogix stated that Datalogix's manuals included the rules on California's meal and rest breaks, that Datalogix would "spend time with the employees" discussing the rules, and that Datalogix representatives would "physically visit with [the] employees in California . . . at least once a month or once every two months . . . to make sure they [were] in compliance."

Benton argues the "undisputed evidence" showed the staffing companies "had no control over the workplace or the workers," "did not have the authority to provide or permit workers to take breaks while assigned to TNS," and "could not know if a worker was entitled to a break." We have no problem with Benton's theory that a staffing company's meal and rest break policies would not insulate TNS from liability if the conditions of the TNS worksites prevented technicians from taking breaks without TNS's approval. Benton, however, did not show the evidence on this issue was undisputed. While Benton asserted in his motion for summary adjudication it was undisputed "TNS had exclusive control over . . . any provision of breaks," the evidence he cited did not support this purported fact. Benton relied on Ellis's testimony that he told technicians which sites to go to and assigned them the scope of their work and that TNS was ultimately responsible for completing the work at cell sites. Ellis did not testify, however, technicians could not take breaks if their staffing company had authorized them to do so; to the contrary, Ellis stated he "never" discouraged technicians from taking breaks. And as discussed, several technicians submitted declarations stating they felt they had the ability to take breaks at their discretion. Whether TNS exercised control over the worksites to such a degree that staffing companies could not authorize technicians to take breaks was a disputed factual issue that must be resolved at trial.

e. The Trial Court Erred by Deciding To Exclude Members of the Class from the Damages Calculation, Rather than Denying the Motion for Summary Adjudication

The trial court recognized there were factual issues on the technicians' damages. Rather than denying the motion for summary adjudication, the court tried to "fix" the problem. The court's fix, however, did not entitle Benton to summary adjudication as a matter law.

To resolve the factual issue on the damages element of Benton's claims, the court directed Kriegler, Benton's expert, to recalculate the class's damages by excluding from his calculations all instances where TNS's timekeeping records suggested a technician "may have taken a break"; "[o]therwise," the court stated, "there [would] be disputed issues of material fact." In addition, recognizing there were "isolated instances where [TNS] technicians said they knew they could take breaks," the court directed Kriegler to "exclude" those technicians from his damages recalculation. After Kriegler recalculated the class's damages, including awarding $0 in damages to those technicians who stated they could take breaks, the court granted the motion for summary adjudication regarding those class members who remained. That was error.

California law allows "trial courts to be 'procedurally innovative' in managing class actions." (Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 33 (Duran); see City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 453.) Indeed, "'the trial court has an obligation to consider the use of . . . innovative procedural tools proposed by a party to certify a manageable class .... [¶] '"By establishing a technique whereby the claims of many individuals can be resolved at the same time, the class suit both eliminates the possibility of repetitious litigation and provides small claimants with a method of obtaining redress for claims which would otherwise be too small to warrant individual litigation.'"'" (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 339-340; see Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 469.)

But "the class action procedural device may not be used to abridge a party's substantive rights. 'Class actions are provided only as a means to enforce substantive law.'" (Duran, supra, 59 Cal.4th at p. 34; see City of San Jose v. Superior Court, supra, 12 Cal.3d at p. 462.) "A class action trial may determine that an employer is liable to an entire class . . . if it is shown that the employer had a consistently applied policy or uniform job requirements and expectations contrary to" the requirements of the Labor Code or applicable wage orders. (Duran, at p. 37.) "However, any procedure to determine the defendant's liability to the class must still permit the defendant to introduce its own evidence, both to challenge the plaintiffs' showing and to reduce overall damages." (Id. at p. 38.) Moreover, "[i]f a defense depends upon questions individual to each class member," the evidence "must be designed to accommodate these case-specific deviations," and "statistical proof may not be appropriate." (Id. at p. 40.) "Procedural innovation must conform to the substantive rights of the parties." (Ibid.)

Benton submitted evidence that TNS had a companywide meal and rest break policy that did not comply with the Labor Code and applicable wage orders and that TNS did not even understand, for much of the class period, it had to authorize breaks. This was a sufficient initial showing by Benton. But TNS demonstrated there were triable issues of material fact on whether it was liable to at least some class members because (viewing the evidence most favorably to TNS) some site managers informed technicians of their meal and rest break rights and allowed them to take breaks, and some technicians in fact took breaks. TNS also demonstrated there were factual issues regarding the class's damages. By granting the motion for summary adjudication, the court denied TNS its right to challenge Benton's showing at a trial that would allow TNS to present case-specific evidence on liability and the class's damages. (See Duran, supra, 59 Cal.4th at p. 38 [By "excluding relevant evidence central to the [employer's] defense, the court . . . did not manage individual issues. It ignored them ...."].)

The trial court attempted to sidestep these issues by effectively changing the definition of the class to exclude (1) class members whose work experience would create factual issues and (2) class members' individual workdays (i.e., time records) that would create factual issues.⁹ These rulings, however, were based on two assumptions: (1) that every single class member who had not (yet) submitted testimony in the action was not provided a meal or rest break and (2) that TNS (or a staffing company) did not authorize a class member to take a break in every instance the time records did not reflect the class member took a break. Both assumptions were flawed.

9 The record does not reflect Kriegler removed from his damages calculation every individual technician for whom TNS demonstrated there was a factual issue. For example, the staffing company James Services supplied one technician to TNS in California for a short time during the class period. The chief executive officer of James Services stated that he gave the employee a copy of James Services' employee handbook, which said employees were entitled to a 30-minute meal and 10-minute rest period; that James Services' employees would "acknowledge that they had taken their meal and rest periods" on their timesheets; and that he did not receive any complaints TNS prohibited the employee from taking meal and rest breaks. The record does not reflect Kriegler removed this technician from his damages calculation for the class. Similarly, the record does not reflect Kriegler removed Benjamin Martinez, notwithstanding Martinez's statement in his declaration TNS "made it clear" to him he was entitled to a 30-minute meal break and a 10-minute rest break.

First, rather than making assumptions that would allow Benton to obtain summary adjudication, the trial court should have made all reasonable inferences in favor of TNS. (See Antonopoulos v. Mid-Century Ins. Co. (2021) 63 Cal.App.5th 580, 599 ["the trial court must view the evidence and inferences drawn from it in the light most favorable to the opposing party," and "'summary judgment shall not be granted if "inferences or evidence . . . raise a triable issue as to any material fact'"].) For example, for purposes of ruling on Benton's motion for summary adjudication, the court reasonably should have inferred that, because some class members submitted declarations stating they were authorized to take meal and rest breaks, other class members were similarly authorized to take meal and rest breaks. The court also reasonably should have inferred that, because class members sometimes recorded meal and rest breaks (particularly after 2010), at other times some class members were authorized to take, or in fact took, breaks during that time but did not record them.

Second, the trial court's assumptions violated the Supreme Court's admonition in Duran that, when considering questions of classwide liability and damages, "'[i]nferences from the part to the whole are justified only when the sample is representative ....'" (Duran, supra, 59 Cal.4th at p. 38; see id. at p. 49 ["The sample relied upon must be representative and the results obtained must be sufficiently reliable to satisfy concerns of fundamental fairness."].) In light of TNS's showing, the court's assumption that absent class members were never provided a meal or rest break (unless the time records specifically indicated otherwise) was not based on reliable and representative evidence. (See id. at p. 56 (conc. opn. of Liu, J.) ["[t]he defendant may introduce evidence, such as individual declarations," to challenge a "generalized finding" in favor of the class; "[f]aced with evidence from individual and aggregate methods of proof, the trial court must reasonably resolve any conflicts"].) While a judge or jury may ultimately find the instances where class members in fact received meal and rest breaks were in fact "isolated," such a finding is not warranted on summary adjudication absent a reliable and representative model of proof. At the very least TNS was entitled to challenge Benton's damages model at trial.¹⁰

10 On the cause of action for failure to provide meal breaks, Benton argues there was a presumption TNS failed to provide the required breaks where it did not record the break. In Donohue, supra, 11 Cal.5th 58 the Supreme Court held that, "[i]f an employer's records show no meal period for a given shift over five hours, a rebuttable presumption arises that the employee was not relieved of duty and no meal period was provided." (Id. at p. 672.) "The presumption derives from an employer's duty to maintain accurate records of meal periods" under the wage orders (id.)-a duty the IWC does not impose for rest break periods (see Cal. Code Regs., tit. 8, §§ 11040(7)(A)(3), 11160(6)(A)(1) ["authorized rest periods need not be recorded"]). The presumption "applies at the summary judgment stage, and the employer may rebut the presumption with evidence of bona fide relief from duty or proper compensation." (Donohue, at p. 78.) Benton did not move for summary adjudication on the ground TNS's records did not show meal periods. In any event, as discussed, TNS raised a triable issue of material fact on whether it provided meal breaks to at least some class members and on damages.

3. The Trial Court Erred in Granting TNS's Motion for Summary Adjudication on the Claims for Waiting Time and Wage Statement Penalties for Failing To Provide Meal and Rest Breaks

a. Relevant Law

"When an employment relationship comes to an end, the Labor Code requires employers to promptly pay any unpaid wages to the departing employee." (Naranjo, supra, 13 Cal.5th at p. 105.) Section 203, subdivision (a), provides that, "[i]f an employer willfully fails to pay . . . any wages of an employee who is discharged or who quits, 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." "Section 203 penalties for willful delays in the payment of end-of-employment wages are commonly referred to as 'waiting time penalties.'" (Naranjo, at p. 106.)

"The wage statement statute (Lab. Code, § 226) . . . require[s] a detailed list of information, including hours worked, wages earned, hourly rates, and employee- and employeridentifying information." (Naranjo, supra, 13 Cal.5th at p. 117; see § 226, subd. (a).) In particular, section 226, subdivision (a), "requires that an employer report both 'gross wages earned' and 'net wages earned.'" (Naranjo, at p. 118; see § 226, subd. (a)(1), (5).) "An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) . . . for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000) ...." (§ 226, subd. (e)(1); see Naranjo, at p. 118.)

b. The Trial Court Erred in Ruling Meal and Rest Break Premiums Are Not Wages Under Sections 203 and 226

As discussed, TNS moved for summary adjudication on Benton's claim for waiting time and wage statement penalties for unpaid and unreported meal and rest break premiums. The court granted the motion, ruling that, because the "penalty for meal and rest break violations is not a 'wage,'" Benton could not recover penalties for TNS's failure to pay or report premiums for missed meal and rest breaks.

After the trial court made its ruling, the Supreme Court held in Naranjo, supra, 13 Cal.5th 93 "missed-break premium pay is indeed wages subject to the Labor Code's timely payment and reporting requirements" and therefore "can support section 203 waiting time penalties and section 226 wage statement penalties where the relevant conditions for imposing penalties are met." (Id. at p. 125.) The Supreme Court explained that, although the premium payment is in part "designed to compensate [the employee] for the unlawful deprivation of a guaranteed break, it also compensates for the work the employee performed during the break period." (Id. at p. 102.)

Benton argues in his cross-appeal, TNS does not dispute, and we agree that, in light of Naranjo, the trial court erred in ruling premiums for meal and rest period violations are not wages under sections 203 and 226. TNS contends, however, we may affirm the trial court's order granting TNS's motion for summary adjudication on the claim for waiting time penalties under section 203 because, according to TNS, its failure to pay the technicians' meal and rest break premiums was not willful, which means TNS had a good faith defense to paying the missed break premiums.

"A willful failure to pay wages within the meaning of Labor Code Section 203 occurs when an employer intentionally fails to pay wages to an employee when those wages are due. However, a good faith dispute that any wages are due will preclude imposition of waiting time penalties under [s]ection 203. [¶] . . . A 'good faith dispute' that any wages are due occurs when an employer presents a defense, based in law or fact which, if successful, would preclude any recovery on the part of the employee." (Cal. Code Regs., tit. 8, § 13520; see Diaz v. Grill Concepts Services, Inc. (2018) 23 Cal.App.5th 859, 873-874 [the standard is an objective one]; Maldonado v. Epsilon Plastics, Inc. (2018) 22 Cal.App.5th 1308, 1332 [same].) TNS argues that, before the Supreme Court issued its opinion in Naranjo, at least one court had held that premiums for missed breaks are not wages under section 203. (See Ling v. P.F. Chang's China Bistro, Inc. (2016) 245 Cal.App.4th 1242, 1261, disapproved in Naranjo, supra, 13 Cal.5th at p. 117.) Therefore, according to TNS, it "presented a good-faith defense to [Benton]'s [s]ection 203 claims that was supported by then-binding case law."

The problem with TNS's argument is that it conflates two separate defenses: a defense that wages (i.e., premiums for meal and rest period violations) are due and a defense to penalties under section 203 for failing to pay those wages. As discussed, if an employer does not provide an employee with a meal or rest period required by the Labor Code or wage orders, the employer must pay the employee a premium equal to one hour of pay for the violation. (§ 226.7, subd. (c); Donohue, supra, 11 Cal.5th at p. 67; Cal. Code Regs., tit. 8, §§ 11040, subds. 11(B), 12(B), 11160, subds. (11)(D), 12(B).) The employee "is entitled to the additional hour of pay immediately upon being forced to miss a rest or meal period." (Murphy v. Kenneth Cole Productions, Inc., supra, 40 Cal.4th at p. 1108; see Naranjo, supra, 13 Cal.5th at p. 109.)

The Supreme Court has now clarified that section 203 requires an employer to pay a penalty-in addition to the premium (i.e., the "wage") already owed to the employee under section 226.7 and the wage orders-if the employer fails to timely pay the employee's premium at the termination of the employment. But whether section 203 imposes that additional penalty is irrelevant to whether the employee was entitled to, and therefore may recover, the break premium in the first instance. Put another way, even if TNS were correct that under the case law that existed prior to Naranjo premiums for meal and rest break violations were not wages for purposes of section 203, the defense would not preclude "any recovery" by the technicians (see Cal. Code Regs., tit. 8, § 13520); the technicians would still be entitled to recover the premiums owed under section 226.7 and the wage orders for the missed meal and rest breaks.

TNS is essentially arguing it refused in "good faith" to pay the premiums owed to the technicians-not because it reasonably believed the technicians were not entitled to those premiums- but because it did not think it would incur an additional penalty for failing to pay those premiums. To hold an employer may willfully withhold an employee's wages simply because the employer does not think it will incur a penalty is inconsistent with the provisions and purposes of the Labor Code and wage orders. (See § 206, subd. (a) ["In case of a dispute over wages, the employer shall pay, without condition . . . all wages, or parts thereof, conceded by him to be due, leaving to the employee all remedies he might otherwise be entitled to as to any balance claimed."]; Augustus v. ABM Securities Services, Inc., supra, 2 Cal.5th at p. 262 [to further the purposes of the Legislature in enacting Labor Code statutes and the IWC in promulgating wage orders, "we liberally construe the Labor Code and wage orders to favor the protection of employees"].)¹¹

11 Benton argues the trial court erred in denying his motion for summary adjudication on the claims for waiting time and wage statement penalties for unpaid and unreported meal and rest break premiums. For the same reasons Benton was not entitled to summary adjudication on his causes of action for failure to provide meal and rest breaks, he was not entitled to summary adjudication on his associated claims for penalties for those violations. The parties' remaining contentions regarding Benton's claims for waiting time and wage statement penalties for unpaid and unreported meal and rest break premiums are more appropriately resolved in the trial court on remand.

4. The Trial Court Did Not Err in Granting Benton's Motion for Summary Adjudication on the Cause of Action for Failure To Pay Overtime Compensation

The Labor Code and applicable wage orders require an employer to compensate an employee at "one and half times [his or her] regular pay for all hours worked in excess of eight hours in a single day"; "one and a half times [his or her] regular rate of pay for all hours worked in excess of 40 hours in a workweek"; and "double [his or her] regular rate of pay for all hours worked in excess of 12 hours in a single day." (Benton I, supra, 220 Cal.App.4th at p. 717; see § 510, subd. (a); Cal. Code Regs., tit. 8, §§ 11040, subd. (3)(A)(1)(a), (b), 11160, subd. 3(A)(1)(a), (b).) "[A]ny employee receiving less than . . . the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of . . . [the] overtime compensation, including interest thereon, reasonable attorney's fees, and costs of suit." (§ 1194, subd. (a); see Benton I, at p. 717.)

"As a general rule, employees have the burden of proving that they performed work for which they were not [properly] compensated." (Maldonado v. Epsilon Plastics, Inc., supra, 22 Cal.App.5th at p. 1328; see Hernandez v. Mendoza (1988) 199 Cal.App.3d 721, 727.) As the Supreme Court has recognized, however, "such proof is almost impossible to establish . . . if the employer has not kept accurate or adequate records." (Duran, supra, 59 Cal.4th at p. 40.) Moreover, the Labor Code and wage orders require employers to keep records of the total wages paid to, the total hours worked by, and the applicable pay rate for each employee during each pay period. (§ 1174, subd. (d); Cal. Code Regs., tit. 8, §§ 11040, subd. 7(A), 11060, subd. 7(A)(4)-(5).)

Therefore, where the employer's records are "inaccurate or incomplete, the employee carries [her or her] burden by proving the amount and extent of work performed 'as a matter of just and reasonable inference.' [Citation.] 'The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate.'" (Duran, supra, 59 Cal.4th at p. 41; see Maldonado, at p. 1327; Hernandez, at p. 727; see also Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, 687-688 (Mt. Clemens) [establishing a burden-shifting approach for claims for unpaid overtime under the Fair Labor Standards Act of 1938 (29 U.S.C. § 201 et seq.)].)

In granting Benton's motion for summary adjudication on the staffing company technicians' cause of action for failure to pay overtime compensation, the trial court ruled Benton met his burden to show the technicians in the class did not receive overtime wages to which they were entitled and accepted Kriegler's method of calculating damages. In particular, the court-relying on the Mt. Clemens/Duran burden shifting approach-accepted Kriegler's assumption that, where there was no available payroll record reflecting how much compensation a technician received, the technician did not receive overtime compensation.

TNS does not contend that, assuming the Mt. Clemens/Duran burden-shifting approach applies, Benton did not meet his summary adjudication burden on the cause of action for failure to pay overtime wages. Nor does TNS contend it submitted evidence showing there were triable issues of material fact regarding how much overtime compensation TNS owed to the class. TNS argues only that the burden-shifting approach described in Mt. Clemens/Duran should not apply where a joint employer, such as TNS, delegates the duty to pay wages to another joint employer. According to TNS, applying the burdenshifting approach in this context would "contravene[ ] the Supreme Court's admonition" in Dynamex, supra, 4 Cal.5th 903 that, "even when a larger business is found to be a joint employer of [a] subcontractor's employees," the "result does not mean that the larger business is prohibited from . . . obtaining benefits that may result from utilizing the services of a separate business entity." (Id. at p. 945, fn. 17.)

Not quite. As discussed, the Labor Code and wage orders impose on all employers an obligation to keep records of the pay rate of, wages paid to, and hours worked by each employee during each pay period. The purpose of the burden-shifting approach is to prevent an employer from "benefit[ing] from its own poor recordkeeping" (Duran, supra, 59 Cal.4th at p. 41) and to avoid "penaliz[ing] the employee by denying him any recovery on the ground that he is unable to prove the precise extent of uncompensated work" (Mt. Clemens, supra, 328 U.S. at p. 687; see Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 748). Indeed, the Supreme Court in Donohue, supra, 11 Cal.5th 58 recently articulated a similar rationale in holding that time records showing noncompliant meal breaks raise a rebuttable presumption of a meal break violation. (See id. at p. 75 ["To place the burden elsewhere would offer an employer an incentive to avoid its recording duty and a potential windfall from the failure to record meal periods."]; id. at p. 76 ["'"'[W]here the employer has failed to keep records required by statute, the consequences for such failure should fall on the employer, not the employee.'"'"]; see also Brinker, supra, 53 Cal.4th at p. 1053 &fn. 1 (conc. opn. of Werdegar, J.) [proposing a burden-shifting approach for meal break claims].) Declining to apply the burdenshifting approach simply because a joint employer delegates responsibility to pay wages to another joint employer could result in a windfall to an employer who does nothing to ensure compliance with the wage laws, while limiting the employee's ability to prove and recover unpaid wages. "'[P]ublic policy prohibits making' an employee's burden to prove 'he performed work for which he was not compensated . . . an impossible hurdle for the employee.'" (Eicher v. Advanced Business Integrators, Inc. (2007) 151 Cal.App.4th 1363, 1377; see Hernandez v. Mendoza, supra, 199 Cal.App.3d at p. 727.)

Our analysis in Benton I for why TNS could not avoid liability for failing to provide meal and rest breaks simply by delegating the responsibility to staffing companies is instructive. As we explained, the Labor Code and wage orders impose an affirmative obligation on every employer to authorize and provide legally required meal and rest breaks. (Benton I, supra, 220 Cal.App.4th at p. 728.) So too do the Labor Code and wage orders impose an affirmative obligation on every employer to pay overtime wages. (See § 510, subd. (a); Cal. Code Regs., tit. 8, § 11040, subd. 3(A)(1)(a), (b), 11160, subd. 3(A)(1)(a), (b).) We explained that, while it was "conceivable that, under certain circumstances, a joint employer could satisfy its affirmative meal and rest obligations by delegating those duties to a coemployer, that is not what the trial court found or the facts demonstrate[d]" at the class certification stage because there was no evidence TNS took steps to ensure that the staffing companies had compliant policies in place. (Benton I, at p. 730.) Similarly, it is conceivable that under certain circumstances a joint employer may not be liable for unpaid overtime compensation-or at least it would be improper to apply the Mt. Clemens/Duran burden shifting approach-if the evidence showed the joint employer delegated the duty to pay overtime compensation to a subcontractor and the joint employer took steps to ensure the subcontractor was paying all overtime wages. Here, however, TNS presented no evidence it ever inquired whether staffing companies were complying with the wage orders. Indeed, the evidence was to the contrary. Ellis testified that, during the class period, he heard some technicians received overtime compensation, but he had "no idea" whether other technicians were receiving overtime compensation.

Moreover, the passage in Dynamex cited by TNS, if anything, supports applying the Mt. Clemens/Duran burdenshifting approach in the joint employment context. The complete passage of the Supreme Court's opinion states: "It is important to understand, however, that even when a larger business is found to be a joint employer of [a] subcontractor's employees under the suffer or permit to work standard, this result does not mean that the larger business is prohibited from entering into a relationship with the subcontractor or from obtaining benefits that may result from utilizing the services of a separate business entity. Even when the subcontractor's employees can hold the larger business responsible for violations of the wage order under the suffer or permit to work standard, the larger business, so long as authorized by contract, can seek reimbursement for any such liability from the subcontractor." (Dynamex, supra, 4 Cal.5th at p. 945, fn. 17, citing Goldstein et al., Enforcing Fair Labor Standards in the Modern American Sweatshop: Rediscovering the Statutory Definition of Employment (1999) 46 UCLA L.Rev. 983, 1055-1066.)

Thus, Dynamex suggests that, where a joint employer has delegated to a subcontractor the duty to pay an employee's wages, the employee's ability to recover unpaid wages from the employer should not be affected. (See Noe v. Superior Court (2015) 237 Cal.App.4th 316, 334 ["whether an employer is liable under the Labor Code depends on the duties imposed under the particular statute at issue"].) Rather, the employer still receives the benefit of using a subcontractor because, where the subcontractor fails to comply with its duty, the employer can seek reimbursement from the subcontractor for any liability to the employee. TNS has not shown the trial court erred in granting the motion for summary adjudication on the cause of action for failure to pay overtime compensation. (See Abdulkadhim v. Wu (2020) 53 Cal.App.5th 298, 301 ["'On review of a summary judgment, the appellant has the burden of showing error, even if he did not bear the burden in the trial court.'"].)

B. The Trial Court Did Not Err in Finding in Favor of the Class on the Claim for Waiting Time Penalties for Unpaid Overtime

1. Standard of Review

In general, on appeal from a judgment based on a statement of decision following a court trial, we "review questions of law de novo and we review the trial court's findings of fact under the substantial evidence standard." (Gajanan Inc. v. City and County of San Francisco (2022) 77 Cal.App.5th 780, 791-792; see Espinoza v. Hepta Run, Inc. (2022) 74 Cal.App.5th 44, 52; Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981.) "We construe findings of fact liberally to support the judgment; consider the evidence in the light most favorable to the judgment; draw all reasonable inferences in support of the findings; and infer that the trial court '"impliedly made every factual finding necessary to support its decision."'" (Gajanan, at pp. 791-792; see Thompson, at p. 981; Barickman v. Mercury Casualty Co. (2016) 2 Cal.App.5th 508, 516.) We must "give deference to the factual findings made by the trial court, where there is substantial evidence supporting them." (Greif v. Sanin (2022) 74 Cal.App.5th 412, 442.) It is the employer's burden, however, to raise a good faith dispute to preclude imposition of waiting time penalties under section 203. Where the factfinder rules a party has not met its burden of proof at trial, the standard of review is not substantial evidence, but "'whether the evidence compels a finding in favor of the appellant as a matter of law,'" and specifically, "'whether the appellant's evidence was (1) "uncontradicted and unimpeached" and (2) "of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding."'" (Dreyer's Grand Ice Cream, Inc. v. County of Kern (2013) 218 Cal.App.4th 828, 838; see Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011) 196 Cal.App.4th 456, 466.)

Although one court has stated the law "is not entirely clear" whether an employer has the burden to prove a good faith dispute or whether "lack of good faith is an element of willfulness on which [an employee] has the burden of proof" (Maldonado v. Epsilon Plastics, Inc., supra, 22 Cal.App.5th at p. 1332), placing the burden on the employer is more consistent with the statutory and wage order scheme governing employment law. Section 203 does not require the employee to show the employer's lack of good faith to recover waiting time penalties. It does not use the phrase "good faith"; it simply imposes liability on the employer if the employer "willfully" fails to pay the employee's wages upon termination. (§ 203, subd. (a).) Section 13520 of title 6 of the California Code of Regulations states a "willful failure to pay wages" under section 203 means the employer "intentionally fails to pay wages." (See Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314, 325 ["'[t]o be at fault within the meaning of [section 203], the employer's refusal to pay need not be based on a deliberate evil purpose'"].) There is a good faith dispute only after the employer "presents a defense" that, if successful, would preclude any recovery by the employee. (Cal. Code Regs., tit. 6, § 13520, subd. (a).) Therefore, the employee has the burden to show the employer willfully, i.e., intentionally, failed to pay the wages. Once the employee makes that showing, the employer, to avoid waiting time penalties, has the burden to "present" evidence of a good faith dispute. Neither the language of the statute and the regulations nor the purposes of the Labor Code support placing the burden on the employee to anticipate the employer's possible defenses and prospectively show, before the employer has asserted them, the defenses are unsupported. (See People ex rel. Garcia-Brower v. Kolla's, Inc. (2023) 14 Cal.5th 719, 725 [we "'"'liberally construe the Labor Code . . . to favor the protection of employees'"'"].) In any event, under either the substantial evidence or "uncontradicted and unimpeached" standard of review, TNS has not met its burden on appeal to show the trial court erred.

2. The Trial Court Did Not Err in Rejecting TNS's Good Faith Dispute Argument

TNS argues the trial court erred in finding TNS did not have a good faith dispute it owed overtime to its employees. TNS contends it had two good faith disputes: whether the technicians were its employees and whether the staffing companies were paying overtime compensation to the technicians. The trial court did not err in finding TNS did not have a good faith dispute.

As a preliminary matter, TNS does not discuss or cite the evidence either party presented at trial on the issue whether TNS had a good faith dispute. In its opening brief, TNS cites the court's statement of decision and asserts TNS's purported legal defenses to paying the technicians overtime wages. "A fundamental principle of appellate practice is that . . . [a] judgment or order of the lower court is presumed correct." (IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 639, internal quotation marks omitted; see Denham v. Superior Court (1970) 2 Cal.3d 557, 564; Rayii v. Gatica (2013) 218 Cal.App.4th 1402, 1408.) "'"An appellant challenging the sufficiency of the evidence to support the judgment must cite the evidence in the record supporting the judgment and explain why such evidence is insufficient as a matter of law. [Citations.] An appellant who fails to cite and discuss the evidence supporting the judgment cannot demonstrate that such evidence is insufficient."'" (Vendor Surveillance Corp. v. Henning (2021) 62 Cal.App.5th 59, 76-77; see Verrazono v. Gehl Co. (2020) 50 Cal.App.5th 636, 652; Rayii, at p. 1408.) Moreover, the trial court rejected TNS's good faith dispute argument based, in part, on a factual finding-that the evidence did not support TNS's defenses. (See Cal. Code Regs., tit. 8, § 13520, subd. (a) ["[d]efenses presented which, under all the circumstances, are unsupported by any evidence" do not qualify as good faith disputes].) By failing to cite and discuss the evidence presented at trial, TNS has not shown the evidence was insufficient to support the trial court's finding. (See Road Sprinkler Fitters Local Union No. 669 (2002) 102 Cal.App.4th 765, 783 [employer forfeited its substantial evidence argument by not setting "forth all the material substantial evidence in support of" the trial court's findings the employer did not raise a good faith dispute under section 203].)

In any event, the trial court did not err in finding TNS did not have a good faith dispute over paying the technicians' overtime wages. The court found TNS's claim the staffing company technicians were independent contractors was not presented in good faith or supported by the evidence. The court stated that "TNS had an intentional policy of treating [staffing company technicians] as nonemployees" irrespective of their working conditions and that TNS implemented this policy without ever seeking advice from attorneys, asking for guidance from state agencies, or using a "benchmark" to determine whether the staffing company technicians qualified as employees under the Labor Code and wage orders. The evidence amply supported the trial court's finding. Ellis testified all persons TNS hired through staffing companies were designated independent contractors. He stated there was no difference between how TNS treated its direct hires (whom TNS classified as employees) and the staffing company technicians; "[t]hey came to the same meetings, got the same parts, [and] got the same assignments." There is no evidence TNS took any steps to determine whether staffing company technicians qualified as independent contractors under the labor laws, and TNS does not on appeal describe how it decided to classify every one of the staffing company technicians as independent contractors. (See Road Sprinkler Fitters Local Union No. 669 v. G &G Fire Sprinklers, Inc., supra, 102 Cal.App.4th at pp. 782-783 [employer did not show a good faith dispute in failing to pay workers their wages upon termination where the employer "did not act in good faith in determining the workers' classification"]; Davis v. Morris (1940) 37 Cal.App.2d 269, 274 ["[i]t was the sole province of the trial court to determine whether the defendants were in good faith in claiming that wages were not due"].)¹²

12 TNS's only argument is that it had a good faith belief Borello, supra, 48 Cal.3d 341, rather than Dynamex, supra, 4 Cal.5th 903, stated the appropriate test to determine whether a technician was an employee or independent contractor. But even if TNS in good faith believed Borello governed, TNS does not explain how Borello supported the company's blanket policy of classifying all of the technicians as independent contractors. In fact, TNS argues elsewhere that under Borello the court must make an individual inquiry to determine whether a staffing company technician is an employee or an independent contractor.

TNS's argument it had a good faith dispute whether the staffing companies were paying the technicians overtime compensation fares no better. The trial court found this argument unreasonable and unsupported by the evidence because TNS "intentionally failed or refused to confirm" whether the staffing companies were paying technicians overtime and took no steps to audit the staffing companies for compliance. Again, the evidence fully supported the court's finding. Ellis testified that he heard some employees had received overtime pay, but that he had no idea whether all staffing companies were paying overtime compensation. (See Maldonado, supra, 22 Cal.App.5th at p. 1333 [employer's defense it believed it had inherited a legally compliant alternative work schedule from its predecessor had "no objectively reasonable factual basis" where the employer "made no inquiry whatsoever when it took over"].)

TNS argues it necessarily had a good faith dispute whether the staffing companies were paying overtime because TNS "contractually required them to do so." That argument fails. First, TNS's contracts with its staffing companies did not describe the overtime laws the staffing companies had to comply with; namely, that the staffing companies had to pay technicians one and a half times their normal rate of pay for every hour worked in excess of eight hours in a day or 40 hours in a workweek and twice their normal rate of pay for every hour worked in excess of 12 hours in a day. Rather, the contracts generally stated that the staffing company "shall comply with the provision of all applicable federal, state, county and local laws," including "laws relating to labor standard." It is not necessarily reasonable for an employer to assume a joint employer is complying with the requirements of the Labor Code and wage orders solely because the joint employer has generally agreed to comply with labor laws-particularly where the employer makes no inquiry into the other employer's practices.¹³ TNS is essentially rehashing its argument that, if it generally delegates the duty to comply with labor laws to a subcontractor, TNS is relieved of all obligations under the Labor Code and wage orders. While there may be circumstances where it is reasonable for an employer to believe a joint employer is paying all required wages-for example, where the employer is familiar with and investigates the joint employer's practices-the record here does not contain any such evidence.

13 TNS points to two of its contracts with staffing companies that state the staffing company "will notify employees in writing of . . . any entitlement to overtime and/or double time ...." This provision is marginally more informative, but still does not explain when technicians are entitled to overtime pay or the required rate of compensation.

Moreover, there was evidence TNS reasonably should have suspected the staffing companies were not paying the overtime compensation the technicians were entitled to. Ellis testified some technicians were "complaining" about not receiving overtime compensation (although some told him they eventually got a "big check"). There is no evidence TNS did anything in response to the technicians' complaints. (See Diaz v. Grill Concepts Services, Inc., supra, 23 Cal.App.5th at p. 869 [trial court did not err in finding the employer did not have a good faith dispute whether it was complying with an ordinance governing employee wages where the employer "suspected it was underpaying its employees" and confirmed a "wage law was in the midst of being amended, but then did nothing else"].)¹⁴

14 Section 1194.2 includes a provision (somewhat analogous to section 203) that "provides for liquidated damages where an employer has failed to pay the minimum wage." (Seviour-Iloff v. LaPaille (2022) 80 Cal.App.5th 427, 447, review granted Oct. 26, 2022, S275848; see § 1194.2, subd. (a).) "If the employer demonstrates it acted in good faith, the court may, in its discretion, reduce or refuse to award liquidated damages." (Seviour-Iloff, at p. 447; see § 1194.2, subd. (b).) The Supreme Court granted review in Seviour-Illoff on the following issue: Must an employer demonstrate it affirmatively took steps to ascertain whether its pay practices comply with the Labor Code and IWC Wage Orders to establish a good faith defense to liquidated damages under section 1194.2, subdivision (b)? Until the Supreme Court decides the issue, we follow Maldonado, Diaz, and other cases holding an employer's failure to investigate whether it is complying with the wage and hour laws is relevant to the issue whether there was a good faith dispute.

C. The Trial Court Did Not Err in Denying TNS's Motion To Decertify the Class

1. Applicable Law and Standard of Review

"A party moving for decertification generally has the burden to show that certification is no longer warranted ...." (Kight v. CashCall, Inc. (2014) 231 Cal.App.4th 112, 126 .) "A motion for decertification is not an opportunity for a disgruntled class defendant to seek a do-over of its previously unsuccessful opposition to certification." (Williams v. Superior Court (2013) 221 Cal.App.4th 1353, 1360.) Generally, "[d]ecertification requires new law or newly discovered evidence showing changed circumstances." (Ibid.; see Green v. Obledo (1981) 29 Cal.3d 126, 148 ["Before judgment, a class should be decertified 'only where it is clear there exist changed circumstances making continued class action treatment improper.'"]; Weinstat v. Dentsply Internat., Inc. (2010) 180 Cal.App.4th 1213, 1225 [same].) Nevertheless, because "it is desirable for the trial court to retain some measure of flexibility in handling a class action," a trial court is not required to maintain an action as a class proceeding "when there is a proper reason for decertification ...." (Green, at p. 148; accord, Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1084.) "Trial courts also have the obligation to decertify a class action if individual issues prove unmanageable." (Duran, supra, 59 Cal.4th at p. 929; see Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 335.)

"Trial courts '"'are ideally situated to evaluate the efficiencies and practicalities of permitting group action'"' and therefore are '"'afforded great discretion'"' in evaluating the relevant factors." (Kight v. CashCall, Inc., supra, 231 Cal.App.4th at p. 126; see Brinker, supra, 53 Cal.4th at p. 1022.) "A trial court order denying a motion to decertify a class is generally subject to review pursuant to an abuse of discretion standard." (Dynamex, supra, 4 Cal.5th at p. 92, fn. 16; see Williams v. Superior Court, supra, 221 Cal.App.4th at p. 1360.)

TNS argues that, after the court granted the motion for class certification, the Legislature enacted (or clarified) the test that "governs whether the staffing company-supplied workers are employees or independent contractors of TNS ...." "The question of what legal standard or test applies in determining whether a worker is an employee or, instead, an independent contractor for purposes of the obligations imposed by a wage order is . . . a question of law [citation], and if the trial court applied the wrong legal standard and that error affected the propriety of its class certification ruling, the order denying decertification would constitute an abuse of discretion." (Dynamex, supra, 4 Cal.5th at p. 92, fn. 16; see Williams v. Superior Court, supra, 221 Cal.App.4th at p. 1361 ["Decertification resting on improper legal criteria or an incorrect assumption is an abuse of discretion."].)

2. TNS Has Not Shown the Trial Court Abused Its Discretion

TNS argues that recent developments in the law have clarified the trial court applied the wrong standard in ruling the technicians were employees of TNS, rather than independent contractors, and that decertification was warranted in light of the changes. Some background and context will illuminate this argument.

In its 1989 decision in Borello, supra, 48 Cal.3d 341 the Supreme Court applied the common-law "control-of-work-details" test to determine whether a worker was a covered employee or excluded independent contractor under the Worker's Compensation Act. The Supreme Court in Borello held the control-of-work-details test (referred to as the Borello standard) incorporates six factors, the "most important" of which is "the right to control work." (Id. at pp. 350, 353-355.) Courts have "characterized Borello as embodying the common law test or standard for distinguishing employees and independent contractors ...." (Dynamex, supra, 4 Cal.5th at p. 934; see Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522, 530-531.)

Two decades after Borello, in 2010, the Supreme Court held in Martinez, supra, 49 Cal.4th 35 that, in actions to recover wages under section 1194 of the Labor Code, the IWC's wage orders-not the common law-define the employment relationship (although the wage orders incorporate common law principles). (Martinez, at pp. 62, 66.) The Supreme Court in Martinez ultimately concluded the wage orders established three "alternative definitions" of "employ": (a) "to exercise control over the wages, hours or working conditions" of a worker; "(b) to suffer or permit to work," and "(c) to engage, thereby creating a common law employment relationship." (Martinez, at p. 64; see, e.g., Cal. Code Regs., tit. 8, §§ 11040, subd. 2(E), (H), 11160, subd. 2(D), (F).)

In granting Benton's motion for class certification after our opinion in Benton I, the trial court determined there was a common question, whether the test articulated in Martinez or the test articulated in Borello governed whether TNS was the employer of the technicians. The court resolved the issue in its order granting Benton's motion for summary adjudication, ruling that Martinez governed and that, under Martinez, TNS was the employer of all technicians because it "exercise[d] control over the wages, hours, or working conditions" of all technicians.

Shortly after the trial court granted the motion for summary adjudication, the Supreme Court held in Dynamex, supra, 4 Cal.5th 903 that, for purposes of the "suffer or permit to work" definition used in the wage orders, the standard "commonly referred to as the 'ABC' test" governs whether the "worker is properly considered the type of independent contractor to whom the wage order does not apply ...." (Dynamex, at p. 916.) In 2019 the Legislature enacted Assembly Bill No. 5 (2019-2020 Reg. Sess.), which codified Dynamex and established the ABC test as the default test for determining whether a worker is an employee or independent contractor under the Labor Code. Section 2775 now provides that, "for the purposes of wage orders . . ., a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates" each of the ABC factors is satisfied. (§ 2775, subd. (b)(1); see People v. Uber Technologies, Inc. (2020) 56 Cal.App.5th 266, 274.)

The Legislature also established several statutory exceptions where the Borello test, rather than Dynamex and the ABC test, governs. TNS argues one of those exceptions applies here. Section 2781 provides: "Section 2775 and the holding in Dynamex do not apply to the relationship between a contractor and an individual performing work pursuant to a subcontract in the construction industry, and instead the determination of whether the individual is an employee of the contractor shall be governed by . . . Borello, if the contractor demonstrates" certain criteria. According to TNS, it was the contractor, the technicians were individuals performing work pursuant to a subcontract, and the cell site maintenance the technicians performed was work in the construction industry. TNS asserts that, because under Borello courts apply a multifactor test to determine whether a worker is an employee or independent contractor, the trial court must conduct an individual inquiry to determine whether TNS is the employer of each technician. Thus, TNS concludes, common issues do not predominate in this litigation.

As discussed, the court denied the motion for certification on several grounds. We need only focus on one ground: even if Assembly Bill No. 5 generally governs where a hirer asserts a joint employment theory of liability,¹⁵ and even if the technicians were performing work in the construction industry, TNS did not establish the statutory criteria necessary for the exception described in section 2781 to apply.

15 "In a joint employer claim, the worker is an admitted employee of a primary employer [here, the staffing companies], and is subject to the protection of applicable labor laws and wage orders." (Henderson v. Equilon Enterprises, LLC (2019) 40 Cal.App.5th 1111, 1128.) In Martinez the plaintiffs asserted a joint employment theory of liability, while in Dynamex the plaintiffs did not. (See Dynamex, supra, 4 Cal.5th at p 915; Martinez, supra, 49 Cal.4th at p. 73.) Several courts have held Dynamex and the ABC test do not apply when the worker asserts a joint employment theory of liability. (See, e.g., Henderson, at p. 1129.) Instead, according to these courts, the alternative definitions of "employ" in Martinez govern whether a worker is an employee. (See ibid.) It is not clear whether the Legislature intended Assembly Bill No. 5 to apply when an employee brings claims for wage and hour violations under a joint employment theory of liability. We need not resolve this issue. For purposes of this appeal, we assume, without deciding, section 2775 and its exceptions govern whether the staffing company technicians are employees or independent contractors of TNS.

Section 2781 states "the determination of whether the individual is an employee of the contractor shall be governed by Section 2750.5 and by Borello, if the contractor demonstrates" all of the seven criteria apply. One such criterion is that "[t]he subcontractor has the authority to hire and to fire other persons to provide or to assist in providing the services." (§ 2781, subd. (e).) The trial court ruled TNS failed to show this criterion was satisfied. The court was correct.

TNS did not present any evidence in support of its motion to decertify the class that the staffing companies (or individual staffing company technicians) had the authority to hire or fire other persons to provide or to assist in providing the cell site maintenance services for which TNS contracted. Indeed, the undisputed evidence was to the contrary. Ellis and the representatives of several staffing companies testified TNS hired individual technicians from staffing companies to perform work- TNS did not hire staffing companies to complete jobs, with discretion to hire additional workers. TNS would send a "resource request" to the staffing company for an individual technician. The resource request specified the title and grade of the technician requested (and sometimes a specific individual technician), a description of the technician's required knowledge and skills, the location of the work assignment, and to whom the technician would report. Staffing companies would send candidates to TNS, and TNS would interview the candidates and select which ones it wanted to hire. TNS never hired a staffing company to complete a specific job; it only contracted with staffing companies to provide individual workers.

In addition, the service agreements between TNS and the staffing companies confirmed TNS-not the staffing companies- had power to hire or fire technicians. The agreements stated: "Contractor [i.e., staffing company] must have an approved Resource Request . . . for all individuals working on TNS projects ....[¶] . . . TNS's designated Site Manager (the 'Site Manager') shall be in control of the Work site, and Contractor shall follow his direction at all times.... If the Site Manager determines, in his sole discretion, that any of Contractor's employees . . .does not have the skills represented to TNS sufficient to perform the necessary duties at the Work site, . . . Contractor shall immediately remove such Contractor employees from the Work site." Because TNS has not identified any staffing company that had the authority to hire or fire workers to complete the services for which TNS contracted, TNS has not shown section 2781 (and therefore Borello) governs the determination of whether any staffing company technician was an employee or independent contractor of TNS. The trial court did not abuse its discretion in denying TNS's motion to decertify the class.

DISPOSITION

The judgment is reversed. The trial court is directed to vacate its January 27, 2017, February 26, 2018 and February 5, 2019 orders granting Benton's motions for summary adjudication and to enter a new order granting Benton's motion for summary adjudication on the cause of action for failure to pay overtime compensation and denying Benton's motion for summary adjudication on the causes of action for failure to provide meal and rest breaks. The court is also directed to vacate its order granting TNS's motion for summary adjudication on the claims for waiting time and wage statement penalties for unpaid and unreported meal and rest break premiums and to enter a new order denying the motion. The parties are to bear their costs on appeal.

We concur: PERLUSS, P. J. FEUER, J.