Abasolo v. CrystalView Technology Corp.

Full title: MARIA ABASOLO et al., Plaintiffs and Appellants, v. CRYSTALVIEW TECHNOLOGY…

Court: California Court of Appeals, Fourth District, First Division

Date published: Sep 8, 2009

No. D052483 (Cal. Ct. App. Sep. 8, 2009)

Opinion

MARIA ABASOLO et al., Plaintiffs and Appellants, v. CRYSTALVIEW TECHNOLOGY CORP., Defendant and Appellant. D052483 California Court of Appeal, Fourth District, First Division September 8, 2009

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of San Diego County No. GIC860610, John S. Meyer, Judge. Affirmed in part, reversed in part, and remanded for further proceedings.

AARON, J.

I

INTRODUCTION

Plaintiffs Maria Abasolo, Anthony Cruz, Robert Fidel, Corrine Harvey, Rebecca Lutes, Allyntha Mengloi, Karen Smith, and Delenna Young filed this action against defendant CrystalView Technology Corporation (CrystalView), alleging that CrystalView violated various Labor Code wage and hour provisions. The plaintiffs worked for CrystalView under one of two government contracts that CrystalView entered into with the Navy.

The plaintiffs alleged that CrystalView failed to pay them overtime wages for hours they worked in excess of eight hours per day and/or 40 hours per week, in violation of Labor Code¹ sections 510 and 511. The plaintiffs further alleged that CrystalView failed to pay them their final wages at the end of their employment with CrystalView within the time period required by sections 201 (involuntary discharges) or 202 (voluntary discharges). The plaintiffs sought all unpaid overtime wages, as well as waiting time penalties under section 203, for the untimely final wage payments.² The plaintiffs also sought statutory penalties on behalf of themselves and other unnamed aggrieved CrystalView employees who had worked for CrystalView in California, pursuant to section 2699—the Labor Code Private Attorneys General Act of 2004 (PAGA).

1 Further statutory references are to the Labor Code unless otherwise indicated.

2 The penalties assessed pursuant to section 203 for late-paid final wages are often referred to as "waiting time penalties." (See, e.g. Flores v. Axxis Network & Telecommunications, Inc. (2009) 173 Cal.App.4th 802, 804; Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314, 325.)

In response to the plaintiffs' allegations, CrystalView contended that it was not required to comply with state law because it was a federal contractor and its employees were working under a federal contract.

After a bench trial, the trial court issued a judgment. Although the court appears to have rejected CrystalView's contention that it did not have to comply with state wage and hour laws, the court nevertheless exempted CrystalView from the statutory requirement that it either hold an alternative workweek election, or pay its employees overtime for the hours that they worked in excess of eight hours per day and/or 40 hours per week. However, the court awarded the plaintiffs waiting time penalties arising from CrystalView's failure to pay them their final wages within the time restrictions set forth in sections 201 and 202. The trial court also awarded the plaintiffs statutory penalties under section 2699 on behalf of themselves and some of the unnamed aggrieved employees. The trial court declined to award section 2699 penalties for other unnamed aggrieved employees who were not working under the same federal contract under which the plaintiffs had worked, and also denied any statutory penalties for the failure to pay overtime wages under section 558, on the ground that the plaintiffs had not specifically identified section 558 in their complaint. Both parties appealed from the judgment.

On appeal, CrystalView argues that (1) the majority of the plaintiffs' section 203 and 2699 claims are barred by a one-year statute of limitations; (2) the only plaintiff who filed his claims within the relevant one-year statute of limitations cannot prevail because his claims are preempted, since they arose on a federal enclave; (3) the trial court erred in finding that CrystalView, and not the federal government, was the plaintiffs' employer; (4) the trial court erred in awarding the plaintiffs attorney fees; and (5) the trial court erred in concluding that CrystalView's failure to pay timely final wages pursuant to sections 201 and/or 202 was willful under section 203.

The plaintiffs argue in their cross-appeal that (1) the trial court erred in concluding that CrystalView was exempt from the requirement that it either hold an alternative workweek election or pay its employees overtime for the hours they worked in excess of state law daily and/or weekly maximums; (2) the court erred in finding that the plaintiffs' workweeks began and ended at noon on Fridays; (3) the court erred in refusing to award the plaintiffs penalties under section 558 on the ground that they did not seek relief under that provision in their complaint; and (4) the court erred in denying penalties under section 2699 for the unnamed aggrieved employees who were not employed by CrystalView to perform work under the same federal contract as the named plaintiffs.

We conclude that the trial court was correct in its determination that CrystalView was required to comply with state law, despite being a federal contractor. We further conclude that the court was correct in awarding waiting time penalties pursuant to section 203 and statutory penalties under PAGA. However, the trial court erred in excusing CrystalView's noncompliance with sections 510 and 511, and in not awarding the plaintiffs unpaid overtime payments under section 510. The trial court also erred in denying plaintiffs recovery pursuant to section 558 on the ground that the plaintiffs had not cited this section in their complaint, and in denying section 2699 penalties for all of the aggrieved California employees. We therefore affirm the judgment in part, reverse in part, and remand the case to the trial court for further proceedings to determine the proper damage and penalty awards.

II

FACTUAL AND PROCEDURAL BACKGROUND

A. Factual background

CrystalView is a national corporation that employs more than 300 people. CrystalView employs a number of workers in California. Between October 1, 2003 and September 30, 2004, CrystalView provided services to the Navy pursuant to federal contracts. CrystalView agreed to provide services to the Navy pursuant to two contracts that another company, Bechtel National, Inc., had previously been providing under a single contract. The first contract provided that CrystalView would "[m]anage, maintain and distribute government-owned expendable and non-expendable property, equipment and material assigned to the Navy Equipment Management Facilities (NEMFacs)" and would "[p]erform the functions of Environmental Property Administrator in direct support of the Southwest Division Government Property Officer, assigned to the Regional Environmental Contracts directorate." CrystalView was awarded $1,161,202.76 to fulfill this contract (the NEMFac Contract).

Under the second contract, CrystalView would "[p]rovide the personnel, material and services required to organize, maintain and update Environmental Records at various geographic locations in support of the Environmental Records Programs at the Southwest Division, Naval Facilities Engineering Command." The contract provided that "[s]ervices shall include, but are not limited to, establishing, maintaining, updating, researching, copying, organizing, imaging, cataloging, filing, labeling, boxing and preparing material and records for long-term storage and/or shipping to storage facilities, such as the Federal Records Center (FRC) or other local storage facility...." Other services identified in this contract included "provid[ing] for necessary storage space of Environmental Record boxes that are currently being stored in 3 annexes in the building at 1230 Columbia Street, for 6 months following the date of award of this contract" and "modifying and finalizing the Draft Environmental Records Database (ERD) User's Manual prepared by Bechtel National Inc."³ CrystalView was awarded $1,372,225.03 to fulfill this second contract (the Environmental Records Contract or Contract).

3 The second contract specified that "[t]he final manual shall include, but not be limited to, a summary of the overall purpose of the database; operating instructions, including screen snapshots, data entry standards for each data field, building and running queries; a description of all data fields, including field names, types, length and special functions, features or requirements for each data field; description of data and entries of each look-up table; description and screen samples of standard and query reports, etc."

Both contracts provided for a base year of service from October 1, 2003 to September 30, 2004, and had an option for an annual renewal of the contracts. The federal government renewed the contracts with CrystalView for at least one additional year.⁴

4 Because no plaintiff in this case worked beyond June 2005, the record does not reflect whether CrystalView continued to provide services to the federal government under these contracts beyond the first two years.

CrystalView employed the named plaintiffs to work under the Environmental Records Contract. It is undisputed that CrystalView paid the plaintiffs an hourly wage and assigned them to work an alternative workweek schedule, often referred to as a "9/80" schedule. Under this schedule, CrystalView employees worked nine hours per day Monday through Thursday, and alternated between working eight hours on one Friday and not working the following Friday. Under this schedule, the employees worked a total of 80 hours each two-week period.

At trial, CrystalView contended that the workweek for these employees began on Friday at noon, and ended at noon the following Friday. Under a Friday noon to Friday noon workweek, the employees worked no more than 40 hours per week, even under the 9/80 schedule. The plaintiffs disputed CrystalView's assertion regarding when the employees' workweeks began and ended, and noted that employee time sheets did not correspond to a Friday noon to Friday noon workweek.

There was no evidence that CrystalView employees ever held an alternative workweek election in which they approved the 9/80 schedule, and CrystalView essentially conceded that it never held an alternative workweek election. CrystalView presented evidence that Bechtel had conducted an alternative workweek election, and that Bechtel had utilized the 9/80 schedule for its employees who worked under the predecessor contract with the Navy.

CrystalView asserted that the federal government imposed the 9/80 schedule on it, and/or that it "inherited" the alternative workweek schedule from Bechtel by virtue of being a successor to Bechtel's federal contract.

All of the plaintiffs worked in an office building on Columbia Street in which the Navy leased space between October 1, 2003 and September 30, 2004. According to CrystalView, one plaintiff, Anthony Cruz, who worked for CrystalView until June 8, 2005, also worked in Building 110 of the Navy's "Broadway Complex" at the end of his employment with CrystalView. CrystalView contended that the Broadway Complex is a military installation that constitutes a federal enclave.

At the time the plaintiffs filed this action, they no longer worked for CrystalView. Three of the plaintiffs had been involuntarily terminated, and the other five had resigned. It is undisputed on appeal that CrystalView's general practice was to pay its employees their final wages pursuant to its normal pay schedule, even though this schedule did not always comply with the requirements of sections 201 and/or 202.

B. Procedural background

The plaintiffs filed their original complaint on January 31, 2006, seeking unpaid overtime wages and late and underpaid final wages. After exhausting statutorily required administrative prerequisites, the plaintiffs filed a "First Amended Complaint" on April 4, 2006, in which the plaintiffs included an additional cause of action under PAGA.⁵ Thus, in their First Amended Complaint the plaintiffs asserted claims for (1) unpaid and/or underpaid overtime wages for hours worked in excess of 40 hours per week, pursuant to section 510 and applicable wage orders of the Department of Labor; (2) late and underpaid final wages, plus penalties, under sections 201/202 and 203; and (3) additional statutory penalties, pursuant to section 2699 of PAGA on behalf of themselves and other unnamed employees aggrieved by CrystalView's alleged violations of sections 201, 202, and 510. The plaintiffs requested the following relief: (a) an accounting of all employees' hours of work and wages; (b) all unpaid overtime payments; (c) 30 days penalty damages, under section 203; (d) all overtime, penalties and penalty wages for non-plaintiff employees, under section 2699; (e) prejudgment interest; (f) attorney fees; (g) costs; and (e) other relief as the court deemed proper.

5 The parties referred to the unnamed aggrieved employees on whose behalf the plaintiffs were seeking PAGA penalties as the "PAGA employees."

CrystalView demurred to the First Amended Complaint on May 15 on two grounds: that the allegations underlying the causes of action were uncertain, ambiguous and unintelligible, and/or that the plaintiffs failed to state facts sufficient to constitute a cause of action. The trial court overruled the demurrer on July 28. The court conducted a bench trial from March 19 to March 21, 2007.

On June 18, 2007, the trial court issued a document entitled "STATEMENT OF DECISION." After hearing argument from the parties' attorneys, the court later issued an order entitled "AMENDED STATEMENT OF DECISION" on October 29, 2007.⁶ In the amended statement of decision, the trial court made the following relevant rulings: (1) that CrystalView was required to comply with state wage and hour laws; (2) that CrystalView was the direct employer of all of the plaintiffs, and of the aggrieved employees on whose behalf the PAGA claims were brought; (3) that the court was not aware of any federal law that indicated an intent to preempt state wage and hour laws for employees of federal contractors; (4) that CrystalView failed to establish that any of the plaintiffs' claims arose inside a federal enclave; (5) that CrystalView was entitled to use an alternative workweek schedule and was exempted from state law requiring it to hold an election because "the federal government required that [CrystalView's] employees work the schedules they did"; (6) that the employees' workweeks began at noon on Fridays; (7) that no plaintiffs were owed any overtime due to having worked more than 40 hours per week based on a Sunday through Saturday workweek; (8) that plaintiffs were owed overtime wages if they worked more than 40 hours per week based on a Friday noon to Friday noon workweek; (9) that CrystalView willfully violated sections 201 and 202 by failing to make timely final payments to its employees who were voluntarily or involuntarily terminated; (10) that the plaintiffs were entitled to penalties of $100 per person under PAGA for violations of sections 201 and/or 202 for themselves, and also for other unnamed aggrieved employees, with the exception of employees identified by number as 4, 6, 8, 9, 13, 14, 16, 17, 18, 19, 20, 22, 31 and 39, because no violations of sections 201 or 202 had been shown in connection with this latter group of employees; (11) that plaintiffs were not entitled to PAGA penalties on behalf of unnamed aggrieved employees identified by numbers 1, 12, 21, 23, 24, 25, 26, 27, 29, 30 and 35, because "there was no showing that they were similarly situated to the plaintiffs;" and (12) that plaintiffs were not entitled to penalties under section 558 for underpayment or nonpayment of overtime because the plaintiffs did not specifically request relief under this section in their "initial complaint."⁷

6 CrystalView failed to provide a copy of the court's amended statement of decision in its Appellant's Appendix on appeal, despite the fact that this document contains the ultimate findings of fact and statements of law on which the court's judgment is based.

7 Although the court referenced the "initial complaint," rather than the operative First Amended Complaint, neither complaint contained a specific request for relief under section 558.

Counsel for the plaintiffs submitted a proposed judgment, to which CrystalView objected. The court entertained oral argument on CrystalView's objections. The plaintiffs later proposed a second judgment, to which CrystalView again objected. The court heard further argument as to the judgment in November 2007.

The court entered judgment on December 5, 2007, in accordance with the rulings set forth in the court's amended statement of decision. The court awarded plaintiff Fidel overtime wages, but found that none of the other plaintiffs were entitled to overtime wages. The Court awarded the plaintiffs damages for late final wage payments, in varying amounts. With regard to the PAGA cause of action, the court awarded the named plaintiffs, and employees identified by the numbers 2, 3, 5, 7, 11, 15, 28, 32, 33, 34, 37 and 38, penalties in the amount of $100 per person. The court ordered plaintiffs' counsel to transmit 75 percent of the total penalty amount to the Labor and Workforce Development Agency, and to divide the remaining 25 percent between the named plaintiffs, as required under PAGA. The court also awarded the plaintiffs attorney fees and costs in an amount that was to be determined pursuant to a postjudgment motion.

The plaintiffs subsequently filed a request for attorney fees and costs. The court heard oral argument on the matter on January 31, 2008, and awarded the plaintiffs costs and expenses, as well as attorney fees, in the amount of $168,778.50.

CrystalView filed a notice of appeal on January 31, 2008. The plaintiffs filed a notice of cross-appeal on February 22.

The plaintiffs moved to strike CrystalView's opening brief and its appellant's appendix because the documents failed to conform to the California Rules of Court. The plaintiffs also requested sanctions in an amount equal to the cost of the time counsel for plaintiffs had spent preparing the motion to strike. CrystalView opposed the motion and moved to correct its opening brief and appendix. This court granted the plaintiffs' motion to strike CrystalView's opening brief and appendix, but granted CrystalView additional time to submit a corrected opening brief and appendix. We deferred consideration of the plaintiffs' request for sanctions.

After CrystalView submitted a new opening brief and appellant's appendix, the plaintiffs moved to strike the second opening brief on the ground that CrystalView had improperly included an attachment to the brief, in violation of the California Rules of Court. The plaintiffs also requested sanctions. CrystalView opposed the motion to strike and requested sanctions against the plaintiffs. This court denied the plaintiffs' motion to strike on the ground that this court may disregard any improper attachments to the opening brief pursuant to California Rules of Court, rule 8.204, subdivision (e)(2)(C). We deferred consideration of the parties' cross-requests for sanctions. We now deny all three requests for sanctions.⁸

8 As our disposition indicates, the plaintiffs are entitled to an award of attorney fees pursuant to statute. Because the plaintiffs requested sanctions in an amount equal to the attorney fees incurred in filing the motions to strike, these costs may be otherwise recoverable, despite our denial of the plaintiffs' request for sanctions.

III

DISCUSSION

A. Relevant law

1. Penalties for unpaid, late, or underpaid final wages

The plaintiffs alleged causes of action for unpaid, or late or underpaid, final wages pursuant to sections 201 through 203, underpaid overtime wages under sections 510 and 511, and PAGA penalties resulting from these alleged Labor Code violations, pursuant to section 2699.

Sections 201 and 202 provide for the timely payment of final wages to employees who are either involuntarily or voluntarily terminated from employment. Subdivision (a) of section 201 provides in relevant part: " If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately." Similarly, subdivision (a) of section 202 provides in relevant part: "If an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting." Section 203 provides for waiting time penalties if an employer fails to make prompt payment of final wages as required under sections 201 and 202. That section states in full:

"(a) If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, 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. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment.

"(b) Suit may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise." (§ 203.)

2. Overtime wages and penalties

Section 510, subdivision (a) provides in relevant part: "Eight hours of labor constitutes a day's work. Any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee." However, "[t]he requirements of this section do not apply to the payment of overtime compensation to an employee working pursuant to....: [¶] (1) An alternative workweek schedule adopted pursuant to Section 511." (§ 510, subd. (a)(1).)

Section 511, in turn, provides in relevant part:

"(a) Upon the proposal of an employer, the employees of an employer may adopt a regularly scheduled alternative workweek that authorizes work by the affected employees for no longer than 10 hours per day within a 40-hour workweek without the payment to the affected employees of an overtime rate of compensation pursuant to this section. A proposal to adopt an alternative workweek schedule shall be deemed adopted only if it receives approval in a secret ballot election by at least two-thirds of affected employees in a readily identifiable work unit. The regularly scheduled alternative workweek proposed by an employer for adoption by employees may be a single work schedule that would become the standard schedule for workers in the work unit, or a menu of work schedule options, from which each employee in the unit would be entitled to choose. Notwithstanding subdivision (c) of Section 500, the menu of work schedule options may include a regular schedule of eight-hour days that are compensated in accordance with subdivision (a) of Section 510. Employees who adopt a menu of work schedule options may, with employer consent, move from one schedule option to another on a weekly basis.

"(b) An affected employee working longer than eight hours but not more than 12 hours in a day pursuant to an alternative workweek schedule adopted pursuant to this section shall be paid an overtime rate of compensation of no less than one and one-half times the regular rate of pay of the employee for any work in excess of the regularly scheduled hours established by the alternative workweek agreement and for any work in excess of 40 hours per week. An overtime rate of compensation of no less than double the regular rate of pay of the employee shall be paid for any work in excess of 12 hours per day and for any work in excess of eight hours on those days worked beyond the regularly scheduled workdays established by the alternative workweek agreement. Nothing in this section requires an employer to combine more than one rate of overtime compensation in order to calculate the amount to be paid to an employee for any hour of overtime work.

"(c) An employer shall not reduce an employee's regular rate of hourly pay as a result of the adoption, repeal, or nullification of an alternative workweek schedule.

"(d) An employer shall make a reasonable effort to find a work schedule not to exceed eight hours in a workday, in order to accommodate any affected employee who was eligible to vote in an election authorized by this section and who is unable to work the alternative schedule hours established as the result of that election. An employer shall be permitted to provide a work schedule not to exceed eight hours in a workday to accommodate any employee who was hired after the date of the election and who is unable to work the alternative schedule established as the result of that election. An employer shall explore any available reasonable alternative means of accommodating the religious belief or observance of an affected employee that conflicts with an adopted alternative workweek schedule, in the manner provided by subdivision (j) of Section 12940 of the Government Code.

"(e) The results of any election conducted pursuant to this section shall be reported by an employer to the Division of Labor Statistics and Research within 30 days after the results are final.

"[¶]... [¶]

"(i) For purposes of this section, 'work unit' includes a division, a department, a job classification, a shift, a separate physical location, or a recognized subdivision thereof. A work unit may consist of an individual employee as long as the criteria for an identifiable work unit in this section is met."

Section 500 defines "workday" and "day" to mean "any consecutive 24-hour period commencing at the same time each calendar day." (§ 500, subd. (a).) "Workweek" and "week" are defined to mean "any seven consecutive days, starting with the same calendar day each week" and a "workweek" is considered "a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods." (§ 500, subd. (b).) An " '[a]lternative workweek schedule' means any regularly scheduled workweek requiring an employee to work more than eight hours in a 24-hour period." (§ 500, subd. (c).)

Section 558 provides for additional statutory penalties for violations of the overtime laws:

"(a) Any employer or other person acting on behalf of an employer who violates, or causes to be violated, a section of this chapter or any provision regulating hours and days of work in any order of the Industrial Welfare Commission shall be subject to a civil penalty as follows:

"(1) For any initial violation, fifty dollars ($50) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages.

"(2) For each subsequent violation, one hundred dollars ($100) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages.

"(3) Wages recovered pursuant to this section shall be paid to the affected employee.

"(b) If upon inspection or investigation the Labor Commissioner determines that a person had paid or caused to be paid a wage for overtime work in violation of any provision of this chapter, or any provision regulating hours and days of work in any order of the Industrial Welfare Commission, the Labor Commissioner may issue a citation. The procedures for issuing, contesting, and enforcing judgments for citations or civil penalties issued by the Labor Commissioner for a violation of this chapter shall be the same as those set out in Section 1197.1.

"(c) The civil penalties provided for in this section are in addition to any other civil or criminal penalty provided by law."

3. The PAGA framework

The plaintiffs also alleged a cause of action pursuant to PAGA. Section 2699 establishes a private right of action for aggrieved employees to seek statutory penalties that otherwise are to be assessed and collected by state regulatory agencies. Section 2699 provides in relevant part:

"(a) Notwithstanding any other provision of law, any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.

"(b) For purposes of this part, 'person' has the same meaning as defined in Section 18.

"(c) For purposes of this part, 'aggrieved employee' means any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.

"(d) For purposes of this part, 'cure' means that the employer abates each violation alleged by any aggrieved employee, the employer is in compliance with the underlying statutes as specified in the notice required by this part, and any aggrieved employee is made whole.

"(e) [¶] (1) For purposes of this part, whenever the Labor and Workforce Development Agency, or any of its departments, divisions, commissions, boards, agencies, or employees, has discretion to assess a civil penalty, a court is authorized to exercise the same discretion, subject to the same limitations and conditions, to assess a civil penalty.

"(2) In any action by an aggrieved employee seeking recovery of a civil penalty available under subdivision (a) or (f), a court may award a lesser amount than the maximum civil penalty amount specified by this part if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.

"(f) For all provisions of this code except those for which a civil penalty is specifically provided, there is established a civil penalty for a violation of these provisions, as follows:

"(1) If, at the time of the alleged violation, the person does not employ one or more employees, the civil penalty is five hundred dollars ($500).

"(2) If, at the time of the alleged violation, the person employs one or more employees, the civil penalty is one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee per pay period for each subsequent violation.

"(3) If the alleged violation is a failure to act by the Labor and Workplace Development Agency, or any of its departments, divisions, commissions, boards, agencies, or employees, there shall be no civil penalty.

"(g) [¶] (1) Except as provided in paragraph (2), an aggrieved employee may recover the civil penalty described in subdivision (f) in a civil action pursuant to the procedures specified in Section 2699.3 filed on behalf of himself or herself and other current or former employees against whom one or more of the alleged violations was committed. Any employee who prevails in any action shall be entitled to an award of reasonable attorney's fees and costs. Nothing in this part shall operate to limit an employee's right to pursue or recover other remedies available under state or federal law, either separately or concurrently with an action taken under this part.

"(2) No action shall be brought under this part for any violation of a posting, notice, agency reporting, or filing requirement of this code, except where the filing or reporting requirement involves mandatory payroll or workplace injury reporting.

"(h) No action may be brought under this section by an aggrieved employee if the agency or any of its departments, divisions, commissions, boards, agencies, or employees, on the same facts and theories, cites a person within the timeframes set forth in Section 2699.3 for a violation of the same section or sections of the Labor Code under which the aggrieved employee is attempting to recover a civil penalty on behalf of himself or herself or others or initiates a proceeding pursuant to Section 98.3.

"(i) Except as provided in subdivision (j), civil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency for enforcement of labor laws and education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 25 percent to the aggrieved employees.

"(j) Civil penalties recovered under paragraph (1) of subdivision (f) shall be distributed to the Labor and Workforce Development Agency for enforcement of labor laws and education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes."

It is with this statutory framework in mind that we address the parties' contentions on appeal.

B. CrystalView's appeal

1. CrystalView failed to raise a statute of limitations defense in the trial court, thereby forfeiting that defense

CrystalView contends that the plaintiffs' claims for recovery under section 203 and PAGA are barred by a one-year statute of limitations. However, CrystalView never raised a statute of limitations defense in the trial court. "The statute of limitations is an affirmative defense that is forfeited if not appropriately invoked by the defendant. [Citations.]" (Adams v. Paul (1995) 11 Cal.4th 583, 597; see also, e.g., Minton v. Cavaney (1961) 56 Cal. 2d 576, 581 [defendant waived defense of statute of limitations by failing to plead defense in answer or raise it as a ground in its general demurrer].) In fact, not only did CrystalView fail to raise a statute of limitations defense in the trial court, but it conceded that the three-year statute of limitations for unpaid final wages applied to the plaintiffs' claims, and acknowledged that the claims were timely filed under that statute of limitations.⁹

9 At trial, CrystalView's attorney said, "The Labor Code section 203 penalty that he's talking about has a three-year statute of limitations because in the statute itself, it says that the statute of limitations for this section is the same statute of limitations as would apply to section 201 of the Labor Code. And that section allows a three-year statute of limitations. [¶] So that's why 203 has that extra period." Later, the trial court sought further clarification, asking, "They've timely filed the lawsuit?" CrystalView's attorney responded, "Yes, Your Honor, that's true."

In an apparent attempt to avoid forfeiture of the statute of limitations defense, CrystalView suggests, without citation to authority, that the statute of limitations issue goes to the court's jurisdiction and/or to the plaintiffs' standing. However, it is clear that in a civil matter, a defendant can forfeit the statute of limitations defense if the defense is not timely raised. Thus, whether the plaintiffs filed their complaint within the applicable statute of limitations does not implicate jurisdiction or standing. CrystalView nevertheless contends that it should be permitted to challenge the plaintiffs' claims on statute of limitations grounds for the first time on appeal because an "appellate court may permit a change in theory when a question of law, not dependent on facts, is presented."

We reject CrystalView's attempt to portray its failure to raise a statute of limitations defense as being procedurally comparable to the failure to raise a legal theory in the trial court. The statute of limitations defense is not simply a legal theory; it is a complete defense as to which any number of legal theories might be argued both to support, and to avoid, its application. The failure to raise the defense at all in the trial court and then to attempt to raise it on appeal cannot be characterized as merely a "change in theory." Rather, this constitutes an attempt to assert a forfeited affirmative defense.

CrystalView argues that it did not have the benefit of the decision in McCoy v. Superior Court (2007) 157 Cal.App.4th 225 until after the trial in this case.¹⁰ The McCoy decision was published prior to the entry of judgment, yet CrystalView did not bring McCoy to the trial court's attention prior to entry of judgment. Nor did CrystalView move for a new trial, or for judgment notwithstanding the verdict, or seek to have the judgment set aside on statute of limitations grounds. Under these circumstances, we decline CrystalView's invitation to disregard the fact that it never raised a statute of limitations defense in the trial court in order to decide the issue for the first time on appeal.

10 In McCoy, supra, 157 Cal.App.4th at page 227, the court concluded that "when a suit seeks only waiting time penalties [under section 203], the one-year statute under [Code of Civil Procedure] section 340(a) governs." Code of Civil Procedure section 340, subdivision (a) provides that "[a]n action upon a statute for a penalty or forfeiture, if the action is given to an individual, or to an individual and the state, except if the statute imposing it prescribes a different limitation," must be commenced within one year after the cause of action has accrued.

2. CrystalView failed to establish either that any of its employees worked on a federal enclave or that the state labor laws at issue in this case would not apply on the asserted federal enclave

CrystalView contends that plaintiff Anthony Cruz's claims under section 203 are barred, despite being timely under the one-year statute of limitations, because "he was employed and working at the Navy's Broadway Complex beginning in January of 2005." According to CrystalView, the Navy's Broadway Complex is a "federal enclave," and is therefore not subject to California laws.¹¹ The trial court found that "some of the plaintiffs' final work location was the Navy's complex located at the foot of Broadway Street in San Diego; however, no evidence was presented to establish where within that complex... those plaintiffs worked or what parts of that complex, if any, are entitled to federal enclave status."¹² We agree with the trial court that there is no basis to support a finding that Cruz worked on a federal enclave.

11 CrystalView makes no similar argument with regard to the other plaintiffs who worked at the Columbia Street location—a private building in which the Navy rented office space.

12 Although the court's decision leaves open the possibility that more than one plaintiff may have worked at the Broadway Street complex, on appeal, CrystalView contends that only plaintiff Cruz worked on a federal enclave.

"A federal enclave is a portion of land over which the United States government exercises exclusive federal legislative jurisdiction. The federal government obtains control over an enclave through one of three methods. Under the first method, the United States purchases land with the state's consent and the state transfers complete jurisdiction to the United States pursuant to Clause 17 of Section 8 of Article One of the United States Constitution. Under the second method, the federal government purchases land over which a state exercises jurisdiction. The state may cede some or all of its jurisdiction to the federal government after the purchase. Under the third method, the federal government reserves jurisdiction over portions of a state when the state enters the Union." (Kelly v. Lockheed Martin Servs. Group (D.P.R. 1998) 25 F.Supp.2d 1, 3, fn. omitted (Kelly).)¹³

13 Because the federal preemption questions that CrystalView raises involve questions of federal law, we find federal authority useful in guiding our analysis of these issues.

As an initial matter, CrystalView asserts that the federal enclave issue implicates both the trial court's jurisdiction and Cruz's standing to sue, and argues that the trial court therefore "erred in deciding that the burden of proving standing was on the defendant." This contention is without merit. The fact that the conduct giving rise to the plaintiffs' complaints may have occurred inside a federal enclave would not preclude state court jurisdiction, nor would it have any bearing on the plaintiffs' standing to bring a lawsuit alleging violations of state law. Rather, as federal courts have noted, the question of "federal enclave jurisdiction" is an issue of federal question jurisdiction—i.e., whether a federal court possesses subject matter jurisdiction over a plaintiff's claims. (See, e.g., Celli v. Shoell (10th Cir. 1994) 40 F.3d 324, 328.) "Whether federal enclave jurisdiction, a form of federal question jurisdiction, exists is a complex question, resting on such factors as whether the federal government exercises exclusive, concurrent or proprietarial jurisdiction over the property, when the property became a federal enclave and what the state law was at that time, whether the law is consistent with federal policy, and whether it has been altered by national legislation. [Citations.]" (Ibid.)

Even where "federal enclave jurisdiction" exists, a state court may have concurrent subject matter jurisdiction. (See Taylor v. Lockheed Martin Corp. (2000) 78 Cal.App.4th 472, 486, fn. 5 (Taylor) ["We also note that this claim may be properly litigated in state court. State courts generally have subject matter jurisdiction over claims arising in federal enclaves within their borders. Under traditional choice of law principles, the state court is required to apply the enclave's law to such actions. [Citation]"].)

Because the existence of federal enclave jurisdiction, alone, would not implicate either the trial court's jurisdiction in this case or Cruz's standing to sue, we conclude that the trial court correctly placed the burden of establishing federal enclave jurisdiction on CrystalView, as the party asserting its existence. (See Taylor, supra, 78 Cal.App.4th at p. 480 [defendant presented evidence on summary judgment establishing existence of federal enclave and fact that plaintiff's causes of action arose inside the enclave, and only then shifted burden to plaintiff "to present evidence that his causes of action arose outside the enclave"].)

CrystalView attempts to rely on its assertion of federal enclave jurisdiction for the proposition that Cruz's state law claims are preempted by federal law. CrystalView incorrectly assumes that once the existence of a federal enclave is established, only laws passed by Congress apply inside that enclave. However, even presuming that Cruz's claims arose inside a federal enclave, the complete preemption of his state law claims would not necessarily follow. Rather, a number of factors would come into play in determining which state laws have been incorporated as the law of the particular federal enclave at issue:

"There are three theories as to the development of federal enclave law in relation to state law. Under the first theory, when an area becomes a federal enclave, the local law in effect at the time of cession continues to apply until it is abrogated by federal law. [Citations.] In effect, the state law at the time of cession becomes federal law. Only that federal law [i.e., state law that has become federal law] applies in the enclave unless Congress specifically makes a provision for the application of law legislated by Congress. Under this theory, the status quo at the time the federal enclave became an enclave is maintained no matter how much time has passed since the creation of the enclave, unless Congress acts to change the status quo. [Citation.] Under the second theory... subsequent state regulatory changes consistent with the state law in place at the time of cession are applicable within a federal enclave. [Citation.] Thus, the state/federal law is not frozen in time as of cession, but continues to develop as the state develops the law. Under the third regime, all state law rules of the state in which the enclave exists are applicable within the federal enclave unless they interfere with the federal government's jurisdiction. [Citation.]" (Kelly, supra, 25 F.Supp.2d at p. 4, fns. omitted.)

Under these theories, the law of the federal enclave may have incorporated any number of state laws.¹⁴ As a result, even if Cruz was working inside a federal enclave, he would be entitled to assert any claims "authorized by federal law, by any California law not in conflict with federal law that existed when [his workplace] became a federal enclave..., and by subsequently enacted state law to the extent authorized by Congress." (Taylor, supra, 78 Cal.App.4th at p. 482.)

14 In such a situation, "those state laws which are effective within the enclave 'lose their character as laws of the state and become laws of the Union.' [Citation.]" (Celli v. Shoell, supra, 40 F.3d at p. 328, fn. 4.)

Because CrystalView bears the burden to establish that Cruz's claims arose inside a federal enclave and that the law of the federal enclave does not incorporate the laws on which Cruz bases his claims, CrystalView was required to present evidence as to when and how the United States Government accepted jurisdiction over the property at issue, and that Cruz actually worked inside the asserted enclave. (See Taylor, supra, 78 Cal.App.4th at pp. 479-480.) CrystalView failed to present such evidence.

The evidence that CrystalView offered to support its position that Cruz worked inside a federal enclave was Cruz's testimony that the building he worked in was "on the Navy [b]ase" and that he was required to have "[a] passing decal on [his] vehicle, also a military ID... not a military, but something like a CAT card," which he later described as "some kind of military identification." CrystalView apparently also asked the trial court to take judicial notice of "the Navy's Southwest Division Web page," which, CrystalView contends, "showed the information that the Southwest Division of the Navy's Broadway Complex was established in 1919."¹⁵ However, CrystalView has not established that the court took judicial notice of this Web page, and, therefore, has failed to establish that the Web page is properly in the record. Assuming that the trial court declined to take judicial notice of this document, CrystalView does not argue that the trial court abused its discretion in refusing to take judicial notice of the webpage. CrystalView therefore may not rely on this "evidence" to support its position on appeal that Cruz's claims are barred because he worked inside a federal enclave. Further, a Web site's narrative "history" of the property that CrystalView insists is the Broadway Complex where Cruz worked would be insufficient to establish when or how the federal government purportedly took title to the property in question.

15 The portion of the record to which CrystalView cites with regard to this Web page does not include the Web page, and, in fact, is a portion of the plaintiffs' complaint. Although this court is under no obligation to cull the record in an attempt to find evidence to support CrystalView's claims, a document that appears to be the one to which CrystalView is referring is located near the end of Appellant's Appendix. It is a single page printout, unattached to any moving papers, with no accompanying declaration. It is thus not clear whether the document was ever authenticated or admitted in evidence.

Cruz's testimony, including the fact that he may have needed a military identification card to access the building in which he worked, is also insufficient to establish that the property is a federal enclave. CrystalView failed to present any evidence as to when, how, or even whether the federal government obtained control over the property where Cruz worked. Determining whether and to what extent state law may apply on property that is controlled by the federal government is a complex matter, and requires specific evidence as to exactly when and how the federal government came to control the land. (See, e.g., Taylor, supra, 78 Cal.App.4th at pp. 479-480 [describing in detail how the Army purchased the land on which Vandenberg Air Force Base was located in 1941, noting that the United States Government accepted jurisdiction over the land in 1943, and identifying the state law that effectuated consent to federal jurisdiction]; see also Lockhart v. MVM, Inc. (2009) 175 Cal.App.4th 1452 [describing evidence presented by defendant showing creation of federal enclave, including 1927 grant deed and California legislative act authorizing transferred state lands to the federal government].)¹⁶

16 Although CrystalView balks at the idea that the trial court should "look to each building at the Navy's Broadway Complex to make a determination as to where and when the state law would apply and where the federal law would apply," this is precisely what the law of federal enclave jurisdiction requires.

Perhaps recognizing the inadequacy of the record with respect to its contention that Cruz worked inside a federal enclave (and that his state law claims are thus preempted by federal law), in its opening brief on appeal, CrystalView informally requests that this court take judicial notice of a document it identifies as "San Diego County Recorder Record Book No. 227 pages 278-279 deeded [sic] September 13, 1919 showing the transfer of the land at the foot of Broadway by the City of San Diego to the Federal Government in 1919." In response to CrystalView's proffer of this evidence, the plaintiffs filed a motion entitled "CONDITIONAL REQUEST FOR JUDICIAL NOTICE," in which they ask this court to take judicial notice of certified copies of a different deed and a parcel map from the San Diego County Recorder's Office, if and only if the court takes judicial notice of the document that CrystalView proffers.¹⁷ The plaintiffs contend that the deed and parcel map demonstrate that several parcels of land that currently comprise the Broadway Complex were transferred to the federal government in 1940—after the 1937 enactment of sections 201 through 203. Both parties seemingly agree that state laws in effect at the time a parcel of land becomes a federal enclave continue to govern in the enclave absent congressional action to supersede it.

17 Plaintiffs explain in their "conditional" request for judicial notice, "If this court declines to take judicial notice of the document proffered by [CrystalView], then this motion is moot and should be considered withdrawn."

We decline to take judicial notice of the document that CrystalView offers for the first time on appeal. The document has not been properly authenticated. In addition, CrystalView failed to properly request judicial notice pursuant to California Rules of Court, rule 8.252, which requires that a party file a separate motion in order to obtain judicial notice by a reviewing court. Further, there is no indication that CrystalView could not have presented this evidence to the trial court, and CrystalView provides no explanation as to why it failed to introduce this evidence at trial.¹⁸ We therefore deny CrystalView's request for judicial notice, and consider the plaintiffs' conditional request for judicial notice to be withdrawn.

18 Even if we had been inclined to take judicial notice of the purported deed submitted by CrystalView, it is not at all clear that the document would have provided support for CrystalView's position, in that it is virtually impossible to know from this document alone whether the property described in the deed does, in fact, relate to the property on which Cruz was working. Moreover, this document would be insufficient to establish whether the federal government accepted and exercised exclusive federal legislative jurisdiction over the property.

Because we reject CrystalView's contention that it established that Cruz was working on a federal enclave, we also reject CrystalView's contention that Cruz cannot maintain a cause of action under section 2699.

3. The trial court did not err in finding that CrystalView was the plaintiffs' employer

CrystalView contends that the trial court erred in finding that it, and not the federal government, was the plaintiffs' employer. CrystalView maintains that the evidence presented at trial demonstrates that the federal government was the plaintiffs' sole employer, or in the alternative, that the federal government and CrystalView both employed the plaintiffs, under the doctrine of dual employment. CrystalView claims that an Opinion Letter issued by the Division of Labor Standards Enforcement (DLSE) demonstrates that the federal government was the plaintiffs' employer. According to CrystalView, because the federal government was the plaintiffs' employer, federal law, alone, governed the plaintiffs' wages. CrystalView further asserts that section 220, which exempts state and local government employers from complying with sections 201 and 202, prevents the plaintiffs from recovering under sections 203. For the following reasons, we reject CrystalView's contentions.

a. The trial court's finding that CrystalView was the plaintiffs' direct and sole employer is supported by substantial evidence

CrystalView claims that the trial court erred in finding that it, alone, was the plaintiffs' employer. CrystalView asserts two arguments in support of its position: first, that the evidence demonstrates that the federal government, not CrystalView, was the plaintiffs' direct employer, and second, that even if the federal government was not the plaintiffs' direct employer, CrystalView and the federal government were dual employers of the plaintiffs. Both contentions are without merit.

(i) There is substantial evidence to support the trial court's determination that CrystalView was the plaintiffs' direct employer

There is abundant evidence to support the trial court's conclusion that CrystalView—and not the federal government—was the plaintiffs' direct employer. Although CrystalView argues that the federal government was the plaintiffs' employer, CrystalView fails to identify what law this court should apply in determining whether an employer-employee relationship existed between the federal government and the plaintiffs. The plaintiffs suggest that this court should apply the common law test for establishing the existence of an employment relationship for purposes of the Labor Code violations alleged in the complaint. We agree.

The Labor Code provisions at issue in this matter do not define the words "employee" or "employer." " 'In this circumstance—a statute referring to employees without defining the term—courts have generally applied the common law test of employment.' [Citations.] 'California courts have applied this interpretive rule to various statutes dealing with public and private employment.' [Citation.]" (Reynolds v. Bement (2005) 36 Cal.4th 1075, 1087 (Reynolds).)

Under this common law test, the essential question with respect to the existence of an employer-employee relationship is whether the alleged employer exercises direction and control over the alleged employee. (See, e.g., Serv. Employees Internat. Union v. County of Los Angeles (1990) 225 Cal.App.3d 761, 769 [" 'The essential characteristic of employment relationship is the right to control and direct the activities of the person rendering service, or the manner and method in which the work is performed.' [Citation]"].) We therefore consider whether there is substantial evidence to support the trial court's finding that CrystalView, and not the federal government, directed and controlled the plaintiffs' work.

CrystalView asserts that "it is clear that the Federal Government would be considered the direct employer of the CrystalView workers." CrystalView bases this assertion on the following "facts": "They [the federal government] exercise total control over the employees. They provide the money to pay the employees, set the pay rate, the hours of work, the location of work, provide the tools to be used, the manner of performing the job and control who is hired and fired from employment. This is all specified in the contract." CrystalView cites only the first page of one of the two contracts it had with the federal government as the evidentiary basis for all of these asserted "facts." The evidence in the record does not support CrystalView's claims about the federal government's role.

Contrary to CrystalView's contention, there is abundant evidence to support the trial court's finding that the federal government was not the plaintiffs' direct employer. First, the language of the Environmental Records Contract established that CrystalView was the party in control of the plaintiffs' work. CrystalView contracted with the federal government to provide services to the government—services beyond simply providing temporary workers, as CrystalView claims. For example, the Environmental Records Contract stated that CrystalView was to "[p]rovide the personnel, material and services required to organize, maintain and update Environmental Records at various geographic locations in support of the Environmental Records Programs at the Southwest Division, Naval Facilities Engineering Command." The Contract further provides that "[s]ervices shall include, but are not limited to, establishing, maintaining, updating, researching, copying, organizing, imaging, cataloging, filing, labeling, boxing and preparing material and records for long-term storage and/or shipping to storage facilities, such as the Federal Records Center (FRC) or other local storage facility...." The Contract also provides, "Services shall also include modifying and finalizing the Draft Environmental Records Database (ERD) User's Manual prepared by Bechtel National Inc.... The final manual shall include, but not be limited to, a summary of the overall purpose of the database; operating instructions, including screen snapshots, data entry standards for each data field, building and running queries; a description of all data fields, including field names, types, length and special functions, features or requirements for each data field; description of data and entries of each look-up table; description and screen samples of standard and query reports, etc."

The Contract specifications demonstrate that CrystalView provided an estimate of the cost of providing these services to the Navy, which included the cost of paying employees to complete the tasks that would be required to fulfill the Contract. In accordance with that estimate, the federal government awarded CrystalView more than $1.3 million, in exchange for providing the services contemplated by the Environment Records Contract.

In addition, the language of the Environmental Records Contract clearly demonstrates that the parties intended and understood that CrystalView was to be the plaintiffs' employer and that CrystalView was in charge of directing the plaintiffs' work. In fact, the Contract essentially states that the individuals working under the Contract are not to be considered employees of the federal government:

"This contract is a nonpersonal services contract, which means, 'the personnel rendering the services are not subject, either by the contract's terms or by the manner of its administration, to the supervision and control usually prevailing in relationships between the Government and its employees.' "¹⁹

19 This statement is repeated later in the contract in a section entitled "SPECIAL CONDITIONS": "This contract is a nonpersonal services contract, which means, 'the personnel rendering the services are not subject, either by the contract's terms or by the manner of its administration, to the supervision and control usually prevailing in relationships between the Government and its employees.' "

In another section, the Contract states:

"All key personnel shall be employees of the prime contractor. The contractor shall submit a resume of its key personnel. The contractor's responsibility is to organize, furnish, maintain, supervise and direct a work force, which is thoroughly capable and qualified to effectively perform the work set forth in the contract." (Italics added.)

After identifying the "key personnel" positions, the Contract provides: "The above positions may or may not require a full-time employee in each position. For example, a part-time person may suffice for some positions and/or a single person functioning in dual positions may also suffice. Such management decisions are to be made at the contractor's discretion." The Environmental Records Contract thus demonstrates that CrystalView retained significant discretion with regard to how to staff the project and complete the work required under the Contract.

Further, despite CrystalView's assertion that the Navy "dictated" the work schedules of the CrystalView employees, the Contract evidences the opposite, providing instead for flexibility in the scheduling of work:

"a) The contractor shall arrange its work to minimize interference with the normal occurrence of Government business.

"b) The contractor shall arrange its work schedule in order to optimize availability a practical use [sic] for government customers who will be utilizing NEMFAC."

CrystalView asserts that the Contract required that the government authorize any overtime payments, and that this establishes that the government was in control of the plaintiffs' pay and work schedules. CrystalView fails to acknowledge that under the terms of the Contract, the federal government agreed to pay CrystalView for a certain number of hours for its employees, at a certain rate of pay, based on CrystalView's estimates. The Contract provided that the federal government would not pay CrystalView for overtime hours unless CrystalView obtained prior authorization for those hours from a government representative. This does not mean that the federal government controlled whether CrystalView's employees could work overtime. Rather, because CrystalView had not included in its estimated costs any overtime compensation, the government had not agreed in advance to pay for any overtime work. CrystalView, therefore, would have to pay overtime wages if it required its workers to work overtime hours, and would simply have to absorb such costs if it failed to obtain prior authorization for the overtime work from a government representative.

CrystalView similarly contends that certain language in the Contract establishes that the federal government, not CrystalView, had "control over the hiring or firing of [personnel]." The contract language to which CrystalView refers does not support this contention. Rather, the provision refers to "key personnel" substitutions, and sets limits on CrystalView's ability to substitute different individuals into "key personnel" positions. It does not demonstrate that CrystalView had no control over the hiring and/or firing of its personnel, including the plaintiffs, none of whom appear to have been "key personnel" as defined in the contract.

CrystalView grossly misstates the evidence when it asserts that the contract demonstrates that the federal government exercised "total control" over the plaintiffs. There is additional evidence, beyond the language of the contract itself, that supports the trial court's finding that CrystalView controlled and directed the plaintiffs and its other employees. For example, the plaintiffs submitted their time sheets to CrystalView, and were paid by checks issued by CrystalView. The plaintiffs were supervised by CrystalView employees, and were directed not to take instructions from federal government representatives. At an employee meeting, the plaintiffs were informed that if Navy personnel "had problems" with the plaintiffs' work, those individuals were to speak with CrystalView management about these issues, not directly to the plaintiffs. Plaintiff Corrine Harvey testified that she never took any "day-to-day instructions" from anyone who was not a CrystalView employee. In addition, CrystalView provided employees with an employee handbook that details the benefits, policies, programs, and procedures CrystalView offers and utilizes. In that handbook, CrystalView states, "Overtime compensation is controlled by the state in which [the employee is] employed."

CrystalView's questioning of witnesses at trial demonstrated that even CrystalView believed that the plaintiffs were employees of CrystalView, and not the federal government. For example, CrystalView's attorney asked Harvey, "When you became a CVT employee, and CVT is CrystalView Technology... did you have some of the benefits that you had at Bechtel carry over into CrystalView?"²⁰ The record fully supports the trial court's finding that CrystalView, alone, and not the federal government, was the plaintiffs' employer.

20 Similarly, very early in the trial when the court was seeking background information from both parties' counsel as well as from Frances Chiang, president of CrystalView, the court asked, "Do those people [i.e. the workers CrystalView provides to the federal government] have a contract with CrystalView? Are they CrystalView employees?" CrystalView's attorney responded, "Yes." Chiang, who had also been responding to the trial court's questions, did not contradict CrystalView's counsel on this point.

(ii) The trial court's finding of no dual employment is supported by substantial evidence

CrystalView argues, in the alternative, that it, together with the federal government, were "dual employers" of the plaintiffs. CrystalView contends that "because there is dual employment by both the federal government and [CrystalView], the employees placed with the federal government are governed by the government's work schedule and pay schedule."

In making this assertion, CrystalView again takes liberties in describing the state of the evidence, as well as the legal effect of its exaggerated claims. For example, CrystalView asserts that the concept of dual employment applies in the context of the plaintiffs' wage and hour claims. However, CrystalView has offered no relevant authority that suggests that the dual employment concept has been, or should be, applied in a situation such as the one that exists here. Dual employment has generally been found to exist only in tort or workers' compensation cases in order to spread liability (see, e.g., County of Los Angeles v. Workers' Comp. Appeals Bd. (1981) 30 Cal.3d 391, 405-406). It has not been used to limit an employer's liability under state law, as CrystalView urges.

However, even if the concept of dual employment were applicable in this situation, the evidence simply does not support CrystalView's contention that the federal government could be considered a dual employer of the plaintiffs. Rather, as described above, the evidence supports the trial court's finding that CrystalView was the plaintiffs' direct, and sole, employer. CrystalView nevertheless repeatedly relies on the notion that it was somehow a temporary employment agency, rather than a government contractor, in its briefing on appeal. For example, CrystalView cites cases that involved employees of temporary staffing agencies, such as Mathieu v. Norrell Corporation (2004) 115 Cal.App.4th 1174 (Mathieu). In Mathieu, the defendant "place[d] employees in temporary and long-term assignments" with its clients, and the plaintiff "accept[ed] temporary employment" with one of the defendant's clients. (Id. at p. 1179.) The Mathieu court held that "in the context of an individual who is employed by a temporary agency and assigned to work on the premises of the agency's client,... the purpose of FEHA [Fair Employment and Housing Act]... is best served by applying the traditional labor law doctrine of 'dual employers,' holding both the agency and the client are employers and considering harassment by an employee of the client coworker harassment rather than harassment by a third party. [Citations.]" (Mathieu, supra, 115 Cal.App.4th at p. 1183.)

There is no evidence to support CrystalView's claim that it acted only as a temporary employment agency.²¹ Further, it is not at all clear that CrystalView could be considered to be a "temporary employment service," at least in the manner that CrystalView appears to use the phrase. CrystalView contends that the fact that the contracts it entered into with the federal government had terms of one year, means that CrystalView was a "temporary employment service." There is no support for CrystalView's contention that the "temporary" nature of the Environmental Records Contract—for which there was an option for repeated one-year renewals—means that CrystalView can be considered a temporary staffing agency. Temporary employment agencies' only service is to provide temporary workers to employers. CrystalView contracted with the federal government to provide a different service to the government, i.e., to "[p]rovide the personnel, material and services required to organize, maintain and update Environmental Records." CrystalView employed workers so that it could fulfill the terms of its contract. There is no evidence that CrystalView was supplying temporary workers to the government or that any government employee or representative controlled or directed CrystalView's workers on a day-to-day basis.

21 CrystalView contends that although it may not "meet the Labor Code definition of a temporary agency," it must be considered "a temporary employment service." It is not clear why CrystalView believes that there is a distinction between the two concepts, or whether any real or perceived distinction might be useful in our assessment of the relationships among the plaintiffs, CrystalView and the federal government. In other words, CrystalView fails to argue why its being "a temporary employment service," as opposed to a "temporary agency," should matter in our legal analysis.

In sum, there is substantial evidence to support the trial court's finding that CrystalView, alone, was the plaintiffs' employer. Although CrystalView claims that the federal government directly controlled the plaintiffs' work, the only evidence to which it points in support of this contention is its contract with the federal government. The language of the contract clearly contradicts CrystalView's contention. The contract, together with employee testimony, establishes that CrystalView was in fact the plaintiffs' sole employer.

b. The DSLE Opinion Letter does not support CrystalView's position that the federal government employed the plaintiffs

CrystalView argues that the trial court erroneously failed to rely on an Opinion Letter issued by the DLSE as authority to support its position that the federal government was the plaintiffs' employer. CrystalView submitted a January 10, 2003 letter from an attorney in the DSLE to an attorney representing a temporary employment agency regarding a question submitted to the DSLE. The DLSE "is the state agency empowered to enforce California's labor laws....[Citation.]" (Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 581.) The Opinion Letter that CrystalView offered begins, "I have been asked to respond on behalf of the Division of Labor Standards Enforcement to your letter seeking an opinion from the DSLE regarding the applicability of the Industrial Welfare Commission wage order to individuals employed by a temporary employment agency who are placed for temporary employment with various city, county, and other public employers." CrystalView argues that this letter constitutes an advisory opinion, and that the trial court should have considered the letter in determining whether CrystalView was the plaintiffs' employer.

It is clear from the terms of the letter that it does not provide any guidance as to whether the federal government was or was not the plaintiffs' employer. CrystalView quotes selected portions of the letter to suggest that certain assumptions made in the letter would apply to CrystalView and the plaintiffs in this situation. However, the letter simply cannot be understood in the way that CrystalView proposes. First, the basic facts of the employment situation that the letter addresses are vastly different from the facts in this case. The letter was written in response to an inquiry from an attorney whose client was a staffing agency that charged its clients "an hourly fee for the services of the employee." The agency at issue in the letter was thus clearly a temporary staffing agency that provided temporary workers to various employers, including public entities. In contrast, in this case, CrystalView entered into a $1.3 million contract to provide services to the federal government, not to provide temporary employees, and there is no other evidence that CrystalView was a temporary staffing agency.

Further, the author of the letter specifically discourages any broad application of the guidance provided in the letter, stating, "We cannot answer [the question whether any wage order applies to 'Staffing Agency employees for the period of time they are placed in employment assignments with a public employer'] without knowing whether, in fact, the affected workers are 'employees' of the public entity." Since the author did not state any conclusion as to whether the employees discussed in the letter were, in fact, public employees, the letter cannot be read to suggest that the plaintiffs in this case were employees of the federal government. Finally, it is clear that the letter is discussing the question whether state wage orders apply to employees who may be considered to be " 'directly employed by the State or any political subdivision thereof, including any city, county, or special district.' " CrystalView has alleged that the plaintiffs were employed by the federal government, not by the State of California or one of its political subdivisions. The letter, by its terms, makes no comment concerning the application of California's labor laws to persons alleged to be employed by the federal government.

We conclude that the DSLE letter is irrelevant to the question whether the federal government employed the plaintiffs.

c. Section 220 does not apply in this case

Because we reject CrystalView's contention that the federal government was the plaintiffs' employer, we also reject CrystalView's strained argument that section 220 applies in this case. Section 220 provides in relevant part: "Sections 200 to 211, inclusive and sections 215 to 219, inclusive, do not apply to the payment of wages of employees directly employed by any county, incorporated city, or town or other municipal corporation. All other employments are subject to these provisions." (§ 220, subd. (b).) CrystalView argues that the phrase "other municipal corporation" in section 220 includes the federal government. Apart from the fact that there is no legal support whatsoever for the contention that "other municipal corporation" would include the federal government, this argument fails because it is premised on the false assumption that the plaintiffs were employed by the federal government. As we conclude above, they were not.

4. CrystalView's challenge to the trial court's attorney fee award is without merit

The trial court determined that the plaintiffs were "entitled to attorney fees pursuant to Lab.C. §§218.5[], 1194, and/or 2699(g)(1), as well as costs." CrystalView objects to the court's award of attorney fees under section 2699. CrystalView contends that because "Labor Code [s]ection 2699 has not been litigated with regards [sic] to attorney fees, much of the case law concerning PAGA and the right to attorney fees can be derived from cases concerning [Code of Civil Procedure] [s]ection 1021.5."

Code of Civil Procedure section 1021.5 provides in relevant part:

"Upon motion, a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any." (Italics added.)

In contrast, section 2699, subdivision (g)(1) provides in relevant part:

"Except as provided in paragraph (2), an aggrieved employee may recover the civil penalty described in subdivision (f) in a civil action pursuant to the procedures specified in Section 2699.3 filed on behalf of himself or herself and other current or former employees against whom one or more of the alleged violations was committed. Any employee who prevails in any action shall be entitled to an award of reasonable attorney's fees and costs." (Italics added.)

CrystalView appears to suggest that in interpreting section 2699, this court should impose the discretionary considerations pertinent to an award of attorney fees under Code of Civil Procedure section 1021.5, simply because both statutes relate to fee shifting in private actions that effectuate strong public policies. What CrystalView fails to recognize is that there is a significant difference between the attorney fee provisions in Code of Civil Procedure section 1021.5 and section 2699. While Code of Civil Procedure section 1021.5 gives the court discretion to award attorney fees to successful parties in actions resulting in the enforcement of important rights that affect the public interest, section 2699 provides that a prevailing party is entitled to an award of attorney fees. Section 2699's fee-shifting provision is mandatory, while the fee-shifting provision of Code of Civil Procedure section 1021.5 is discretionary.

CrystalView cites no authority and makes no reasoned argument to support its assertion that courts awarding attorney fees under section 2699 should consider authority related to Code of Civil Procedure section 1021.5. Rather, CrystalView simply recites the holdings of various cases that interpret and apply Code of Civil Procedure section 1021.5, apparently under the misimpression that these cases are relevant to an attorney fee award under section 2699. They are not; the two attorney fee provisions differ significantly in their wording, scope, and effect. CrystalView's reliance on case law pertaining to Code of Civil Procedure section 1021.5 to challenge an award of attorney fees under section 2699 is wholly misplaced.

5. The trial court did not err in determining that CrystalView's violations of sections 201 and/or 202 were willful

CrystalView maintains that the trial court erred in finding that "[CrystalView] intended to pay its former employees in this manner [i.e., not within the time requirements of sections 201 and 202] and so its practice was a willful violation of Sections 201 and/or 202." Specifically, CrystalView argues that the trial court "erred in not considering mitigating factors in deciding whether actions in violation of Labor Code sections 201 and 202 were willful." (Capitalization omitted.) According to CrystalView, the trial court "refused to consider any evidence of the circumstances surrounding the non-payment of wages upon termination of employment," and considered only whether CrystalView intended to pay employees after their termination dates. CrystalView argues that the court should have determined whether CrystalView intentionally refused to pay amounts due "without a good faith belief that no obligation was owed." We conclude that the trial court did make such a determination, and that the law and evidence presented in this case support the court's findings.

Section 203, subdivision (a) provides in relevant part: "If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, 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."

"[T]o be at fault within the meaning of the statute, the employer's refusal to pay need not be based on a deliberate evil purpose to defraud workmen of wages which the employer knows to be due. As used in section 203, 'willful' merely means that the employer intentionally failed or refused to perform an act which was required to be done. [Citation.]" (Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 7-8, italics omitted (Barnhill).)

Cases in which courts have determined that a failure to pay wages within the time limits specified in section 203 was not "willful" have based that conclusion on the fact that in those cases there was a good faith dispute as to whether the wages at issue were due at all. "In Barnhill, [the appellate] court considered whether an employer's failure to pay wages is 'willful' if its legal duty to pay them is unclear at the time of the violation." (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1201 (Amaral).) "When the employee in Barnhill was discharged, she owed her employer a balance on a promissory note, which was intended to be repaid in installments by payroll deductions. [Citation.] The employer set off the balance due on the promissory note against the final wages paid to the employee, and the employee sued to recover her full wages plus waiting time penalties under section 203. [Citation.]" (Amaral, supra, at p. 1201.) After concluding that the failure to pay the employee all of the final wages due her was willful, the trial court awarded both wages and penalties. (Ibid.) The appellate court reversed the penalty award. (Ibid.) "Although [the appellate court] ultimately determin[ed] the setoff was not permissible, [the court] noted that the state of the law was not clear at the time the employer withheld wages, and several California appellate decisions approved of such setoffs. [Citation.]" (Ibid.) "'[G]iven that uncertainty,' [the appellate court] reasoned, 'appellant should not be penalized for believing that setoff was proper and payment of wages not required.' [Citation.]" (Ibid.) "Accordingly, the employer's nonpayment of wages was [held] not willful for purposes of section 203." (Amaral, supra, at p. 1201.)

Similarly, in Amaral, the court determined that an employer's duties to pay wages in accordance with a city's "Living Wage Ordinance" (LWO) were so unclear at the time of the employer's alleged failure to pay final wages when due under sections 201 and/or 202 that the failure to pay those wages could not be considered "willful" under section 203. (Amaral, supra, 163 Cal.App.4th at page 1202 ["Even more so than in Barnhill, the legal obligations imposed on employers by the LWO were unclear at the time of Cintas 's violations.... Although we have rejected Cintas 's legal arguments about the LWO, these defenses were not unreasonable or frivolous."].)

The good-faith dispute rule identified in Barnhill was incorporated into California's regulatory framework in California Code of Regulations, title 8, section 13520. That section provides:

"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 Section 203.

"(a) Good Faith Dispute. 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 recover[y] on the part of the employee. The fact that a defense is ultimately unsuccessful will not preclude a finding that a good faith dispute did exist. Defenses presented which, under all the circumstances, are unsupported by any evidence, are unreasonable, or are presented in bad faith, will preclude a finding of a 'good faith dispute.' "

The "dispute" that CrystalView raises is not the type of dispute that appears to come within the Barnhill rule. In Barnhill and subsequent cases such as Amaral, and Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314, the "good faith dispute" involved a question as to whether the claimed wages were, in fact, due to the plaintiffs. Here, however, there was never any dispute as to whether the late-paid wages were due to plaintiffs. Under the language of Barnhill and the regulation memorializing the Barnhill rule, a good faith dispute defense must be based on the existence of a "good faith disputethat any wages are due." (Cal. Code Regs., tit. 8, § 13520, italics added.) CrystalView has not cited any authority in which the Barnhill rule has been applied to immunize an employer for a good faith dispute as to whether it had to comply with time requirements of sections 201 and 202.

To the extent that CrystalView contends that there existed a good faith dispute as to whether the wages in question were due at the times required by California law, and that a dispute as to when the final wages were due (as opposed to a dispute as to whether wages were due at all or as to the amount of wages due) would be sufficient to preclude the court's finding that CrystalView acted willfully in failing to pay the plaintiffs the wages due to them as required by law, this argument also fails. First, there is no indication that the trial court did not consider all of the relevant circumstances surrounding CrystalView's final wage payments to the plaintiffs in deciding whether CrystalView's failure to pay in a timely manner was willful under section 203. The court clearly considered CrystalView's argument that it believed it was not required to comply with California labor laws such as sections 201 and 202 because it was a federal contractor and/or because the federal government should be considered the employer in light of its purported control over a number of aspects of the plaintiffs' employment. However, the court ultimately determined that CrystalView, not the federal government, was the plaintiffs' employer, and further concluded that "[n]either the Service Contract Act nor any other law brought to the attention of the Court indicates any federal intent to preempt state wage and hour laws for employees of federal contractors." It is reasonable to infer from the trial court's findings that the court simply did not believe that CrystalView could have reasonably believed that it did not have to comply with state law regarding when it was required to make final payments to its employees who either were discharged or quit.

We agree with the trial court's conclusion. CrystalView essentially acknowledged that it paid its exiting employees final wages later than it would have been required to pay them under sections 201 or 202. CrystalView simply did not believe that it had to pay the employees their final wages in compliance with sections 201 or 202. These facts are not in dispute. CrystalView has offered no relevant authority that would support its claim that a good faith dispute existed as to whether it was required to pay plaintiffs the wages were due in compliance with sections 201 or 202.²² Specifically, CrystalView has cited no authority supporting its position that it, as a federal government contractor, was reasonable in believing that it did not have to comply with both California and federal labor laws. To the extent that a federal requirement might preempt a state law, such preemption must be adequately demonstrated. CrystalView has identified no federal law that it relied on to conclude it was exempt from state labor laws. Rather, CrystalView seems to have held the simplistic view that it could ignore state law because it was providing services under a federal contract. There is no authority to support such a proposition. Although CrystalView may have subjectively believed that it did not have to comply with state law, CrystalView has not demonstrated that such a belief was reasonable under the circumstances.

22 Again, we are not convinced that the "good faith dispute" necessary to preclude imposition of waiting time penalties under section 203 is intended to include disputes as to whether sections 201 and/or 202 apply at all to the employees at issue (i.e., a dispute only as to when the wages are due). Rather, the dispute identified in the case law and by regulation is a "good faith dispute that any wages are due." (See Cal. Code Regs., tit. 8, § 13520.) The distinction is not irrelevant. A dispute as to whether the claimed wages were due is a dispute as to the nature and amount of wages owed. In contrast, a dispute as to whether the relevant Labor Code provisions apply to require that final wages be paid at a certain time is not a dispute as to the nature and amount of wages owed. An employer making this argument is not claiming that all or some portion of the employee's wages are not due at all; the employer is claiming that the final wages are not due at a certain time. It is not clear that a dispute that does not involve a question as to the amount of final wages that are due is the kind of dispute that may preclude imposition of waiting time penalties.

CrystalView thus cannot rely on the existence of a good faith dispute as to when the wages were due to avoid having to pay penalty wages for failing to pay the plaintiffs their final wages within the time frames identified in sections 201 and 202.

C. The plaintiffs' cross-appeal

1. The trial court erred in ruling that CrystalView was not required to either hold an alternative workweek election or pay the plaintiffs overtime wages for hours worked in excess of the maximum daily or weekly hours set by state law

Despite the trial court's ruling that CrystalView was generally required to comply with state wage and hour laws, the trial court nevertheless ruled that CrystalView was not liable to the plaintiffs for overtime compensation for violating section 510.²³ The trial court acknowledged that CrystalView had not held an alternative workweek election, but ruled that the plaintiffs could not prevail on their overtime wage claims because the "alternative work schedule" that CrystalView employed "was required by the federal government." Specifically, the court found that the alternative work schedule "was authorized in that it was properly implemented by Bechtel, [CrystalView's predecessor], and imposed upon [CrystalView] by the federal government."

23 The trial court apparently recognized that its rulings were contradictory. At a hearing conducted after the court issued its initial "STATEMENT OF DECISION," the court stated: "And the problem is it's either, either the state wage and hour laws apply or they don't, and the statement of decision that I issued, frankly, is a cop-out. It's kind of a little of this and a little of that. And it either applies all the way or it doesn't apply at all. That's the only fair way, the only logical way to do it."

On appeal, the plaintiffs challenge the trial court's finding that the federal government required CrystalView to utilize an alternative workweek schedule. The plaintiffs further argue that even if the federal government did impose an alternative workweek schedule on CrystalView, the trial court erred in concluding that this exempted CrystalView from state law requirements that it either (1) hold an alternative workweek election or (2) pay its employees overtime wages for any hours they worked in excess of eight hours per day and/or 40 hours per week. In response, CrystalView asserts that the federal government required CrystalView employees to work a 9/80 schedule.²⁴ CrystalView also contends that it was not required to hold an alternative workweek election because it was entitled to rely on the alternative workweek election that Bechtel had held for its employees who worked on the project before CrystalView took it over.

24 CrystalView does not identify why this fact, even if true, would exempt CrystalView from complying with state wage and hour laws in performing under the contract.

a. CrystalView may not rely on Bechtel's prior alternative workweek election to avoid liability for failing to pay overtime wages

CrystalView asserts that "Bechtel was the predecessor contractor who filed the appropriate notice of election with the state,"²⁵ and concludes that "[i]f state law applies, then [CrystalView's] operation under an already approved [alternative workweek] schedule would be lawful since they assumed the contract and some of Bechtel's employees along with it." This argument is baseless.

25 CrystalView's citation to the record to support this assertion does not, in fact, provide support for the assertion. CrystalView cites to a page of the plaintiffs' complaint, which says nothing about Bechtel or its alternative workweek election.

CrystalView has cited no authority to support its suggestion that it "assumed" or otherwise "inherited" Bechtel's contract with the federal government and that it therefore could continue to rely on the alternative workweek election that Bechtel had held. The evidence demonstrates that CrystalView is a completely different legal entity from Bechtel, and there is no evidence to suggest that CrystalView was a successor in interest to Bechtel for any purpose. Rather, CrystalView entered into entirely separate contracts with the federal government to provide the services that Bechtel had previously provided. These contracts came into effect only after Bechtel's most recent contract had expired. The fact that CrystalView's contracts covered the same subject matter as Bechtel's prior contract does not mean that CrystalView assumed Bechtel's contract. Nor does it provide any other legal basis for CrystalView to rely on Bechtel's alternative workweek election.

b. There is insufficient evidence to support the trial court's finding that the federal government required CrystalView to utilize an alternative workweek

Underlying the trial court's ruling on the overtime issue was the court's factual finding that the federal government legally or contractually imposed an alternative workweek schedule on CrystalView's employees. The plaintiffs challenge this finding, arguing that there is insufficient evidence that the federal government placed any requirement on CrystalView that forced it to impose a 9/80 work schedule on its employees who were performing services under the Environmental Records Contract.

We review the trial court's factual findings to determine whether there is substantial evidence to support them. (See Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 500-501.) "Under the substantial evidence standard of review, our review begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the trial court's factual determinations. [Citations.]" (Id. at p. 501.) "Substantial evidence, of course, is not synonymous with 'any' evidence, but is evidence which is of ponderable legal significance. It must be 'reasonable in nature, credible, and of solid value; it must actually be "substantial" proof of the essentials which the law requires in a particular case.' [Citations.] Thus, the focus is on the quality, not the quantity of the evidence. Very little solid evidence may be 'substantial,' while a lot of extremely weak evidence might be 'insubstantial.' [Citation.]" (Toyota Motor Sales U.S.A. v. Superior Court (1990) 220 Cal.App.3d 864, 871.)

As the plaintiffs point out, the sole evidence that CrystalView offered to support a finding that the Navy required that CrystalView's employees work an alternative workweek schedule is Chiang's testimony to that effect. At trial, Chiang essentially testified that the government had imposed the alternative workweek schedule on CrystalView, at least in part, because that was the schedule under which Bechtel's employees had been working. Chiang stated, "They told us Bechtel has done it [i.e., utilized an alternative workweek schedule], these people have work[ed] on the schedule for 15 years, and this is the schedule [the] government works as well, and we were ordered to work the same schedule, no choice." However, Chiang never identified who told her that CrystalView employees would have to work the 9/80 schedule, nor did she testify as to when or where such statements were made. The plaintiffs' attorney objected to much of Chiang's testimony on the ground that the testimony was speculative and was based only on Chiang's opinion, since she kept repeating that "they" wanted any number of things, without identifying who "they" were, or stating how she knew what "they" wanted.²⁶ It is unclear from the record how the court ruled on the objection, because the court's only response was, "No, I understand."

26 The identities of the persons to whom Chiang was referring could not be gleaned from CrystalView's attorney's questioning.

CrystalView's attorney finally asked Chiang, "Now, who from the government side mandated [the 9/80 schedule]?" Chiang responded, "The C.O. and C.O.T.R., and government side we have – the contracting side we have Mr. Selby, we have Ms. Rooney, we also have different technical users were there, and Bechtel senior managers were there." The plaintiffs' attorney objected to Chiang's testimony, arguing that anything she might say about what was said at meetings with the identified individuals would be hearsay. The court implicitly overruled this objection, since CrystalView's attorney continued to question Chiang without comment from the court. After a few more questions, the court finally said to CrystalView's attorney, "[S]he's not answering the questions." CrystalView's attorney replied, "I know." CrystalView's attorney again attempted to elicit responsive answers from Chiang, and eventually asked, "And the person, the specific person that was in the meeting [that] you just referenced; who told you about the 9/80 work schedule, what was that person's name?" Chiang responded, "We had government representatives, I wanted to say Mr. Shelby and – I'm sorry, Mr. Selby, Richard Selby. I want to – I want to say Ms. Karen Rooney and James McColl is in every meetings, and there are a couple gentlemen's from Bechtel as well."²⁷ CrystalView's attorney then asked Chiang whether the persons she had named were government representatives. Chiang indicated that Selby and Rooney were government representatives. However, Chiang never identified who, specifically, had told her that the government would require that CrystalView utilize the 9/80 work schedule, or when such statements were made. Even after Chiang was recalled to testify later in the trial, she repeated the same general assertions to the effect that CrystalView had no choice but to accept the government's schedule.

27 Grammar and punctuation errors in the original.

In addition to claiming that government representatives had orally informed CrystalView that it had to utilize a 9/80 work schedule, Chiang also claimed that the Environmental Records Contract dictated CrystalView's employees' work schedules: "Again, [the work schedule is] as dictated by the contract. They can go from nine to five, it can go from eight to four.... We work a government schedule[]. Whatever the contract says we work." However, the only reference to work scheduling in the Contract demonstrates that the government did not, in fact, require that CrystalView employees work according to any particular schedule. Rather, the contract evidences the opposite of what Chiang claimed at trial—i.e., that CrystalView had discretion to determine how to schedule its employees' work hours, as long as it exercised this discretion in a manner that limited conflicts with government work. The Contract provides:

"a) The contractor shall arrange its work to minimize interference with the normal occurrence of Government business.

"b) The contractor shall arrange its work schedule in order to optimize availability a practical use [sic] for government customers who will be utilizing NEMFAC."²⁸

28 It is not clear that subpart part "b" of this portion of the Contract is even relevant to work schedule considerations under the Environmental Records Contract, since this contract does not involve work at "Navy Equipment Management Facilities," i.e., "NEMFacs." Rather, this subpart appears to relate to the provision of services under the NEMFac Contract. This and other portions of the Environmental Records Contract use language identical to the language in the NEMFac Contract, and appears to be a holdover from when Bechtel performed the services described in the Environmental Records Contract and the NEMFac Contract under a single contract.

Chiang testified that she believed that this language "shows that we have to inherit a work schedule that was well defined by the government, it was worked by Bechtel, and we were dictated to work on the same terms." However, when asked to identify where the Environmental Records Contract provided for a particular schedule for CrystalView employees, Chiang could point to no language in the Contract other than the "minimize interference" provision. This language cannot reasonably be interpreted as requiring that CrystalView employees work the same schedule as Bechtel's employees had worked. Neither can this language reasonably be interpreted as requiring CrystalView employees to work an alternative workweek schedule.

To the extent that Chiang can be understood to have been claiming that federal government representatives somehow orally altered the terms of the Contract, the language of the Contract itself precludes this possibility. The Environmental Records Contract states, "The Contractor shall be under no obligation to comply with any orders or directions not issued in writing and signed by the Contracting Officer." At another point, the Contract similarly provides, "Verbal directions, instructions, explanations, commitments and/or acceptances given to the contractor or his personnel by a government employee shall not be construed by the contractor as a change in the scope of this contract and shall not be acted upon without the approval of the Contracting Officer." The plaintiffs' attorney asked Chiang, "The contract, which speaks for itself, says that there shall be no changes unless they are formalized by a proper document executed by the contracting officer. [¶] So did you receive any documents from the contracting officer indicating that you were required to work this alternative workweek that you're telling us you were told orally... was required?" Chiang responded, "We receive[d] oral instruction from the government during the transition to work this schedule." The plaintiffs' attorney then inquired, "Did you ever receive a written memorialization of that instruction?" Chiang stated, "If there's any memos between the government to our contract people or the program leadership, I personally had no knowledge. But my knowledge, my direct knowledge is the verbal instructions from the government to work the hours that's been in place for 15 years." CrystalView thus acknowledged that it did not have any documentary evidence that the government placed any valid or legally binding restriction on CrystalView regarding an alternative workweek schedule.

Further, there is nothing in the Environmental Records Contract that suggests that the only way that CrystalView could "minimize interference with the normal occurrence of Government business" would be to require that all of its employees work the same alternative workweek schedule involving the same nine-hour days, rather than a staggered work schedule under which no single employee would be required to work more than eight hours a day. Similarly, nothing in Chiang's testimony indicated how or why requiring every CrystalView employee to work nine hours on Monday through Thursday and eight hours on alternating Fridays was the only scheduling option that would minimize interference with the Navy's business. Under the terms of the Contract, which required only that CrystalView "minimize interference" with normal government business, CrystalView was not required to have every employee work the same nine hours on each Monday through Thursday.

Chiang's testimony that CrystalView was required to implement the same schedule that Bechtel had used, and thus had no choice but to impose a 9/80 schedule, was called into question by the testimony of Harvey, who had worked for Bechtel for more than a year under its contract to provide services with respect to the Navy's environmental records. Harvey testified that during the time she worked for Bechtel, other Bechtel employees, working under the same contract, had worked a variety of schedules, including five eight-hour days, a 9/80 schedule, and four 10-hour days. This is further evidence that a 9/80 schedule was not needed to "minimize interference" with the government's work, and contradicts Chiang's claim that CrystalView had no choice as to how to schedule its employees' work hours.

The most reasonable inference from Chiang's testimony is that the government's main scheduling concern was that CrystalView employees work during times that the government facilities were open, not that every CrystalView employee work a nine-hour schedule every Monday through Thursday. CrystalView offered no testimonial or documentary evidence from any of its government contacts to support its claim that the government required a 9/80 work schedule. Nor did CrystalView offer any explanation for why it failed to present any evidence other than Chiang's vague, speculative and conclusory statements as to what an unidentified third party orally informed her would be required of CrystalView. Under these circumstances, the trial court should have viewed Chiang's testimony with great skepticism. (See Evid. Code, § 412 ["If weaker and less satisfactory evidence is offered when it was within the power of the party to produce stronger and more satisfactory evidence, the evidence offered should be viewed with distrust."].)²⁹

29 The trial court also should not have considered Chiang's testimony as to what other government representatives may have said to her regarding the 9/80 schedule as evidence of the truth of those statements, since such evidence would constitute hearsay. (See Evid. Code, § 1200 [" 'Hearsay evidence' is evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter stated."].) Although the plaintiffs' attorney did not object on hearsay grounds to some of Chiang's earlier statements to this effect, he did raise a hearsay objection to Chiang's later, repetitious claims as to what the government representatives allegedly told her about the scheduling of CrystalView's employees. The trial court apparently did not rule on that objection. Although the plaintiffs may have forfeited any claim on appeal that the trial court should have excluded all of Chiang's statements about what the government representatives told her, the trial court, sitting as the trier of fact, should nevertheless have considered the hearsay nature of Chiang's testimony (see People v. Zamudio (2008) 43 Cal.4th 327, 351, fn. 10 ["one of the principal reasons for the hearsay rule" is "to exclude declarations where the veracity of the declarant cannot be tested by cross-examination"]) in assessing the weight to give to her testimony on this point.

While Chiang's testimony might support a finding that Chiang believed that the government was requiring a 9/80 work schedule, there is insufficient evidence to support the trial court's conclusion that the government "required" CrystalView to utilize a 9/80 work schedule. The Contract language that required that any changes to the terms of the contract be in writing precluded the court from relying on Chiang's testimony regarding purported oral changes to the Contract. Chiang's testimony is therefore insufficient to support a finding that the federal government in fact imposed a legally binding requirement on CrystalView that its employees work under an alternative workweek schedule.³⁰

30 This is not to suggest that the government representatives did not indicate to Chiang that the 9/80 work schedule would have to be implemented. It is possible that something like that did occur. However, it is simply not reasonable to find, under the minimal evidence that CrystalView presented at trial, that the federal government imposed a specific scheduling requirement on CrystalView that was legally binding or enforceable.

c. Even if the federal government had imposed a contractual scheduling requirement on CrystalView, this would not have relieved CrystalView of its obligation to comply with state wage and hour laws

Even if we were to assume that the federal government did require CrystalView to impose a 9/80 workweek on all of its employees, the trial court nevertheless erred in concluding that this would exempt CrystalView from complying with state wage and hour laws.

CrystalView has not established—and does not even appear to argue—that the federal government required the alternative work schedule by way of federal legislation.³¹ Rather, CrystalView contends that the federal government imposed this requirement contractually, albeit orally. However, CrystalView offered no authority to support its vague assertion that a contractual requirement by the government would necessarily preempt state overtime laws, and we have found no authority to support the proposition that the federal government can preempt state law by virtue of entering into a contract with a private party. Rather, as the court in Empire Healthchoice Assur., Inc. v. McVeigh (2005) 396 F.3d 136, 143 (Empire), explains, "only federal law may preempt state and local law."

31 At oral argument, counsel for CrystalView maintained that under the federal Service Contract Act of 1965 (SCA) (41 U.S.C. § 351 et seq.), CrystalView was required to utilize the same work schedule that Bechtel had utilized. However, CrystalView did not make any argument with regard to the SCA in its briefing on appeal. In fact, CrystalView never mentioned or cited the SCA. We therefore treat the argument as forfeited. (See People v. Dixon (2007) 153 Cal.App.4th 985, 996 [noting the impropriety of raising issues for the first time in a reply brief or at oral argument].)

"The constitutionality of federal preemption is, after all, grounded in the Supremacy Clause of the Constitution, which provides that 'the Laws of the United States... shall be the supreme Law of the Land... Any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.' U.S. Const. Art. VI, cl. 2 (emphasis added); see Sprint Spectrum [L.P. v. Mills (2002)] 283 F.3d at 414-15 ('The foundation of preemption doctrines is the Supremacy Clause, which invalidates state laws that interfere with, or are contrary to, federal law.' (citations, alterations and internal quotation marks omitted)). There is no constitutional basis for making the terms of contracts with private parties similarly 'supreme' over state law. See Arthur D. Little, Inc. v. Commissioner of Health & Hospitals, 395 Mass. 535, 481 N.E.2d 441, 452 (Mass. 1985) ('This court has been unable to locate authority in this or any other jurisdiction which supports the proposition that a contract to which the Federal government is a party somehow constitutes Federal law for the purposes of the supremacy clause.')." (Empire, supra, 396 F.3d at pp. 143-144.)

" 'Law' connotes a policy imposed by the government, not a privately-negotiated contract. [Citations.]" (Empire, supra, 396 F.3d at p. 144.) Thus, a contractual obligation imposed on CrystalView by the federal government would be not sufficient to excuse CrystalView from complying with state labor laws.

Further, there is no basis for otherwise concluding that the federal government's purported desire to have CrystalView employees work an alternative schedule preempted state wage and hour laws. "The supremacy clause of the United States Constitution... makes federal law paramount, and vests Congress with the power to preempt state law. (U.S. Const., art. VI, cl. 2; [citations].) There are four species of federal preemption: express, conflict, obstacle, and field. [Citation.] [¶]... [¶] First, express preemption arises when Congress 'define[s] explicitly the extent to which its enactments pre-empt state law.... [Citations.] Second, conflict preemption will be found when simultaneous compliance with both state and federal directives is impossible. [Citations.] Third, obstacle preemption arises when ' "under the circumstances of [a] particular case, [the challenged state law] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." ' [Citations.] Finally, field preemption, i.e., 'Congress' intent to pre-empt all state law in a particular area,' applies 'where the scheme of federal regulation is sufficiently comprehensive to make reasonable the inference that Congress "left no room" for supplementary state regulation.' [Citations.]" (Viva! Internat. Voice for Animals v. Adidas Promotional Retail Operations, Inc. (2007) 41 Cal.4th 929, 935–936, fn omitted.) Generally, " ' "[c]ourts are reluctant to infer preemption, and it is the burden of the party claiming that Congress intended to preempt state law to prove it." ' " (Ibid.)

CrystalView made no showing that any of these types of preemption would apply to prevent application of state overtime laws in this situation.³² It has cited no Congressional statement that would provide the basis for a finding of express preemption. Nor can CrystalView argue that field preemption exists in the context of labor law. In fact, Congress has avoided any attempt to preempt the entire field of labor law protections, as is evidenced by the Fair Labor Standards Act (FLSA). For example, where there is an apparent conflict between state law requirements and/or FLSA requirements (with which CrystalView must comply under its service contract), the higher standard applies. (See Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 795 (Ramirez).) As the Ramirez court noted:

32 CrystalView does not cite to a single federal legislative act that might serve to preempt state overtime laws.

"The FLSA explicitly permits greater employee protection under state law. 'The FLSA includes a "savings clause," which provides: "No provision of this chapter or of any order thereunder shall excuse noncompliance with any... State law or municipal ordinance establishing... a maximum workweek lower than the maximum workweek established [hereunder]...." (29 U.S.C. § 218(a).) The federal courts that have addressed this question have interpreted this savings clause as expressly permitting states to regulate overtime wages. [Citation.]' [Citation.]" (Ramirez, supra, 20 Cal.4th at p. 795.)

Thus, for example, if the FLSA requires overtime pay for work in excess of 40 hours per week, while state law requires overtime pay for work in excess of 40 hours per week or work in excess of eight hours per day, the state overtime law applies because it imposes the stricter standard. Thus, CrystalView cannot rely on field preemption in this context.

CrystalView also has not argued that either conflict or obstacle preemption should apply to prevent application of state wage and hour laws in this circumstance, and any such argument would necessarily be fruitless. There is no reason to conclude that application of state wage and hour laws here would, in fact, conflict with any scheduling requirement imposed by the federal government. Even if the government had required a 9/80 workweek, state law does not prohibit the utilization of a 9/80 work schedule. CrystalView could have avoided the overtime pay problem by holding an alternative workweek election, as Bechtel did. CrystalView could thus have complied with both a 9/80 scheduling request by the federal government and California's requirement that an employer hold an alternative workweek election before imposing such a schedule on its employees.

Alternatively, even if CrystalView did not hold an election, it could have imposed the alternative workweek that it claims the government required, and paid its employees overtime for hours worked in excess of eight hours per day. There is no argument that federal law prohibits a contractor from paying overtime wages. The fact that the Contract may not allow CrystalView to be reimbursed for overtime work performed without prior government authorization does not mean that state law requirements are in conflict with the Contract. Rather, it means simply that CrystalView would have to pay those wages itself, and would not be reimbursed if the overtime was not authorized in advance. This does not equate to a conflict between state and federal law on this issue.

Moreover, we are aware of no authority that would support an argument that the application of state wage and hour laws in this situation would create an obstacle to the accomplishment of Congressional objectives. Rather, at least one other court has determined that an employee's state law meal and rest period claims neither conflict with nor hinder the achievement of Congressional goals under the Service Contract Act. (See Naranjo v. Specturum Security Services, Inc. (2009) 172 Cal.App.4th 654, 665-666.)

Consequently, we must reverse the trial court's ruling that CrystalView was not required to either hold an alternative workweek election, or pay the plaintiffs overtime wages for hours worked in excess of the maximum hours set by state law.

Because we conclude that CrystalView was not relieved of its duty to either hold an alternative workweek election, or pay its employees overtime wages for any hours worked in excess of eight hours per day, we need not address the plaintiffs' additional contention that the trial court erred in finding that the plaintiffs' workweeks began at noon on Friday and ended at 11:59 a.m. the following Friday. Where an employee works in excess of both the daily and weekly maximum hour limits in the same workweek, overtime pay is not to be duplicated. (See Monzon v. Schaefer Ambulance Serv. (1990) 224 Cal.App.3d 16, 22 ["[T]he proper method to use in calculating overtime is one in which the employer must identify at week's end all hours worked by an employee during that workweek and pay overtime based upon the excess of total hours over the greater of either: (1) eight hours in a workday, including double time, or (2) forty hours in a workweek."].) Thus, employees are to be paid overtime wages for all hours worked in a workweek in excess of applicable daily maximum number of hours or the hours worked in a workweek in excess of the applicable weekly maximum number of hours, whichever number of hours is greater. (Ibid.)

In this situation, the hours worked in excess of eight hours per day is either equal to or greater than the hours that would have been worked in excess of 40 hours per week if the trial court had found that the workweek was not from Friday to Friday, but was, instead, Monday to Sunday, as the plaintiffs suggest. Any employee would have worked four excess hours per workweek under either the daily maximum standard or the weekly maximum standard. Since the employees may be paid only for the hours worked in excess of either the daily maximum or the weekly maximum and not both, the employees would be eligible to receive, at most, four hours of overtime wages per workweek, even under a Monday through Sunday workweek. Because the plaintiffs could not recover any additional overtime pay even if we were to agree that the plaintiffs' workweeks were from Monday to Sunday, we need not determine whether the trial court erred in finding that the plaintiffs' workweek began on Friday at noon and ended on the following Friday at 11:59 a.m.

2. The trial court erred in denying PAGA penalties under section 558 on the ground that section 558 was not mentioned in the complaint

In its "AMENDED STATEMENT OF DECISION," the trial court stated that it was "declin[ing] to award civil [] penalties under Section 558 for either plaintiff Fidel or any other employees who were not paid overtime wages" because "the initial complaint did not state that penalties would be sought under Labor Code Section 558." The plaintiffs contend that the trial court erred in determining that it could not award them penalties under section 558 because they failed to seek specific relief under that provision in their complaint. The plaintiffs further argue that the trial court abused its discretion in denying them leave to amend their complaint according to proof in order to include a request for relief pursuant to section 558.

The question whether the plaintiffs' complaint was sufficient to allow for an award of penalties under section 558 is one of law and is subject to de novo review. (See Montclair Parkowners Ass'n v. City of Montclair (1999) 76 Cal.App.4th 784, 790 [trial court's determinations as to sufficiency of complaint are reviewed de novo].) Our independent review of the issue leads us to conclude that the trial court erred in its determination that the plaintiffs were precluded from seeking section 558 penalties on the ground that they did not specifically request such penalties in their complaint.

Section 558 sets out no substantive violations, but, rather, provides only for additional remedies, in the form of penalties, for violations of other substantive provisions of the law, i.e., sections 510-556. Section 558 states in relevant part:

"(a) Any employer or other person acting on behalf of an employer who violates, or causes to be violated, a section of this chapter or any provision regulating hours and days of work in any order of the Industrial Welfare Commission shall be subject to a civil penalty as follows:

"(1) For any initial violation, fifty dollars ($50) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages.

"(2) For each subsequent violation, one hundred dollars ($100) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages." (§ 558, subd. (a)(1)-(a)(2).)

Section 558 penalties are an additional remedy, over and above those available to the plaintiffs under the substantive provisions of the Labor Code. "There is a 'basic distinction... between the cause of action (the primary right and duty, and the violation thereof) and the remedy or relief sought.' [Citation.] 'The gravamen, or essential nature... of a cause of action is determined by the primary right alleged to have been violated, not by the remedy sought. [Citation.]' [Citation.]" (Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1535.) " 'Since 1872, Code of Civil Procedure section 580 has provided that "[t]he relief granted to the plaintiff, if there be no answer, cannot exceed that which he shall have demanded in his complaint; but in any other case, the court may grant him any relief consistent with the case made by the complaint and embraced within the issue." ' [Citation.]" (Sovlensky, supra, 142 Cal.App.4th at p. 1535, italics added.)³³ " 'Under [a] prayer for general relief the court can give such judgment as plaintiffs show themselves entitled to, and as may be necessary to effect justice between the parties and protect the rights of both.' [Citation.]" (Id. at pp. 1535-1536.)

33 Code of Civil Procedure section 580, subdivision (a) currently provides in relevant part: "The relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint, in the statement required by Section 425.11, or in the statement provided for by Section 425.115; but in any other case, the court may grant the plaintiff any relief consistent with the case made by the complaint and embraced within the issue."

Courts are thus limited in their ability to award relief that exceeds what is requested in the complaint in the context of default judgments. However, the same is not true in contested cases. The policy behind the rule in Code of Civil Procedure section 580 limiting awards in default judgments to the relief that is specifically demanded in the complaint is explained in Finney v. Gomez (2003) 111 Cal.App.4th 527:

" '[N]otice [of the amount demanded by the plaintiff] enables a defendant to exercise his right to choose... between (1) giving up his right to defend in exchange for the certainty that he cannot be held liable for more than a known amount, and (2) exercising his right to defend at the cost of exposing himself to greater liability.' The restrictions imposed by [Code of Civil Procedure] section 580 thus serve to ensure the defendant is able to make a fair and informed choice. Therefore, as a general rule, in order to ensure notice, the default judgment must be limited to the specific amount of relief demanded in the complaint." (Finney v. Gomez, supra, 111 Cal.App.4th at p. 535.)

The same concerns do not exist in contested cases. "[W]hen an answer is filed, the case becomes one in which the court is authorized regardless of the prayer to grant any relief consistent with the plaintiff's averments. The jurisdiction of the court to grant any particular relief depends not on the prayer but on the issues -- that is, on the scope of the complaint and the issues made or which might have been made under it -- and any relief consistent with the issues raised may be granted regardless of the prayer. [Citations.]" (Wright v. Rogers (1959) 172 Cal.App.32d 349, 367-368.)

The plaintiffs' general prayer for relief included a request for "[a]ll such other and further relief as the Court may deem proper." This was sufficient to permit the plaintiffs to seek, and for the court to award, any remedy arising from the issues raised in the complaint. Since the plaintiffs very clearly alleged (and ultimately established) that CrystalView violated the overtime compensation law, the trial court erred in denying relief arising from these violations on the basis that the plaintiffs failed to specifically plead relief under section 558.

On remand, the trial court should consider to what extent the plaintiffs may be entitled to penalties under section 558 as a result of their having established CrystalView's violation of the overtime compensation.³⁴ Because we conclude that the trial court erred in holding that the plaintiffs may not recover the remedy provided in section 558, we need not consider the plaintiffs' alternative argument that the trial court abused its discretion in not allowing them to amend their complaint to add a request for relief under section 558.

34 The penalty provided in section 558, subdivision (a), is mandatory where a violation has been found: "Any employer... who violates, or causes to be violated, a section of this chapter... shall be subject to a civil penalty as follows...." (Italics added.) However, under PAGA, the court "may award a lesser amount than the maximum civil penalty amount specified by this part if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory." (§ 2699, subd. (e)(2).) Therefore, on remand, the court may exercise its discretion in awarding section 558 penalties in conformance with the standards provided in subdivision (e)(2) of section 2699.

3. The trial court erred in denying section 2699 penalties for CrystalView's Labor Code violations with respect to those employees who performed services for CrystalView in California and as to whom CrystalView violated sections 201 or 202

The trial court assessed penalties under PAGA for violations of sections 201 and 202 with respect to "each of the named plaintiffs and [CrystalView's] former employees who, at the time of their termination, were working on the same 'Environmental Support' contract on which the plaintiffs were working and who [were] not paid... final wages in compliance with the provision of Section 201 or 202." However, the court "decline[d] to award penalties on behalf of those employees identified only by number as employees 1, 12, 21, 23, 24, 25, 26, 27, 29, 30 and 35 as there was no showing that they were similarly situated to the plaintiffs." The plaintiffs contend that the trial court erred in requiring that the plaintiffs demonstrate that the other employees who were not paid their final wages in compliance with sections 201 or 202 were "similarly situated" to the plaintiffs. The plaintiffs established that the unnamed employees were aggrieved in that CrystalView failed to pay them their final wages in compliance with sections 201 and/or 202; PAGA does not require any further showing that the employees on whose behalf a plaintiff brings the PAGA action are otherwise "similarly situated" to the plaintiffs.

At trial, CrystalView's attorney argued, "[T]he 39 employees [for whom penalties were being sought under PAGA],... they can't be considered similarly aggrieved employees because they're working at a different location under different sets of rules, under different contracts, and whether or not they have an alternative workweek set up... nobody's even discussed. But they are not similarly aggrieved employees...." The trial court apparently agreed with CrystalView's position. However, neither the law nor the record supports CrystalView's contentions.

As the plaintiffs point out, the phrase "similarly situated" is often used in connection with class actions and other situations in which one or more plaintiffs sue on behalf of unnamed individuals. (See Code Civ. Proc., § 384(b); Civ. Code, § 1781, subd. (a).) The phrase is not used, however, in PAGA. Subdivision (a) of section 2699 states that civil penalties assessed under the Labor Code "may... be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3" (Italics added.) An "aggrieved employee" is defined as "any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed." (§ 2699, subd. (c).) Section 2699 does not define "other current or former employees." Presumably one must read the phrase, "other current or former employees" in concert with that part of the provision that provides that the penalties to be recovered are those arising from Labor Code violations. Thus, the most reasonable interpretation of the phrase "other current or former employees" is that it refers to other employees who were aggrieved by the alleged violations. The Supreme Court's description of these individuals (i.e., the "other current or former employees" on whose behalf a named plaintiff is seeking to recover penalties) as "nonparty aggrieved employees" in its recent decision in Arias v. Superior Court (2009) 46 Cal.4th 969, 984-987 (Arias) is consistent with this interpretation.³⁵

35 By letter dated July 9, 2009, counsel for the plaintiffs notified this court and opposing counsel of the Supreme Court's decision in Arias.

In Arias, supra,46 Cal.4th at page 975, the Supreme Court held that an employee pursuing a representative action against an employer for civil penalties under PAGA need not meet the class action requirements. In describing the logistics of a PAGA representative action, the Court explained, "An employee plaintiff suing, as here, under the Labor Code Private Attorneys General Act of 2004, does so as the proxy or agent of the state's labor law enforcement agencies. The act's declared purpose is to supplement enforcement actions by public agencies, which lack adequate resources to bring all such actions themselves. [Citation.] In a lawsuit brought under the act, the employee plaintiff represents the same legal right and interest as state labor law enforcement agencies—namely, recovery of civil penalties that otherwise would have been assessed and collected by the Labor Workforce Development Agency. [Citations.]" (Arias, supra, at p. 986)

Although the Arias court did not specifically consider whether a PAGA representative plaintiff must demonstrate that he or she is "similarly situated" to the other aggrieved former and current employees being represented, the court's holding that an aggrieved employee acting as private attorney general to enforce the Labor Code need not meet the class action requirements implicitly demonstrates that PAGA imposes no heightened procedural requirements similar to those that putative class action plaintiffs must meet. Rather, PAGA requires only that a representative plaintiff establish that the employer committed the Labor Code violations for which recovery is sought against the unnamed aggrieved employees, and that at least one of these violations was committed against the representative plaintiff. (§ 2699, subds. (a) and (c); see also Arias, supra, 46 Cal.4th at p. 987 ["Recovery of civil penalties under the act requires proof of a Labor Code violation [citation]."].) It appears that in concluding that the unnamed former CrystalView employees who also were not paid their final wages in compliance with sections 201 or 202 were not similarly situated to the named plaintiffs, the trial court was laboring under a misapprehension similar to that of the defendants in Arias, who argued that a PAGA representative plaintiff must meet class action requirements.

The plaintiffs presented evidence of section 201 and 202 violations as to the employees identified by number as 1, 12, 21, 23, 24, 25, 26, 27, 29, 30 and 35. In fact, after being presented with spreadsheets reflecting damages for all named and unnamed aggrieved employees, the court stated, "It seems like these spreadsheets would adequately and properly reflect damages, and the burden is on you [CrystalView] to show otherwise." The plaintiffs thus met their burden to prove the existence of CrystalView's violations of state labor law with regard to the 39 unnamed former employees.

Further, CrystalView admitted that its usual practice was to pay all of its employees their final wages according to the same pay schedule on which they had previously been paid. This meant that CrystalView paid its California employees their final wages not necessarily at the time of their termination, but often days or even weeks later, in violation of sections 201 and/or 202. CrystalView acknowledged that its practice violated state labor law, but relied on the unmeritorious defense that federal law preempted enforcement of state labor laws as to its employees.

It thus appears that the trial court denied recovery of PAGA penalties for the unnamed employees under the assumption that the plaintiffs were required to demonstrate additional similarities between the unnamed aggrieved employees and the representative plaintiffs beyond the fact that CrystalView committed violations of sections 201 and/or 202 against them—i.e., that they worked for CrystalView under similar federal contracts or were not working on federal enclaves. However, the only basis on which these factors would allow CrystalView to escape liability under state law is federal preemption, and federal preemption is a defense that CrystalView would have had the burden to establish. CrystalView presented no evidence, let alone sufficient evidence, to establish how or why it could avoid state law penalties for failing to comply with section 201 or 202 with respect to any of the unnamed aggrieved employees—even those who did not perform work for CrystalView under the Environmental Records Contract.

We conclude that the trial court improperly placed on the plaintiffs the burden to prove not only that CrystalView violated the Labor Code with respect to the unnamed, non-Environmental Records Contract employees, but also to prove the nonexistence of any of CrystalView's potential affirmative defenses. This was error. The trial court should have considered only whether the plaintiffs proved the elements of the Labor Code violations they alleged. On remand the trial court shall recalculate the penalty award under section 2699 to include all of the employees for whom the plaintiffs established violations of section 201 or 202.

IV

DISPOSITION

The judgment is affirmed in part and reversed in part, and the case is remanded. The judgment is affirmed to the extent that it awards the plaintiffs the following relief:

(1) unpaid overtime wages to plaintiff Fidel under section 511;

(2) untimely final wage penalties plus pre-judgment interest under sections 201, 202, and 203;

(3) section 2699 penalties for violations of sections 201 and/or 202 with respect to employees 2, 3, 5, 7, 11, 15, 28, 32, 33, 34, 37, 38, 40, 41, 42, 43, 44, 45, 46 and 47; and

(4) court costs and attorney fees.

The judgment is reversed to the extent that it:

(1) denies the plaintiffs unpaid overtime wages pursuant to section 511;

(2) denies relief under section 558; and

(3) denies section 2699 penalties for violations of sections 201 and/or 202 with respect to employees 1, 12, 21, 23, 25, 26, 27, 29, 30 and 35.

The matter is remanded for a determination of the unpaid wages and penalties due to plaintiffs, in accordance with this opinion. To the extent that the opinion of this court may require a new calculation of any of the affirmed awards, the trial court is directed to make such recalculations as are necessary to ensure proper resolution of the plaintiffs' claims.

Pursuant to section 1194, the plaintiffs are entitled to recover attorney fees and costs on appeal, in an amount to be determined by the trial court.

WE CONCUR: McCONNELL, P. J., O'ROURKE, J.

Despite recognizing the contradiction in its rulings, the court affirmed its tentative rulings.