Opinion
H042072
02-27-2017
GERARDO RAMIREZ, Plaintiff and Appellant, v. ISB MEHTA CORP et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 1-12-CV-237735)
Defendants ISB Mehta Corp and Vipul J. Mehta prevailed in a wage and hour lawsuit advanced by Gerardo Ramirez, a former employee who managed defendants' restaurants. Ramirez challenges the trial court's ruling that he was an exempt employee under Industrial Welfare Commission Wage Order No. 5-2001, entitling him to no overtime compensation. Finding no error, we will affirm the judgment.
I. BACKGROUND
Erik's DeliCafé is a franchised restaurant in the greater Bay Area featuring sandwiches, salads, and soups. ISB Mehta Corp, owned by Vipul J. Mehta (Owner) and his wife Sushma Mehta, purchased restaurants located in Sunnyvale and Cupertino. Owner hired Ramirez (Employee) in 2007 to manage the Cupertino restaurant. After a few months, Owner increased Employee's compensation with the understanding that he would work 50 hours per week managing both the Cupertino and Sunnyvale locations, in exchange for a $43,000 salary. Owner sold the Cupertino restaurant in December 2012. The day after the restaurant changed ownership, Owner gave Employee his last paycheck. According to Employee, he was fired at that time, but Owner claims Employee refused an offer of continued employment at the Sunnyvale restaurant for less pay.
Payroll records showed Employee earned $1,654 biweekly starting in 2008, except for three pay periods in 2010, when he was paid his wife's $885 biweekly salary and she was paid his salary. According to Employee, the salary switch occurred at Owner's suggestion to reduce Employee's child support obligation; Owner not only switched the salaries, but also gave Employee a letter to use in family court stating that his salary would be reduced due to an economic downturn. Employee testified at his deposition that his salary was reduced because of the letter, never mentioning that the reduction was contrived. Owner denied switching the salaries. He testified that he had confronted Employee, who admitted to making the switch.
One week later, Employee filed a class action lawsuit alleging that defendants, for at least four years preceding the filing of the complaint: failed to pay minimum wages (Lab. Code, §§ 226, 226.6, 1194, 1194.2, 1197; first cause of action); failed to pay overtime wages (Lab. Code, §§ 500, 510, 1194; second cause of action); failed to provide rest periods (Lab. Code, §§ 203, 226, 226.7, 1194; third cause of action); failed to provide meal periods (Lab. Code, §§ 203, 226, 226.7, 512, 1194; fourth cause of action); failed to provide itemized wage statements (Lab. Code, §§ 226, 1174, 1175; sixth cause of action); and violated unfair competition laws (Bus. & Prof. Code, § 17200 et seq.; seventh cause of action). Employee also alleged that defendants failed to pay timely wages after discharge (Lab. Code, §§ 201, 202, 203; fifth cause of action). The gravamen of Employee's case was that he was entitled to overtime compensation because his duties as a manager involved primarily nonexempt work.
Employee did not pursue class certification. He withdrew the third and sixth causes of action, and the remaining causes of action were tried to the court.
A. EMPLOYEE'S CASE
According to Employee's deposition and trial testimony, he worked more than 50 hours a week from December 2008 to December 2012. He regularly worked from about 7:30 a.m. to 5:30 p.m. during the week, splitting time between the restaurants. That schedule changed in 2010, when he would leave early two days a week for childcare obligations and work later the other three days. He worked Saturdays from 8:00 a.m. to about 2:30 p.m. He described his daily duties including counting cash, entering daily sales information, making daily bank deposits, writing checks, placing food orders, buying produce, marketing, preparing and delivering catering orders, and working the register (taking walk-in customer orders). Owner provided Employee with a cell phone, but he paid Owner $100 a month for the service.
Employee described working part-time as a manager and part-time as a regular employee. He was required to prepare food and serve customers because the restaurants were understaffed, and he stated he lacked true managerial authority because Owner was "over me on all decisions." Employee felt Owner undermined his authority by instructing employees to do things after Employee had instructed differently. Employee cited as an example giving a worker named Rosemary permission to leave her shift for a family emergency, and Owner instead ordering Employee to fire her. At one point Employee threatened to quit, but Owner promised to not interfere and let Employee run the business. In 2013 Employee was hired to manage a different Erik's DeliCafé. There he was not preparing food, working the register, or working weekends, and he was in charge of everything.
Employee's brother Jose was a salaried employee at the Cupertino restaurant, and his brother Rodolfo was salaried at the Sunnyvale restaurant. They, and employee Livier from the Sunnyvale restaurant, testified regarding Employee's hours and work activities.
Because some witnesses share surnames, we will use their given names to avoid confusion, intending no familiarity or disrespect.
Jose and Roldofo testified that Owner required salaried employees who worked less than their contemplated shifts to reimburse him for unworked hours. Employee stated he collected overpaid wages from salaried employees and gave the money to Owner. Jose was required to return money to Owner if he worked fewer than 112 hours in a two-week pay period, and Rodolfo had to pay Owner $9 per hour if he worked fewer than 114 hours in a pay period.
B. DEFENDANTS' CASE
1. Owner's Deposition and Trial Testimony
Owner hired Employee as the general manager of the Sunnyvale and Cupertino restaurants, Employee signed an employment contract requiring a 50-hour workweek, and Employee understood and met that time expectation. Owner could not produce the employment contract at trial because Employee had taken his personnel file and never returned it. Owner paid Employee a $43,000 salary—2.6 times the minimum wage—to manage both restaurants " 'A' to 'Z'." Employee's duties included hiring, firing, determining which employees should be put on salary, scheduling employees, inventorying, ordering supplies, marketing, calculating profits and losses, and calculating hours worked for payroll.
Owner generally spent a few hours each weekday at the Sunnyvale restaurant. He arrived about 10:30 a.m., made the catering deliveries (Employee helped him when there were several deliveries), and returned about noon. He checked the sales numbers, reviewed invoices, and signed checks. He met with Employee weekly. They would discuss labor costs and how to increase business. He would leave the restaurant about 2:00 p.m. to attend to other responsibilities. Between 2009 and 2012, Owner was actively involved in a local temple. He relied on Employee to manage the restaurants, as he sat on the temple's executive committee and considered his temple activities to be a full-time job.
Owner testified that Employee was on his group cell phone plan, which Owner paid for without requiring Employee to reimburse him. According to Owner, it was Employee who fired Rosemary, and Owner allowed that decision to stand because undermining Employee could have adversely affected his ability to manage his workers.
2. Sushma's Testimony
Owner's wife Sushma was not an active owner of either restaurant. She worked during the week in Cupertino without pay, and she described Employee's daily routine. Marketing was the manager's responsibility according to corporate policy, and it involved dropping off menus and business cards at local businesses. She could not find the Cupertino personnel files in 2012 when she and Owner were selling that restaurant. Employee told her the files were in his car and he would return them, but he never did.
3. Other Employee Testimony
Joaquin, Jaime, Mary, and Rosemary testified regarding Employee's schedule, duties, and activities. Rosemary testified that Employee fired her in 2011 after she left her shift for a family emergency. Owner refused to intervene in Employee's decision to fire her. Employee unsuccessfully contested Rosemary's unemployment claim.
4. Franchisor Operations Manual
The DeliCafé Operations Manual, which Employee acknowledged he had read, contained the job profile for a manager and a section addressing management training. The manager training checklist contained tasks and procedures under job function categories including financial management, ordering, catering, operational policies, hiring, training, performance management, pay and benefits, safety and sanitation, maintenance, and customer service. The customer service tasks included sales visits to local businesses and distribution of menus and coupons.
C. STATEMENT OF DECISION
The trial court rejected Employee's overtime compensation and minimum wage claims, finding that he was an exempt employee under both the executive and administrative exemptions defined in Industrial Welfare Commission Wage Order No. 5-2001 (Cal. Code Regs., tit. 8, § 11050). The court found that Employee primarily engaged in activities falling within those exemptions, noting that Employee directed the work of others; was authorized to hire and fire; customarily and regularly exercised independent judgment; and regularly and directly assisted Owner. Employee's duties and responsibilities also involved performance of non-manual work directly related to management policies or general business operations, and Employee was paid a salary more than twice the minimum wage.
The court found that Employee was responsible for overseeing operations at the Sunnyvale and Cupertino restaurants. His duties included "hiring and firing employees, approving all time sheets, preparing payroll orders for submission to [Owner's] payroll company, scheduling employees, monitoring employees to ensure that they took their meal and rest breaks, checking inventory, ordering food, preparing checks for vendors, sending royalties to the corporate office, remitting marketing royalties, soliciting catering business, engaging in marketing activities, training new employees, counting money, making daily bank deposits, picking up produce when needed, preparing and delivering catering orders, and occasionally working the register at one of the locations or assisting in the making of sandwiches. In addition, [Employee] regularly met with the owner as part of his managerial duties."
The court found "much of [Employee's] testimony not to be credible" given inconsistencies in his testimony, and it specifically rejected his claim that Owner had suggested he and his wife switch salaries to reduce his child support obligations. (See footnote 1, ante.) The court rejected the testimony of Employee's brothers Jose and Rodolfo largely because of their unsubstantiated claims that Owner had demanded cash reimbursements from them and other salaried employees who failed to work a certain number of hours during any pay period. The court relied on the testimony of other witnesses to find that Employee had engaged in nonexempt activities, including "preparing catering orders, making sandwiches, making deliveries, and manning the cash register," less than 50 percent of his 50-hour workweek.
The trial court rejected Employee's missed meal periods claim, finding no evidence that Owner had actively undermined his ability to take meal breaks. Employee's waiting time penalty claim failed because Owner had paid all accrued wages upon his resignation. Having lost his statutory claims, Employee's derivative unfair competition claim also failed.
Employee filed a timely appeal and opening brief. Owner failed to file a respondent's brief. Under Rules of Court, rule 8.220(a)(2), we "decide the appeal on the record, the opening brief, and any oral argument by the appellant."
II. DISCUSSION
Labor Code section 515 authorizes the Industrial Welfare Commission to establish exemptions from the overtime compensation requirements for executive, administrative, and professional employees. (Lab. Code, § 515, subd. (a).) Wage Order No. 5-2001 governs overtime exemptions for restaurants. (Cal. Code Regs, tit. 8, § 11050, subd. 2(P)(1).) The executive exemption has six components: (1) the employee's "duties and responsibilities involve the management of the enterprise in which he/she is employed," (2) the employee "customarily and regularly directs the work of two or more other employees," (3) the employee "has the authority to hire or fire other employees ...," (4) the employee "customarily and regularly exercises discretion and independent judgment," and (5) the employee earns a monthly salary "no less than two (2) times the state minimum wage for full time [40 hour per week] employment." (Cal. Code Regs, tit. 8, § 11050, subd. 1(B)(1)(a)-(d), (f).)
The remaining component, at issue here, requires the employee to be "primarily engaged in duties which meet the test of the exemption." (Cal. Code Regs, tit. 8, § 11050, subd. 1(B)(1)(e).) The Wage Order instructs that activities constituting exempt and nonexempt work be construed consistent with regulations governing the executive exemption under the Fair Labor Standards Act "effective as of the date of the order: 29 C.F.R. Sections 541.102, 541.104-111, and 541.115-116." (Ibid.) The Wage Order provides further: "Exempt work shall include, for example, all work that is directly and closely related to exempt work and work which is properly viewed as a means for carrying out exempt functions. The work actually performed by the employee during the course of the workweek must, first and foremost, be examined and the amount of time the employee spends on such work, together with the employer's realistic expectations and the realistic requirements of the job, shall be considered in determining whether the employee satisfies this requirement." (Ibid.) The employer has the burden of proving the exemption. (Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 794-795 (Ramirez).)
References to the Code of Federal Regulations are to the federal regulations as they existed on January 1, 2001, the effective date of Wage Order 5-2001.
Whether Employee was an exempt employee within the meaning of Labor Code section 515, subdivision (a) and Wage Order No. 5-2001 is a mixed question of law and fact. We therefore independently evaluate whether Employee's duties come within the meaning of the applicable statutes and regulations. (Ramirez, supra, 20 Cal.4th at p. 794.) To the extent Employee challenges the trial court's factual findings set forth in the statement of decision, we review those findings for substantial evidence. (Tribeca Companies, LLC v. First American Title Inc. Co. (2015) 239 Cal.App.4th 1088, 1102.) We " 'consider all of the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference, and resolving conflicts in support of the [findings]. [Citations.]' [Citation.] We may not reweigh the evidence and are bound by the trial court's credibility determinations. [Citations.] Moreover, findings of fact are liberally construed to support the judgment. [Citation.]" (In re Estate of Young (2008) 160 Cal.App.4th 62, 76.) A. CLAIMED ERROR UNDER HEYEN V. SAFEWAY
Employee relies on Heyen v. Safeway, Inc. (2013) 216 Cal.App.4th 795 (Heyen) to challenge the trial court's finding that he was an exempt employee. In Heyen, a former assistant store manager brought an action to recover unpaid overtime compensation, contending she had spent more than 50 percent of her work hours performing nonexempt tasks and was therefore misclassified as an exempt employee. (Id. at pp. 798-799.) As part of the mercantile industry, Safeway was governed by Wage Order No. 7-2001 (id. at p. 816), which contains an executive exemption identical to that in Wage Order No. 5-2001, applicable here.
The main issue in Heyen was how to classify time spent by an employee who concurrently performed exempt and nonexempt tasks. (Heyen, supra, 216 Cal.App.4th at p. 815.) The case was tried to an advisory jury, which was instructed to attribute the employee's time engaged concurrently performing exempt and nonexempt work to exempt or nonexempt activity depending on the primary purpose for which the employee undertook the activity. (Id. at p. 808.) The advisory jury was further instructed with a list of exempt and nonexempt tasks, and asked to decide whether the employee performed exempt tasks more than half her time. (Id. at pp. 808-809.)
In rejecting Safeway's argument that concurrent time should always be classified as exempt, the Heyen court drew upon principles from the federal regulations cited in Wage Order No. 7-2001 (the same regulations referenced in Wage Order No. 5-2001): (1) Work performed by a nonexempt employee is generally nonexempt work when performed by the supervisor; (2) the regulations do not recognize hybrid activities (activities having both exempt and nonexempt aspects); (3) identical tasks may be exempt or nonexempt depending on the manager's purpose in engaging in the task or the task's role in the work of the organization; and (4) in large retail establishments when certain tasks are customarily assigned to nonexempt employees, the performance of that work by a manager is nonexempt. (Heyen, supra, 216 Cal.App.4th at pp. 822-823.) The court concluded that the federal regulations, which "look to the supervisor's reason or purpose for undertaking a task," did not support the multitasking standard proposed by Safeway. (Id. at p. 826, italics in original.)
1. Evaluating and Quantifying Employee's Duties
Employee contends that the trial court erred "by refusing to parcel out exempt versus [non]exempt duties and undertake the inquiry mandated by Heyen." In Employee's view, Heyen required the trial court to "count up the exempt versus non-exempt duties," and to quantify how much of Employee's workweek was spent on each task. As relevant here, and consistent with the applicable jury instruction, the advisory jury in Heyen was tasked with deciding whether the employee had " 'performed exempt tasks for more than 50% of her time.' " (Heyen, supra, 216 Cal.App.4th at p. 808.) To that end, special verdicts required the advisory jury to find whether the employee had " 'spent more than 50% of her time each and every week [during the relevant time period] performing exempt tasks as defined by the Court's Instructions,' " and whether the employee " 'was primarily engaged in exempt work in each and every week' " during the relevant time period. (Id. at p. 810.)
CACI 2720 requires the employer to prove that the employee "performs executive duties more than half the time."
The trial court undertook a similar approach here. After listing the tasks Employee performed as the general manager overseeing the Cupertino and Sunnyvale restaurants, the court found that Employee spent "less than 50 percent of the week out of the 50 hours per week that [Employee] testified to having worked," engaged in nonexempt activities "including preparing catering orders, making sandwiches, making deliveries, and manning the cash register." The court further found that Employee "was primarily engaged in activities falling within the Executive and/or the Administrative Exemptions defined in IWC Wage Order No. 5-2001." Nothing more was required under Heyen.
2. Classifying Employee's Duties
Employee argues that making bank deposits, inputting sales data, paying bills, calculating employee hours for payroll purposes, handling inventory, ordering supplies, and marketing are nonexempt functions. Employee notes that basic bookkeeping was classified as nonexempt work in Heyen, and that making bank deposits and maintaining the necessary inventory to operate the restaurants "is something that an hourly non-exempt worker can and would do."
a. Bookkeeping
One of the tasks identified as nonexempt in Heyen was bookkeeping, which, according to the trial testimony in that case, was a low-paying position performed by an hourly employee. (Heyen, supra, 216 Cal.App.4th at p. 800.) But the Heyen court did not hold, nor even suggest, that bookkeeping be designated a nonexempt task in small business establishments such as Owner's restaurants. Indeed, the federal regulations discussed in Heyen make clear that classifying a job duty depends on a business's size and structure, and the employee's purpose in performing a particular task. (Id. at pp. 819-820, citing 29 C.F.R. § 541.108(a), (b), and (c).)
Guided by the relevant federal regulations, we conclude that the bookkeeping functions performed by Employee are exempt managerial tasks. Section 541.102 identifies "maintaining [] production or sales records for use in supervision or control" as an exempt managerial function. (29 C.F.R. § 541.102(b).) Section 541.108 recognizes as exempt tasks those that are "closely associated with the performance of the duties involved in such managerial and supervisory functions or responsibilities." (29 C.F.R. § 541.108(a).) Subsection (a) explains that supervision and management of a department "include a great many directly and closely related tasks which are different from the work performed by subordinates and are commonly performed by supervisors because they are helpful in supervising the employees or contribute to the smooth functioning of the department for which they are responsible." (Ibid.) By way of example, the regulation provides that basic timekeeping is a nonexempt function when a timekeeper is employed to maintain those records, but, as relevant here, in businesses "not large enough to employ a timekeeper," maintaining the basic time records of subordinates "is directly related to the function of managing the particular department and supervising its employees." (§ 541.108(b).)
We conclude that the bookkeeping tasks performed by Employee here—inputting sales data for inventory purposes, royalty purposes, and staffing purposes, maintaining employee hours for an accurate payroll, counting money, making bank deposits, and paying bills—were exempt functions because they were directly related to managing the restaurants, and they contributed to the smooth functioning of the restaurants for which Employer was responsible. Further, in this small business setting, the tasks were assigned to the manager and not performed by nonexempt employees.
b. Maintaining inventory and ordering supplies
Maintaining the inventory needed to operate the restaurants is an exempt managerial function under section 541.102(b), which states that "controlling the flow and distribution of materials or merchandise and supplies" is exempt work when tasked to a manager. (29 C.F.R. § 541.102(b); see also § 541.108(c) ["Maintaining control of the flow of materials or merchandise and supplies in a department is ordinarily a responsibility of the managerial employee in charge."].) Employee's tasks, including daily inventory, ordering food and other supplies needed to operate the restaurants, and purchasing produce from local retailers fall under that provision. A nonexempt employee's ability or willingness to check inventory and order supplies has no bearing on the classification of the inventory job functions here. Unlike in a large corporate setting as in Heyen, here those tasks were expressly the manager's responsibility, and they were not performed by nonexempt employees.
c. Marketing
Marketing the catering business falls under the executive exemption as a task closely related to managing the restaurants. (29 C.F.R. § 541.108(a).) Employee was responsible for keeping the restaurants' operating costs within budget, and promoting sales was a means of achieving that objective. As with the bookkeeping and inventory tasks, Employee was solely responsible for marketing, and that task was not handled by nonexempt employees.
B. SUBSTANTIAL EVIDENCE OF EXEMPT AND NONEXEMPT FUNCTIONS
Employee argues that defendants failed to introduce sufficient evidence that he was engaged in exempt activities more than 50 percent of the workweek, in part because they failed to quantify how much time Employee spent performing each exempt task. We reject that argument. By establishing the converse (i.e., the amount of time Employee spent engaged in nonexempt tasks), defendants necessarily established the amount of time Employee was engaged in exempt activity. Accordingly, we must determine whether substantial evidence supports the finding that Employee spent less than 50 percent of his 50-hour workweek performing the nonexempt activities identified by the trial court—preparing catering orders, making sandwiches, making deliveries, and operating the cash register.
We defer to the trial court's credibility determinations as to Employee's brothers. We interpret the court's credibility finding that "much of" Employee's testimony was not credible as rejecting his self-serving and contradicted testimony regarding switching salaries with his wife, reimbursing Owner for his monthly cell phone service, collecting money from salaried employees on Owner's behalf, and firing Rosemary. However, we do not interpret that credibility determination as extending to testimony from Employee that was undisputed and offered or elicited to establish the hours he engaged in nonexempt workplace activities.
1. Weekday Mornings
The evidence shows Employee starting his weekday at the Cupertino restaurant taking inventory, entering sales data, preparing the cash register, and preparing the bank deposit. He would drive to the Sunnyvale restaurant and repeat the same tasks there, finishing about 9:15 a.m. On a typical day, Employee would take half an hour to go to the bank, buy produce, and return to Sunnyvale, where he would spend another half hour on paperwork. Those exempt tasks would conclude at 10:15 a.m.
Employee would then turn his attention to preparing and delivering the Sunnyvale catering orders, nonexempt activities. Jaime testified that Employee returned to Cupertino about 11:00 a.m., Sushma testified that Employee returned to Cupertino between 11:30 a.m. and noon, and Employee testified that he would arrive in Cupertino at 12:00 p.m. or 12:10 p.m. Based on a noon arrival at Cupertino (reflecting the maximum amount of time Employee could have spent on nonexempt catering activities), Employee would have spent 1.75 hours per day on nonexempt catering activities, for a total of 8.75 hours per week.
2. Weekday Lunch Shift
Jaime testified that Employee worked in Cupertino until 3:00 p.m., and Mary testified that Employee spent half his time helping customers during the lunch shift. Sushma testified that Employee would help with the Cupertino lunch service "once in a while." Otherwise, he would do paperwork. Employee testified that he went "office to the register, office to the register," and that typically he was able to spend a half hour eating lunch without interruption twice a week. Based on the collective testimony, Employee would have performed a maximum of 1.5 hours of nonexempt work serving customers during the three-hour lunch shift, for a total of 7.5 hours per week.
3. Weekday Afternoons
After working the Cupertino lunch shift, Employee returned to Sunnyvale and spent the remainder of the afternoon on paperwork or marketing. Employee testified at his deposition: "If I have to come back in the afternoon with my daughters to do deliveries, I do." At trial he said if there were a nighttime delivery, he would handle it. Jose testified that Employee made afternoon deliveries for the Sunnyvale restaurant once or twice a week, but the trial court rejected that testimony. Given Employee's uncontradicted testimony that he made some afternoon deliveries and Owner's burden to quantify that activity to prove the exemption, we attribute some nominal time to nonexempt afternoon deliveries.
4. Saturdays
Employee testified that his Saturday workday started at 8:00 a.m. He prepared both restaurants to open at 9:00 a.m. In Sunnyvale, he would spend half an hour placing the food order, and "one hour, or 30 minutes," or "maybe ... until 11:00 something making the sandwiches." He would go to the bank, which took about 15 minutes, and upon his return he would cashier until 2:00 p.m. Then he would call the Cupertino restaurant and take any supplies to that location before ending his day about 2:30 p.m. He was able to take uninterrupted half-hour meal breaks two Saturdays per month. Livier, who worked Saturdays in Sunnyvale, testified that Employee worked until about 2:00 or 2:30 p.m. helping with food preparation, orders, and deliveries.
No evidence was presented disputing that Employee worked Saturdays or that, aside from making the bank deposit and placing a food order, he engaged in nonexempt activities between 9:00 a.m. and 2:00 p.m. Subtracting 30 minutes for placing the food order, 15 minutes for making the bank deposit, and 15 minutes for a meal break (averaging two Saturday half-hour meal breaks over 4.3 Saturdays per month), the record shows that Employee engaged in no more than 4 hours of nonexempt activity on Saturdays.
In summary, substantial evidence shows Employee spending approximately 20.25 hours per week performing nonexempt work, plus nominal time delivering the occasional afternoon catering order. The total time spent on nonexempt activity is less than 25 hours per week.
C. REMAINING ISSUES
Relying on Ramirez, Employee argues that Owner knew he was understaffed and that his realistic job expectation was for Employee to engage primarily in nonexempt activity. In Ramirez, the California Supreme Court noted that an employee cannot diverge from an employer's realistic expectation that he perform exempt work to evade a valid exemption. (Ramirez, supra, 20 Cal.4th at p. 802.) This is not such a case. Owner's expectation was fully consistent with the managerial duties set out in the Operations Manual, and Owner testified that Employee met those expectations. While it appears that Owner's staffing levels affected the amount of time Employee had to devote to nonexempt activity, the fact remains that Employee spent less than 50 percent of his 50-hour workweek performing nonexempt tasks.
Owner argued in the trial court that Employee's overtime claim failed for the additional reason that the parties had entered into a mutual wage agreement for a fixed salary to include overtime. A mutual wage agreement may compensate an employee for statutory overtime work provided the parties specifically and mutually agree to "the basic hourly rate of compensation upon which the guaranteed salary is based before the work is performed." (Ghory v. Al-Lahham (1989) 209 Cal.App.3d 1487, 1491.) An agreement to a weekly or monthly salary does not qualify as an explicit, mutual wage agreement that would eliminate statutory overtime pay. (Espinoza v. Classic Pizza, Inc. (2003) 114 Cal.App.4th 968, 974.) Owner failed to establish a mutual wage agreement because no evidence showed the parties having agreed to an hourly rate of pay. The evidence shows Employee receiving $1,654 biweekly, which amounts to a $43,000 annual salary. We will disregard the trial court's finding that plaintiff had signed a mutual wage agreement providing for "a base rate of $15.03 per hour" as it is not supported by the record.
Having found substantial evidence to support the trial court's factual determinations, we reject Employee's contention that the trial court's decision reflects an abuse of discretion.
Given our disposition affirming the judgment, we need not reach Employee's arguments regarding Owner's personal versus corporate liability.
III. DISPOSITION
The judgment is affirmed.
/s/_________
Grover, J.
WE CONCUR:
/s/_________ Rushing, P. J. /s/_________ Walsh, J.