COURT USE ONLY - Colorado › pacific › sites › default...AllPhase Landscape Construction, Inc. , No. 12-cv-1048 (April 15, 2015); see Sobolewski v. Boselli & Sons, LLC, 342 F

9/5/2019 State.co.us Executive Branch Mail - Colorado District Court Decision re Rest Breaks

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Primo - CDLE, Michael <[email protected]>

Colorado District Court Decision re Rest BreaksAdam M. Harrison Thu, Sep 5, 2019 at 11:13 AMTo: Scott Moss - CDLE <[email protected]>Cc: "Funk - CDLE, Elizabeth" <[email protected]>, Mike Primo - CDLE <[email protected]>, "David H.Miller" , Leroy Moya , "Yohe - CDLE, Eric" <[email protected]>

Mr. Moss and Ms. Funk:

I am writing to provide you with the attached Order from the Colorado District Court for the District of Jefferson Countyfrom the case of Pilmenstein v. Devereux, No. 2017CV30319 (Jefferson Co. Sept. 5, 2019), and to ask that the CDLEDivision of Labor Standards and Statistics consider it as part of its deliberations regarding the Colorado Minimum WageOrder.

As you probably remember, the parties in Pilmenstein conducted a joint deposition of the CDLE/DLSS under C.R.C.P.30(b)(6) in July. During that deposition, the CDLE’s designees were clear that: (1) the CDLE does not pursue monetaryremedies for rest break violations and (2) the CDLE takes no position on whether private individuals may bring civilactions for violations of Section 8 of the CMWO.

We ask the Division to reconsider the latter position based on today’s ruling.

As you may know, the United States District Court for the District of Colorado has previously ruled that an employee whois deprived of rest breaks in violation of Section 8 has a private right of action for additional compensation for the timethey spent working that should have been paid breaks. Sanchez v. Front Range Transportation, No. 17-cv-00579-RBJ (D.Colo. Sept. 17, 2017); Lozoya v. AllPhase Landscape Construction, Inc., No. 12-cv-1048 (April 15, 2015); see Sobolewskiv. Boselli & Sons, LLC, 342 F. Supp. 3d 1178, 1184 (D. Colo. 2018). The federal court’s rulings are attached. We havecommunicated with many other plaintiffs’ attorneys, and believe this is the first state court decision to come to thatconclusion.

We do not believe any court has ever held that a plaintiff/employee may not bring a civil action for monetary damages forviolations of Section 8.

The Directors who testified at the Rule 30(b)(6) showed a great deal of familiarity with the rulemaking processes of theUnited States Department of Labor and other lawmaking bodies. As such, the CDLE is probably aware that the USDOLhas often cited to court decisions in its regulations and the “Fact Sheets” it issues. We would ask the CDLE to treat thisdecision in a similar matter.

It is vital to the rights of Colorado workers that the CDLE clarify that there is, and always has been, a private right ofaction for monetary damages for violations of the Minimum Wage Order.

Thank you for your time.

9/5/2019 State.co.us Executive Branch Mail - Colorado District Court Decision re Rest Breaks

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Sincerely,

Adam

Adam M. HarrisonAttorney

The Sawaya Law Firm

1600 Ogden Street, Denver, CO 80218

Firm: (303)839-1650 ext. 1079 I Direct: (303)551-7691

I Fax: (303) 832.7102 I www.sawayalaw.com

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Small Claims County Court District Court Probate Court Juvenile Court Water Court

Jefferson County, State of Colorado

100 Jefferson County Parkway Golden, Colorado 80401

Plaintiff: ABIGAIL PILMENSTEIN, On behalf of Herself and All other Similarly Situated, v. Defendant: DEVEREUX CLEO WALLACE, A Colorado Nonprofit Corporation, Doing business as “Devereux Advanced Behavioral Health”

Case Number: 17CV30319

Division 3 Courtroom 4F

ORDER: LEGAL ISSUES TO BE DECIDED UNDER C.R.C.P. 56(h)

This matter comes before the Court on the parties’ joint request to determine four

legal issues pursuant to C.R.C.P. 56(h). After considering the pleadings and applicable authority, the Court issues this order.1

I. BACKGROUND

On March 2, 2017, Plaintiff Abagail Pilmenstein (“Plaintiff”) filed this case as an

individual and class action. She alleges that Defendant Devereux Cleo Wallace (“Defendant”) violated the Colorado Minimum Wage Order (“CMWO”), 7 C.C.R. § 1103-1:8 (“Section 8”), by failing to provide rest periods to a group of its employees known as direct care professionals (“DCPs”).2 Although Defendant concedes that it did not always provide rest periods, it argues that the duties and responsibilities of a DCP make it impractical within the meaning of the CMWO for Defendant to provide scheduled rest periods and that some rest periods were provided to some DCPs.

1 See Joint Status Report and Motion to Set Briefing Schedule (June 28, 2019) (“Joint Status Report”); Defendant’s Initial Brief on Legal Issues (July 17, 2019) (“Defendant’s Brief”); Plaintiff’s Initial Brief on Legal Issues Jointly Submitted to the Court for Resolution (July 31, 2019) (“Plaintiff’s Brief”); Defendant’s Reply Brief on Legal Issues (August 6, 2019) (“Defendant’s Reply”); Plaintiff’s Sur-Reply on Legal Issues (August 9, 2019) (“Plaintiff’s Sur-Reply”). 2 Plaintiff is no longer pursuing Count I, which asserted Defendant violated the CMWO (7 C.C.R. § 1103-1:7 (“Section 7”)) by failing to provide duty-free meal periods. See Amended Order: Stipulation of Dismissal of Count I of Plaintiff's Individual and Class Complaint Without Prejudice (April 17, 2018). Thus, only one claim (Count II) remains.

COURT USE ONLY

DATE FILED: September 5, 2019 8:42 AM CASE NUMBER: 2017CV30319

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In early 2019, the parties filed cross motions for summary judgment, which

focused largely on an alleged exemption granted by the Colorado Department of Labor and Employment (“CDLE”). On March 2, 2018, the Court denied the cross motions. See Order: Cross Motions for Summary Judgment (March 2, 2018) (“SJ Order”). Among other findings, the Court concluded that two opinion letters issued by the CDLE did not provide a legal exemption and that questions of fact remained as to whether DCPs fell within the “insofar as practicable” exemption.3

On October 10, 2019, the Court certified the class of “ALL DIRECT CARE

PROFESSIONALS EMPLOYED BY DEVEREUX CLEO WALLACE AT ANY TIME BETWEEN MARCH 2, 2014 AND THE PRESENT.” See Order: Plaintiff’s Motion for Class Certification (October 10, 2018) (“Class Order”) (emphasis in original). Essentially, the time-scope of the class begins three years before Plaintiff filed the complaint.

Since the certification, the parties have been cooperating with class certification

issues and trial preparation. In doing so, they ask the Court to decide four legal issues pursuant to C.R.C.P. 56(h):

“Does the [CMWO] allow a covered employer to not provide10-minute rest periods for each four hours or major fraction thereof worked by its employees if doing so is impracticable?” Joint Status Report at 2.

“Does the [CMWO] require that rest periods be scheduled?” Id.

“May an employee of an employer covered by the [CMWO] who was not provided with 10-minute rest periods under the [CMWO] obtain monetary damages for the violation(s)? If so, what is the measure of damages?” Id.

“If Defendant violated the [CMWO] by not providing 10-minute rest periods to its employees, did Defendant act willfully within the meaning of C.R.S. § 8-4-122 as a matter of law?” Id.

The parties believe that resolution of these four issues will clarify the factual and legal issues for trial and/or allow an interlocutory appeal. Id. In deciding these issues, the Court sets forth relevant portions of the CMWO, and incorporates the undisputed facts set forth in the SJ Order and Class Order.

Count II alleges that Defendant violated the Colorado Wage Claim Act, C.R.S. §§ 8-4-101 et seq. (“CCWA”) and the CMWO. The CWCA requires employers to “make timely payment of wages earned by an employee and [provides] judicial relief when employers fail to pay wages.” Cusimano v. Metro Auto, Inc., 860 P.2d 532, 533 (Colo.

3 The Court refers to the two letters as the “Two Letters.” See Letter from M. Blue to G. McHugh (March 6, 1998) and Letter from J. Wright to P. Long (November 17, 2003).

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App. 1992).4 The rules by which the CWCA is enforced are contained in CMWO No. 33. 7 C.C.R. § 1103-1.5 As a healthcare provider, Defendant is covered by the CMWO. See SJ Order at 7.

The CWCA itself does not contain provisions governing rest periods. Instead,

the CDLE addressed these issues in the CMWO, which are promulgated annually. The provision at issue is located in Section 8 of the CMWO, titled “ Rest Periods:”

Every employer shall authorize and permit rest periods, which, insofar as practicable, shall be in the middle of each four (4) hour work period. A compensated ten (10) minute rest period for each four (4) hours or major fractions thereof shall be permitted for all employees. Such rest periods shall not be deducted from the employee's wages. It is not necessary that the employee leave the premises for said rest period.

Section 8. In addition, Section 18 of the CWMO, titled “Recovery of Wages,” allows an employee to recovery unpaid wages:

An employee receiving less than the legal minimum wage applicable to such employee is entitled to recover in a civil action the unpaid balance of the full amount of such minimum wage, together with reasonable attorney fees and court costs, notwithstanding any agreement to work for a lesser wage, pursuant to C.R.S. § 8-6-118 (2016).

7 C.C.R. 1103-1:18 (“Section 18”).

II. LEGAL STANDARD

The parties seek determinations of questions of law under C.R.C.P. 56(h): At any time after the last required pleading, with or without supporting affidavits, a party may move for determination of a question of law. If there is no genuine issue of any material fact necessary for the determination of the question of law, the court may enter an order deciding the question.”

The traditional summary judgment standard applies to Rule 56(h) motions. Coffman v. Williamson, 348 P.3d 929, 934 (Colo. 2015). “[A]n order is proper under Rule 56(h) ‘’[i]f there are no genuine issue of material fact necessary for the determination of the

4 The Division of Labor Standards and Statistics of CDLE is statutorily charged with adopting rules under the CWCA, including regulations and wage orders. See C.R.S. § 8-4-101(3) and (4); C.R.S. § 8-4-111; Bonidy v. Vail Valley Ctr. For Aesthetic Dentistry, P.C., 186 P.3d 80, 84 (Colo. App. 2008). 5 The current CMWO No. 35 went into effect on January 1, 2019. CMWO No. 32 was in effect through 2016, CMWO No. 33 was in effect through 2017, and CMWO No. 34 was in effect through 2018. The provisions relevant to this case, Sections 3, 8, and 18, have remained the same over time.

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question of law.’” Id. (quoting C.R.C.P. 56(h)). The nonmoving party is entitled to the benefit of all favorable inferences that may be drawn from the undisputed facts, and all doubts as to the existence of a triable issue of fact must be resolved against the moving party. Id.6

III. ANALYSIS

With this standard in mind, the Court turns to the four issues.

A. Issue #1 – The “Insofar as Practicable” Exception

The parties dispute the meaning of Section 8. Plaintiff argues that the “insofar as practical” language applies only to the timing of rest periods, not the occurrence of rest periods. Defendant’s position, on the other hand, has evolved.7 It now argues that Section 8 is ambiguous and cannot be determined on summary judgment. Because of this ambiguity, Defendant maintains that parties should be allowed to present evidence at trial as to the meaning of Section 8 and its application to Defendant’s DCPs. Based on the plain language and undisputed facts, the Court finds that the meaning of Section 8 is clear – Defendant must provide a compensated a ten-minute rest period for each four hours worked or major fractions thereof worked by DCPs. This interpretation is supported by each sentence of Section 8. The first sentence states Defendant “shall authorize and permit rest periods.” Section 8 (emphasis added). The second sentence states rest periods “shall be permitted for all employees.” Id. (emphasis added). This language requires Defendant to provide rest periods – it does not give Defendant discretion.

6 The moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact. Cont’l Airlines, Inc. v. Keenan, 731 P.2d 708, 712 (Colo. 1987). When a party moves for summary judgment on an issue on which that party would not bear the burden of persuasion at trial, the moving party satisfies its initial burden by demonstrating to the court that there is an absence of evidence in the record to support the non-moving party's case. Sanderson v. American Family Mut. Ins. Co., 251 P.3d 1213, 1216 (Colo. App. 2010). If the moving party meets its burden, the non-moving party must demonstrate by relevant and specific facts that a real controversy exists. Knittle v. Miller, 709 P.2d 32, 35 (Colo. App. 1985). An adverse party may not rest upon mere allegations or denials in its pleadings, but rather must set forth specific facts through affidavits or discovery responses demonstrating the existence of a genuine issue for trial. Id. A genuine issue of material fact cannot be raised by counsel simply by the means of argument. Hunter v. Mansell, 240 P.3d 469, 476 (Colo. App. 2010). If the nonmoving party fails to establish a genuine issue for trial, then summary judgment may be entered in favor of the moving party if the moving party has met its ultimate burden of persuasion. Sanderson, 251 P.3d at 1216.

7 Defendant contends that the Court has already decided this issue because it “concluded Defendant’s interpretation [of the rest period provision] was supported and thereby denied summary judgment to Plaintiff on the issue.” See Defendant’s Brief at 3-4. Although Defendant correctly quotes the order, it fails to note two important statements. First, the Court found that “under the CMWO, an employer must provide . . . rest periods ‘which, insofar as practicable, shall be in the middle of each four (4) hour work period.’” SJ Order at 7, citing Section 8. Further, the Court explained that “Section 8 is a close call which may require discovery and may be revisited in the future.” Id. at 9, n.7. There is nothing that prohibits the Court from revisiting a summary judgment issue as the case develops, especially here where the Court reserved such a ruling.

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The “insofar as practical” language relates only to the timing of the rest period. If practicable, the ten-minute rest period must be in the middle of each four hour work period. Stated differently, the “insofar as practicable” clause modifies the timing of the rest period. The clause does not modify the absolute requirement to provide rest periods. The Court agrees with Plaintiff that the “insofar as practical” language applies only to the timing of rest periods, not the occurrence of rest periods. Defendant has not presented any facts or authority otherwise. Further, its attempt to label this interpretation as “a strict liability obligation” is not persuasive because it can present evidence about how it complied with Section 8 as interpreted by the Court.

B. Issue #2 – “Scheduled” Rest Periods

The second issue is does Section 8 require the reset periods be scheduled? The answer is no. As explained above, Section 8 does not mandate that rest periods be “scheduled.” The word “scheduled” is not found therein. Instead, Section 8 only requires a rest period be “in the middle of each four (4) hour work period” if that option is practicable. Id. Stated differently, if something about the work environment makes it impracticable for a rest period in the middle of the four hour period, another more appropriate time is permitted. Although such a scenario may relieve Defendant of the timing of the rest period, it does not relieve Defendant of the obligation to provide the rest period. In sum, Section 8 does not require the rest period be scheduled. Defendant has not presented any facts or authority otherwise. However, it may present evidence about how it complied with Section 8 as interpreted by the Court.

C. Issue #3 – Monetary Damages

The next issue is whether an employee may recover monetary damages for violations of Sections 8? Plaintiff says the answer is yes – “an employee who is not provided with ten-minute rest periods . . . may obtain monetary damages for 10 minutes of wages for each rest period she did not receive.” Plaintiff’s Brief at 8. Defendant contends that monetary damages are not recoverable because there is no private right of action. To resolve this dispute, the Court begins with Section 18, which states in relevant part:

An employee receiving less than the legal minimum wage applicable to such employee is entitled to recover in a civil action the unpaid balance

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of the full amount of such minimum wage together with reasonable attorney fees and court costs . . .

Section 18 (emphasis added). Thus, an employee who receives “less than the legal minimum wage” may pursue damages in a civil action Id. Section 3 then requires employers to pay employees the minimum hourly wage (currently $11.20/hour) “for all hours worked.” 7 C.C.R. § 1103-1:3 (“Section 3”). This section covers both the hourly rate and the number of hours worked. If an employee works but is not paid for her time, she has received less than the legal minimum wage for the hours worked. Section 8 then elaborates on what time must be compensated in terms of rest periods – rest periods must be compensated and included in “hours worked.” Section 8 (“a compensated ten (10) minute rest period for each four (4) hours or major fractions thereof shall be permitted for all employees. Such rest periods shall not be deducted from the employee’s wages”).8 So, if an employee works during rest periods required by Section 8 and is not paid, she is “receiving less than the legal minimum wage . . . for all hours worked.” Sections 18 and 3 (emphasis added). An employee who is deprived of her rest period effectively provides the equivalent number of minutes of work to her employer without additional compensation. As such, she can pursue monetary damages in a civil action. Any suggestion that a civil action is limited only to wages for less than the hourly rate (Section 3), defies common sense and ignores the language and purpose of the statues and regulations. See Sobolewski, 342 F.Supp.3d 11787, 1184 (D. Colo. 2018). In this case, Plaintiff alleges she was not paid for rest periods (for which she worked) as required by Section 8. Had her hours been properly calculated, she would have been entitled to receive minimum wage for the time worked. Stated differently, she was an employee “receiving less than the legal minimum wage applicable to such employee . . . for all hours worked.” Sections 18 and 3. Since she was not paid for the would-be rest periods, she may pursue a civil action for the unpaid balance of any minimum wage amounts owed to her by reason of Defendant’s alleged violations. Defendant’s other arguments are not persuasive. For example, Defendant’s suggestion that she cannot recover damages because she has been paid for the would-be rest periods has been rejected by other courts. Lozoya v. AlllPhase Landscape Construction, Inc., 2015 WL 1757080 at *2 (D. Colo. Apr. 15, 2015) (quoting Wingert v. Yellow Freight Systems, Inc., 50 P.3d 256, 260 (Wash. 2002). When employees are not provided with the ten-minute mandated rest period their workday is extended by ten minutes without compensation. Further, the Court is not implying a private right of action, rather it is enforcing an express damages remedy. Any other result would leave Plaintiff without a remedy for unpaid wages – something that is inconsistent with the

8 See also Section 7 (“The employees must be completely relieved of all duties and permitted to pursue personal activities to qualify as a non-work, uncompensated period of time”).

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language and purpose of the statutes and regulations at issue. The three federal cases cited by Plaintiff are most persuasive.9 For these reasons, the Court holds that an employee who is not provided with ten-minute rest periods (as required by Section 8) may recover monetary damages for ten-minutes of wages for each rest period not received. Defendant has not presented any facts or authority otherwise.

D. Issue # 4 – Willful Violation of Section 8 for the Purpose of the Statute of

Limitations

The final issue relates to the statute of limitations for Plaintiff’s claim. The parties ask the Court to decide the following question: “[i]f Defendant violated the [CMWO] by not providing 10-minute rest periods to its employees, did Defendant act willfully within the meaning of C.R.S. § 8-4-122 as a matter of law?” Joint Statement at 2. If Defendant acted willfully, as Plaintiff argues, the three-year statute of limitations applies. Whereas, if Defendant did not act willfully, as Defendant asserts, the two-year statute of limitations applies. C.R.S. § 8-4-122 sets forth a two- or three-year statute of limitations for actions brought under the CWCA:

All actions brought pursuant to this article shall be commenced within two years after the cause of action accrues and not after that time; except that all actions brought for a willful violation of this article shall be commenced within three years after the cause of action accrues and not after that time.

C.R.S. § 8-4-122 (emphasis added). “To fall under the three-year statute of limitations, the plaintiff must show that the employer either knew or showed reckless disregard for the matter of whether its conduct violated the statute. Reckless disregard can be shown through ‘action entailing an unjustifiably high risk of harm that either known or so obvious that it should be known.’” Mumby v. Pure Energy Servs. (USA), Inc., 636 F.3d 1266, 1270 (10th Cir. 2011) (internal citations omitted). Plaintiff argues that Defendant acted willfully because it failed to exercise diligence in face of the obligations of Section 8. Plaintiff cites testimony that Defendant

9 See Sobolewski, 342 F.Supp.3d at 1184 (rejecting argument that a cause of action under the CWMO may only be maintained if the employee is paid less than the minimum wage and finding that “an employee-plaintiff may bring a private civil action for violations of the Wage Order's meal and rest period regulations”); Sanchez v. Front Range Transp., 2017 WL 4099896 at *4 (D. Colo. Sept. 15, 2017) (finding that CMWO supports a private right of action for violations of Section 8, as it does for Section 4 (overtime) and Section 19 (prohibition of threats)); Lozoya, 2015 WL 1757080 at *2 (finding that the plaintiffs could prevail on their claim for lost wages because of unused rest periods based on principle that “when the employees are not provided with the mandated rest period, their workday is extended by 10 minutes”).

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did not have a policy or practice to provide ten-minute periods before the first of the Two Letters or that Defendant did not know why it refused rest periods. There is evidence that other health care providers were not exempt from Section 8. Defendant argues that its rest period policy was based on the Two Letters. Defendant’s reliance on these letters was reasonable and cannot be willful. See, e.g. Jordan v. Maxim Health Servs, No. 15-CV-01372-KMT, 2018 WL 1535507 (D. Colo. Mar. 29, 2018) (while an employer’s reliance on an opinion letter from CDLE did not foreclose plaintiff’s claim, the employer’s reliance was sufficient to preclude a finding of willfulness as a matter of law). Defendant also references testimony of CDLE officials. There are genuine issues of material fact as to whether Defendant willfully violated Section 8. The trier of fact, not the Court, must decide this issue

IV. CONCLUSION

In sum, the Court enters the following orders:

Section 8 does not except Defendant from providing ten-minute rest periods for each four hours or major fractions thereof worked by DCPs.

Section 8 does not require a rest period be scheduled.

A DCP who was not provided with ten-minute rest periods may obtain money damages for ten minutes of wages for each rest period she did not receive.

If Defendant violated Section 8, the fact-finder must decide whether such violations were willful for the purpose of the statute of limitations.

The Court orders the parties to contact the Court to schedule a status conference to be completed on or before September 16, 2019. Although the parties should continue to prepare for trial (set to begin on October 21, 2019), a trial management order is not required before the status conference. September 5, 2019.

BY THE COURT:

_____________________ Jeffrey R. Pilkington District Court Judge

Lozoya v. AllPhase Landscape Construction, Inc., Not Reported in Fed. Supp. (2015)2015 WL 1757080, 2015 Wage & Hour Cas.2d (BNA) 107,025

© 2019 Thomson Reuters. No claim to original U.S. Government Works. 1

2015 WL 1757080United States District Court, D. Colorado.

José LOZOYA; Antonio Maldonado; and Mario Peña, on behalf ofthemselves, individually, and on behalf of those similarly situated, Plaintiffs,

v.ALLPHASE LANDSCAPE CONSTRUCTION, INC., a Colorado corporation, doing business as All Phase

Landscape; Donald Troy Tinberg; and Mark Fisher, in their individual and corporate capacities, Defendants.

Civil Action No: 12–cv–1048–JLK|

Signed April 15, 2015

Attorneys and Law Firms

Leslie Ann Krueger–Pagett, Rachel Graves, David H. Miller, Sawaya, Rose, McClure & Wilhite, P.C., Denver, CO, for Plaintiffs.

Joseph Andrew Ausmus, Ausmus Law Firm, P.C., Centennial, CO, Nancy Cornish Rodgers, Paul David Godec, Kissinger &Fellman, P.C., Denver, CO, for Defendants.

MEMORANDUM OPINION AND ORDER

Kane, Senior U.S. District Judge

*1 Before me are the parties' cross motions for partial summary judgment on certain issues (Docs. 104, 112, 114 and 105,111, 113). For the reasons that follow, Defendants' motion is GRANTED in part and DENIED in part, and Plaintiffs' Motionis DENIED.

BackgroundThe Plaintiffs in the action have brought claims against their former employer, AllPhase Landscape Construction (“AllPhase”or “Defendant”) and two of its executives under the Federal Labor Standards Act (“FLSA”) and Colorado's minimum wagelaw, challenging certain of Defendant's pay policies and practices, including its policy of not paying employees for time spenttraveling to job sites (“windshield time”) and of taking deductions from wages for equipment damaged on the job. The discoverycut-off was August 14, 2014, and both parties have now fully briefed cross-motions for partial summary judgment on certainissues (Docs. 104, 112, 114 and 105, 111, 113).

Summary Judgment StandardSummary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgmentas a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter–Chem CoalCo., Inc., 41 F.3d 567, 569 (10th Cir.1994). Whether there is a genuine dispute as to a material fact depends upon whether theevidence presents a sufficient disagreement to require submission to a jury or conversely, is so one-sided that one party mustprevail as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d1132, 1136 (10th Cir.2000); Carey v. U.S. Postal Service, 812 F.2d 621, 623 (10th Cir.1987). A fact is “material” if it pertainsto an element of a claim or defense; a factual dispute is “genuine” if the evidence is so contradictory that if the matter wentto trial, a reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. The Court must resolve factualambiguities against the moving party, thus favoring the right to a trial. Quaker State Minit–Lube, Inc. v. Fireman's Fund Ins.Co., 52 F.3d 1522, 1527 (10th Cir.1995); Houston v. Nat'l General Ins. Co., 817 F.2d 83, 85 (10th Cir.1987).

DATE FILED: July 31, 2019 11:13 AM FILING ID: 3093E7AC2FBF4 CASE NUMBER: 2017CV30319



Defendants' Motion for Partial Summary JudgmentDefendants seek partial summary judgment on two issues: (1) whether Plaintiffs can recover penalties or liquidated damageswith respect to their state law claims under Colo.Rev.Stat. § 109(3)(b), and (2) whether Plaintiffs can recover damages forallegedly missed rest periods required by the Minimum Wage Order.

i. Penalties Under the Colorado Wage Act

The Colorado Wage Act (“CWA”) provides that if an employee is terminated “by volition of the employer,” the employeethereafter makes a written demand for wages due, and the employer does not pay those wages within 14 days, “the employershall be liable to the employee for the wages or compensation, and a penalty” calculated under a certain formula. C.R.S. § 8–4–109(3)(b). An employee who has not made a written demand for the payment within sixty days after the date of separation

“shall not be entitled to any such penalty under this subsection (3).” C.R.S. § 8–4–109(3)(d). 1 Plaintiffs argue that Section109's written demand requirement does not apply to current employees, and that Plaintiff Lozoya's complaint to the ColoradoDepartment of Labor (“CDOL”) in December of 2011 (while he was still an employee) satisfies the written demand requirementon behalf of the class such that class members are entitled to statutory penalties. Doc. 111 at 11–14. Defendant argues that thepenalty provision does not apply to demands made during employment, and that Plaintiff Lozoya's complaint to the CDOLconcerned only travel time. Doc. 105 at 9–10.

1 This language has been removed from the version of the statute effective January 1, 2015.

*2 The CWA contemplates payment after termination of wages that are not in dispute. See CWA 8–4–109(1)(a) (providing thatwages “earned, vested, determinable, and unpaid at the time of such discharge [are] due and payable immediately”); Summersv. Texas de Brazil (Denver) Corp., No. 09CV3147, 2011 WL 1832334, *4 (D.Colo. May 11, 2011) (“Colorado courts have heldthat penalties assessable under § 8–4–109(3) are for wages that are ‘undisputed but unpaid.’ ”). The only written demand inthis case was made while Plaintiff Lozoya was still an employee, and the wages sought are not “undisputed and unpaid,” butrather compensation for Defendant's “windshield time” policy and other practices, which were and continue to be an area offactual and legal dispute between the parties. Accordingly, I find that statutory penalties are not available, and grant this portionof Defendants' motion for summary judgment.

ii. Compensation for Rest Periods

Plaintiffs seek straight or overtime pay for the rest periods required by the Minimum Wage Order that Defendant allegedly didnot allow them to take. Defendants argue that because Plaintiffs were paid for all the time that they actually worked, they are notentitled to any further monetary damages for rest periods, even if they were not taken. Doc. 105 at 10–12. Defendants also relyon a redacted letter from a “Compliance Officer” at the CDOL indicating that “[i]t is the position of this office ... [that] unlessthe employee is docked for [rest] breaks not allowed, there is no monetary recovery” available for missed rest periods. Ex. Gto Doc 105. Plaintiffs argue that the Court owes no deference to a letter written by a “Compliance Officer” under unspecifiedcircumstances and that being forced to work through required rest breaks means in effect that Plaintiffs were not compensatedfor that time. Doc. 111 at 16–19. The Colorado Wage Claim Act allows an employee “to sue his or her former employer forearned wages and other compensation the employer has refused to pay.” Lester v. Career Bldg. Acad., 338 P.3d 1054, 1058(Colo.App.2014); see also Colo.Rev.Stat. § 8–4–109. Although there do not appear to be any state or federal Colorado decisionson point, the idea that missed rest periods can constitute “wages or compensation” has been accepted by other courts. See, e.g.,Wingert v. Yellow Freight Systems, Inc., 50 P.3d 256, 260 (Wash.2002) (rejecting argument that failure to provide employeeswith required rest period did not result in lost wages and concluding that “[w]hen the employees are not provided with the



mandated rest period, their workday is extended by 10 minutes”). I find that Plaintiffs may prevail on their claim for lost wagesbecause of unused rest breaks and deny this portion of Defendants' motion for partial summary judgment.

Plaintiffs' Motion for Partial Summary JudgmentPlaintiffs seek summary judgment on Defendant's liability with respect to each of the major challenged policies or practices,and with respect to the applicable statute of limitations.

i. Defendant's Policy of Not Paying for “Windshield Time”

Plaintiffs argue that they are entitled to summary judgment on their claim that Defendant's “Windshield Policy” of not payingemployees for time worked before arrival at a job site violated the FLSA and the Colorado Wage Act, citing examples of certainemployees' timecards, testimony that employees were not paid for time worked before arrival at the job site, and testimony ofcertain of Defendant's employees indicating that this was the Defendant's policy and practice. Doc. 104 at 12–15. Defendantargues that despite its written policy, its actual practice was to pay employees if they began work at AllPhase's premises beforetraveling to a job site, Doc. 112 at 7, and that employees working under certain supervisors and in certain divisions (e.g., theenhancement subdivision, snow removal crews, and irrigation technicians) were actually paid for time spent loading trucksand driving to the first job site. Doc. 112 at 7–15. I agree with Defendants that summary judgment is inappropriate becausethere are factual disputes as to whether and how Defendant's policy was applied in practice, to which employees, and underwhat circumstances.

ii. Failure to Pay Overtime for Shifts Over 12 Hours

*3 Plaintiffs argue that they are entitled to summary judgment on their claim that Defendant illegally failed to pay overtimefor shifts in excess of 12 hours, citing testimony indicating it was Defendant's practice not to pay overtime for hours workedover 12 in one day. Doc. 104 at 16–17. Plaintiffs also cite to certain timecards showing between 11–12 hours of work and arguethat credit for “windshield time,” rest breaks not taken, and lunch breaks not taken would increase the time worked to morethan 12 hours, thus requiring overtime pay. Id. at 17. Defendants argue that Plaintiffs have not identified any specific employeeswho failed to receive overtime pay for time worked over 12 hours. I deny summary judgment on this issue because Plaintiffs'evidence does not meet their burden of proof to show overtime was not paid.

iii. Deductions for Equipment/Vehicle damage/Cell Phone Use

Plaintiffs seek summary judgment on their claim for illegal payroll deductions, citing numerous examples of deductions madefor broken or damaged equipment, allegedly personal cell phone use, uniforms, small tools, and safety equipment, all allegedlyin violation of C.R.S. 84–105, which provides that deductions are permitted only in certain enumerated circumstances. Doc.104 at 21–27. Defendants argue that they are permitted under the Colorado Wage Act to take deductions pursuant to writtenagreements with the employees, and give examples of written agreements for deductions for personal cell phone use, extracompany apparel, tools and equipment for personal use, and disciplinary sanctions. Doc. 112 at 19–25. However, Plaintiffspoint to certain examples of these agreements that are not signed. See Doc. 104 Ex. 18 (payroll withholding authorizationform with handwritten note that employee “did not want to sign”). Because there appear to be factual disputes between theparties regarding whether or not each challenged deduction is covered by an authorization form, and whether those forms areenforceable contracts, summary judgment is denied on this issue. See Southern Colorado MRI, Ltd. v. Med–Alliance, Inc., 166F.3d 1094, 1098 (10th Cir.1999) (“Whether parties have entered into a contract is a question of fact.”); United States v. Hess, 194F.3d 1164, 1174 (10th Cir.1999) (“[W]here interpretation of a contract requires examination of extrinsic evidence to determineintent, and where more than one inference may be drawn therefrom, a question of fact is presented.”).



iv. Time Worked “Off the Clock”

Plaintiffs move for summary judgment on their claim that Defendant illegally forced employees to work “off the clock” topay off certain alleged debts or deductions without keeping records as required by the Wage Act. In support, Plaintiffs citetestimony of individuals defendants Tinberg and Fisher that the company may have allowed employees to work off the clock inorder to pay certain deductions. Doc. 104 at 29–30. Defendants reply that Plaintiffs have failed to identify a single employee orincident in which an employee worked off the clock in order to pay for a deduction. Doc. 112 at 26. In reply, Plaintiffs identifytwo examples of testimony regarding work done off the clock in order to pay for certain deductions. Doc. 114 at 9–10. I denysummary judgment on this claim because the parties dispute whether and to what extent this off-the-clock work took place.

v. Failure to Pay the Minimum Wage

Plaintiffs also argue that they are entitled to summary judgment on their claim that Defendant effectively paid employees belowthe minimum wage when work done off the clock is considered. Doc. 104 at 10–15. Because there are issues of fact with respectto whether and to what extent off the clock work took place, I deny summary judgment as to this issue.

vi. Individual Liability of Tinberg and Fisher under the FLSA

*4 Plaintiffs assert that they are entitled to summary judgment on the issue of whether individual defendants Troy Tinberg andMark Fisher, AllPhase's owner and director and Vice President of Maintenance Operations, respectively, are individually liablefor Defendant's alleged violations of the FLSA. Doc. 104 at 27–29. Although the Tenth Circuit has not set forth a test to beused to determine individual liability under the FLSA, district courts in this Circuit have focused the inquiry on the “operationalcontrol” of individual defendants over the plaintiff employees. See Jensen v. Redcliff Ascent, Inc., No. 2:13–CV–00275–TC–EJF, 2014 WL 2739297, *2–7 (D. Utah June 17, 2014). Defendants acknowledge that Mr. Tinberg has “ultimate responsibilityfor the policies and practices of All Phase.” Doc. 112 at 28. With respect to Mr. Fisher, however, Defendants argue that becauseonly some authority has been delegated to him, he cannot have any individual liability under the FLSA. Although the partiesappear to agree that Mr. Tinberg exercised the type of control necessary to be individually liable for any proven FLSA violations,I deny summary judgment as to this issue because the parties appear to dispute the extent of Mr. Fisher's authority, and aspremature because no FLSA violations have yet been established.

vii. Applicable Statute of Limitations

Plaintiffs argue that they are entitled to the 3–year statute of limitations that applies to willful FLSA violations, as opposed tothe 2–year statute of limitations that applies ordinarily. See 29 U.S.C. § 255(a); see also Brinkman v. Dep't of Corrections, 21F.3d 370, 372 (10th Cir.1994). According to Plaintiffs, because there is no evidence that Defendant consulted an attorney orperformed any investigation before “reaching its decision concerning the applicability of the wage and hour law,” Defendant'sconduct should be deemed willful. Doc. 104 at 38. Defendant responds that there is no evidence that Defendant knew or showedreckless disregard about whether its conduct violated the applicable statutes, and that in any event, Defendant did consult withattorneys in drafting certain of its policies. Doc. 112 at 29. Because the parties dispute the factual issues surrounding whetherDefendant consulted with an attorney and whether its alleged violations of the FLSA and wage and hour law were willful,summary judgment is denied as to this issue.

Conclusion



For the reasons given above, Defendants' Motion for Summary Judgment is GRANTED as to the availability of statutorypenalties and DENIED as to liability for missed rest periods, and Plaintiffs' Motion for Summary Judgment is DENIED.

All Citations

Not Reported in Fed. Supp., 2015 WL 1757080, 2015 Wage & Hour Cas.2d (BNA) 107,025

End of Document © 2019 Thomson Reuters. No claim to original U.S. Government Works.

Sanchez v. Front Range Transportation, Not Reported in Fed. Supp. (2017)2017 WL 4099896, 120 A.F.T.R.2d 2017-6273


2017 WL 4099896United States District Court, D. Colorado.

John SANCHEZ, Abby Kindell, Mityah Thornton, and Terrence Thornton,Individuals, on behalf of themselves and all others similarly situated, Plaintiffs,

v.FRONT RANGE TRANSPORTATION d/b/a Front Range Shuttle and Tours, a

Colorado limited liability company, and Corey Watson, an individual, Defendants.

Civil Action No 17-cv-00579-RBJ|

Signed 09/15/2017


Gary M. Kramer, Gary Kramer Law, LLC, Colorado Springs, CO, for Plaintiffs.

Bradley John Sherman, Cornish & Dell'Olio, Colorado Springs, CO, for Defendants.

ORDER on PARTIAL MOTION TO DISMISS

R. Brooke Jackson, United States District Judge

*1 Four former employees of Front Range Transportation, LLC claim that they were victims of unlawful compensationpractices and retaliation by the company and its principal. Defendants have moved to dismiss three of the eight asserted claims.Having reviewed the motion and briefs, the Court grants the motion in part, finds that it is moot in part, and denies it in part,as explained in this order.

BACKGROUND

This case has evolved since its inception, and it will be useful briefly to describe where it began and where it now stands. FrontRange provides shuttle and “executive car” service primarily between Colorado Springs or Pueblo and the Denver InternationalAirport. The original complaint was brought by two former employees: Brandon Smith, a dispatcher and driver; and DonaldHickman, a driver. Purporting to represent themselves and a class of similarly situated individuals, these gentlemen asserted thatthey had not been paid for all the hours they worked, and that they had not been properly paid for overtime work, in violationof the Fair Labor Standards Act (FLSA) and the Colorado Minimum Wage Order (CMWO). They also alleged that they hadbeen improperly classified as independent contractors during portions of their employment, allegedly supporting claims of taxfraud contrary to the Internal Revenue Code; violation of the Colorado Wage Protection Act (CWPA); and unjust enrichment.ECF No. 1.

Plaintiffs' (First) Amended Complaint, still naming Mr. Smith and Mr. Hickman as the plaintiffs, whittled the claims down abit. The tax fraud, CWPA and unjust enrichment claims remained. The CWPA claim was expanded into two new claims. TheFLSA claims were dropped. ECF No. 6.

Plaintiffs Second Amended Complaint named two additional plaintiffs: John Sanchez, a former administrative assistant; andAbby Kindell, a former dispatcher. Again, the tax fraud and unjust enrichment claims of Mr. Smith and Mr. Hickman remained.However, several FLSA claims were asserted on behalf of Mr. Smith and Ms. Kindell, including that they were not compensated




for all hours worked (required to work “off-clock” hours). In addition, plaintiffs asserted claims of retaliation in violation ofthe FLSA on behalf of Mr. Hickman and Mr. Sanchez. ECF No. 16.

Plaintiffs' Third Amended Complaint, which now is the operable complaint, added two more plaintiffs: Mityah Thornton, aformer dispatcher/administrative assistant, and her husband Terrence Thornton, also a former dispatcher. ECF No. 23. Plaintiffsassert the following claims: (1) tax fraud in violation of the Internal Revenue Code (Smith, Hickman, and M.Thornton—purportedly class claims); (2) unjust enrichment (same); (3) FLSA based on unpaid “off-clock” hours (Sanchez, Kindell,M.Thornton—purportedly collective action claims); (4) FLSA based on unpaid overtime (M.Thornton); (5) CMWO based onfailure to provide breaks (Kindell—purportedly a class action); (6) FLSA based on retaliation (Sanchez); (7) FLSA based onretaliation (M.Thornton); and (8) FLSA based on retaliation (T.Thornton).

*2 Defendants then filed the pending motion for partial dismissal, i.e., to dismiss the first, second and fifth claims under eitheror both of Rules 12(b)(6) and 9(b). ECF No. 25. In response, among other things, plaintiffs voluntarily dismissed the claimsof the original plaintiffs Smith and Hickman, ECF No. 29, hence the change of the caption that I now order. Plaintiffs alsowithdrew their second claim (unjust enrichment) entirely. ECF No. 30 at 5-6. Accordingly, what remains for decision by theCourt at this time are (1) whether the First Claim sufficiently states a claim for tax fraud on behalf of Mityah Thornton (andthe purported class), and (2) whether the Fifth Claim sufficiently states a claim regarding the lack of breaks on behalf of AbbyKindell (and the purported class).

STANDARD OF REVIEW

To survive a 12(b)(6) motion to dismiss, the complaint must contain “enough facts to state a claim to relief that is plausibleon its face.” Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (quoting Bell Atlantic Corp. v.Twombly, 550 U.S. 544, 570 (2007)). A plausible claim is a claim that “allows the court to draw the reasonable inference thatthe defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While the Court must acceptthe well-pleaded allegations of the complaint as true and construe them in the light most favorable to the plaintiff, Robbinsv. Wilkie, 300 F.3d 1208, 1210 (10th Cir. 2002), conclusory allegations are not entitled to be presumed true, Iqbal, 556 U.S.at 681. However, so long as the plaintiff offers sufficient factual allegations such that the right to relief is raised above thespeculative level, he has met the threshold pleading standard. See, e.g., Twombly, 550 U.S. at 556; Bryson v. Gonzales, 534F.3d 1282, 1286 (10th Cir. 2008).

Federal Rule of Civil Procedure 9(b) imposes a higher pleading standard as to fraud claims: “In alleging fraud or mistake, a

party must state with particularity the circumstances constituting fraud or mistake.” 1 This means that a complaint allegingfraud must “set forth the [1] time, [2] place and [3] contents of the false representation, [4] the identity of the party making thefalse statements and [5] the consequences thereof. Rule 9(b)’s purpose is to afford defendant fair notice of plaintiff’s claimsand the factual ground upon which they are based.” Koch v. Koch Indus., Inc., 203 F.3d 1202, 1236 (10th Cir. 2000) (bracketednumbers added, internal citations and quotations omitted).

1 The dismissal of a complaint for failing to satisfy the requirements of Rule 9(b) is treated as a dismissal for failure to state a claimupon which relief can be granted under Rule 12(b)(6). Seattle-First Nat. Bank v. Carlstedt, 800 F.2d 1008, 1011 (10th Cir. 1986).

ANALYSIS

A. Tax Fraud.

1. Facts alleged by plaintiffs.



Plaintiffs First Claim, now asserted on behalf of Mityah Thornton (and the purported class), asserts that Front Range violated26 U.S.C. § 7434(a). This section of the Internal Revenue Code provides: “If any person willfully files a fraudulent informationreturn with respect to payments purported to be made to any other person, such other person may bring a civil action for damagesagainst the person so filing such return.” An “information return” is “any statement described” in [26 U.S.C. §] 6724(d)(1)(A).

Plaintiffs allege that Front Range filed such a return, specifically an IRS Form 1099-MISC return, in respect to Ms. Thornton forthe year 2016. Ms. Thornton was hired to be a dispatcher and administrative assistant, and she was initially classified as a “W-2employee.” ECF No 23 at ¶ 53-54. But in June 2016 she was reclassified as a “1099 independent contractor.” She alleges thatdefendant Watson explained that he couldn't afford to increase her compensation at that time, but that “she would make moremoney as a 1099;” her job duties were now described as “office management, although they apparently had not changed.” Id.at ¶ 56-57. She was thereafter paid a salary rather than an hourly wage and was required to present an “Independent ContractorInvoice” to get paid.

*3 In September 2016 Ms. Thornton was presented with, and apparently signed, a document indicating that she was operatingunder the name “Mityah Thornton Consulting.” She was now said to be providing human resources services. But, plaintiffalleges, there was no such business, and she provided no human resources services. Rather, she continued to work as a dispatcherand administrative assistant. Id. at ¶¶ 58-60. Defendants even went to the trouble of filing Articles of Organization with theColorado Secretary of State for “Mityah Thornton LLC.” This was a charade. Nevertheless, Ms. Thornton filed both federaland state tax returns for 2016 based on the amounts reported by defendants on IRS Forms W-2 and 1099. Id. at ¶ 64.

Meanwhile, plaintiff John Sanchez was working in the office as Mr. Watson’s “Administrative Assistant.” Until he later fell outof favor he allegedly had the boss’s ear. Plaintiffs allege that Mr. Watson “repeatedly commented about how FRS could savemoney by misclassifying employees as independent contractors,” thereby reducing the amount of taxes the company had to payfor unemployment insurance tax and federal employer payroll tax contributions. Mr. Watson confided that he was attemptingto convince employees to “ ‘accept’ ” IC “misclassification” by representing to them that it would be to their financial benefit.Id. at ¶ 38.

The present suit was filed on March 3, 2017 and was served on the defendants on March 8, 2017. ECF Nos. 1, 5. The FirstAmended Complaint was filed on March 16, 2017. ECF No. 6. Plaintiffs allege that on March 20, 2017 Ms. Thornton wasreclassified back to employee status, and she remained an employee until she was fired on May 9, 2017. Id. at ¶¶ 68-71, 84.

Plaintiffs allege that Front Range’s filing of the IRS Form 1099-MISC with respect to payments made to employees who weremisclassified as independent contracts, such as Ms. Thornton, was “willful and fraudulent” because defendants knew that theindividuals were employees as is shown by their switching them from one classification to another without any change in jobduties, and as is confirmed by the statements Mr. Watson made to Mr. Sanchez. Id. at ¶¶ 108, 111.

2. Conclusions.Defendants cite Liverett v. Torres Advanced Enterprise Solutions LLC, 192 F.Supp.3d (E.D. Va. 2016). The same argument wasmade there as here, namely, that the employer’s willful treatment of employees as independent contractors in order to avoidpaying employer taxes violates 26 U.S.C. § 7434(a). The court dismissed the claim. The court interpreted § 7434(a)’s phrase“willfully files a fraudulent information return with respect to payments purported to be made to any person” to mean that “thefiling of an information return is actionable only if the information return is false or misleading as to the amount of paymentspurportedly made” to the employee, not whether the misclassification was false. Id. at 650-55. Accord, Jayo Vera v. ChallengerAir Corp., No. 16-cv-62354, 2017 WL 2591946, at **2-3 (S.D. Fla. June 6, 2017); Derolf v. Risinger Bros. Transfer, No. 16-cv-1298, 2017 WL 1433307 at **6-7 (C.D. Ill. Apr. 21, 2017); Tran v. Tran, 239 F.Supp.3d 1296, 1297-98 (M.D. Fla. 2017).Because plaintiffs in the present case have alleged only that they were misclassified, not that Front Range falsely reported thepayments made to them, defendants argue that the First Claim must be dismissed.



Plaintiffs' responds that other district courts have interpreted § 7434(a) differently, i.e., that the filing of a Form 1099 based uponwillful misclassification of an employee as an independent contractor does trigger a claim under the statute. See Leon v. Tapas& Tintos, Inc., 51 F.Supp.3d 1290, 1297-98 (S.D. Fla. 2014); Seijo v. Casa Salsa, Inc., No. 60892-Civ., 2013 WL 6184969, at*7 (S.D. Fla. Nov. 25, 2013); Pitcher v. Waldman, No. 1:11-cv-148, 2017 WL 526906, at **4-9 (W.D. Ohio Oct. 23, 2012).

*4 Neither the parties nor I have located a circuit court decision on the issue to date. Having studied the several district cases,however, I am persuaded by the thorough examination of the issue and reasoning of Judge Ellis in Liverett, as were the threedistrict courts that decided the issue subsequent to Liverett (Jayo Vera, Derolf and Tran). Plaintiffs rely on pre-Liverett casesthat did not have the benefit of Judge Ellis' analysis and, respectfully, did not in my view examine the language of 26 U.S.C. §7434(a), the context provided by §§ 7434(e) and (f), and the legislative history in the same depth. Therefore, although I find thatplaintiffs have adequately alleged that misclassification of Ms. Thornton as an independent contractor was willful, I neverthelessconclude that plaintiffs have not stated a claim of tax fraud in violation of 26 U.S.C. § 7434(a) as a matter of law.

B. Breaks During Work Day.

1. Facts alleged by plaintiffs.Plaintiffs allege that John Sanchez, Abby Kindell and Mityah Thornton were not afforded breaks every four hours. ECF No. 23at ¶ 4. In their Fifth Claim for Relief—which defendants move to dismiss—they incorporate all prior allegations but then singleout Ms. Kindell, alleging that “Defendants did not provide Kindell and similarly situated non-exempt hourly employees withten-minute rest periods (breaks) every four (4) hours as required by the Colorado Minimum Wage Order, 7 Colo. Code Regs.1103-1, paragraph 8.” Id. at ¶ 134. This was in a work day that allegedly began at 4:45 a.m. and ended at 1:30 p.m. Id. at ¶ 45.Plaintiffs allege that Ms. Kindell, a dispatcher, was unable to take breaks or a meal period. Id. at ¶ 47.

2. Conclusions.Colo. Code Regs § 1103-1:8 provides,

Every employer shall authorize and permit rest periods, which, insofar as practicable, shall be in themiddle of each four (4) hour work period. A compensated ten (10) minute rest period for each four(4) hours or major fractions thereof shall be permitted for all employees. Such rest periods shall not bededucted from the employee’s wages. It is not necessary that the employee leave the premises for saidwork period.

Defendants suggest that there is no private right of action for violation of the Colorado Minimum Wage Order. 2 They provideno authority for this proposition. The regulation they cite, Colo. Code Regs. § 1103-1:18, authorizes a civil action to recover theunpaid balance of the minimum wage owed. It does not state or imply that a civil action may not be brought under other sectionsof the regulations. In Bracamontes v. Bimbo Bakeries, No. 15-cv-02324, 2016 WL 5791202, at **6-11 (D. Colo. Sept. 30,2016), I denied a motion to dismiss a count asserting violations of Colo. Code Regs. §§ 1103-1:4 (overtime), 1:12 (maintenanceof records), and 1:19 (prohibition of threats). I now hold expressly that workers in covered industries have an implied privateright of action for damages for violations of § 1103-1:8 of the CMWO.

2 The CMWO is the means by which the Colorado Minimum Wage Claim Act, C.R.S. § 8-4-101 et seq. and the Colorado MinimumWage Act, C.R.S. § 8-6-101 et seq. have been implemented. See, e.g., Cartier v. Western Electricity Coordinating Council, No. 14-cv-0079-WJM-MJW, 2015 WL 3581346, at *5 (D. Colo. June 9, 2015).

Even were plaintiffs confined to a suit to recover the unpaid balance of a minimum wage, however, I would not grant the motion.Front Range points out that plaintiffs have not pled that Ms. Kindell was not paid for the hours she worked. I agree. But because



she was (allegedly) denied reasonable rest periods, for which she would have been paid, she effectively provided the equivalentnumber of minutes of work to Front Range without additional compensation. That was essentially the conclusion in Lozoya v.AllPhase Landscape Construction, Inc., No. 12-cv-1048-JLK, 2015 WL 175080, at *2 (D. Colo. April 15, 2015). Defendantsdisagree with Judge Kane’s reasoning and holding in that case. See ECF No. 25 at 15. I do not.

ORDER

*5 For the reasons set forth, defendants' Partial Motion to Dismiss, ECF No 25 is GRANTED IN PART, MOOT IN PART,and DENIED IN PART. It is GRANTED as to plaintiffs' First Claim (tax fraud) which is dismissed with prejudice. It is MOOTas to plaintiffs' Second Claim (unjust enrichment) which plaintiffs have withdrawn. It is DENIED as to plaintiffs' Fifth Claim(lack of breaks during the workday).

All Citations

Not Reported in Fed. Supp., 2017 WL 4099896, 120 A.F.T.R.2d 2017-6273


Sobolewski v. Boselli & Sons, LLC, 342 F.Supp.3d 1178 (2018)2018 Wage & Hour Cas.2d (BNA) 343,251


342 F.Supp.3d 1178United States District Court, D. Colorado.

Thomasz SOBOLEWSKI, on Behalf of Himself and All Similarly Situated Persons, Plaintiff,v.

BOSELLI & SONS, LLC, a Colorado Limited Liability Company, Boselli Investments LLC, a Colorado LimitedLiability Company, James J. Boselli, Don A. Boselli, Francis A. Boselli, and Stephen M. Boselli, Defendants.

Civil Action No. 16-cv-01573-RM-STV|

Signed September 21, 2018

SynopsisBackground: Former employee brought putative class action against restaurant, alleging violations of Colorado's wage laws,as well as for breach of contract. Restaurant moved for partial summary judgment.

Holdings: The District Court, Raymond P. Moore, J., held that:

[1] restaurant's strict meal break policy did not violate Colorado's Wage Order meal break requirement;

[2] employee could maintain breach of contract action under Colorado law against restaurant based on alleged violations ofwage and hour laws; and

[3] Colorado's general six-year statute of limitations applied to employee's meal and rest period claims.

Motion denied in part and granted in part.

West Headnotes (10)

[1] Statutes Undefined terms

Statutes Context

When a term in a statute is not defined, under Colorado law, a court must look to the plain meaning of the languageused, considered within the context of the statute as a whole.

Cases that cite this headnote

[2] Statutes Purpose and intent; determination thereof

Statutes Plain, literal, or clear meaning; ambiguity

Under Colorado law, if a statute's plain meaning and context leave it capable of being understood by reasonably well-informed persons in two or more different senses, then, and only then, do courts look beyond that language for otherevidence of legislative intent and purpose, such as legislative history or other rules of statutory construction.





[3] Action Statutory rights of action

Labor and Employment Nature and form of remedy

An employee-plaintiff may bring a private civil action for violations of the Colorado's Minimum Wage Order mealand rest period regulations. 7 Colo. Code Regs. § 1103-1.


[4] Labor and Employment Meal or break periods

Restaurant's strict policy that employees take no more than a 30 minute meal break did not violate requirement underColorado's Wage Order that employees have meal periods that were at least 30-uninterrupted-minutes, even thoughemployees would finish meals early and wait by time clock to ensure they did not clock back in late, where employeeswere relieved of all duties during the break, employers could reprimand employees for returning late, and Wage Orderdid not provide additional time for travel or clocking in and out. 7 Colo. Code Regs. § 1103-1.


[5] Labor and Employment Right of action

Employee could maintain breach of contract action under Colorado law against restaurant based on alleged violationsof wage and hour laws; wage and hour laws were incorporated into the terms of the employment contract.


[6] Contracts Existing law as part of contract

Parties are presumed under Colorado law to contract with reference to existing principles of law, and in the absenceof clear contractual language the relationship is governed by the rules mandated by law.


[7] Labor and Employment Limitations applicable in general

Colorado's general six-year statute of limitations applied to employee's meal and rest period claims under Colorado'sMinimum Wage Order, where limitations period contained in different section of Wage order applied only tocomplaints filed with Colorado Department of Labor and Employment Division of Labor Standards and Statistics,provision under with employee brought claims did not state or incorporate any limitations period for private rightsof action, and claims were not based in contractor or tort. Colo. Rev. Stat. Ann. § 13-80-103.5(1)(a); 7 Colo. CodeRegs. § 1103-1.


[8] Limitation of Actions Limitation as affected by nature or form of remedy in general

Under Colorado law, it is the nature of the right sued upon and not the nature of the relief demanded which governsthe applicability of a statute of limitations.


[9] Limitation of Actions Actions to which statute applies



To decide which one of two arguably applicable statutes of limitation should control under Colorado law, courtsconsider: (1) a later enacted statute should be applied over an earlier enacted statute; (2) the more specific of twoapplicable statutes should be applied; and (3) the longer of two applicable statutes should be applied.


[10] Limitation of Actions Actions to which statute applies

The rule under Colorado law favoring application of a longer, rather than a shorter, of two applicable statutes oflimitations is a rule of last resort.



*1179 Brian David Gonzales, Brian D. Gonzales, PLLC, Fort Collins, CO, for Plaintiff.

Bruce Charles Anderson, Kaitlin Fox Hinkle, Fisher & Phillips, LLP, Denver, CO, for Defendants.

MEMORANDUM OPINION AND ORDER

RAYMOND P. MOORE, United States District Judge

*1180 Plaintiff Thomasz Sobolewski is a former employee who worked at Defendants' McDonald's restaurants in Colorado.Plaintiff seeks, on behalf of himself and as class representative, damages against Defendants for alleged meal and rest periodviolations. Defendants have filed two motions for partial summary judgment seeking resolution of four issues: (1) whetherColorado's Minimum Wage Order grants Plaintiff a private right of action for violations of its meal period and rest periodrequirements; (2) whether, based on the undisputed facts, Plaintiff's claim for violation of the Wage Order's meal periodrequirements fail as a matter of law; (3) whether Plaintiff's breach of contract claim must be dismissed for lack of consideration;and (4) whether the statute of limitations provision contained in the Wage Order applies to Plaintiff's claims for meal periodand rest period violations. (ECF Nos. 39 and 83.)

For the reasons stated below, the Court denies in part and grants in part Defendants' first motion for partial summary judgment.(ECF No. 39.) Defendants' second motion for partial summary judgment is denied. (ECF No. 83.)

I. FACTUAL AND PROCEDURAL BACKGROUNDThe following are the undisputed and material facts taken from the parties' statements of undisputed facts and accompanyingexhibits.

Defendants are the owners and operators of twelve McDonald's restaurants in Colorado. 1 (ECF No. 49-1, Defs.' Sep. Statementof Undisputed Mat. Facts (“Defs.' SUMF”), Defs.' SUMF ¶ 1.) Plaintiff worked at least one of the locations. (Id.) Plaintiff'sClass and Collective Action Complaint alleges that Defendants' violated federal law and Colorado law by: “1) failing to ensurethat employees received meal and rest breaks during their shifts; and 2) deducting time from employee pay for breaks that neverwere taken.” (ECF No. 1 at ¶ 1.) Plaintiff asserts the following four causes of action: (1) violation of the Fair Labor StandardsAct, 29 U.S.C. § 201, et seq. (“FLSA”); (2) violation of the Colorado Wage Claim Act, Colo. Rev. Stat. § 8-4-101, et seq.(“CWCA”); (3) violation of the Colorado Minimum Wage Act, Colo. Rev. Stat. § 8-6-101, et seq. (“CMWA”), as implemented



by the Colorado Minimum Wage Order (“Wage Order”); and (4) breach of contract. (See id.) Two motions for partial summaryjudgment are before the Court.

1 Plaintiff alleges that each defendant was materially involved in the operation of the McDonald's restaurants and, therefore, a jointlyand severally liable “employer” of the Plaintiff for the alleged wage and hour violations. (ECF No. 1 at ¶ 6.) Neither of Defendants'motions challenges the existence of an employer-employee relationship as to any of the named defendants. Thus, the Court collectivelyrefers to “the Defendants” as though each was an employer of Plaintiff.

Defendants' [First] Motion for Partial Summary Judgment (the “First Motion”) seeks dismissal of Plaintiff's third claim underthe Wage Order for meal period and rest period violations. (ECF No. 39 at 2.) The underlying facts supporting Plaintiff's thirdclaim are almost entirely undisputed. Defendants had a policy that required its employees to clock in and out of a computersystem for 10-minute rest periods and 30-minute meal periods. (ECF No. 49-1, Defs.' SUMF ¶¶ 2-4.) Employees were requiredto punch in when they arrived for their shift, punch out for their 30-minute unpaid meal periods, and then punch back *1181in to the system when they returned from their 30-minute meal period. (Id., Defs.' SUMF ¶ 5.) The employees are paid based onthe time punches recorded by Defendants' computer system. (Id., Defs.' SUMF ¶ 6.) The heart of Plaintiff's meal period claimis that Defendants' management was very strict about making sure that employees clocked back into the system no later than30 minutes after their lunch break started. (Id., Defs.' SUMF ¶ 8.) As a result, employees “often went to the timeclock to clockback in a few minutes before 30 minutes had passed to make sure [they] clocked in no late[r] than the 30 minute deadline.” (Id.,Defs.' SUMF ¶ 9.) Stated differently: “Many employees just waited around the timeclock until exactly 30 minutes had passedso they could clock in exactly on time.” (Id., Defs.' SUMF ¶ 10.) Defendants' First Motion argues that the Wage Order does notprovide a private cause of action for Plaintiff's alleged meal period and rest period violations. (See ECF No. 39.) And, even ifPlaintiff may maintain a private right of action, no meal period violation has occurred under these undisputed facts. (Id.)

Defendants' Second Motion for Partial Summary Judgment (the “Second Motion”) does not rely on any additional facts. (ECFNo. 83.) Instead, the Second Motion seeks resolution of two legal questions: (1) whether Plaintiff has stated a valid breachof contract claim; and (2) assuming that Plaintiff can maintain a private action under the Wage Order, whether the statute oflimitations provided in Section 15 the Wage Order applies to such a claim. (Id. at 1-2.) Plaintiff opposes the relief sought inboth motions.

II. LEGAL STANDARD FOR SUMMARY JUDGMENTSummary judgment is appropriate only if there is no genuine dispute of material fact and the moving party is entitled to judgmentas a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986);Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569– 70 (10th Cir. 1994). Whether there is a genuine dispute as to amaterial fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251–52, 106 S.Ct. 2505, 91L.Ed.2d 202 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000); Carey v. United States Postal Serv., 812F.2d 621, 623 (10th Cir. 1987). Once the moving party meets its initial burden of demonstrating an absence of a genuine disputeof material fact, the burden then shifts to the nonmoving party to demonstrate the existence of a genuine dispute of material factto be resolved at trial. See 1-800-Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229, 1242 (10th Cir. 2013) (citation omitted).

The Court will consider statements of fact, or rebuttals thereto, which are material and supported by competent evidence. Fed. R.Civ. P. 56(c)(1)(A), 56(e)(2), 56(e)(3). Summary judgment evidence need not be submitted in a form that would be admissibleat trial, but the content or substance of the evidence must be admissible. Johnson v. Weld Cty., 594 F.3d 1202, 1210 (10th Cir.2010). Affidavits must be based on personal knowledge and must set forth facts that would be admissible at trial. Murray v. Cityof Sapulpa, 45 F.3d 1417, 1422 (10th Cir. 1995) (quotations and citation omitted). “Conclusory and self-serving affidavits arenot sufficient.” Id. “[O]n a motion for summary judgment, it is the responding party's burden to ensure that the factual disputeis portrayed with particularity, without depending on the trial court to conduct its own search of the record.” Cross v. The HomeDepot, 390 F.3d 1283, 1290 (10th Cir. 2004) (quotations and citation omitted). The Court is *1182 “not obligated to comb



the record in order to make [a party's arguments].” Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1199 (10th Cir. 2000). TheCourt now addresses the motions.

III. ANALYSIS

A. Private Right of Action Under the Colorado Minimum Wage OrderPlaintiff alleges violations of the Colorado Minimum Wage Act, C.R.S. § 8-6-101, et seq., and the Colorado Wage Claim Act,C.R.S. § 8-4-101, et. seq. These two acts are implemented by Colorado Minimum Wage Orders. See, e.g., Colo. Minimum WageOrder No. 34, 7 Colo. Code Regs. § 1103-1 (effective January 1, 2018 through December 31, 2018). The Colorado Departmentof Labor and Employment is authorized to promulgate a new Wage Order each year. C.R.S. Title 8, Articles 1, 4, 6, and 12; seealso Colo. Const. art. XVIII, § 15. Each Wage Order supersedes the previous year's order, establishes a minimum wage, and“regulates wages, hours, working conditions and procedures for certain employers and employees for work performed withinthe boundaries of the state of Colorado.” Colo. Code Regs. § 1103-1:1. “Section 1103-1:18. Recovery of Wages” states that“[a]n employee receiving less than the legal minimum wage applicable to such employee is entitled to recover in a civil actionthe unpaid balance of the full amount of such minimum wage, together with reasonable attorney fees and court costs[.]” Colo.Code Regs. § 1103-1:18.

Defendants first contend that “the only circumstance in which a person may assert a private cause of action under the Wage Orderis where the ‘employee is receiving less than the legal minimum wage.’ ” (ECF No. 39 at 6.) As Defendants read the regulation,this means that Plaintiff does not have a private right of action for violations of the meal and rest break provisions contained in

Sections 7 and 8 2 of the Wage Order. (Id. at 8.) Plaintiff responds that the meal and rest period violations resulted in him notbeing paid the minimum wage for all of the hours he worked. (ECF No. 45 at 6.) In other words, Plaintiff's claims fall within theplain language of Section 18's authorization of a private civil action for failure to pay the “legal minimum wage.” (Id. at 6-8.)

2 For ease of reading, the Court refers to the Wage Order's regulations only by the subsection number. For example, Section 1103-1:8is simply referred to as “Section 8.”

[1] [2] Interpretation and application of Colorado's Wage Order is governed by Colorado law. Deherrera v. Decker TruckLine, Inc., 820 F.3d 1147, 1160 (10th Cir. 2016) (citations omitted). And because the term “legal minimum wage” is not defined,the Court must “look to the plain meaning of the language used, considered within the context of the statute as a whole.” Id.“If a statute's plain meaning and context still leave it capable of being understood by reasonably well-informed persons in twoor more different senses, then—and only then—do we look beyond that language for other evidence of legislative intent andpurpose, such as legislative history or other rules of statutory construction.” Id. (quotations and citations omitted). When readingthe plain language of the Wage Order, the Court does not find the terms ambiguous when considered within the context of the

Wage Order as a whole. 3

*1183 To start with, the full text of the private right of action provision states as follows:

An employee receiving less than the legal minimum wage applicable to such employee is entitled torecover in a civil action the unpaid balance of the full amount of such minimum wage, together withreasonable attorney fees and court costs, notwithstanding any agreement to work for a lesser wage,pursuant to C.R.S. § 8-6-118 (2017). Alternatively, an employee may elect to pursue a minimum wagecomplaint through the division's administrative procedure as described in the Colorado Wage Act, C.R.S.§ 8-4-101, et seq. (2017).



7 Colo. Code Regs. § 1103-1:18. Section 3 mandates that employees “shall be paid not less than [the specified minimum wage]for all hours worked.” 7 Colo. Code Regs. § 1103-1:3. Section 7 governing meal periods states:

Employees shall be entitled to an uninterrupted and ‘duty free’ meal period of at least a thirty minuteduration when the scheduled work shift exceeds five consecutive hours of work. The employees mustbe completely relieved of all duties and permitted to pursue personal activities to qualify as a non-work,uncompensated period of time. When the nature of the business activity or other circumstances exist thatmakes an uninterrupted meal period impractical, the employee shall be permitted to consume an ‘on-duty’ meal while performing duties. Employees shall be permitted to fully consume a meal of choice ‘onthe job’ and be fully compensated for the ‘on-duty’ meal period without any loss of time or compensation.

7 Colo. Code Regs. § 1103-1:7. Section 8 governing rest periods states: “A compensated ten (10) minute rest period for eachfour (4) hours or major fractions thereof shall be permitted for all employees. Such rest periods shall not be deducted from theemployee's wages.” 7 Colo. Code Regs. § 1103-1:8.

3 Defendants also argue the Wage Order does not create an “implied private right of action” for violations of the meal and rest periodprovisions. (ECF No. 39 at 6-8.) Here, Section 18 of the Wage Order expressly creates a private right of action—the issue is whetherPlaintiff's claims are within the scope of that express private right of action. Notwithstanding, the Court notes that this case isdistinguishable from Silverstein v. Sisters of Charity of Leavenworth Health Servs. Corp., 38 Colo.App. 286, 559 P.2d 716, 718(1976). Silverstein involved a statute that imposed only a criminal sanction; accordingly, the Silverstein court would not impose civilliability where the legislature declined to do so. Id. at 718. Similarly, the applicable factors favor the finding of an implied privatecause of action: (1) Plaintiff and the proposed class are within the class of persons intended to be benefited by the Wage Order; (2)the General Assembly intended to create a private right of action for all instances where an employee is receiving less than the legalminimum wage; and (3) an implied right of action is consistent with the purpose of the statute. Colorado Ins. Guar. Ass'n v. Menor,166 P.3d 205, 210 (Colo. App. 2007) (“When a statute does not expressly provide for a private civil remedy, a court must considerthree factors in determining whether a particular plaintiff has available a private cause of action: whether the plaintiff is within a classof persons intended to be benefited by the legislative enactment; whether the legislature intended to create, albeit implicitly, a privateright of action; and whether an implied civil remedy would be consistent with the purposes of the legislative scheme.”).

First, Plaintiff's claims fall within the plain language of the Wage Order. He claims that he was not paid for meal breaks andrest breaks, but should have been. Had his hours been properly calculated, he would have been entitled to receive minimumwage for the time worked. Stated differently, Plaintiff claims that he is an employee “receiving less than the legal minimumwage applicable to such employee.” 7 Colo. Code Regs. § 1103-1:18. And Plaintiff has filed this “civil action [for] the unpaidbalance of the full amount of such minimum wage[.]” Therefore, Plaintiff may maintain a private right of action for the unpaidbalance of any minimum wage amounts owed to him by reason of Defendants' alleged meal and rest break violations.

*1184 Second, Defendants read Section 18 to mean that a private right of action is limited to a scenario where the employer ispaying an employee an hourly rate that is less than $10.20 per hour (the minimum wage as of January 1, 2018). In other words,Defendants rewrite the statute to read as follows: “An employee [being paid an hourly rate that is] less than [$10.20 per hour]is entitled to recover in a civil action....” But that is not what the text of the statute says. The text provides for a civil actionin any circumstance where an employee is “receiving less than the legal minimum wage applicable to such employee,” whichencompasses more than Defendants' narrow reading. By way of example, an employer could pay an hourly employee $12.00per hour (an hourly rate above the required minimum), but not pay that employee for meal and rest breaks that are requiredto be compensated under the Wage Order. In such a case, the hypothetical employee is ultimately receiving less than the legalminimum wage applicable to such employee for all hours worked, even though his hourly rate of compensation is more thanthe minimum set forth by the Wage Order. Such a narrow reading of the Wage Order is not supported, nor is it consistent withits purpose.



Third, nothing in Section 18 defines legal minimum wage. One must look to other provisions within the Wage Order to givemeaning to when an employee is receiving less than the legal minimum wage applicable to such employee. Section 3 statesthat employees “shall be paid not less than $10.20 for all hours worked.” 7 Colo. Code Regs. § 1103-1:3 (emphasis added).The meal and rest period provisions elaborate on what time must be compensated and included in “hours worked.” See 7 Colo.Code Regs. § 1103-1:7 (“The employees must be completely relieved of all duties and permitted to pursue personal activitiesto qualify as a non-work, uncompensated period of time.”); 7 Colo. Code Regs. § 1103-1:8 (“A compensated ten (10) minuterest period for each four (4) hours or major fractions thereof shall be permitted for all employees. Such rest periods shall not bededucted from the employee's wages.”). Those provisions explain when an employee must be compensated for breaks and whatis required of a meal period for it to be an uncompensated period of time. If the Court were to read the statute as Defendantssuggest, it would mean that a plaintiff could bring a private civil action under Section 18 to enforce Section 3, but not Sections7 or 8—even though Section 3, 7, and 8 are related. The Wage Order does not say as much and Defendants offer no explanationfor such a disparate result.

[3] Finally, Defendants offer no caselaw where a court has ascribed to the proposed interpretation of Section 18. In fact,decisions on this issue undermine Defendants position. Sanchez v. Front Range Transportation, 17-cv-00579-RBJ, 2017 WL4099896, at *4 (D. Colo. Sep. 15, 2017) (rejecting suggestion that the Wage Order does not provide a private right of action forrest period violations, concluding “Colo. Code Regs. § 1103-1:18, authorizes a civil action to recover the unpaid balance of theminimum wage owed. It does not state or imply that a civil action may not be brought under other sections of the regulations.”);see also Lozoya v. AllPhase Landscape Construction, Inc., No. 12-cv-1048-JLK, 2015 WL 1757080, at *2 (D. Colo. April15, 2015) (implicitly finding a private right of action for alleged rest period violations). Accordingly, the Court finds that anemployee-plaintiff may bring a private civil action for violations of the Wage Order's meal and rest period regulations. Havingfound that a private civil action may be asserted, it must now be decided whether such a violation has been established.

*1185 B. Meal Period Violation[4] Defendants contend that Plaintiff's meal period claims fail as a matter of law. (ECF No. 39 at 8-11.) Plaintiff claims that

Defendants violated the Wage Order's requirement that meal periods be at least 30-uninterrupted-minutes or such a meal periodis treated as “on-duty” and must be paid. (ECF No. 45 at 4.) Because of Defendants' strict policy of not allowing any morethan 30 minutes for a meal period, Plaintiff, and others, would often end their meal periods early and wait by the time clock toensure they did not clock back in late. (Id.) Defendants advance three arguments for dismissal of Plaintiff's meal period claims:(1) employees were entitled to a 30-minute meal break and an employee's decision to clock back in a few minutes early tocomply with the policy does not violate the Wage Order; (2) under the “predominant benefit test,” Plaintiff was not engaged inwork activities so the meal periods were bona fide; and (3) employees were paid for all time that was entered into the computersystem—even under those circumstances where an employee chose to clock in from lunch a few minutes before his or her 30-minute meal period expired.

The Court will again start with the text of the Wage Order. Section 7 governing meal periods states:

Employees shall be entitled to an uninterrupted and ‘duty free’ meal period of at least a thirty minuteduration when the scheduled work shift exceeds five consecutive hours of work. The employees mustbe completely relieved of all duties and permitted to pursue personal activities to qualify as a non-work,uncompensated period of time.

7 Colo. Code Regs. § 1103-1:7. Here, the undisputed facts are that employees were required to punch out from their 30-minute unpaid meal periods and punch back in when they returned from their meal periods. (ECF No. 49-1, Defs.' SUMF ¶ 5.)Management was very strict about making sure that workers clocked in no later than 30 minutes after their lunch started. (Id.,



Defs.' SUMF ¶ 8.) Employees would either return to the timeclock to punch in early or wait around the timeclock until exactly30 minutes had passed so they could clock back in exactly on time and not violate Defendants' policy. (Id., Defs.' SUMF ¶¶

9-10.) 4 Based on these facts, Defendants have not violated the Wage Order.

4 Plaintiff includes two additional facts in response to Defendants' First Motion. (See ECF 45-1, ¶¶ 11, 12.) Plaintiff cites to Paragraph3 of his declaration in support of the additional facts. But Paragraph 3 does not provide evidentiary support for either additional fact.Therefore, Plaintiff has failed to provide competent evidence in response to Defendants' First Motion or create a material factualdispute.

First, an employee must be completely relieved of all duties for a meal period to qualify as an uncompensated period of time. 7Colo. Code Regs. § 1103-1:7. In deciding whether a meal break is “bona fide” and, therefore, can be treated as uncompensatedtime, Defendants urge application of the predominant benefit test articulated in Castaneda v. JBS USA, LLC, 819 F.3d 1237,1253 (10th Cir. 2016) (deciding what constitutes a bona fide meal period under the FLSA). Plaintiff proposes application ofthe completely-relieved-from-duty test suggested in Brennan v. Elmer's Disposal Serv., Inc., 510 F.2d 84, 88 (9th Cir. 1975).Here, the Wage Order provides the applicable standard (“completely relieved of all duties”); Defendants have complied withthat standard; and Plaintiff offers no evidence to suggest otherwise. The crux of Plaintiff's meal period claim is that Defendants'strict policy resulted in lost meal period time because Plaintiff could not clock in late because “[e]ven being a couple of minuteslate *1186 could result in a reprimand from a manager.” (ECF No. 39-2, Sobolewski Decl. ¶ 3.) The Court finds nothing illegalabout reprimanding an employee for returning from lunch a couple of minutes late. Moreover, there is no allegation, argument,or evidence to suggest, let alone conclude, that Plaintiff was required to perform any work-related duties on his meal break.Thus, Plaintiff was completely relieved of all duties and Defendants were permitted to treat meal periods as an uncompensatedperiod of time.

Next, the real question becomes whether strict enforcement of a meal policy violates Section 7. In essence, Plaintiff claims thatthe strict policy of requiring employees to clock back in from lunch on time, and no later, resulted in a “net meal period” ofless than 30 minutes. The Court again starts with the text of the Wage Order, which entitles employees “to an uninterruptedand ‘duty free’ meal period of at least a thirty minute duration[.]” 7 Colo. Code Regs. § 1103-1:7 (emphasis added). Section7 undoubtedly entitles employees to a meal period of at least 30 minutes. But the regulation does not provide additional timeto walk, drive, or travel to and from the location an employee chooses for his or her meal break; nor does the regulation allowadditional time for the employee to clock in and out for lunch. The Court will not read such a requirement into the regulations.Some portion of a 30-minute meal period will necessarily include time to log out of and back into a time-keeping system,prepare, eat, or purchase a meal, and return to the employee's work station. Although the Court understands the time pressurethis places on hourly employees, it is what Colorado law requires—even if the result is a “net meal period” of slightly less than30 minutes. To be clear, there are no facts before the Court to suggest that Defendants are exerting control over an employeeduring a meal period or requiring the employees to wait by the time clock. And there is no evidence that Plaintiff, or otheremployees, were not allowed at least 30 minutes—even if the policy was 30 minutes and no more—for their meal period.

Similarly, an employee's decision to clock in early or wait by the time clock to comply with Defendants' meal break policycannot be considered a violation of the Wage Order. Based on the facts before the Court in this case, an employee cannot triggera violation of the Wage Order by deciding to clock in early from lunch. Whether Defendants' policy is to be considered strict,very strict, or extremely strict, the method in which an employee chooses to comply with the policy does not create a violationof the Wage Order. This is not a case where the employer is accused of coercing or ridiculing its employees for taking a mealbreak. Defendants merely have a meal policy, that policy is enforced, and employees are reprimanded for failing to complywith the policy. Such facts do not amount to a violation of the Wage Order. Therefore, summary judgment is granted in favorof Defendants with respect to Plaintiff's alleged meal break violations.

C. Breach of Contract Claim[5] Next, Defendants argue that Plaintiff's breach of contract claim fails, as a matter of law, because any agreement between

Plaintiff and Defendants lacks consideration, which is a necessary element of establishing a contract. (ECF No. 83 at 4-6.)



Specifically, any agreement lacks consideration because “Defendants had a pre-existing legal duty to pay their employee inaccordance with federal and state wage and hour laws[.]” (Id. at 5.) Plaintiff responds that the employment relationship gave riseto a unilateral contract—Defendants offered work and Plaintiff accepted by performing the offered work. (ECF No. *1187 86at 2.) Plaintiff contends that he can maintain a breach of contract claim because the wage and hour laws are merely incorporatedinto the terms of the contract. (ECF No. 86 at 2-3.) The Court agrees with Plaintiff.

[6] “Parties are presumed to contract with reference to existing principles of law, and in the absence of clear contractuallanguage the relationship is governed by the rules mandated by law.” Dean Witter Reynolds Inc. v. Variable Annuity Life Ins. Co.,373 F.3d 1100, 1106 (10th Cir. 2004) (applying Colorado law and its Uniform Commercial Code provisions); see also Shaw v.Sargent Sch. Dist. No. RE-33-J ex rel. Bd. of Educ., 21 P.3d 446, 450 (Colo. App. 2001) (“The existing law at the time and placeof the making of the contract ... becomes a part of the contract.”). Here, Plaintiff had no legal obligation to work for Defendantsand Defendants owed no legal obligation to employ Plaintiff. Defendants' offer of employment, along with Plaintiff's promise orperformance of such employment, can be consideration that will support the formation of a contract. DeJean v. United Airlines,Inc., 839 P.2d 1153, 1159 (Colo. 1992) (stating that an “offer of employment would have amounted to adequate considerationfor a release of [a group of 570 pilot's] state law claims” where the pilots argued that airline had a pre-existing obligation toemploy them based on pre-employment promises or Colorado statutory labor provisions). The FLSA and Colorado state lawmerely impose minimum rules on an employer-employee relationship once such a legal relationship is formed. In other words,the FLSA and Wage Order presume the existence of the very employer-employee contract that Plaintiff asserts—and those rulesonly apply after the employer-employee relationship is formed, whether by contract or otherwise. Moreover, the existence ofa contract is ordinarily a question of fact for the jury. Jaeco Pump Co. v. Inject-O-Meter Mfg. Co., 467 F.2d 317, 320 (10thCir. 1972); I.M.A., Inc. v. Rocky Mountain Airways, Inc., 713 P.2d 882, 887 (Colo. 1986). Defendants present no evidence on

the issue. 5 And the Court is not persuaded by the analysis or conclusions reached by the District of New Jersey in Merlo v.Fed. Exp. Corp., No. 07-4311, 2010 WL 2326577, at *10-11 (D. N.J. June 7, 2010). Therefore, summary judgment as to thisissue must be denied.

5 In essence, Defendants have moved for judgment on the pleadings, not partial summary judgment.

D. Applicable Statute of Limitations to Wage Order Claims[7] Finally, Defendants argue that the two or three-year statute of limitations contained in Section 15 of the Wage Order applies

to Plaintiff's meal and rest period claims brought under the private right of action provision in the Wage Order. (ECF No. 88 at5-8.) Plaintiff responds that the Wage Order's private right of action section does not contain a specific statute of limitations;therefore, Colorado's general six-year statute of limitations, C.R.S. § 13-80-103.5(1)(a), should apply to any meal and rest breakviolations under the Wage Order. (ECF No. 86 at 3-7.)

[8] [9] [10] “[I]t is the nature of the right sued upon and not the nature of the relief demanded which governs the applicabilityof a statute of limitations.” McDowell v. United States, 870 P.2d 656, 661 (Colo. App. 1994). The Supreme Court of Coloradoprovides the following guidance to decide which one of two arguably applicable statutes of limitation should control: “(1) a laterenacted statute should be applied over an earlier enacted statute; (2) the *1188 more specific of two applicable statutes shouldbe applied; and (3) the longer of two applicable statutes should be applied.” Reg'l Transp. Dist. v. Voss, 890 P.2d 663, 668 (Colo.1995). However, the rule favoring application of the longer, rather than the shorter, of two applicable statutes of limitations is arule of last resort. “When conflicting statutes are related to each other as general and specific provisions, however, the GeneralAssembly has specified its own rule of preference or choice, which takes precedence and alleviates any need for resolution bya rule of last resort.” BP Am. Prod. Co. v. Patterson, 185 P.3d 811, 814-15 (Colo. 2008).

Defendants rely on “Section 1103-1:15. Filing of Complaints” to support its argument that Plaintiff's meal and rest period claimsare subject to a two or three-year statute of limitations. (ECF No. 83 at 9.) That Section states:



Any person may register with the division, a written complaint that alleges a violation of the MinimumWage Order within two (2) years of said violation(s), except that all actions brought for a willful violationshall be commenced within three (3) years after the cause of action accrues and not after that time.

7 Colo. Code Regs. § 1103-1:15. Section 15 became effective in 2018 and C.R.S. § 13-80-103.5(1)(a) became effective in 2013.Thus, Section 15 is the later-enacted statute, but that does not answer the question in this case. Section 15 is more specific thanC.R.S. § 13-80-103.5(1)(a). Although, in this case, Section 15's specificity does not help Defendants.

The statute of limitations contained in Section 15 only applies to written complaints filed with the Colorado Department ofLabor and Employment Division of Labor Standards and Statistics (“the division”). The first clause of Section 15 (“Any personmay register with the division”) modifies the remaining statutory language, which includes the 2-year and 3-year time limitsfor written complaints to the division. As a result, based on the plain language of Section 15, the two and three-year provisionsin that section do not apply to civil actions brought under Section 18 for the recovery of wages.

By contrast, the statute of limitations for FLSA causes of action is contained in Title 29 of the United States Code and is titled,“§ 255. Statute of limitations[.]” 29 U.S.C. § 255. It states:

Any action commenced on or after May 14, 1947, to enforce any cause of action for unpaid minimumwages, unpaid overtime compensation, or liquidated damages, under the Fair Labor Standards Act of1938, ... if the cause of action accrues on or after May 14, 1947--may be commenced within two yearsafter the cause of action accrued, ... except that a cause of action arising out of a willful violation may becommenced within three years after the cause of action accrued[.]

Id. at § 255(a)(emphasis added). Thus, the FLSA's statute of limitations clearly applies to a plaintiff seeking to “enforce anycause of action” unlike the limited scenario of written complaints filed with the division contained in Colorado's Wage Order.Accordingly, the Court cannot say the two or three-year statute of limitations in Section 15 applies to private rights of actionsbrought under Section 18.

Indeed, Section 18 does not state or incorporate any limitations period for private rights of action. The Wage Order does notcontain any other limitations provisions. The Court must, therefore, look to Colorado's general statutes of limitation for ananswer. Plaintiff's wage period and meal period claims arise by statute—the Wage Order. Thus, these claims are neither based incontract nor tort, making inapplicable the general limitations on actions *1189 found in Colo. Rev. Stat. § 13-80-101 (3 yearsfor contract actions) and Colo. Rev. Stat. § 13-80-102 (2 years for tort actions). Neither of the parties nor the Court's researchhas identified a general limitations period more applicable to Plaintiff's claims than Colo. Rev. Stat. § 13-80-103.5(1)(a), whichapplies to a “liquidated debt” or an “unliquidated, determinable amount.” Portercare Adventist Health Sys. v. Lego, 286 P.3d525, 528 (Colo. 2012); Interbank Investments, L.L.C. v. Vail Valley Consol. Water Dist., 12 P.3d 1224, 1230 (Colo. App. 2000)(applying Colo. Rev. Stat. § 13-80-103.5(1)(a)'s six-year statute of limitations where dispute was over amount of compensationowed). Because Section 13-80-103.5(1)(a) is most applicable to Plaintiff's claims under the Wage Order, and it is the longerof the potentially applicable periods of limitations, the Court relies on the “rule of last resort” and finds the longer statute oflimitations should be applied to Plaintiff's claims brought pursuant to the Wage Order. Patterson, 185 P.3d 811, 814-15 (Colo.2008). Therefore, Defendants' motion for partial summary judgment as to this issue is denied.

IV. CONCLUSION



Based on the foregoing, the Court:

(1) GRANTS IN PART and DENIES IN PART Defendants' [First] Motion for Partial Summary Judgment (ECF No. 39); and

(2) DENIES Defendants' Second Motion for Partial Summary Judgment (ECF No. 83).

All Citations

342 F.Supp.3d 1178, 2018 Wage & Hour Cas.2d (BNA) 343,251


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COURT USE ONLY - Colorado › pacific › sites › default...AllPhase Landscape Construction, Inc. , No. 12-cv-1048 (April 15, 2015); see Sobolewski v. Boselli & Sons, LLC, 342 F