Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—C.D. Cal.: Store manager's unfair competition claim based on labor law violations fails, (May 22, 2014)

By Edward L. Puzzo, J.D.

Since a store manager's claims of wage and hour violations by his employer under the California Labor Code were not credible, his California Unfair Competition Law claim, based on the alleged Labor Code violations, must also fail, the federal district court in Los Angeles has ruled (Molina v. Dollar Tree Stores, Inc., May 19, 2014, O'Connell, B.).

Plaintiff Oscar Molina was employed by defendant Dollar Tree Stores from 2004 to 2011, first as an associate and later, starting in 2005, as a store manager. Molina filed a number of claims under the California Labor Code, alleging that Dollar Tree had failed to pay him overtime compensation and wages when due. He also brought a claim under the California Unfair Competition Law (UCL).

Exempt status. When employed as a store manager, Dollar Tree classified Molina as an exempt employee. He was expected to work 45 hours per week and to spend at least 30 hours per week on managerial duties. Periodically, Molina certified that he spent no more than 35 percent of his time on non-exempt duties, such as receiving, distributing, and storing stock or preparing the store and cashiering.

Molina's claims were essentially that Dollar Tree mischaracterized store managers as exempt. He claimed that he worked more than 35 percent of the time on non-exempt tasks, but was coerced to certify that he worked less time on non-exempt tasks than he actually did. He also claimed he never took lunch breaks.

The court did not find Molina's testimony credible because it was contradicted by his own resume and by co-workers and supervisors and because of his misrepresentations concerning his level of education, his criminal record, and his violation of procedures regarding store bank deposits. The court did find credible the testimony of co-workers and supervisors and ruled that Molina had failed to prove that he worked hours for which he was entitled to overtime compensation or that he was not afforded the opportunity to take meal and rest breaks.

The court found that Molina managed a store; regularly oversaw and trained up to 40 employees; had the authority to hire and fire employees; completed work schedules; and exercised independent judgment. The court ruled that Dollar Tree carried its burden of showing that Molina primarily engaged in exempt tasks and had been properly classified as an exempt employee. Thus, the court ruled against Molina's claims for unpaid overtime and meal period wages under the California Labor Code.

Unfair Competition Law. The UCL allows recovery for any unlawful, unfair, or fraudulent business practice, including violations of other laws committed pursuant to business activity. Molina's UCL claims were premised on the alleged violations of state labor law regarding unpaid overtime and meal period wages. Because his claims under the Labor Code failed, Molina's claims under the UCL must also fail, the court ruled.

The case is No. CV 12-1428- BRO (FFMx).

Attorneys: Aparajit Bhowmik (Blumenthal Nordrehaug & Bhowmik) for Oscar Molina. Christopher L. Dengler (Littler Mendelson PC) for Dollar Tree Stores, Inc.

Companies: Dollar Tree Stores, Inc.

Cases: StateUnfairTradePractices CaliforniaNews