Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_14-cv-01721/USCOURTS-cand-4_14-cv-01721-7/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ROBERTA WATTERSON,

Plaintiff,

v.

GARFIELD BEACH CVS LLC,

Defendant.

Case No. 14-cv-01721-HSG 

ORDER GRANTING MOTION FOR 

SUMMARY JUDGMENT

Re: Dkt. No. 41

Pending before the Court is Defendant Garfield Beach CVS, LLC’s motion for summary 

judgment. Dkt. No. 41 (“Mot.”). The motion concerns whether an employer must compensate an 

employee for time and expenses relating to annual health screenings and wellness reviews 

completed in compliance with the terms of a voluntary medical insurance plan sponsored by the 

employer. For the reasons described below, the Court GRANTS the motion.

I. BACKGROUND

The following facts are undisputed unless stated otherwise. Plaintiff Roberta Watterson 

has been employed as a clerk by Defendant Garfield Beach CVS, LLC since June 2005. Dkt. No. 

48-1 (“Watterson Decl.”) ¶ 3. Beginning on June 1, 2009, and every year thereafter, Plaintiff has 

voluntarily enrolled in the CVS Caremark Welfare Benefit Plan (“Plan”), a group medical 

insurance program. Dkt. No. 20 (“Joint Not. Facts”) ¶¶ 7-12, 14.

Beginning sometime in 2012 or 2013,

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the Plan instituted a program called 

“WellRewards,” under which participants who do not complete an annual health screening and 

 

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The parties reference conflicting start dates for the WellRewards program. Compare Watterson 

Decl. ¶ 11 (“2013/2014”), with Mot. at 4 (“June 1, 2012”). Because the start date of the 

WellRewards program does not impact the Court’s legal analysis, this apparent dispute of fact is 

not material.

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online wellness review are required to pay an additional medical insurance premium of $50 per 

month. See Watterson Decl. ¶ 11. In a document describing the WellRewards program, CVS 

Caremark—which is not a party to this case—stated that “every colleague enrolled in the CVS 

Caremark medical plan will be expected to” complete the health screening and online review 

before a specific deadline. Dkt. No. 48-10. Participants in the Plan must complete the health 

screening at a CVS MinuteClinic or Quest lab. Dkt. No. 48-7 at 76:1-3.

In the 2013-2014 Plan year, Plaintiff failed to complete the online wellness review and 

paid a total of $184.64 in additional premiums as a result. Dkt. No. 41-1 (“Watterson Dep. Tr.”) 

at 50:22-51:20. In each subsequent year, Plaintiff has completed both the annual health screening 

and online wellness review. Watterson Decl. ¶¶ 15, 17-19. Defendant did not compensate 

Plaintiff for her time spent completing the health screenings or wellness reviews. See id. ¶ 16.

Plaintiff filed this action on March 13, 2014 in Alameda County Superior Court. Dkt. No. 

1. Defendant removed the action to this Court on April 14, 2014. Id. Based on the abovedescribed facts, Plaintiff alleges (1) Failure to Pay Hourly Wages in violation of the California 

Labor Code; (2) Failure to Indemnify in violation of the California Labor Code; (3) Unlawful 

Deductions in violation of the California Labor Code; (4) Failure to Provide Accurate Written 

Wage Statements in violation of the California Labor Code; and (5) Unfair Competition in 

violation of California Business and Professions Code § 17200. Dkt. No. 1-3. In her opposition, 

Plaintiff states that she “stipulates to the dismissal of” her third cause of action (Unlawful 

Deductions).2 Dkt. No. 48 (“Opp.”) at 1 n.1.

II. DISCUSSION

A. Legal Standard

Summary judgment is proper where the pleadings and evidence demonstrate “there is no 

genuine issue as to any material fact and . . . the movant is entitled to judgment as a matter of 

 

2 Defendant states in its reply brief that it does not stipulate to the dismissal of this claim without 

prejudice. Dkt. No. 50 (“Reply”) at 4. Plaintiff does not specify whether she stipulates to the 

dismissal of the claim with or without prejudice. Because Plaintiff failed to substantively oppose 

Defendant’s argument related to Plaintiff’s third cause of action, the Court GRANTS Defendant’s 

motion for summary judgment as that claim. As a result, Defendant’s preemption argument is 

moot.

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law.” Fed. R. Civ. P. 56(c)(2); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A material 

issue of fact is a question a trier of fact must answer to determine the rights of the parties under the 

applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute 

is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving 

party.” Id.

The moving party bears “the initial responsibility of informing the district court of the 

basis for its motion.” Celotex, 477 U.S. at 323. To satisfy this burden, the moving party must 

demonstrate that no genuine issue of material fact exists for trial. Id. at 322. To survive a motion 

for summary judgment, the non-moving party must then show that there are genuine factual issues 

that can only be resolved by the trier of fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736, 

738 (9th Cir. 2000). To do so, the non-moving party must present specific facts creating a genuine 

issue of material fact. Fed. R. Civ. P. 56(c); Celotex, 477 U.S. at 324.

The court must review the record as a whole and draw all reasonable inferences in favor of 

the non-moving party. Hernandez v. Spacelabs Med. Inc., 343 F.3d 1107, 1112 (9th Cir. 2003). 

However, unsupported conjecture or conclusory statements are insufficient to defeat summary 

judgment. Id. Moreover, the court is not required “to scour the record in search of a genuine issue 

of triable fact,” Keenan v. Allen, 91 F.3d 1275, 1279 (9th Cir. 1996) (citations omitted), but rather 

“may limit its review to the documents submitted for purposes of summary judgment and those 

parts of the record specifically referenced therein.” Carmen v. San Francisco Unified Sch. Dist., 

237 F.3d 1026, 1030 (9th Cir. 2001).

B. Plaintiff’s Time Spent Completing The Annual Health Screening And Wellness 

Review Is Not Compensable

“The Industrial Welfare Commission (IWC) is the state agency empowered to formulate 

regulations (known as wage orders) governing employment in the State of California.” Morillion 

v. Royal Packing Co., 22 Cal. 4th 575, 581 (2000) (internal quotation marks omitted). The IWC 

Wage Order at issue here requires employers to pay employees for all “hours worked.” IWC 

Wage Order No. 7. “Hours worked” is defined as “the time during which an employee is subject 

to the control of an employer, and includes all the time the employee is suffered or permitted to 

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work, whether or not required to do so.” Id. § 2(G). Therefore, in order for Plaintiff to prevail on 

her first cause of action for failure to pay wages, Plaintiff must have been “subject to the control” 

of Defendant while she was completing the annual health screenings and online wellness reviews. 

Making all factual inferences in Plaintiff’s favor, the Court finds as a matter of law that she was 

not. 

1. Plaintiff Was Not Subject To Defendant’s Control Because Her Participation 

In The Plan Was Voluntary

Plaintiff first argues that she was subject to Defendant’s control because Defendant 

directed her to perform a task within a specified time period and threatened her with “lost wages”

if she failed to so perform. Furthermore, Plaintiff argues that Defendant (1) does not permit 

employees to have the screening performed by their own physician or by a lab of their own 

choosing; (2) dictates which metrics must be tested; and (3) dictates the number, type, and content 

of questions on the wellness review questionnaire. Finally, Plaintiff contends that she is not free 

to use her own time for her own purposes while waiting to be screened. 

While the above-listed facts might be relevant if Defendant had required Plaintiff to 

complete the annual health screenings and wellness reviews as a condition of her employment, 

they are not persuasive here where Defendant did not force Plaintiff to enroll in the Plan. There is 

no dispute that Plaintiff voluntarily enrolled in the Plan, which is offered as part of Defendant’s 

optional benefits package for employees. Plaintiff concedes that “[Defendant] does not coerce 

Plaintiff to sign up for health insurance under threat of lost wages” and that she would not be 

“entitled to compensation for her time filling out paperwork to enroll in [Defendant]’s health plan” 

because she “is not subject to [Defendant]’s control when she fills out the paperwork to enroll in 

the health plan.” Opp. at 18-19. The Court thus finds unpersuasive Plaintiff’s argument that she 

was subject to Defendant’s control after voluntarily signing up for the Plan. 

California cases addressing an employer’s provision of transportation services to its 

employees are persuasive in this context. In Morillion v. Royal Packing Co., the California 

Supreme Court held that “an employer that requires its employees to travel to a work site on its 

buses must compensate the employees for their time spent traveling on those buses.” 22 Cal. 4th 

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at 578 (emphasis added). However, the court specifically noted that “[t]ime employees spend 

traveling on transportation that an employer provides but does not require its employees to use 

may not be compensable as ‘hours worked.’” Id. at 588. This distinction was further clarified in 

Overton v. Walt Disney Co., in which the California Court of Appeal held that employers need not 

compensate employees for time spent riding a shuttle from a parking lot to the work site when

those employees were not required to ride the shuttle. 136 Cal. App. 4th 263, 271 (2006) (“[T]he 

key factor is whether [Defendant] required its employees who were assigned parking in [a certain 

parking lot] to park there and take the shuttle. Quite obviously, [Defendant] did not.”) (emphasis 

in original); see also Alcantar v. Hobart Serv., No. 11-cv-1600-PSG, 2012 WL 6539547, at *4 

(C.D. Cal. Dec. 13, 2012) (holding that defendant employer was not obligated to compensate 

plaintiff employee for time spent driving the defendant’s service vehicle home where “driving the 

service vehicle home was an option provided by” the defendant and the plaintiff “was not required 

to subject himself to [the defendant’s] control”). These cases support the conclusion that 

restrictions imposed on the use of optional benefits provided by an employer to employees do not 

subject those employees to the control of the employer such that the Wage Order’s requirements 

are applicable. See Novoa v. Charter Comm’ns, LLC, No. 13-cv-1302-AWI, 2015 WL 1879631, 

at *7 (E.D. Cal. Apr. 22, 2015) (“Despite the restrictions that Defendant placed on Plaintiff’s use 

of the company vehicle, its use to commute directly to the first job assignment was voluntary. 

Thus, the use of the vehicle to commute to and from home was not compensable.”).

Furthermore, though Plaintiff contends that enrolling in the Plan was not “voluntary” 

because it was both a life and a legal necessity, the question for the Court is whether Defendant 

necessitated such enrollment. See Overton, 136 Cal. App. 4th at 272-73 (rejecting plaintiff’s 

argument that “Morillion mandates travel time payments to employees who, as a practical matter, 

are required to use an employer-provided shuttle because no alternative transportation is available 

or feasible,” because the California Supreme Court’s analysis did not turn on that question). 

Plaintiff’s need for health insurance results from circumstances and forces outside of Defendant’s 

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control, and she does not need to enroll specifically in the Plan in order to satisfy that need.3

Finally, Plaintiff argues that her completion of the health screenings and wellness reviews 

“primarily benefited” Defendant by “help[ing] [Defendant] control its health care costs,” and that 

this further suggests that such time should be compensable under California law. Opp. at 18. But 

the decisions cited by Plaintiff are limited to the analysis of whether “on-call or standby time” 

requires compensation; in this particular context California courts have considered whether the 

on-call or standby time “primarily benefited” the employer. See Mendiola v. CPS Sec. Sols., Inc., 

60 Cal. 4th 833, 841 (2015) (“Courts have identified various factors bearing on an employer’s 

control during on-call time . . . Courts have also taken into account whether the on-call waiting 

time . . . is spent primarily for the benefit of the employer and its business.”) (internal quotation 

marks omitted and emphases added). Plaintiff cites no decision applying this “primary benefit” 

test outside of the context of on-call or standby time, which undisputedly is not at issue in this 

case.

2. Frlekin And Sullivan Address Materially Different Circumstances Than 

Those Presented Here

Plaintiff argues that the voluntary nature of her enrollment and participation in the Plan is 

not dispositive in light of two decisions by courts in this district, Frlekin v. Apple, Inc., No. 13-cv03451-WHA, 2014 WL 2451598 (N.D. Cal. May 30, 2014), and Sullivan v. Kelly Servs., Inc., No. 

08-cv-03893-CW, 2009 WL 3353300 (N.D. Cal. Oct. 16, 2009). But neither of these cases 

addressed the circumstances present here: an employer’s provision of an optional benefit with 

strings attached. Rather, Frlekin and Sullivan addressed required employee activities that were 

inextricably intertwined with the performance of those employees’ job duties. 

In Frlekin, the court denied the defendant’s motion for summary judgment that time spent 

 

3

Plaintiff also submits that the dramatic increase in health screening and wellness review 

completion rates after the WellRewards program was instituted constitutes evidence that 

compliance with the Plan’s requirements is not “voluntary.” Of course, this evidence is only 

pertinent to the question of whether the $50 premium surcharge encourages those employees who 

have voluntarily enrolled in the Plan to comply with the requirements of the Plan. It does not 

address the threshold question presented here, which is whether Defendant directed or required 

Plaintiff to enroll in the Plan, such that her decision to do so—and subsequent decision whether to 

complete the annual health screening and wellness review—was not voluntary.

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by employees waiting to undergo a security check before they could enter or leave the workplace 

was not compensable. 2014 WL 2451598, at *4. In arriving at that conclusion, the court 

considered the Alcantar opinion cited above and distinguished that case by noting that “the 

employees [in Alcantar] could decide not to volunteer to subject themselves to their employers’ 

requirements,” whereas “the summary judgment record [in Frlekin] is at best ambiguous about 

whether the security screenings were mandatory for at least some locations and circumstances.” 

Id. The Frlekin court also rejected the defendant’s argument that it only required employees who 

had bags to undergo a security screening and the choice of whether to bring a bag to work was a 

voluntary choice; the court noted in passing that the “choice” to bring a bag to work may be driven 

“by the necessities of life,” such as if employees needed to bring “medication, feminine hygiene 

products, or disability accommodations” to work. Id. The Frlekin defendant effectively required 

the plaintiff employees to leave their bags—and life necessities—at home if they did not want to 

undergo a security screening in order to enter the workplace. Here, there is no factual dispute that 

enrollment in the Plan was purely voluntary and is in no way tied to Plaintiff’s actual employment

or job duties. It is a purely optional benefit in which Plaintiff voluntarily participates. As such, 

Frlekin is inapposite.

In Sullivan, the court denied defendant’s motion for summary judgment that California law 

does not require a temporary staffing agency to pay its employees for time and expenses relating 

to interviews with the staffing agency’s customers. 2009 WL 3353300, at *1. The defendant 

argued that the employees were not subject to its control because attending the interviews was 

voluntary, in that the employees would still be eligible for assignment with customers that did not 

require placement interviews. The court rejected this argument, finding that “the interviews are 

‘voluntary’ only to the extent that employees are willing to forego the types of jobs that require an 

interview. That amounts to approximately fifty percent of the jobs Defendant offers. Refusing to 

attend interviews would preclude Plaintiff from working these assignments.” Id. at *4. 

Here, a voluntary decision by Plaintiff not to enroll in the Plan would not deprive her of 

any opportunities tied to her employment with Defendant. As noted above, the Plan is a purely 

optional benefit provided by Defendant to its employees. It is undisputed that Defendant in no 

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way conditions any terms of employment on enrollment in the Plan, or on participants’ completion 

of the annual health screening or wellness review. Indeed, this is what differentiates the facts here 

from those in Plaintiff’s grave hypotheticals. See, e.g., Opp. at 20 (“CVS could even direct 

workers who ‘voluntarily’ enroll in the health plan to work an extra 5 hours per week without 

compensation, and dock their pay if they refuse or fail to do so.”). The conditions imposed as a 

result of Plaintiff’s voluntary enrollment in the Plan are not at all related to her day-to-day work as 

a clerk. Moreover, the Plan is of the type explicitly envisioned by federal regulations governing 

group health insurance plans. See, e.g., 26 C.F.R. § 54.9802-1(f)(5) (describing an example plan 

that “offers employees a health-contingent wellness program . . . focused on exercise, blood sugar, 

weight, cholesterol, and blood pressure” that provides “an annual premium rebate of $600” as a 

“reward for compliance”).4

3. Plaintiff Was Not Suffered Or Permitted To Work While Completing The 

Health Screening And Wellness Review

Plaintiff argues in the alternative that she was “suffered or permitted to work” because 

Defendant knew or should have known that she was working while completing the health 

screening and wellness review. The Court disagrees. Plaintiff’s arguments on this point 

essentially repeat the arguments rejected by the Court above—namely, that Plaintiff was 

“working” because Defendant directed her to complete the health screenings and wellness 

reviews, or because her completion of the health screenings and wellness reviews benefited 

Defendant by helping it reduce its health care costs. Taking all inferences in Plaintiff’s favor, the 

record here establishes conclusively that Plaintiff’s completion of the health screenings and 

wellness reviews was not “work” as defined by California law.

* * *

The Court finds that the undisputed material facts demonstrate that Defendant did not 

require Plaintiff to enroll in the Plan and subject herself to the WellRewards program.5 As a 

 

4

The Court does not need to reach the theoretical question of whether the requirements of a 

voluntary benefit program offered by an employer could ever be so onerous as to give rise to some 

sort of legal claim by employees.

5

In its reply brief, Defendant asserts that there is a distinction between Defendant as a legal entity 

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result, Plaintiff was not “subject to the control of” Defendant when she completed the annual 

health exams and wellness reviews. Nor was Plaintiff “suffered or permitted to work” while 

engaging in those activities. Therefore, her time spent completing the health screening and 

wellness review is not compensable. The Court grants Defendant’s motion for summary judgment 

as to Plaintiff’s first cause of action.

C. The Expenses Incurred By Plaintiff In Relation To The Plan Were Not Incurred 

In Direct Consequence Of The Discharge Of Her Duties Or At Defendant’s 

Direction

California Labor Code § 2802 provides that “[a]n employer shall indemnify his or her 

employee for all necessary expenditures or losses incurred by the employee in direct consequence 

of the discharge of his or her duties, or of his or her obedience to the directions of the employer.” 

Plaintiff has not shown that § 2802 applies here, where Plaintiff’s expenses incurred in 

relation to completing the annual health screenings and wellness reviews were not tied to her job 

duties as a clerk or her employment more generally. Therefore, none of Plaintiff’s activities in 

relation to the Plan were “in direct consequence of the discharge of” her job duties. Furthermore, 

as described in detail above, Defendant did not “direct” Plaintiff to complete the annual health

screenings or wellness reviews because Plaintiff voluntarily enrolled in the Plan and thereby 

subjected herself to its terms. Accordingly, the Court grants Defendant’s motion for summary 

judgment as to Plaintiff’s second cause of action.

D. Plaintiff’s Fourth And Fifth Causes Of Action Are Derivative Of Her First And 

Second Causes Of Action

Plaintiff cannot prevail on her fourth and fifth causes of action unless she prevails on her 

first or second cause of action. Because Plaintiff’s first and second causes of action fail for the 

reasons explained above, the Court finds that Plaintiff’s fourth and fifth causes of action must fail 

 

and the Plan as a legal entity, and argues that any requirement of the Plan is not equivalent to the 

direction of the employer sponsor of the Plan. Reply at 7. In a sur-reply filed without leave of 

Court, Plaintiff contends that Defendant waived any argument based on the legal distinction 

between the Plan and Defendant. The Court did not consider or rely upon Defendant’s untimely 

argument attempting to technically distinguish the Plan as a separate legal entity, and crediting 

that argument would require resolution of numerous disputed issues of material fact. Instead, the 

Court’s ruling assumes that the conditions imposed on participants who voluntarily enroll in the 

Plan are attributable to Defendant.

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as well.

III. CONCLUSION

For the foregoing reasons, Defendant’s motion for summary judgment is GRANTED. The 

clerk is directed to enter judgment in favor of Defendant and close the file. Both parties shall bear 

their own costs of suit.

IT IS SO ORDERED.

Dated: August 12, 2015

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

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