Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-04367/USCOURTS-cand-3_07-cv-04367-0/pdf.json

Nature of Suit Code: 730
Nature of Suit: Labor Management Report &amp; Disclosure
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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Case 3:07-cv-04367-BZ Document 9 Filed 09/28/07 Page 1 of 65
Dated: September 28, 2007

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORN

I

A

IT IS SO ORDERED

Judge Bernard Zimmerman

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FIRST AMENDED COMPLAINT 

CASE NO. C 07 4367 

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CHRISTOPHER R. ROBYN, ESQ. (SBN 243149) 

chris.robyn@hrdlaw.com

HEINTZ ROBYN & DIGESTI LLP 

1113 Adella Avenue, Suite 100 

Coronado, CA 92118 

Phone: (800) 939-8533 

Fax: (800) 939-8533 

LAURENCE P. DIGESTI (SBN 74323) 

digestilaw@aol.com

LAW OFFICES OF LAURENCE P. DIGESTI 

485 W. Fifth Street 

Reno, NV 89503 

Phone: (775) 323-7797 

Fax: (775) 323-5944 

Attorneys for Plaintiffs JOEL ASSEKO, ALFREDO RITA and ALEX SHPAK, individually and 

on behalf of all others similarly situated 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO/OAKLAND DIVISION

JOEL ASSEKO, ALFREDO RITA, and 

ALEX SHPAK, individually and on behalf of 

all others similarly situated, 

 Plaintiffs, 

 vs. 

GUARDSMARK LLC and DOES 1-25, 

 Defendants. 

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Case No.: C 07 4367 BZ 

FIRST AMENDED COMPLAINT FOR: (1) VIOLATIONS OF CALIFORNIA 

LABOR CODE § 200 et seq.; 

(2) VIOLATIONS OF BUSINESS & 

PROFESSIONS CODE § 17200 et 

seq.; 

(3) BREACH OF CONTRACT; 

(4) BREACH OF IMPLIED 

COVENANT OF GOOD FAITH 

AND FAIR DEALING; and 

(5) CONSTRUCTIVE FRAUD 

CLASS ACTION 

DEMAND FOR JURY TRIAL

 UNLIMITED CIVIL CASE 

 On information and belief, PLAINTIFFS allege as follows: 

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FIRST AMENDED COMPLAINT 

CASE NO. C 07 4367 

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NATURE OF THE ACTION

1. This is a class action brought by JOEL ASSEKO, ALFREDO RITA and ALEX 

SHPAK (hereinafter “PLAINTIFFS”), individually and on behalf of all persons similarly 

situated. 

2. This class action is brought against GUARDSMARK LLC and DOES 1-25, 

(collectively “DEFENDANT” or “GUARDSMARK”) for violations of Labor Code §§ 200 et. 

seq. and Business & Professions Code §§ 17200 et. seq. Moreover, as beneficiaries of any and 

all of DEFENDANT’S contracts with the California Department of General Services (“DGS”) 

to provide private security services, PLAINTIFFS also allege a breach of said contracts. 

 3. This action alleges that DEFENDANT failed to provide PLAINTIFFS, who 

perform work pursuant to a security guard services contract between DEFENDANT and DGS, 

benefits and/or cash-in-lieu payments at the level required under said contract and Government 

Code § 19134 (“Section 19134”). 

4. As such, this action alleges the following causes of action: (1) DEFENDANT 

has violated and continues to violate Labor Code § 200 et. seq. by failing to pay PLAINTIFFS 

their full wages, benefits and/or cash-in-lieu when due; (2) DEFENDANT has engaged and 

continues to engage in unfair and unlawful business practices in violation of California Business 

& Professions Code § 17200 et. seq.; (3) DEFENDANT has breached and continues to breach 

its contracts with DGS; (4) DEFENDANT has breached and continues to breach the implied 

covenant of good faith and fair dealing; and (5) DEFENDANT has breached and continues to 

breach its duty owed to PLAINTIFFS resulting in constructive fraud. 

5. Through these exclusively state and common law causes of action, PLAINTIFFS 

seek compensation for all unpaid or underpaid wages, benefits and/or cash-in-lieu, plus interest, 

other damages as permitted by law, restitution of all benefits obtained by DEFENDANT from 

its unlawful business practices, punitive damages, a permanent injunction, other equitable relief 

permitted by law and reasonable attorney’s fees and costs. 

/// 

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Case 3:07-cv-04367-BZ Document 9 Filed 09/28/07 Page 4 of 65
FIRST AMENDED COMPLAINT 

CASE NO. C 07 4367 

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PLAINTIFFS

6. Plaintiff JOEL ASSEKO is, and at all times pertinent herein was, a resident of 

California, County of Contra Costa and employed by DEFENDANT as a security guard at the 

State Building, San Francisco Civic Center Complex, located at 455 Golden Gate Ave., San 

Francisco, California since October 15, 2002. Plaintiff ASSEKO brings this action on his own 

behalf and on behalf of all other persons similarly situated. 

7. Plaintiff ALFREDO RITA is, and at all times pertinent herein was, a resident of 

California, County of San Mateo and employed by DEFENDANT as a security guard at the 

State Building, San Francisco Civic Center Complex, located at 455 Golden Gate Ave., San 

Francisco, California since November 2002. Plaintiff RITA brings this action on his own behalf 

and on behalf of all other persons similarly situated. 

8. Plaintiff ALEX SHPAK is, and at all times pertinent herein was, a resident of 

California, County of San Francisco and employed by DEFENDANT as a security guard at the 

State Building, San Francisco Civic Center Complex, located at 455 Golden Gate Ave., San 

Francisco, California since August 2003. Plaintiff SHPAK brings this action on his own behalf 

and on behalf of all other persons similarly situated. 

DEFENDANTS

9. PLAINTIFFS are ignorant of the true names and capacities of DEFENDANTS 

sued in this First Amended Complaint as DOES 1 through 25, inclusive, and therefore sue these 

DEFENDANTS by such fictitious names and capacities. PLAINTIFFS will amend this 

complaint to allege DEFENDANTS true names and capacities when learned. PLAINTIFFS are 

informed and believe and thereon allege that each of the fictitiously named DEFENDANTS is 

in breach of their contracts with DGS and/or is tortiously or otherwise legally responsible in 

some manner for the occurrences alleged in this First Amended Complaint and for 

PLAINTIFFS’ damages. PLAINTIFFS will amend this First Amended Complaint to allege 

such responsibility when the same shall have been learned. 

10. PLAINTIFFS are further informed and believe, and on that basis allege, that at 

all relevant times, each DEFENDANT, including DOES 1 through 25, inclusive, was the agent 

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FIRST AMENDED COMPLAINT 

CASE NO. C 07 4367 

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or employee and/or co-conspirator of one or more of the named DEFENDANTS, and in doing 

the things alleged, was acting within the scope of that agency or employment. PLAINTIFFS 

are further informed and believe, and on that basis allege, that some or all of the fictitiouslynamed DEFENDANTS aided and assisted the named DEFENDANT in committing the 

wrongful acts alleged in this First Amended Complaint and that PLAINTIFFS’ damages were 

legally caused by each such DEFENDANT. 

JURISDICTION AND VENUE

11. The San Francisco Superior Court (“Superior Court”) has jurisdiction over all 

causes of action herein pursuant to the California Constitution, Article VI, § 10, which grants 

the Superior Court “original jurisdiction in all cases except those given by statute to other trial 

courts.” 

12. The Superior Court has jurisdiction over DEFENDANT because DEFENDANT, 

and each of them, has sufficient minimum contacts with the State of California so as to render 

the exercise of jurisdiction over DEFENDANT, and each of them, by the California courts 

consistent with traditional notions of fair play and substantial justice. 

13. This case is properly filed in Superior Court since it is a civil action wherein the 

relief sought is not of a type that may be granted in a limited civil case. 

14. Venue is proper in the Superior Court because the unlawful acts alleged in this 

Complaint occurred and continue to occur in San Francisco County. 

FACTUAL ALLEGATIONS

I. Unpaid and/or Underpaid Wages and/or Benefits as per Section 19134

15. Section 19134 provides that “[p]ersonal services contracts entered into by a state 

agency . . . for persons providing . . . security guard services shall include provisions for 

employee wages and benefits that are valued at least 85 percent of the state employer cost of 

wages and benefits provided to state employees for performing similar duties.” Gov. Code § 

19134(a). 

16. Section 19134 requires the Department of Personnel Administration to establish, 

annually, the required wage and benefit costs for covered workers. Gov. Code § 19134(c). 

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FIRST AMENDED COMPLAINT 

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17. Section 19134 further provides that “[i]n lieu of providing actual benefits, 

contractors may comply with this section by a cash payment to employees equal to the 

applicable determination [by the Department of Personnel Administration] under [Section 

19134(c)].” Gov. Code § 19134(d). 

18. Moreover, Section 19134 specifies that “[f]ailure to provide benefits or cash-inlieu to employees as required under this section shall be deemed to be a material breach for any 

contract for personal services covered by this section.” Gov. Code § 19134(e). 

19. Since 2001, DEFENDANT has entered into multiple written agreements (“the 

Contracts”) with DGS to provide security guard services. The three known Contracts between 

DEFENDANT and DGS are provided as exhibits herein. The first contract (“Exhibit 1”) covers 

the period from December 1, 2001 to November 30, 2004. (A true and correct copy of the 

pertinent provisions of this contract is attached hereto as Exhibit 1 and incorporated by this 

reference). The second contract (“Exhibit 2”) covers the period from December 1, 2004 to 

March 31, 2005. (A true and correct copy of the pertinent provisions of this contract is attached 

hereto as Exhibit 2 and incorporated by this reference). The third contract (“Exhibit 3”) covers 

the period from April 1, 2005 to March 31, 2008. (A true and correct copy of the pertinent 

provisions of this contract is attached hereto as Exhibit 3 and incorporated by this reference). 

20. The Contracts require DEFENDANT to provide security guard services at the 

following two locations: 350 McAllister Street, San Francisco, California and 455 Golden Gate 

Avenue, San Francisco, California. 

21. The Contracts expressly provide that “[p]ursuant to Government Code section 

19134, contracts for security guard services must include provisions for employee benefits that 

are valued at least 85 percent of the state employer cost of benefits provided to state employees 

performing similar duties.” (See Exhibits 1, 2 and 3). Additionally, the Contracts specify the 

“applicable benefit rates to be paid to Contractor’s employees providing services under this 

contract” and defines “[e]mployee benefits” as “1) health, dental and vision benefits (either 

through a purchased plan or self insurance); 2) cash-in-lieu payments; or 3) a combination of 

actual benefits and cash-in-lieu payments.” (See Exhibits 1, 2 and 3). The Contracts further 

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provide that “[e]very employee performing covered services under this contract shall receive the 

applicable rate corresponding to the employee’s enrollment status (tier) [See Exhibit 1] and the 

total number of hours such employee works (excluding overtime). There is no minimum 

number of work hours required in order to qualify for section 19134 benefits.” (See Exhibits 1, 

2 and 3). 

22. The Contracts expressly state that “Contractor acknowledges that failure to 

comply with the provisions of section 19134 will be deemed a material breach of this contract . . 

. .” (See Exhibit 1, 2 and 3). 

23. DEFENDANT has consistently failed to provide any benefits and/or cash-in-lieu 

payments at hourly rates that are equal to or greater than the rate required under Section 19134 

to employees that perform security guard services pursuant to the Contracts with DGS. 

DEFENDANT’S practice to this effect is on-going. 

24. DEFENDANT has consistently failed to disclose the manner of calculation of 

PLAINTIFFS’ benefits and/or cash-in-lieu under the terms of Section 19134 and 

DEFENDANT’S Contracts with DGS. DEFENDANT’S practice to this effect is on-going. 

25. The value of failed payments by DEFENDANT as per DEFENDANT’S 

Contracts with DGS exceeds $25,000. 

CLASS ACTION ALLEGATIONS

26. PLAINTIFFS bring this action on their own behalf and on behalf of all persons 

similarly situated. The class that PLAINTIFFS represent is composed of any and all 

GUARDSMARK security guard employees currently working, or having previously worked 

within four years prior to the filing of this Complaint, to fulfill DEFENDANT’S contractual 

duties set out in any and all security guard services contracts between DEFENDANT and DGS. 

This putative class will be referred to herein collectively as the GUARDSMARK SECURITY 

GUARDS. 

27. The GUARDSMARK SECURITY GUARDS are so numerous that joinder of all 

such persons is impracticable and that the disposition of their claims in a class action, rather 

than in individual actions, will benefit the parties and the court. 

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FIRST AMENDED COMPLAINT 

CASE NO. C 07 4367 

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28. There is a well-defined community of interest in the questions of law involving 

and affecting the GUARDSMARK SECURITY GUARDS in that DEFENDANT, on a classwide basis, violated the same sections of the California Labor Code and Business & Professions 

Code, as well as breaching the same terms of DEFENDANT’S contracts with DGS, while 

engaging in constructive fraud as to all members of the class. 

29. There is a well-defined community of interest in the questions of fact involving 

and affecting GUARDSMARK SECURITY GUARDS in that: 

 a. DEFENDANT has a uniform policy of promising to provide wages, 

benefits and/or cash-in-lieu benefits to similarly situated security guards; 

and 

 b. DEFENDANT has a uniform policy of failing to pay all wages, benefits 

and/or cash-in-lieu benefits due to similarly situated security guards. 

 30. These common questions of law and fact predominate over questions that affect 

only individual class members. 

 31. PLAINTIFFS’ claims alleged herein are typical of those of the class that could 

be alleged by other similarly situated GUARDSMARK SECURITY GUARDS working for 

DEFENDANT pursuant to DEFENDANT’S contracts with DGS in that DEFENDANT has and 

continues to engage in a pattern and practice of treating all similarly situated GUARDSMARK 

SECURITY GUARDS in the same fashion regarding the claims sought herein. Moreover, the 

relief sought is typical of the relief that would be sought by each of the similarly situated 

GUARDSMARK SECURITY GUARDS in separate actions. 

 32. PLAINTIFFS, through their counsel, will fairly and adequately represent and 

protect the interests of the proposed class of employees. 

 33. The prosecution of separate actions by individual GUARDSMARK SECURITY 

GUARDS would create a risk of inconsistent and/or varying adjudications with respect to the 

individual members of the class, would establish incompatible standards of conduct for 

DEFENDANT, and would result in the impairment of rights of employees and the disposition 

of their interests through actions to which they were not parties. 

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FIRST AMENDED COMPLAINT 

CASE NO. C 07 4367 

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 34. A single class action is superior to numerous individual actions as a means of 

adjudicating those claims. 

FIRST CAUSE OF ACTION

(By PLAINTIFFS for Failure to pay full wages when due under Cal. Labor Code §§ 200 

et. seq. against DEFENDANT) 

35. PLAINTIFFS incorporate by reference, as though fully set forth, paragraphs 1-

34. 

36. By failing to compensate employees, as required by Section 19134, as fully set 

forth above, DEFENDANT has violated and continues to violate Labor Code Section 204, 

which requires employers, including DEFENDANT, to pay their employees their full wages 

when due. 

37. By failing to compensate employees, as required by Section 19134, 

DEFENDANT has willfully failed to make timely payment of full wages, benefits and/or cashin-lieu benefits due to its employees who quit or have been discharged, and thereby has violated 

Labor Code Sections 201 and 202. 

38. As a result of said violations, PLAINTIFFS have been damaged in an amount 

according to proof but exceeding $25,000. 

WHEREFORE, PLAINTIFFS pray for judgment against DEFENDANT, and each of 

them, as more fully set forth below. 

SECOND CAUSE OF ACTION

(By PLAINTIFFS for Unfair/Unlawful Business Practices against DEFENDANT) 

39. PLAINTIFFS incorporate by reference, as though fully set forth, paragraphs 1-

38. 

40. By engaging in the above-alleged business practices in violation of Section 

19134 and Labor Code Section 201, 202 and 204, DEFENDANT has engaged and continues to 

engage in unfair and unlawful business acts and practices in violation of Business & Professions 

Code Section 17200 et. seq. 

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FIRST AMENDED COMPLAINT 

CASE NO. C 07 4367 

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41. Unless enjoined, DEFENDANT will continue to engage in the unlawful and 

unfair business practices complained of herein. 

42. As a result of said business practices, PLAINTIFFS have been damaged in an 

amount according to proof but exceeding $25,000. 

WHEREFORE, PLAINTIFFS pray for judgment against DEFENDANT, and each of 

them, as more fully set forth below. 

THIRD CAUSE OF ACTION

(By PLAINTIFFS for Breach of Contract against DEFENDANT) 

 43. PLAINTIFFS incorporate by reference, as though fully set forth, paragraphs 1-

42. 

 44. PLAINTIFFS are informed and believe that DGS has performed all of its 

obligations and/or satisfied all conditions under the Contracts between DEFENDANT and DGS. 

Additionally, PLAINTIFFS are informed and believe that DEFENDANT is not excused from 

full performance of its duties under the Contracts. 

 45. The Contracts between DEFENDANT and DGS are governed by Section 19134. 

Section 19134(a) provides that employees working under covered contracts shall be provided 

with “wages and benefits that are valued at least 85 percent of the state employer cost of wages 

and benefits provided to state employees for performing similar duties.” Section 19134(e) 

further provides that contractors shall be deemed in material breach if they fail “to provide 

benefits or cash-in-lieu to employees as required under this section.” As a condition of this 

contract, DEFENDANT agreed to comply with Section 19134 and to provide its employees 

who provide covered services with all wages, benefits and/or cash-in-lieu benefits at the rates 

specified in the contract. 

46. PLAINTIFFS are individuals who perform covered services pursuant to the 

Contracts between DEFENDANT and DGS. As such, PLAINTIFFS are beneficiaries of the 

Contracts between DEFENDANT and DGS. 

 47. DEFENDANT has failed and refused, and continues to fail and continues to 

refuse, to provide PLAINTIFFS, who perform services pursuant to DEFENDANT’S Contracts 

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FIRST AMENDED COMPLAINT 

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with DGS all wages, benefits and/or cash-in-lieu benefits as required by (1) Section 19134 and 

(2) DEFENDANT’S Contracts with DGS. Consequently, DEFENDANT has breached the 

Contracts without justification or excuse. As a result of said breach, PLAINTIFFS have been 

damaged in an amount according to proof but exceeding $25,000. Specifically, the difference 

between the amount paid by DEFENDANT to PLAINTIFFS and the amount owed to 

PLAINTIFFS as required by (1) Section 19134 and (2) DEFENDANT’S Contracts with DGS is 

due and payable. 

WHEREFORE, PLAINTIFFS pray for judgment against DEFENDANT, and each of 

them, as more fully set forth below. 

FOURTH CAUSE OF ACTION

 (By PLAINTIFFS for Breach of Implied Covenant of Good Faith and Fair Dealing against 

DEFENDANT) 

 48. PLAINTIFFS incorporate by reference, as though fully set forth, paragraphs 1-

47. 

 49. As a party to the DGS contracts, DEFENDANT had a duty to do everything that 

the contracts obligated the DEFENDANT to do to accomplish the contracts’ purpose, including 

payment to PLAINTIFFS of all wages, benefits and/or cash-in-lieu benefits when due. 

 50. DEFENDANT breached the implied covenant of good faith and fair dealing by 

failing to cooperate with PLAINTIFFS in the performance of the contracts, including 

DEFENDANT’S continuing failure to pay PLAINTIFFS of all wages, benefits and/or cash-inlieu benefits when due. 

 51. As a result of said breach, PLAINTIFFS have been damaged in an amount 

according to proof but exceeding $25,000. 

WHEREFORE, PLAINTIFFS pray for judgment against DEFENDANT, and each of 

them, as more fully set forth below. 

/// 

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FIRST AMENDED COMPLAINT 

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FIFTH CAUSE OF ACTION

(By PLAINTIFFS for Constructive Fraud against DEFENDANT) 

52. PLAINTIFF incorporates by reference, as though fully set forth, paragraphs 1 -

51. 

53. Based upon the particular duties that arise under DEFENDANT’S Contracts with 

DGS, a special and/or fiduciary relationship exists between PLAINTIFFS and DEFENDANT. 

 54. By continually failing to pay and disclose an explanation and manner of 

calculation of PLAINTIFFS’ wages, benefits and/or cash-in-lieu under the terms of Section 

19134 and DEFENDANT’S Contracts with DGS, DEFENDANT has breached its special 

and/or fiduciary relationship with PLAINTIFFS. 

 55. DEFENDANT’S failure to pay all wages, benefits and/or cash-in-lieu benefits 

and/or disclose an explanation and manner of calculation of said benefits resulted in a financial 

and informational business advantage over PLAINTIFFS. 

 56. PLAINTIFFS justifiably relied upon the representation by DEFENDANT that 

PLAINTIFFS would be paid their full wages, benefits and/or cash-in-lieu benefits consistent 

with the terms and conditions of the Contracts. 

 57. As a result of DEFENDANT’S fraudulent conduct, PLAINTIFFS have been 

damaged in an amount according to proof but exceeding $25,000. 

 58. Additionally, because of DEFENDANT’S ongoing fraudulent conduct, 

PLAINTIFFS pray for punitive damages in an amount to be determined by the Court. 

WHEREFORE, PLAINTIFFS pray for judgment against DEFENDANT, and each of 

them, as more fully set forth below. 

JURY TRIAL DEMAND

 PLAINTIFFS hereby demand a jury trial on all issues as to which a jury trial is 

available. 

/// 

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/// 

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