Filed 9/8/20 Richardson v. Ruan Transport Corp. CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

BOBBY RICHARDSON,

Plaintiff and Appellant,

v.

RUAN TRANSPORT CORPORATION,

Defendant and Respondent.

F076850

(Super. Ct. No. 265882)

OPINION

APPEAL from a judgment of the Superior Court of Tulare County. Bret D. 

Hillman, Judge.

Wagner, Jones, Kopfman & Artenian, Andrew B. Jones, Daniel M. Kopfman, 

Lawrence M. Artenian, Angela E. Martinez; Peter S. Bradley, for Plaintiff and Appellant.

McDermott Will & Emery, Ellen M. Bronchetti and Philip Shecter, for Defendant 

and Respondent. 

-ooOoo-
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INTRODUCTION

This is a wage-and-hour misclassification case. Appellant Bobby Richardson 

(Richardson) is seeking overtime wages, among other items of damage, for his former 

employer’s purported failure to properly classify him as a nonexempt employee.

Richardson initially filed a complaint with the Division of Labor Standards 

Enforcement (DLSE); the Deputy Labor Commissioner concluded Richardson was 

misclassified as an exempt employee. Richardson’s employer, Ruan Transport 

Corporation (Ruan), appealed and sought a trial in Tulare County Superior Court.

Following a bench trial de novo, the trial court concluded Richardson had been 

properly classified as an exempt employee of Ruan. We affirm.

MOTION TO AUGMENT THE RECORD

“When practicing appellate law, there are at least three immutable rules: first, take 

great care to prepare a complete record; second, if it is not in the record, it did not 

happen; and third, when in doubt, refer back to rules one and two.” (Protect Our Water 

v. County of Merced (2003) 110 Cal.App.4th 362, 364.)

Richardson filed a motion to augment the record to include the trial court’s 

statement of decision following the bench trial. Because of the importance of the trial 

court’s statement of decision in facilitating appellate review, this issue must be addressed 

first.

In January 2018, Richardson designated the items to be included in the record on 

appeal. While he requested inclusion of the December 22, 2017 judgment, he did not 

request inclusion of the December 22, 2017 statement of decision. The record on appeal 

was filed in August 2018, and an extension of time to file Richardson’s opening brief was 

granted in September 2018. On November 14, 2018, Richardson’s counsel asked Ruan’s 

counsel via email to stipulate to augment the record with the statement of decision. Ruan 

did not stipulate, and Richardson filed his opening brief on November 30, 2018, without 

requesting augmentation. Ruan’s responsive brief was filed on April 2, 2019, and 
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asserted the failure to include the statement of decision was fatal to the appeal. 

Richardson filed a reply brief on May 20, 2019, asserting the statement of decision was 

unnecessary to support his claims of error, which he argues are entirely legal and 

supported by the trial testimony in the reporter’s transcript of the trial proceedings. 

Then, on July 18, 2019, Richardson filed a motion to augment the record with the 

statement of decision, which he had inadvertently failed to designate as part of the record 

on appeal, representing it would assist with appellate review but was not categorically 

necessary for it. Ruan opposed this motion arguing it was untimely, not taken in good 

faith, and would prejudice Ruan because the request was filed after the briefing was 

completed. Ruan also noted the statement of decision provided with the motion to 

augment was not a certified copy, as required by our Local Rules. Richardson filed a 

reply brief stating the following in relevant part:

“Contrary to Ruan’s claim, Richardson has shown

good cause. Specifically, Richardson was not aware of the 

omission of the Statement of Decision until after receiving 

Ruan’s Respondent’s Opening Brief, whereupon Richardson 

requested that Ruan agree to augment the record. 

Richardson’s refusal was then the cause for seeking to 

augment the record.”

This is simply untrue. The email correspondence attached to Ruan’s counsel’s 

declaration in opposition to the motion to augment the record clearly shows Richardson’s 

counsel was aware of the omission of the statement of decision even before Richardson’s 

opening brief was filed. Upon Ruan’s refusal to stipulate, no request to augment the 

record was made with the opening brief or with Richardson’s reply brief. In fact, no 

request to augment the record was made until two months after the reply brief was filed. 

Meanwhile, although there is no dispute about its authenticity, the copy of the statement 

of decision accompanying the motion is, in fact, not certified.

California Rules of Court, rule 8.155(a)(1), states that “[a]t any time, on motion of 

a party or its own motion, the reviewing court may order the record augmented to 
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include: [¶] (A) Any document filed or lodged in the case in superior court.” The Local 

Rules of the Court of Appeal Fifth Appellate District state that requests for augmentation 

of the record should be requested within 40 days of filing the record. “Thereafter, 

motions to augment will not be granted except upon a showing of good cause for the 

delay.” (Ct. App. Fifth Dist., Local Rules, rule 1(b).) 

Under the circumstances here, Richardson’s request to augment the record is 

denied. While the rule allowing record augmentation “is to be construed liberally” 

(People v. Brooks (1980) 26 Cal.3d 471, 484, citing an earlier version of Cal. Rules of 

Court, rule 8.155 [formerly rule 12]) requests for augmentation made after a reasonable 

time has expired from receiving the record on appeal will be denied absent a strong 

showing of unusual or unavoidable circumstances giving rise to the delay (People v. 

Preslie (1977) 70 Cal.App.3d 486, 492).

Richardson’s motion was not filed within a reasonable timeframe, and no good 

cause has been shown for the delay, especially given Richardson’s counsel’s knowledge 

of the omission before any of the briefs were filed. Augmentation at this point would 

cause delay to allow any necessary supplemental briefing and additional expense to 

Ruan. 

How the absence of the statement of decision affects the viability of Richardson’s 

arguments is considered below.

FACTUAL AND PROCEDURAL BACKGROUND

I. Procedural Background

This case originated with Richardson’s claim for unpaid wages with DLSE on 

October 16, 2015, against Ruan. The DLSE found Richardson had been misclassified, 

issued a decision in his favor, and awarded a total of $61,901.90. Ruan filed an appeal in 

the Tulare County Superior Court, posting a bond. A three-day bench trial was held on 

September 18 to 20, 2017. On November 8, 2017, the trial court issued a tentative 

decision in favor of Ruan, concluding Richardson had been properly classified as an 
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exempt administrative employee. On December 22, 2017, the court issued a statement of 

decision, and a judgment was entered. No objection to the statement of decision was 

made by Richardson. This appeal followed. 

II. Trial Proceedings and Testimony

Ruan initiated an appeal of the Deputy Labor Commissioner’s decision pursuant to 

Labor Code section 98.2. “The timely filing of a notice of appeal forestalls the 

commissioner’s decision, terminates his or her jurisdiction, and vests jurisdiction to 

conduct a hearing de novo in the appropriate court.” (Post v. Palo/Haklar & Associates

(2000) 23 Cal.4th 942, 947.) “Although denoted an ‘appeal,’ unlike a conventional 

appeal in a civil action, hearing under the Labor Code is de novo. [Citation.] ‘“A 

hearing de novo [under Labor Code section 98.2] literally means a new hearing,” that is, a 

new trial.’ [Citation.] The decision of the commissioner is ‘entitled to no weight 

whatsoever, and the proceedings are truly “a trial anew in the fullest sense.’” (Id. at pp. 

947–948.) Testimony from the resulting three-day trial is provided below.

A. Ruan’s Milk Transport Operations Out of Tulare Terminal

There was general agreement throughout the testimony of Richardson’s and 

Ruan’s witnesses regarding the logistics of Ruan’s milk transport operations through the 

Tulare terminal. 

1. Ruan’s Farm Pickup Operational Logistics

Ruan is a nationwide freight transfer company; part of its business is based on 

milk transport, which, because it is a perishable product, it is different than other types of 

freight transport. Ruan has multiple terminal locations throughout California involved in 

milk transport. Through the Tulare terminal location, Ruan performs farm pickups of 

raw milk and delivers the milk to various plants/creameries where the milk is processed 

into different types of dairy products. The largest customer Ruan serves through that 

terminal is California Dairy, Incorporated (CDI). When Richardson was transportation 

supervisor, approximately 75 percent of the milk delivered through that terminal was 
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transported for CDI. The Tulare terminal services approximately 50 to 60 discrete 

dairies; Ruan’s creamery customers, including CDI, direct how many loads of milk are to 

be delivered, sometimes from particular dairies, to various plants for processing. 

The timing of pickups and deliveries is critical from a customer-service 

standpoint, but also in terms of Ruan’s profits. Picking up milk from a dairy must be 

precisely timed, and must also be adjusted for seasonal variations in the amount of milk 

farms produce. Cows have to be milked; that milk is stored by the dairy in a bulk tank 

until a pickup. The dairies’ tanks have to be sanitized for the dairies to receive quality 

bonuses – without sanitization, the bacteria counts become too high and quality bonuses 

are lost. Pickup timing matters in several respects, both to the dairy and to Ruan. If the 

pickup is too early, the driver loses time waiting, or the load is undersized, causing 

inefficiency in hauling costs. If the pickup is too late, the bulk tank may become full 

during the milking process, and milk will have to be “spilled” – i.e., dumped on the 

ground. Dairies might also lose a viable window to clean the tank, causing a loss of 

quality bonuses. Some dairies have set schedules for pickups, some do not. Dairies may 

encounter issues that require changes in pickup frequency or timing, and they will contact 

Ruan to make adjustments to these pickups. 

On the delivery side, plants may experience backups, drivers may have to wait in 

line to make deliveries that create scheduling delays, or load adjustments to a particular 

plant must be made. Truck trailers have to be sanitized every 24 hours to maintain the 

quality of milk being hauled. Wash tags are used to track this sanitization schedule. If 

wash tags expire while milk is being hauled, the milk is downgraded to a different class 

and it may have to be delivered to a different plant to undergo alternative processing. 

This can result in losses to Ruan if it is responsible for an expired wash tag. While trucks 

are usually washed at the creamery, an expired wash tag may require Ruan to pay the 

costs of a wash. Beyond the sanitization schedule for trucks, drivers are limited to 14 
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hours of service in a day. Changes to delivery schedules or routes must accommodate the 

driver’s hours-of-service limitation. 

Creameries/plants may experience difficulties or changes in production schedules 

that require milk to be rerouted. Customers like CDI may also change the number of 

loads of milk they require at different creameries/plants for a variety of reasons, which in 

turn, requires Ruan to reroute deliveries. These types of modifications occur frequently 

on each shift, and adjustments to driver routes are a common occurrence. 

Ruan’s profit margin on milk transport is thin. Up to 65 percent of every dollar 

earned by Ruan is spent on drivers’ wages; after paying for the costs of transport and 

other operating costs, Ruan’s costs comprise 92 cents of every dollar it takes in, which 

translates to about a 10 percent profit margin. Therefore, maximizing loads, calculating

efficient routes, eliminating empty miles (a truck that is empty), and maintaining precise 

timing for pickups is especially critical to the profit margin. 

2. Dispatcher’s Coordination of Pickups and Deliveries

Ruan coordinates dairy pickups and plant deliveries through dispatchers located at 

the Tulare terminal who use a computer software program called RedTrak. RedTrak 

utilizes geofencing technology and displays the various routes, plant wait times, farm 

pickup sites, and delivery sites – this digitally-displayed configuration is referred to as 

“the board.” Each shift’s schedule is preset based on basic parameters of loads requested, 

drivers scheduled, and pickup times required. However, as a shift progresses, any 

number of variables require changes to this preset schedule. Dispatchers are able to make 

changes to the board by clicking, dragging, and rearranging these preset routes. Truck 

drivers have cellphones that are linked through satellite to RedTrak – if dispatchers 

change routes, messages will be relayed to the drivers through the cellphone. While 

RedTrak helps dispatchers plan and oversee pickup and delivery schedules by providing 

information such as when a driver’s shift began and when a driver’s service hours expire, 

the program does not assist with ensuring full loads, meeting customer load counts, or 
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automatically recalculating routes to maximize efficiency. It also does not account for 

the most profitable distribution and management of drivers and their hours, or how to 

meet customer needs. 

B. Witnesses for Richardson

1. Richardson 

Richardson was employed by Ruan as a transportation supervisor between April 

2012 and July 2015, overseeing approximately 40 truck drivers per shift who picked up 

milk from farms and delivered it to creameries for processing. Each truck driver had 

approximately four routes to complete on a shift. As a supervisor, Richardson was to 

decide how to most efficiently direct drivers to complete these pickups and deliveries, 

and he utilized RedTrak for this.

Determining what plant/creamery a driver was sent to was based on a series of 

factors including time, if the driver could make the dairy pickup window, and the 

proximity of the creamery to the farm where pickup occurred. Each driver had a license 

for which drivers took responsibility. Drivers had to be responsible for determining 

whether there was sufficient time on their wash tags1to complete their current route. 

Richardson kept track of drivers’ start times to ensure they did not exceed their 14-hour 

driving limit. 

When Richardson arrived at work, the dairies where milk was to be picked up 

were already decided. The dayshift was responsible for setting up the initial schedule, 

but Richardson would have to make changes as needed during the course of his shift. If, 

after evaluating the way the setup had been done by the dayshift, he could make changes 

if he determined there was a more efficient way to perform the pickups and deliveries. 

He would independently direct those changes without prior approval from anyone else. 

1 Wash tags refer to how many loads a driver could haul in a 24-hour period without 

sanitizing their truck. They sterilize the truck every 24 hours. 
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When Richardson started his own shift, drivers might be in the middle of their own shifts. 

Richardson might reconfigure the assignments to deal with expiring wash tags. Drivers 

were not permitted to refuse his instructions, nor could they decide what pickup and 

deliveries to make. 

If Richardson dispatched a driver in a way that exceeded the hours of service, that 

could result in fines to Ruan or the revocation of a terminal DOT (Department of 

Transportation) license. When necessary, Richardson would remind drivers they needed 

to comply with the hours-of-service requirements. His basic function was to note drivers’ 

start times, and see how they were running their series to make sure they did not exceed 

their 14-hour shift maximum. He never recalled disciplining a driver on an hours-ofservice violation. 

It was also Richardson’s responsibility to make sure drivers were taking meal 

breaks. In prior testimony, Richardson had indicated he had to adjust drivers’ schedules 

at times to accommodate meal breaks. As a supervisor, he could grant that request or ask 

that drivers take their break at a later time.

Ruan’s major customer with whom Richardson worked most was CDI. 

Richardson’s responsibility was to maintain a strong relationship with CDI and remain 

responsive to CDI’s needs. CDI would provide daily “counts” or loads needed at a 

particular creamery; the counts could change multiple times per day. The counts would 

be set at the beginning of his shift, but with changes to counts made by CDI throughout 

the shift, Richardson would have to reconfigure which loads by which drivers were 

delivered to which creameries. Richardson had to do everything he could to comply with 

CDI’s requests to change a count. CDI would tell Richardson where extra loads were to 

go, and then he would rearrange drivers and routes as required. He had to do this in a 

way that was operationally efficient, kept empty miles to a minimum, and still met pickup 

windows at the dairies. If milk was not picked up on time from the dairy, bulk tanks 

could overfill, milk would be “spilled,” and Ruan would have to cover the costs. In some 
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cases, Richardson would have to change the schedule of many drivers to accommodate 

changes to counts. 

Richardson was expected to be courteous in his discussions with customers such 

as CDI; when he spoke to them, he was speaking on behalf of Ruan and any rudeness 

would negatively impact Ruan’s reputation. If there was a problem the customer had, 

Richardson was required to come up with a solution he thought might work. Richardson 

remembered one instance of a request he could not cover. 

There were times when Richardson had to dispatch loads of milk to Los Angeles 

for CDI upon request. It was Richardson’s duty to determine whether he could 

accommodate that request based on what was going on, but he would not need prior 

approval before authorizing a driver to take a load to Los Angeles for CDI. 

There was always another person on the night shift with Richardson. Sometimes 

that person was a dispatcher, a driver who was covering for a dispatcher, or another 

transportation supervisor. He also occasionally had a dispatch supervisor work with him 

at night. The other person worked with another customer, Dairy Foods of America. 

Richardson testified his job duties as transportation supervisor were identical to that of 

dispatcher. 

Richardson did some training of other dispatchers, but it was so busy on his shift 

that those trainees often had to simply watch and absorb what Richardson was doing. 

When Richardson could take a break, he would give those trainees guidance. The length 

of training was dependent upon the trainee’s abilities and experience level. 

Drivers’ equipment was set up at the plants at the start of the drivers’ shifts, not 

the terminal. The number of drivers was set by upper management, and Richardson 

dispatched based on what was pre-decided with respect to equipment and scheduled 

drivers. The “309 drivers” would get in whatever truck was available when they reported 
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for work at their assigned creamery.2 Equipment was not kept at the terminal for 309 

drivers because if it sat in the terminal yard, it was not being utilized for loads. 

Richardson’s job required him to make sure equipment was utilized. When there were 

multiple trailers in the yard, Richardson had to evaluate which trailer to direct the driver 

to use to get maximum utilization out of that trailer; this decision could impact the 

amount of time the trailer was on the road making money for Ruan. 

Another of Richardson’s responsibilities was to deal with a customer when a 

driver’s wash tag expired. If a wash tag expired at a time the driver was carrying a load, 

Richardson would receive notification from CDI, and Richardson would be expected to 

reroute that milk to a different plant for processing, as the milk was downgraded due to 

the expired wash tag. The trailer would have to be sanitized, which could take two or 

three hours, and while that was occurring, Richardson would have to determine how to 

cover impacted routes and reconfigure drivers for coverage. Most plants washed the 

trailers themselves, and the customer would tell Richardson what the customer’s 

preference was in those circumstances. If Ruan had to wash the truck itself, that would 

cost Ruan extra money. 

Accidents were another variable Richardson had to navigate in his discretion. He 

had to call his supervisor on two occasions related to accidents: one accident caused 

severe disability, the other was fatal. In the event of accidents, Richardson would 

complete the first report. When an accident with a truck occurred, Richardson would 

have to readjust the drivers’ assignments to ensure that no milk was spilled. It was his 

job to mitigate the effects of the accident on the routes. He also had to navigate backups 

2 Two different groups of drivers were dispatched out of the Tulare terminal: 504 

drivers and 309 drivers; these two groups of drivers had different collective bargaining 

agreements with Ruan. The 504 drivers were utilized for transports to Los Angeles, and 

the 309 drivers were for local runs. Richardson testified they did not want cross-over 

among the two groups. 
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at a plant, long lines to unload milk, equipment breakdowns, or plants changing the type 

of product they were processing which could result in delays. He made changes to meet 

the challenge presented and ensure Ruan’s profits were maximized. 

Richardson’s main concerns involved being timely with pickups at dairies and not 

having drivers work over their 14-hour work limit. He was not particularly concerned 

with managing overtime. He would call management if the changes he was making 

would impact the next day, or if he could not accommodate a customer’s request to make 

count changes. For the most part, however, Richardson did not have to obtain 

management approval before rerouting drivers during his shift. The changes he made 

were not written in a manual, nor was there a certain protocol for making changes. 

Richardson would look at RedTrak to identify opportunities to improve efficiency 

of the operation and to optimize the direction of drivers to ensure profitability. It was 

also part of Richardson’s job to understand his customer’s needs and the services he 

could offer to maximize profits for Ruan, and he used his independent judgment to create 

solutions to meet those objectives. He would make service suggestions to dispatch 

supervisors or dispatch managers. 

Richardson completed a self-evaluation in 2013 indicating his job duties were to 

provide timely and thorough pass-down information to his team members to ensure and 

enhance the operation’s effectiveness; he would follow up on changes to identify whether 

the changes were successful or required refinement. He was in constant communication 

with drivers during the shift to ensure safe and efficient work habits; he monitored his 

drivers’ hours and tried to optimize the schedule to ensure they were not exceeding their 

company or DOT limitations. He followed up with drivers to ensure safety issues were 

resolved in a timely and effective manner. 

As a transportation supervisor, Richardson’s job required him to issue verbal 

disciplinary warnings to drivers if he observed them doing something prohibited. 

Disciplining drivers was part of Richardson’s responsibilities. Richardson would coach 
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drivers to address issues with driver conduct. He had some input into what discipline a 

driver would receive; but the level of discipline was left to the dispatch supervisors. 

Richardson was involved in discipline of drivers, he would sign citations, and 

meet with drivers to go over discipline reports. Richardson recalled an attendance matter 

and an instance when a driver damaged a truck at a plant. Richardson testified he would 

not recommend any particular form of discipline, but that he started the disciplining 

paperwork. Richardson felt he had authority to send a driver home if he thought it was 

necessary. 

It was among Richardson’s daily job duties to ensure drivers were following safe 

protocols, and to enforce Ruan’s safety policies and protocols. Richardson understood he 

was to participate in accident-cause investigations should they become necessary. His 

job was to gather information so the company could determine whether the accident had 

been avoidable and how to make better safety policies. If Richardson did not have time 

to perform a root-cause investigation, it would get passed to the dispatch supervisor 

working on the day shift. 

Richardson did not attend management meetings, which were held during the day; 

policy decisions were not made at night. CDI met with dispatch managers and the 

terminal manager during the day throughout the week to discuss any problems. 

Richardson would call his supervisor if he was going to have a problem making the 

requested counts, or if there may be a problem making the counts the following day, or 

when drivers were taking loads to Los Angeles – particularly if that could not be 

accomplished. In one instance, there had been a power outage and CDI requested six 

out-of-service trailers be put in place. Richardson did not have the authority to make that 

decision. As for drivers, Richardson might go weeks at a time without seeing them. 

Richardson did not have the authority to implement his own system of delivery or 

pickups, he was required to work through RedTrak; he could not enter into any contracts 

on behalf of Ruan; he did not address issues directly with the dairies, although he was the 
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dairies’ contact to report problems. The field representative would follow up with dairies 

if there were issues. He did not oversee any maintenance of equipment, there was a 

separate department for that. He did not determine whether accidents were preventable 

or whether there should be a safety determination made. He had no independent 

authority to hire or fire employees; he did not set rates of pay for anyone, or oversee 

anyone’s hours (other than service hours of drivers); he never had anything to do with 

accounting, auditing, or financial budgets; he did not do any procurement, quality control, 

purchasing, advertising, or marketing. He had no authority to change farm pickup 

practices, decide not to service a dairy, or to not deliver milk to a creamery.

After Richardson was asked to document his time, Ruan changed his title to 

dispatcher in 2015, and he worked hourly, but very few of his duties changed with the job 

title adjustment, although other supervisors took over the communication with CDI 

during his shift. 

2. Phil Radosevic

Radosevic was employed by Ruan between 2012 and 2014 as a transportation 

supervisor on the day shift. He largely corroborated Richardson’s testimony about the 

duties required by the position. 

Radosevic did not design discipline for employees, although he participated in 

delivery of disciplinary write-ups to drivers. He did not have any influence on Ruan’s 

contracting; the salary, pay, or hours of any employees; he did not direct truckers in the 

details of checking tanker cleanliness or direct them how to keep their DOT logbooks for 

their hours of service. Radosevic did not hire or fire employees. Other than gathering 

information for accident reports, he did not investigate to determine whether discipline 

should result from an accident. 

Radosevic also had nothing to do with broad policy decisions by Ruan related to 

safety or maintenance of equipment; he had nothing to do with budget, legal compliance, 

taxes, accounting, insurance, quality control, auditing, purchasing, advertising, or 
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marketing. In his position, he did not make any decisions about whether to serve a 

particular dairy or to deliver milk to a creamery; all of those decisions were made by 

upper management located in Iowa. 

Radosevic had been a dispatcher before he became a transportation supervisor, but 

none of his duties changed with the job title change. His job duties included 

communicating with drivers about assignments, talking with dairymen about changes to 

pickups; Radosevic felt it was part of his job to figure out how to accommodate customer 

requests and then how to rearrange drivers and routes to make that happen. 

Radosevic had no authority to write up drivers for violating company policy. At 

times, he would start a form regarding an accident or an incident, and then it would be 

passed along to the terminal manager – that was Radosevic’s extent of involvement. 

Although, in prior testimony, Radosevic had stated he had the authority to write someone 

up. If management sent him a warning letter to deliver to a driver, he would hand the 

letter to the driver, but Radosevic never issued the warning letters or met with the driver 

to review disciplinary action. However, Radosevic had signed correction letters issued to 

drivers regarding various failures to maintain compliance with company policies; he had 

also attended sexual harassment training for supervisors. 

Radosevic indicated a transportation supervisor was concerned with picking up 

milk timely so that it did not spill and so a dairyman would not lose a quality bonus. The 

quality bonus could be lost if a transportation supervisor did not provide adequate time 

for the dairyman to wash his tank. Radosevic did not need any approval to order 

additional milk pickups requested by a dairyman. 

3. Claude Balaam

At the time Richardson started working for Ruan in 2012, Balaam was an 

operations manager and he oversaw several terminals for the company. In July or August 

2015, Balaam became a senior scheduler. He was also involved with safety, although he 

was not the head of the safety department. As operations manager, he managed 
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everything to do with transportation. When he became senior terminal manager, he had 

fewer terminals to oversee, but he had the same types of duties. Sam Schott was the 

director of operations, and Balaam reported to him. 

Balaam testified that while Richardson did not create Ruan’s business objectives 

or manage personnel, Richardson could make suggestions. According to Balaam, 

Richardson had the authority to discipline drivers by sending them home; Richardson was 

expected to manage issues with the customers, resolve customer concerns, and manage 

the routes and deliveries in a way that would be most profitable for Ruan’s Tulare 

terminal. Richardson was to run the board however he believed was most efficient, and 

he was expected to counsel drivers if he saw them doing something inappropriate. 

Richardson was also responsible to ensure drivers were complying with their hours-ofservice limitations. Richardson did not have to obtain prior supervisor approval for any 

of those activities, and he was the highest level supervisor on site at night. 

Richardson was to use his independent judgment to make decisions that would 

help Ruan profit – if there were changes to load counts or a dairy that needed a pickup, 

Richardson was to meet those needs in the most efficient way possible. Richardson had 

significant discretion to make the decisions necessary to meet the customer’s and Ruan’s 

needs, which impacted the financial profits of Ruan at that terminal location. RedTrak 

was used by dispatchers and Richardson to dispatch drivers and set deliveries for the 

shift; the board would identify the location of a pickup, the location of a driver, and this 

would be used to determine who was closest to handling the route most efficiently. 

RedTrak was set up on the day shift under a best-case scenario; then it had to be adjusted 

throughout the shift to meet all the variables. 
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C. Testimony of Ruan’s Witnesses

1. Sam Schott, Operational Leader for Ruan

Schott was an operational leader for Ruan, who had been working for the company 

for 25 years. He oversaw multiple locations throughout the state, he had profit and loss 

responsibilities, and he considered acquisitions. 

When he worked as director of operations, he traveled extensively between 

various terminals; his main office was located in Tulare, which was where Richardson 

worked. 

Schott had never worked as a transportation supervisor, but he was a dispatcher for 

KCTL (Kings County Truck Lines) before it was purchased by Ruan. In that position, he 

had the same duties as Richardson, and he was classified as exempt. He believed 

Richardson’s main responsibility was to ensure customer service, on-time pickups and 

deliveries, driver management, and route management, all performed safely. Richardson 

was in charge of operations at night, and it was his responsibility to be the point of 

contact for CDI, make any load changes requested, plant-change requests, order any other 

changes, and resolve issues that arose at any of the dairies. 

No one beside Richardson was in charge of customer relations with CDI on the 

night shift. At the time, Ruan’s milk transport business was 70 to 75 percent from CDI, 

at the time of trial it was closer to 90 percent. Thus, Richardson’s handling of CDI’s 

milk transportation was critical to Ruan’s business. 

Transportation supervisors over the years had contributed to the development of 

RedTrak, a proprietary system that Schott himself developed. These transportation 

supervisors made suggestions about how the boards displayed information related to the 

dairies; there were suggestions about moving to multiple monitors so that multiple 

dispatchers could see the same system simultaneously; then it was integrated with 

phones. They kept having dispatch meetings to talk about what the dispatchers would 

like to see from the system. 
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RedTrak was limited, however, in that it did not tell transportation supervisors 

how to safely manage the fleet of drivers or tell supervisors what hours of service the 

driver had remaining; it also did not provide information about traffic or weather 

conditions, and milk production times at dairies. It did not automatically redirect changes 

to minimize wasted empty miles, it did not ensure load efficiency or consider wash tag 

expirations, and it did not redistribute work to drivers. 

The Tulare terminal served 50 to 60 discrete dairies and approximately 10 to 25 

different creamery plant locations. There were no regular routes assigned to drivers; only 

5 percent of the plants had fixed delivery times; and some plants could only produce one 

product at a time, thus that impacted how they received milk if plants made a product 

change, for which Ruan did not always receive advance notice. Dairies also changed 

how much milk was to be picked up, and dispatchers would have to understand these 

changing needs and respond during a shift. 

Rates Ruan charged were based on pounds hauled per dairy; loads changed quite a 

bit, sometimes product could vary by two million pounds, but that was extreme. Ruan 

did not make any money from trailers which were moved empty. Driver management 

was the largest cost to the company, so it was critical to the financial success of the 

business that transportation supervisors managed the time spent hauling loads, getting to 

a dairy on time to prevent spilled milk from overfilled dairy bulk tanks. One load of milk 

product was worth approximately $8,400. Driver labor costs to Ruan made up 65 cents 

of every dollar the company took in; managing driver time was critical to this margin. 

The overall profit margin was slim – 92 cents of every dollar taken in went toward 

Ruan’s costs. 

Schott described that driver management, timing and load management, and 

customer service were the core functions Richardson oversaw. Transportation 

supervisors were to manage the time drivers spent on their routes. Driver management 

was critical to maintaining customer service – both in terms of delivery to CDI of the 
19

correct loads, and in terms of pickups at dairies. If drivers picked up loads from dairies 

too early, the driver was left waiting and time was wasted. If drivers were too late, the 

dairy may have to spill milk because it did not have storage capacity. Also, if drivers 

were late to dairies, dairies may have insufficient time to sanitize storage tanks, and the 

diary would lose its quality bonus, which could be $18,000 to $20,000. Ruan had to pay 

for loss of these bonuses in the past when Ruan drivers did not manage to pick up the 

milk from the dairy timely. If milk was picked up by a truck with expired wash tags, the 

milk was downgraded in quality, had to go to a different processing plant, and Ruan 

would have to pay the difference. If this service was not managed properly, dairies could 

request other haulers because of poor service. Ruan’s contracts with CDI could also be 

canceled by CDI if deliveries were not properly managed. It was Richardson’s job as 

transportation supervisor to maximize loads, make sure drivers managed their wash tags 

properly, and make sure the workforce was directed efficiently. If those things did not 

happen, the profit margin was diminished. 

Richardson had a favorable relationship with CDI, and the customer always had 

good things to say about him; CDI trusted his oversight on the night shift. There was a 

CDI liaison between Richardson and CDI, and there was a field representative who 

would visit dairies to resolve issues that came up; if the transportation supervisor 

resolved an issue, the field representative would follow up to make sure the dairy was 

satisfied. The field representative would take direction from the transportation supervisor 

on some of these issues. 

When Richardson was a supervisor, an hourly dispatcher was regularly scheduled 

to work with him, but the dispatcher was not expected to manage the Tulare operations; it 

was expected Richardson would perform all terminal operation oversight on his shift. As 

a supervisor, Richardson was expected to enforce driver attendance; drivers could not 

ignore the transportation supervisor, they could not hang up on dispatch or refuse to take 
20

part in checkout reviews. Supervisors also interviewed drivers if there was a wash tag 

error. 

Richardson was encouraged to attend weekly management meetings, and he 

attended training on meal and rest break requirements in California; Richardson was also 

expected to attend monthly webinars.

In 2015, the transportation supervisor position was eliminated and replaced with a 

dispatch manager position. The distinction was that dispatch managers were to be paired 

with an hourly dispatcher, so dispatchers could focus on the logistics portion of the 

business while dispatch managers would focus on driver discipline and customer 

interaction. When that occurred, Richardson was offered a dispatcher position with 

comparable compensation so that he was not taking a step backwards. By keeping him 

hourly exempt, Ruan could still have him manage some of the things that dispatch 

managers might normally supervise and allow Richardson to continue to make 

independent decisions about dispatching activities. 

After Richardson was moved to a dispatcher position, he had the same authority to 

make any adjustments for load counts, and he was still responsible to be efficient with 

respect to dispatching drivers, timely pickups at dairies, and proper delivery of loads to 

creameries. He continued the use of RedTrak using the same procedures as he did when 

a transportation supervisor. He still had to report unsafe behavior by drivers. Sometimes 

drivers worked as dispatchers, and they were paid hourly with overtime when it occurred. 

2. Rochelle Borg

Borg testified she had a long employment history with Ruan. She first started in 

February 2006, but had worked for KCTL since 1999, a company Ruan acquired in 2006. 

In 2008, she was promoted to a terminal manager position in Bakersfield, and then she 

was transferred to be a transportation supervisor in Tulare in August of that year. She 

transferred back to Bakersfield in a different position, and then came back to Tulare as an 

assistant terminal manager in 2012. In 2014, she became dispatch manager in Tulare.
21

When Richardson was transferred to the dispatcher position in 2015, this was the first 

time she worked with him on the night shift. When Richardson was a transportation 

supervisor, she supervised him as assistant terminal manager; he was expected to perform 

his duties without hands-on oversight. He was directly responsible for CDI; he had the 

authority to cancel loads and could make that decision without approval from anyone 

else. Borg was responsible for handling CDI during the day; she would generally receive 

one to five calls from them per day. 

Richardson made decisions that directly impacted profitability; he was constantly 

routing and rerouting drivers based on his judgment about what was most profitable and 

efficient. He trained other employees, one of whom shadowed him for two months,

training as a dispatcher. Richardson’s duties, in Borg’s opinion, were related to Ruan’s 

general business operations. 

Borg’s job as assistant terminal manager carried the same duties as her job as 

dispatch manager; she preset routes on a template for drivers; drivers would bid on start 

times. The template routes would never stay the same; drivers were routed and rerouted 

all day and night according to inventories at dairies and varied delivery locations. In a 

prior deposition, Borg testified she managed all dispatchers and drivers as dispatch 

manager; she set the schedules for the dispatchers. 

D. Post-Trial Proceedings

The trial court issued a tentative decision on November 8, 2017, concluding 

Richardson was properly classified as an exempt administrative employee under 

Industrial Welfare Commission (IWC) Wage Order No. 9-2001 (Wage Order 9), codified 

at California Code of Regulations, title 8, section 11090. The court ordered Ruan to 

submit a proposed statement of decision. 

On December 12, 2017, Ruan filed the proposed statement of decision, but

Richardson did not make any proposals for changes or objections to it. On December 22, 

2017, the court issued a statement of decision concluding Ruan had met its burden of 
22

establishing Richardson was an exempt administrative employee. Also on December 22, 

2017, the court entered judgment in accordance with the statement of decision. No 

motion for a new trial, nor motion to vacate the judgment was filed, and this appeal 

followed.

DISCUSSION

I. The Administrative Exemption under Wage Order 9-2001 

California law presumptively entitles employees to overtime pay if they work 

more than eight hours a day or 40 hours a week. (Lab. Code, § 510, subd. (a).) 

California law also entitles employees to meal and rest breaks. (See generally Lab. Code, 

§§ 226.7, 512.) However, the Legislature authorized the IWC to establish exemptions for 

various categories of employees, including “administrative” employees, where the 

employee “is primarily engaged in the duties that meet the test of the exemption.” (Lab. 

Code, § 515, subd. (a).)3

Wage Order 9, codified at California Code of Regulations, title 8, section 11090, 

governs workers employed in the transportation industry. Workers employed in an 

executive, administrative, or professional capacity are exempt from sections 3 through 12 

of Wage Order 9, which includes provisions regarding overtime compensation, meal and 

rest periods, and related recordkeeping requirements, among other things. (Cal. Code 

Regs., tit. 8, § 11090, subd. (1)(A).)

As relevant here, employees are exempt as an “administrative” employee if (1) 

their duties and responsibilities involve the performance of office or non-manual work 

directly related to management policies or general business operations of their employer 

or their employer’s customers; (2) they customarily and regularly exercise discretion and 

independent judgment; (3) they perform under only general supervision work along 

3 The IWC was defunded in 2004, but its wage orders remain in effect. (Batze v. 

Safeway, Inc. (2017) 10 Cal.App.5th 440, 471.)
23

specialized or technical lines requiring special training, experience, or knowledge; (4) 

they are primarily engaged in duties meeting the test of the exemption; and (5) they earn 

a monthly salary at least two times the state minimum wage for full-time employment. 

(Cal. Code Regs., tit. 8, § 11090, subd. (1)(A)(2).) 

“The activities constituting exempt work and non-exempt work shall be construed 

in the same manner as such terms are construed in the following regulations under the 

Fair Labor Standards Act effective as of the date of this order: 29 C.F.R. Sections 

541.201-205, 541.207-208, 541.210, and 541.215.” (Cal. Code Regs., tit. 8, § 11090 

(1)(A)(2)(f).) The California Supreme Court held in Harris that only the version of the 

federal regulations in effect as of the effective date of Wage Order 9, January 1, 2001, are 

applicable. (Harris v. Superior Court (2011) 53 Cal.4th 170, 178-179 (Harris).)

“[I]n light of the remedial nature of the legislative enactments authorizing the 

regulation of wages, hours and working conditions for the protection and benefit of 

employees, the statutory provisions are to be liberally construed with an eye to promoting 

such protection.” (Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 

702.) Thus, exemptions from statutory mandatory overtime provisions are narrowly 

construed. (Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 794 (Ramirez); 

Nordquist v. McGraw-Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 562.) The 

assertion of an exemption from the overtime laws is considered an affirmative defense, 

thus the employer bears the burden of proving the employee’s exemption. (Ramirez, 

supra, at pp. 794-795.) 

Whether an employee is exempt “depends not only upon factors related to the job, 

itself (e.g., ‘employer’s realistic expectations’ and ‘realistic requirements of the job’), but 

also ‘first and foremost’ upon what an employee actually does on the job (e.g., ‘work 

actually performed’).” (Mies v. Sephora U.S.A., Inc. (2015) 234 Cal.App.4th 967, 978.) 

“‘No bright-line rule can be established classifying everyone with a particular job title as 

per se exempt or nonexempt—the regulations identify job duties, not job titles.’” (Ibid. 
24

quoting United Parcel Service Wage & Hour Cases (2010) 190 Cal.App.4th 1001, 1015 

[relying on Ramirez, supra, at p. 802 and 29 C.F.R. § 541.2 (2010)].)

II. Standard of Review

Task classification in an exemption case is a mixed question of law and fact. 

(Ramirez, supra, 20 Cal.4th at p. 794; Sav-On Drug Stores, Inc. v. Superior Court (2004) 

34 Cal.4th 319, 330.) “We review the trial court’s factual findings for substantial 

evidence and independently determine issues of law pursuant to a de novo standard of 

review.” (Walker v. Physical Therapy Bd. of California (2017) 16 Cal.App.5th 1219, 

1227.) Substantial evidence is evidence of ponderable legal significance that is 

reasonable, credible, and of solid value. (Kuhn v. Department of General Services (1994) 

22 Cal.App.4th 1627, 1633.)

Relevant here, an employee’s job duties and responsibilities, the employer’s 

reasonable expectations, and the time an employee spent performing tasks are factual 

issues. (Ramirez, supra, 20 Cal.4th at pp. 802-803 & fn. 5 [whether work activity is 

sales-related is mixed question of fact and law].) Whether those facts establish the 

employee meets the legal elements and requirements of the exemption is a question of 

law, particularly to the extent it requires an interpretation of the applicable wage order or 

the incorporated federal regulations. (Ibid; Muldrow v. Surrex Solutions Corp. (2012) 

208 Cal.App.4th 1381, 1386 [whether commissioned employee exemption applied was 

primarily question of law and reviewed de novo]; McInteer v. Ashley Distrib. Servs., Ltd. 

(2014) 40 F.Supp.3d 1269, 1290-1291 [noting that, pursuant to Ramirez, supra, 20 

Cal.4th at p. 794, “[t]he issue of what Plaintiff did as an employee for Defendants is a 

question of fact, while the precise scope of the exemption is a question of law”]; see 

generally United Parcel Service Wage & Hour Cases, supra, 190 Cal.App.4th at pp. 

1024-1028 [whether undisputed, material facts about job duties established employee met 

the legal requirements of exemption determined as a matter of law].)
25

Ruan argues the omission of the statement of decision renders the record 

inadequate for meaningful review of the trial court’s decision. A statement of decision 

facilitates appellate review by revealing the bases for the trial court’s decision. (Slavin v. 

Borinstein (1994) 25 Cal.App.4th 713, 718.) Absent a statement of decision, the 

reviewing court presumes the trial court made all factual findings necessary to support 

the judgment and reviews those implied findings under the substantial evidence rule. 

(County of Orange v. Barratt American, Inc. (2007) 150 Cal.App.4th 420, 437-438.) 

This is the doctrine of implied findings, and it “‘is a natural and logical corollary to three 

fundamental principles of appellate review: (1) a judgment is presumed correct; (2) all 

intendments and presumptions are indulged in favor of correctness; and (3) the appellant 

bears the burden of providing an adequate record affirmatively proving error.’” (Id. at p. 

439.)4 

This is a wage-and-hour misclassification case relating to the application of an 

exemption to Ruan’s obligation to pay overtime and provide meal breaks, among other 

requirements. Task classification as exempt or nonexempt is a fact-intensive analysis 

which, as noted, presents a mixed question of law and fact. We will presume the trial 

court resolved any and all factual disputes in Ruan’s favor (so long as supported by 

substantial evidence) and impliedly made all factual findings necessary to support the 

judgment. Whether Richardson’s job falls within the legal criteria of the exemption 

requirements poses a legal question, which we consider de novo. For example, 

Richardson argues that, within the meaning of Wage Order 9 and the federal regulations 

incorporated therein, his dispatching duties were not “related to” the management 

4 Here, the doctrine of implied findings applies due to the absence of a statement of 

decision within the record – it is as though no statement of decision was requested under 

Code of Civil Procedure section 632. (In re Marriage of Ditto (1988) 206 Cal.App.3d 

643, 647.) Thus, we need not reach Ruan’s additional argument the doctrine of implied 

findings applies because Richardson did not object to any ambiguity or omission in the 

statement of decision pursuant to Code of Civil Procedure section 634.
26

policies or general business operations of Ruan, nor did they involve the exercise of 

discretion and independent judgment. After presuming all findings of fact necessary to 

support the judgment in Ruan’s favor were made by the trial court, we will consider de 

novo the question whether those tasks and duties meet the legal requirements of the 

exemption. (County of Orange v. Barratt American, Inc., supra, 150 Cal.App.4th at pp. 

437-438; Ramirez, supra, 20 Cal.4th at pp. 794, 803 & fn. 5.)

III. Applicability of the Administrative Exemption

A. Dispatcher Tasks Are Not Per Se Nonexempt Activities

Threaded throughout Richardson’s arguments is an assertion that dispatchers 

working for Ruan are primarily engaged in nonexempt work. Richardson claims 90 

percent of his time as a transportation supervisor was spent on dispatcher duties, thus 90 

percent of his duties and responsibilities were nonexempt. Richardson argues the trial 

court necessarily applied the incorrect legal standard in assessing his duties and 

responsibilities by transforming his nonexempt dispatcher duties into exempt duties 

merely because he performed them as a transportation supervisor.5 

This argument rests on a false predicate: there is no legal authority identified by 

Richardson that recognizes the core functions of dispatchers to be categorically 

nonexempt activities. The fact that Ruan decided to treat dispatchers as nonexempt 

employees is not binding on our analysis here, nor does Richardson offer a prior legal 

decision that would, on the basis of res judicata, estop a determination that dispatcher 

duties as Richardson performed them in Ruan’s Tulare terminal are exempt duties and 

tasks within the meaning of Wage Order 9 and the incorporated federal regulations.

5 Richardson has forfeited his argument the trial court’s statement of decision cited 

older federal authority and that it necessarily applied the wrong legal standard to 

evaluating his job duties. We have no statement of decision in the record to determine 

the correctness of the trial court’s legal analysis. Whether Richardson’s job duties come 

within the legal requirements of the exemption is considered de novo. (Ramirez, supra,

20 Cal.4th at pp. 794, 803 & fn. 5.)
27

Richardson’s reliance on Heyen v. Safeway, Inc. (2013) 216 Cal.App.4th 795 

(Heyen) in this respect ignores the distinction between the executive exemption and the 

administrative exemption. Heyen involved the executive exemption under Wage Order 

7-2001, codified in California Code of Regulations, title 8, section 11070, related to 

mercantile employees. (Heyen, supra, at p. 817.) The executive exemption encompasses 

employees whose duties involve, among other things, the management of the employer’s 

enterprise, regularly directing the work of two or more employees, and the authority to 

hire or fire or whose related recommendations will be given particular weight. (Cal. 

Code Regs., tit. 8, § 11070, subd. (1)(A)(1).) A relevant federal regulation observes, 

“[i]n the usual situation the determination of whether a particular kind of work is exempt 

or nonexempt in nature is not difficult. In the vast majority of cases the bona fide 

executive employee performs managerial and supervisory functions which are easily 

recognized as within the scope of the exemption.” (29 C.F.R. § 541.102(a) (2000).) 

Heyen was a supermarket assistant manager who, to meet the expectations of her 

employer, was required to perform many nonexempt tasks –– i.e., tasks performed by 

courtesy clerks, stockers, and bookkeepers. (Heyen, supra, 216 Cal.App.4th at pp. 817-

818.) There was no dispute about what types of tasks were exempt or nonexempt. (Ibid.)

On appeal, in the context of an assertion the jury was erroneously instructed, the 

dispute centered on whether exempt and nonexempt tasks performed concurrently should 

be deemed exempt because they were undertaken by a manager while functioning in her 

managerial capacity. (Heyen, supra, 216 Cal.App.4th at p. 819.) In interpreting the wage 

order and the incorporated federal regulations, the court held whether nonexempt tasks 

performed by a manager could be deemed exempt turned on the objective purpose for 

which they were undertaken, combined with consideration of the realistic expectations of 

the employer. (Heyen, supra, at pp. 827-829.) If the manager’s actions, consistent with 

the reasonable expectations of the employer, were taken to supervise the employees or 
28

contribute to the smooth functioning of the department, they were exempt work; if they 

were taken for some other reason, they were nonexempt work. (Id. at p. 827.)

Here, unlike in Heyen, there is a dispute whether the dispatching activities 

Richardson performed were exempt tasks or nonexempt tasks within the meaning of 

Wage Order 9, and the distinction between the two is not simple. Ruan does not argue 

Richardson’s dispatching tasks were exempt merely because he undertook them as a 

supervisor. Ruan’s argument is that the dispatching tasks themselves, and also 

particularly as Richardson performed them within his role as transportation supervisor, 

were exempt activities. Whether Ruan employees with the title “dispatcher” at the Tulare 

terminal may have been paid hourly or deemed nonexempt employees by Ruan is 

irrelevant – we must look at the tasks performed to determine the applicability of the 

exemption, not the title held or how Ruan decided to classify them. “No bright-line rule 

can be established classifying everyone with a particular job title as per se exempt or 

nonexempt.” (United Parcel Service Wage & Hour Cases, supra, 190 Cal.App.4th at p. 

1015.) Dispatchers are not, the world over, performing the same duties. It is not even 

clear dispatchers and transportation supervisors at Ruan performed the same dispatching 

duties across the company, particularly when the freight type differed. 

B. Whether Richardson’s Job Tasks Meet the Exemption Requirements

As relevant here, the administrative exemption applies to an employee (1) whose 

job duties and responsibilities involve the performance of office or nonmanual work 

directly related to management policies or general business operations of the employer or 

the employer’s customers; (2) who customarily and regularly exercises discretion and 

independent judgment; (3) who performs under only general supervision work along 

specialized or technical lines requiring special training, experience, or knowledge; (4) 

who is primarily engaged in duties that meet the exemption; and (5) who earns a monthly 

salary equivalent to no less than two times the state minimum wage for full-time

employment. (Cal. Code Regs., tit. 8, § 11090, subd. (1)(A)(2)(a)-(g).) 
29

There is no dispute about the interpretation of the requirements to satisfy elements 

3 and 5, nor is it disputed substantial evidence supports a finding Ruan met those 

elements. The parties dispute the legal scope of elements 1 and 2 and whether the tasks 

Richardson performed come within the terms of these requirements. Whether there is 

substantial evidence that Richardson was primarily engaged in tasks that meet the 

exemption is dependent upon whether his job tasks come within the scope of elements 1 

and 2.6 

1. “Directly Related To” Element

The parties’ dispute centers on whether Richardson’s job duties and tasks as a 

transportation supervisor were “directly related” to Ruan’s “management policies” or 

“general business operations” or the general business operations of Ruan’s customers. 

(Cal. Code Regs., tit. 8, § 11090, subd. (1)(A)(2)(a)(i).)

For purposes of the administrative exemption, the California Supreme Court has 

clarified that to be “directly related” to management policies or general business 

operations, the work performed by an employee must be both “qualitatively 

administrative” and “quantitatively ... of substantial importance to the management or 

operations of the business.” (Harris, supra, 53 Cal.4th at p. 181.)

Pursuant to Wage Order 9, 8 California Code of Regulations section 11090 directs 

that “activities constituting exempt work and non-exempt work shall be construed in the 

6 Again, in absence of a statement of decision, all factual findings underpinned by 

substantial evidence that support application of the exemption requirements are presumed 

to have been made by the trial court. To the extent there were any disputes in the 

testimony about Richardson’s job tasks, the scope of his supervisorial role and authority, 

or the breadth of his exercise of discretion, they are presumed to have been resolved in a 

manner that supports application of the exemption. (Fladeboe v. American Isuzu Motors 

Inc. (2007) 150 Cal.App.4th 42, 61-62 [because judgment is presumed correct, and 

because appellant bore the burden of affirmatively proving error, doctrine of implied 

findings requires inference trial court made every implied factual finding supported by 

substantial evidence necessary to affirm the judgment].)
30

same manner as such terms are construed in the following regulations under the Fair 

Labor Standards Act effective as of the date of this order: 29 C.F.R. Sections 541.201-

205, 541.207-208, 541.210, and 541.215.” (Cal. Code Regs., tit. 8, § 11090, subd. 

(1)(A)(2)(f).) 

Code Federal Regulations, title 29, former part 541.205 (2000) (former part 

541.205)7 provides as follows:

“(a) The phrase ‘directly related to management 

policies or general business operations of his employer or his 

employer’s customers’ describes those types of activities 

relating to the administrative operations of a business as 

distinguished from ‘production’ or, in a retail service 

establishment, ‘sales’ work. In addition to describing the 

types of activities, the phrase limits the exemption to persons 

who perform work of substantial importance to the 

management or operation of the business of his employer or 

his employer’s customers.

“(b) The administrative operations of the business 

include the work performed by so-called white-collar 

employees engaged in ‘servicing’ a business as, for, example, 

advising the management, planning, negotiating, representing 

the company, purchasing, promoting sales, and business 

research and control....

“(c) As used to describe work of substantial 

importance to the management or operation of the business, 

the phrase ‘directly related to management policies or general 

business operations’ is not limited to persons who participate 

in the formulation of management policies or in the operation 

of the business as a whole. Employees whose work is 

‘directly related’ to management policies or to general 

business operations include those [whose] work affects policy 

or whose responsibility it is to execute or carry it out....

7 All references to the Code of Federal Regulations are to the version that came into 

effect in July 2000, not subsequently amended versions of those regulations, unless 

otherwise noted. (See Harris, supra, 53 Cal.4th at pp. 179-180.)
31

“(1) It is not possible to lay down specific rules that 

will indicate the precise point at which work becomes of 

substantial importance to the management or operation of a 

business. It should be clear that the cashier of a bank 

performs work at a responsible level and may therefore be 

said to be performing work directly related to management 

policies or general business operations. On the other hand, 

the bank teller does not. Likewise it is clear that 

bookkeepers, secretaries, and clerks of various kinds hold the 

run-of-the-[mill] positions in any ordinary business and are 

not performing work directly related to management policies 

or general business operations. On the other hand, a tax 

consultant employed either by an individual company or by a 

firm of consultants is ordinarily doing work of substantial 

importance to the management or operation of a business.” 

(29 C.F.R. § 541.205(a)-(c).)

The qualitative requirement articulated in Harris stems from former parts

541.205(a) and 541.205(b). (Harris, supra, 53 Cal.4th at pp. 180-182.) Former part 

541.205(a) articulates that work “‘directly related to the management policies or general 

business operations’” describes activities “relating to the administrative operations of a 

business”; and part (b) provides, in turn, that the “administrative operations of the 

business” include work performed by “so-called white-collar employees engaged in 

‘servicing’ a business [such as] advising the management, planning, negotiating, 

representing the company, purchasing, promoting sales, and business research and 

control.” The Harris court explained that former part 541.205(c) relates to the 

quantitative component “that tests whether work is of ‘substantial importance’ to 

management policy or general business operations.” (Harris, supra, 53 Cal.4th at p. 

182.) Both the qualitative and the quantitative components must be satisfied for work to 

be considered “directly related” to the management policies or general business 

operations. (Id. at pp. 181-182.) 

a. Qualitatively Administrative Prong

Richardson argues there is no evidence the work tasks he performed more than 50 

percent of his day were qualitatively administrative. The fact that he monitored the 
32

boards and made individualized changes does not translate into servicing the business –

he did not perform any of the activities articulated in former part 541.205(b). He did not 

make decisions for the business or that related to the business as a whole. Richardson 

also notes he performed none of the “functional areas” identified in part 541.201, such as 

budgeting, human resources, entering into contracts, marketing, making termination 

decisions, and similar activities.8 

Ruan argues the dispatch tasks Richardson testified he was engaged in 90 percent 

of the time were qualitatively administrative: Richardson’s main responsibility was to 

maximize Ruan’s profits by ensuring that its dairy pickup business operated efficiently 

and cost-effectively. The vast majority of his duties were related to managing and 

dispatching dozens of drivers to ensure that Ruan’s business was profitable. Ruan also

notes that former part 541.208(e) illustrates how a supervisor who handles a company’s 

transportation problems, in ways very similar to Richardson, meets the administrative 

exemption. Moreover, Richardson not only had the authority to make decisions that

impacted Ruan, but his duties had a significant financial impact on the business. 

As set forth in former part 541.205(b), the administrative operations of a business 

include the work performed by employees involved in “‘servicing’” the business, and it 

provides examples including advising the management, planning, negotiating, 

representing the business, purchasing, promoting sales, and performing business research 

and control. 

Richardson argues he performed none of these activities, and the absence of such 

activities is critical to the application of the exemption. He notes that in Combs v. 

Skyriver Communications, Inc. (2008) 159 Cal.App.4th 1242, 1265, an employee was 

held to fall within the administrative exemption because his work involved tasks 

8 To the extent Richardson argues he did not perform the “functional areas” 

identified by part 541.201(c), his brief cites to a later version of part 541.201, not the 

2000 version of former part 541.201 incorporated by Wage Order 9. 
33

enumerated by the regulation such as budgeting, purchasing, and procurement. While 

these are types of activities that involve “servicing” a business, as recognized in Combs, 

supra, at page 1265, they are not the only types of activities that could conceivably be 

considered “servicing” the business – the activities outlined in the regulation are not an 

exhaustive or exclusive list.

Former part 541.208 provides various illustrations of the types of work that is 

considered administratively exempt. One of the illustrations describes a “traffic manager 

[who] is employed to handle the company’s transportation problems. The exempt work 

performed by such an employee would include planning the most economical and 

quickest routes for shipping merchandise to and from the plant, contracting for commoncarrier and other transportation facilities, negotiating with carriers for adjustments for 

damages to merchandise in transit and making the necessary rearrangements resulting 

from delays, damages, or irregularities in transit.” (29 C.F.R. § 541.208(e).) 

Richardson’s dispatching tasks and duties mirror, in many respects, this 

illustration. Richardson did not plan the initial designation of routes, but throughout the 

shift he would rearrange the routes to meet myriad variables that arose during the shift. 

This took a significant degree of planning to synthesize the needs of the customer – both 

the dairies and CDI – while maintaining operational efficiency for profit and observing 

driver limitations such as wash tags and times of service. Schott testified Richardson had 

to account for those variables when planning changes to the routes to meet varying 

situations. Balaam testified Richardson was the highest ranking supervisor on the night 

shift, and he was charged with running the operations of the terminal during that time. 

Richardson’s job activities involved more than meeting individualized, day-to-day 

operational tasks of transporting milk. Because of the array of variables involved in 

timely pickups and delivery of milk, there was no single course of internal operations to 

meet ever-changing customer needs, account for all the regulatory aspects of collecting 

and transporting the milk (wash tags, hours-of-service limitations, dairy tank 
34

sanitization), and manage safe and efficient equipment utilization all while balancing 

Ruan’s profit margin requirements. RedTrak could provide fast access and tracked some 

of the variables that had to be assessed in formulating the most efficient delivery and 

pickup plans, but as Schott testified, it could not analyze the data. 

For Ruan’s milk transport to operate profitably, it had to do more than simply pick 

up milk on time from dairies and deliver the correct number of loads to the correct plant 

or creamery. There had to be real-time assessment of operational efficiency under 

whatever combination of variables was presented at any given moment – such 

assessment, analyzing, and planning could not be done ahead of time. While there was a 

template for the basic pickup and delivery structure formulated ahead of each shift, that 

template only remained effective both for customer service and for Ruan’s internal 

operational needs so long as nothing changed – e.g., no driver was absent, no customer 

required different load counts, no plant delivery change was needed, no dairy required a 

different pickup time, no plant had wait times or changes in product. If Richardson had 

only been responsible for getting milk picked up on time and then delivering it to the 

creameries in the correct amounts, he would be servicing customer needs, not servicing 

internal administrative operations of Ruan. However, Richardson had to assess, plan, 

reorganize how Ruan could both meet its customers’ needs while maintaining Ruan’s 

internal operational need for efficiency in the use of personnel and equipment. 

Substantial evidence established that was far more involved than “monitor[ing] the 

boards,” as Richardson argues were all that his work tasks entailed. 

Richardson oversaw approximately 40 drivers on his shift. He was authorized and 

expected to monitor driver attendance, call drivers in to work, send drivers home if 

necessary, resolve their complaints, ensure meal breaks were provided to them, and issue 

correction reports for various infractions by drivers. While the act of issuing a correction 

to a driver was not a task he undertook frequently and thus this particular activity did not 

take a significant amount of his time on a daily basis, Richardson was responsible for 
35

overseeing whether drivers were meeting their obligations, which, inferable from the 

testimony of Balaam, Schott and Richardson himself, was an ongoing oversight task. 

Schott testified Richardson’s role interacting with CDI was critical to ensuring the 

terminal maintained its most important customer. Richardson’s role with CDI involved 

far more than simply taking orders about load volume from CDI. In response to load 

requests or other changes from CDI, Richardson had to reassess, replan, or create new 

routes; call in drivers; and marshal equipment. In doing this, he had the authority to 

represent Ruan, and his decisions with regard to how to manage CDI’s needs impacted 

both Ruan’s farm transport operations at that terminal and its financial bottom line. 

In his nightly duties and responsibilities, Richardson marshaled equipment; had an 

ongoing obligation to oversee drivers, offer coaching, and complete correction reports 

when necessary; he planned and replanned routes based on Ruan’s economic 

profitability; during his shift, he solely represented the company with its most valuable 

customer at that terminal; determined whether and how the needs of that customer could 

be met; and all of this was performed almost entirely without any direct oversight or prior 

approval. 

Richardson argues these tasks were not tantamount to running the business as a 

whole. But, there is no requirement “servicing” a business must involve the needs of the 

entire company. (See 29 C.F.R. § 541.205(b).) Richardson was servicing Ruan’s milk 

transport business by analyzing all the variables involved in timely pickup, transport and 

delivery of the milk, and then deploying and managing Ruan’s resources – personnel and 

equipment – to meet Ruan’s thin profit margin. That was a vital component of Ruan’s 

internal administrative operations at the Tulare terminal – ongoing, real-time analysis of 

the profitability of the pickup and delivery system to manage the deployment of Ruan’s 

resources in a manner that best satisfied Ruan’s bottom-line profit margin considerations. 

In short, Richardson’s tasks were qualitatively administrative.
36

b. Quantitatively Administrative Prong

In former part 541.205(a), the phrase “directly related to management policies or 

general business operations” is limited “to persons who perform work of substantial 

importance to the management or operation of the business of his employer or his 

employer’s customers.” (29 C.F.R. § 541.205(a).) In former part 541.205(c), work of 

substantial importance “is not limited to persons who participate in the formulation of 

management policies or in the operation of the business as a whole.” (29 C.F.R. 

§ 541.205(c).) Former part 541.205(c)(1) recognizes it is “not possible to lay down 

specific rules that will indicate the precise point at which work becomes of substantial 

importance to the management or operation of a business.” (29 C.F.R. § 541(c)(1).) As 

guideposts on a continuum, the regulation went on to draw the distinction between the 

cashier of the bank who performs work directly related to the management policies or 

general business operations and the bank teller who does not. (Ibid.) 

Richardson argues his work was not quantitatively administrative: it did not affect 

company policy or carry out or execute company policy. Rather, his work was performed 

under the supervision of a higher-level manager. His work, he argues, was like that of a 

bank teller who is not performing tasks of substantial importance to the company. 

Although his work was important to Ruan, he argues he had no more responsibility and 

discretion in carrying it out than a bank teller does in greeting a customer, taking money, 

performing addition or subtraction, and addressing the customer’s needs. 

As pointed out in Rieve v. Coventry Health Care, Inc. (2012) 870 F.Supp.2d 856,

whether an employee performs work of substantial importance is “a delicate analysis” 

because all employees of a business “must serve some essential function, or their 

respective positions would not exist.” (Id. at pp. 872-873.) The court analogized that,

while a retail clothing store cannot function without a store manager, it is also unable to 

function without sales people. (Ibid.) The court reasoned that “[t]he key inquiry is thus 

perhaps not one of relativity or a focus on the word ‘substantial’ but rather an 
37

examination of whether the employee’s value directly flows ‘to the management or 

operation of the business.’” (Id. at p. 873.) Rieve reasoned this language implied that the 

employee in question would be expected to hold a supervisory position instead of serving 

on the front lines of the business – “it would seem that an employee whose value flows to 

management or the operation of the business would actually supervise other employees.” 

(Ibid.)

Richardson was the highest ranking supervisor on the night shift, and he worked 

with very little oversight. As already noted, Richardson’s work duties and 

responsibilities required him to perform real-time assessment of existing variables to 

deploy resources in a manner that met Ruan’s thin profit margin needs. That assessment 

could not be done ahead of time in the absence of the real-time variables, it could only be 

plotted generally. To implement his efficiency analysis in any given scenario, 

Richardson had direct and ongoing oversight of approximately 40 drivers during his shift, 

and he was the sole contact on his shift for the terminal’s most important customer. 

Beyond his supervisorial role, if Richardson failed to analyze the data and 

variables correctly, his assessment would have a direct impact on millions of dollars of 

product being moved each week on a very thin profit margin. Former part 541.205(c)(2) 

is clear that simply because serious consequences or losses to the employer may flow 

from an employee’s neglect, this does not transform otherwise clerical work into that of 

substantial importance to the manager or operation of the business. (29 C.F.R. 

§ 541.205(c)(2).) For example, “[a] messenger boy who is entrusted with carrying large 

sums of money or securities cannot be said to be doing work of importance to the 

business even though serious consequences may flow from his neglect.” (Ibid.) 

Richardson’s work was of substantial importance to the operations of Ruan’s 

business not because his mistakes would have been financially significant to the 

company, but because the company’s ability to carry out milk transport in a financially 

feasible way was dependent on how Richardson assessed real-time conditions to make 
38

ongoing profitability and efficiency analyses while managing and making decisions about 

Ruan’s operational resources. RedTrak could not perform those operational efficiency 

analyses, nor could they be assessed by anyone else in advance or plotted out ahead of 

time on some sort of formulaic decision tree. Given its thin profit margin, Ruan could 

not have maintained its milk transport business at the Tulare terminal without the realtime efficiency analyses performed by Richardson as a transportation supervisor. If 

Richardson were merely directing drivers based on efficiency analyses performed by 

RedTrak or pursuant to a preset protocol, he would be more like a bank teller who does 

not perform work of substantial importance. (29 C.F.R. § 541.205(c)(1).) However, 

Richardson himself was assessing and analyzing the data to make determinations about 

what actions, or series of actions, would meet customer needs, satisfy relevant regulatory 

parameters, and be most profitably efficient to Ruan; then, based on those analyses, he 

had to decide what resources to deploy and how. Those assessments and determinations 

are more akin to those made by the cashier of the bank than the bank teller. 

We conclude Richardson’s tasks dispatching drivers, analyzing variables to meet 

profit considerations, and overseeing and managing the safe, proper, and effective 

utilization and deployment of Ruan’s resources was quantitatively administrative work of 

substantial importance to the management or operations of the business. 

2. Exercises Discretion and Independent Judgment Element

The parties also dispute whether Richardson’s tasks as transportation supervisor 

met the second element of the administrative exemption, which requires that an exempt 

employee “customarily and regularly exercises discretion and independent judgment.” 

(Cal. Code Regs., tit. 8, § 11090, subd. (1)(A)(2)(b).) While Wage Order 9 and the 

regulation codified thereunder do not define “discretion and independent judgment,” 

former part 541.207, which Wage Order 9 incorporates, states that the exercise of 

discretion and independent judgment “involves the comparison and the evaluation of 

possible courses of conduct and acting or making a decision after the various possibilities 
39

have been considered. The term ... implies that the person has the authority or power to 

make an independent choice, free from immediate direction or supervision and with 

respect to matters of significance.” (29 C.F.R. § 541.207(a).) “Matters of significance” 

means the decision to be made is relevant to something consequential and not trivial. (Id.

at § 541.207(d).) Matters of significance applies to the kinds of decisions made by those 

who “exercise authority within a wide range to commit their employer in substantial 

respects financially or otherwise.” (Id. at § 541.207(d)(2).) 

The regulations also indicate there has been frequent confusion “between the 

exercise of discretion and independent judgment, and the use of skill in applying 

techniques, procedures, or specific standards.” (29 C.F.R. § 541.207(b).) As an example 

of the distinction, the regulation poses this scenario: “An employee who merely applies 

his knowledge in following prescribed procedures or determining which procedure to 

follow, or who determines whether specified standards are met or whether an object falls 

into one or another of a number of definite grades, classes, or other categories ... is not 

exercising discretion and independent judgment.” (Id. at § 541.207(c)(1).)

Richardson argues his work duties did not involve discretion and judgment, only 

the use of skill he acquired through on-the-job experience. He maintains the evidence 

shows only that he monitored boards and rerouted trucks based on the skill he developed 

with the RedTrak system. He honed his skills on the job, which were then implemented 

through manipulation of the RedTrak software system that he did not create, nor could he 

change. We disagree.

The nature of dispatching duties under the particular conditions navigated by 

Richardson involved a significant exercise of discretion and independent judgment on 

matters of significance. Richardson was required to make ongoing efficiency 

assessments in meeting customer needs while accounting for Ruan’s operational 

efficiencies that were critical to profits at that terminal. These assessments were not 

made within a preset framework of standards or a decision model that Richardson simply 
40

implemented. Richardson’s work was not like that of inspectors who “may have some 

leeway in the performance of their work but only within closely prescribed limits.” (29 

C.F.R. § 541.207(c)(2).) Richardson did not simply dispatch drivers to meet specific 

time frames and loads for the customer, he had to assess how that could be done with an 

evolving number of distinct variables, choosing from among different alternatives to 

accomplish all the necessary objectives, which he had to assess for importance and 

financial efficiency. If RedTrak had assessed the data and informed Richardson there 

were only two most efficient configurations of the variables that met all the objectives, 

and he could select from among those two, this would not be an exercise of discretion 

and judgment – dispatching drivers would involve only his skill and training in 

implementing RedTrak instructions and selecting among predetermined choices. But that 

was not the situation.

The comparison shopping example in former part 541.207(c)(6) also provides 

guidance. The regulation distinguished comparison shopping performed by an employee 

of a retail store with that of a buyer. While the comparison shopper who “merely reports 

to the buyer his findings as to the prices at which a competitor’s store is offering 

merchandise of the same or comparable quality” is not exercising discretion and 

independent judgment, the buyer who evaluates the assistants’ reports and then directs 

that certain items be repriced is exercising discretion and judgment. (29 C.F.R. 

§ 541.207(c)(6).) Richardson’s work is more like the buyer who evaluates the variables 

and makes an election about what will serve the needs of the business best, and then 

directs resources to accomplish that end without any direct supervision. 

Moreover, Richardson exercised authority “within a wide range to commit [his] 

employer in substantial respects financially or otherwise.” (29 C.F.R. § 541.207(d)(2).) 

Richardson had autonomous oversight of meeting CDI’s needs during the night shift in 

almost all respects, and he could create special routes to Los Angeles without prior 

approval. He could determine in his discretion whether there were sufficient employees 
41

to meet customer needs, whom to call in, whom to send home, and how to rearrange 

resources and schedules to meet the need for efficiency and maximizing profitability. 

Richardson’s work duties and responsibilities clearly fit the federal regulatory 

guidance of what constitutes the exercise of discretion and independent judgment. 

3. Primarily Engaged in Duties Which Meet the Test of the 

Exemption Element

Up to 90 percent of Richardson’s work duties and responsibilities involved his 

tasks dispatching drivers, representing Ruan with CDI, assessing and replanning routes in 

light of constantly changing variables in a manner that was most operationally efficient 

for Ruan, and managed and oversaw drivers on his shift. As discussed above, this work 

was office work directly related to management policies or general business operations—

both qualitatively and quantitatively administrative—and which customarily and 

regularly required Richardson to exercise discretion and independent judgment.9 As 

such, there is substantial evidence Richardson was “primarily engaged” in duties that 

meet the test of the exemption, as defined by Wage Order 9-2001 (Wage Order 9, subd. 

2(K) [“‘Primarily’ as used in Section 1 ... means more than one-half the employee’s 

work time.”].)

4. Conclusion

Construing the exemption requirements narrowly (Ramirez, supra, 20 Cal.4th at 

pp. 794-795), the trial court correctly determined Ruan met its burden to establish 

Richardson’s duties and tasks as transportation supervisor fit within the administrative 

9 There is no dispute Richardson performed under only general supervision work 

along specialized or technical lines requiring special training, experience, or knowledge 

(Cal. Code Regs., tit. 8, § 11090 (1)(A)(2)(d)), or that Richardson earned a monthly 

salary equivalent to no less than two times the state minimum wage (Id. at § 11090 

(1)(A)(2)(g)). Moreover, there is substantial evidence underpinning these findings, 

which impliedly were made in support of the judgment in favor of Ruan.
42

exemption of Wage Order 9, codified at California Code of Regulations section 11090, 

subdivision (1)(A). 

IV. Remaining Arguments

Richardson argues he was not an exempt employee under the executive 

exemption. As the trial court’s judgment that Richardson is an exempt employee is 

affirmed, we need not reach whether another exemption applies. It is also not clear Ruan 

ever asserted the executive exemption as an affirmative defense.

DISPOSITION

The judgment is affirmed. Respondent is awarded the costs of appeal. (Cal. Rules 

of Court, rule 8.278, subd. (a)(1).)

SMITH, J.

WE CONCUR:

DETJEN, Acting P.J.

MEEHAN, J.