CALDERWOOD & HARKNESS LLP 1900 Avenue of the Stars, Suite 2800 Los Angeles, California 90067
CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT
MEMORANDUM
TO: Engagement File — Matter No. 1017-00004
FROM: Nadia Petrov
DATE: November 18, 2022
RE: Applicable Wage Orders — IWC Wage Order 12 (Motion Picture Industry)
I. Purpose and Overview
This memorandum identifies and summarizes the Industrial Welfare Commission ("IWC") Wage Order applicable to the non-exempt, hourly production-support employees in the putative class in Fuentes v. Aurelius Media Americas Inc., Los Angeles Superior Court Case No. 22STCV38214. The purpose of this memorandum is to provide a comprehensive analysis of the operative Wage Order provisions, the manner in which they interact with the California Labor Code, and their significance to both the merits of Plaintiffs' claims and the class certification analysis.
Based on the nature and scope of Aurelius Media Americas Inc.'s ("AMA") California production operations, AMA's workforce falls primarily under IWC Wage Order 12-2001, as amended, codified at Title 8, California Code of Regulations, Section 11120 (hereinafter "Wage Order 12"). Wage Order 12 governs wages, hours, and working conditions in the "Motion Picture Industry." The IWC adopted Wage Order 12 specifically to address the unique operational characteristics of motion picture production, while maintaining the core worker protections enshrined in the broader California Labor Code.
Understanding the specific requirements of Wage Order 12 is critical for three interrelated purposes: (1) assessing the merits of each cause of action in Plaintiffs' Complaint; (2) evaluating AMA's historical and current compliance posture with respect to the wage-and-hour obligations imposed by Wage Order 12 and the corresponding Labor Code provisions; and (3) developing a comprehensive defense strategy, including arguments to oppose class certification. This memorandum addresses each of these objectives in turn, beginning with an analysis of Wage Order 12's applicability, proceeding through its key substantive provisions, and concluding with recommendations for the defense team.
This memorandum is intended to be read alongside the other memoranda prepared in connection with this engagement, including the Preliminary Case Assessment memorandum dated November 7, 2022, the PAGA Standing and Procedural Requirements memorandum dated November 15, 2022, and the forthcoming Auto-Deduction Policy Risk Assessment memorandum, which is expected to be completed by November 22, 2022.
II. Applicability of Wage Order 12
A. Definition of "Motion Picture Industry"
Wage Order 12 applies to "all persons employed in the motion picture industry" within the State of California. The Wage Order defines the "motion picture industry" broadly to encompass a wide range of production activities. Specifically, the Wage Order states that the motion picture industry includes:
"the production of motion pictures, including combinator photographs, television programs, and video productions, including but not limited to features, shorts, serials, commercials, documentaries, and other pictures, regardless of the methods of production or distribution thereof."
This definition is intentionally expansive. By including "television programs" and "video productions" without limitation as to format or genre, and by employing the catch-all phrase "regardless of the methods of production or distribution thereof," the IWC ensured that Wage Order 12 would apply not only to traditional theatrical motion picture production but also to the full spectrum of content production that characterizes the modern entertainment industry. Courts have consistently applied Wage Order 12 broadly, finding that it encompasses production activities ranging from traditional film production to digital content creation and streaming programming. See, e.g., Brinker Rest. Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1026–1027 (discussing the role of IWC Wage Orders in defining industry-specific obligations); Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903, 914 (acknowledging the IWC's broad authority to define industry classifications).
The definition's reference to production "regardless of the methods of production or distribution thereof" is particularly significant in the context of AMA's operations, as AMA produces content for distribution across traditional broadcast television, cable networks, streaming platforms, and digital/social media channels. Regardless of the ultimate distribution medium, the production activities themselves fall within the scope of Wage Order 12.
B. AMA's Operations Within Wage Order 12
During the putative class period — November 1, 2018 through the date of preliminary approval of any class settlement — AMA operated fourteen (14) distinct production units across seven (7) California facilities. AMA's California operations are dedicated to the production of unscripted/reality television content, digital content, and live-events programming. All fourteen show units are engaged in the production of television programs and/or video productions, and therefore fall squarely within the Wage Order 12 definition of the "motion picture industry."
AMA's seven California production facilities are as follows:
1. 8500 Sunset Boulevard, Suite 1400, West Hollywood, CA 90069 — Corporate headquarters and post-production facility. This facility houses AMA's executive offices, the post-production pipeline for multiple show units, and centralized production support functions including accounting, human resources, and legal.
2. 4024 Penmark Strategy Partners Avenue, Studio City, CA 91604 (Stage A & Stage B) — Primary unscripted production facility. Stage A and Stage B at this location are used for in-studio filming of AMA's flagship unscripted programming, including the reality competition series "Summit Challenge" and the docuseries "Behind the Brand." Named Plaintiff Marisol Fuentes was based at this facility.
3. 15301 Ventura Boulevard, Suite 300, Sherman Oaks, CA 91403 — Digital content production facility. This facility supports AMA's digital content division, which produces short-form and mid-form content for streaming platforms and social media distribution.
4. 3800 West Alameda Avenue, Burbank, CA 91505 — Live events and field production facility. This facility serves as the base of operations for AMA's live events division and field production teams. Named Plaintiff Yesenia Padilla was based at this facility.
5. 1438 North Gower Street, Hollywood, CA 90028 — Scripted development and post-production facility. Although AMA's primary production output is unscripted content, this facility supports the company's nascent scripted development pipeline and certain post-production functions. Named Plaintiff Derek Halloran was based at this facility.
6. 2120 Colorado Avenue, Santa Monica, CA 90404 — E-commerce studio. This facility supports AMA's branded content and e-commerce video production operations.
7. 888 North Sepulveda Boulevard, El Segundo, CA 90245 — Post-production annex. This satellite post-production facility handles overflow editing, color correction, and audio mixing work for multiple show units.
The putative class is defined as: All current and former non-exempt, hourly employees of Aurelius Media Americas Inc. who worked in California at any time from November 1, 2018 through the date of preliminary approval of the class settlement. Based on AMA's payroll records as produced to date, the estimated class size is approximately 1,850 individuals. This figure encompasses employees across all seven facilities and all fourteen show units, including production coordinators, post-production assistants, segment coordinators, production assistants, runners, office production assistants, and other non-exempt, hourly production-support personnel.
The breadth of AMA's California production operations and the diversity of roles within the putative class underscore the importance of Wage Order 12 as the unifying legal framework for evaluating Plaintiffs' claims.
C. Named Plaintiffs' Positions Under Wage Order 12
The three named Plaintiffs in Fuentes v. Aurelius Media Americas Inc. each held non-exempt, hourly positions within AMA's production operations during the class period. Their specific employment details are as follows:
Marisol Fuentes — Production Coordinator, Unscripted Programming Division. Ms. Fuentes was based at the Studio City facility (4024 Penmark Strategy Partners Avenue) and was employed by AMA from March 14, 2019 through August 5, 2022. Her hourly rate at the time of separation was $28.50 per hour. As a Production Coordinator, Ms. Fuentes was responsible for coordinating scheduling, logistics, and administrative functions for in-studio and on-location shoots associated with AMA's unscripted programming slate. Her role required regular interaction with talent, crew, and production management, and her work hours were dictated by the production schedule of the show unit to which she was assigned.
Derek Halloran — Post-Production Assistant, Digital Content Division. Mr. Halloran was based at the Hollywood facility (1438 North Gower Street) and was employed by AMA from June 1, 2020 through November 30, 2022. His hourly rate at the time of separation was $24.75 per hour. As a Post-Production Assistant, Mr. Halloran supported the editorial process by ingesting and organizing raw footage, preparing media for editorial review, managing project files, and performing other post-production support tasks. His work hours were generally more predictable than those of on-set production personnel, although extended hours were common during deadline-driven periods.
Yesenia Padilla — Segment Coordinator, Live Events Division. Ms. Padilla was based at the Burbank facility (3800 West Alameda Avenue) and was employed by AMA from January 10, 2018 through May 17, 2022. Her hourly rate at the time of separation was $31.00 per hour. As a Segment Coordinator, Ms. Padilla was responsible for coordinating segment production elements for AMA's live events programming, including pre-production planning, on-site coordination during live broadcasts, and post-event wrap activities. The nature of live events production required Ms. Padilla to work variable hours, including extended shifts on event days.
All three named Plaintiffs held non-exempt, hourly positions within AMA's production operations. Each position falls within the scope of the "motion picture industry" as defined by Wage Order 12, and each named Plaintiff was engaged in work directly related to the production of television programs and/or video productions. There is no dispute — nor could there reasonably be — that Wage Order 12 is the applicable Wage Order for the named Plaintiffs and the putative class.
III. Key Provisions of Wage Order 12
This section addresses the substantive provisions of Wage Order 12 that are most directly relevant to the claims asserted in Fuentes v. Aurelius Media Americas Inc. For each provision, we summarize the legal requirements, identify the specific compliance issues raised by Plaintiffs' allegations, and note the implications for AMA's defense.
A. Meal Periods (§ 11)
1. First Meal Period Requirement
Wage Order 12, Section 11, establishes the meal period obligations applicable to employers in the motion picture industry. Under this provision, employers must provide employees with a meal period of not less than thirty (30) minutes for any work period that exceeds five (5) hours. The five-hour threshold under Wage Order 12 derives from California Labor Code Section 512, subdivision (a), which provides that "[a]n employer shall not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes." This statutory mandate applies uniformly across all IWC Wage Orders, and Wage Order 12 incorporates this standard.
It is important to note that the five-hour threshold is distinct from the six-hour threshold that applies under certain other regulatory frameworks or that some employers have adopted as a matter of internal policy. Some employers in the entertainment industry have historically applied a six-hour trigger for meal periods, either due to confusion about the applicable standard or reliance on outdated internal policies. As discussed further below, this distinction is directly relevant to one of the compliance issues identified in AMA's operations.
Critical Compliance Note: AMA utilizes NovaPay Solutions' "TimeTrack Pro" automated timekeeping system across all seven California facilities. The TimeTrack Pro system includes an auto-deduction feature that automatically deducts thirty (30) minutes from an employee's recorded work time for a meal period. However, our review of the TimeTrack Pro system configuration documents (produced by AMA in response to our initial document request) reveals that the auto-deduction is currently programmed to trigger at six (6) hours, not five (5) hours. Under Wage Order 12 and California Labor Code Section 512, the meal period obligation arises when an employee's work period exceeds five (5) hours. This means that for employees working shifts of between five and six hours, the TimeTrack Pro system would not trigger the auto-deduction — but, more critically, those employees would also not be prompted by the system to take a meal period, potentially resulting in both unreported and uncompensated meal period violations. This five-hour versus six-hour discrepancy represents an independent compliance issue that is addressed in greater detail in the separate Auto-Deduction Policy Risk Assessment memorandum, which is being prepared concurrently with this memorandum and is expected to be circulated by November 22, 2022.
2. Second Meal Period Requirement
A second meal period of not less than thirty (30) minutes is required for any work period that exceeds ten (10) hours. This second meal period requirement is of particular significance in the entertainment industry generally and in AMA's operations specifically. Entertainment industry production schedules — particularly for on-set and field production work — routinely involve extended workdays. Based on AMA's timekeeping records produced to date, it is not uncommon for AMA employees on active production days to work shifts of twelve (12) to sixteen (16) hours. On such extended shooting days, the second meal period obligation is triggered, and AMA must provide a second duty-free meal period of at least thirty (30) minutes.
3. Timing Requirements
The timing of meal periods is governed by both the Wage Order and the Labor Code. The first meal period must commence no later than the end of the employee's fifth hour of work. For example, if an employee begins work at 7:00 a.m., the first meal period must begin no later than 12:00 p.m. (i.e., before the end of the fifth hour). The second meal period, where required, must commence no later than the end of the employee's tenth hour of work. These timing requirements are mandatory and non-waivable, except to the limited extent provided by the on-duty meal period exception discussed below.
4. Duty-Free Requirement
The California Supreme Court has made clear that a compliant meal period must be "duty-free" — the employee must be relieved of all duties and must be free to leave the employer's premises for the duration of the meal period. See Brinker Rest. Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1040 ("An employer's duty with respect to meal breaks . . . is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so."). The duty-free requirement means that an employee who is required to remain on-call, to monitor equipment, to respond to communications, or to remain available for work-related tasks during a purported meal period has not received a compliant meal period.
5. On-Duty Meal Period Exception
Wage Order 12 recognizes a narrow exception to the duty-free requirement in the form of the on-duty meal period. An on-duty meal period is permissible only when all of the following conditions are satisfied:
(a) The nature of the work prevents the employee from being relieved of all duties during the meal period;
(b) The employee and the employer agree in writing to an on-duty meal period; and
(c) The written agreement specifically provides that the employee may, in writing, revoke the agreement at any time.
This exception is construed narrowly. The "nature of the work" must genuinely prevent the employee from being relieved of all duties — it is not sufficient for the employer to assert that it is merely inconvenient or operationally difficult to relieve the employee. The written agreement requirement is mandatory, and an oral agreement or a general policy statement does not satisfy the requirement. Furthermore, the agreement must contain an express provision allowing the employee to revoke the on-duty meal period arrangement in writing at any time.
6. Meal Period Premium
Under California Labor Code Section 226.7, subdivision (c), if an employer fails to provide an employee with a required meal period in accordance with the applicable Wage Order, the employer must pay the employee one (1) additional hour of pay at the employee's regular rate of compensation for each workday that the meal period is not provided. This premium payment is a statutory penalty, not a wage payment, and it is triggered each time a required meal period is not provided, regardless of whether the employee suffered any actual damages as a result.
The meal period premium is calculated based on the employee's "regular rate of compensation," which the California Supreme Court has held to mean the employee's regular rate of pay as determined under the methodology applicable to overtime calculations. See Ferra v. Loews Hollywood Hotel, LLC (2021) 11 Cal.5th 858, 867 (holding that "regular rate of compensation" in Section 226.7 has the same meaning as "regular rate of pay" used elsewhere in the Labor Code and in the IWC Wage Orders). This means that the premium must be calculated on the basis of the employee's total compensation — including non-discretionary bonuses, shift differentials, and other forms of remuneration — not merely the employee's base hourly rate.
7. Relevance to Case
The meal period claims are among the most significant causes of action in Fuentes. Plaintiffs allege the following specific meal period violations:
Auto-Deduction Practices. Plaintiffs allege that AMA's TimeTrack Pro auto-deduction system automatically deducted thirty (30) minutes from employees' recorded work time for meal periods, regardless of whether employees actually received compliant, uninterrupted thirty-minute meal breaks. The auto-deduction was applied as a blanket policy across all facilities, and Plaintiffs contend that it resulted in systematic undercompensation of employees who worked through their meal periods, had their meal periods interrupted, or took shortened meal periods. Auto-deduction policies are not per se unlawful, but they create significant compliance risk because they shift the burden to the employee to self-report missed or shortened breaks — a burden that is particularly onerous in the fast-paced entertainment production environment.
On-Call During Meal Periods. Plaintiffs allege that production personnel were routinely required to remain "on call" during meal periods, particularly during active shooting days. According to Plaintiffs, production coordinators, segment coordinators, and other production-support personnel were expected to remain reachable by radio, walkie-talkie, or mobile phone during meal periods and were frequently called back to the set or production area before completing a full thirty-minute break. If substantiated, this practice would violate the duty-free requirement established by Wage Order 12 and interpreted by the California Supreme Court in Brinker.
Absence of On-Duty Meal Period Agreements. Plaintiffs allege that AMA did not have compliant written on-duty meal period agreements in place for situations where employees could not be fully relieved of their duties during meal periods. If AMA is unable to produce compliant on-duty meal period agreements, AMA cannot avail itself of the on-duty meal period exception, and any instance in which an employee was not fully relieved of duties during a meal period would constitute a violation triggering the meal period premium.
Inconsistent Deployment of Missed Meal Attestation Feature. The TimeTrack Pro system includes a "Missed Meal Attestation" feature that, when activated, prompts employees to confirm whether they received a compliant meal period at the end of each shift. If the employee reports a missed or shortened meal period, the system flags the entry for supervisory review and, in theory, allows the employer to remedy the violation by paying the meal period premium. However, our review of AMA's TimeTrack Pro configuration records reveals that the Missed Meal Attestation feature was activated at only four (4) of AMA's seven (7) California facilities — specifically, at the West Hollywood, Sherman Oaks, Hollywood, and Santa Monica locations. The feature was not activated at the Studio City, Burbank, and El Segundo facilities. The failure to activate this feature at three facilities means that employees at those locations had no systematic mechanism for reporting missed or shortened meal periods, which significantly undermines AMA's ability to argue that it maintained a compliant system for identifying and remedying meal period violations.
The inconsistent deployment of the Missed Meal Attestation feature is particularly troubling because two of the three named Plaintiffs — Marisol Fuentes (Studio City) and Yesenia Padilla (Burbank) — were based at facilities where the feature was not activated. This creates a direct nexus between the named Plaintiffs' individual experiences and the alleged systemic deficiency.
B. Rest Periods (§ 12)
1. Rest Period Entitlement
Wage Order 12, Section 12, requires employers to authorize and permit employees to take a net ten (10) minute paid rest period for every four (4) hours worked, or "major fraction thereof." The phrase "major fraction thereof" has been interpreted by the California Supreme Court in Brinker to mean more than half of a four-hour period — that is, more than two hours. Brinker, 53 Cal.4th at 1029. Under this interpretation, the rest period entitlement is calculated as follows:
• Shifts of 3.5 hours or less: No rest period required.
• Shifts of more than 3.5 hours but no more than 6 hours: One (1) rest period.
• Shifts of more than 6 hours but no more than 10 hours: Two (2) rest periods.
• Shifts of more than 10 hours but no more than 14 hours: Three (3) rest periods.
• Shifts of more than 14 hours: Four (4) rest periods.
For AMA employees on extended production days — which, as noted above, frequently involve shifts of twelve (12) to sixteen (16) hours — this means that three (3) to four (4) rest periods per shift are required under Wage Order 12. The obligation to provide multiple rest periods during extended shifts places a significant compliance burden on AMA's production supervisors, particularly during active shooting days when production timelines are tight and interruptions are costly.
2. Timing and Location of Rest Periods
Rest periods must, "insofar as practicable, be in the middle of each work period." This language imposes a qualified obligation — it does not require absolute precision in the timing of rest periods, but it does require the employer to make reasonable efforts to schedule rest periods in the middle of each work segment. In the entertainment production context, the "insofar as practicable" qualifier may provide AMA with some flexibility, as production schedules are often dictated by factors such as talent availability, lighting conditions, and equipment constraints. However, the qualifier does not excuse a wholesale failure to provide rest periods, nor does it permit the employer to routinely schedule rest periods at the very beginning or very end of a work segment.
3. Paid Time
Unlike meal periods, rest periods are paid time. Employees must remain "on the clock" during rest periods and must be compensated at their regular rate of pay. Because rest periods are paid time, employers are generally not required to record the start and end times of rest periods in their timekeeping systems, and the failure to record rest periods in timekeeping records does not, standing alone, constitute a violation. This distinction between meal periods (unpaid) and rest periods (paid) has significant evidentiary implications, as discussed below.
4. Employer's Obligation to "Authorize and Permit"
The employer's obligation with respect to rest periods is to "authorize and permit" them. The California Supreme Court has held that this obligation requires more than merely having a written policy — the employer must actively ensure that employees have the opportunity to take rest breaks. See Brinker, 53 Cal.4th at 1033 ("The employer's obligation is to authorize and permit rest periods; an employer need not ensure that the employee takes the rest period."). At the same time, an employer that maintains a policy authorizing rest periods but that, through its operational practices, creates an environment in which rest periods are routinely discouraged, impeded, or made impractical may be found to have failed to "authorize and permit" rest periods within the meaning of the Wage Order.
5. Rest Period Premium
The rest period premium is identical to the meal period premium: one (1) additional hour of pay at the employee's regular rate of compensation for each workday that a required rest period is not authorized and permitted. Cal. Lab. Code § 226.7, subd. (c). As with meal period premiums, the regular rate of compensation used to calculate the rest period premium must include all forms of non-discretionary compensation, consistent with the California Supreme Court's holding in Ferra v. Loews Hollywood Hotel, LLC (2021) 11 Cal.5th 858.
6. Relevance to Case
Plaintiffs allege that during production days — particularly on extended twelve (12) to sixteen (16) hour shooting days — AMA did not authorize and permit required rest periods. According to Plaintiffs, the pace and intensity of production work, combined with pressure from supervisors to maintain production timelines, effectively prevented employees from taking their full allotment of rest periods.
The rest period claims present significant evidentiary challenges for both sides. AMA's TimeTrack Pro timekeeping system does not record the timing or duration of rest periods. This is consistent with typical industry practice, as rest periods are paid time and are generally not tracked in automated timekeeping systems. However, the absence of rest period tracking data creates a double-edged evidentiary landscape:
For Plaintiffs: There is no systematic, company-wide data demonstrating that rest periods were missed. Plaintiffs cannot point to a database of TimeTrack Pro records showing that rest periods were not taken, because the system was not designed to capture that information. Plaintiffs will therefore need to rely on testimonial evidence — declarations, depositions, and class representative testimony — to establish that rest periods were routinely denied or impeded.
For AMA: Conversely, AMA cannot point to systematic data proving that rest periods were, in fact, taken. AMA has no affirmative record of rest period compliance, and it cannot argue that its timekeeping records establish that it fulfilled its obligation to authorize and permit rest periods. AMA's defense will necessarily rely on testimonial evidence from supervisors, Unit Production Managers, and Line Producers, as well as on the existence of written rest period policies.
The absence of rest period tracking data has particular significance at the class certification stage. Because there is no class-wide data from which to determine whether rest periods were provided or denied, the rest period claims are likely to involve significant individualized factual inquiries — each class member's rest period experience will depend on the specific show unit, facility, supervisor, and production schedule under which that class member worked. This individualization may support AMA's argument that the rest period claims are not amenable to class-wide adjudication, and it may provide a basis for opposing certification of the rest period cause of action. We discuss this issue further in Section V below.
C. Overtime (§ 3)
1. Overtime Thresholds
Wage Order 12, Section 3, incorporates the standard California overtime rules codified in California Labor Code Section 510. Under these provisions, AMA's non-exempt, hourly employees are entitled to overtime compensation as follows:
Daily Overtime: One and one-half times (1.5×) the employee's regular rate of pay for all hours worked in excess of eight (8) hours in any one workday.
Double Time: Two times (2×) the employee's regular rate of pay for all hours worked in excess of twelve (12) hours in any one workday.
Weekly Overtime: One and one-half times (1.5×) the employee's regular rate of pay for all hours worked in excess of forty (40) hours in any one workweek.
Seventh Consecutive Day: One and one-half times (1.5×) the employee's regular rate of pay for the first eight (8) hours of work on the seventh consecutive day of work in a workweek; two times (2×) the regular rate of pay for all hours worked in excess of eight (8) hours on the seventh consecutive day.
Wage Order 12 does not contain any industry-specific exemption from these overtime standards for the motion picture industry. Unlike certain other Wage Orders — such as those applicable to agricultural operations or healthcare facilities, which contain modified overtime provisions tailored to the specific operational needs of those industries — Wage Order 12 applies the standard California overtime framework without modification. This means that AMA's non-exempt employees are entitled to the full protections of the daily, weekly, and seventh-day overtime provisions.
2. Regular Rate Calculation
The regular rate of pay for purposes of overtime calculation is not limited to the employee's base hourly rate. Under both the Labor Code and Wage Order 12, the regular rate must include all forms of non-discretionary compensation, including non-discretionary bonuses, shift differentials, production bonuses, and any other remuneration earned by the employee. The regular rate is calculated by dividing the employee's total non-discretionary compensation for the workweek by the total number of hours worked during that workweek.
This calculation is particularly important in the context of Plaintiffs' off-the-clock allegations. If Plaintiffs can establish that employees performed uncompensated pre-shift or post-shift work, the total hours worked for purposes of the regular rate calculation would need to be adjusted to include the off-the-clock hours. This adjustment would have two effects: (1) it would reduce the regular rate (because the same compensation would be spread over a greater number of hours), and (2) it would increase the number of overtime and double-time hours owed (because the additional hours would typically fall within the overtime or double-time portion of the workday, as discussed below).
3. Relevance to Case
The overtime claims in Fuentes are closely linked to Plaintiffs' off-the-clock work allegations. Plaintiffs allege that AMA employees were routinely required to perform uncompensated work before and after their officially recorded shifts. Specifically, Plaintiffs allege:
Pre-Shift Setup Time. Plaintiffs allege that production-support employees were required to arrive at their assigned facility or location approximately thirty (30) to forty-five (45) minutes before the official start of their shifts to perform setup tasks, including setting up production equipment, reviewing production notes and call sheets, attending informal pre-production briefings with supervisors, and preparing the set or workspace for the day's production activities. Plaintiffs allege that this pre-shift time was not recorded in the TimeTrack Pro system and was not compensated.
Post-Shift Wrap Time. Plaintiffs allege that production-support employees were required to remain at their assigned facility or location approximately fifteen (15) to thirty (30) minutes after the official end of their shifts to perform wrap-up tasks, including logging and cataloging footage, striking sets and equipment, completing daily production paperwork, and participating in informal post-production debriefs. Plaintiffs allege that this post-shift time was also not recorded in TimeTrack Pro and was not compensated.
The overtime implications of these off-the-clock allegations are significant. Because production days at AMA frequently exceeded eight (8) hours — and often exceeded twelve (12) hours — any uncompensated pre-shift or post-shift work would typically fall within the overtime or double-time portion of the workday. For example, if an employee's officially recorded shift was 7:00 a.m. to 7:00 p.m. (12 hours), but the employee actually began working at 6:30 a.m. and finished at 7:30 p.m. (13 hours total), the additional hour of unrecorded work would be compensable at the double-time rate (2× the regular rate), because it exceeded the twelve-hour daily threshold. The aggregate exposure from off-the-clock overtime, multiplied across approximately 1,850 putative class members over a four-year class period, could be substantial.
However, the off-the-clock claims are inherently individualized. Different employees in different roles performed different pre-shift and post-shift tasks, and the amount of time spent on those tasks varied based on the employee's specific position, the show unit to which the employee was assigned, the nature of the day's production activities, and the practices of the employee's immediate supervisor. A production coordinator preparing for a studio shoot may have spent thirty minutes reviewing call sheets and coordinating logistics, while a post-production assistant may have spent only fifteen minutes organizing files. This variability in the nature and duration of off-the-clock work across different positions, show units, and facilities creates individualized factual issues that may support AMA's argument against class certification of the overtime cause of action. We discuss this issue further in Section V below.
D. Hours and Days of Work (§ 3)
The standard workday under Wage Order 12 is eight (8) hours, and the standard workweek is forty (40) hours. These standards define the thresholds beyond which overtime compensation is owed, as discussed in Section III.C above. Wage Order 12 does not contain any industry-specific exemption from these standards for the motion picture industry. Unlike certain other Wage Orders that provide modified hours-of-work standards for specific industries — such as Wage Order 14 (Agricultural Occupations), which historically contained different overtime thresholds, or Wage Order 5 (Public Housekeeping Industry), which contains specific provisions for healthcare workers — Wage Order 12 applies the standard eight-hour day and forty-hour week without modification.
AMA's production schedules vary significantly across its fourteen show units and seven California facilities, reflecting the diverse operational profiles of different types of entertainment production:
• Studio-based shows (e.g., in-studio unscripted programming filmed at the Studio City facility): Typically involve eight (8) to ten (10) hour production days, with occasional longer days during intensive shooting periods.
• Field-based shows (e.g., the reality competition series "Summit Challenge," which involves on-location filming at various outdoor and remote locations): Frequently involve fourteen (14) to sixteen (16) hour production days, driven by the logistical demands of location shooting, weather constraints, and limited access windows.
• Live events (produced out of the Burbank facility): Variable shift lengths, dictated by the timing and duration of the live event. Pre-event setup and post-event teardown can extend the total workday well beyond the event broadcast window.
• Post-production (conducted at the West Hollywood, Hollywood, and El Segundo facilities): Typically involves eight (8) to ten (10) hour days, with occasional extended hours during deadline-driven periods (e.g., final delivery deadlines for network or streaming platform partners).
This variability in shift lengths across AMA's operations is relevant to both the merits analysis and the certification analysis. On the merits, the prevalence of extended shifts — particularly in field production and live events — increases the frequency with which meal period, rest period, and overtime obligations are triggered. On certification, the significant differences in operational profiles across show units and facilities may support AMA's argument that the class members' experiences are too varied to be adjudicated on a class-wide basis.
E. Reporting Time Pay (§ 5)
1. Reporting Time Pay Requirement
Wage Order 12, Section 5, establishes a reporting time pay requirement designed to compensate employees who report to work as scheduled but are not provided with their expected amount of work. Specifically, if an employee is required to report to work and does report to work, but is not put to work or is furnished with less than half of the employee's usual or scheduled day's work, the employee must be paid for half the usual or scheduled day's work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee's regular rate of pay.
This requirement applies regardless of the reason the employee is not put to work, with two narrow exceptions: (1) where operations cannot commence or continue due to threats to employees or property, or when recommended by civil authorities (i.e., force majeure events); and (2) where the employee is unable to produce work due to the employee's own fault.
2. Relevance to Case
Reporting time pay is not a primary focus of the Complaint filed by Plaintiffs in Fuentes. However, reporting time pay may be relevant to isolated incidents in which production schedules were changed or cancelled after employees had already reported to a facility or production location. The entertainment industry is characterized by frequent last-minute schedule changes, which can be caused by a range factors, including adverse weather conditions, talent unavailability (due to illness, scheduling conflicts, or personal issues), equipment failures, location access issues, permit problems, and creative or editorial direction changes from network or studio executives. When such schedule changes result in the cancellation or significant shortening of a production day after employees have already reported to work, reporting time pay obligations are triggered.
Based on our preliminary review of AMA's production records and HR files, there is no indication that AMA maintained a systematic reporting time pay policy or that it consistently paid reporting time pay when production days were shortened or cancelled. This issue is more likely to arise in the context of individual claims or as an ancillary issue in the class litigation, rather than as a driver of class-wide liability. Nevertheless, AMA should be prepared to address reporting time pay claims if they are raised during discovery or at trial.
F. Wages and Records (§§ 4, 7)
1. Minimum Wage
Wage Order 12 incorporates the applicable California minimum wage, which is established by statute and has increased periodically during the class period. The applicable minimum wage rates for employers with twenty-six (26) or more employees — a threshold that AMA comfortably exceeds — during the class period are as follows:
AMA's non-exempt, hourly employees were paid base hourly rates significantly above the applicable minimum wage throughout the class period. As noted above, the three named Plaintiffs' hourly rates at separation ranged from $24.75 per hour (Derek Halloran) to $31.00 per hour (Yesenia Padilla). Based on our review of AMA's payroll summaries, the lowest hourly rate paid to any non-exempt employee during the class period was approximately $18.00 per hour, which is well above the minimum wage for each year of the class period.
However, the minimum wage claim asserted by Plaintiffs is derivative of the off-the-clock work allegations. Plaintiffs contend that when the total hours actually worked by an employee — including unrecorded pre-shift and post-shift time — are used as the denominator in calculating the effective hourly rate, the resulting effective rate for certain shifts falls below the applicable minimum wage. This theory depends on the existence and extent of the alleged off-the-clock work and is subject to the same individualization challenges described in Section III.C above.
2. Records. Wage Order 12, Section 7, requires employers to maintain accurate records of hours worked, wages paid, meal period information, and other employment data for each employee. California Labor Code Section 226, subdivision (a), further requires that each wage statement (pay stub) provided to an employee include specific itemized information, including, among other items, gross wages earned, total hours worked, net wages earned, all deductions, and the applicable rates of pay.
Plaintiffs allege that AMA's reliance on the TimeTrack Pro auto-deduction system and its failure to record off-the-clock work resulted in inaccurate records of hours worked and wages paid. This forms the basis for Plaintiffs' cause of action under California Labor Code Section 226 for failure to provide accurate itemized wage statements. To the extent that AMA's recorded hours were understated (due to the auto-deduction of meal periods that were not actually taken, or due to the failure to record pre-shift and post-shift work), the corresponding wage statements would contain inaccurate information regarding total hours worked and gross wages earned, in violation of Section 226.
Additionally, as discussed in Section IV below, California Labor Code Section 226, subdivision (a)(9), requires that each wage statement identify the applicable IWC Wage Order. If AMA's wage statements failed to correctly identify Wage Order 12 as the applicable Wage Order — or if they omitted this information entirely — this would constitute an independent violation of Section 226, separate from any inaccuracy in the hours or wages reflected on the statements.
G. Uniforms and Equipment (§ 9)
Wage Order 12, Section 9, provides that where an employer requires employees to wear uniforms or use special equipment as a condition of employment, the employer must provide and maintain such uniforms and equipment at no cost to the employee. This provision reflects the broader California policy against shifting the costs of doing business to employees.
The uniforms and equipment issue is not a primary focus of the class claims in Fuentes. However, it bears mention in the context of California Labor Code Section 2802, which requires employers to indemnify employees for all necessary expenditures and losses incurred in direct consequence of the discharge of the employee's duties. To the extent that production-support employees at AMA were required to use personal equipment — such as personal cell phones, personal vehicles, or personal computing devices — for work-related purposes without reimbursement, AMA may face exposure under Section 2802.
It is worth noting that Gavin Aldrich, a former AMA employee, has asserted a separate individual action against AMA that includes a Section 2802 claim alleging $28,400.00 in unreimbursed business expenses. Mr. Aldrich's claim is not part of the class action in Fuentes and involves distinct factual allegations specific to his individual employment. However, Mr. Aldrich's claim underscores the potential for Section 2802 exposure among AMA's production workforce more broadly, and AMA should evaluate whether its expense reimbursement policies and practices are compliant with Section 2802 and Wage Order 12, Section 9.
IV. Relationship Between Wage Order 12 and the California Labor Code
Wage Order 12 and the California Labor Code are complementary — not competing — sources of law governing the wage-and-hour obligations of employers in the motion picture industry. The IWC Wage Orders and the Labor Code operate in tandem, and both must be consulted to determine the full scope of an employer's obligations. Where the Labor Code provides a standard that is more protective of employees than the corresponding Wage Order provision, the Labor Code governs. Conversely, where the Wage Order provides a standard that is more protective of employees than the corresponding Labor Code provision, the Wage Order governs. In either case, the more protective standard prevails. See, e.g., Martinez v. Combs (2010) 49 Cal.4th 35, 61 (discussing the interplay between IWC Wage Orders and the Labor Code).
The principal areas of overlap and interplay relevant to this case are as follows:
Meal Periods. California Labor Code Section 512 establishes the five-hour threshold for the first meal period and the ten-hour threshold for the second meal period. Wage Order 12, Section 11, implements the same thresholds and adds additional detail regarding the on-duty meal period exception. The two sources are consistent with respect to meal period timing, but Wage Order 12 provides the specific procedural requirements for on-duty meal period agreements (written consent, revocability). Both sources must be consulted when evaluating AMA's meal period compliance.
Rest Periods. Wage Order 12, Section 12, establishes the ten-minute rest period requirement and the "major fraction" calculation methodology. The Labor Code does not independently establish rest period requirements; instead, California Labor Code Section 226.7 provides the premium pay remedy for violations of the rest period requirements established by the applicable Wage Order. Thus, the Wage Order defines the substantive obligation, and the Labor Code provides the penalty for non-compliance.
Overtime. California Labor Code Section 510 establishes the daily, weekly, and seventh-day overtime thresholds. Wage Order 12, Section 3, incorporates these same standards by reference. The two sources are entirely consistent with respect to overtime requirements for AMA's employees.
Wage Statements. California Labor Code Section 226, subdivision (a), establishes the content requirements for itemized wage statements. Section 226(a)(9) specifically requires that each wage statement identify the applicable IWC Wage Order under which the employee is employed. This requirement creates an independent compliance obligation — even if AMA's wage statements are otherwise accurate with respect to hours worked and wages paid, the failure to identify the applicable Wage Order (Wage Order 12) on the face of the statement would constitute a separate violation of Section 226. AMA's wage statements should be audited to confirm compliance with this requirement, as discussed in Section VI below.
The complementary nature of these two legal frameworks underscores the importance of evaluating AMA's compliance under both Wage Order 12 and the applicable Labor Code provisions. A defense strategy that focuses exclusively on one source of law to the exclusion of the other would be incomplete and potentially ineffective.
V. Implications for Class Certification
The applicability of Wage Order 12 to AMA's California production operations has significant implications for the class certification analysis in Fuentes. This section summarizes the principal arguments on both sides.
A. Arguments Favoring Certification
Plaintiffs will argue that the uniform applicability of Wage Order 12 to all putative class members supports certification of a class for several reasons:
Common Legal Standard. All putative class members — approximately 1,850 individuals — are governed by the same IWC Wage Order. There is no dispute about which Wage Order applies, and there is no subclass of employees governed by a different Wage Order. This eliminates one of the most common sources of variation in wage-and-hour class actions: the applicability of different legal standards to different class members. Plaintiffs will argue that the uniformity of the legal framework satisfies the "common questions of law" prong of the class certification analysis under Code of Civil Procedure Section 382 and Brinker.
Common Timekeeping System. All putative class members across all seven facilities and all fourteen show units were subject to the same NovaPay Solutions TimeTrack Pro timekeeping system, with the same auto-deduction feature. Plaintiffs will argue that the auto-deduction is a common, uniform policy that was applied to all class members in the same manner, and that its compliance (or non-compliance) can be evaluated on a class-wide basis. The auto-deduction feature, rather than individual supervisor conduct, is the mechanism that allegedly resulted in systematic meal period violations — and that mechanism is common to the entire class.
Uniform Meal Period Standard. The meal period requirements under Wage Order 12 are uniform across all facilities and show units. The same five-hour threshold for the first meal period, the same ten-hour threshold for the second meal period, the same duty-free requirement, and the same premium obligation apply to every class member at every facility. Plaintiffs will argue that these uniform standards create common questions — specifically, whether AMA's auto-deduction policy, combined with its alleged failure to ensure duty-free meal periods and its failure to deploy the Missed Meal Attestation feature at all facilities, resulted in a class-wide pattern of meal period violations.
B. Arguments Against Certification
AMA should argue that, notwithstanding the uniform legal framework provided by Wage Order 12, the actual implementation of meal and rest break practices varied so significantly across AMA's operations that class-wide adjudication would be impracticable and unmanageable. The principal arguments against certification are as follows:
Variation Across Show Units and Facilities. Despite the uniform legal framework, the actual implementation of meal and rest break practices varied significantly across AMA's fourteen show units and seven facilities. Each show unit operated under a different production schedule, with different shooting patterns, different operational rhythms, and different logistical constraints. A studio-based unscripted show at the Studio City facility operated in a fundamentally different manner from a field-based reality competition series filmed at remote locations, which in turn operated differently from live events produced out of the Burbank facility. These operational differences necessarily led to different break experiences for employees in different show units, and the question of whether each employee actually received a compliant break cannot be answered on a class-wide basis.
Supervisor Discretion. Different supervisors — specifically, Unit Production Managers ("UPMs") and Line Producers — exercised different levels of discretion regarding break scheduling and enforcement. Some supervisors were diligent about scheduling breaks and ensuring compliance; others were less so. The variation in supervisor practices means that the class members' break experiences depended not only on the show unit and facility to which they were assigned, but also on the specific supervisor under whom they worked. This level of individualization is inconsistent with class treatment.
Individualized Off-the-Clock Claims. The overtime and off-the-clock claims are particularly individualized. Different employees in different roles — production coordinators, post-production assistants, segment coordinators, production assistants, runners, and others — performed different pre-shift and post-shift tasks, and the amount of time spent on those tasks varied based on the employee's position, the show unit, the specific day's production activities, and the employee's individual work habits. There is no uniform "off-the-clock" policy that can be challenged on a class-wide basis; rather, the off-the-clock allegations depend on the specific tasks performed by each individual employee.
Legal Standard vs. Factual Compliance. Wage Order 12's uniformity applies to the legal standard — it establishes common rules that govern all class members. But the central question in this case is not what the legal standard requires (that is undisputed); the central question is whether AMA complied with the legal standard for each individual class member on each individual workday. That factual question — whether each employee was actually provided a compliant meal period, actually permitted to take a rest period, and actually compensated for all hours worked — necessarily requires individualized inquiry that cannot be resolved through class-wide adjudication.
This distinction between the uniformity of the legal standard and the individuality of the compliance question is the linchpin of AMA's certification defense. We should develop this argument with specificity, drawing on facility-by-facility and show-by-show evidence of the variation in AMA's actual practices.
VI. Recommendations
Based on the foregoing analysis, the defense team should take the following steps in connection with the Wage Order 12 issues identified in this memorandum:
1. Frame the defense around the distinction between legal standards and factual implementation. The legal standard imposed by Wage Order 12 is uniform and common to all class members. AMA does not dispute that Wage Order 12 is the applicable Wage Order, and AMA does not dispute the substantive requirements that Wage Order 12 imposes. What AMA disputes is whether those requirements were violated on a class-wide, systematic basis — and that factual question is inherently individualized. The defense narrative should emphasize that the uniformity of the legal standard does not translate into uniformity of the factual compliance inquiry. Each class member's experience depended on a constellation of individual factors — the specific facility, the specific show unit, the specific supervisor, the specific production schedule, and the specific tasks performed by that employee on each workday. This framing is central to AMA's certification defense and should be developed in all briefing, expert submissions, and oral argument related to the class certification motion.
2. Audit AMA's wage statements to confirm that they correctly identify Wage Order 12 as the applicable Wage Order. California Labor Code Section 226, subdivision (a)(9), requires that each itemized wage statement provided to an employee include the name of the applicable IWC Wage Order. If AMA's wage statements failed to identify the applicable Wage Order, or if they identified the wrong Wage Order, this would constitute an independent violation of Section 226 — separate from and in addition to any inaccuracies in the hours-worked or wages-paid information on the statements. We should request from AMA's payroll department (through Lorraine Okafor, SVP of Human Resources) representative samples of wage statements from each year of the class period, from each facility, and review them for compliance with Section 226(a)(9). If deficiencies are identified, AMA should be advised to correct them prospectively and to evaluate the potential exposure associated with historical non-compliance.
3. Address the five-hour versus six-hour threshold discrepancy. As discussed in Section III.A above, AMA's TimeTrack Pro system is configured to trigger the auto-deduction at six (6) hours rather than five (5) hours. Under Wage Order 12 and California Labor Code Section 512, the meal period obligation arises when an employee's work period exceeds five (5) hours. The system's six-hour configuration means that employees working shifts of between five and six hours were neither receiving an auto-deduction nor being prompted or required to take a meal period. While shifts of this length may be relatively uncommon in AMA's production environment, any instance in which an employee worked a shift exceeding five hours without receiving a meal period (or a meal period premium) represents a violation. This discrepancy should be corrected immediately — AMA should instruct NovaPay Solutions to reconfigure TimeTrack Pro to trigger the auto-deduction at five (5) hours, consistent with the legal requirement. The potential exposure associated with the historical five-hour versus six-hour discrepancy is addressed in greater detail in the separate Auto-Deduction Policy Risk Assessment memorandum.
4. Analyze second meal period compliance separately. For shifts exceeding ten (10) hours — which are common in field production and live events — the second meal period was not subject to the TimeTrack Pro auto-deduction. Instead, employees working shifts of more than ten hours were expected to manually adjust their time entries to reflect the second meal period. This creates a fundamentally different compliance profile for second meal periods than for first meal periods. The first meal period issue is primarily a systems issue (the auto-deduction may or may not have accurately reflected whether a compliant break was taken), while the second meal period issue is primarily a supervisory practices issue (whether supervisors ensured that second meal periods were scheduled and taken during extended shifts). This distinction may support a different certification outcome for second meal period claims — specifically, AMA may argue that second meal period compliance is even more individualized than first meal period compliance, because it depends entirely on the practices of individual supervisors on individual production days, rather than on the operation of a uniform automated system.
5. Evaluate the on-duty meal period exception. If AMA can establish that the nature of certain production work genuinely prevented employees from being fully relieved of duties during meal periods — for example, a segment coordinator monitoring a live broadcast, or a production coordinator managing a time-sensitive location shoot — the on-duty meal period exception could provide a defense to meal period claims for those specific situations. However, the defense is available only if compliant written on-duty meal period agreements were in place: agreements that were signed by the affected employees, that accurately described the nature of the work preventing relief, and that contained an express provision allowing the employee to revoke the agreement in writing at any time. Our preliminary understanding, based on initial conversations with AMA's in-house counsel, is that AMA did not have compliant on-duty meal period agreements in place during the class period. This should be confirmed through a direct inquiry to Lorraine Okafor (SVP, Human Resources) and Celine Arroyo (Director of Production Operations), who would have the most direct knowledge of the company's meal period policies and agreements. If no compliant agreements exist, AMA can