Villalpando v. Exel Direct Inc. (161 F. Supp. 3d 873, 2016)

ORDER RE MOTIONS IN LIMINE

JOSEPH C. SPERO, Chief Magistrate Judge

I. INTRODUCTION

In preparation for a jury trial that commences on May 31, 2016, the parties have filed fifteen motions in limine (“the Motions”). The Court’s rulings on the Motions are set forth below.

II. ANALYSIS

Many of the parties’ motions in limine relate to a relatively small number of highly contentious issues. Therefore, the Court starts its analysis by addressing these issues and then addresses the remaining motions in limine individually.

A. General Legal Standards Governing Motions in Limine

In the Motions, the parties seek exclusion of certain evidence and arguments pursuant to Rules 401, 402 and 403 of the Federal Rules of Evidence. Rule 401 provides that “[e]vidence is relevant if.. .it has any tendency to make a fact more or less probable than it would be without the evidence; and.. .the fact is of consequence in determining the action.” Rule 402 provides that “[irrelevant evidence is not admissible.” Rule 403 gives the trial court discretion to “exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.”

B. Whether the Class Members With Second Drivers Should be Excluded From the Class and Related Issues (Defendants’ MIL Nos. 3 & 5; Plaintiffs’ MIL No. 3)

1. Background

In its April 21, 2016 Order (“April 21 Order”), the Court declined to decertify the Class as to individuals who employed second drivers, concluding that “the legal and factual issues that relate to class members who have used second drivers do not require decertification of the class, but instead can be managed through the creation of a subclass of class members who used a second driver during the class period.” April 21 Order at 19. The Court noted that the Class members who employed second drivers (hereinafter, “Second Driver Subclass”) might be able to recover expenses of both the first and second drivers on the theory — advanced by Plaintiffs at the April 20 hearing — that they constitute a single, unitary “employee” under the California Labor Code. The Court further noted, however, that if it ultimately rejected Plaintiffs’ theory, it might “reconsider the question of whether the Class should be decertified as to the individuals who used second drivers because it does not appear the Plaintiffs have offered sufficient evidence to show liability or damages for these class members if their second drivers are not included.”- Id. Plaintiffs’ “unitary employee” theory and Defendants’ renewed request to decertify as to these class members are addressed in Defendants’ MIL No. 5 (to exclude evidence regarding Second Driver Subclass and to decertify class). The closely related question of whether class members can recover for hours worked, routes driven or expenses incurred by second drivers is addressed in Defendants’ MIL No. 3 (to exclude evidence and argument regarding hours worked, routes driven, breaks denied, and expenses incurred by second drivers). Finally, these questions also have implications for Plaintiffs’ MIL No. 3 (to exclude evidence or argument concerning class members’ alleged entrepreneurial opportunities and business experience).

2. Summary of Arguments

Plaintiffs argue that the class members with second drivers can recover unpaid wages, meal and rest break penalties and expenses not only for the days when they personally drove a truck for Exel but also for the days when the Exel routes were driven by their second drivers, citing California Labor Code section 3357 (“Any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, -is presumed to be an employee”) and 18 (defining “Person” as “any person, association, organization, partnership, business trust, limited liability company, or corporation”). Opposition (Defendants’ MIL No. 3) at 1-2; Opposition (Defendants’ MIL No. 5) at 1. According to Plaintiffs, the plain language of these provisions makes clear that a “person” under the Labor Code is not limited to a natural person. Opposition (Defendants’ MIL No. 3) at 2. Plaintiffs further point to the remedial purpose of the Labor Code, which generally requires that it be construed broadly. Id. Plaintiffs contend their position is supported by the fact that “courts in this Judicial District have certified classes of ‘employees’ bringing claims under the Labor Code that include both individuals and entities.” Id. at 3 (citing Bowerman v. Field Asset Servs., Inc., No. 13-CV-00057-WHO, 2015 WL 1321883, at *1, *11 (N.D.Cal. Mar. 24, 2015); Saravia v. Dynamex, Inc., 310 F.R.D. 412, 424 (N.D.Cal.2015) (Alsup, J.); De Giovanni v. Jani-King Int’l, Inc., 262 F.R.D. 71, 87 (D.Mass.2009)).

Plaintiffs also advance an alternative theory that would allow class members to recover damages incurred by second drivers, namely, that these damages are necessary expenses of the class members under California Labor Code section 2802. Id. Plaintiffs seem to contend that this theory applies not only to the expenses incurred by the second drivers and the chargebacks taken out of class members’ compensation for items attributable to the second drivers but also the uncompensated time of second drivers and the damages associated with their missed meal and rest breaks. See id. In their Opposition to Defendants’ MIL No. 5, though, Plaintiffs don’t mention the meal and rest periods taken by second drivers, arguing that class members with second drivers “should be reimbursed for the out-of-pocket costs of enlisting second drivers to perform routes as an expense under Labor Code section 2802.” Opposition (Defendants’ MIL No. 5) at 4. Plaintiffs cite the testimony of Defendants’ expert that the “market rate” for second drivers’ daily wages is $120-150 per day. Id.

If the Court rejects these arguments,however, Plaintiffs contend the data and analysis .of their expert, Mr. Breshears, allows the damages attributable to second driver work to be excluded from their damages estimate. Id. at 4-5. They point to Breshears’ deposition testimony that he could “break up the data into separate slices, and for those days actually driven by the contractor or those weeks where the contractor worked, and then those weeks that show no activity by the contractor.” Piller Opposition Deck, Ex. 1 (Breshears Dep. at 200). They also point to an “alternative analysis” performed by Breshears, described in a March 11, 2016 declaration that was filed with Plaintiffs’ opposition to Defendants’ combined Daubert/ Decertification motion. See Docket No. 242-4. “According to Plaintiffs, in this alternative analysis, Breshears incorporated the assumptions of Exel’s expert, Dr. Walker, which did not take into account any time worked or miles driven by second drivers.” Opposition (Defendants’ MIL No. 5) at 5 (citing Docket No. 242-4, Breshears Deck, ¶ 10). Plaintiffs also argue that they should not be penalized for Defendants’ failure to keep accurate records, that they can rely on just and reasonable inference to establish their damages and that damages can be reduced, if necessary, based on the proportion of all routes that Dr. Walker estimates were driven by second drivers (39%). Id. at 5-6.

Finally, Plaintiffs argue class members who hired second drivers should not be excluded from the class because some class members used second drivers for only a short period of time (e.g, Alcala used a second driver for six months out of a total of six years with Exel) and decertification as to these class members would be unfair. Id. at 7. Further, in Plaintiffs’ MIL No. 3, Plaintiffs argue that Exel should not be permitted to argue or present evidence that class members had “entrepreneurial opportunities” in connection with the use of second drivers as the prejudice that could result would outweigh any probative value under Rule 403. Plaintiffs’ MIL No. 3 at 1.

Defendants reject Plaintiffs’ “entity employee” theory, arguing that under the Labor Code, an employee is a natural person. Defendants MIL No. 5 at 1. Exel contends the Labor Code “consistently frames employee status in terms of natural persons,” citing provisions in which the words “his or her” are used to refer to the word “employee.” Id. at 2. Exel also points to Wage Order No. 9, in which the term “employee” is defined as “any person employed by an employer” whereas the term “employer” is defined as “any person as defined in Section 18 of the Labor Code, who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person.” Id. at 2 n. 2 (IWC Wage Order 9, §§ 2(F), 2(G) (emphasis added)).

Exel further asserts that the terms “labor” and “wages” refer to work that was personally performed by the employee. Id. at 3 (citing Cal. Labor Code sections 200(a)) (defining “wages” as “all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation”) and 200(b) (defining “labor” as “including labor, work, or service whether rendered or performed under contract, subcontract, partnership, station plan, or other agreement if the labor to be paid for is performed personally by the person demanding payment”) (emphasis in Exel’s brief). Exel contends Plaintiffs’ claims for minimum wage, overtime, payment for all hours worked and unlawful wage deductions all depend on the existence of “wages” and therefore, cannot be based on the labor of the second drivers. Id.

Exel also argues that “the claims for meal and rest pay depend on proving that the employer failed to provide that employee with a meal or rest break during that employee’s workday.” Id. at 4 (citing Cal. Labor Code § 226.7(c)) (“If an employer fails to provide an employee a meal or rest or recovery period in accordance, with a state law..., the employer shall pay the- employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided”); 8 Cal. Code Regs. § 11090, sec. 12 (“Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period”). Exel also argues that the language of section 2802, for reimbursement of employment-related expenses, supports the conclusion that it entitles a class member only to his own expenses and not that of a second driver, requiring employees indemnify the “employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties. ” Id. (emphasis in original). To the extent the UCL and PAGA claims derive from the alleged Labor Code violations, Exel asserts, the same requirement applies to those claims. Id. at 4.

In its trial brief, Exel rejects Plaintiffs’ assertion that courts in this judicial district have “regularly certified classes of ’employees’ bringing claims under the Labor Code that include both individuals and entities,” distinguishing the two cases cited by Plaintiffs that were decided in this District (Bowerman and Saravia) and noting that the third ease cited by Plaintiffs was decided in Massachusetts and the court did not apply California law in that case. Defendants’ Trial Brief at 39 (quoting Plaintiffs’ Opposition to Defendants’ MIL No. 5 at 2). In fact, Exel argues, there is no authority that supports Plaintiffs’ entity employee theory. Id.

Because Plaintiffs’ “entity employee” argument fails, Exel contends, evidence relating to the hours worked, routes driven, breaks denied and expenses incurred by second drivers is irrelevant and prejudicial and should be excluded. Defendants’ MIL No. 3 at 1. Further, Defendants assert, Plaintiffs should be required to “prove up front that the class members personally worked all hours, drove all routes, missed all breaks, paid all expenses', etc., for which they are offering evidence.” Id. In Defendants’ MIL No. 5, they also argue that the Second Driver Subclass must be decertified because common issues do not predominate. Defendants’ MIL No. 5 at 6. This is because each class member with second drivers would have to prove that “he personally worked specified hours, drove routes, missed breaks, or incurred expenses on any given day, and that those are not attributable to his second driver.” Id. at 6.

Even if class members could recover the costs of the second drivers under Plaintiffs’ alternative theory (treating the costs associated with using second drivers as an employee expense under California Labor Code section 2802), Exel argues that this approach also would require individualized inquiries that would predominate. Defendants’ Trial Brief at 40. Exel uses fuel as an example: while Plaintiffs assert that something like fuel is still an out-of-pocket expense of the class member regardless of whether the class member or the second driver drove the truck, Exel contends there is no way to know if this is true because it has never had the opportunity to depose the second drivers to discover whether it is the second driver or the class member who bears the cost of the fuel. Id. Nor is there any evidence that there was a uniform practice as to who pays for fuel when a second driver is used. Id. Moreover, Exel contends, Plaintiffs’ experts “have not prepared any analysis to provide quantitative support for the Plaintiffs’ new theory that class members now make claims for unreimbursed out-of-pocket expenses incurred by second driver payments.” Id. at 41.

Finally, Exel now offers evidence that the Second Driver Subclass — which appeared to be relatively small at the time of the Court’s April 21 Order — includes 164 class members and not the approximately 12 class members the Court believed used second drivers. See Declaration of Landrie Weaver [Docket No. 283] ¶ 4. According to Weaver, these 164 class members employed a total of 468 second drivers. Id. Exel points out that at the April 20 hearing, the Court relied, in part, on the small size of the subclass in support of its conclusion that the individual issues raised by class members with second drivers were manageable and did not require decertification. Id. at 40 n. 16.

3. Discussion

Having considered the arguments of the parties in their motions in limine and trial briefs, and in light of the new evidence offered by Exel indicating that the Second Driver Subclass is significantly larger than the Court previously believed, the Court now reconsiders its previous conclusion that creation of that subclass will adequately address the problems of manageability that are likely to arise in connection with the claims of these individuals. Instead, for the reasons set forth below, the Court concludes that the Class must be partially decertified. Specifically, the Court decertifies the Class as to damages with respect to all class members who are in the Second Driver Subclass. In addition, as to liability, the Court decertifies the Second Driver Subclass as to the Overtime claim only.

First, tíie Court is not persuaded by Plaintiffs’ argument that the Class members who used second drivers may recover damages for hours worked, miles driven and expenses incurred by second drivers on the basis that the term “employee” encompasses entities under the California Labor Code. The Court agrees with Exel that the definitions of “wages” and “labor” under California Labor Code section 200 support the conclusion that employees are natural persons who are entitled to wages only if they personally performed the work at issue. Consequently, the claims for minimum wage and unpaid wages may not be asserted by the Second Driver Subclass for time worked by second drivers. Further, while deductions for second driver expenses were taken directly from the settlement payments of the Second Driver Subclass members, the settlement payments cannot be considered “wages” of those Class members to the extent they were based on the work of the second drivers. The Court also agrees that the language of section 2802, for reimbursement of employee expenses, supports the conclusion that a Second Driver Subclass member can recover only his own expenses. Finally, the Court concludes that the meal and rest break requirements apply only to individual employees. While neither side has pointed to any case law that addresses this question, the Court concludes that the meal and rest break requirements as applied to an entity, as opposed to an individual, simply makes no sense.

Plaintiffs have not cited any authority that points to a contrary conclusion. Neither Bowerman v. Field Asset Servs., Inc., nor Saravia v. Dynamex, Inc., 310 F.R.D. 412, 424 (N.D.Cal.2015) held that an individual could recover wages or expenses owed to another individual on the basis that the individuals constituted a single “entity” employee. In Bowerman, the court certified a class of “persons... [who] personally performed property preservation work” for defendant FAS more than 70 percent of the time. 2015 WL 1321883, at *1 (N.D.Cal. Mar. 24, 2015). The class members were “vendors” — a term the court used to refer to the individuals who owned the businesses rather than the businesses themselves. Id. at *1 n. 2. Although the court acknowledged that some of the vendors hired their own workers while others did not, see id. at *12, nothing in the court’s decision suggested that the class members would be able to recover damages for work performed by individuals who were not members of the class. In Saravia, the court granted conditional certification under the FLSA to a class of delivery drivers who alleged that they were misclassified. 310 F.R.D. at 424. The court cited the lenient standard applied at the conditional certification stage case. Id. It simply did not address the issue before the Court here. Nor did the court in De Giovanni v. Jani-King Int’l, Inc. address that issue (under Massachusetts or California law). Therefore, the Court finds that the cases cited by Plaintiffs do not support their position.

Having found that Second Driver Subclass members may not recover for the alleged Labor Code violations based on the work performed or expenses incurred by the second drivers, the Court revisits the question of whether Plaintiffs’ claims meet the predominance requirement of Rule 23. The challenge appears to be determining as to these class members what proportion of the driving was personally performed by the class member and what proportion of the driving was done by second drivers. From this information a jury could potentially determine, at least by reasonable inference, the amount of time Second Driver Subclass members may have spent in morning meetings, the number of meal and rest breaks they may -have missed, the deductions taken from their “wages” and their reimbursable expenses, all of which would need to be determined by the jury to come up with an overall damages figure for the Second Driver Subclass. Yet Plaintiffs do not point to any evidence or expert opinion that will allow the jury to determine for the Second Driver Subclass how much time the class members drove. Although Plaintiffs contend the iDirect data will allow them to identify who actually drove specific routes, that data only covers a subset of drivers. In addition, even assuming Mr. Breshears’ recent declaration was timely, it does not solve the problem because he has not performed an analysis that separates out the Second Driver Subclass from the remaining Class members in a manner that would permit the jury to draw inferences as to the amount of time and number of days these class members drove for the purposes of determining liability on the overtime claim or damages for all of the claims.

Nor is the Court persuaded by Plaintiffs’ assertion that this problem can be solved by treating the cost of the second drivers to the Second Driver Subclass as a reimbursable expense under California Labor Code section 2802. Assuming section 2802 allows for such a recovery, Plaintiffs have not demonstrated that there was any common practice as to how second drivers are paid that would allow a jury to address this question for the Second Driver Subclass as a whole. Nor have Plaintiffs demonstrated that they can establish the expenses of the second drivers by common proof. In short, the Court concludes that individual issues relating to how much Second Driver Subclass members personally drove and what expenses they personally incurred will overwhelm the common issues, making the determination of damages by the jury unmanageable for this Subclass as to all of Plaintiffs’ claims. Similarly, because liability on the overtime claim for the Second Driver Subclass will require the jury to determine whether the Second Driver Subclass members drove more than 40 hours in a week and eight hours in a day — and because Plaintiffs have not demonstrated that this question can be decided on the basis of common proof — the Court concludes that the Second Driver Subclass must be decertified as to liability on the overtime claim.

On the other hand, the Court concludes that the problems of common proof discussed above do not apply to proving liability on the remaining - claims, apart from the overtime claim. These claims do not depend on the amount of time the Second Driver Subclass members drove for Exel, the precise number of meal and/or rest breaks missed, or the amount of any reimbursable expenses or deductions. Rather, as to liability the jury need only decide that all Second Driver Subclass members’ rights were violated. Plaintiffs intend to prove liability based on Exel’s policies and procedures and all Class members, including the Second Driver Subclass members, have personally driven for Exel. Regardless of what the jury concludes, this approach to proving liability is manageable. Therefore, the Second Driver Subclass will not be decertified as to liability on Plaintiffs’ claims for minimum wages, pay for all hours worked, missed meal periods and rest periods, deductions from wages and reimbursement of expenses.

In connection with the partial decertification of the Class, the Court also concludes that the Class should be divided into two subclasses: the Second Driver Subclass and another subclass that consists of all of the remaining Class members, that is, the Class members who did not use second drivers at any time during the class period (the “Single Driver Subclass”). In creating their revised verdict form the parties should ask the jury to determine liability separately for each of the subclasses as to all claims except for the overtime claim, which should address only the Single Driver Subclass. The damages verdict form should address only the Single Driver subclass as the Second Driver Subclass is decertified as to damages.

Based on the foregoing analysis, the Court GRANTS Defendants’ MIL No. 3 to the extent that Plaintiffs will not be permitted to introduce evidence relating to the hours worked, routes driven, breaks missed or expenses incurred by second drivers. On the other hand, the Court DENIES Defendants’ MIL No. 3 to the extent Exel asserts Plaintiffs must “prove up front” that the class members “personally worked all hours”, drove all routes, missed all breaks, paid all expenses, etc. for which they are offering evidence, as this issue is now moot. The Court also GRANTS Plaintiffs’ MIL No. 3 as to evidence relating to entrepreneurial activities on the basis that such evidence is no longer relevant to Plaintiffs’ claims, though the Court may permit Exel to introduce such evidence at trial if it can make a specific showing to the Court that the evidence at issue is relevant to Plaintiffs’ claims and/or Exel’s defenses. The Court also GRANTS in part and DENIES in part Defendants’ MIL No. 5 by partially decertifying the class as set forth above.

C. Whether Exel Should Be Permitted • to Argue and Present Evidence that it Paid Enhanced Compensation to Cover Morning Meeting Time, Expenses and Meal and Rest Breaks (Plaintiffs’ MIL No. 1)

1. Background

In the parties’ Proposed Final Pretrial Order, Exel lists as one of its defenses that “Plaintiffs cannot recover for reimbursement of expenses, because Exel already reimbursed them for expenses, and Exel is entitled to a set-off.” Proposed Final Pretrial Order at 4. It appears that Exel intends to assert analogous defenses as to Plaintiffs’ claims for minimum wage, unpaid wages and deductions from wages. In particular, with respect to the minimum wage and unpaid wages claims, Exel contends in its Opposition to Plaintiffs’ MIL No. 1 that “[t]he stop rate was intended to cover all steps necessary to perform delivery services, and class members knew this.” Because the morning meetings were of “like character” to the deliveries drivers performed, Exel argues, this time was included in the stop rate. Opposition (Plaintiffs’ MIL No. 1) at 7; see also Defendants’ Proposed Jury Instruction No.4 (Non-Payment of Minimum Wage — Essential Factual Elements) (citing Balasanyan v. Nordstrom, Inc., 913 F.Supp.2d 1001, 1006 (S.D.Cal.2012)).

With respect to the allegedly unlawful deductions, Exel appears to advance a similar defense, including in its proposed jury instruction the following language: “Exel claims that it did not deduct from wages but rather from weekly payments that included advances on payments of expenses, and that were recovering amounts already expended by Exel on the class members’ account....” Defendants’ Proposed Jury Instruction No. 23. In the Proposed Final Pretrial Order, the parties also include the following “factual issue” to be tried for the “Deductions From Wages” claim: “Does the law permit Exel to argue that its settlement payments cover expenses as well as wages, and if so, did they?” Proposed Final Pretrial Order at 7.

It does not appear that Exel is asserting that the stop rate included compensation for rest breaks but Exel does contend that to the extent Plaintiffs are seeking to recover minimum wages for rest breaks that class members have taken (as opposed to premium pay for breaks denied), the claim has been waived. See Exel’s Brief Explanation of Position re: Instruction No. 18.

2. Summary of Arguments

In their MIL No. 1, Plaintiffs argue that “Exel should be precluded from introducing or soliciting any testimony or argument suggesting, directly or indirectly, that its independent contractor compensation pay structure included payments for expenses, rest periods, overtime or minimum wage.” Plaintiffs’ MIL No. 1 at 1. Plaintiffs first point to Estrada v. FedEx Ground Package Sys., Inc., 154 Cal. App.4th 1, 15, 64 Cal.Rptr.3d 327 (2007) and Smith v. Cardinal Logistics Mgmt. Corp., 2009 WL 2588879, at *3 (N.D.Cal. Aug. 19, 2009) (Conti, J.), arguing that in these cases the courts held “under strikingly similar circumstances that a nearly identical compensation scheme as Exel’s here does not cover expense reimbursements.” Id. at 2. Plaintiffs contend the Court should following the reasoning and holdings in those cases to bar Exel from asserting the same defense here. Id. at 2-3.

Plaintiffs further contend that Exel cannot rely on its “lump sum” defense because employers who use such an approach to meet their obligations under Labor Code § 2802 must “actually apportion the expense reimbursements from the wages.” Id. at 3 (citing Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554, 573, 67 Cal.Rptr.3d 468, 169 P.3d 889 (2007)). According to Plaintiffs, Exel has admitted that the alleged expense reimbursements are not apportioned. Therefore, Plaintiffs ask the Court to hold, as a matter of law, that Exel has not satisfied Gattuso and may not assert this defense. Id. Plaintiffs also contend that Exel cannot argue both that expenses are variable (and therefore may not be handled on a class-wide basis) and that it pays a flat rate to reimburse expenses as these two arguments are contradictory. Id. at 4. Plaintiffs also object to Exel’s assertion that the stop rate was “sufficient” to cover employee expenses, arguing that this term is “subjective and meaningless.” Id. at 5.

Plaintiffs argue that Exel should also be precluded from arguing that the deductions taken from Plaintiffs’ settlement payments are covered by Exel’s compensation structure, citing Smith v. Cardinal Logistics. Id. Similarly, Plaintiffs contend Exel should not be permitted to claim that its compensation structure covers time spent taking rest breaks. Id. at 5-6 (citing Bluford v. Safeway Stores, Inc., 216 Cal. App.4th 864, 872, 157 Cal.Rptr.3d 212 (2013)). Nor should it be permitted to argue that the compensation structure covers morning meetings. Id. at 6 (citing Gonzales v. Downtown Motors, LP, 215 Cal.App.4th 314, 323 (2005); Armenta v. Osmose, Inc., 135 Cal.App.4th 314, 323, 37 Cal.Rptr.3d 460 (2005)).

Plaintiffs contend Exel’s arguments related to their allegedly “enhanced” compensation scheme are simply intended to appeal to the jury’s emotions and will be prejudicial as well as confusing to the jury. Id. at 6-7.

Exel opposes Plaintiffs’ MIL No. 1 on the basis that it is a summary judgment motion disguised as a motion in limine and argues that it should not be permitted. Opposition (Plaintiffs’ MIL No. 1) at 2-3. Exel further contends Estrada and Smith v. Cardinal Logistics do not support Plaintiffs’ position because those cases were decided on their specific facts and not as a matter of law. Exel also rejects Plaintiffs’ assertion that Exel’s witnesses admit that the alleged reimbursement included in the stop rate is not apportioned. Id. at 5-6. This is a question of fact, according to Exel, and Exel plans to offer evidence that meets the requirements of Gattuso. Id. at 5-6. In particular, Exel plans to offer evidence showing that the rates of compensation were sufficient to fully reimburse drivers for all their necessary expenses. Id. at 6. According to Exel, it will also “offer evidence of the cost estimates used to construct the stop rate — estimates that are actually higher than those proposed by Plaintiffs’ expert Mr. Curtis, as he admits”. Id. (emphasis in original). Exel asserts that “[t]hese estimates, viewed in context of Exel’s revenue projections across estimated numbers of stops, provide the basis to easily calculate the ‘apportionment’ between wages and expense reimbursement. ...” Id. (citing Gattuso, 42 Cal.4th at 573, 67 Cal.Rptr.3d 468, 169 P.3d 889). Exel notes that under Gattuso, a flat payment can cover variable expenses such as mileage. Id.

As discussed above, Exel also argues that the morning meeting time is covered in the stop rate because it is related to the Plaintiffs’ delivery work, and that any claim for minimum wages for rest breaks taken has been waived. Id. at 7.

3. Discussion

a. Reimbursement and Deduction Claims

Exel’s defense to Plaintiffs’ reimbursement and deduction claims is based on Gattuso v. Harte-Hanks, 42 Cal.4th 554, 568, 67 Cal.Rptr.3d 468, 169 P.3d 889 (2007). In that case, the plaintiffs were sales representatives who used their own vehicles in the performance of their jobs and sought reimbursement from their employer under California Labor Code section 2802 for the automobile expenses they actually and necessarily incurred in performing their employment tasks. 42 Cal.4th at 567, 67 Cal.Rptr.3d 468, 169 P.3d 889. The defendant did not dispute that it was required to reimburse its employees for their necessarily incurred expenses under section 2802. Id. The only dispute was whether the employer could meet its obligations “through an- increase in overall compensation rather than through a separately identified reimbursement payment.” Id. at 568, 67 Cal.Rptr.3d 468, 169 P.3d 889. The Court found that it could, reasoning that “[njothing in the language of section 2802 restricts the methods that an employer may use to calculate reimbursement, and we are required to construe section 2802 in a manner that produces a workable and reasonable result.” Thus, for example, “[i]f. ..an employee drives exactly the same route day after day, so that the mileage driven varies little if at all from one day to the next, it would be unreasonable to require a meticulous record of actual miles driven. In that situation, an employer should be able to dispense with actual mileage reports and calculate a lump-sum payment based on the employer’s knowledge of the distances that an employee must drive to perform the duties of the employee’s job.” Id. at 570-71, 67 Cal.Rptr.3d 468, 169 P.3d 889.

The Gattuso court also found, however, that if an employer uses a lump sum payment, the “employee must be permitted to challenge the amount of a lump-sum payment as being insufficient under section 2802,” by comparing the amount of the lump sum to the employee’s actual expenses or to an estimate based on mileage. Id. at 571, 67 Cal.Rptr.3d 468, 169 P.3d 889. Thus, while the employer may reimburse employees under section 2802 by paying an enhanced salary, the employer must:

provide some method or formula to identify the amount of the combined employee compensation payment that is intended to provide expense reimbursement. Using that method or formula, the employee (and also officials charged with enforcement of state and federal wage laws) then can readily determine whether the employer has discharged all of its legal obligations as to both wages and business expense reimbursement. Although section 2802 does not expressly require the employer to provide an apportionment method, it is essential that employees and officials charged with enforcing the labor laws be able to differentiate between wages and expense reimbursements. Because providing an apportionment method is a practical necessity for effective enforcement of section 2802’s reimbursement provisions, it is implicit in the statutory scheme.

Id. at 573, 67 Cal.Rptr.3d 468, 169 P.3d 889 (emphasis added); see also id. at 574, 67 Cal.Rptr.3d 468, 169 P.3d 889 (“As we have explained, an employer that uses salary and/or commission increases to discharge its reimbursement obligation must also communicate to its employees the method or basis for apportioning any increases in compensation between compensation for labor performed and business expense reimbursement. Such a requirement, as noted, is necessary for effective enforcement of section 2802’s reimbursement provisions and, thus, implicit in the statutory scheme”).

In Smith v. Cardinal Logistics, Judge Conti addressed the apportionment requirement under circumstances that appear to be similar to the facts of this case. There, the plaintiffs were delivery drivers who were hired by defendant Cardinal as independent contractors and paid based on the number of deliveries they completed. 2009 WL 2588879, at *1 (N.D.Cal. Aug. 19, 2009). The drivers asserted they were misclassified and sought to recover necessarily incurred expenses under Labor Code section 2802. Id. at *2. Before they were hired, Cardinal provided drivers with “Worksheets that detailed a driver’s estimated gross revenue or earnings, estimated operating expenses or equipment charges that would be deducted from gross revenue, and estimated net revenue or earnings.” Id. at *1. In addition, after they began driving for Cardinal the drivers received a weekly “Settlement Sheet” from Cardinal listing their taxable earnings (based on the number of deliveries they performed) and certain deductions. Id. Cardinal sought summary judgment that it met its obligations under section 2802 “because based on the Earnings Worksheets and the Settlement Sheets, the drivers can identify the portion of compensation attributable to expense reimbursement, and they have been fully reimbursed for their necessary expenses.” Id. at *3. The Court disagreed, however. Id.

Judge Conti found not only that there were fact questions as to whether the rates paid were “sufficient to fully reimburse drivers for all necessary expenses.” Id. at *4. He also concluded, as a matter of law, that Cardinal’s “compensation system does not satisfy the test for expense reimbursement established by the California Supreme Court in Gattuso.” Id. He reasoned as follows:

Under Cardinal’s system, there was no up-front, lump-sum payment that included a means of identifying the amount being paid for labor performed and the amount being paid as reimbursement for business expenses. Instead, the Earnings Worksheets merely provided the drivers with an estimate of rates per delivery and likely expenses. See Earnings Worksheet Class A Daycab; Earnings Worksheet Reno, NV; Earnings Worksheet San Francisco, CA. The only payment the drivers received occurred after expenses had already been deducted. See Figueroa Settlement Sheet; Rady Settlement Sheet; Smith Settlement Sheet. Cardinal wants the Court to treat these deductions as functionally equivalent to reimbursements. This system of compensation is too far removed from what the California Supreme Court had in mind. The Court will not treat it as equivalent to the lump-sum payment method endorsed by the California Supreme Court in Gattuso.

Id.

Here, Exel plans to show that it paid a lump sum to reimburse employees for work-related expenses and similarly, that the deductions listed on the settlement statements given to drivers were simply to avoid double-counting for items that were also'covered by these lump sum payment. Exel does not dispute that the Gattuso apportionment requirement applies to both types of expenses, whether Plaintiffs seek reimbursement or object to deductions. The evidence it plans to offer to show the apportionment requirement is satisfied, however, appears to be deficient on its face. As discussed above, Exel intends to offer evidence of the estimates that were used to come up with the stop rates, which it contends — when viewed in context of Exel’s revenue projections across estimated number of stops — will allow for an “eas[y] calculation” of the apportionment between wages and expense reimbursement. Gattuso is clear, however, that a lump sum payment only satisfies an employer’s obligations if the employee is given sufficient information to determine what part of his salary constituted “wages” and what part was for the reimbursement of expenses. There is no authority to suggest that this obligation is satisfied if that information only becomes available through litigation, nor would such a rule comport with the reasoning of Gattuso. Whether the jury will be able to easily calculate the amount of the lump sum payments using information that was not available to Exel drivers prior to this litigation (such as the evidence Exel plans to offer showing the estimates it allegedly used to come up with its stop rates) is not the issue.

As Exel has not pointed to any evidence that Class members could have determined that either their unreimbursed expenses or the expenses that were later deducted from their pay were actually included in their settlement pay, it appears that Exel will be unable to prevail on this defense, as a matter of law. Therefore, unless Exel can make a showing that it will be able to offer evidence from which a jury could reasonably conclude that the apportionment requirement is met, Exel will not be permitted to introduce evidence that the settlement payments were enhanced to include unreimbursed expenses or expenses for which deductions were later taken.

b. Morning Meetings (Minimum Wage and Unpaid Wages Claims)

Plaintiffs also ask the Court to exclude evidence and arguments by Exel that time spent in morning meetings was covered by the piece rate that was paid to drivers because that time was related to the drivers’ delivery work. Plaintiffs rely on the rule announced in Armenia v. Osmose that California’s minimum wage law, Labor Code section 1194, requires that employees be paid at least minimum wage for each hour worked and that the law is violated where an employer pays only for “productive time,” even if the average pay for all “productive” and “nonproductive' time” combined meets or exceeds the minimum wage rate. 135 Cal.App.4th 314, 324, 37 Cal.Rptr.3d 460 (2005). In that case, the employees were utility pole workers who were paid only for time when they were actually at work sites and not for time spent driving in the company vehicle between sites, even though the driving time was frequently used for “safety meetings, planning the day’s work, training, and reviewing maps.” 135 Cal.App.4th at 318, 37 Cal.Rptr.3d 460. In Gonzalez v. Downtown LA Motors, LP, the court found that the rule in Armenta also applied to piece workers. 215 Cal.App.4th 36, 49, 155 Cal. Rptr.3d 18 (2013). In that case, the court held that a class of automatic service technicians who were paid on a piece-rate basis for repair work were entitled to separate hourly compensation for time spent waiting for repair work or performing other non-repair tasks directed by the employer during their work shifts regardless of whether their average compensation for all hours work fell below the minimum wage. Id. at 40, 155 Cal.Rptr.3d 18.

Exel attempts to avoid the Armenta rule by arguing that the stop rate was intended to cover “all steps necessary to perform delivery services, and class members knew this.” The relevance of Class members’ alleged knowledge is addressed in connection with Plaintiffs’ MIL No. 2. The Court addresses here whether there is any basis in California law for Exel to contend that the activities that occur before a driver leaves the warehouse are adequately compensated under California’s minimum wage law.

Exel relies on Balasanyan v. Nordstrom, Inc., 913 F.Supp.2d 1001, 1006 (S.D.Cal.2012), in support of its assertion that it can meet its minimum wage obligation for the unpaid pre-trip time by averaging the piece rate paid over all hours worked. That case, however, does not support Exel’s position. In Balasanyan, the plaintiffs were salespeople who were paid commissions only unless the total amount of their commissions for a given pay period, when averaged across all “Selling Time,” fell below the minimum wage, in which case the employees received the minimum wage instead. 913 F.Supp.2d at 1002-03. The “Selling Time” included not only time actually on the store floor serving customers but also “30 minutes of daily stocking assignments as well as up to 40 minutes of pre-opening and post-closing time.” Id. at 1002. The plaintiffs argued that this scheme violated the minimum wage law because commission could only be used to compensate them for “commission-earning activities” and therefore, they should have been compensated separately for the pre-opening, post-closing and stocking time, when they couldn’t make sales that would earn commissions. Id. at 1003.

The court in Balasanyan agreed with the plaintiffs, finding that Armenta precluded the averaging approach used by Nordstrom and required that “compensation must be directly tied to the activity being done, whether it is selling on commission or preparing to sell on commission.” Id. at 1006. The court implied that preparing to sell on commission was only indirectly tied to the commission payment and therefore did not satisfy Armenta. The court went on to reject Nordstrom’s argument that “[cjompensating employees via commission for [time spent in connection with sales, including facilitating future sales] is... appropriate because those activities are related to the Plaintiffs’ ability to generate profits.” Id. at 1007. It noted that the cases cited by Nordstrom were not on point because they did not involve pay averaging. Id. The court further noted that this argument had been expressly rejected, citing two case decided in federal district courts applying California law in which courts held that employers violated California minimum wage law when they failed to pay workers for activities that were “essential” or “integral and necessary” to the work that was compensated. Id. at 1007-08 (citing Ontiveros v. Zamora, 2009 WL 425962 (E.D.Cal.2009) and Cardenas v. McLane FoodServs., Inc., 796 F.Supp.2d 1246, 1249-53 (C.D.Cal.2011)).

For the reasons stated in Balasanyan, the Court rejects Exel’s assertion that the unpaid morning meetings and other activities are “directly related” to the actual deliveries for which Class members are paid and therefore that averaging of the piece rate payments is permitted. As a matter of law, Class members in this case, as in Balasanyan, cannot make deliveries during this time and therefore, cannot directly earn compensation under the piece rate scheme used by Exel. As a consequence, the averaging that is barred under Armenia is also barred here. Neither Balasanyan nor any other case the Court has found supports Exel’s assertion that it may establish compliance with California’s minimum wage law by showing that Plaintiffs’ average wages for all hours worked (including drivers’ pre-trip work in the morning) is at or above the minimum wage rate and that the work was “directly related” to deliveries. Exel may not present such an argument at trial and any evidence that is only relevant to that defense will be excluded.

c. Rest Periods

Plaintiffs also ask the Court to hold, that Exel may not argue that its pay structure compensates Class members for rest breaks actually taken because such pay must be separately compensated. Plaintiffs are correct that pay for rest periods taken by employees must be separate from piece-rate compensation and cannot be satisfied by averaging. See Bluford v. Safeway Stores, Inc., 216 Cal.App.4th 864, 872, 157 Cal.Rptr.3d 212 (2013) (“a piece-rate compensation formula that does not compensate separately for rest periods does not comply with California minimum wage law”). Moreover, Exel concedes that it “didn’t separately pay minimum wage for rest periods.” Defendants’ Opposition to Plaintiffs’ MIL No. 1 at 7. Therefore, the Court GRANTS Plaintiffs’ MIL No. 1 to the extent Plaintiffs seek to preclude Exel from arguing that it compensated Class members for rest breaks taken in its settlement payments.

D. Whether Exel Should be Precluded from Arguing or Presenting Evidence that Plaintiffs Waived their Rights under the California Labor Code by Signing the Independent Truckman’s Agreement (“ITA”) or the Equipment Lease Agreement (“ELA”) (Plaintiffs’ MIL No. 2)

1. Summary of Arguments

Plaintiffs ask the Court to “preclude Defendants’ witnesses testifying, and Defense counsel from referencing, arguing, soliciting testimony, or submitting documentary evidence that Class Members agreed to relinquish their rights under the Labor Code, by contract or otherwise.” Plaintiffs’ MIL No. 2 át 1. Because the protections afforded by the California Labor Code may not be waived, they contend, such evidence could only be introduced to suggest to the jury an improper basis for rejecting Plaintiffs’ claims. Id.

Exel does not dispute that the protections of the California Labor Code cannot be waived by contract and state that it has “no intention of arguing that Plaintiffs waived rights that the Labor Code makes unwaivable.” Opposition (Plaintiffs’ MIL No. 2) at 2. Nonetheless, it contends, it must be allowed to argue that Plaintiffs “agreed to particular methodologies for fulfillment of their Labor Code rights.” Id. For example, it contends, it should be allowed to point to the compensation scheme established under the ITA and ELA to show that Plaintiffs agreed to be reimbursed for their expenses and for their morning meeting time in the manner specified under these agreements and that Exel’s scheme was in compliance with the Labor Code. Id. at 4. Exel further asserts that “because Plaintiffs have a claim under the Unfair Competition Law, Exel’s waiver, estoppel, and laches arguments apply to that claim” and “[ujnless the Court decides to bifurcate the UCL claim..., Exel has a right to put on evidence relating to these defenses, even if the Court will ultimately be the fact-finder.” Id. at 2. Exel also argues that Plaintiffs’ motion in limine is too broad and-will result in the exclusion of relevant evidence. Id.

2. Discussion

The parties do not dispute that the claims Plaintiffs assert under the California Labor Code are based on rights that cannot be waived by the agreement of the parties, and the Court agrees. See, e.g., Gentry v. Superior Court, 42 Cal.4th 443, 455, 64 Cal.Rptr.3d 773, 165 P.3d 556 (2007), abrogated on other grounds (“By its terms, the rights to the legal minimum wage and legal overtime compensation conferred by the statute are unwaivable.”); Cal. Lab. Code § 2804 (providing that any agreement made by an employee to waive his or her right to expense reimbursement is null and void); Cal. Lab. Code § 206.5 (providing that employers and employees may not enter into agreements that waive the employee’s right to receive wages). Consequently, Exel will not be permitted to argue to the jury that the ITA and/or ELA gave rise to a waiver of any of Plaintiffs’ claims.

On the other hand, to the extent this evidence may be relevant to Exel’s defenses on the Labor Code claims — and also may be necessary for the jury to understand the nature of Plaintiffs’ claims — the Court does not preclude the introduction into evidence of the ITA and the ELA. With proper instruction, this evidence need not be so prejudicial as to warrant a blanket exclusion. Exel is incorrect, however, as to its assertion that it has a “right” to put on evidence relating to the equitable defenses of estoppel, waiver and laches that it intends to assert on Plaintiffs’ UCL claim. The Court has already decided — and the parties agreed — that the UCL claim is to be tried to the Court after the jury trial has concluded. Evidence that relates only to Exel’s equitable defenses on the UCL claim may not be presented to the jury, as such evidence is not relevant to the issues the jury is being asked to decide, will be confusing (to the extent the Labor Code rights cannot be waived), and is likely to be highly prejudicial.

Therefore, Plaintiffs’ MIL No. 2 is GRANTED in part and DENIED in part as stated above.

E. Whether Exel Should be Precluded from Arguing or Presenting Evidence Regarding the Propriety of Class Certification (“Plaintiffs’ MIL No. 4”)

1. Summary of Arguments

Plaintiffs ask the Court to “preclude Defendants’ witnesses from testifying, referencing, and defense counsel- from soliciting testimony, arguing, mentioning in testimony, questions or comments or submitting documentary evidence regarding the propriety of class certification in this case.” Plaintiffs’ MIL No. 4 at 1. Plaintiffs contend the propriety of class certification is now the “law of the case” and that permitting Exel to introduce evidence pertaining to class certification, such as evidence that Plaintiffs are not similarly situated, would be unduly prejudicial and confusing to the jury. Id. at 2.

Exel contends this motion in limine should be denied because it is vague and overbroad and does not identify the specific evidence Plaintiffs seek to exclude. Opposition (Plaintiffs MIL No. 4) at 2. Exel agrees that it would not be appropriate to argue to the jury that the class should be decertified. Id. at 3. It contends, however, that it must be allowed to offer evidence on damages and liability that turn on individualized issues.

2. Discussion

There is no question (and Exel does not dispute) that Exel may not argue to the jury that the Class should not have been certified. The Court declines, however, to rule generally that evidence of variation among class members or relating to individual class members is impermissible as Exel, as a general matter, is entitled to present such evidence as a defense to both liability and damages. Therefore, Plaintiffs’ MIL No. 4 is GRANTED in part and DENIED in part as stated above.

F. Motions in Limine Relating to the Types of Evidence and Testimony Plaintiffs May Use to Prove their Claims (Plaintiffs’ MIL No. 5 and Defendants’ MIL Nos. 2, 6 & 7) 1. Background

In the Court’s April 21 Order, it addressed whether Plaintiffs would be permitted to rely on representative evidence, estimates and sampling under Mt. Clemens to prove their claims on the basis of “reasonable inference.” The Court concluded that they could, finding that the paper records produced by Exel were inadequate and that Exel’s duty to keep accurate records applied not only to hours worked but also to expenses. April 21 Order at 15-17. It further concluded that Plaintiffs could use estimates to establish damages on its claim for employee expenses under California Labor Code section 2802 and that they are not required to prove their expenses through actual receipts. Id. at 31-32. In the same Order, the Court rejected both parties’ Daubert challenges, finding that Plaintiffs’ damages experts and Defendants’ rebuttal expert satisfied the requirements of Rule 702 of the Federal Rules of Evidence and that the parties’ challenges to these experts’ methodologies and conclusions could be addressed through cross-examination at trial. Id. at 33-34 (Curtis), 35-38 (Breshears) & 39-41 (Walker).

2. Summary of Arguments

a. Plaintiffs’ MIL No. 5

In their MIL No. 5, Plaintiffs ask the Court to “preclude Defendants from presenting testimony, other evidence or argument suggesting that Plaintiffs cannot demonstrate class liability or damages by estimates, averaging, extrapolation, or other reasonable inference, or that Plaintiffs’ recovery should be reduced because it is possible they could have proved damages more precisely with additional data or individualized inquiry.” Plaintiffs’ MIL No. 5 at 1. Defendants respond that this motion in limine should be denied because it does not identify the specific evidence Plaintiffs seek to exclude. Opposition (Plaintiffs’ MIL No. 5) at 4. Exel expresses concern that if the Court were to grant this motion, relevant evidence, such as Dr. Walker’s testimony challenging the reliability of Plaintiffs’ estimates, would be excluded. Id.

b. Defendants’ MIL No. 2

In Defendants MIL No. 2, Exel asks the Court to “bar[] Plaintiffs, their counsel, and any witness Plaintiffs may call or examine, from making any reference to, commenting about, introducing testimony, evidence or documents, or presenting any argument in an effort to show Plaintiffs’ allegedly unreimbursed expenses by Plaintiffs, class members, or Plaintiffs’ experts, except to the extent those expenses are supported by contemporaneous receipts or other documentation that was actually produced in discovery in this case.” Defendants’ MIL No. 2, Notice of Motion. In this motion in limine, Exel repeats the arguments it made in its combined Dau-. heri/Decertification Motion. Plaintiffs oppose the motion on the basis that Exel is attempting to reargue an issue that the Court already decided. Opposition (Defendants’ MIL No. 2).

c. Defendants’ MIL No. 6

In Defendants’ MIL No. 6, Defendants argue that the damages estimates of Plaintiffs’ experts, Breshears and Curtis, should be excluded because actual records exist and Breshears and Curtis have relied on “a small subset of actual records to extrapolate class-wide damages for unpaid employee expenses, overtime pay, and meal and rest period premiums.” Defendants’ MIL No. 6 at 3-4 & Notice of Motion. According to Exel, the paper driver daily logs are “extremely accurate.” Id. at 5 (citing Capotosto Dep. at 70-73). At a minimum, Exel contends, the Court should hold a hearing on the adequacy of the paper records under Rule 104 of the Federal Rules of Evidence and make a finding on this question. Id. at 4. Defendants further assert that because the paper records were adequate, Mt. Clemens does not apply to Plaintiffs’ claims and Plaintiffs may not rely on estimates, representative evidence or sampling. Id. at 4-6. Because the estimates of Curtis and Breshears will result in prejudice to' Exel under Rule 403, that evidence should be excluded, Exel contends. Id. at 7. If the Court permits these experts to testify, Exel asks that the jury be instructed that their estimates have no bearing on liability. Id.

Plaintiffs oppose Defendants’ MIL No. 6 on the grounds that the Court has already ruled on these issues. Opposition (Defendants’ MIL No. 6) at 1-3. Moreover, it asserts, the paper records are inadequate and the deposition testimony offered by Exel of Henry Capotosto to show that they are complete and accurate relates only to drivers’ logs, which represent only a very small percentage of Exel routes. Id. at 4-5. Plaintiffs argue that Exel still has not shown that it maintained complete and adequate records and that as a consequence Plaintiffs must be permitted to prove their damages by “just and reasonable inference.” Id. at 5-6.

d.Defendants’ MIL No. 7

In its MIL No. 7, Exel asks the Court to preclude Plaintiffs’ expert witness Breshears from testifying as to four specific estimates that they contend are arbitrary: 1) the miles driven by class members, (where classwide evidence is absent); 2) the number of hours and days class members worked (where classwide evidence is absent); 3) the class members’ regular hourly rate; and 4) the average length of morning meetings. Defendants’ MIL No. 7 at 1. Exel repeats the challenges to these estimates it raised in its Combined Daubert Decertification motion and argues that while Plaintiffs’ counsel can argue to the jury as to these amounts, Breshears should not be permitted to offer them as “expert” conclusions. Plaintiffs argue that Exel is attempting to reargue its Daubert motion and that the Court has already rejected Exel’s position.

3. Discussion

All of the issues addressed in the motions in limine discussed above were decided in the Court’s April 21 Order. For the reasons stated in that Order: 1) the Court GRANTS Plaintiffs’ MIL No. 5 to the extent Plaintiffs seek to preclude Exel from arguing at trial that Plaintiffs may not prove their claims based on reasonable inference, estimates and representative testimony. In particular, Exel may not argue or seek to elicit testimony that the methodology of Plaintiffs’ experts was unreasonable because they did not use actual receipts or rely on the paper records that the Court has found were inadequate. On the other hand, Exel is not prohibited from introducing the content of the paper records in order to show that the inferences Plaintiffs’ experts have drawn are unreasonable; 2) The Court DENIES Defendants’ MIL Nos. 2, 6 and 7.

The Court also rejects Exel’s request to hold an evidentiary hearing regarding the adequacy of the paper records that it produced under Rule 104 of the Federal Rules of Evidence, as requested in Defendants’ MIL No. 6. The Court recognizes the importance of this question, given that the applicability of the Mt. Clemens rule to some of. Plaintiffs’ claims turns on the Court’s determination of whether Exel maintained adequate records. A review of the evidence offered by Exel in support of its motion in limine, however, persuades the Court that the conclusions stated in the April 21 Order are correct. As a preliminary matter, Exel challenges the Court’s conclusion that it is the employer who bears the burden of demonstrating that it has maintained adequate records. See Defendants’ MIL No. 6 at 1. Instead, Exel argues that the employees must demonstrate that an employers’ records are inadequate before they will be entitled to prove their claims by “just and reasonable inference,” citing Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946). Mt. Clemens says no such thing and in fact, does not appear to address the situation here, where there is a dispute as to the adequacy of the records produced.

As the Court noted in its previous order, it is the emp