GARY BATZE et al., Plaintiffs and Appellants, v. SAFEWAY, INC., et al., Defendants and Respondents.
No. B258732
Court of Appeal, Second District, Division Four, California
Apr. 4, 2017
10 Cal. App. 5th 440
Daniels, Fine, Israel, Schonbuch & Lebovits, Paul R. Fine, Scott A. Brooks, Craig S. Momita; Law Offices of Ian Herzog, Ian Herzog; Law Offices of Stephen Glick and Stephen Glick for Plaintiffs and Appellants.
Littler Mendelson, J. Kevin Lilly, R. Brian Dixon and Philip L. Ross for Defendants and Respondents.
Opinion
MANELLA, J.—Appellants Gary Batze, Carlo Cesar and Justin Hayes brought suit against their employer, Safeway, Inc., and The Vons Companies, Inc., for failure to pay overtime wages.1 Appellants claimed that in their positions as first and second assistant managers (AMs) for respondent’s stores they had been required to work long hours performing such nonmanagerial tasks as stocking shelves, checking customers’ purchases and building product displays. After weeks of trial and the testimony of dozens of witnesses, the trial court ruled, for the most part, in respondent’s favor, finding that appellants were engaged for more than 50 percent of their work week in managerial tasks, and that they met all the other qualifications to be exempt from the overtime rules. The court also ruled that during the five-month
Appellants contend the court’s findings that they spent the majority of their time at work engaged in managerial activities during the four-year period at issue was not supported by substantial evidence. Specifically, they contend that an employee’s ratio of exempt to nonexempt activities must be determined on a week-by-week basis, that no inferences may be drawn from the employee’s activities in surrounding weeks, and that because the employer bears the burden of proof, for any specific week in which no defense witness observed appellants’ actions at work the court should have found in appellants’ favor. We reject that contention and conclude the court drew reasonable inferences from the witnesses’ testimony and other evidence that established how appellants spent the majority of their time.
Appellants also contend the court improperly found that the strike period constituted an emergency that permitted respondent to assign managerial employees to nonexempt tasks without losing their exempt status. We affirm the court’s decision.
Finally, appellants contend the trial court erred in ruling that the statute of limitations precluded them from raising claims based on periods of employment more than four years prior to the filing of each of their complaints. We conclude the trial court reasonably found that the filing of the class action did not toll the statute of limitations.
FACTUAL AND PROCEDURAL BACKGROUND
A. Background Facts
In July 2002, a putative class action was filed by Peter Knoch and Jason Ritchey (the Knoch action) on behalf of all store managers and AMs employed by respondent. The claims included failure to pay overtime wages and violation of the unfair competition law (
Appellant Gary Batze, who had been a second AM (Second AM) for respondent, filed his complaint for unpaid wages in February 2006. Appellants Carlo Cesar and Justin Hayes, who had been first AMs (First AMs), filed their complaints in October 2008.3 Multiple other managerial employees filed related claims against respondent in 2005 and 2006. Appellants’ claims were selected to be tried together.
B. Evidence at Trial4
1. Evidence Pertinent to Batze
a. Plaintiffs’ Evidence
Batze worked for respondents from June 1987 through August 2006. In August 1998, he was promoted to a salaried managerial position at the Blackstone store.5 Between 2000 and 2006, he worked at the Clovis store, with a stint at Bakersfield and Lake Isabella stores during the five-month strike by union employees in 2003 and 2004. Throughout his tenure as a salaried employee, he was assigned to the night/early morning shift (4:00 a.m. to noon or 1:00 p.m.), and testified that he regularly worked 50 to 60 hours per week.
According to Batze, his primary duty was building and filling merchandise displays. He was given specifications as to the design of the displays, where they were to be placed in the store, and the merchandise to include, exercising little or no discretion. When products requiring display arrived, he might spend up to 12 hours in a single day moving pallets of products from the back room to the floor, physically tearing down the old displays and putting up the new ones. He also stocked shelves and was responsible for keeping the back room organized, which required him to personally move and stack pallets and merchandise some of the time. Although Batze was the sole managerial employee at the store during the late-night hours and was titularly in charge, the night crew boss normally oversaw the hourly employees. Because few of his working hours took place when the store was open,
Throughout the time Batze and the other appellants were employed by respondent, the stores were required to adhere to an “operating ratio” of sales to employee salary.6 In Batze’s experience, meeting the operating ratio required salaried employees to perform the jobs of hourly workers because salaried employees could work overtime without causing the store to incur additional labor costs.
During the Southern California grocery clerks’ strike that took place from October 2003 to the beginning of March 2004, Batze claimed to have worked at stores in Bakersfield and Lake Isabella for 14 to 16 hours a day for two or three weeks without a day off. He did everything the striking hourly employees would have done, except checking. He denied having responsibility for training the employees brought in to replace the striking workers.7
As a Second AM, Batze had no discretion over pricing, hours of operation, employee salary, the dress code, or the design and layout of stores. Batze was never enrolled in respondent’s retail leadership development (RLD) program.8 Batze did not deny that he performed some managerial tasks, including writing employee appraisals and preparing the work schedule for the night crew, but estimated he spent only a couple of hours a year writing appraisals and only 10 to 15 minutes a week writing the schedule. He acknowledged that he had discretion over the displays in “one [or] two” locations in the store, that he could add products he believed tied in to displays, and that at least some of the displays were built by vendors, under his supervision. Batze also was responsible for minimizing “out-of-stocks” (products carried by the store that sold out, leaving empty shelves) and for placing orders for the grocery department, which comprised the bulk of the store. Managing out-of-stocks required him to walk the aisles to see whether the store was low on any product, scan bar codes to trigger the warehouse to send more product, confirm that deliveries had come in, and work with the night crew to get products from the pallets on which they were delivered to the shelves. He used his discretion in taking tags off the shelves when he knew or believed the warehouse was out of the described products.
b. Defense Evidence
Michelle Macaluso was the store manager who supervised Batze at the Clovis store from January 2004 to August 2006, when Batze left respondent’s employ. The Clovis store was very large and busy. There were 115 to 125 employees, and weekly sales were approximately $600,000. It was open from 6:00 a.m. to midnight. Macaluso worked from 6:00 or 7:00 a.m. to 5:30 p.m., Monday through Wednesday, and Friday and Saturday, 48 to 50 hours per week. Batze, who started at 4:00 a.m., generally left on time at noon or 1:00 p.m., or if he worked late one day, left early another.
Macaluso testified Batze was responsible for “merchandising,” making sure displays were built at the correct place in the store and filled. Batze had some discretion concerning where to place displays and how large they would be. He could create a theme for a display, such as a holiday theme, and could add items he believed were tied in to the products he was required to include. There were 40 to 45 displays in the store; some changed weekly or monthly, but others were permanent. Batze built four to six displays per week. He had the assistance of the “GM” manager, an hourly position, when he built them. Vendors were responsible for many of the displays, and Batze coordinated with 20 to 25 vendors per week concerning their displays and where to place
Batze supervised the ten employees (including four clerks, two night crew supervisors, a receiver, and a scan coordinator) on duty at night. He coached them and reviewed their performance. He addressed their negative behavior. He trained new employees. Batze also was responsible for the back room, making sure it was organized and that vendors delivered the correct amount of product. He had the assistance of the store’s receiver, an hourly employee. Batze placed his office in the back area so he could more easily interact with the vendors. Macaluso confirmed that Batze was responsible for minimizing the store’s out-of-stocks. In that role, he coordinated with department managers or the receiver to ensure they ordered correctly to prevent the problem from arising. Personally walking up and down the aisles assisted him in managing out-of-stocks, as it permitted him to determine where and when the problems arose. Macaluso put Batze in charge of eliminating or minimizing “shrink” (unsold products, such as those that spoil and must be discarded). She credited him with producing “the best shrink numbers in the district.” Batze also was on the safety committee which met monthly and regularly communicated safety concerns to employees. Macaluso estimated Batze spent 60 percent of his time on managerial work.
Respondent introduced a number of notes Macaluso wrote to Batze about his management skills, including one congratulating him for achieving a score of “100%” on the “[s]hrink audit.” Respondent also introduced performance appraisals demonstrating Batze had been commended for “mak[ing] good decisions,” “involv[ing] his employees in some decision making,” “foster[ing] a positive attitude with employees,” “tak[ing] charge of his department,” “build[ing] a strong team,” “display[ing] good leadership qualities,” “improv[ing] sales in the grocery department,” and “manag[ing] with minimal supervision.” Concerning his claim to have worked overtime in Bakersfield and Lake Isabella during the strike, respondent submitted cash register data showing Batze working in the Clovis store in the early part of 2004. Macaluso testified that Batze was working with her in Clovis from January 2004 until the strike ended.
Batze was the subject of an observational study on September 27, 2004 (a Monday), over a year before he filed suit. The observer tracked him through the store that day and wrote down precisely how much time he spent on his
2. Evidence Pertinent to Cesar
a. Plaintiffs’ Evidence
Cesar began working for respondent in June 1987 and was still employed by respondent at the time of trial. In August 2002, while working at the Dublin store, he became a First AM.11 Prior to assuming the position, he completed respondent’s RLD program.12 The program trained him to work in
Cesar testified that he spent between 60 and 90 percent of his work time on nonexempt tasks, and that the allocation between managerial and nonmanagerial tasks was fairly similar at all the stores in which he worked as an AM. At his then current position, the Alamo store, almost every day he would be given a list of nonexempt tasks by the store manager, such as cleaning a freezer, filling an outside stand with advertising brochures, moving products on and off the floor, straightening products in displays or on the shelves, or cleaning and organizing the upstairs storage area. He stated that he checked and stocked shelves almost every day, and was often formally scheduled to be a stocker or the backup checker. He recently had been asked to wear the badge of a “manager in training” because the union had complained about the Alamo store having too many salaried employees.
According to Cesar, one of his duties at virtually all the stores to which he had been assigned was to work as the “front-end” manager. This required him to stay at the front of the store observing the checkers, directing customers, calling for more checkers, and checking “as needed.”13 At Alamo, Cesar was assigned the task of managing the front end approximately one to two hours per day. At the Blackhawk/Danville store, his prior assignment, he spent three to four hours at the front end. At Orinda and Lafayette, he was in the front end three to six hours daily. At the Pleasanton store, almost all his time was in the front end. At Pleasant Hill, he was at the front end one to two hours per day. At the Livermore store, he was at the front end from two to six hours until the store got a new manager, at which point he was reassigned and spent more time stocking and organizing the back room. At Dublin, he averaged two to four hours per day in the front end.
One of Cesar’s regular duties was to perform a store walk at the end of his shift, checking displays and ordering items needed to fill them, and making sure products on shelves around the perimeter were “faced” (placed neatly on the shelf, older items in the front). He performed dozens of shorter store walks every day to observe store conditions. During those store walks, he sometimes brought a dolly full of merchandise to fill in shelves or displays. He also looked for opportunities to observe and communicate with employees, and to ensure they were staying on task.
In his deposition, Cesar was asked about what he had done on his most recent day of work, a day he had described as “typical.” He testified he met with the store manager when he arrived at work and obtained a list of tasks, which was not lengthy. He had a meeting that lasted 30 minutes and participated in a conference call. He checked his e-mail. He conducted a short store walk, during which he greeted department managers, fixed the problems he could, and put other items on a list to be handled later, either by himself or assigned to other employees, at his discretion. He testified that he checked for an hour and stocked shelves and worked on displays for only one to two hours that day.
In 2009, after his stint at the Orinda store and a period of disability, Cesar was placed on a performance improvement plan (PIP) by his superiors. Under the PIP, he was given the goal of keeping out-of-stocks to fewer than 120 daily. He was told to “identify and develop at least one department manager and two employees to meet [respondent’s] goal in key performance areas, service, [out-of-stocks], shrink, food safety and sanitation.” He was told to make sure to sign off on various inspections. Other goals given in the PIP were to plan advertising weekly with department managers and order writers; attend weekly profit hour meetings; perform “mock shops” and “role plays” with employees to test their performance; hold three “huddles” daily with employees; create a list while walking the store for merchandising, food
In his annual evaluations, Cesar had been praised for his hiring, training, coaching and mentoring efforts. He had been criticized for failing to “get involved in opportunities to save costs and add value to [the] bottom line,” “demonstrate an acceptable degree of forecasting and scheduling ability,” “spend [sufficient] time on scheduling and in merchandising for sales,” “follow through on the work that he has delegated,” and review the inventory report. He also was criticized when a store to which he was assigned failed to pass its safety audit on multiple occasions, and was directed to monitor safety issues more closely and to perform more “safety laps.” He had been told in his evaluations to “address disciplinary issues,” “take a more active role in identifying and solving store issues,” “improve on holding people accountable and following up on directions given,” “tak[e] charge of an issue or opportunity to improve the overall store performance,” “[rally] employees to service excellence,” and “identify opportunities in the operation and then make the improvements.” One evaluation said that Cesar “works hard, but does not work the big picture,” that he was “very adaptable to various demands and assignments[,] always willing to get in and work,” but that his “willingness to roll up [his] sleeves [got] in the way of managerial functions.”
A number of Cesar’s fellow employees testified in support of his claim that he spent more than half his work time on nonexempt tasks. Jonathan Meyer worked with Cesar at the Dublin, Livermore and Blackhawk/Danville stores.14 According to Meyer, Cesar spent much of his time at Dublin checking, “throwing freight,” and stocking shelves. If an hourly employee called in sick, Cesar would take over his or her job. At the Livermore store, Cesar worked alongside Meyer, building displays and stocking shelves. Meyer estimated 90 to 95 percent of Cesar’s time was spent performing nonmanagerial work.
Thomas Hogan, a store manager, supervised Cesar at the Livermore store in 2005 and 2006.15 Hogan acknowledged AMs were responsible for watching out for problems and training staff, but stated there were not enough hourly employees at the store to perform all the necessary tasks, requiring use of salaried managers to fill in to meet the prescribed operating ratio. Hogan believed the majority of Cesar’s day was spent checking, cleaning or stocking shelves, rather than performing managerial tasks. Hogan acknowledged that Cesar was in charge of the store two days a week, on Hogan’s days off.
Jennifer Attia, an hourly employee, worked with Cesar in Pleasant Hill, where Cesar had been acting store manager, and at the Alamo store.17 Cesar stocked shelves, checked and generally did whatever needed to be done, including relieving employees on breaks. Attia did not see Cesar in the office very much at Alamo. Attia acknowledged that Cesar used store walks to observe how employees were doing their jobs and to see what needed to be done.
Vickie Penny, a clerk, Amy Carey, a clerk and former AM, and Debra Penny, a bookkeeper and clerk, worked with Cesar at the Lafayette store.18 They testified he was stocking or checking 85 to 90 percent of the time. Carey also recalled Cesar building displays. Debra Penny said he frequently watched the front end.19
Jeremy Schoen and Shena Meyer worked with Cesar at the Orinda store.20 Schoen testified that for the majority of his time at work, Cesar checked, worked freight or filled displays. In Meyer’s perception, Cesar was greeting customers, stocking shelves, facing, checking, bagging and helping in any short-staffed department 95 percent of the time.
Tracy Pierson, an hourly employee, Carole Drevno, a front-end manager, and Gary Dunmoyer, a day stocker, worked with Cesar at the Blackhawk/Danville store.21 They testified that the bulk of his day was spent on the sales floor, doing nonmanagerial tasks, such as stocking, checking and building displays. He was in the office one to two hours per day.
Susan Bryce and Scott Benvie, both hourly clerks, and Daniel Carey worked with Cesar at the Alamo store.22 They testified they typically observed him stocking shelves and building displays. Bryce testified that
b. Defense Evidence
Janet Navarrette worked in the Dublin store with Cesar in 2004. She was the deli manager. She saw Cesar performing store walks of up to two hours. She rarely saw him working at the cash registers. In Navarrette’s estimation, Cesar spent 50 percent of his time in the office, dealing with managers, vendors and employees.
Beverly Gandolfo, a Second AM, worked with Cesar at the Livermore store in 2006 and at the Alamo store, his then current assignment. Gandolfo had been a stocker at the Livermore store and did not observe Cesar working in that capacity with any frequency. There were sufficient hourly stockers at the store to complete the task without the assistance of the AMs. Gandolfo described her responsibilities as an AM at Alamo as observing, coaching and mentoring employees, preparing the work schedule, preparing time and attendance reports, reviewing e-mails, participating in conference calls, and performing store walks. She spent a great deal of her time in the office. During store walks, she observed employees and talked to them about service, met with the various department managers, checked for out-of-stocks, and made sure missing items were ordered. She did not have time during store walks to perform tasks that could be delegated to an hourly employee. Because she was responsible for controlling out-of-stocks, she sometimes scanned them herself. This facilitated her ability to follow up with her crew and the receiver to determine why the problem had arisen. Gandolfo had seen Cesar perform store walks at Alamo and did not notice him doing anything differently than she did. She often saw Cesar working in the office. She acknowledged that she sometimes worked on displays, stocked shelves and checked, and was occasionally given a nonmanagerial task to perform by the store manager, but maintained that she performed managerial work the majority of her time. She had not seen Cesar stocking shelves, building displays or checking for lengthy periods. On a typical day, those activities would occupy less than two hours of a manager’s time.
Helen Carver was the district manager when Cesar was the acting manager at Pleasant Hill and when he worked at the Lafayette and Orinda stores. Carver transferred Cesar from Pleasant Hill to the Lafayette store, after observing that the Pleasant Hill store was experiencing problems with cleanliness, organization and missing signage. When Carver spoke to Cesar about the problems the store was experiencing and his transfer, he did not suggest that spending time on nonexempt work had interfered with his ability to properly manage the store. After Cesar’s transfer to Lafayette, Carver
Steven Kozak was the store manager for the Blackhawk/Danville store where Cesar was assigned after being placed on the PIP. The store was large, with 100 to 150 employees. There were sufficient numbers of nonsalaried people to perform all needed stocking and checking. Kozak had no trouble meeting the operating ratio without overusing salaried managers. He did not expect Cesar to spend more than half his time on nonmanagerial functions. When Kozak performed a store walk, he took notes, wrote down “opportunities,” made a list of tasks, talked to staff, made sure the departments were up and running, coached and gave direction. He trained Cesar to do the same. He gave Cesar other managerial responsibilities, including preparing the weekly marketing plan. He told Cesar to pick a different department every day and meet with the employees working in that department to coach them on service. He instructed Cesar to document that he had engaged in three “huddles” daily. He saw Cesar stepping in to check more often than he should have, and told him “he should not be the first person in the check stand.” Kozak did not observe Cesar stocking shelves for long periods.
Kimberly Johnson took over from Kozak as store manager for Blackhawk/Danville. She supervised Cesar in 2009. She twice admonished Cesar to do less checking. Once, she had been out for part of the day and returned to find Cesar checking when the lines were not long. She told him to move on to other tasks. Johnson performed store walks with Cesar in the afternoons. During those walks, they would evaluate store conditions, make adjustments, talk to employees about service, coach and role-play, delegate tasks to prepare for the evening business, and tidy up displays. Cesar would perform a store walk on his own in the morning for approximately two hours. She observed Cesar interacting with employees throughout his workday.23 The store had multiple hourly stockers, and Cesar was assigned to oversee them and keep them on task. Out-of-stocks were scanned three times a day by
Adrienne Simpson worked with Cesar at the Blackhawk/Danville store in 2009. In her capacity as a bookkeeper, she was frequently in and out of the manager’s office. She saw Cesar in the office a couple of hours each day. She observed him directing employees to perform various tasks and disciplining employees. She saw him in the checkstands daily, but only for a few minutes at a time. She never saw him stocking shelves.
Susan Obenour was the deli manager at the Alamo store and worked with Cesar in 2009. From her work area, she could see the manager’s office. She also went in and out of the office multiple times a day. She estimated Cesar was in the manager’s office from 30 to 55 percent of his time. When Cesar did his morning store walk, Obenour observed him writing notes about problems that she and other department managers might have.
3. Justin Hayes
a. Plaintiffs’ Evidence
Hayes completed respondent’s RLD program in 2003. He was working as a First AM at the Citrus Heights store at the time of trial. He had worked as a First AM at the Arden Way store from 2004 to 2007, at the West Sacramento store for a few months in 2007, and at the Elk Grove/Laguna store from 2007 to 2009.24 In addition, he had been acting store manager for part of his tenure at the West Sacramento and Elk Grove/Laguna stores.
Hayes’s hours were generally 7:30 a.m. to 5:30 p.m. or 10:00 a.m. to 8:00 p.m. He estimated that 90 percent of his time as First AM was spent on
On cross-examination, Hayes acknowledged performing managerial tasks. He was responsible for minimizing out-of-stocks. He regularly reviewed e-mails, service reports, the store schedule, payroll documents, out-of-stock reports, budget reports and sales reports. When he performed a store walk, he stopped to speak to department managers and looked for safety issues. His responsibilities for the front end included evaluating the clerks. He performed financial forecasting. He was acting manager at his current store when the store manager was out, during which time he was responsible for supervising all the store’s employees. At his deposition, Hayes testified he was in the office up to two hours daily.
Hayes injured his shoulder in 2003. After examining Hayes, the medical examiners reported that he was “working more in management so has been able to work full duty” and that he had “progressed to an[] upper position not requiring the same duties as [a] retail clerk.”
Kristin Caro and Susan Venrick-Mardon, both hourly employees, worked with Hayes at the Arden Way store when he was an AM. They testified that Hayes did every job that needed to be done, including checking, stocking shelves, building and filling displays and filling out-of-stocks. Caro testified Hayes was rarely in the office, and that he was performing some type of nonmanagerial physical labor 80 percent of the time.
Sajid Khan, a checker, worked with Hayes at the West Sacramento store and the Elk Grove/Laguna store. At West Sacramento, he saw Hayes spending significant time returning misplaced items to shelves, stocking, checking and helping with shipments from vendors. At Elk Grove/Laguna, Hayes spent most of his time setting up promotional or holiday displays. Hayes also checked and stocked. He was rarely in the office at either store.
Thomas LePage, the manager of the Elk Grove/Laguna store testified on Hayes’s behalf.27 He said Hayes occupied his workdays checking, stocking shelves and building displays. Hayes was in the office 5 to 10 percent of his time and a little longer on the days he put together the schedule. LePage testified he was told to use AMs in positions like checking and stocking because there were not enough hours of administrative work to fill their time. LePage acknowledged that Hayes had to fulfill more managerial tasks when he took over as acting store manager when LePage was out.
b. Defense Evidence
Camelia Chira worked with Hayes at the Arden Way store. She was the Second AM. She saw Hayes preparing the schedule, working on projections, and doing other paperwork. Hayes trained Chira to do the paperwork required of an AM. She did not recall ever seeing him stocking shelves. He performed store walks, during which he talked to employees and customers, fixed things and made sure everything was running smoothly. She occasionally saw him check. He spent the bulk of his time, up to 70 percent, in the office.
Joseph Chappelle, a store manager, supervised Hayes at the Arden Way store. He testified that Hayes wrote the schedule for the night crew, the front end and the courtesy clerks—more than 70 employees. Writing the schedule required knowledge of sales projections and hours allotted by the operating ratio. It also required knowledge of which checkers were better than others, so they would be scheduled during prime periods, and input from the employees as to when they wanted time off. Hayes spent eight to 10 hours per week on the schedule. Chappelle testified that Hayes spent 75 percent of his time in the office, writing the schedule, pulling reports and e-mails, and participating in conference calls and meetings. Hayes checked only 5 percent of his day, and was even less involved with stocking shelves or building displays. Those tasks were taken care of by hourly employees.
Lisa Lewis became the store manager of the West Sacramento store at the end of 2007, relieving Hayes, who had been acting manager. When she arrived, she asked him to stay on for two weeks and run the store as if she
Lewis had been First AM at the Elk Grove/Laguna store, where Hayes went after West Sacramento. Her duties there were very similar to her duties as store manager because the Elk Grove/Laguna store manager, LePage, was frequently absent and left her in control of the store. She estimated she spent 70 percent of her time managing. She never had to check or stock for the store to meet its operating ratio.
Nicholas Patmore, a produce manager, worked with Hayes at the Elk Grove/Laguna store. Hayes was usually in the office when Patmore needed to find him. When an extra checker was needed, someone from the produce department would step in, not Hayes. Patmore saw Hayes walking the store, but not stocking shelves.
John Cain was a district manager and a 35-year employee of respondent. Hayes had been an assistant manager in his district for 10 years. Because Hayes‘s Citrus Heights store was near Cain‘s office, Cain visited it frequently. He normally found Hayes in the store manager‘s office. Hayes took over the manager‘s duties on the manager‘s two days off per week and during the manager‘s vacations.
Cain also discussed the typical responsibilities of the First AMs in his district. They are responsible for store safety and participate in safety calls every week. They are responsible for ensuring that the store‘s departments do not go over budget on supplies. They keep track of sales forecasts and checker productivity. They are responsible for developing ways to minimize shrink. They are expected to deal with product recalls. They are responsible for front-end service, including the checkers’ performance and the appearance of the areas in front of the store. They are expected to observe employees on the sales floor and to train, coach and “role play” with them. Cain testified that First AMs engaged in those and other managerial tasks more than 50 percent of the time.
Lance Feliciano, a receiving clerk, worked with Hayes at the Citrus Heights store. Hayes frequently called Feliciano away from his regular responsibilities to work as a checker. Feliciano rarely saw Hayes checking and never saw him stocking shelves. Feliciano estimated Hayes spent 70 to 80 percent of his time in the manager‘s office.
Melissa Mastalski, a deli manager, worked with Hayes at the Citrus Heights store. She never saw Hayes stocking shelves. She occasionally saw him checking, but only for a few minutes a day. Mastalski would go to Hayes for help with employee disciplinary problems, because Hayes “t[ook] care of the discipline of employees” for the store. She described him as a “by-the-book” manager who spent most of his time in the office. Mastalski further stated that the store manager preferred to work on the floor and let Hayes handle the office work and the more administrative parts of managing the store.
C. Trial Court‘s Statement of Decision
1. Preliminary Findings
After hearing the evidence, the trial court prepared a 101-page modified statement of decision (MSOD) that summarized and analyzed the evidence in great detail.28 The court recognized that its primary task was to determine “how each plaintiff spent his time,” particularly whether “they customarily and regularly exercised discretion” and “devote[d] more than 50% of their time to exempt activities.”29 The secondary issue was “if they did not, was their failure . . . due to their own substandard work such that they failed to meet [respondent‘s] realistic expectations with respect to [AMs]?” The court recognized that respondent bore the burden of “convinc[ing] [the] court that it realistically expected people like [appellants] to manage, and that they in fact did so more than half the time.” The court also recognized that exemptions to the general rule requiring employees to be paid overtime “are narrowly
Preliminarily, the court rejected the contention that because respondent bore the burden of proof, “it must produce evidence of [the] tasks [appellants] performed during every workweek for which liability is in question.” Instead, the court ruled that respondent could properly rely on logical inferences or evidence from which extrapolation was possible.30 The court acknowledged it should not apply data directly pertinent to one appellant to another, but found it “proper to consider a store‘s time records for one [appellant‘s] so-called typical day in determining [the] time the same person spent on other days in the same store, or even in stores of similar size and characteristics.”
The court then considered how to categorize three of the predominant work activities engaged in by appellants: store walks, managing out-of-stocks, and working at the front end. The court recognized that “[t]he regulations do not recognize hybrid activities,” and that “each discrete task [must] be separately classified as exempt or non[-]exempt.” The court found that “store walks, especially long ones, constitute exempt tasks.” They were, the court observed, “the chief method a manager uses to determine what is going on in the store and where (and with whom) he needs to devote attention.” The walks “offer an opportunity to interact with employees, survey the merchandise and spot needs, especially with respect to the all-important out-of-stocks.” The court concluded that “[a] momentary pause” to relocate or rearrange products did not transform the activity from exempt to nonexempt: “The purpose of the walk remains managerial . . . .”
With respect to managing out-of-stocks, the court broke down the activity into three parts—“counting, ordering and replenishing.” The court found that “replenishing“—essentially stocking shelves—was nonexempt. It found the other two aspects of managing out-of-stocks to be managerial. Taking part in scanning the tags on the shelves allowed the AM to personally determine where the problems were, what items were fast moving and the time of day they were likely to run out. Thus, “the AM can assess the situation and determine if the [out-of-stock] comes from the vendor, the failure of the night clerk to order, a problem at the warehouse, or a problem that can be controlled at the store level.” Taking part in ordering allowed the AM to give order writers input and training. Moreover, fixing the problem might require
Finally, the court found that the time appellants spent at the front end was exempt time. The purpose of the task was to “regulat[e] the work flow and/or [watch] and evaluat[e] the performance of their employees . . . .” Because “[t]he manager is surveying the employees and trying to ensure that they deliver excellent service, that the checkout lines run smoothly, and that no confounding incidents occur[,] [t]he activity calls for discretion and independent judgment and qualifies as exempt.”
2. Exercise of Discretion
With respect to the exercise of discretion, the court noted that respondent limited an AM‘s discretion in significant ways: “The inventory they carry, the merchandise they display, the manner in which they display it, how much they display—[respondent] dictates all of those points. . . . Just about everything is measured and audited either by a corporate auditor, a division auditor, a field merchandiser, or [a district manager].” Nevertheless, the court concluded that “[a]ll the micromanaging [respondent] engaged in did not eliminate the need for a person with common sense and leadership ability to exercise the discretion needed to make the store operate according to [respondent‘s] practices and procedures, schedules and schematics.” The evidence pertaining to each appellant “show[ed] they got involved with employees . . . , coaching and disciplining and training them.” The AMs were expected to “schedule their stores, train the front-end employees, train the courtesy clerks, and hold a minimum of two huddles a day,” in short, “create order out of chaos.” While they may have been “tightly bound,” the court concluded “managers do not lose their exempt status when their job is to manage the little things. If left unchecked, little problems can become big problems.”
Turning to the related question whether each appellant spent more than 50 percent of his time in managerial activities requiring the exercise of discretion, the court reviewed all the testimony and made credibility findings before concluding that respondent had largely met its burden of proof on this issue.
3. Batze
With respect to Batze, the court pointed out that Batze himself had acknowledged “he wrote the schedule,” “was responsible for managing the
In support of its finding that Batze spent the majority of his time on exempt work, the court found credible Macaluso‘s testimony that Batze spent 60 percent of his time performing managerial duties. The court found her testimony “straightforward” and “honest.” In addition, her testimony was supported by memoranda she wrote and compliments she directed to Batze for his management work. The court found particularly significant Macaluso‘s testimony that Batze coordinated and negotiated with 20 to 25 vendors per week to determine where they would put their displays: “Ms. Macaluso testified, and this court agrees, that the relationship between an AM like Gary Batze and a vendor was important. If they did not get along, the store would suffer lost sales and lost loyalty.” The court also found significant the evidence that Batze was put in charge of eliminating shrink, and that the Clovis store ended up with “the best shrink numbers in the district.” With respect to Batze‘s witnesses, the court concluded that their estimates that he was working on nonexempt tasks 80 to 90 percent of the time were “exaggerated,” and likely “the product of faulty memory,” causing the court to discount their testimony.
The court also relied on the observational study that found Batze performed “a host of managerial functions” throughout the day, including “[d]irecting a clerk to make tags and signs[,] [¶] telling a stocker how to arrange merchandise[,] [¶] directing a stocker to re[-]merchandise a display[,] [¶] . . . [¶] speaking to the receiver about performance[,] [¶] talking to a receiver about an employee‘s time and attendance[,] [¶] . . . [¶] talking to a stocker about a soda shipment, talking on the phone with a frozen food manager about placing an order, talking with a store manager about an employee who was sick, and talking to a receiver and a manager about the placement of signs.” While the study found that Batze spent more than 40 percent of his time working on displays and stocking, the court made clear that it did not agree that all time spent dealing with displays was nonexempt. Although “corporate” controlled the designs, layouts and items to include on displays, Batze had discretion about what to display in some areas, and he could create themes and add tie-ins. “Product placement can be important to marketing effectiveness. Such an activity does not lose its exempt status
The court found further support for its conclusions concerning Batze in the characteristics of the Clovis store: “[A]pproximately 115-125 people were employed at that location[,] . . . [its] average weekly sales reached $600,000[,] [it] occupie[d] 55,000 square feet, and the sales floor [took] up 40,000 square feet.” A store of that size “cannot run itself, nor can one manager handle it. There are simply too many people and too many moving parts to the operation. [¶] . . . [W]hen employees are first hired to work in a supermarket, they generally have no training and probably no background in the food industry. They start in entry positions like courtesy clerks and advance to positions like front-end managers, grocery managers, and deli managers. . . . Someone has to give them instructions and make sure they follow them. The ‘corporate people’ are not there often enough to do this task. To fill the missing link, [respondent] uses managers and [AMs]. For this reason, among others, . . . it is hard to accept that the store‘s leadership could devote almost all their time to non-exempt physical work. Even acknowledging the lesser customer interaction during night work, logic dictates that someone must direct and coordinate after-hours activities if the store is to remain organized and properly stocked. The size of stores like Clovis, standing alone, constitutes strong evidence that . . . Batze had to have performed exempt tasks most of the time. Otherwise, the night operation would have fallen apart.”
The court concluded that the “reasonable, credible, and solid value evidence [respondent] presented with respect to [Batze‘s] time and tasks” satisfied its burden with respect to Batze: “[Respondent] realistically expected him to manage, and he did so. . . . more than fifty percent of the time.”
4. Cesar
The court then turned to Cesar. Preliminarily, the court pointed to Cesar‘s own testimony that he spent a minimum of one to two hours in the office, that he did not “typically sit or stand in one place during the day,” that he did not “devote continuous time to one task, but d[id] many things in small increments,” and that he was “constantly looking for opportunities to observe and
The court specified the testimony it found particularly credible: (1) Kozak‘s testimony that the Blackhawk/Danville store had sufficient stockers and checkers that there was no need for AMs to perform those tasks, and that he had no difficulty meeting his store‘s operating ratio without relying on salaried AMs to perform nonexempt tasks; (2) Johnson‘s testimony that when she heard Cesar and another AM had spent a large amount of time in the checkstand on her partial day off, she questioned why; (3) Gandolfo‘s testimony that as a First and Second AM, she spent the majority of her time engaged in managerial tasks, including observing, mentoring and disciplining employees, handling e-mails and daily time and attendance reports, scheduling, attending to recalls, regularly talking to department managers, and performing store walks; (4) Gandolfo‘s testimony that Cesar performed store walks similar to hers, spent more than half his time in the office, and did not spend excessive time stocking shelves or checking; (5) Carver‘s testimony that when she put Cesar on a PIP because his store was not meeting expectations, he did not suggest it was because he was required to perform nonexempt labor; (6) Obenour‘s testimony that she generally saw Cesar in the office doing paperwork at the Alamo store or walking the store to identify problems; (7) Navarrette‘s testimony that Cesar spent most of his time in the
5. Hayes
With respect to Hayes, the court recounted Lewis‘s testimony that when she “asked Hayes to run the store as though she were not there,” he “made sales plans, drew up schedules, spent, she estimate[d,] 80% of his time in the office [citation], talked with employees, walked the front end[,] made observations, moved displays, and made a few changes to them.” Moreover, “[s]he did not observe Hayes stocking except for five or ten minutes when he replenished eggs or milk.” The court also recounted Lewis‘s “densely detailed narrative of management activities, based on her experience in that position“: “She described the [operating ratio] system, participating in huddles, managing out[-]of[-]stocks, attending safety meetings, profit hour meetings, using front end activities as an opportunity to coach, . . . and performing store walks. . . . She contradicted [appellants] (and especially Hayes) every step of the way, claiming that some 80-90% of her time is spent in the office managing [citation] and maybe 5-10% of her time at the front end, where she mostly manages. She said it was ‘absolutely not’ true that a manager had to check or stock to make [operating ratio]. She spends ‘maybe thirty minutes to four hours a week’ checking and next to no time building and stocking displays as she has clerks who do that.” (Fn. omitted.) The court found Lewis “credible throughout.”
The court also highlighted Cain‘s, Mastalski‘s, Patmore‘s, Feliciano‘s, and Chappelle‘s testimony that Hayes spent most of his time in the office, Mastalski‘s testimony that the Citrus Heights store manager preferred to let Hayes handle paperwork and administrative matters, and Feliciano‘s testimony that he never saw Hayes stocking. With respect to Chappelle‘s testimony that Hayes was responsible for scheduling the store‘s employees, the court observed: “He scheduled the night crew and the front end including
The court discounted much of LePage‘s testimony. Because he was pursuing a claim against respondent, he had reason to be biased. “[M]ore important, given his time away from the store, it is hard to accept that his conclusions about Hayes’ time on tasks are accurate.”
With respect to Hayes himself, the court pointed out numerous discrepancies between his testimony at trial and his deposition testimony, including whether he regularly reviewed and passed on information in departmental budget reports, whether he conversed with employees and department heads while performing store walks, and the amount of time he spent in the office at the West Sacramento store. The court also found that Hayes had been less than honest concerning whether he reported to his workers’ compensation doctor that his duties were managerial and not the same as a clerk‘s. The court discussed the data provided by respondent summarizing the amount of time Hayes engaged in checking; it showed that he generally spent 15 hours or less per week in that activity, thus refuting his claim that he spent “the better part of his days checking.”33 It appeared to the court that Hayes‘s memory was faulty, and that he erroneously believed he was toiling more hours doing nonexempt work than he actually was.
Ultimately, the court concluded that Hayes spent “at least 55% of his time in the office performing exempt tasks,” that “at least 10-15% of his time was devoted to store walks, also exempt,” that “he spent no more than 37% of his time in the check stand,” and that “the other non-exempt activities he performed did not consume more than 10% of his time.” In short, the court concluded, “[respondent] met its burden with respect to Justin Hayes.”
6. Realistic Expectations
The court further found that respondent had a realistic expectation that its store managers and AMs would be involved primarily in exempt work. The court focused on whether “there was enough exempt, i.e., managerial, work for [appellants] to fill their day.” If not, or “if there was plenty of managerial
The court found further support for its determination that respondent‘s realistic expectation was that appellants would engage primarily in managerial work in the evidence concerning AMs’ responsibilities. In addition to being responsible for the entire store on the store manager‘s day off, the First AM had nearly entire responsibility for the front end, including customer service, checkout success, the outside areas, the lobby and the parking lot. The evidence further established that AMs were expected to schedule the employees’ work hours and to discipline them. The court also relied on evidence that when AMs performed nonexempt tasks, the store suffered: “AMs are responsible for service levels and conditions, and if they are tethered to a specific task, they are unable to move about and effectively manage the store.” Carver testified that the Pleasant Hill and Lafayette stores suffered due to Cesar‘s failure to adequately manage. The evidence concerning the characteristics of the stores—their size, the number of personnel each employed, and the number of daily sales transactions—further persuaded the court that respondent realistically expected its managers to perform exempt tasks: “A store like this cannot run itself, nor can one manager handle it. There are simply too many people and too many moving parts to the operation.”
The court found further support in the evaluations appellants received over the course of their employment. Batze‘s evaluations “focus[ed] on his management style, his ability to motivate others, mak[e] solid sound decisions, proactively involv[e] employees in decision making, not being afraid ‘to go outside the envelope to make his department the best,’ even calling his team on his days off.” The court also discussed the evaluations for Cesar: (1) complimenting his hiring, training and mentoring abilities; (2) stating that he needed to learn to analyze financial reports and get involved in opportunities
7. Exempt Work During Strike
The court found that the work performed during the strike did not transform Batze or Hayes into nonexempt employees. The court found the strike constituted an emergency, during which neither employee lost his exempt status even if performing nonexempt work. In addition, the court found that Hayes‘s claim for work during the strike was barred by the statute of limitations, and that Batze‘s claim to have worked long days at the Lake Isabella and Bakersfield stores was not credible in the face of other evidence—including cash register data and Batze‘s own calendar—showing him working his usual hours at the Clovis store.
8. Statute of Limitations
The court found that the statute of limitations precluded appellants from raising claims arising more than four years before the filing of their individual complaints and that the filing of the Knock action in 2002 did not toll the running of the statute. Specifically, the court found “[t]he discrepancies between what happened to each of these many plaintiffs in each of their many stores are simply too great for the Knock action to have put [respondent] on notice that it needed to preserve evidence with respect to every one of its managers and assistant managers.” Moreover, respondent could not “be expected to maintain all employment records relating to literally thousands of employees who have held multiple positions in hundreds of locations dating
Judgment was entered on the court‘s findings. This appeal followed.
DISCUSSION
A. Substantial evidence supports the court‘s determination that appellants were primarily engaged in exempt work.
1. Categorizing Work as Exempt or Nonexempt
California‘s
“(a) [His or her] duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof; and [¶] (b) [he or she] customarily and regularly directs the work of two or more . . . employees therein; and [¶] (c) [he or she] has the authority to hire or fire other employees or [his or her] suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and [¶] (d) [he or she] customarily and regularly exercises discretion and independent judgment; and [¶] (e) [he or she] is primarily engaged in duties which meet the test of the exemption. . . . [¶] (f) Such an employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment.” (
Cal. Code Regs., tit. 8, § 11070, subd. (1)(A)(1) .)
The Wage Order states that exempt and nonexempt work “shall be construed in the same manner as such items are construed in the following regulations under the Fair Labor Standards Act effective as of the date of this order [2001]:
As this Court discussed in Heyen, supra, 216 Cal.App.4th 795, the 2001 version of
The pertinent federal regulations discussed in Heyen contain examples of exempt and nonexempt activities directly applicable here: “In a large retail establishment . . . , where the replenishing of stocks of merchandise on the sales floor is customarily assigned to a nonexempt employee, the performance of such work by the manager or buyer of the department is nonexempt.” (Heyen, supra, 216 Cal.App.4th at p. 820, quoting
The Wage Order defines “[p]rimarily” (see
In Heyen, supra, 216 Cal.App.4th 795, we resolved whether the checking, bagging and stocking activities of a grocery store manager could be
We did not state, however, that the same task must always be labeled exempt or nonexempt: “[I]dentical tasks may be ‘exempt’ or ‘nonexempt’ based on the purpose they serve within the organization or department. Understanding the manager‘s purpose in engaging in such tasks, or a task‘s role in the work of the organization, is critical to the task‘s proper categorization. A task performed because it is ‘helpful in supervising the employees or contribute[s] to the smooth functioning of the department’ is exempt, even though the identical task performed for a different, nonmanagerial reason would be nonexempt.’ [Citation.]” (216 Cal.App.4th at p. 822.)
In Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785 [85 Cal.Rptr.2d 844, 978 P.2d 2] (Ramirez), our Supreme Court considered whether an employee fell into the exemption for an outside salesperson (IWC wage order No. 7-80). In doing so, the Court clarified the provision found in multiple wage orders, including wage order No. 7-2001, requiring consideration of “the employer‘s realistic expectations” and the “realistic requirements of the job“: “Is the number of hours worked in sales-related activities to be determined by the number of hours that the employer, according to its job description or its estimate, claims the employee should be working in sales, or should it be determined by the actual average hours the employee spent on sales activity? The logic inherent in the IWC‘s
2. The Evidence Below
Applying these principles, we conclude the trial court properly addressed the issues before it. It found that appellants clearly met three of the five criteria of Wage Order No. 7-2001: they supervised the entire stores or a sub-department; they customarily and regularly directed the work of two or more employees, they had authority to hire or fire other employees or to make suggestions and recommendations as to hiring, firing, promotions or other changes in employees’ status; and they earned the requisite salary.37 With respect to whether they customarily and regularly exercised discretion and independent judgment and were primarily engaged in exempt duties, the court waded through weeks of testimony from dozens of witnesses and a massive quantity of documentary evidence in concluding that respondent had met its burden of proving they did. The evidence supporting the court‘s findings was carefully documented in its MSOD and outlined above. With respect to Batze, the testimony of his store manager, Michelle Macaluso, and
Cesar‘s situation was more complex, as he had multiple assignments at multiple stores during the relevant claim period. But the evidence presented covered some aspect of each of his assignments. Janet Navarrette, who worked with him at the Dublin store, testified Cesar was in his office 50 percent of the time dealing with managerial problems. She also saw him perform store walks up to two hours long, a task the court reasonably found exempt because of its importance to proper management of the stores. Beverly Gandolfo, who had been a stocker at the Livermore store during Cesar‘s time there, did not recall his assisting her with that function with any regularity and testified there were sufficient hourly stockers to complete the task without the assistance of the AMs. There were no defense witnesses who worked alongside Cesar at Pleasanton, Pleasant Hill, Lafayette or Orinda, but respondent provided records showing that Cesar spent minimal time checking during that period. Cesar himself testified that he spent significant periods working at the front end during his assignments to those stores, including nearly 100 percent of his time at the Pleasanton store. The court reasonably found that working at the front end, except while actually checking, was a managerial assignment because it required the AM to observe and direct the checkers to ensure they were properly performing their jobs and providing superior customer service. Moreover, Cesar was acting manager of the entire store when he was at Pleasant Hill. Helen Carver testified concerning Cesar‘s performance at Pleasant Hill and Lafayette, and explained that she transferred Cesar from Pleasant Hill to Lafayette and placed him on a PIP after Orinda because he was not meeting respondent‘s managerial expectations. Numerous witnesses testified concerning Cesar‘s performance at the Blackhawk/Danville store, including two managers: Steven Kozak and Kimberly Johnson. Both testified that Cesar spent his time primarily on managerial tasks. Finally, at his deposition, Cesar himself attested to his “typical” day at Alamo, supporting the determination that he spent only two to three hours on
Hayes worked at multiple stores as well, and evidence was presented that supported the court‘s findings as to each of them. Joseph Chappelle, the store manager when Hayes was at the Arden Way store, and Camelia Chira, a coworker there, both testified that Hayes spent the majority of his time—up to 70 percent—in the office. Lisa Lewis relieved Hayes as manager of the West Sacramento store and had him walk her through his duties as manager for two weeks. She testified he spent the majority of his time in the office on managerial tasks. Lewis had come from the Elk Grove/Laguna store to which Hayes was transferred and described her duties, which were primarily managerial. Several employees who observed Hayes at the Citrus Heights store—district manager John Cain and coworkers Lance Feliciano and Melissa Mastalski—testified he was primarily involved in managerial tasks.40
Appellants do not dispute any of this evidence, but contend it was insufficient because it did not cover in week-by-week detail all periods in which they worked. Appellants point out that in challenging class certification, respondent argued that “‘managers were not trained uniformly,‘” “‘[m]anagers [did] different jobs at different times,‘” “‘[e]ven stores of similar size operate differently,‘” and there were “‘many differences among [its] stores which affect the time spent on various job duties.‘” The trial court adopted respondent‘s arguments, at least in part, in concluding that “‘significant differences in the size of [the] various stores, both in dollar volume and physical configuration, to the seasonal nature of business at certain stores, to the differences in daily tasks allegedly flowing from variations in the managerial skills and experience of any given team of managers in a given store, both as to location and as to time,’ militated against class certification, as did the testimony showing that a number of managers ‘perform[ed] different duties and/or allocated the time differently among similar tasks depending on the store to which they were assigned.‘” Appellants claim respondent is now taking a contrary position, “arguing that a single day at a single store could be used as a basis for inference and extrapolation, even
Our review of the record finds no such contradictory positions taken by respondent or adopted by the trial court. The evidence presented established that each appellant had varying duties. Batze was in charge, inter alia, of displays, which required him not only to build and fill them, a nonexempt task, but to deal with vendors and consider how displays could be used to the best advantage of his store. Neither Cesar nor Hayes spent a significant portion of his time building displays. Nor did either spend as much time in the back room as Batze, who had his office there in order to deal more efficiently with vendors and fulfill his responsibility of keeping the area organized. Both Cesar and Hayes spent more time managing the front end of the store and ensuring checkers and courtesy clerks performed efficiently, while providing superior service to the customers. This required them to step in and out of the checkstands, a nonexempt task Batze rarely performed as the bulk of his workday occurred before the store opened for customers. Batze spent little time scheduling, as his crew was fairly small, whereas Hayes spent a significant number of hours per week on this task at one of his stores, scheduling more than 70 employees. Both Hayes and Cesar had responsibility for their stores on the store manager‘s days off or when the manager was on vacation or leave. Moreover, both had been acting store managers at various times, something Batze never experienced, and had significantly more responsibility for discipline than Batze. In reaching its conclusion, the court took all this evidence into account, including evidence of the variations in tasks from party to party and store to store.
Appellants claim there were substantial gaps in the evidence that precluded a finding in respondent‘s favor for every contested period of their employment. For example, appellants contend there was no defense evidence covering Batze for the period prior to 2004, when Macaluso became the store manager and the observational study was conducted. They further point to the lack of defense witnesses who directly observed Cesar for the periods he was assigned to Pleasanton, Pleasant Hill, Lafayette and Orinda, or for Hayes for part of the period he was assigned to the Arden Way store.41 As discussed, there was sufficient defense evidence from which the court could make reasonable inferences about how appellants spent their time at every store. Although the significant period for determining exempt status is the work week, and “‘employees[‘] exempt or non-exempt status can vary on a week
Similarly supported was the court‘s finding that to the extent appellants spent excessive amounts of time performing tasks that could have been performed by hourly workers, respondent realistically expected them to be engaged primarily in managerial activities. (See Ramirez, supra, 20 Cal.4th at p. 802 [“[A]n employee who is supposed to be engaged in [exempt] activities during most of his working hours and falls below the 50 percent mark due to his own substandard performance should not thereby be able to evade a valid exemption“].) The court cited the extensive and costly management training respondent provided most new managers, the contents of the RLD program, the numerous managerial responsibilities assigned to the AMs, the size and complexity of the stores, the testimony of multiple managerial employees that they had no trouble meeting the operating ratio, providing good customer service, keeping the check lines moving, the shelves stocked and the stores clean and organized without doing the work themselves or relying excessively on salaried employees, the evidence that stores suffered when managerial employees spent too much time on nonexempt tasks, and the evidence that Cesar in particular had been criticized for performing hourly work rather than attending to managerial duties. The court‘s finding as to respondent‘s realistic expectations, amply justified by the evidence, further supports the determination that appellants were exempt employees.
Appellants claim the trial court improperly placed on them the burden of proving that they performed nonexempt work. They point to its citation to the 1993 DLSE letter suggesting a presumption arises that an employee‘s duties
Appellants claim the court improperly categorized the three work activities frequently engaged in by AMs: managing out-of-stocks, store walks, and working at the front end.43 They contend that scanning the bar codes for out-of-stock products should have been deemed a nonexempt activity because it is routinely done by hourly employees. The court recognized that this task could be done by hourly employees. When performed occasionally by an AM, however, the court concluded that walking the aisles scanning out-of-stocks was exempt because it assisted the AM to fulfill his or her managerial responsibility for determining when and where out-of-stocks occur and minimizing them. The regulations permit the trier of fact to make such distinctions. (See
Appellants claim that store walks should have been deemed nonexempt because they might involve cleaning, fixing displays, stocking shelves or returning products to the correct shelves. The court found that the “long” store walks, the walks lasting “from two to two and a half hours,” were “the chief method a manager uses to determine what is going on in the store and where (and with whom) he needs to devote attention,” that the walks “offer an opportunity to interact with employees, survey the merchandise and spot needs, especially with respect to the all important out-of-stocks,” and that “[a] momentary pause” during a lengthy walk conducted for these purposes did not “turn the activity from exempt to non-exempt.” That managerial employees performed lengthy store walks once or twice a day for the purpose of talking to department heads and other employees, assessing the condition of the store and determining the problems that needed to be addressed throughout the store that day, was established by the testimony of numerous witnesses, and supported the court‘s categorization of store walks as exempt tasks.
Appellants similarly claim that time spent at the front end was nonexempt, contending it was “uncontroverted” that much of their front-end time was spent checking, bagging and performing other routine services for customers. To the contrary, the evidence established that AMs were put at the front to improve customer service by observing the checkers and courtesy clerks to determine whether they were working efficiently and providing satisfactory customer service. AMs were told to stand in one place to observe and manage, not to check. Moreover, as appellants acknowledge, if circumstances required an AM to step in to check, that time was recorded on the checking data submitted by respondent. The trial court reviewed that data carefully and concluded that with minimal exceptions, appellants were not required to spend excessive time checking.
B. The court properly rejected Hayes‘s and Batze‘s claims for work performed during the strike.
As discussed, the pertinent Wage Order (No. 7-2001) provides that activities constituting exempt work and nonexempt work are to be construed in the same manner as such activities are construed in certain regulations under the Fair Labor Standards Act, effective as of 2001, including former section
The court ruled that the strike constituted an emergency under the regulations. It further ruled that the period Hayes spent replacing striking employees was beyond the statute of limitations for his complaint, filed in October 2008. With respect to Batze, the court found not credible his testimony that he worked lengthy hours replacing striking workers in Lake Isabella and Bakersfield. Batze was impeached by his own calendar and by checking data showing him working in Clovis during the strike. In addition, Macaluso denied that Batze had been sent to other stores to work after she arrived in January 2004. The court‘s finding was supported by substantial evidence, and its decision to credit respondent‘s evidence over Batze‘s testimony “with respect to how Batze spent his time and how long he worked” was within its purview as the trier of fact.
C. The trial court did not err in finding the statute of limitations was not tolled.
Appellants contend that under the rule of American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538 [38 L.Ed.2d 713, 94 S.Ct. 756] (American Pipe), the statute of limitations was tolled from the date the Knoch action was filed in 2002 until the trial court‘s order denying class certification was filed in September 2008, and that their work assignments dating back to 1998 should have been at issue. We conclude the court properly analyzed the tolling issue under the relevant authorities.
In American Pipe, the United States Supreme Court held that under certain limited circumstances, the filing of a class action lawsuit could toll the statute of limitations with respect to individual members of the putative class who made timely motions to intervene after the court denied certification.
Here, class certification was denied due to lack of commonality, giving rise to a presumption that American Pipe tolling should not apply. The trial court, nonetheless, considered whether to do so under the standards set forth in Jolly. It found the discrepancies between the claims of the members of the putative class were “too great for the Knock action to have put [respondent] on notice that it needed to preserve evidence with respect to every one of its managers and assistant managers,” that respondent had no way of predicting which of the
The evidence presented bore out the court‘s conclusions. Each appellant relied on different facts and different scenarios, and there was little overlap in the evidence to support the respective claims. Moreover, numerous managers and AMs testified that the majority of their workdays was spent attending to managerial duties. Respondent could not have anticipated who might be a member of the putative class when the Knock action was filed in 2002, and thus had no realistic opportunity to prepare a defense for the potential claimants. The fact that nearly 200 plaintiffs had already brought individual claims before the class certification was denied adds further support to the trial court‘s ruling, as it demonstrates that denial of class certification was not unforeseen. The court also found that Cesar and Hayes unreasonably delayed asserting their claims after certification was denied, adding to the prejudice to respondent of defending stale claims. Under these circumstances we discern no error in the trial court‘s determination that the statute of limitations was not tolled.
DISPOSITION
The judgment is affirmed. Respondent is awarded costs on appeal.
Epstein, P. J., and Willhite, J., concurred.
A petition for a rehearing was denied May 3, 2017, and the opinion was modified to read as printed above. Appellants’ petition for review by the Supreme Court was denied July 19, 2017, S241934.