NIVIDA LUBIN et al., Plaintiffs and Appellants, v. THE WACKENHUT CORPORATION, Defendant and Respondent.
No. B244383
Second Dist., Div. Four
Nov. 21, 2016.
5 Cal. App. 5th 926
Weinberg, Roger & Rosenfeld, Emily P. Rich, Theodore Franklin, Manuel A. Boigues; Posner & Rosen, Howard Z. Rosen, Jason C. Marsili, Brianna M. Primozic; James R. Hawkins and Gregory E. Mauro for Plaintiffs and Appellants.
Gibson Dunn & Crutcher, Theodore J. Boutrous, Jr., Theane Evangelis, Bradley J. Hamberger, Jennifer E. Rosenberg; Gordon & Rees, Stephen E. Ronk, Mollie Burks-Thomas and Michelle L. Steinhardt for Defendant and Respondent.
Horvitz & Levy, John A. Taylor, Jr., Felix Shafir, and Robert H. Wright for Chamber of Commerce of the United States of America, National Association of Security Companies and California Association of Licensed Security Agencies as Amici Curiae on behalf of Defendant and Respondent.
OPINION
EPSTEIN, P. J.—Appellants Nivida Lubin, Sylvia M. Maresca, and Kevin Denton (together plaintiffs) filed this action on behalf of themselves and similarly situated persons, alleging defendant and respondent The Wackenhut Corporation (Wackenhut)1 violated California labor laws by failing to provide employees with off-duty meal and rest breaks and by providing inadequate wage statements. The trial court initially granted plaintiffs’ motion for class certification. However, as the case approached trial, the United States Supreme Court reversed a grant of class certification in Wal-Mart Stores, Inc. v. Dukes (2011) 564 U.S. 338 [180 L.Ed.2d 374, 131 S.Ct. 2541] (Wal-Mart). Relying on Wal-Mart, Wackenhut moved for decertification. The trial court granted the motion. Plaintiffs appeal, contending that decertification was not warranted by a change in circumstances or case law and that the court used improper criteria in granting the motion for decertification. We conclude that the trial court erred in granting the motion.
FACTUAL AND PROCEDURAL SUMMARY
Wackenhut is an international security solutions company, employing thousands of private security officers who are assigned to provide physical security services to a variety of clients, including commercial businesses, governmental entities, gated communities, industrial facilities, oil refineries,
Plaintiffs are former security officers employed by Wackenhut. In the operative pleading, they allege that Wackenhut violated the
Prior to class certification, plaintiffs moved to compel production of the on-duty meal agreements for all Wackenhut security officers working in California. The trial court denied the motion, finding the production would be burdensome and oppressive. Its denial was without prejudice to “further, more specific requests or interrogatories.” In September 2009, plaintiffs, on behalf of themselves and all others similarly situated, moved for class certification. Their motion proposed the following five subclasses: “(a) All non-exempt Security Officers employed by Wackenhut in California from January 7, 2001 through on or about May 23, 2008 who at the time of hire did not sign an on-duty meal period agreement that stated that the Security Officers could revoke the agreement and who were not provided with an off-duty meal period; [[] (b) All non-exempt Security Officers employed by Wackenhut in California during the Class Period to work at one-officer posts and who, in accordance with the agreement between Wackenhut and its clients, were not provided an off-duty meal period; [[] (c) All non-exempt Security Officers employed by Wackenhut in California during the Class Period to work at posts with multiple officers and who, in accordance with the agreement between Wackenhut and its clients, were not provided an off-duty meal period; [[] (d) All non-exempt Security Officers employed by Wackenhut in California during the Class Period who were not authorized and permitted to take rest breaks; [and] [] (e) All non-exempt Security
On March 3, 2010, the trial court granted plaintiffs’ motion, certifying the class as “‘all non-exempt Security Officers employed by Wackenhut in California during the Class Period of January 7, 2001 to the present,’ ”2 excepting proposed subclasses which the court found were unascertainable. Plaintiffs propounded an interrogatory on March 10, 2010, asking Wackenhut to provide the date on which each class member signed a meal period agreement that included revocation language. In a tentative ruling on May 6, 2010, the court stated that “[m]erits discovery in a certified class action which involves as many current and former employees as this case will inevitably be burdensome and time consuming. The parties may want to consider whether an agreement for statistically valid sampling might be acceptable in lieu of full discovery.”
On November 19, 2010, Wackenhut objected to plaintiffs’ interrogatory as unduly burdensome and instead offered plaintiffs a reasonable opportunity to inspect responsive documents. After several meet-and-confer sessions between November 2010 and January 2011, the parties agreed to use statistical sampling in lieu of document production or inspection. They entered into a stipulation under which Wackenhut agreed not to challenge the sampling on the grounds that a less than statistically significant number of personnel files were sampled or that there was a bias in the sample. Wackenhut “reserve[d] all rights to challenge, contest, dispute and/or object to the original 1,200 files selected by Plaintiffs for sampling as being an inappropriate sample for any [other] reason.”
On June 20, 2011, the United States Supreme Court reversed a class certification order in Wal-Mart, supra, 564 U.S. 338. Subsequently, on September 23, 2011, Wackenhut moved for decertification, citing Wal-Mart as a significant change in law justifying reconsideration of class certification. In their opposition to Wackenhut‘s motion, plaintiffs again proposed five subclasses as a way to obviate some of the concerns raised in Wackenhut‘s motion.3
This timely appeal followed.
DISCUSSION
I
A. Standard of Review
“The party advocating class treatment must demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives. [Citations.] ‘In turn, the “community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.“’ [Citations.]” (Brinker, supra, 53 Cal.4th at p. 1021.)
The factor at issue in this appeal is predominance. “The ‘ultimate question’ the element of predominance presents is whether ‘the issues which
Any party may file a motion to decertify a class. (
We review a decertification order for abuse of discretion. (Brinker, supra, 53 Cal.4th at p. 1022; Sav-On, supra, 34 Cal.4th at p. 326.) A trial court ruling supported by substantial evidence generally will not be disturbed unless improper criteria were used or erroneous legal assumptions were made. (Sav-On, at pp. 326–327.) “An appeal from an order denying class certification presents an exception to customary appellate practice by which we review only the trial court‘s ruling, not its rationale. If the trial court failed to conduct the correct legal analysis in deciding not to certify a class action, “‘an appellate court is required to reverse an order denying class certification . . . even though there may be substantial evidence to support the court‘s order.‘“’ [Citation.] In short, we . . . ‘consider only the reasons cited by the trial court for the denial, and ignore other reasons that might support denial.‘” (Alberts v. Aurora Behavioral Health Care (2015) 241 Cal.App.4th 388, 399 [193 Cal.Rptr.3d 783] (Alberts).)
“Nearly a century ago, the Legislature responded to the problem of inadequate wages and poor working conditions by establishing the [Industrial
B. Wal-Mart
The trial court found that Wackenhut‘s decertification motion was supported by changed circumstances because the Supreme Court decision in Wal-Mart, supra, 564 U.S. 338 created significant new case law, warranting a reassessment of class certification. We begin with a brief overview of Wal-Mart, then address each of plaintiffs’ claims and the court‘s application of Wal-Mart in its decertification order.
Wal-Mart, supra, 564 U.S. 338, involved class certification of some 1.5 million current and former female employees, alleging that their employer, Wal-Mart, discriminated against them based on sex by denying them equal pay and promotions, in violation of title VII of the
Also at issue in Wal-Mart was the means by which the plaintiffs planned to establish liability and damages. Plaintiffs proposed to select a sample of class
As discussed below, the trial court‘s reliance on Wal-Mart to support decertification for each of plaintiffs’ claims overextended holdings in that case. The crux of Wackenhut‘s motion for decertification and the court‘s subsequent order was Wal-Mart‘s treatment of statistical sampling, even though statistical sampling had been introduced only in relation to one of plaintiffs’ three claims, the meal period claim. Thus, although the court had urged the parties to consider using statistical sampling to make the class action more manageable as to the meal period claim, it determined that this method was disapproved in Wal-Mart.
After the trial court issued its decertification order, the Supreme Court clarified that Wal-Mart does not “stand for the broad proposition that a representative sample is an impermissible means of establishing classwide liability.” (Tyson Foods, Inc. v. Bouaphakeo (2016) 577 U.S. 442 [194 L.Ed.2d 124, 136 S.Ct. 1036, 1048] (Tyson).) “A representative or statistical sample, like all evidence, is a means to establish or defend against liability. Its permissibility turns not on the form a proceeding takes—be it a class or individual action—but on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action.” (Id. at p. [136 S.Ct. at p. 1046].) Thus, “[w]hether and when statistical evidence can be used to establish classwide liability will depend on the purpose for which the evidence is being introduced and on ‘the elements of the underlying cause of action . . . ’ [citation].” (Ibid.) In Tyson, a case involving a class of employees claiming that they did not receive statutorily mandated overtime pay for time spent “donning and doffing protective gear,” the court upheld the use of statistical evidence to calculate the additional time class members spent donning and doffing, even though differences in the type of gear worn meant that plaintiffs may have taken different amounts of time to don and doff. (Id. at p. [136 S.Ct. at pp. 1042, 1048–1049].) The court distinguished Wal-Mart, explaining that “[w]hile the experiences of the employees in Wal-Mart bore little relationship to one another, in this case each employee worked in the same facility, did similar work, and was paid under the same policy . . . . [U]nder these circumstances the experiences of a subset of
Here, statistical evidence was proposed only for the limited purpose of determining how many employees had signed on-duty meal agreements lacking revocation language during the class period. Plaintiffs already had established through deposition testimony that Wackenhut required all employees to sign on-duty meal agreements; that prior to 2004, most of the meal agreements lacked the required revocation language; that between 2004 and 2008 only new employees signed meal agreements with revocation language; and that it was only in 2008 and thereafter that all employees signed meal agreements with the required revocation language. As in Tyson, under these circumstances the percentage of the subset of employees who signed meal agreements lacking the required revocation language during a given time period is probative as to the percentage of the class that signed meal agreements lacking the required revocation language. Although, as Tyson has made clear, Wal-Mart does not prohibit the broad use of statistical sampling in class action lawsuits, as we discuss below, the decision whether to allow statistical evidence ultimately is within the discretion of the trial court.
Throughout its order the court also found that individualized inquiries were necessary because, pursuant to Wal-Mart, Wackenhut was entitled to defend by proving that, even if plaintiffs presented evidence that it had a general policy of not providing valid meal or rest breaks, in practice some employees were afforded an off-duty meal or rest break. This rationale misapplies Wal-Mart. In Wal-Mart, the Supreme Court found that plaintiffs failed to present evidence establishing the existence of a common policy of discrimination. In this case, when it originally certified the class, the trial court found that plaintiffs had presented sufficient evidence that Wackenhut had policies and practices that violated wage and hour laws. Because plaintiffs met their burden of establishing a common policy, whether an individual was permitted to take a valid meal or rest break on any given day is a question of damages. (See Brinker, supra, 53 Cal.4th at p. 1022 [” ‘As a general rule if the defendant‘s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages’ “].)
The distinctive nature of
II
A. Meal Period Claim
“An employer‘s duty with respect to meal breaks . . . is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.” (Brinker, supra, 53 Cal.4th at p. 1040.)
Wackenhut‘s standard practice was to have all new security officers sign an on-duty meal agreement during orientation. It then allowed its clients to determine whether Wackenhut security officers would be provided an on-duty or off-duty meal period at each site. The vast majority of clients preferred to provide on-duty meal periods.
The trial court also found the testimony of Wackenhut managers was not sufficient to prove that in every case class members were provided with on-duty meal periods. Instead, the evidence only supported the conclusion that as a general matter, Wackenhut managers intended to provide on-duty meal periods at most, although not all, worksites.5
Accordingly, the court found that liability depended on an individualized assessment of the meal periods taken by each class member at each site. The court explained that individual inquiries were necessary pursuant to Wal-Mart because Wackenhut had a “right to defend itself by proving that, in practice, even at worksites that typically had on-duty meal periods, some class members were actually authorized to take off-duty meal periods, as evidence in the record suggest[ed].”6
In Brinker, the court instructed that for purposes of class certification, the focus must be on the policy the plaintiffs are challenging and whether the legality of that policy can be resolved on a classwide basis. (Brinker, supra, 53
Here, rather than focusing on whether plaintiffs’ theory of liability as described in their complaint—that Wackenhut violated wage and hour requirements by not providing security officers with off-duty meal periods—was susceptible to common proof, the court focused on whether individualized inquiries would be required to determine whether in practice, security officers ever received an off-duty meal period. (See Benton v. Telecom Network Specialists, Inc. (2013) 220 Cal.App.4th 701, 725 [163 Cal.Rptr.3d 415] (Benton) [trial court employed improper criteria by focusing on whether individualized inquiry required to determine which technicians missed meal and rest periods, rather than focusing on plaintiffs’ theory of liability, that employer violated wage and hour requirements by failing to adopt a meal and rest period policy].)
Wal-Mart, supra, 564 U.S. at page 350, requires class claims to depend on a common contention which “must be of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Here, plaintiffs’ theory at class certification was based on a common contention: that Wackenhut violated California labor laws by failing to provide employees with off-duty meal periods. This violation resulted from Wackenhut‘s policy of requiring all employees to sign on-duty meal agreements and allowing client preference to dictate whether an employee had an off-duty or on-duty meal period, rather than itself determining, as the employer, whether the nature of the work at each site prevented its employees from having an off-duty meal period. Whether plaintiffs’ theory has merit is a common question that is “capable of classwide resolution.” (Ibid.; see Faulkinbury, supra, 216 Cal.App.4th at p. 234 [employer‘s blanket policy requiring all new employees, regardless of individualized job duties, to sign an on-duty meal agreement is a classwide issue].)
Nor was the trial court correct in determining that Wal-Mart required individualized inquiries. In Brinker, supra, 53 Cal.4th at page 1022, the California Supreme Court explained that ” ‘[a]s a general rule if the defendant‘s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove
In Alberts, supra, 241 Cal.App.4th at page 407, the Court of Appeal held the trial court erred in requiring, at the certification stage, that plaintiffs demonstrate a “‘universal practice’ on the part of management to deny nursing staff the benefit of the Hospital‘s written break policy” and that the proper question was “whether plaintiffs had articulated a theory susceptible to common resolution.” (Ibid.) Alberts explained that requiring plaintiffs to prove class members missed all breaks to which they were entitled was an “incorrect standard for certification that, as other courts have also found, if correct, would prevent certification of virtually any wage and hour class. (See, e.g., Bufil v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193, 1207 [76 Cal.Rptr.3d 804] (Bufil) [‘a class is not inappropriate merely because each member at some point may be required to make an individual showing as to eligibility for recovery‘]); Benton, [supra, 220 Cal.App.4th] at pp. 725–728 [reversing order denying certification despite evidence that some putative class members received breaks].)” (Alberts, at p. 407.)
As Faulkinbury, supra, 216 Cal.App.4th at page 235 explains, “the employer‘s liability arises by adopting a uniform policy that violates the wage and hour laws. Whether or not the employee was able to take the required break goes to damages, and ‘[t]he fact that individual [employees] may have different damages does not require denial of the class certification motion.’ [Citation.]”
1. Nature of the Work Exception
A key issue driving the court‘s decertification order on the meal period claim was its finding that Wackenhut‘s affirmative defense, the nature of the work exception, could not be adjudicated on a classwide basis, even if the class were divided into subclasses as proposed by the plaintiffs, because common issues did not predominate. The nature of the work exception has three express conditions: (1) the nature of the work must prevent the employee from being relieved of all duty; (2) the employee must agree to the on-duty meal period in writing; and (3) the written agreement must provide
In the class certification order, the court found that common questions predominated because plaintiffs had shown Wackenhut had a uniform practice allowing clients to determine whether to provide on-duty meal periods, but in its decertification order, the court concluded that whether Wackenhut allowed client preference to dictate whether a security officer was provided an on-duty meal period was not the correct inquiry. Rather, the court concluded, even if Wackenhut had not made a determination whether the nature of the work prevented its employees from taking an off-duty meal period before allowing its clients to provide on-duty meal periods, it still was entitled to prove at trial whether on-duty meal periods actually were permissible due to the nature of the work.
In analyzing whether the nature of the work permitted on-duty meal periods, the trial court found that “because the duties and work environments differ dramatically amongst the class, the nature of the work performed by Wackenhut security officers [could not] be resolved on a classwide basis.” In reaching its determination, the court considered a five factor test outlined by the Division of Labor Standards Enforcement (DLSE),7 noting that California courts have yet to delineate the scope of the nature of the work exception. The five factors are (1) the type of work; (2) the availability of other employees to provide relief to an employee during a meal period; (3) potential consequences to the employer if the employee is relieved of all duty during the meal period; (4) the ability of the employer to anticipate and mitigate the consequences; and (5) whether work product or process will be destroyed or damaged by relieving the employee of all duty. The court explained that this was not an exhaustive list of factors and that the ” ‘critical determination . . . whether an on-duty meal period may be lawfully provided by an employer is whether the employer can establish that the facts and circumstances in the matter point to the conclusion that the nature of the work prevents the employee from being relieved of all duty.’ ”
Plaintiffs argued that the differences among the class members were not significant because all security officers “‘observe, patrol, protect, assist, and
Citing an opinion letter from the DLSE, the court also found that plaintiffs’ theory that Wackenhut could relieve workers at almost every worksite was “based on the incorrect premise that if an employer can theoretically remake its business operations to provide an off-duty meal period, it should be required to do so and precluded from taking advantage of the nature of the work exception.” The court also noted that even if plaintiffs’ theory were correct, an analysis of what steps Wackenhut could have taken to provide off-duty meal periods would require numerous individualized inquiries.
Finally, the court found that plaintiffs’ proposed subclasses did not make their meal break claim more amenable to classwide treatment because the subclasses did not “eliminate the need for numerous individualized inquiries to determine whether the nature of the work performed by class members allowed for on-duty meal periods.”
Two appellate decisions in class action cases particularly have analyzed the nature of the work defense in the context of the DLSE opinion letter: Faulkinbury, supra, 216 Cal.App.4th 220 and Abdullah, supra, 731 F.3d 952. Neither was available to the trial court in this case since both were published after the court granted Wackenhut‘s decertification motion. Each clarifies the scope of the nature of the work defense in the class action context. In Faulkinbury, as here, the plaintiffs were employees who worked for a private security guard company, Boyd. Boyd provided security services to a range of clients, including gated residential communities, hospitals, commercial buildings, and retail stores. (Faulkinbury, at p. 225.) The plaintiffs alleged that when hired, they had to sign an agreement to take on-duty meal periods, and that they never took an off-duty meal break. “As a defense to class certification, Boyd asserted the nature of the work exception . . . .” (Id. at p. 234.) In response, plaintiffs argued “[l]iability turns on the issue whether Boyd‘s policy requiring all security guard employees to sign blanket waivers of off-duty meal breaks is lawful. That issue can be resolved on a classwide basis.” (Ibid.)
In light of Brinker, the Court of Appeal found that whether Boyd‘s policy requiring all security guard employees to sign blanket waivers of off-duty meal breaks was lawful “can be resolved on a classwide basis.”
In Abdullah, supra, 731 F.3d 952, the Ninth Circuit reached the same conclusion in a case with strikingly similar facts. There, a class of private security guards working for U.S. Security Associates, Inc. (USSA), alleged violations of California labor laws. (Id. at pp. 954–956.) USSA guards worked at over 700 locations in California, including hotels, hospitals, warehouses, and construction sites. (Id. at p. 954.) USSA challenged the district court‘s certification of a meal period subclass on the grounds that the plaintiffs had “not established ‘commonality,’ as required under
After noting that California courts had not addressed the substantive scope of the nature of the work exception, the Ninth Circuit reviewed several DLSE opinion letters concerning the parameters of that exception. (Abdullah, supra, 731 F.3d at pp. 958–959.) The court explained that the “DLSE has emphasized that the ‘on-duty’ meal period is a ‘limited[] alternative’ to the off-duty meal period requirement. DLSE Opinion Letter 2009.06.09 at 8. Critically, it is ‘not described or defined as a waiver of an off-duty meal period,’ id. (emphasis added), but rather as ‘a type of meal period that can be lawfully provided only in those circumstances in which the three express conditions set forth in [the regulation] are satisfied.’ ” (Id. at p. 959, fn. omitted.) The court identified two categories of work where the DLSE has found that the nature of the work exception applies: “(1) where the work has some particular, external force that requires the employee to be on duty at all times, and (2) where the employee is the sole employee of a particular employer.” (Ibid.)
The court concluded that “the plaintiffs’ claims [would] yield a common answer that [was] ‘apt to drive the resolution of the litigation,‘” as required by
“Consider, for example, the illustrative list of duties that USSA has provided to demonstrate the variety of its employees duties: ‘[T]he duties performed by security guards include patrolling parking lots; checking receipts; signing in and out trucks; setting up school parking lots and assisting with student drop-offs and pick-ups; inspecting vehicles; restraining unruly patients; escorting dead bodies; checking the inventory, mileage, and temperature of trucks; working undercover to catch shoplifters; monitoring psychiatric patients; checking in employees and answering phones at a front desk; performing surveillance; and enforcing hotel quiet hours.’
“These duties are undoubtedly distinct from one another, but the only reason any of them ‘prevent’ the employee from taking a meal period is because USSA has chosen to adopt a single-guard staffing model. See
“On this basis, we conclude that the merits inquiry will turn on whether USSA is permitted to adopt a single-guard staffing model that does not allow for off-duty meal periods—namely, whether it can invoke a “nature of the work” defense on a class-wide basis, where the need for on-duty meal periods results from its own staffing decisions. Such an inquiry is permissible under Brinker and Faulkinbury; the latter clarified that an employer may be held liable under state law ‘upon a determination that [its] uniform on-duty meal break policy [is] unlawful,’ with the “nature of the work” defense being relevant only to damages. Faulkinbury, supra, 216 Cal.App.4th at p. 235. Thus, the legality of USSA’s policy is a ‘significant question of law, Mazza [v. American Honda Motor Co. (2012)] 666 F.3d 581, 589, that is ‘apt to drive the resolution of the litigation’ in this case, Wal-Mart, [supra, 654 U.S.] at pp. 349-350.” (Abdullah, supra, 731 F.3d at pp. 962-963, fns. omitted.)
Wackenhut, as the employer, was required to provide 30-minute off-duty meal periods to its employees. Because an “‘on duty’ meal period
In this case, Wackenhut, not its clients, is the employer and hence was responsible for determining whether the nature of the work at each site prevented its employees from being relieved of all duty during the meal break. Wackenhut offered no evidence that it made the determination on the basis of the five-factor test required by the DLSE: the “type of work, the availability of other employees to provide relief to an employee during a meal period, the potential consequences to the employer if the employee is relieved of all duty, the ability of the employer to anticipate and mitigate these consequences such as by scheduling the work in a manner that would allow the employee to take an off-duty meal break, and whether the work product or process will be destroyed or damaged by relieving the employee of all duty.” (Dept. of Industrial Relations, DLSE Opn. Letter No. 2002.09.04 (Sep. 4, 2002) p. 2.) Rather, the record indicates that Wackenhut allowed client preference to dictate whether officers were provided on-duty or off-duty meal periods. Client preference cannot be determinative under the wage order. In the 2002 DLSE opinion letter, the department concluded that “an off-duty meal period must be provided unless [the five] factors, taken as a whole, decisively point to the conclusion that the nature of the work makes it virtually impossible for the employer to provide the employee with an off-duty meal period.” (Id. at p. 2.) Thus, plaintiffs’ claim that Wackenhut’s common practice of allowing client preference to dictate whether meal periods were on duty or off duty, resulting in the vast majority of plaintiffs receiving on-duty meal periods in violation of IWC wage order No. 4-2001, is amenable to class treatment.
Wackenhut cannot discharge its duty by arguing that its clients that requested on-duty meal periods determined that the nature of the work prevented security officers from being relieved of all duty. A similar issue was discussed in Benton, supra, 220 Cal.App.4th at page 729. In that case the court concluded that an employer’s “affirmative obligation to authorize and permit meal and rest breaks” could not be discharged, even if a co-employer staffing company had adopted a lawful meal and rest break policy, in the “absence of any evidence showing that [the employer] took steps to ensure that the staffing company had such a policy in place.” (Ibid.) We agree with that analysis. Thus, Wackenhut could not discharge its affirmative duty to provide lawful meal and rest breaks without presenting evidence that it had precautions in place to ensure that its clients considered and applied the five-factor test outlined by the DLSE in determining whether the nature of the
Wackenhut also has failed to show that individual issues predominate in this case. Plaintiffs argue that the nature of the work defense can be litigated on a classwide basis by showing that regardless of variations in specific job assignments, Wackenhut could have relieved class members of all duty for meal periods. Specifically, plaintiffs’ security expert explained that Wackenhut could relieve security officers for off-duty meal periods by (1) having security officers and supervisors at multiofficer sites relieve each other; (2) having field supervisors who already travel from site to site, relieve security officers for breaks; (3) increasing the current number of “rover” security officers that Wackenhut already uses to report to different locations throughout the day to relieve security officers for breaks; and (4) where clients agree, having employees of Wackenhut’s clients relieve security officers for breaks.
Wackenhut argues that individual issues predominate because the nature of the work exception can only be determined by inquiring into the details of each individual client, worksite, job post, and shift. If an employer, with employees working at multiple sites, with various job duties, had made individualized determinations regarding the nature of the work, and employees challenged whether those determinations were correctly made, class certification might be inappropriate because the employer should have an opportunity to defend each of those individualized determinations. But, in this case, since the employer did not analyze whether the nature of the work exception applies before requiring employees to take on-duty meal periods, it cannot rely on the nature of the work defense to bar class certification.
2. Invalid Meal Agreements
The second and third conditions of the affirmative defense require that the employee sign a written agreement that specifies on-duty meal breaks and that also provides that the employee may, in writing, revoke the agreement at any time. (
In its decertification order, the trial court found that the plaintiffs’ plan to use statistical sampling to determine the percentage of agreements that lacked revocation language was essentially indistinguishable from the method of proof rejected in Wal-Mart. Specifically, the court noted that Wal-Mart, supra, 564 U.S. at pages 366-367, held “that the use of statistical sampling as a
The trial court also concluded that even if plaintiffs were to obtain every meal period agreement and attempt to prove liability without relying on statistical sampling, individual issues would still predominate. It explained that although examining each agreement and determining whether it contained revocation language would be nothing more than a “tedious and extensive audit that is not likely to result in many factual disputes,” proving class members had signed invalid agreements would not, on its own, establish liability because plaintiffs would still have to prove that class members who signed invalid agreements also had on-duty meal periods.
Plaintiffs had proposed a subclass consisting of class members who signed meal agreements lacking a revocation clause who also worked at a post with an on-duty meal period. The trial court found the proposed subclass was not “readily ascertainable” because plaintiffs failed to define the class in objective terms without regard to the merits of the claim. The court noted that the “proposed subclass definition includes elements necessary to establish liability, and thus determining who is in the subclass would require an evaluation” of whether an agreement was invalid and whether meal periods were on duty, which would require answering numerous individualized questions.
Even without statistical sampling, determining which employees signed a meal agreement that lacked a revocation clause can be ascertained. As discussed, the parties agreed to statistical sampling as an alternative to Wackenhut producing meal agreements for all class members or allowing plaintiffs to inspect Wackenhut’s files. During the hearings on Wackenhut’s decertification motion, the court warned Wackenhut that by arguing, pursuant to Wal-Mart, that statistical sampling violated its due process rights, it waived its objection to limiting discovery of the meal agreements. In response, Wackenhut agreed to produce all of the meal agreements and engage in full discovery, noting that it was “not asking to have it both ways.” The court acknowledged in its order that determining which class members signed a
Additionally, determining whether an employee, who signed a meal agreement that is invalid on this ground, also had on-duty meal periods, does not require numerous individualized questions. At the hearing on the motion for decertification, plaintiffs introduced a spreadsheet produced by Wackenhut. The spreadsheet was generated by a Wackenhut computer program and includes each employee’s name, the client for whom the employee worked, address, start time, stop time, and a column on the right for nonpaid breaks. Plaintiffs argued that the spreadsheet could be sorted by the nonpaid break column, making it easy to ascertain which employees had a paid on-duty meal period. Wackenhut did not challenge the accuracy of the spreadsheet for determining which employees had off-duty meal periods. (See Brinker, supra, 53 Cal.4th at p. 1053 (conc. opn. of Werdegar, J.) [“[i]f an employer’s records show no meal period for a given shift over five hours, a rebuttable presumption arises that the employee was not relieved of duty and no meal period was provided”]; see also Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 963 [employers have duty to record their employees’ meal periods].) Thus, the proposed subclass was ascertainable.
Further, the use of statistical sampling in this case is distinguishable from the method rejected by the Supreme Court in Wal-Mart because, in that case, the plaintiffs proposed to use representative evidence as a means of overcoming the absence of a common policy. (Tyson, supra, 577 U.S. at p. 453-456.) In Wal-Mart, supra, 564 U.S. at p. 355, the only policy that plaintiffs were able to identify was that managers and supervisors had discretion in making employment decisions, a policy that in itself does not establish liability. Here, when the trial court originally certified the class, it found that plaintiffs had met their burden. They did so by proffering substantial evidence of a common practice by showing (through deposition testimony of Wackenhut managers) that meal agreements distributed between January 2001 and April or May 2004 lacked the required revocability clause, that meal agreements distributed between April or May 2004 and May 2008 contained the revocability clause but were signed only by new employees, and that it was not until May 2008, that Wackenhut distributed agreements with a revocability clause to all employees. Thus, unlike Wal-Mart, where the use of statistical sampling was the only evidence establishing liability, here, the results of the statistical sampling (calculating an average percentage of meal agreements lacking revocation language for
This case also is distinguishable from Wal-Mart because of the remedial nature of the
At oral argument, Wackenhut relied on Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1. Duran was a wage and hour class action involving alleged misclassification that proceeded through trial to a verdict. (Id. at p. 12.) On appeal, the California Supreme Court concluded that sampling errors required reversal. (Id. at p. 49.) Specifically, the court found that the sample was not sufficiently representative or random and that there was an intolerably large margin of error. (Id. at pp. 42, 43, 46.) The court explained that “without following a valid statistical model developed by experts, the [trial] court improperly extrapolated liability findings from a small, skewed sample group to the entire class.” (Id. at p. 33.) The court noted that individual issues may be managed through surveys and statistical sampling as long as “some glue” binds class members together apart from statistical evidence. (Id. at p. 31.)
Here, Wackenhut entered into a stipulation by which it agreed not to challenge the sample on grounds that a less than statistically significant number of personnel files were sampled or that there was a bias in the sample. Wackenhut does not challenge the accuracy or reliability of the proposed sampling method. Additionally, the statistical sample provided a secondary source of proof and was agreed to as a manageability tool, not as plaintiffs’ only form of proof. As discussed, at class certification plaintiffs offered testimony by Wackenhut managers that prior to 2004, the on-duty meal agreements did not contain the required revocation clause; beginning in 2004, only new hires signed meal agreements with revocation language; and it was not until 2008 that Wackenhut required all security officers to sign a meal agreement with a revocation clause. Thus, the testimony of Wackenhut managers and the meal agreements themselves constitute “some glue” that binds class members together apart from the statistical evidence.
The trial court’s conclusion that statistical sampling will lead to over- and underrecovery has not been explicitly resolved by California courts, but
In Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 750, the court found that “from the perspective of the administration of justice, . . . an important negative consequence of the use of statistical sampling to calculate damages [is that] it necessarily yields an average figure that will overestimate or underestimate the right to relief of individual employees.” (Ibid.) “Weighing against this disadvantage is the consideration that statistical inference offers a means of vindicating the policy underlying the Industrial Welfare Commission’s wage orders without clogging the courts or deterring small claimants with the cost of litigation. In a particular case, the alternative to the award of classwide aggregate damages may be the sort of random and fragmentary enforcement of the overtime laws that will fail to effectively assure compliance on a classwide basis.” (Id. at p. 751, fn. omitted.) The court found that it was “within the discretion of the trial court to weigh the disadvantage of statistical inference—the calculation of average damages imperfectly tailored to the facts of particular employees—with the opportunity it afforded to vindicate an important statutory policy without unduly burdening the courts.” (Ibid.)
Here, even if the trial court used its discretion to find that the disadvantages of statistical sampling outweighed the advantages, class certification of the meal break subclass was still appropriate because Wackenhut can produce the meal agreements or allow plaintiffs to inspect them.
B. Rest Break Claim
“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. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. . . . Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages.” (
Cal. Code Regs., tit. 8, § 11040, subd. 12(A) .) “If an employer fails to provide an employee a rest period in accordance with the applicable provisions of this order, the employer shall pay the employee one (1) hour of pay at the employee’s regular rate of compensation for each workday that the rest period is not provided.” (Id., subd. 12(B).)
When the trial court initially granted class certification, it “found that common issues predominated with respect to the rest period claim because . . . Wackenhut managers had testified in depositions that Wackenhut had a policy not to provide off-duty rest periods, and there is no nature of the work exception for off-duty rest periods.” In its motion for decertification, Wackenhut did not present new evidence rebutting plaintiffs’ evidence that prior to 2008, it had a uniform policy of not authorizing and permitting employees to take off-duty rest periods. Rather, Wackenhut challenged whether requiring employees to remain on the premises or be reachable by phone or radio, in the event that the rest period had to be interrupted in case of an emergency, meant that the rest period was on duty. Wackenhut also argued that “even if [it] had a policy not to provide off-duty rest periods (which it did not), in practice Wackenhut security officers overwhelmingly were able to take rest breaks.”
In its decertification order, the court found that the deposition testimony of Wackenhut managers on which it had relied in its original class certification order did not “conclusively establish that Wackenhut had a policy of providing on-duty rest periods at every worksite, but instead show[ed] only that Wackenhut intended to place certain restrictions on rest periods at some worksites, and [that those] restrictions may or may not have rendered such rest periods on duty.”
The court also found that resolution of the rest period claim would involve numerous individualized inquiries because evidence in the record showed class members at many Wackenhut worksites were provided with rest periods that lacked any restrictions and appeared to be fully off duty. Applying the same reasoning it applied to the meal period claim and again relying on Wal-Mart, the court explained that common issues no longer predominated because Wackenhut had a due process right to prove on an individualized basis that it provided off-duty rest periods to class members. The court cited declarations from two security officers and deposition testimony from plaintiff Lubin to support its finding that class members at many Wackenhut worksites were provided with rest periods that lacked any restrictions and appeared to be fully off duty. The court also explained that “analyzing whether any restrictions placed on rest periods made them on duty would require unmanageable individualized inquiries into the nature of the rest periods for each distinct worksite, shift, and security officer position.” The court rejected plaintiffs’ theory that if employees were required to remain on duty for their meal break, it would follow that they also were required to remain on duty for their rest periods. Instead, the court found it was entirely possible for an employer to provide an off-duty rest break even if it chose to provide an on-duty meal period.
As we have discussed, Wal-Mart does not support Wackenhut’s claim that it had a due process right to prove on an individualized basis that it provided off-duty rest periods to every class member. (See Duran, supra, 59 Cal.4th at p. 38 [“[n]o case, to our knowledge, holds that a defendant has a due process right to litigate an affirmative defense as to each individual class member”].) If defendant had a policy or practice that violates labor laws, then
In Faulkinbury, supra, 216 Cal.App.4th at page 237, the defendant submitted declarations from employees in opposition to a motion for class certification. “Some declarations stated the employee was relieved of duties in order to take off-duty rest breaks; other declarations stated breaks were taken during periods of inactivity; at least one declaration stated the employee determined, based on the circumstances, when to take a rest break; and another declaration stated the employee frequently took rest breaks at her post.” (Ibid.) The court explained that “in light of Brinker, this evidence at most establishes individual issues of damages, which would not preclude class certification” and that the defendant’s “liability, if any, would arise upon a finding that its uniform rest break policy, or lack of policy, was unlawful.” (Ibid.) Similarly, because the trial court in this case found that plaintiffs had made a showing that Wackenhut had a policy or practice of not providing off-duty rest breaks, anecdotal evidence that some employees had valid off-duty rest breaks does not preclude class certification; rather, it is evidence that is relevant to damages.
Determining whether restrictions placed on class members’ rest breaks made them on duty also is amenable to classwide treatment. A DLSE opinion letter of February 22, 2002, explains that the 10-minute rest break must be consecutive and must be “duty-free.” (Dept. of Industrial Relations, DLSE Opn. Letter Re: Rest Period Requirements (Feb. 22, 2002) p. 1.)11 However, unlike meal periods, there is no on-duty exception for rest breaks. Thus, whether the restrictions Wackenhut placed on rest breaks made them on duty (for example, requiring employees to remain on call) does not require individualized inquires; rather, it is a merits question that can be resolved on a classwide basis. (See Brinker, supra, 53 Cal.4th at p. 1034 [whenever possible, courts should “determine class certification independent of threshold questions disposing of the merits”].) Similarly, plaintiffs’ theory that employees who were required to work on duty for their meal periods, also were required to remain on duty for rest breaks is a merits question that can be resolved on a classwide basis.
At class certification, plaintiffs presented deposition testimony from Wackenhut managers that the trial court credited as establishing that Wackenhut had a policy of not providing off-duty rest breaks. Wackenhut did not present evidence rebutting plaintiffs’ evidence and has not shown that it had an informal policy or practice of authorizing and permitting employees to take 10-minute rest breaks. (See Brinker, supra, 53 Cal.4th at p. 1033 [employer is required to permit and authorize required rest breaks, and if it adopts uniform policy that does not do so, then “it has violated the wage order and is liable”]; see also Bufil, supra, 162 Cal.App.4th at p. 1199 [onus is on employer to clearly communicate authorization and permission to employees].) Wackenhut may rebut plaintiffs’ evidence of a lack of policy authorizing and permitting rest breaks by providing evidence of a uniform policy or practice. However, while Mr. Goodboe did not testify that there are no enhancements for California, he did testify that he was unaware of any California enhancements, and Wackenhut has not presented any other evidence demonstrating that there were in fact California enhancements authorizing and permitting rest breaks. Anecdotal evidence that some employees had rest breaks goes to damages and is not evidence of a uniform policy or practice. (Faulkinbury, supra, 216 Cal.App.4th at p. 237.) Further, Wackenhut’s defense that it had a policy or practice authorizing rest breaks is susceptible to classwide resolution. (See Bradley, supra, 211 Cal.App.4th at p. 1150 [plaintiffs’ theory that employer lacked rest break policy and failed to authorize breaks are matters of common proof—although employer could potentially
C. Wage Statement Claim
Pursuant to
An employee is deemed to suffer injury for purposes of
In support of class certification, plaintiffs advanced two theories of liability regarding wage statements. First, that wage statements provided by Wackenhut lacked three items required by
In its decertification order, the trial court explained that because the wage statement claim was derivative and individual issues now predominated with respect to the meal and rest break claims, the wage statement claim was no
Subsequent to the court’s order, the Legislature enacted Senate Bill No. 1255 to clarify what constitutes “suffering injury” for purposes of
The bill, codified at
Accordingly, we conclude that plaintiffs’ wage statement claim is amenable to class treatment under both of plaintiffs’ theories of liability. First, the question whether Wackenhut’s wage statements contained the required elements under
DISPOSITION
The order is reversed, and the case is remanded as to off-duty meal break, rest break, and wage statement issues, and for further proceedings consistent with this opinion. Appellants are entitled to their costs on appeal.
Willhite, J., and Manella, J., concurred.
A petition for a rehearing was denied December 14, 2016, and respondent’s petition for review by the Supreme Court was denied March 15, 2017, S239254.