Muhammed ABDULLAH, as an individual and on behalf of all others similarly situated, Plaintiff-Appellee, v. U.S. SECURITY ASSOCIATES, INC., a corporation, Defendant-Appellant.
No. 11-55653
United States Court of Appeals, Ninth Circuit
Argued and Submitted March 7, 2013. Filed Sept. 27, 2013.
731 F.3d 952
Kenneth H. Yoon (argued), Los Angeles, CA; Peter M. Hart and Amber S. Healy, Los Angeles, CA, for Plaintiff-Appellee.
Before: RICHARD A. PAEZ and PAUL J. WATFORD, Circuit Judges, and LESLIE E. KOBAYASHI, District Judge.*
OPINION
PAEZ, Circuit Judge:
The district court certified a class of former and current employees of U.S. Security Associates, Inc. (“USSA“), who allege that USSA committed numerous violations of California labor law. USSA filed a petition to appeal the district court‘s certification order, which we granted. See
I. BACKGROUND
A.
Plaintiff Muhammed Abdullah is a former employee of USSA, a private security guard company.1 USSA provides guards at over 700 locations in California, including hotels, hospitals, warehouses, and construction sites, among other locations. In addition to standing guard at such locations,
As a condition of employment, all of USSA‘s employees are required to sign “on-duty meal period agreements.” The record contains two versions of such agreements. The first, which was used prior to 2007, provides:
Due to the nature of the work I perform as a Security Guard, and due to the nature of the services provided by U.S. Security Associates, Inc., I understand that my work prevents me from being relieved of all duty during my meal period. I am voluntarily agreeing to have my daily meal period “on duty.” I understand that I will be paid at my regular rate of pay for my on duty meal period. I understand that, if I elect to revoke this agreement, I may do so at any time, provided my revocation is in writing.
The second, which USSA has used since mid-2007, provides:
Due to the nature of the work I perform as a Security Guard, and due to the nature of the services provided by U.S. Security Associates, Inc., I understand that I may be prevented from being relieved of duty during my meal period. On this basis, I voluntarily agree to have an “on-duty” meal period that shall be counted as time worked and compensated by U.S. Security Associates, Inc.
After five (5) hours worked, the following waiver becomes relevant:
Pursuant to paragraph 13 of Wage Order No. 4-2001 of the California Industrial Welfare Commission, Employee and Employer, as evidenced by their respective signatures below, hereby mutually agree to waive the right to an off-duty meal period for any hours worked in excess of five (5) total hours in a workday.
I understand that I may revoke this agreement at anytime in writing, and such revocation shall be presented to my Supervisor or Operations Manager at the beginning of the shift on which I first desire to revoke the agreement. I am voluntarily signing this agreement.
Flury testified that if an employee refuses to sign the “on-duty meal period agreement,” he or she “won‘t work for us.” He further testified that one of the “requirements” of the job, as evidenced by the meal-period “waiver,” was for USSA employees to eat meals on the job.
B.
The plaintiffs sought to maintain a class action on behalf of themselves and all others similarly situated, alleging that USSA committed numerous violations of California labor laws, including, inter alia, requiring them to work through their meal periods. Of note here, they allege that USSA has a “policy of requiring employees to work through their legally mandated meal periods,” and is therefore liable for “paying premium compensation for missed meal periods ... pursuant to
The district court certified the class and seven sub-classes, pursuant to
A Subclass of all of Defendant‘s past and present California Security Guard/Officer employees who worked more than six hours and were not provided a checked-out meal break in any work shift from July 1, 2007 through the present, and who were not compensated for such on-duty meal break(s) pursuant to
California Labor Code § 226.7(b) .
The district court determined that certifying this sub-class was appropriate, “[g]iven [USSA‘s] uniform policy of requiring the putative subclass members to sign the on-duty meal break agreement,” as well as the “evidence that, in the vast majority of cases, this policy was implemented to require on-duty meal breaks be taken.” A few months later, the court reached the same conclusion in an order denying USSA‘s motion for reconsideration. Having been granted leave to appeal, USSA challenges the district court‘s certification of the meal break sub-class on the grounds that the plaintiffs have not established “commonality,” as required under
II. STANDARD OF REVIEW
We review a district court‘s decision to certify a class under
III. ANALYSIS
We are concerned here with two overlapping requirements for class certification. First, a party seeking class certification must always show that “there are questions of law or fact common to the class.”
A. Rule 23(a)(2)
“The Supreme Court has recently emphasized that commonality requires that the class members’ claims ‘depend upon a common contention’ such that ‘determination of its truth or falsity will resolve an issue that is central to the validity of each claim in one stroke.‘” Mazza v. Am. Honda Motor Co., 666 F.3d 581, 588 (9th Cir.2012) (quoting Wal-Mart, 131 S.Ct. at 2551) (internal alteration omitted). Put another way, the key inquiry is not whether the plaintiffs have raised common questions, “even in droves,” but rather, whether class treatment will “generate common answers apt to drive the resolution of the litigation.” Wal-Mart, 131 S.Ct. at 2551 (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L.Rev. 97, 132 (2009)) (emphasis added) (internal quotation marks and alteration omitted). This does not, however, mean that every question of law or fact must be common to the class; all that
Here, the district court concluded that “a common legal question that is presented and susceptiblе to class-wide determination” is whether California‘s “nature of the work” exception to Industrial Welfare Commission (“IWC“) wage order No. 4-2001 (“Wage Order No. 4-2001“)—which governs meal periods—“applies to [USSA]‘s single guard post staffing model.”5 USSA counters that this question will not generate a common answer, because USSA‘s “nature of the work” defense requires “an individualized, fact-specific analysis” of each employee‘s work history, including “a day-by-day examination of an employee‘s job duties.” We therefore begin our
1.
Under California law, an employer may not “require any employee to work during any meal ... period mandated by an applicable order of the Industrial Welfare Commission.”
An “on duty” meal period shall be permitted only when thе nature of the work prevents an employee from being relieved of all duty and when by written agreement between the parties an on-the-job paid meal period is agreed to. The written agreement shall state that the employee may, in writing, revoke the agreement at any time.
a.
The California state courts have not addressed the substantive scope of the “nature of the work” exception.8 The California Division of Labor Standards Enforcement (“DLSE“), however, has issued several opinion letters addressing when the “nature of the work” exception may apply.9 “The DLSE‘s opinion letters, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.” Brinker, 273 P.3d at 529 n. 11 (internal quotation marks and citations omitted). We look to them for guidance on what an employer must show to invoke the exception, as well as examples
First, DLSE has emphasized that the “on-duty” meal period is a “limited[ ] alternative” to the off-duty meal period rеquirement. 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.”11 Id. Thus,
[i]n determining whether “the nature of the work” prevents an employee from being relieved of all duty, [DLSE] starts with the premise that the general requirement for an off-duty meal period is remedial in nature, and any exception to that general requirement must be narrowly construed, so as to avoid frustrating the remedial purpose of the regulation.
DLSE Opinion Letter 2002.09.04 at 2. The employer has the burden to “establish[ ] the facts that would justify an on-duty meal period.” Id. at 2-3; see also DLSE Opinion Letter 2009.06.09 at 7; DLSE Opinion Letter 1994.09.28 at 4 (“In the view of the Division, the onus is on the employer to show that the work involved prevents the employee from being relieved of duty.“).
Second, we can characterize the instances in which DLSE has found that the “nature of the work” exception applies into two categories: (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.12 For example, in its most recent opinion letter, DLSE concluded that employees who transport hazardous materials, and are required by federal regulation to attend to their vehicles at all times, are covered by the “nature of the work” exception. DLSE Opinion Letter 2009.06.09 at
[W]e do not comment upon the application of the on-duty meal period requirements for any period of time during which the driver is not engaged in activity that is regulated by the referenced federal regulations.... It may indeed be the case that drivers may be provided an off-duty meal period during these times even though they are otherwise prevented by the nature of their work from taking a meal period during times in which they are engaged in activity otherwise governed by the [federal regulations].
Id. DLSE further allowed for the possibility that another employee might be able to cover the driver, explaining,
Also, the nature of the work element may not be satisfied under circumstances where the employer may have another qualified representative reasonably available to perform the attending duties required under [federal regulation]. For instance, drivers who transport fuel in and around the Bay Area may likely park their vehicle at one of the Company‘s yards and leave such vehicle unattended in compliance with federal law in order to take an off-duty meal period. Such a driver would not be entitled to an on-duty meal period if the nature of his or her work did not prevent the driver from being relieved of all duty.
Id.13 In another opinion letter, DLSE noted that the “nature of the work” exception might apply where the position involves “the continuous operation of machinery requiring monitoring” that is “essential to the business of the employer.” DLSE Opinion Letter 1994.09.28 at 2.
In addition to these jobs, which by their nature require the employee to be present at all times, DLSE has also found that the “nature of the work” exception would apply to an “isolated” gas station “in which only a single employee is present,” but only if there was not “another employee employed at the worksite.” DLSE Opinion Letter 2003.11.03 at 3; see also DLSE Opinion Letter 1994.09.28 (noting that “the nature of the work” exception might apply where “the employee is the only person employed in the establishment and closing the business would work an undue hardship on the employer“). Cf. DLSE Opinion Letter 2002.09.04 at 2-3 (concluding that the “nature of the work” exception does not apply to late-night shift managers at fast-food restaurants, in part because other employees are on duty and could cover for the manager).14
With this understanding of the “nature of the work” defense, we turn to two recent state court decisions that guide our analysis of
[T]he Court of Appeal concluded that because rest breaks can be waived—as all partiеs agree—“any showing on a class basis that plaintiffs or other members of the proposed class missed rest breaks or took shortened rest breaks would not necessarily establish, without further individualized proof, that Brinker violated” the Labor Code and Wage Order No. 5. This was error. An employer is required to authorize and permit the amount of rest break time called for under the wage order for its industry. If it does not—if, for example, it adopts a uniform policy authorizing and permitting only one rest break for employees working a seven-hour shift when two are required—it has violated the wage order and is liable....
... The theory of liability—that Brinker has a uniform policy, and that that policy, measured against wage order requirements, allegedly violates the law—is by its nature a common question eminently suited fоr class treatment.
Id., 273 P.3d at 531-32 (emphasis added).
The California Court of Appeal subsequently interpreted and applied Brinker in a case with strikingly similar facts to the case before us. See Faulkinbury v. Boyd & Assocs., Inc., 216 Cal.App.4th 220, 156 Cal.Rptr.3d 632 (2013). In Faulkinbury, the putative class was made up of private security guards whose employer “had a uniform policy of requiring all security guard employees to take paid, on-duty meal breaks and to sign an agreement by which the employee agreed” to such on-duty meal breaks. Id. at 233. The court of appeal concluded that the employee‘s liability turned on “the issue [of] whether Boyd‘s policy requiring all security guard employees to sign blanket waivers of off-duty meal breaks is lawful,” id. at 234, explaining,
Brinker leads us ... to conclude Boyd would be liable upon a determination that Boyd‘s uniform on-duty meal break policy was unlawful.... [T]he employer‘s
liability arises by аdopting 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....
Id. at 235 (emphasis added).15 The court of appeal explicitly rejected the defendant‘s argument that the “nature of the work” exception applied, concluding that, “by requiring blanket off-duty meal break waivers in advance from all security guard employees, regardless of the working conditions at a particular station,” the defendant itself “treated the off-duty meal break issues on a classwide basis.” Id. at 234; see also Bradley v. Networkers Int‘l, LLC, 211 Cal.App.4th 1129, 150 Cal.Rptr.3d 268, 284-85 (2012), as modified on denial of reh‘g (Jan. 8, 2013) (“The lack of a meal/rest break policy and the uniform failure to authorize such breaks are matters of common proof.“), review denied (Mar. 20, 2013); Bufil v. Dollar Fin. Grp., Inc., 162 Cal.App.4th 1193, 76 Cal.Rptr.3d 804, 811 (2008) (concluding that the plaintiffs theory that “two circumstances—single employee on duty or providing training—do not come within the ‘nature of the work’ exception” was “a legal question” that could be resolved on a class-wide basis). Of course, we are not bound by the California Court of Appeal‘s determination under California law that the sub-class certified by the district court is amenable to class-wide treatment. See
2.
In light of these state authorities, we conclude that the plaintiffs’ claims will yield a common answer that is “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 chоsen 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, 156 Cal.Rptr.3d at 632. Thus, the legality of USSA‘s policy is a “significant question of law,” Mazza, 666 F.3d at 589, that is “apt to drive the resolution of the litigation” in this case, Wal-Mart, 131 S.Ct. at 2551. We therefore hold that the district court did not abuse its discretion in concluding that
B. Rule 23(b)(3)
We next turn to
1.
First, our analysis of the “nature of the work” exception, supra, drives our conclusion that
2.
We are mindful that it is an abuse of discretion for the district court to rely on uniform policies “to the near exclusion of other relevant factors touching on predominance.” In re Wells Fargo, 571 F.3d at 955; see also Wang, 737 F.3d at 544-45; Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 946 (9th Cir.2009). Thus, in In re Wells Fargo, we held that the district court had abused its discretion when it certified a class of home mortgage consultants (“HMCs“), all of whom Wells Fargo had classified as “exempt from overtime laws,” under
This case is not like In re Wells Fargo, Wang, or Vinole. First, unlike in those cases, federal or state exemption classifications—which may sometimes be fact-intensive—are not at issue here. Cf. In re Wells Fargo, 571 F.3d at 959 (explaining that the “federal outside salesperson exemption” often “requires ‘a fact-intensive inquiry into each potential plaintiff‘s employment situation‘” (quoting the district court)); Vinole, 571 F.3d at 945 (explaining that under California law, “a court evaluating the applicability of the outside salesperson exemption must conduct an individualized analysis of the way each employee actually spends his or her time,” and the court‘s “analysis of the FLSA exemption” is likewise “a fact-intensive inquiry” (emphasis added)).
Second, unlike in Wells Fargo and Vinole, the district court did not rely on the existence of USSA‘s uniform on-duty meal period policy to the exclusion of other factors. To the contrary, the district court found that nearly all of the evidence in the record—including Flury‘s testimony about USSA‘s actual business practices, as well as the declarations of USSA‘s employees—supports a finding that common questions would predominate. For example, the court found that Flury‘s testimony described “more than a policy,” since he also explained how USSA‘s “policies and practices are implemented on the ground.” In considering the employee declarations, the court found that “[n]one of these declarations establishes that the declarant was categorically given off-duty meal breaks.” And, “[g]iven the uniform policy of requiring ... the on-duty meal break agreement,” the court further found that, “in the vast majority of casеs, this policy was implemented
USSA nevertheless challenges the district court‘s factual findings, particularly with regard to the employee declarations. USSA argues that it staffs its guards in groups “ranging from one guard per shift to up to 30 guards per shift and practically everything in between.” It further argues that “at many locations, ‘off-duty’ meal periods were provided.” But these arguments directly contradict the statements that Flury made during his deposition. Flury testified to three critical facts. First, he initially testified that 99.9% of employees work at single guard posts (he later changed his answer to say that “a large majority” of еmployees work at such posts).19 Second, Flury testified that no single guard post allowed for a lunch break. (“I don‘t know of any single post that has a lunch break as part of the program.“). Third, Flury made clear that such “on-duty” meal periods are required as a matter of policy—not necessity—explaining that one of the “requirements as signed to by the waiver” was for the guards to eat lunch at their posts. In fact, when asked if one USSA employee could relieve another for a meal period, Flury responded, “[b]ut then [the employee] wouldn‘t be doing his job, would he? No.”20
We agree with the district court that although USSA “may wish to distance itself from Flury‘s statements, his admissions were material and [are] properly before us.” Furthermore, to the extent the employee declarations submitted by USSA are not entirely consistent with Flury‘s testimony, we defer to the district court‘s decision to weigh his testimony over the employee declarations. We cannot say, in light of all the evidence, that the district court‘s findings of fact were “illogical,” “implausible,” or “without support in inferences that may be drawn from the facts in the record.” See Hinkson, 585 F.3d at 1262. The district court here did not abuse its discretion by finding, on the record before it, that common issues of law or fact would predominate.
3.
Finally, USSA argues that individual issues will predominate because USSA‘s “time records will not dispositively show which meal periods were ‘off duty’ meal periods” for any given employee. As a factual matter, however, USSA‘s argument is again belied by the record. Many of the employee declarations describe keeping records of their time worked. And, as the district court noted, “given Flury‘s admission that those staffed at single guard posts were required to take on-duty meals, Defendant‘s records of each employee‘s clock-in and clock-out times, how much he was paid, and whether he was staffed at a single guard post, can be used to extrapolate whether his meal break was on- or off-duty.” For example, Flury testified that “for on-duty meal breaks, the sign-in sheets would just have a start time and end time.” In light of these records, it would not be difficult to determine USSA‘s
For the foregoing reasons, we conclude that the plaintiffs’ claims “will prevail or fail in unison,” as required by
IV. CONCLUSION
In sum, we conclude that the district court did not abuse its discretion by certifying the meal break sub-class.
AFFIRMED.
Notes
It is the opinion of the Division that the Company and employee may enter into a single agreement so long as the conditions necessary to establish that the nature of the employee‘s work prevents the employee from being relieved of all duty are met for each applicable on-duty meal period taken.Id. at 9 (emphasis added). Although not dispositive of any issue, DLSE‘s response supports the plaintiffs’ argument that it is unlawful for USSA to impose a uniform policy of requiring “on-duty” meal periods, given USSA‘s own admission that, “beyond the variation in general duties by post,” the guards’ day-tо-day responsibilities also vary.