235 F.R.D. 474 | E.D. Cal. | 2006
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION.
(Doc. 15)
On April 3, 2006, the Court heard Plaintiffs’ Motion for Class Certification (the “Motion”). Upon due consideration of the written and oral arguments of the parties and the record herein, the Court GRANTS the Motion in part and DENIES it in part, as set forth herein.
I. Factual Background
Plaintiffs in this case are employees of Defendant Producers Dairy Foods, Inc. (“Defendant”), who transport dairy products to Defendant’s customers. Plaintiffs claim that their employer failed to pay them overtime wages due under federal and state law. Defendant is a Fresno-based company that produces milk and other dairy products at its Fresno plant. It distributes the products it produces through its shipment facilities in Tulare, Fresno, Ceres, Sacramento, San Le-andro, Castroville, San Luis Obispo, Ukiah, Anderson, and Chico. Over the last four years, Defendant has employed over 100 drivers.
Employees classified as “Route Sales Drivers” distribute Defendant’s products from the distribution facilities to customers, such as restaurants, markets, chain stores, and hospitals. The Route Sales Drivers’ Job Description indicates that they are expected perform a number of tasks. Nelson Decl. Ex. A. In addition to delivering products, Route Sales Drivers collect money from customers and create a record of the transaction. Route Sales Drivers also place the items that they deliver on customers’ shelves and pick up empty containers or unsold merchandise. Route Sales Drivers are also responsible for loading, cleaning, and maintaining their trucks.
The extent to which Route Sales Drivers engage in sales activities is a matter of vigorous dispute. Route Sales Drivers’ duties as laid out in the Job description include calling on prospective customers to solicit new business, selling new items to current customers, and informing regular customers of new products or services. Nelson Decl. Ex. A. Declarations of two Route Sales Drivers that Plaintiffs submit indicate that they were not responsible for making sales to old customers or soliciting new customers. Parker Decl. II36; Jeanes Decl. ¶24. It is undisputed that managers and sales representatives, who are also employed by Defendant, have a responsibility to increase sales of Defendant’s products.
Defendant also employs Relief Drivers who fill in for Route Sales Drivers who are unavailable to work. Route Sales Drivers and Relief Drivers are compensated based on a single incentive-based pay schedule, which includes a base salary combined with possibilities to earn commission. They do not receive additional pay for each hour they
Employees called “School Route Drivers” and “Specials Drivers” also deliver Defendant’s products. School Route Drivers make deliveries to schools. Specials Drivers work during the promotion of specials or other special occasions. Both School Route Drivers and Specials Drivers earn an hourly wage and are paid overtime for time in excess of forty hours per week.
II. Procedural History
On January 19, 2005, Plaintiffs Raymond Jeanes, Lawrence Heffington, Lauren Portil-lo, and Joe Romero (collectively “Named Plaintiffs”) filed their Complaint in the United States District Court for the Northern District of California. The Complaint alleged overtime violations under the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. section 207, California Labor Code sections 201, 202, 204, 510, and 1198, and California Business and Professions Code sections 17200 et seq. On April 6, 2005, the district court granted Defendant’s motion to transfer venue to this Court.
On February 17, 2006, Plaintiffs moved to certify two classes: an opt-in collective action under FLSA, 29 U.S.C. section 216(b), and an opt-out class action under Rule 23(b)(3) of the Federal Rules of Civil Procedure. Plaintiffs submitted declarations supporting class certification as well as a document that they proposed the Court order distributed to class members to give them notice of the actions. On March 10, 2006, Defendant filed its Opposition to both classes, along with supporting declarations. On March 25, Plaintiffs filed their Reply, along with a supplemental declaration and objections to Defendant’s declarations.
III. Opt-in Action under FLSA
Plaintiffs ask the Court to certify an opt-in collective action under the Fair Labor Standards Act of 1938 (“FLSA”). The proposed class is:
All persons who are or were employed by Producers Dairy as RSDs and equivalent delivery positions who worked in excess of forty (40) hours in a work week in the State of California at any time from January 19, 2002 to the present and who were not paid overtime compensation for those excess hours.
Mot. 12:22-25.
A. Legal Standard
The FLSA establishes a cause of action by an employee against an employer who fails to pay overtime wages. See 29 U.S.C. § 207. Under 29 U.S.C. section 216(b) (“Section 216(b)”), an employee who files such a suit under FLSA may bring a collective action on behalf of “employees similarly situated.” Does I thru XXIII v. Advanced Textile Corp., 214 F.3d 1058, 1064 (9th Cir.2000). Each employee who wishes to join the action must opt in to the suit- by filing a consent to sue with the district court. Id.
The district court has discretion to determine whether a collective action is appropriate. Leuthold v. Destination Am., Inc., 224 F.R.D. 462, 466 (N.D.Cal.2004). A court must decide whether the proposed lead plaintiffs and the proposed collective action class are “similarly situated” for purposes of Section 216(b). Id. The burden of making this showing is on the Plaintiffs. Id.
FLSA does not define the term “similarly situated,” and the Ninth Circuit does not appear to have addressed the issue. Id. District courts have addressed three different approaches to determining whether plaintiffs are similarly situated: (1) a two-tiered case-by-case approach, (2) the incorporation of the requirements of Rule 23 of the current Federal Rules of Civil Procedure, or (3) the incorporation of the requirements of the pre-1966 version of Rule 23 for “spurious” class actions. See Thiessen v. GE Capital Corp., 267 F.3d 1095, 1103 (10th Cir.2001).
According to district courts that have addressed the issue, the majority of courts have adopted the two-tiered approach. Leuthold,
The parties do not discuss the merits of the various approaches, though Defendant concedes that the FLSA requirements are “not as strict” as those under Rule 23. Opp’n 5:8-12. The Court therefore will use the two-tiered approach taken by the majority of district courts to address the issue and taken previously by this Court.
The first decision under the two-tiered approach concerns whether the potential class should be given notice of the action. Leuthold, 224 F.R.D. at 467. A court should base this decision on the pleadings and any affidavits the parties submit. Id. The decision is made under a “fairly lenient standard” and the usual result is conditional class certification. Id.; see Grayson v. K Mart Corp., 79 F.3d 1086, 1096 (11th Cir.1996) (holding that the “similarly situated” requirement is less stringent than that for joinder under Rule 20(a) or for separate trials under Rule 42(b)). The Eleventh Circuit has described the plaintiffs’ burden as “demonstrating a ‘reasonable basis’ for their claim of class-wide discrimination.” Grayson, 79 F.3d at 1097. Plaintiffs may make this showing “by making substantial allegations of class-wide discrimination, that is, detailed allegations supported by affidavits which ‘successfully engage defendants’ affidavits to the contrary.”’ Id.
The second tier of analysis occurs once discovery is complete and the case is ready to be tried, generally triggered by defendant’s motion to decertify the class. Leuthold, 224 F.R.D. at 467. At that point, a court must make a factual determination regarding the propriety and scope of the class, based on the following factors: “(1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to the defendants with respect to the individual plaintiffs; and (3) fairness and procedural considerations.” Id.; Thiessen, 267 F.3d at 1103. If the court then decides on the basis of the complete factual record that the plaintiffs are not similarly situated, it may decertify the class and dismiss the opt-in plaintiffs without prejudice. Leuthold, 224 F.R.D. at 467.
Where discovery is complete, courts sometimes bypass the first tier in favor of immediately making the second-tier factual determination. Id. at 468. Defendant does not ask the Court to proceed to the more stringent second-tier analysis, but rather concedes that at this stage Plaintiffs must only make a “limited showing.” Opp’n at 6:1-3. Furthermore, it does not appear that the factual record is sufficient for the Court to make a thorough factual determination. The Court will limit its analysis to a first-tier determination. Defendant may move to decertify the class at the close of discovery.
B. Plaintiffs’ Showing
The allegations of the Complaint establish the basis for a collective action. Plaintiffs are drivers employed by Defendant. Compl. ¶ 9. During the liability period, Plaintiffs worked in excess of forty hours in a week. Compl. ¶ 16. Plaintiffs were not paid at a rate of one and one-half times their regular rate for their overtime hours. Id. The Court finds that these allegations are sufficiently detailed and set forth a basis for Defendant’s liability under FLSA.
Plaintiffs submit the declarations of Raymond Jeanes, a current Route Sales Driver, and Cecil R. Parker, a former Route Sales Driver, in support of certification of a collective action. Mr. Jeanes has been an employee of Defendant for approximately four years. Jeanes Decl. ¶ 2. Mr. Parker was an employee for approximately thirteen years from 1992 to 2005. Parker Decl. ¶2. Mr.
C. “Outside Salesman” Exemption
Defendant does not dispute that Plaintiffs’ allegations and declarations amount to “substantial allegations” of FLSA violations against the named Plaintiffs and other similarly situated employees. See Grayson, 79 F.3d at 1097. Defendant does contend that Route Sales Drivers who comprise the proposed collective action fall within the “outside salesman” exemption of the FLSA. See 29 U.S.C. § 213(a)(1). Defendant concedes, however, that “for purposes of the limited showing that must be made for an opt-in collective action under the FLSA, Producers recognizes that this defense is a matter of individualized proof.” Opp’n 6:1-3. Mr. Parker declares that Route Sales Drivers “were not responsible for and did not regularly make sales to customers.” Parker Deck ¶ 36. Mr. Jeanes avers that he “was not responsible for soliciting sales from entities that were not customers.” Jeanes Deck ¶24. Route Sales Drivers were instead instructed to refer questions regarding modifications in prices or orders to a manager or a sales representative. Parker Deck ¶ 21; Je-anes Deck ¶26. Plaintiffs’ declarations are sufficient to establish that the “outside salesman” exemption does not preclude conditional certification.
D. Description of the Collective Action
Defendant claims that the proposed FLSA collective action is overbroad and ill-defined.
1. School Route Drivers and Specials Drivers
Defendant points to particular subgroups of Defendant’s employees that it contends fall outside the definition of the proposed collective action. Defendant submits a declaration of its Director of Administration stating that it paid School Route Drivers and Specials Drivers on an hourly basis along with overtime pay for time in excess of forty hours per week. See Sewill Deck ¶ 3. Consequently, Defendant contends, these groups of employees should be expressly excluded from the collective action.
Plaintiffs do not dispute that School Route Drivers and Specials Drivers are paid on an hourly basis and receive an overtime premium for all hours worked beyond forty in a single work week. Nor do Plaintiffs contend that this pay arrangement functions similarly to the “company-wide commission schedule” that covers Route Sales Drivers and Relief Drivers. Reply 1:21-2:1. Plaintiffs do not claim that any of the Named Plaintiffs have ever worked as School Route Drivers or Specials Drivers. In any event, Plaintiffs do not point to any portions of the declarations they have submitted that indicate that School Route Drivers and Specials Drivers are similarly situated with the Named Plaintiffs with respect to their compensation for time beyond forty hours per week.
Plaintiffs contend that “it is not known at this point whether School Route Drivers or Special Drivers ever fill in for an RSD.” Reply 6:27-28. Plaintiffs appear to place the burden on Defendant to show that these groups of employees are not similarly situated to Route Sales Drivers, pointing out that none of Defendant’s declarations have claimed “that School Route Drivers or Specials drivers never fill in for a Route Sales Driver or Relief Driver.” Reply 6:28-7:2 (emphasis in original). Plaintiffs do not explain how “filling in” for Route Sales Drivers would cause these groups to be similarly situated with Route Sales Drivers under FLSA’s overtime requirements. It appears that Plaintiffs are assuming that while filling in, School Route Drivers and Specials Drivers would be compensated under the Route Sales Driver commission-based schedule. Nothing in the record supports this assumption. Plaintiffs’ burden at this stage is “fairly lenient.” See Leuthold, 224 F.R.D. at 467. They must nonetheless provide some support, in the form of affidavits, to establish the factual predicate for their assertion that School Route Drivers and Specials Drivers
2. Relief Drivers
Defendant does not contend that Relief Drivers are not similarly situated to Route Sales Drivers. It is undisputed that Relief Drivers, like Route Sales Drivers, are paid on a base salary and commission earnings basis. Sewill Deck ¶ 2. The Court finds that Relief Drivers are similarly situated to Route Sales Drivers.
3. Drivers in Castroville and San Luis Obispo
Citing Frank Sewill’s declaration, Defendant claims that Route Sales Drivers based at Defendant’s San Luis Obispo and Castroville facilities never worked more than forty hours per week. See Sewill Deck ¶ 5. In response, Plaintiffs submit the timecards for two Route Sales Drivers based in Castro-ville and one based in San Luis Obispo that indicate each worked over forty hours in a week. Nelson Supp. Deck ¶¶ 14-18, Exs. C, D, E, F. Plaintiffs have made a sufficient showing that Route Sales Drivers based in Castroville and San Luis Obispo are similarly situated to the Named Plaintiffs.
4. Statute of Limitations
Defendant also contends that the time period for the collective action should be limited to recovery for work performed since January 19, 2003. While the statute of limitations for violation of the FLSA is ordinarily two years, for willful violations it is extended to three years. 29 U.S.C. § 255(a); Brock v. Superior Care, Inc., 840 F.2d 1054, 1061 (2d Cir.1988).
Plaintiffs allege that “Defendant was advised by skilled and competent lawyers and other professionals, employees and advisors knowledgeable about the requirements of the FLSA ... regarding the payment of overtime compensation to eligible employees.” Compl. ¶ 14. Plaintiffs contend that Defendant knew it had the duty to pay Plaintiffs overtime, was financially able to make such payments, “but willfully, knowingly and intentionally failed and refused to do so.” Id. Defendant does not submit any evidence that establishes that its acts were not willful. At this stage, it is unclear what evidence Plaintiffs could conceivably submit to establish that Defendants acted willfully. Given the lenient standard that Plaintiffs face at this stage and the difficulty of establishing, by affidavits, Defendant’s willful behavior, the Court finds that the allegations of willful conduct in the Complaint, combined with the declarations evidencing FLSA violations are sufficient. Therefore, for the purpose of conditional certification, the three-year statute of limitations applies.
5.“Equivalent Delivery Positions”
Defendant asserts that the inclusion in the collective action of “equivalent delivery positions” to Route Sales Drivers is without meaning and is nonspecific. The Court agrees that this phrase introduces ambiguity in the class, especially given the Court’s conclusion that School Route Drivers and Specials Drivers do not meet the class criteria. At oral argument, Plaintiffs indicated that, at its broadest, the phrase “RSDs and equivalent delivery positions” refers to Route Sales Drivers, Relief Drivers, School Route Drivers, and Specials Drivers.
Plaintiffs have met their burden to show that two groups of Defendant’s employees are similarly situated to the Named Plaintiffs: Route Sales Drivers and Relief Drivers. Accordingly, the Court conditionally certifies a collective action described as follows:
All persons who are or were employed by Producers Dairy as Route Sales Drivers and Relief Drivers who worked in excess of forty (40) hours in a work week in the State of California at any time from January 19, 2002, to the present and who were not paid overtime compensation for those excess hours.
Plaintiffs ask the Court to certify their second through sixth causes of action as an opt-out class under Rule 23 of the Federal Rules of Civil Procedure. They define the proposed class as follows:
All persons who are or were employed by Producers Dairy as RSDs and equivalent delivery positions who worked in excess of eight (8) hours in a day and/or forty (40) hours in a work week in the State of California at any time from January 19, 2001 to the present who were not paid overtime compensation for those excess hours.
Mot. 18:3-6.
A. Rule 23(a) Prerequisites
Federal Rule of Civil Procedure 23(a) enumerates four prerequisites to class certification:
One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
Plaintiffs bear the burden of establishing each of the Rule 23(a) prerequisites. Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir.1992) (citing Mantolete v. Bolger, 767 F.2d 1416, 1424 (9th Cir.1985)). In evaluating whether Plaintiffs have met their burden, a court should accept the substantive allegations of the complaint as true. Blackie v. Barrack, 524 F.2d 891, 901 n. 17 (9th Cir.1975).
1. Numerosity
A Rule 23 class must be so numerous that joinder of all members individually is “impracticable.” Fed.R.Civ.P. 23(a)(1). Defendant admits in its answer that it employed over “one hundred or more persons as route drivers during the last four years.” Answer ¶ 12(a). A class with over forty members is presumed to satisfy the numerosity prerequisite. Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir.1995) (citing 1 Newberg On Class Actions, (2d ed.) § 3.05); see also Mathis v. Bess, 138 F.R.D. 390, 393 (S.D.N.Y.1991) (joinder impracticable solely because putative class had 120 members). The numerosity requirement is more readily met where a class contains employees suing their present employer. Mullen v. Treasure Chest Casino, L.L.C., 186 F.3d 620, 625 (5th Cir.1999). This is because class members may be unwilling to sue their employer individually out of fear of retaliation. Id. The Court finds that the class meets the numerosity prerequisite.
2. Commonality
Rule 23(a)(2) requires “questions of law or fact common to the class.” The Ninth Circuit construes the commonality prerequisite permissibly. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir.1998). All questions of law and fact need not be common. Id. Rather, “[t]he existence of shared legal issues with divergent factual predicates is sufficient, as is a common core of salient facts coupled with disparate legal remedies within the class.” Id.; see In re Agent Orange Prod. Liab. Litig., 818 F.2d 145, 166 (2d Cir.1987) (holding that the commonality requirement of Rule 23(a)(2) was satisfied because the military contractor defense was common to all of the plaintiffs’ claims).
a. Common Pay Scheme
Route Sales Drivers and Relief Drivers are paid under the same commission schedule. Opp’n 3:5-10; Reply 1:21-2:1. Consequently, employees in both groups are treated similarly by Defendant with respect to overtime pay. It is undisputed that School Route Drivers and Specials Drivers are paid under a separate scheme that involves hourly wages and overtime pay. The Court finds that claims of School Route Driver and Specials Drivers do not raise questions of law or fact in common with the class representatives’ claims. Plaintiffs’ unsupported assertion that School Route Drivers and Specials Drivers may fill in for Route Sales Drivers at times does not meet their
b. Vehicle Weight Exemption
Defendant all but concedes satisfaction of the commonality prerequisite by contending that a single defense bars the claims of every potential class member. Defendant argues that the Route Sales Drivers, Relief Drivers, School Route Drivers, and Specials Drivers are all exempt from the overtime requirements under California law because the gross vehicle weights of their trucks exceed 26,001 pounds. Defendant cites in support Paragraph 3(L) of Industrial Welfare Commission Order No. 9-2001; title 49 of the Code of Federal Regulations, sections 395.1 to 395.13; and title 13 of the California Code of Regulations, subchapter 6.5, sections 1200 et seq. Defendant states that it is undisputed that the trucks of all of the proposed class members exceed 26,001 pounds, and supports this contention with evidence in the form of the registration cards Defendant has produced in response to an interrogatory. See Hipp Decl. Ex. D. Defendant contends, in essence, that a legal question exists the resolution of which potentially precludes the claims of the entire class based on undisputed facts. This issue alone is sufficient to satisfy the commonality requirement.
c. “Outside Salesman” Exemption
Defendant also argues that class members’ claims turn on case-by-case, fact specific analyses of each individual’s sales efforts and whether each is exempt from overtime requirements as an outside sales person. Under California Labor Code section 1171, “any individual employed as an outside salesman” may not recover for wages, hours, and working conditions violations, such as those Plaintiffs allege under Labor Code section 1198. Ramirez v. Yosemite Water Co., 20 Cal.4th 785, 789, 85 Cal.Rptr.2d 844, 978 P.2d 2 (1999). This exempts from California overtime laws any employee “who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities.” Id. at 795, 85 Cal.Rptr.2d 844, 978 P.2d 2 (emphasis in original).
In Ramirez, the court addressed the relevant factors in determining whether a route sales representative who delivered bottled water to customers was an “outside salesperson” exempt from California overtime laws. Id. at 802, 85 Cal.Rptr.2d 844, 978 P.2d 2. The court adopted a quantitative approach that compares an employee’s time spent “selling” to time spent performing other activities. Id. at 801, 85 Cal.Rptr.2d 844, 978 P.2d 2. Certain job tasks, such as travel time, should be apportioned according to types of activities that they facilitate. Id. So, for example, if an employee travels to a destination to engage in both sales and non-sales activities, the travel time must be apportioned among sales and nonsales work. Id. The court explained that the analysis should not focus either solely on the employer’s job description or on the employee’s actual work pattern:
A trial court, in determining whether the employee is an outside salesperson, must steer clear of these two pitfalls by inquiring into the realistic requirements of the job. In so doing, the court should consider, first and foremost, how the employee actually spends his or her time. But the trial court should also consider whether the employee’s practice diverges from the employer’s realistic expectations, whether there was any concrete expression of employer displeasure over an employee’s substandard performance, and whether these expressions were themselves realistic given the actual overall requirements of the job.
Id. at 802, 85 Cal.Rptr.2d 844, 978 P.2d 2 (emphasis in original).
Justice Werdegar, writing for Supreme Court of California, clarified the amenability of the factual inquiry in Ramirez to class action treatment. Sav-On Drug Stores, Inc. v.Super. Ct., 34 Cal.4th 319, 335-38, 17 Cal.Rptr.3d 906, 96 P.3d 194 (2004). The court noted that the first part of the Ramirez inquiry, which involves “any dispute over ‘how the employee actually spends his
Justice Werdegar went on to demonstrate the problematic nature of a rule to the contrary. Id. at 338, 85 Cal.Rptr.2d 844, 978 P.2d 2. If individual overtime exemption issues could preclude class certification, the proponent of an overtime class action would be forced to prove that the entire class was nonexempt whenever a defendant raises the affirmative defense of exemption. Id. Under California law, the employer bears the burden of showing that an employee is exempt from overtime laws. Id. (citing Ramirez, 20 Cal.4th at 794-95, 85 Cal.Rptr.2d 844, 978 P.2d 2). Requiring a plaintiff to demonstrate that class members are not exempt would effectively reverse that burden. Id.
The Court finds that determining whether Plaintiffs are outside salespeople will likely require the Court to make a single factual finding regarding the requirements and realistic expectations Defendant had regarding Route Sales Drivers’ job performance. See id. at 337, 85 Cal.Rptr.2d 844, 978 P.2d 2. Were the Court to rely solely on the “actual activity” of Route Sales Drivers, an employee assigned to sell might evade the outside sales exemption by his own “substandard performance.” Id. (quoting Ramirez, 20 Cal.4th at 802, 85 Cal.Rptr.2d 844, 978 P.2d 2). In fact, Defendant has already contended, in the context of its typicality argument, that Mr. Parker and Mr. Jeanes’s failure to engage in sales work “sets them well apart from the rest of the Route Sales Drivers who performed sales work and who understood that their primary job responsibility was to sell products from the full line of Producers’ dairy products.” Opp’n 10:4-6. The Court will likely be required to make a finding as to whether a Route Sales Driver who engages in little or no sales work falls outside of Defendant’s realistic expectations. Unless new evidence comes forth indicating that Defendant had different expectations regarding different Route Sales Drivers’ duties—an unlikely proposition given the uniform nature of the compensation scheme—this finding will be identical -with respect to each of the Plaintiffs.
Contrary to Defendant’s contention, class treatment of the outside sales exemption would not entail altering the substantive law. Rather, the Supreme Court of California has concluded that, consistent with California overtime statutes, courts may couple uniform findings on common issues with “innovative procedural tools” that can efficiently resolve individual questions. See Sav-On Drug Stores, 34 Cal.4th at 337 & n. 12, 17 Cal.Rptr.3d 906, 96 P.3d 194 (suggesting, citing federal district court eases, that a trial court could determine individual overtime entitlement through separate judicial or administrative miniproceedings on individualized issues, hearings before a special master, or calculation of damages based on a standard formula). Thus, Defendant’s invocation of the “outside salesperson” exemption does not preclude a finding that common questions of law and fact exist.
d. Commission Salespersons
Defendant also argues that a decision about whether Route Sales Drivers are exempt as commission salespersons will be fact-specific and will differ according to the circumstances of each Route Sales Driver. California overtime statutes do not apply to any employee who earns one and one-half times the minimum wage if more than one-half of the employee’s compensation represents commissions. Ramirez, 20 Cal.4th at 803, 85 Cal.Rptr.2d 844, 978 P.2d 2. “Commission” is defined as follows: “Commission wages are compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof.” Id. (quoting Cal. Lab.Code
Defendant does not dispute that all Route Sales Drivers were paid under a single compensation scheme. Rather, Defendant submits the declaration of Anastasio Perez, who states that Route Sales Drivers “were all paid under the same sales commission program.” Perez Deck ¶ 5; see also Montoya Deck ¶ 5 (“[W]e were all paid under the same sales commission program-”). Nor does Defendant dispute Plaintiffs’ contention that all Route Sales Drivers share the same job description. Defendant contends that the amount of money that a Route Sales Driver actually earned would depend on that driver’s personal sales effort. Consequently, Defendant argues, this ease will turn on individual proof of the work performed by each Route Sales Driver.
It appears to the Court that, as with the “outside salesman” exemption, a determination of whether Route Sales Drivers are paid commission wages under California law will turn on issues of law and fact common to all employees. The inquiry into whether Route Sales Drivers are principally involved in selling a product or are merely rendering a service should produce an answer common to all Route Sales Drivers. Route Sales Drivers do sell different amounts of products to different customers at different times. Nevertheless, it seems that the Court will necessarily decide whether a delivery of product to a customer, combined with certain financial incentives of the commission plan, amounts to “principally selling a product.” See Ramirez, 20 Cal.4th at 804, 85 Cal.Rptr.2d 844, 978 P.2d 2.
The Court will be required to make certain findings about the nature of the compensation scheme. The Court may, for instance, be called upon determine whether a base salary combined with incentives for selling certain products makes compensation “a percent of the price of the product or service.” See id. (remanding with instructions that the trial court determine whether the flat-rate portion of an incentive-based compensation scheme “represented a ‘draw’ against future bottle sales” properly characterized as commission). The Court will not relieve Defendant, merely by the accident of the class action device, of its burden to prove the commission salesperson exemption as an affirmative defense. Cf. Sav-On Drug Stores, 34 Cal.4th at 338, 17 Cal.Rptr.3d 906, 96 P.3d 194. After deciding the common issue concerning which parts of Defendant’s pay scheme, if any, are properly categorized as commission, an individual determination can then be made of how much of each employee’s pay represents commission wages.
The Court finds that, with the exception of School Route Drivers and Specials Drivers, the proposed class satisfies the commonality requirement.
3. Typicality
The typicality prerequisite ensures that interests of the named representative align with the interests of the class. Hanon, 976 F.2d at 508. Typicality tests “whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct.” Id. A court should consider the nature of the claim or defense of the class representative, rather than the specific facts from which it arose or for which relief is sought. Id. For instance, typicality may be lacking where the putative class representative is subject to unique defenses that might jeopardize the recovery of absent plaintiffs. Id.; see, e.g., Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 179-80 (2d Cir.1990) (denying class certification for lack of typicality where actions of class representative subjected it to “several unique defenses”).
At base, it appears that the Named Plaintiffs seek relief based on the same conduct of Defendant: the failure to pay overtime wages. Defendant does not contend that the Named Plaintiffs’ claims arise from conduct that Defendant directed at them alone. It is undisputed that all Route Sales Drivers were paid under a single compensation scheme and thus appear to have been treated similarly. Accepting the declarants’ assertions, it appears that Mr. Perez and Mr. Montoya, by substantially altering their customer interactions in response to financial incentives, reacted differently than Plaintiffs Mr. Jeanes and Mr. Parker to the same compensation scheme. This is not the sort of asymmetry that jeopardizes absent class members and precludes a finding of typicality. See Gary Plastic Packaging, 903 F.2d at 179-80.
Defendant also attacks the typicality of the Named Plaintiffs’ claims on the grounds that Mr. Romero worked as a supervisor, not a Route Sales Driver, from October 2002 to January 2004. Nothing before the Court suggests that this disparity will prejudice absent class members. Defendant does not contend that the tenure of the other Named Plaintiffs are atypical of absent individuals. Nor does Defendant object to the inclusion of Mr. Jeanes, who ceased work as a Route Sales Driver in 2003, as a Named Plaintiff.
The Court finds that a range of Named Plaintiffs with differing employment dates best represents absent class members. It is inevitable that, of the dozens of absent class members, some were hired during the statutory period, some ceased employment before the end of the period, and some spent time in other positions with Defendant or outside the company altogether. The multiple backgrounds of the Named Plaintiffs help ensure that they will protect the interests of absent class members of varying circumstances.
4. Adequacy of Representation
The adequacy of representation prerequisite under Rule 23(a)(4) has two criteria: “First, the named representatives must appear able to prosecute the action vigorously through qualified counsel, and second, the representatives must not have antagonistic or conflicting interests with the unnamed members of the class.” Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir.1978). There is no dispute as to this prerequisite.
B. 23(b)(3) Requirements
Under Rule 23(b)(3), a court may certify a class action where the prerequisites are met and “the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.”
1. Predominance of Common Questions
Because no precise test can determine whether common issues predominate, the Court must pragmatically assess the entire action and the issues involved. Rodriguez v. Carlson, 166 F.R.D. 465, 477 (E.D.Wash.1996). Common questions may predominate where the resolution of a question common to the class would significantly advance the litigation. McClendon v. Continental Group, Inc., 113 F.R.D. 39, 43-44 (D.N.J.1986) (citing In re School Asbestos Litigation, 789 F.2d 996, 1010 (3d Cir.1986));
Where a central common defense may bar each of plaintiffs claims, class action treatment is particularly apt. This is because “[i]f the defense succeeds, the entire litigation is disposed of. If it fails, it will not be an issue in the subsequent individual trials.” In re Agent Orange, 818 F.2d at 167.
The existence of the potential overtime exemption for Route Sales Drivers based on the weight of their trucks counsels strongly in favor of class treatment in this case. Defendant asserts that this affirmative defense potentially bars all recovery under California overtime statutes. Furthermore, Defendant claims that the facts that would trigger this defense are undisputed. Even if the relevant facts—the weight of the Route Sales Drivers’ trucks—are ultimately subject to dispute, it appears they can be resolved with reference to simple forms of proof. See Hipp Decl. 7:13-17, Ex. D (Department of Motor Vehicles Registration Cards bearing the model, make, class, type, weight, and Vehicle Identification Number of each vehicle operated by a Route Sales Driver). A series of individual actions in which the weight exemption is a central issue would be a waste of judicial resources. Regardless of the extent of the other individual issues, this issue alone appears to dominate in importance.
Other common issues also have the potential to expediently resolve the claims of all Route Sales Drivers. If Defendant realistically expects that Route Sales Drivers spend most of their time engaging in sales activities, then an inquiry into how each of the Route Sales Drivers actually spends their time may be unnecessary. See Ramirez, 20 Cal.4th at 802, 85 Cal.Rptr.2d 844, 978 P.2d 2 (“[A]n employee who is supposed to be engaged in sales 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.”)
Even if individualized proof is ultimately necessary to determine whether a class member is entitled to recover, legal questions on which these individual questions turn will be common to the class. The Court will need to differentiate between activities of Route Sales Drivers that are properly characterized as “selling a product or service” and those activities that are merely amount to “rendering the service.” See id. at 804, 85 Cal.Rptr.2d 844, 978 P.2d 2 (quoting Keyes Motors, 197 Cal.App.3d at 563, 242 Cal.Rptr. 873). Litigating the characterization of Route Sales Driver tasks over and over again in individual actions would be impractical. The same rationale supports a class-wide determination of which parts of Route Sales Driver pay are commission wages under California law. See Ramirez, 20 Cal.4th at 804, 85 Cal.Rptr.2d 844, 978 P.2d 2.
The individual issues that will remain if the common issues do not resolve the case appear to be relatively straightforward and subject to easy calculation. Evaluating the amount of overtime work performed and the amount of commission wages received can likely be determined with reference to time-cards and payroll records. The calculation of time spent on outside sales activities could be more difficult, depending on how specifically Route Sales Drivers account for their time. However given the purported uniformity of Route Sales Driver activities, it is possible that the Court could determine whether sales activities take up more than half of a Route Sales Driver’s time with reference to a sample of several Route Sales Drivers. Even if individual proceedings were necessary to determine the hours each class member spent performing sales activities, class action proceedings on the predominant common issues present substantial litigation economies.
2. Superiority of a Class Action
Rule 23(b)(3) sets forth factors a court may consider to determine whether certifying a class is superior:
(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be en*491 countered in the management of a class action.
Defendant does not dispute the superiority of class action treatment under these factors.
There is no indication that individual members of the class, other than the Named Plaintiffs, desire to individually control their case. Two Route Sales Drivers appear to be cooperating with Defendant in opposing class certification, inasmuch as they have submitted supporting declarations for Defendant. These Route Sales Drivers do not contend that they wish to control the litigation or disagree with the manner in which Plaintiffs are proceeding.
The Court is aware of no parallel litigation that adjudicates these issues. In past cases, this Court has not shied away from certifying a Rule 23(b)(3) class action simply because of the presence of an FLSA opt-in collective action in the same case. See, e.g., Aguayo v. Oldenkamp Trucking, CV-04-6279. Another district court has declined to certify a Rule 23(b)(3) class action, finding that proceeding on pendent state law claims on an opt-in basis in the FLSA action was superior where defendant demonstrated substantial hostility against the lawsuit amongst potential class members. Leuthold, 224 F.R.D. at 469-71. Other than the cooperation of some Route Sales Drivers with Defendant, no such hostility exists here.
The Rule 23(b)(3)(D) manageability inquiry “encompasses the whole range of practical problems that may render the class action format inappropriate for a particular suit.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 164, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974). Whether a case is manageable as a class action can be an “overriding consideration” in determining superiority. Krehl v. Baskin-Robbins Ice Cream Co., 78 F.R.D. 108, 124 (C.D.Cal.1978). Even where individual issues exist, the value of treating them separately decreases as the commonality of issues increases. See Epifano v. Boardroom Bus. Prods., Inc., 130 F.R.D. 295, 299 (S.D.N.Y.1990) (class action treatment can be useful in “preventing a multiplicity and scattering of suits which essentially rely on the same legal theories and evidence”).
There is a significant possibility that resolution of a common legal issue—the vehicle weight exemption—will resolve the entire action before trial. Failing this, a legal determination of what components of Route Sales Drivers’ pay are commission wages could result in some or all of the Route Sales Drivers’ claims being resolved with reference to payroll records. Also, following a class-wide determination of which Route Sales Driver job tasks amount to “sales activities,” individual proceedings can determine whether these activities comprise more than half of an employee’s time, triggering the outside sales exemption. If none of the affirmative defenses succeed and Plaintiffs are entitled to recovery, the damages of each class member can be easily determined with reference to timecards.
The governing law and number of members of the putative class indicate that a class action would be manageable. All of the claims are governed by the same state law. See Castano v. Am. Tobacco Co., 84 F.3d 734, 743-44 (5th Cir.1996) (finding that district court erred in failing to consider manageability problems caused by differences in state law). The putative class is not so large that determination of certain facts particular to individuals will not be overly burdensome. See Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1305 (9th Cir.1990) (difficulty of calculating individual damages of 1349 undocumented Mexican workers made class action unfeasible).
Following the course of action this Court has taken in past cases by proceeding as a class action appears to be the superior approach in this case. Accordingly, the Court certifies the following Rule 23(b)(3) class:
All persons who are or were employed by Producers Dairy as Route Sales Drivers or Relief Drivers who worked in excess of eight (8) hours in a day and/or forty (40) hours in a work week in the State of California at any time from January 19, 2001, to the present who were not paid overtime compensation for those excess hours.
The FLSA requires the Court to provide potential class members “accurate and timely notice concerning the pendency of the collective action, so that they can make informed decisions about whether to participate.” Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 170, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989). A court certifying a Rule 23(b)(3) class action “must direct to class members the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort.” Fed.R.Civ.P. 23(c)(2)(B).
A. Contents
Plaintiffs have submitted a six-page document (the “Notice”) they propose should be mailed to all putative class members and posted in Route Sales Drivers’ workplaces. Nelson Deck Ex. B. Defendant objects to the Notice on several grounds.
Defendant claims that, on page 1 of the Notice, the “TO” paragraph and the third paragraph of the Introduction refer only to Plaintiffs’ state-law theory of the case. Nelson Deck Ex. B at 1. The Court disagrees. These passages merely state generally the overtime violations that could give rise to liability under federal law (over forty hours in a week) or California law (over eight hours in a day or forty hours in a week). Defendant does not give any reason why the more detailed explanation of the law featured at section III of the Notice (Nelson Deck Ex. B at 2) should also be included on the first page.
Defendant also contends that the following portion of the Notice inaccurately states federal law: “Under the FLSA, Plaintiffs seek payment of overtime compensation for these excess hours, plus liquidated damages in the form of twice the overtime compensation owed, or in the alternative, prejudgment interest.” Nelson Deck Ex. B at 2 (emphasis added). Defendant cites in support only Section 216(b), which appears to be silent on the issue of whether double liquidated damages are available. Plaintiffs cite cases where courts have awarded employees liquidated damages equal to unpaid overtime wages under the FLSA. See, e.g., Angelo v. United States, 57 Fed.Cl. 100, 104 (Fed.Cl.2003); Tho Dinh Tran v. Alphonse Hotel Corp., 281 F.3d 23, 35 (2d Cir.2002). Furthermore, the passage merely states what “Plaintiffs seek,” not what they will actually receive. Nelson Deck Ex. B at 2. To mitigate any risk that the reader might perceive that the Court has endorsed this interpretation, Plaintiffs include in section VII of the Notice a passage explicitly providing that the Court has not expressed an opinion regarding the merits of the case. Nelson Deck Ex. B at 4.
Defendant requests that the proposed notice delete any reference to the phrase “or equivalent position” and expressly exclude School Route Drivers and Specials Drivers. Because the Court finds that School Route Drivers and Specials Drivers are not properly members of either the FLSA collective action or Rule 23 class action, these requests are well taken. The Notice shall reflect the Court’s revised description of the class.
In its Opposition, Defendant asked the Court to delete section VII of the Notice as unnecessary and lacking a rational basis. At oral argument, Defendant clarified that it had intended to refer to section VIII, which states that Defendant may not retaliate against employees who participate in the lawsuit, not section VII. The Court finds that section VIII is accurate and that it helps to address the reluctance that employees often have to suing an employer out of fear of retaliation. See Mullen, 186 F.3d at 625.
B. Distribution
Plaintiffs ask that the Court order (1) the Notice sent to all potential class members by first class mail and (2) that Defendant post the Notice and provide multiple copies of the Consent to Join form in each place where class members work.
1. Posting on Defendant’s Premises
Defendant objects to a requirement that it post the Notice and provide copies of the Consent to Join form on the grounds that it is “obviously punitive” and unnecessary. First class mail is ordinarily sufficient to notify class members who have
The Court doubts Defendant’s unsupported claim that posting in Defendant’s workplace should be barred as punitive. Multiple district courts have approved this method of notice, militating against the existence of a categorical bar against the practice. See, e.g., Johnson v. Am. Airlines, Inc., 531 F.Supp. 957, 961 (N.D.Tex.1982) (finding notice reasonable when communicated by “direct mail, posting on company bulletin boards at flight bases and publishing the notice”); Lantz v. B-1202 Corp., 429 F.Supp. 421, 424 (E.D.Mich.1977).
Plaintiffs claim that the names and addresses of certain employees do not appear on an employee list Defendant has produced (Supp. Nelson Decl. Ex. A) even though the employees are listed in Commission reports (Supp. Nelson Decl. Ex. B). At oral argument Defendant argued that each of those employees was a statutory supervisor, not a Route Sales Driver, and therefore fell outside of the putative class. It appears that each of the purportedly missing employees are indeed either Branch Managers or Branch Supervisors. Hipp Decl. Ex. D (exhibit labeled “INTERROGATORY # 9,12,13”).
Nevertheless, some risk exists that the failure of Defendant to provide the contact information of potential class members will prevent them from receiving notice to which they are entitled. Defendant would face only a small burden in being required to post the Notice and distribute the Consent to Join forms where Route Sales Drivers work. See Oppenheimer Fund v. Sanders, 437 U.S. 340, 359, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978) (despite burden on plaintiff to provide for class notice, court may properly require defendant to bear “insubstantial” expenses). The Court finds that first class mail, combined with posting in Route Sales Drivers’ workplaces, provides the “best notice practicable” to the potential class.
2. Computer-readable Data File
Plaintiffs also ask the Court to order Defendant to submit a “computer-readable data file containing” contact information of all potential class members. Mot. 19:10-12. Defendant’s Director of Administration states that Defendant “does not have a computer readable data file containing employees’ names, addresses, and telephone numbers.” Sewill Decl. ¶ 8. It is unduly burdensome to require Defendant to do Plaintiffs’ work for them by creating a computer-readable file. Accordingly, the Court will not order Defendant to produce one. Defendant must provide, however, contact information for any potential class members that it has not yet provided.
VI. Class Counsel
Plaintiffs ask that the Court certify “the law offices of Beeson, Tayer & Bodine, specifically Robert P. Bonsall, Jason Rabinowitz and Michael D. Nelson, as Class Counsel.” Mot. 19:8-10. Rule 23(a)(4)’s requirement that “the representative parties will fairly and adequately protect the interests of the class” also requires the Court to ensure that class counsel will adequately represent the class. Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1238-39 (9th Cir.1998); see Fed.R.Civ.P. 23(g)(1)(B). In appointing class counsel, the Court
(i) must consider:
• the work counsel has done in identifying or investigating potential claims in the action,
• counsel’s experience in handling class actions, other complex litigation, and claims of the type asserted in the action,
• counsel’s knowledge of the applicable law, and
• the resources counsel will commit to representing the class; ...
Fed.R.Civ.P. 23(g)(1)(C).
The Court has reviewed the Complaint and the briefing in support of class certification, which provide evidence that Plaintiffs’ counsel have investigated the class claims thoroughly and are familiar with the applicable law. Plaintiffs’ counsel also has extensive
ACCORDINGLY:
1. Plaintiffs’ First Cause of Action is conditionally certified as a collective action under 29 U.S.C. section 216(b) with respect to the following class:
All persons who are or were employed by Producers Dairy as Route Sales Drivers and Relief Drivers who worked in excess of forty (40) hours in a work week in the State of California at any time from January 19, 2002, to the present and who were not paid overtime compensation for those excess hours.
2. Plaintiffs’ Second through Sixth Causes of Action are certified as a Rule 23(b)(3) class action consisting of the following class:
All persons who are or were employed by Producers Dairy as Route Sales Drivers or Relief Drivers who worked in excess of eight (8) hours in a day and/or forty (40) hours in a work week in the State of California at any time from January 19, 2001, to the present who were not paid overtime compensation for those excess hours.
3. The Named Plaintiffs Joe Romero, Raymond Jeanes, Larry Heffington, and Loren Portillo are certified as class representatives.
4. Robert P. Bonsall, Jason Rabinowitz, and Michael D. Nelson are certified as class counsel.
5. Plaintiffs shall alter the proposed Notice as follows:
a. replace any phrase referring to “Route Sales Drivers and other equivalent positions” with the phrase “Route Sales Drivers and Relief Drivers.”
b. replace the definitions of the FLSA and Rule 23 classes with the Court’s definition of each.
c. indicate that class members may opt in to the FLSA action by submitting their Consent to Join form postmarked by September 8, 2006.
d. indicate that class members may opt out of the Rule 23 class by submitting their Election to be Excluded form postmarked by September 8, 2006.
6. By April 26, 2006, Plaintiffs shall provide the Court and Defendant with an updated copy of the Notice.
7. By May 26, 2006, Defendant shall post the updated Notice and place multiple copies of the Consent to Join forms in all workplaces of Route Sales Drivers and Relief Drivers in a place visible and accessible to these individuals.
8. The updated Notice shall be sent by first class mail to all potential class members by June 8, 2006.
IT IS SO ORDERED.
. Plaintiffs object to a variety of passages in the declarations Defendant submits. Because none of these objections would change the Court's decision on this Motion, the Court need not rule on them at this time. Leuthold v. Destination Am., Inc., 224 F.R.D. 462, 466 (N.D.Cal.2004).
