The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge
ORDER: GRANTING PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
Presently before the Court are Plaintiffs' motion for class certification [Doc. No. 51]; Defendants' opposition [Doc. No. 67]; Plaintiffs' reply [Doc. No. 96]; Defendants' surreply [Doc. No. 97]; and Plaintiffs' response to Defendants' surreply [Doc. No. 108.] For the following reasons, this Court GRANTS Plaintiffs' motion for class certification.
Defendant FedEx ("FedEx") operates a ground package delivery system throughout the United States. [Pls.' Motion at 1-2.] Plaintiffs, former FedEx managers, allege that Defendants improperly classified them as exempt from overtime pay because they spent the majority of their time conducting non-managerial (non-exempt) tasks, including package handling. [Id.] Plaintiffs also argue that since they were in fact non-exempt employees, they were improperly denied meal and rest breaks during their tenure. [Id.]
FedEx's operations involve unloading inbound packages, sorting, moving to outbound docks and ports, and loading onto vans and trailers for delivery. [Id.at 2-3.] There are two divisions at FedEx: the Ground Division, consisting of Satellite and Hub facilities, and the Home Delivery division, which are either stand-alone facilities, or are co-located with Ground Division Satellites. [Id.]
At both Ground Satellite and Ground Hub facilities there are Senior Managers who are in charge of the entire operation. [Id.] There are also Sort Managers that serve as assistant managers for the Senior Manager. [Id.] Next, there are Dock Service Managers, that serve essentially as assistants to the Sort Mangers, and work directly with hourly-paid Package Handler employees. [Id.] At the Home Delivery facilities, there are no Sort Managers, but there are Dock Service Managers that report directly to the Senior Managers. [Id.]
As of March 2005, FedEx handled 2.66 million packages per day and had grown 16% year over year. [Id.] Given this large volume, Defendants have created standardized policies, procedures, standards, manuals, task lists, work flow processes and engineering for many of the elements of their operation. [Id. at 3-7.] For example, Defendants have created training manuals on handling packages, loading vans, increasing production and handling time cards. [Id.] Defendants have conducted studies on their operations that have concluded "Too much of our management's time is spent loading" and "Focus is to free up Managers from loading." [Id.] Defendants have also uniformly classified management positions, including Sort Managers and Dock Service Managers, as exempt from overtime compensation.
Plaintiffs allege that due to corporate's productivity goals, understaffing, tight hourly budgets allocated towards package handlers, high turnover of hourly employees, absenteeism, and equipment failures, their primary duty was package handling--a non-exempt activity. [Id.] Plaintiffs also allege that they were forced to miss meal and rest breaks in violation of California law. [Id.] Therefore, in seeking damages and injunctive relief, they now move to certify five classes: (1) Sort Managers classified as salaried exempt employees; (2) Dock Service Managers classified as salaried exempt employees; (3) Sort Managers and Dock Service Managers that were not provided a 30-minute uninterrupted meal period; (4) Sort Managers and Dock Service Managers that were not provided two 10-minute rest breaks; and (5) Sort Managers and Dock Service Managers that have not received their overdue overtime compensation in violation of California Labor Code Section 203. [Id.at 2.]
APPLICABLE CALIFORNIA LABOR LAWS
The California Labor Code provides that employees are presumptively entitled to be paid overtime for all hours worked in excess of eight hours during a day or forty hours a week, and are entitled to recover unpaid amounts at a rate of at least 1.5 times the employee's regular rate of pay. Cal. Lab. Code § 510(a).
Under California law, "[n]o employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes, except that when a work period of not more than six (6) hours will complete the day's work the meal period may be waived by mutual consent of the employer and the employee." Cal. Code Regs. tit. 8, § 11070(11)(A). With respect to rest periods, employers are required to provide rest periods for a period of ten minutes for every four hours worked. Id. § 11070(12)(A).
C. Waiting Time Penalties
Section 203 of the California Labor Code provides in pertinent part: "If an employer willfully fails to pay . . . in accordance with Sections 201, 201.5, 202, and 202.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days." Cal. Labor Code § 203.
D. Exemption Classification
An employee qualifies for an "executive exemption" from California's overtime and meal and rest period laws if: (1) his duties and responsibilities involve the management of the enterprise in which he or she is employed; (2) he customarily and regularly directs the work of two or more employees; (3) he has the authority to hire or fire other employees; (4) he customarily and regularly exercises discretion and independent judgment; (5) he is primarily engaged in duties that meet the test for exemption; and (6) he earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. Id. § 11070(1)(A)(1). An employee classified as "exempt" based on all these elements is not covered by California's overtime and meal and rest period laws. If a classification is challenged, the employer must demonstrate that its "exempt" classification is proper. Ramirez v. Yosemite Water Co., 20 Cal.4th 785, 794-95 (1999).
Motions for class certification proceed under Rule 23(a) of the Federal Rules of Civil Procedure. Rule 23(a) provides four prerequisites to a class action: (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. Fed. R. Civ. P. 23(a). A proposed class must also satisfy one of the subdivisions of Rule 23(b).
"In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met." Eisen v Carlisle & Jacquelin, 417 US 156, 178 (1974) (quoting Miller v Mackey Int'l., 452 F 2d 424 (5th Cir. 1971)) (internal quotation marks omitted). As the party seeking to certify a class, plaintiffs bear the burden of demonstrating that they satisfy the elements of Rule 23. Doninger v. Pac. Nw. Bell, Inc., 564 F.2d 1304, 1308 (9th Cir. 1977); W. States Wholesale, Inc. v. Synthetic Indus., Inc., 206 F.R.D. 271, 274 (C.D. Cal. 2002). The court is "at liberty to consider evidence which goes to the requirements of Rule 23 even though the evidence may also relate to the underlying merits of the case." Hanon v Dataproducts Corp, 976 F 2d 497, 509 (9th Cir 1992).
However, a weighing of competing evidence is inappropriate at this stage of the litigation. Staton v. Boeing Co., 327 F.3d 938, 954 (9th Cir. 2003); Wang v. Chinese Daily News, Inc., 231 F.R.D. 602, 605 (C.D. Cal. 2005); Chun-Hoon v. McKee Foods Corp., 2006 U.S. Dist. LEXIS 82029, *14-16 (N.D. Cal. 2006). Finally, on a motion for class certification, the court "is bound to take the substantive allegations of the complaint as true." Blackie v Barrack, 524 F2d 891, 901 n.17 (9th Cir 1975).
A. Class Certification is Appropriate Under Rule 23(a)
1. Numerosity: The Class is Sufficiently Numerous that Joinder is Impracticable
Rule 23(a)(1) requires that the class be so numerous that joinder of all class members is "impracticable." Fed. R. Civ. P. 23(a)(1). Defendants do not rebut Plaintiffs' estimate that the proposed class consists of 83 Sort Managers and 485 Dock Service Managers. This number is sufficient to make joinder impracticable. Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 482 (2d Cir. 1995) (stating that numerosity is "presumed at a level of 40 members"); Ikonen v. Hartz Mountain Corp., 122 F.R.D. 258, 262 (S.D. Cal. 1988) ("As a general rule, [however,] classes of 20 are too small, classes of 20-40 may or may not be big enough depending on the circumstances of each case, and classes of 40 or more are numerous enough."); Herbert ...