APPEAL from the order of the Superior Court of Los Angeles County. Carl J. West, Judge. JCCP No. 4510 (Los Angeles County Super. Ct. No. BC357662)
The opinion of the court was delivered by: Grimes, J.
Opinion following remand from Supreme Court. Certified for publication 9/5/12 (order attached)
Plaintiffs and appellants Marlon Flores, Hooman Khalili, and Ryan McGuinness appealed from the order denying their motion for class certification of their labor claims against Lamps Plus, Inc., Pacific Coast Lighting, Inc., and Lamps Plus Centennial, Inc. (Lamps Plus, or defendants). We published an opinion concluding that employers must provide employees with breaks, but need not ensure employees take breaks, that individual disputes dominated all of plaintiffs' claims, and the class representatives were inadequate. We held the trial court did not abuse its discretion in denying the motion and therefore affirmed the trial court's order. (Lamps Plus Overtime Cases (2011) 195 Cal.App.4th 389, review granted July 20, 2011, S194064.) Our decision was issued while awaiting the California Supreme Court's decision in Brinker Restaurant Corp. v. Superior Court (2008) 165 Cal.App.4th 25, review granted October 22, 2008, S166350. The California Supreme Court granted review of our case, decided Brinker, and has since remanded the case "with directions to vacate [our] decision and to reconsider the cause in light of Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 [Brinker]." (Lamps Plus Overtime Cases (June 20, 2012, S194064) 2012 Cal. Lexis 6067.) Following remand, the parties submitted supplemental briefs about the impact of Brinker on this case. Finding that our decision is consistent with Brinker, we affirm the trial court's order denying class certification.
FACTUAL AND PROCEDURAL BACKGROUND
Lamps Plus is a retail lighting chain, employing thousands of nonmanagerial hourly employees in its 29 stores in California during the relevant period. Lamps Plus's corporate headquarters are in California. It has centralized timekeeping and payroll systems that are operated from headquarters, and all of its corporate policies and procedures are issued from headquarters.
The Lamps Plus workforce includes managers-in-training, assistant managers, store managers, stockroom people, cashiers, and others performing office, display, cleaning, and sales duties. The number of employees and types of positions vary from store to store. All Lamps Plus employees are nonexempt, except the store managers. Even assistant managers are nonexempt hourly employees. All employees use the same timekeeping system.
Lamps Plus has an employee handbook that includes a policy requiring meal and rest breaks. Its meal and rest break policy provides that its nonexempt employees "must" take an uninterrupted meal period of at least 45 minutes after not more than five hours of work. Employees are "entitled" to take a second meal period if they work more than 10 hours. "Employees are required to take [unpaid] meal periods, and should not eat at their desks or work stations." Nonexempt employees are "authorized and permitted" to take a 15-minute paid rest period "for every four hours, or major fraction of four hours, that they work." The policy also provides for written waiver of the meal periods for employees working a shift of six hours or less, as well as written waiver of the second meal period for those employees working between 10- and 12-hour shifts. Employees are required to sign an acknowledgment providing: "I acknowledge that I have received a copy of the Company's meal and rest break policy, and I acknowledge and I agree that I will comply with the policy. I further agree that if I am not provided with the meal and rest periods specified in the policy, I will contact Human Resources . . . ."
Meal and rest periods are scheduled by the employee's supervisor. Meal periods are logged in the timekeeping system, but rest periods are not. Lamps Plus uses a progressive discipline system for violations of the meal and rest period policy.
Lamps Plus has a uniform procedure for payment of wages upon both voluntary and involuntary terminations, administered from headquarters. The procedures require that managers prepare and submit a termination report to Lamps Plus's central human resources department for processing. The last day worked by an employee is determined from the termination report. The payroll department is then responsible for transmitting the final paycheck to the employee. The paycheck is sent by courier to the employee's store, or is sent by mail at the request of the employee.
All three plaintiffs reported to the same manager at the same Lamps Plus store in San Rafael, which is only one of the 29 stores Lamps Plus operates in California. Marlon Flores (Flores) worked at Lamps Plus's San Rafael store as a full-time sales associate from January 2003 to July 2003, and as a part-time sales associate from August 2003 to December 2003. Hooman Khalili (Khalili) was briefly employed as a part-time stock person in the San Rafael Lamps Plus store between September 2003 and February 2004. During that time, Khalili worked a total of only 12 shifts. Ryan McGuinness (McGuinness) worked as a full-time sales associate at Lamps Plus's San Rafael store, from September 2003 to May 2005.
a. The operative complaint
Flores, Khalili, and McGuinness (collectively plaintiffs) filed this lawsuit against Lamps Plus on their own behalf and on behalf of a putative class of similarly situated nonmanagerial employees. They allege Lamps Plus violated labor laws by denying meal and rest breaks, requiring off-the-clock work, failing to provide itemized wage statements, and failing to timely pay wages due upon termination. Their complaint states causes of action for: (1) failure to pay wages for all time worked; (2) failure to pay all overtime wages; (3) failure to pay minimum wages; (4) failure to provide rest breaks; (5) failure to provide meal breaks; (6) late payment of all accrued wages and compensation; (7) unfair business practices (Bus. & Prof. Code, § 17200); (8) conversion of accrued wages and compensation; (9) violation of Civil Code section 52.1; and (10) declaratory relief. The complaint rests on the theory that California employers must ensure employees take meal and rest breaks, and that Lamps Plus had companywide practices of not paying wages timely upon termination and requiring off-the-clock work.
b. The class certification motion and opposition
Plaintiffs moved for class certification, estimating a total of 2,608 current and former employees in the putative class of nonmanagerial, nonexempt hourly employees. Plaintiffs sought certification of seven subclasses, including: (1) employees who worked more than five hours and did not receive a 30-minute meal period; (2) employees who worked more than 10 hours and did not receive at least two 30-minute meal periods; (3) employees who worked at least three and a half hours and did not receive a 10-minute rest period; (4) employees who worked at least six hours and did not receive two 10-minute rest periods; (5) all employees subject to a salesperson performance-tracking policy; (6) employees belonging to the above subclasses who terminated their employment during the class period; and (7) all class members who did not timely receive all wages due upon termination.
The parties conducted precertification discovery, and Lamps Plus produced timekeeping records from a random sampling of putative class members. Plaintiffs retained a third party provider of data entry and data processing services that compiled the sample time records into spreadsheets. Plaintiffs also retained a mathematics and statistics expert, Dr. Robert Fountain, who analyzed Lamps Plus's time card data, termination and final pay data, and other administrative data. In addition to submitting the work products and opinions of these retained experts, plaintiffs submitted portions of the transcripts of depositions of key Lamps Plus representatives, portions of their own deposition testimony, declarations of some employees, and responses to an employee questionnaire furnished by plaintiffs' counsel to a random sample of employees.
Dr. Fountain opined the timekeeping records demonstrated that 91.9 percent of the sample employees experienced meal period violations. Also, Dr. Fountain concluded that 63.6 percent of the sampled employees received their final paychecks late after termination of their employment.
Plaintiff Flores testified in his deposition that he would sometimes arrive at work early on Saturday and not punch in until his shift was scheduled to begin, and he performed work before he punched in. Flores also reported that his supervisor told employees to work off the clock. He also testified that he worked during his lunch break, for example, getting inventory from the warehouse for a customer. When he took breaks in the break room, he would be interrupted by a co-worker or a manager to assist customers. He also testified to working overtime hours after punching out. Sometimes he did not take a lunch break because the store was busy. However, he did not recall a manager ever telling him he could not take a lunch break.
Plaintiff Khalili testified in his deposition that he was occasionally asked to work off the clock, for example, to assemble an item and deliver it to a customer's home or carry an item to a customer's car. Most of the time, he clocked out for lunch and in after his lunch break. But he sometimes did not get a lunch break.
Plaintiff McGuinness testified in his deposition that his manager never told him he could not take a lunch break. He also testified that he understood he could take his rest breaks during the day. However, there were some days when he did not take rest breaks. "[W]e were never told we could not take a lunch break, specifically. However, we felt that if we took a lunch or a meal break during the certain busy times, there could have been maybe some repercussions for that." He recalled taking meal breaks on a "consistent basis." However, his breaks were often less than 30 minutes long.
Five employees, including the named plaintiffs, submitted declarations in support of the class certification motion. These declarations generally averred that meal and rest periods were missed. Also, some employees declared they did not receive their final paychecks on their last day of work. Others stated that they did receive their final paychecks on the last day of employment.
Plaintiffs' counsel distributed a questionnaire to a sampling of putative class members. Some employees responded, saying they often missed meal and rest breaks; others said they always received their meal and rest breaks; and still others said they always received either their meal break or their rest break, but not both. The questionnaire did not ask why a break was missed. Also, some involuntarily terminated employees said they did not receive their final paychecks on their last day of work. Others said they did receive their final paychecks on their last day of work.
In response to the certification motion, Lamps Plus pointed out several weaknesses in plaintiffs' evidence, including (1) errors in Dr. Fountain's mathematical analysis; (2) an admission by plaintiff Flores that he suffered a conviction for driving under the influence; (3) that all named plaintiffs worked at the same San Rafael store, under the same manager; (4) Khalili's poor memory of his brief employment; (6) the largely varying responses to plaintiffs' questionnaires; and (6) Dr. Fountain's admission in deposition that he did not include in his meal and rest period analysis whether the employees' shifts were six hours or less, or 10 hours or less.
Plaintiffs' reply included a supplemental declaration from Dr. Fountain, further analyzing the information contained in the employee questionnaires, including an assessment of meal and rest period violations and off-the-clock work.
c. The trial court's ruling on the class certification motion
After the hearing on the motion, the trial court took the matter under submission and later issued a comprehensive ruling denying the certification motion. The trial court found that plaintiffs had established numerosity and ascertainability of the class. However, the court concluded that individual issues predominated over common issues as to the meal and rest period claims, and class treatment was not superior to individual actions. The trial court reasoned, with regard to meal and rest breaks, that employers need only authorize and permit them, which means make them available, but not ensure they are taken. The trial court recognized the California Supreme Court had granted review of Brinker to decide whether California law requires employers to ensure employees take breaks, or if employers need only provide an opportunity for employees to take breaks.*fn1 The trial court relied on numerous federal authorities holding that California employers were required to provide employees the opportunity to take breaks, not to ensure breaks are taken.*fn2
The trial court also concluded that commonality had not been established for the remaining claims, as they all required an individualized assessment, and there was no evidence of any illegal companywide policy. The trial court also concluded that class treatment of the claims was not manageable and would not provide a substantial benefit to the court or parties. Rather, because individual inquiries predominated, the trial court determined that class treatment was not superior to individual actions.
1. Class Action Standard ...