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In Re Taco Bell Wage and Hour Actions

November 26, 2012

IN RE TACO BELL WAGE AND HOUR ACTIONS,


The opinion of the court was delivered by: Dennis L. Beck United States Magistrate Judge

FINDINGS AND RECOMMENDATIONS REGARDING PLAINTIFFS' MOTION FOR CLASS CERTIFICATION (Documents 185, 305, 315)

On December 30, 2010, Plaintiffs filed their Motion for Class Certification. After a subsequent stay was lifted and the parties submitted additional briefing, the matter was heard on October 19, 2012, before the Honorable Dennis L. Beck, United States Magistrate Judge. Matthew Theriault, David Cheng and Michael Coats appeared on behalf of Plaintiffs. Tracy Kennedy, Morgan Forsey, and Nora Stiles and appeared on behalf of Defendants.

BACKGROUND

In re Taco Bell consists of six consolidated wage and hour class actions against Defendants Taco Bell Corp. and Taco Bell of America, Inc. The Consolidated Complaint, filed on June 29, 2009, alleges (1) unpaid overtime; (2) unpaid minimum wages; (3) unpaid wages; (4) missed meal periods; (5) missed rest periods; (6) non-compliant wage statements; (7) unreimbursed business expenses; (8) vested accrued vacation wages; (9) non-payment of wages upon termination; and (10) non-payment of wages during employment. The Consolidated Complaint also asserts a claim for violation of California Business and Professions Code section 17200, et seq., and seeks penalties pursuant to California's Private Attorneys General Act, California Labor Code sections 2698 et seq. ("PAGA").

On December 30, 2010, Plaintiffs filed their Motion for Class Certification, seeking to certify subclasses for meal and rest break claims, untimely final pay claims and vacation pay claims. For the meal and rest break classes, Plaintiffs sought to certify a late meal break subclass, an on-duty meal period agreement subclass, an unpaid on-duty meal period subclass and a rest break subclass.

On March 14, 2011, Plaintiffs filed a Motion for Leave to Amend the Consolidated Complaint in part to conform the subclass definitions to facts learned in discovery. On May 3, 2011, the Court denied Plaintiffs' request, finding that the amendments substantially altered the scope of the class action.

On May 17, 2011, Plaintiffs filed a First Amended Consolidated Complaint ("FACC") incorporating the changes that the Court allowed. The FACC included subclasses for (1) unpaid wages; (2) improper wage statements; (3) unreimbursed business expenses; (4) vested accrued vacation time and (5) final pay.

Hearings were held on the Motion for Class Certification on June 6 and 7, 2011, before the Honorable Oliver W. Wanger.

On September 9, 2011, the Court granted Taco Bell's Motion to Stay the Fourth Cause of Action (missed meal periods) and Fifth Cause of Action (missed rest periods) pending the California Supreme Court's decisions in Brinker Restaurant Corp. v. Superior Court and Brinkley v. Public Storage, Inc.

On September 26, 2011, the Court denied certification of the final pay and vacation pay subclasses without prejudice.

On June 27, 2012, after the California Supreme Court issued a decision in Brinker, the Court held a status conference and set a supplemental briefing schedule.

Pursuant to the Court's request, Plaintiffs filed new briefing in support of their motion on August 15, 2012. Defendants opposed the motion and filed evidentiary objections on August 29, 2012. Plaintiffs filed their reply, along with their own objections to evidence, on September 5, 2012.

ALLEGATIONS IN THE FACC RELATED TO THIS MOTION

Plaintiffs Sandrika Medlock, Lisa Hardiman, Miriam Leyva, Loraine Naranjo, Endang Widjaja, Christopher Duggan, Kevin Taylor, Debra Doyle and Hilario Escobar are California residents who were, at all relevant times, employed by Defendants as non-exempt or hourly employees.*fn1 Plaintiffs bring this action on their own behalf, as well as on behalf of each and all other persons similarly situated. Plaintiff Hardiman is also seeking PAGA penalties on behalf of the State of California.

As is relevant to this motion, the Fourth and Fifth Causes of Action are brought by the Unpaid Wages Subclass, defined as "All non-exempt or hourly-paid employees of Taco Bell Corp., and/or Taco Bell of America, Inc., in the State of California from September 7, 2003, until the resolution of this law suit." FACC, ¶ 23(a).

The Fourth Cause of Action alleges violations of meal period requirements pursuant to California Labor Code sections 226.7 and 512(a), and the applicable IWC Wage Order. Plaintiffs allege that during the relevant time period, they and other class members who were scheduled to work (1) for a period of time no longer than six hours, and who did not waive their legally-mandated meal periods by mutual consent, were required to work for periods longer than five hours without a meal period of not less than thirty minutes; (2) for a period of time in excess of six hours were required to work for periods longer than five hours without a meal period of not less than thirty minutes; (3) in excess of ten hours but not longer than twelve hours, and who did not waive their legally-mandated meal periods by mutual consent were required to work in excess of ten hours without receiving a second meal period of not less than thirty minutes; and (4) for a period of time in excess of twelve hours were required to work for periods longer than ten hours without a meal period of not less than thirty minutes. FACC, ¶¶ 85-88.

The Fourth Cause of Action further alleges that Defendants willfully required Plaintiffs, the other class members and the other aggrieved employees to work during meal periods and failed to compensate Plaintiffs for work performed during those meal periods. Defendants also failed to pay Plaintiffs, the other class members, and the other aggrieved employees the full meal period premium due pursuant to California Labor Code section 226.7. FACC, ¶¶ 89-90.

The Fifth Cause of Action alleges a violation of the rest period requirements of California Labor Code section 226.7 and the applicable IWC Wage Order. Plaintiffs allege that Defendants required Plaintiffs, the other class members and the other aggrieved employees to work in excess of four hours without providing a ten minute rest period. FACC, ¶ 97. Plaintiffs further allege that Defendants required them to work for an additional four hours without providing a second ten minute rest period. FACC, ¶ 98. Plaintiffs contend that Defendants failed to compensate employees for work performed during rest periods and failed to pay the full rest period premium pursuant to California Labor Code section 226.7. FACC, ¶ 100.

PROPOSED SUBCLASSES

By this motion, Plaintiffs seek to certify four subclasses under Federal Rules of Procedure 23(a) and 23(b)(3):

Meal Break Subclass:

All persons who work or worked as a non-exempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2003, until the resolution of this lawsuit who worked for a period of time in excess of six hours and who worked for periods longer than five hours without a meal period of not less than thirty minutes as reflected in Defendants' employees' time records.

Underpaid Meal Period Premium Subclass:

All persons who work or worked as a non-exempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California who, between September 7, 2003, until November 12, 2007, received at least one 30-minute automatic adjustment on Taco Bell's Time and Attendance System as reflected in Defendants' employees' time records. On-Duty Meal Period Agreement Subclass:

All persons who work or worked as a non-exempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2003, until the resolution of this lawsuit who signed an on-duty meal period agreement and who have not revoked their agreement in writing, as found in Defendants' employees' records.

Rest Break Subclass:

All persons who work or worked as a non-exempt, hourly-paid employee at a corporate-owned Taco Bell restaurant in California from September 7, 2003, until the resolution of this lawsuit, who worked for a period of time in excess of six hours and less than seven hours without at least two rest periods of not less than ten minutes, as reflected in Defendants' employees' time records.

LEGAL STANDARD

To qualify for class certification, Plaintiff must satisfy all of the requirements of Rule 23(a) of the Federal Rules of Civil Procedure and any one of the requirements of Rule 23(b). Rule 23(a) requires (1) impracticability of joinder due to numerosity; (2) commonality of questions of law or fact; (3) typicality of claims; and (4) adequacy of representation.

The burden is on the party seeking to maintain the class action. In this case, Plaintiffs must establish a prima facie showing of each of the elements of Rule 23(a) prerequisites and the appropriate 23(b) ground for a class action. Taylor v. Safeway Stores, Inc., 524 F.2d 263, 270 (10th Cir. 1975), overruled on other grounds by Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983). The burden, however, is slight. Plaintiffs need only present sufficient proof to allow the court to come to a "reasonable judgment" on each requirement. Blackie v. Barrack, 524 F.2d 891, 901 (9th Cir. 1975), cert. denied, 429 U.S. 816 (1976).

DISCUSSION

I. Meal Break ...


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