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Martinez v. Joe's Crab Shack Holdings

California Court of Appeals, Second District, Seventh Division

November 10, 2014

ROBERTO MARTINEZ et al., Plaintiffs and Appellants,
JOE’S CRAB SHACK HOLDINGS et al., Defendants and Respondents.

[As modified Dec. 3, 2014.]

APPEAL from an order of the Superior Court of Los Angeles County, No. BC377269 Charles F. Palmer, Judge.

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Righetti Glugoski, Matthew Righetti and John Glugoski, for Plaintiffs and Appellants.

Epstein Becker & Green, Michael S. Kun and Ted A. Gehring, for Defendants and Respondents Crab Addison, Inc. and Ignite Restaurant Group, Inc.

Law Offices of Mary E. Lynch; Mary E. Lynch; Sheppard, Mullin, Richter & Hampton, Charles F. Barker and Karin Dougan Vogel, for Defendant and Respondent Landry’s Restaurants, Inc.



Litigation by class action has long been recognized as a superior method of resolving wage and hour claims in California (see Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1033 [139 Cal.Rptr.3d 315, 273 P.3d 513] (Brinker)), including those seeking redress for unpaid overtime wages. Nonetheless, when confronted with the myriad individual facts asserted by employers in support of the executive exemption as a defense to a wage claim, courts at all levels have struggled to answer the question central to certification of a class—that is, “whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.” (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 327 [17 Cal.Rptr.3d 906, 96 P.3d 194] (Sav-On); accord, Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 28 [172 Cal.Rptr.3d 371, 325 P.3d 916] (Duran); Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522, 531 [173 Cal.Rptr.3d 332, 327 P.3d 165] (Ayala).)

Here, the trial court, after wrestling with the factual issues raised by Defendants Crab Addison, Inc., Ignite Restaurant Group, Inc. and Landry’s Restaurants, Inc., [1] denied class certification to a putative class consisting of managerial employees allegedly misclassified as exempt on the grounds plaintiffs had failed to establish (a) their claims are typical of the class, (b) they can adequately represent the class, and (c) common questions predominate the class claims such that a class action is the superior means of resolving the litigation. (See Brinker, supra, 53 Cal.4th at p. 1021; Code Civ. Proc. § 382.) Last year we reversed the trial court’s order and remanded the

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matter for reconsideration in light of our then-recent decision in Benton v. Telecom Network Specialists, Inc. (2013) 220 Cal.App.4th 701 [163 Cal.Rptr.3d 415] (Benton). (See Martinez v. Joe’s Crab Shack Holdings [*](Cal.App.).) We filed our prior decision in this case while Duran was pending in the Supreme Court, something we had noted in our opinion. The Court granted a petition for review and ordered briefing deferred pending its decision in Duran. The Court then decided Duran and, on July 30, 2014, transferred the matter to us for reconsideration in light of that decision. The parties have submitted supplemental briefs, which we have considered. We remain convinced the trial court erred in denying certification and remand the case to that court for reconsideration of its order.

Factual and Procedural Background

Roberto Martinez, Lisa Saldana, Craig Eriksen and Chanel Rankin-Stephens are current or former employees of different Joe’s Crab Shack (JCS) restaurants in California. Martinez filed the original complaint in September 2007, seeking to represent a class of salaried managerial employees who worked at JCS restaurants in California on claims they had been misclassified as exempt employees and were entitled to overtime pay.[2] In March 2010 the trial court denied Martinez’s motion for class certification on the ground he was not an adequate class representative. Martinez did not appeal that order.

The trial court permitted Saldana, Eriksen and Rankin-Stephens to join the lawsuit as named plaintiffs. In June 2011 plaintiffs moved for certification of a class consisting of “[a]ll persons employed by Defendants in California as a salaried restaurant employee in a Joe’s Crab Shack restaurant at any time since September 7, 2003.” In support of their motion plaintiffs presented training and operations manuals, as well as deposition testimony from various witnesses employed by CAI and Landry’s. According to this evidence, JCS’s hiring and training practices are uniform throughout the chain; it utilizes an operations manual that applies to all restaurants and every employee; each restaurant offers the same menu; and managerial employees are evaluated using the same form and procedure. All managerial employees are classified as exempt employees and are expected to work a minimum of 50 hours per

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week. Each restaurant is staffed with three to seven managerial employees, who are cross-trained in positions throughout the restaurant and perform the same general tasks.[3]

Plaintiffs also filed 22 declarations from current and former salaried employees who held managerial positions during the relevant time period.[4] The gist of these declarations is the same. Most of the declarants were employed in assistant managerial positions. Although they were told they would be working 50 to 55 hours per week, all stated they had routinely worked more than 55 hours per week; and some reported working more than 70 hours per week. JCS did not keep track of the hours worked by managerial employees. Because labor budgets were set by district or regional managers and, in general, did not provide adequate staffing, managerial employees were required to perform “utility” functions, filling in where needed as cooks, servers, bussers, hosts, stockers, bartenders or kitchen staff. Managerial employees were also required to fill in when hourly employees failed to show up and conduct inventory one night a week after the restaurant closed, which could take as long as three to four hours to complete. As a result, the declarants stated they had worked extended time in positions ordinarily occupied by hourly employees but had received no overtime compensation for those tasks. Each of the declarants estimated ...

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