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Munoz v. Chipotle Mexican Grill, Inc.

California Court of Appeals, Second District, First Division

June 30, 2015

CORINA MUNOZ et al., Plaintiffs and Appellants,
v.
CHIPOTLE MEXICAN GRILL, INC., Defendant and Respondent.

APPEAL from an order of the Superior Court of Los Angeles County No. BC447232, Barbara M. Scheper, Judge.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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COUNSEL

Knapp, Petersen & Clarke and Stephen M. Harris for Plaintiffs and Appellants.

Sheppard, Mullin, Richter & Hampton, Richard J. Simmons, Jason W. Kearnaghan, Daniel J. McQueen and Robert Mussig for Defendant and Respondent.

OPINION

BENDIX, J. [*]

Plaintiffs Corina Munoz and Keresha Edwards appeal from an order denying certification of a class of approximately 26,000 nonexempt California current and former employees of defendant Chipotle Mexican Grill, Inc. (Chipotle) regarding what plaintiffs allege is Chipotle's policy to require employees to purchase slip-resistant shoes from a vendor, Shoes for Crews, in order to work at Chipotle's restaurants. Plaintiffs further contend that Chipotle deducted the cost of these shoes from employee wages without obtaining the employee’s written authorization, these deductions caused wages to dip below minimum wage, and Chipotle’s pay stubs were noncompliant because they did not contain the start date for the pay period. Plaintiffs set forth these claims in seven causes of action, and Munoz seeks civil penalties on behalf of herself and "all current and former employees” under the Labor Code Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.) for all causes of action except their Business and Professions Code section 17200 claim.

We conclude that the trial court’s order denying plaintiffs’ class certification motion and granting Chipotle’s motion to deny class certification is a nonappealable order because the PAGA claims remain in the trial court and the “death knell” doctrine does not apply under these circumstances. Accordingly, we dismiss plaintiffs’ appeal.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs’ employment history and Chipotle’s Shoes for Crews program and wage statements

Munoz started working for Chipotle in July 2009 as a cashier in Chipotle’s Victorville restaurant. According to Chipotle, it terminated her on September 9, 2010, because of a “fight she initiated with a co-worker.” Edwards started

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working in August 2004 as a part-time cashier in Chipotle’s Beverly Hills location. Chipotle asserts that it terminated her for theft in November 2009.

The parties dispute the contours of Chipotle’s Shoes for Crews program, particularly as to plaintiffs’ contention that Chipotle had a policy to require only verbal authorization for payroll deductions related to the program during the time period alleged for the proposed class. They also dispute whether Chipotle’s wage statements uniformly failed to set forth the beginning date for the pay period, and whether just listing the end date satisfied the applicable labor laws even if the start date could be deduced by counting back from the end date. Finally, they dispute Munoz’s assertion that deductions for the Shoes for Crews program caused wages to dip below minimum wage, and in what Chipotle described as the “rare” instance when a deduction would cause wages for a pay period to fall below minimum wage, whether Chipotle reimbursed the affected employee for the cost of the shoes.[1]

Plaintiff's' complaints

Munoz filed the original class action complaint on October 12, 2010, in which she alleged violations of the following statutes: (1) Labor Code sections 2800 and 2802 (unpaid business-related expenses); (2) Labor Code sections 201 and 202 (wages not paid upon termination); (3) Labor Code section 204 (wages not paid during employment); (4) Labor Code section 226, subdivision (a) (improper wage statements); and (5) Business and Professions Code section 17200 et seq. She also sought civil penalties under the PAGA in each of the latter Labor Code causes of action on behalf of herself and "current and former employees” as " 'aggrieved employees' " within the PAGA.[2]

On November 16, 2010, Munoz filed a first amended complaint, and on March 11, 2011, a second amended complaint in which she added a class claim for unlawful deductions under Labor Code sections 221 and 400 to 410 (unlawful business deductions). Specifically, she alleged that Chipotle forced employees to buy shoes from Shoes for Crews and then illegally deducted the cost of those shoes from employee paychecks. Both complaints contained PAGA allegations, including that Munoz was bringing those claims and seeking PAGA civil penalties on behalf of herself and "current and former employees.”

On February 14, 2012, a third amended complaint (TAC) was filed, adding Edwards as a named plaintiff and a claim on behalf of Munoz and the

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putative class for nonpayment of minimum wages. In the TAC, Munoz seeks civil penalties for herself and “current and former employees” under the PAGA for all but her Business and Professions Code section 17200 causes of action. Edwards is not a named representative for the PAGA claims in the TAC, although she is a “former employee” on whose behalf Munoz is seeking PAGA civil penalties.

The class certification proceedings

Plaintiffs’ motion

On February 1, 2013, plaintiffs filed their motion for class certification. In their TAC, plaintiffs alleged two subclasses: (1) an unpaid wages subclass for nonexempt California employees who worked for Chipotle within four years of the filing of the complaint until the date of certification; and (2) a noncompliant wage statement subclass consisting of Chipotle’s nonexempt California employees who worked for Chipotle within one year prior to the filing of the complaint until the date of certification.

In their class certification motion, plaintiffs added a “Shoe Expenses Subclass”: “All non-exempt or hourly-paid employees who worked for [Chipotle] in California beginning from the date when [Chipotle] started the Shoes for Crews program until October 12, 2010.” Plaintiffs also modified their “Minimum Wage Subclass” to define the relevant time period as “beginning from the date when [Chipotle] started the Shoes for Crews program until the date on which [Chipotle] changed their Shoes for Crews payroll deduction policy to deduct shoe expenses from three separate pay periods.”

Plaintiffs also asserted that if the three proposed subclasses were certified, the derivative claims also should be certified. Plaintiffs defined as “derivative” their claims under Labor Code sections 201 to 202 (wages not paid upon termination), 204 (wages not paid during employment), and 226, subdivision (a) (improper wage statements), and Business and Professions Code section 17200.

Prior to filing their motion, plaintiffs sent notices to approximately 16,000 potential class members pursuant to the procedures set forth in Belaire-West Landscape, Inc. v. Superior Court (2007)149 Cal.App.4th 554 [57 Cal.Rptr.3d 197]. Plaintiffs’ counsel represented in their class certification motion that pursuant to the Belaire-West “process, ” Chipotle had “identified each and every putative class member through its payroll records.”

In support of their class certification motion, plaintiffs filed the Edwards declaration. Edwards asserted that “Chipotle implemented a program in

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which employees were required to wear Shoes for Crews... brand slip-resistant shoes, or wear [Shoes for Crews] overshoes. Once this program was implemented, no other brands of shoes were permitted.” In June 2009, she purchased shoes from the Shoes for Crews catalogue for $27.42, and that amount was deducted from her paycheck during the pay period ending on July 5, 2009, without her “express written authorization” during her employment or “otherwise.” Chipotle never reimbursed her for this purchase.

With respect to her wage statements, Edwards declared that it was her “understanding that none of my wages statements listed a beginning date for the pay period for which I was being paid, ” and that she thus had to calculate the pay period “manually” on the assumption that the pay period started 14 days before the ending date on her wage statement. She also described her ability and willingness to be a class representative.

The motion included excerpts from Munoz’s deposition in which she stated that nobody told her that the cost of the shoes she needed for work would come out of her paycheck; she blamed Chipotle for her not being able to find employment when she was terminated. Plaintiffs also submitted five wage statements: three for plaintiff Munoz with no ...


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