United States District Court, N.D. California
ORDER GRANTING QED'S MOTION TO DENY CLASS
CERTIFICATION; GRANTING IN PART PLAINTIFFS' MOTION FOR
CONDITIONAL FLSA CERTIFICATION; DENYING QED'S MOTION FOR
RULE 11 SANCTIONS; AND SETTING CASE MANAGEMENT CONFERENCE
DKTS. NO. 50, 53, 56
William H. Orrick, United States District Judge
labor case, plaintiff Terrill Johnson brings a putative class
action and Fair Labor Standards Act (“FLSA”)
collective action on behalf of himself and all
similarly-situated non-exempt employees and former employees
of Q.E.D Environmental Systems Inc. (“QED”)
because QED used an “automatic deduct” policy and
failed to provide all meal periods, full wages or accurate
wage statements as required by law. Third Amended Complaint
(“TAC”) ¶1 (Dkt. No. 29). QED now moves to
deny class certification because QED did not have a common
nationwide auto deduct policy: Johnson's testimony
establishes that he was atypical of the class; and
Johnson's testimony and evidence establish that there are
only six to seven individuals in the class. Decertify Mot. at
1 (Dkt. No. 53). QED is correct; Johnson cannot meet the
commonality, typicality, numerosity, and adequacy
requirements of Rule 23 and the motion to deny class
certification is GRANTED.
also moves for sanctions against Johnson's lawyers,
arguing that they failed to conduct a reasonable
investigation which would have revealed that Johnson was
atypical of the class; that QED's policies comply with
California law; and that the proposed class could not meet
the numerosity requirements for class certification.
Sanctions Mot. at 1-3 (Dkt. No. 50). While I agree with much
of QED's argument, in light of its failure to provide
critical discovery on numerosity in a timely fashion, I DENY
the motion for sanctions.
also moves for conditional certification of his FLSA meal
break claim. Certification Mot. at 1 (Dkt. No. 56). Because
he has met the very low bar for conditional certification,
his motion for conditional FLSA certification is GRANTED in
filed this putative class action on August 26, 2017, in
California Superior Court. (Dkt. No. 2-1). QED removed the
case to federal court on March 24, 2016, after Johnson added
a FLSA claim to his Second Amended Complaint
(“SAC”). (Dkt. No. 1); (Dkt. No. 2-2). QED moved
to dismiss the SAC, which I granted because “Johnson
ha[d] wholly failed to meet the minimum pleading
requirements” and his allegations relating to an
“unidentified ‘policy or practice' ” of
not providing uninterrupted meal breaks were insufficient.
Dkt. No. 27 at 3.
then filed his TAC, this time alleging that QED supervisors
instructed and encouraged employees to skip or take shortened
meal breaks and attaching excerpts from a July 2012
Employment Manual that outlines a meal break policy that is
facially non-compliant with California law. TAC at 6; TAC,
Ex. A (Dkt. No. 29-1). QED moved to dismiss, but I denied the
motion because Johnson's allegations that QED pressured
employees to skip meal breaks or take shorter meal breaks
than required by law, in conjunction with the facially
deficient policy outlined by the Employment Manual, was
sufficient to meet the pleading standard. Dkt. No. 42 at 5
(explaining that because the deficient meal break policy
placed “the responsibility [on] QED supervisors to
advise and schedule work compliant meal and rest breaks, the
allegations that QED instructed, encouraged, and directed its
employees to work in a manner contrary to the Labor Code at
least plausibly suggests that the QED did not in fact have a
compliant meal break policy”).
September 30, 2016, QED produced to plaintiffs a California
addendum to the employee manual, outlining a facially
compliant meal break policy. Segal Decl. in Support of Oppo.
to Sanctions Mot. Ex. 2 (Dkt. No. 62-3). Counsel for Johnson
declares that this addendum was not included with the copy of
the Employment Manual that Johnson provided to them in
October of 2014. Shim Decl. ¶7.
the TAC was filed, QED began efforts to arrange a deposition
of named plaintiff Terrill Johnson. Sanctions Mot. at 3.
After Johnson's counsel refused 11 different deposition
dates, Johnson was finally deposed on December 12, 2016.
Id. At his deposition, Johnson testified that he had
no knowledge about the meal break or time keeping practices
of QED facilities outside the San Leandro facility and had
never spoken to any employees at other facilities. Connors
Decl. Ex. A (“Johnson Depo”) at 28:9-12, 23-24;
29:3-5; 77:8-19; 77:3-19; 83:7-22 (Dkt. No. 53-2). He also
testified that, to his knowledge, there were only six or
seven other employees, all production line workers, at the
San Leandro facility that were denied meal periods.
Id. 52:1-8, 13-20. He specifically stated that he
had no knowledge whether other non-exempt employees were
denied meal periods, id. 97:23-98:8, and that the
supervisors at the San Leandro facility would not have been
denied lunch breaks or subject to the same meal break issues.
Id. 98:23-99:17. He further testified that he
believed he was denied meal periods and singled out because
his supervisor didn't like him. Id. 58:13-18;
72:20-73-20; 74:22-25; 76:3-6.
counsel also belatedly served a 30(b)(6) notice on QED at
plaintiff Johnson's deposition on December 12, 2016. Dkt.
No. 60 at 3. QED refused to produce a 30(b)(6) deponent
because the request was overbroad. Id. The parties
brought their discovery dispute to me. I ordered that they
proceed with a narrowed notice, and depositions for two
30(b)(6) witnesses finally occurred on March 7, 2017.
January 6, 2017, QED served on counsel for Johnson its motion
for sanctions, explaining that if Johnson did not voluntarily
dismiss the TAC within 21 days it would seek sanctions from
the court. Dkt. No. 59-1. Johnson's counsel responded to
this letter on January 28, 2017 offering to “add a
clarification regarding QED's employment manual”
but declining to dismiss the TAC. Conners Decl., Ex. C (Dkt.
No. 68). Johnson did not take any action to amend the TAC and
QED subsequently filed its motion for sanctions. Dkt. No 50.
FEDERAL RULE OF CIVIL PROCEDURE 23
Rule of Civil Procedure 23 governs class actions.
“Before certifying a class, the trial court must
conduct a rigorous analysis to determine whether the party
seeking certification has met the prerequisites of Rule
23.” Mazza v. Am. Honda Motor Co., Inc., 666
F.3d 581, 588 (9th Cir. 2012) (internal quotation marks
omitted). The burden is on the party seeking certification to
show, by a preponderance of the evidence, that the
prerequisites have been met. See Wal-Mart Stores, Inc. v.
Dukes, 131 S.Ct. 2541, 2551 (2011); Conn. Ret. Plans
& Trust Funds v. Amgen Inc., 660 F.3d 1170, 1175
(9th Cir. 2011).
under Rule 23 is a two-step process. The party seeking
certification must first satisfy the four threshold
requirements of Rule 23(a), numerosity, commonality,
typicality, and adequacy. Specifically, Rule 23(a) requires a
(1) the class is so numerous that joinder of all members is
(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).
party seeking certification must then establish that one of
the three grounds for certification under Rule 23(b) applies.
See Fed. R. Civ. P. 23(b).
employee may bring a collective action under the FLSA on
behalf of other “similarly situated” employees.
29 U.S.C. § 216(b). Most courts follow a two-step
approach to determine whether employees in a proposed
collective are “similarly situated” such that
FLSA certification is appropriate. Harris v. Vector Mktg.
Corp., 716 F.Supp.2d 835, 837 (N.D. Cal. 2010); see
also Daniels v. Aeropostale West, Inc., No.
12-cv-05755-WHA, 2013 WL 1758891, at *5 (N.D. Cal. Apr. 24,
2013). During the first step, the court must determine
whether the proposed collective should be informed of the
action and given “notice.” Harris, 716
F.Supp.2d at 837. The “notice” stage
determination of whether the putative collective members will
be similarly situated is made under a “fairly lenient
standard” which typically results in conditional
certification. Daniels, 2013 WL 1758891 at *6. At
the notice stage it is the plaintiffs' burden to make
substantial allegations that the putative collective members
were subject to an illegal policy, plan, or decision, by
showing that there is some factual basis beyond the
“mere averments” in the complaint. Id.
the lenient standard at the notice stage, courts have held
that plaintiffs bear a “very light burden” in
substantiating the allegations. Prentice v. Fund for Pub.
Interest Research, Inc., No. 06-cv-7776-SC, 2007 WL
2729187, at *5 (N.D. Cal. Sept. 18, 2007) (“Given that
a motion for conditional certification usually comes before
much, if any, discovery, and is made in anticipation of a
later more searching review, a movant bears a very light
burden in substantiating its allegations at this
party opposing the certification may move to decertify the
class once discovery is complete.” Benedict v.
Hewlett-Packard Co., No. 13-cv-0019-LHK, 2014 WL587135,
at *5 (N.D. Cal. Feb. 13, 2014). During this second stage the
court makes factual determinations as to the “propriety
and scope of the class, and must consider three factors: (1)
the disparate factual and employment setting of the
individual plaintiffs; (2) the various defenses available to
the defendants with respect to the individuals plaintiffs;
and (3) fairness and procedural considerations.”
Richie v. Blue Shield of California, No.
13-cv-2693-EMC, 2014 WL 6982943, at *7 (N.D. Cal. Dec. 9,
2014). During this stage the “court engages in a more
stringent inquiry into the propriety and scope of the
collective action” because “discovery is complete
and the case is ready to be tried.” Labrie v. UPS
Supply Chain Solutions, Inc., No. 08-cv-3182 PJH, 2009
WL 723559, at *4 (N.D. Cal. Mar. 18, 2009). The second step
of FLSA certification occurs “after the conditional
class has received notice and discovery has been completed.
Richie, 2014 WL 6982943 at *7. “Where
substantial discovery has been completed, some courts have
skipped the first-step analysis and proceeded directly to the
second step.” Smith v. T-Mobile USA, Inc., No.
05-cv-5274, 2007 WL 2385131, at *4 (C.D. Cal. Aug. 15, 2007).