Frausto v. Bank of America, National Association

          ORDER CERTIFYING RULE 23(B)(3) CLASS RE: ECF NO. 90

          LAUREL BEELER United States Magistrate Judge

         INTRODUCTION

         The plaintiffs both worked for Bank of America as non-exempt employees and - on behalf of themselves and the putative class - sued for alleged wage-and-hour violations under the California Labor Code for off-the-clock work and missed meal-and-rest breaks. They also made derivative claims predicated on the off-the-clock work and missed-breaks claims: failure to pay final wages on time, failure to provide accurate wage-and-hour statements, and unfair business practices under California's Unfair Competition Law (“UCL”). The court grants the motion in part and certifies the following narrowed classes: (1) for the off-the-clock claim, (a) all Treasury Services Advisors and persons with similar job duties (in call centers) and (b) all Assistant Managers and persons with similar job duties (in financial centers); and (2) for the meal-and-rest-breaks claims, all Treasury Services Advisors and persons with similar job duties (in call centers). The court certifies the same classes for the derivative claims for the reasons that it certifies classes for the predicate claims.

         STATEMENT

         1. The Plaintiffs, Their Jobs and Class Claims, and Their Proposed Class

         Ms. Frausto worked in a call center as a Treasury Services Advisor from 1999 to 2017 and spent her day fielding calls from commercial clients, financial centers, and other business partners, and (generally) verifying wires, the amount of cash in vaults, and information about accounts.^[1] Ms. Suarez worked from 2003 to 2016, first as a teller, then as a Teller Operations Specialist and a Client Services Specialist, and starting in 2015, as an assistant manager.^[2]

         Following the court's summary-judgment orders, the Frausto complaint has two stand-alone class claims: (1) claim two charging a failure to provide meal breaks, in violation of the California Labor Code, and (2) claim three charging a failure to provide rest breaks, in violation of the Labor Code. It has three class claims predicated on claims two and three: (3) claim four charging a failure to pay final wages on time, in violation of the Labor Code, (4) claim five charging a failure to provide accurate wage-and-hour statements, in violation of the Labor Code, and (5) claim six charging unfair business practices, in violation of the UCL.^[3] The complaint's class definition is as follows:

All persons who worked for any Defendant in California as a non-exempt employee at any time during the period beginning four years before the filing of the initial complaint in this action and ending when notice to the Class is sent.^[4]

         The Frausto complaint has the following subclasses:

Meal Period Premium Sub-Class: All persons who worked for any Defendant in California as a non-exempt employee at any time during the period beginning four years before the filing of the initial complaint in this action and ending when notice to the Class is sent and received from any Defendant payment for a bonus and a missed meal period.

Late Pay Sub-Class: All persons who worked for any Defendant in California as a non-exempt employee at any time during the period beginning three years before the filing of the initial complaint in this action and ending when notice to the Class is sent and terminated their employment with any Defendant.^[5]

         The Suarez complaint has three stand-alone class claims: (1) claim one for overtime wages, (based on work “off the clock”), in violation of the Labor Code; (2) claim two, charging a failure to pay minimum wage (based on the overtime violations), ^[6] in violation of the Labor Code; and (3) claim three, charging a failure to provide meal-and-rest breaks, in violation of the Labor Code.^[7] It has four class claims predicated on claims one through three: (4) claim five, charging a failure to pay vacation time at termination, in violation of the Labor Code (a claim that is not at issue in the class-certification motion); (5) claim six, charging a failure to pay final wages on time, in violation of the Labor Code; (6) claim eight, charging a failure to provide accurate wage-and-hour statements, in violation of the Labor Code; and (7) claim twenty, charging unfair business practices, in violation of the UCL.^[8]

         The Suarez complaint has the following class definitions:

All non-exempt employees who worked for Bank of America as Assistant Manager or similar job titles, in the State of California at any time on or after the date that is four years prior to when the Complaint was filed.

Terminated Subclass: All persons who are eligible for membership in the Class but who are no longer employed by Defendant.^[9]

         In their joint class-certification motion, the plaintiffs ask to certify the following class:

All persons who worked for Defendant Bank of America, National Association in California as a non-exempt employee at any time during the period beginning on February 22, 2014 and ending when the Court grants class certification, but expressly excluding therefrom any individuals who, as of the date the Court grants class certification, (a) have filed their own separate action as a named plaintiff alleging any of the same claims alleged by Plaintiffs, (b) have opted into a collective action or are class members in a certified class action against Defendant alleging any of the same claims alleged by Plaintiffs, and/or (c) have previously released all claims against Defendant being alleged by Plaintiffs.^[10]

         2. The Plaintiffs' Submissions About the Alleged Labor Code Violations

         The plaintiffs do not contend that Bank of America had non-compliant overtime and meal-and-rest break policies and instead assert that it did not follow its policies.^[11] Their submissions in support of their class-certification motion include the following: (1) declarations and testimony from witnesses; (2) a plan to conduct a survey and use statistical sampling to establish whether Bank of America's policies and practices resulted in Labor Code violations; and (3) expert analysis of timekeeping, payroll, phone, and work-schedule records to identify any violations and calculate damages.^[12]

         2.1 Declarations and Testimony

         The plaintiffs submitted declarations from 64 class members.

         Ms. Frausto estimated that she worked overtime approximately once a week.^[13] Ms. Suarez estimated that she worked overtime approximately two to three days per week.^[14] 62 other class members submitted declarations too.^[15] They had various non-exempt jobs (such as relationship banker, personal banker, mortgaging-servicing specialist, teller, sales-and-services specialist, customer-service representative, sales-service associate, assistant branch manager, operations manager, short-sale specialist, customer-service chat agent and phone agent, loan coordinator, Financial Center loan officer, small-business consultant, workforce-management analyst and liaison, collector and intake specialist, negotiator, Doc Drawer, and senior work-out specialist).^[16]In their declarations, they reported that (1) they worked overtime hours (in the form of off-the-clock work before or after they logged in for their shifts) and were routinely denied 30-minute uninterrupted duty-free meal breaks and 10-minute uninterrupted rest periods, (2) managers knew that they worked through their meal-and-rest breaks, (3) performance goals and deadlines required them to miss their breaks and work overtime, resulting in the equivalent of a Bank of America policy that did not allow employees to take meal-and-rest break and required overtime; and (4) employees clocked in and out of a computerized system for the start and end of their daily shifts and meal-and-rest breaks.^[17] The plaintiffs' evidence chart summarizes the evidence in the declarations by pin cite, including the following facts: (1) employees were routinely denied 30-minute meal breaks; (2) employees were routinely denied 10-minute uninterrupted rest periods; (3) employees clocked in and out at the start and end of their daily shifts and meal-and-rest breaks; (4) employees received warning messages from the computer systems when they tried to insert less than a 30-minute meal break; (5) Bank of America's timekeeping system and warning system forced employees to record 30 minutes for a meal break, even when they did not take it; (6) Bank of America's practices amounted to a policy of not allowing employees to take meal-and-rest breaks; (7) employees worked more than eight hours a day or 40 hours a week; and (8) Bank of America required or pressured employees to work off-the-clock and forego breaks.^[18] This meant that Bank of America did not pay all final wages to terminated employees or give them accurate wage statements.^[19]

         In her deposition testimony, Ms. Frausto said (among other things) that she (1) worked off the clock for around ten minutes when she booted up her computer in the morning (so that she could start handling calls when her shift started at 6 a.m.), (2) was told that she could not log in earlier than 6 a.m. to the timekeeping system and had to start by 6 a.m., (3) was too intimidated to report off-the-clock work, (4) was told to be available at all times to take calls (resulting in missing meal-and-rest breaks), (5) told her managers about the problems with the call volume and was told (among other things) that “[i]t is what it is” and “do the best you can, ” and (6) logged off the computer system after she logged off the timekeeping system (a process that took two to five minutes before she could leave for the day).^[20] She acknowledged that Bank of America's policies required her to take her breaks, but she missed breaks six to eight times a week.^[21]

         In her deposition testimony, Ms. Suarez said (among other things) that she (1) could not clock in at the time when she actually started and instead had to clock in at the precise start time of her shift, (2) she logged times when she did not take a lunch or rest break, and management would not approve her time sheet unless she “unchecked” the box reporting the missed break, (3) only management could approve overtime, and they did not, and (3) she was unable to take meal breaks, which were interrupted every day (when she was working at certain locations).^[22]

         Rest breaks are not recorded in Bank of America's time-keeping system.^[23] If non-exempt employees want to ask for pay for missed meal or rest breaks, they have to call Employee Relations (essentially, HR).^[24]

         2.2 Survey Evidence

         Jon Krosnick, Ph.D., a Stanford professor, will conduct a survey and use statistical sampling to evaluate the alleged Labor Code violations.^[25] He describes the process for the survey: (1) draw a sample of class members to interview (either with a simple random sample or by selecting respondents randomly from within subgroups, depending on what Bank of America produces about the relevant employee population, (2) conduct a small number of one-on-one interviews to determine the natural language employees use to talk about the nature of their work, and (3) design a questionnaire to determine (a) whether, how often, and how much employees worked off the clock, (b) whether, how often, and how much employees worked more than eight hours a day or 40 hours a week, (c) the experiences that caused employees to work off the clock, (d) whether, how often, and how much employees took meal-and-rest breaks, (e) work experiences that contributed to not taking meal-and-rest breaks, and (f) whether employees were told they were permitted to take meal-and-rest breaks.^[26] He describes how he would (1) test the questionnaire so employees can understand it, (2) conduct the interviews, (3) analyze the data, and (4) conduct auxiliary analyses.^[27] Finally, he evaluates the proposed survey.^[28]

         In a second report, Dr. Krosnick responds to the Bank's expert report (by Robert Crandall) point by point and concludes that Mr. Crandall's critique of the proposed survey lacks merit.^[29]

         2.3 Expert Analysis of Bank of America Records

         Jarrett Gorlick, a data analyst, will analyze timekeeping records, payroll records, phone records, and work schedules to determine the frequency of any violations and related payments.^[30] He will compare phone records for customer-service calls to the corresponding entries in the timekeeping records and schedules and determine (1) how many meal breaks took place after more than five hours of work, (2) how many shifts greater than five hours did not have a recorded meal break, (3) how many shifts greater than five hours had a recorded meal break shorter than 30 minutes, (4) how many shifts greater than 10 hours had no recorded second rest break, (5) how many shifts greater than 3.5 hours had no recorded rest break, (6) how many shifts greater than six hours had no second recorded rest break, (7) how many shifts greater than 10 hours had no third recorded rest break, and (8) how many shifts greater than 3.5 hours had a recorded rest break shorter than 10 minutes.^[31] For class members without phone-reporting records, he can use timekeeping records to determine categories one through four and also (1) how many shifts greater than six hours and up to 10 hours had a scheduled second rest break, (2) how many shifts greater than 10 and up to 12 hours had a second scheduled meal break, and (3) how many sifts greater than 12 hours had a second scheduled meal break.^[32]

         He can calculate class-wide damages for meal breaks and rest breaks by multiplying the shifts showing a violation (as determined by a trier of fact) by the statutory penalty of one hour at the employee's wage rate.^[33] He can determine time-and-a-half and double-time overtime pay by calculating the regular rate of pay, using the appropriate multiplier, and subtracting the reported overtime pay shown on the wage statements.^[34] Wage-statement class-wide damages can be assessed by multiplying the number of wage statements with a violation (as determined by a trier of fact) by the applicable statutory penalty.^[35]

         In a second declaration, Mr. Gorlick responds to Mr. Crandall's analysis - that a data set supported Mr. Crandall's conclusion that the Bank complied with the Labor Code - and said (among other things) that the data and documents identified in Mr. Crandall's report “are not the same or necessarily analogous to those provided to” Mr. Gorlick.^[36]

         3. Bank of America

         Bank of America's submissions in support of its opposition to the class-certification motion include the following: (1) the organization of its operations; (2) its policies and training about recording shifts and breaks; (3) witness declarations about their jobs; and (4) expert analysis.

         3.1 Organization of Bank Operations

         Bank of America operates contact centers and financial centers.

         At its contact centers (or call centers), the Bank performs customer-support operations through employees who receive and respond to telephone calls and emails from the Bank's clients or other employees.^[37] Contact centers are broken into various lines and sublines of business with different divisions, subdivisions, groups, departments, and teams with different supervisory and managerial hierarchies.^[38]

         Its financial centers (or branches) have branch managers (called Financial Center Managers) who report to Market Leaders.^[39] The Financial Center Manager and a Financial Center Assistant Manager (formerly known as an operations manager) are responsible for the management and operational functions in the branch.^[40] Non-exempt employees in the branches include the assistant manager, tellers, relationship managers (or personal bankers), and relationship bankers.^[41]

         Its non-exempt employees in California have hundreds of unique job titles and have different responsibilities.^[42] To demonstrate this, Bank of America submitted 51 declarations from class members.^[43] For example, in the call centers, some employees handle inbound and outbound calls, some take only inbound calls, others communicate by email, and most perform non-call-related tasks.^[44] Some work with clients, and others work behind the scenes.^[45] Similarly, in the branches, tellers work with customers in the teller line, relationship managers drive sales of banking products and services and meet with clients by appointment, and relationship bankers pinch hit for tellers and relationship managers as needed.^[46]

         3.2 Policies and Training About Recording Time

         Non-exempt employees record their own time, including the start and end of shifts and all breaks, and Bank policy requires them to record time accurately.^[47] Bank of America trains its employees on its policy, and the named plaintiffs here had that training.^[48]

         3.3 Declarations

         Bank of America submitted employee declarations stating that they understood the timekeeping policies, recorded their time accurately, and were paid for all time worked.^[49]Employees said that no one told them to work off the clock or overtime, and they regularly recorded (and were paid for) overtime.^[50] Supervisors could correct time entries if necessary.^[51]

         3.4 Expert Evidence

         Bank of America's expert is Robert Crandall.^[52] He discounted the plaintiffs' experts as providing nothing more than “generic statements that ‘a survey or statistical[] analysis could be done.'”^[53] He reviewed a data sample, that he opines, reflects legal compliance by the Bank.^[54]

         ANALYSIS

         Class actions are governed by Federal Rule of Civil Procedure 23. A party seeking to certify a class must prove that all the prerequisites of Rule 23(a) are met, as well as those of at least one subsection of Rule 23(b) (and the relevant subsection here is Rule 23(b)(3)).

         The following are the prerequisites of Rule 23(a): (1) the class is so numerous that joinder of all members is impracticable; (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. A court may certify a class under Rule 23(b)(3) if “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3).

         “[P]laintiffs wishing to proceed through a class action must actually prove - not simply plead - that their proposed class satisfies each requirement of Rule 23, including (if applicable) the predominance requirement of Rule 23(b)(3).” Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258, 275 (2014) (emphasis in original) (citing Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350-51 (2011); Comcast Corp. v. Behrend, 569 U.S. 27, 32-33 (2013)). “[C]ertification is proper only if ‘the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23[] have been satisfied.'” Comcast, 569 U.S. at 33 (quoting Wal-Mart, 564 U.S. at 350-51). “Such an analysis will frequently entail ‘overlap with the merits of the plaintiff's underlying claim.'” Id. at 33-34 (quoting Wal-Mart, 564 U.S. at 351). “That is so because the ‘class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'” Id. at 34 (quoting Wal-Mart, 564 U.S. at 351). Still, “Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage.” Amgen Inc. v. Conn. Ret. Plans and Tr. Funds, 568 U.S. 455, 466 (2013). “Merits questions may be considered to the extent - but only to the extent - that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied.” Id. (citing Wal-Mart, 564 U.S. at 351 n.6).

         The plaintiffs' main claims are for off-the-clock work and missed meal-and-rest-breaks, and they also raise claims predicated on these claims: failure to pay final wages on time, failure to provide accurate wage-and-hour statements, and unfair business practices under the UCL. They move to certify classes for all claims.^[55] The court grants the motion in part and certifies the following narrowed classes: (1) for the off-the-clock claim, (a) all Treasury Services Advisors and persons with similar job duties (in call centers) and (b) all Assistant Managers and persons with similar job duties (in financial centers); and (2) for the meal-and-rest-breaks claims, all Treasury Services Advisors and persons with similar job duties (in call centers). The court certifies the same classes for the derivative claims for the reasons that it certifies classes for the predicate claims.^[56]

         1. Rule ...