CALIFORNIA CLASS ACTION LAW

Category: Wage & Hour

Fourth District Reverses Denial of Meal & Rest Break Class Action

English: Cash transport van with guards in Gua...

English: Cash transport van with guards in Guangzhou, China Русский: Машина инкассаторов с охраной в Гуанчжоу (Photo credit: Wikipedia)

In a meal and rest break class action, the Fourth District on Friday reversed the denial of certification of a class of security guards.  Faulkinbury v. Boyd & Associates, Inc., No. G041702, __ Cal. App. 4th. __ (4th Dist. May 10, 2013).  Reconsidering in light of the California Supreme Court decision in Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012), the court concluded that the primary issue was the legality of certain company policies, which could be determined on a class-wide basis, even if the application of the policies varied by individual.  

By CHARLES H. JUNG

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Second District Articulates “Clear and Unmistakable” Waiver Standard for Labor Code Section 227.3

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_DSC9576 (Photo credit: treyguinn)

In a wage and hour class action, the Second District articulated today a “clear and unmistakable” standard for waiver of right to immediate payment of vested vacation time under the collective-bargaining exception to Labor Code section 227.3.  Choate v. Celite Corporation, No. B239160, __ Cal. App. 4th __ (2d Dist. May 2, 2013).  However because Choate  was the first case to define this standard, the Court found defendant did not act unreasonably, and reversed waiting time penalties under Labor Code section 203:

Although we agree with the trial court that this is the appropriate standard, this is the first case to define the standard for waiver under section 227.3. Plaintiffs argue that Saustez decided this issue, but it did not. (Saustez, supra, 31 Cal.3d 774.) Celite’s good faith reliance on a different waiver standard was accordingly reasonable, particularly in light of the language in Firestone supporting that standard. [Internal citation omitted.]  That Celite’s position did not prevail does not mean that its position was unreasonable. (8 Cal. Code Regs., § 13520.)

You can read more here.

By CHARLES H. JUNG

In Wage Class Action, Second District Affirms Labor Code Section 203 Penalties and Requires Separate Minimum Wage Pay for Certain Piece Rate Workers

1905 American Mercedes In a year when the aver...

1905 American Mercedes In a year when the average wage was only $200 to $400 annually, the Mercedes was a car for the rich readers of Country Life magazine. (Photo credit: Wikipedia)

Today, the Second District Court of Appeal published Gonzalez v. Downtown LA Motors, LP, et al., Case No. B235292, __ Cal. App. 4th __ (2d Dist. Mar. 6, 2013).  Gonzalez is a wage class action where the question presented was whether California’s minimum wage law requires an employer that compensates its automotive service technicians on a “piece-rate” basis for repair work must also pay those technicians a separate hourly minimum wage for time spent during their work shifts waiting for vehicles to repair or performing other non-repair tasks directed by the employer.  Defendant automobile dealership contended it was not required to pay the technicians a separate hourly minimum wage for such time because it ensured that a technician’s total compensation for a pay period never fell below what the employer refers to as the “minimum wage floor” — the total number of hours the technician was at work during the pay period (including hours spent waiting for repair work or performing non-repair tasks), multiplied by the applicable minimum wage rate.  The employer supplemented pay, if necessary, to cover any shortfall.

The Court of Appeal concluded that class members were entitled to separate hourly compensation for time spent waiting for repair work or performing other non-repair tasks directed by the employer during their work shifts, as well as penalties under Labor Code section 203, subdivision (a).  You can read more about the Gonzalez opinion here.

By CHARLES H. JUNG

In Wage Class Action, Sixth District Reverses Summary Judgment on Question of Whether Leave Policy Was Sabbatical or Regular Vacation

A True vacation spirit

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In a wage and hour class action, California’s Sixth District Court of Appeal held that a genuine issue of material fact existed as to whether eight-week leave was a sabbatical or regular vacation precluded summary judgment in former employee’s class action against the former employer.  Paton v. Advanced Micro Devices, — Cal. Rptr. 3d —-, 2011 WL 3369346, No. H034618 (6th Dist. Aug. 5, 2011).

Background

Plaintiff Eric Paton sued defendant Advanced Micro Divices, Inc. on behalf of himself and a class of others, alleging that Defendant had failed to pay him for an eight-week sabbatical he earned but had not used when he retired. Id. *1 Salaried employees who served for seven years were eligible for an eight-week fully paid sabbatical.  Id. Plaintiff argued that the sabbatical was extra vacation and, pursuant to Labor Code section 227.3, the employer could not require an employee to forfeit vacation pay.  Id.  Plaintiff cited Suastez v. Plastic Dress-Up Co., 31 Cal. 3d 774 (1982), to support his claim that the sabbatical had vested over the seven years he had worked for defendant and he was entitled to the pay when he resigned.  Id.  Class members who had not worked for the full seven years or more were entitled to payment for the unused sabbatical in proportion to the time they had worked. Id. Read the rest of this entry »

Northern District Denies Certification of Wage & Hour Class Action

A Joe's Crab Shack branch in San Diego, CA. Th...
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The Northern District of California denied class certification of a meal and rest break class action in Washington v. Joe’s Crab Shack, No. C 08-5551 PJH, 2010 WL 5396041 (N.D. Cal Dec. 23, 2010.) (slip op.).  Plaintiff Drew Garrett Washington asserted that defendant Crab Addison, Inc. (“Crab Addison”), a company that operates a number of Joe’s Crab Shack restaurants, failed to provide employees with meal and rest breaks, allowed its restaurant managers to manipulate employee time records to deprive employees of pay for all hours worked (including overtime and missed meal break pay), required employees to perform work “off the clock”; and required employees to pay for their own employer-mandated uniforms.  Id. *1.

Class Definition

Plaintiff moved pursuant to Federal Rule of Civil Procedure 23, to certify a plaintiff class consisting of “all non-exempt restaurant employees employed by Crab Addison at Joe’s Crab Shack restaurants in California from January 1, 2007, through the present.”

Discussion

The court denied the certification motion.  Id. *11.  “Plaintiff’s position is that common questions predominate because the main issue is whether—notwithstanding Crab Addison’s written policies—Joe’s Crab Shack restaurants in California followed a common unwritten policy of denying meal and rest breaks, failing to pay employees who did not take breaks, failing to pay for overtime, requiring employees to purchase their own uniforms, and so forth.” Id. Plaintiff contended that the existence of a policy or practice that in effect contradicts Crab Addison’s written policies can be ascertained by an analysis of the data in Crab Addison’s computer systems.  Id. “But since plaintiff has failed to adequately explain how that analysis works and exactly what the data shows, he has failed to adequately establish the existence of such a policy or practice.” Id. Read the rest of this entry »

Central District Denies Twombly Challenge to Wage & Hour Class Action Pleadings, Holds That FLSA Is a Proper Predicate for a UCL Claim, but Strikes Fees Prayer Under C.C.P. § 1021.5

countrywide
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The United States District Court for the Central District of California held that (1) relatively formulaic pleadings in a wage and hour case were sufficient to meet the pleading requirements of Rule 8, even under Twombly and Iqbal; (2) the FLSA is a proper predicate for a UCL claim; and (3) plaintiffs’ prayer for attorneys fees under Cal. Code Civ. Proc. section 1021.5 should be stricken. Whitaker v. Countrywide Financial Corp., No. CV CAS 09-5898 (PJWx), 2010 WL 4537098 (C.D. Cal. Nov. 1, 2010).

Background

A putative class action was brought on behalf of current and former employees of Countrywide Financial Corporation and Countrywide Home Loans, Inc. (the “Countrywide Defendants”) against the Countrywide Defendants and Bank of America, the alleged successor employer and/or successor in liability to the Countrywide Defendants. Id. *1. The FAC alleges claims for: (1) failure to pay overtime in violation of Cal. Labor Code s 510 and s 1194 and IWC Wage Order 4-2001; (2) Cal. Labor Code s 203 waiting penalties; (3) failure to provide an accurate itemized wage statement pursuant to Cal. Labor Code s 226; (4) failure to pay minimum wage in violation of Cal. Labor Code s 1194 and IWC Wage Order No. 4-2001; (5) failure to pay minimum and overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. s 206(a); and (7) unfair competition pursuant to Cal. Business & Professions Code, s 17200 et seq. Id. Defendants moved to dismiss or strike plaintiffs’ first amended complaint.  Id.

Discussion

Defendants argued that plaintiffs’ claims should be dismissed because they are factually devoid and simply “parrot the statutory language and proffer purely conclusory allegations”, thereby running afoul of the standards set out in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007) and Ashcroft v. Iqbal, 556 U.S. ___, 129 S.Ct. 1937 (2009). Read the rest of this entry »

Northern District Denies Discovery of Class Member Identities on Privacy Grounds

[Bob Burman, race car driver] (LOC)
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The United States District Court for the Northern District of California denied the production of names, addresses and telephone numbers of non-opt-in members of a FLSA collective and putative Labor Code class action.  Hill v. R+L Carriers Shared Services, LLC, No. C 09-1907 CW (MEJ), 2010 WL 4175958 (N.D. Cal. Oct. 20, 2010).  Plaintiff Glenn Hill is a former employee of Defendant R+L Carriers Shared Services, LLC, which provides administrative employees to transportation companies all across the United States.  Id. *1. Plaintiff worked as a “dispatcher” at Defendant’s San Lorenzo terminal in California, and brought a collective and class action pursuant to the Fair Labor Standards Act (“FLSA”), California’s wage-and-hour laws and California Business & Professions Code section 17200. Id.

Background

Plaintiff sought two sub-classes: those employees in California and those that he refers to as a Nationwide Collective.  Id. The California Class is defined as “all persons who worked for any period of time in California who were classified as Dispatchers (including “City Dispatchers” and any other position(s) who are either called, or work(ed) as, dispatchers) in the four years prior to the filing of this Complaint, up through the final disposition of this action.” Id. In Defendant contended that a collective action under the FLSA is improper because the job duties, work schedules, and salary of its employees varies across the United States, as well as in the State of California. Id.

Hon. Claudia Wilken, the presiding judge in this matter, conditionally certified a class of Nationwide Collective Plaintiffs.  Judge Wilken also ordered Defendant to “disclose to Plaintiff, subject to a protective order if necessary, the number, location and actual job titles of persons who are classified as dispatchers.”  Id. Defendant provided the class members’ contact information to a third-party administrator, who propounded notice to all putative class members.  Id. Defendant also disclosed the number, location and actual job titles of putative class members to Plaintiff. Id. Two California putative members subsequently opted into the case. Id. Read the rest of this entry »

Ninth Circuit Vacates Denial of Unopposed Class Certification Motion for Failure to Conduct a “Rigorous Analysis”

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The United States Court of Appeals for the Ninth Circuit reversed a denial of an unopposed class certification motion.  Cortez v. Saia Motor Freight Line, Inc., No. 08-56356, 2010 WL 3938273 (9th Cir. Oct. 8, 2010) (slip. op.).  The Ninth Circuit held that the “district court erred in failing to explain its reasons for denying the unopposed class-certification motion of plaintiff Hoany G. Cortez”.   Id. *1.

The district court’s conclusory assertion that this case presents “no common questions” of law or fact under Rule 23(a) falls far short of the “rigorous analysis” required in the class-certification context. See Fed.R.Civ.P. 23(a); Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982). Nor is this a case where the “issues [a]re so plain and the analytical framework so clear that the record,” standing alone, enables effective appellate review. Chamberlan v. Ford Motor Co., 402 F.3d 952, 961 (9th Cir.2005). Contrary to the district court’s conclusion, the record suggests a number of possible common issues, such as whether defendant Saia Motor Freight Line, LLC maintains an official policy of refusing to reimburse workers for required footwear and whether federal OSHA regulations legitimize such a policy.  The district court also omitted any mention of the remaining Rule 23(a) factors and did not discuss any of the prongs of Rule 23(b). See Fed. R. Civ. P. 23(a)-(b). Read the rest of this entry »

Northern District Decertifies FLSA Overtime Class of Loan Officers Because of Lack of Evidence of Centralized Employer Practice re Outside Salespersons Exemption

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The Northern District of California granted defendant’s motion to decertify a conditional FLSA class in Wong v. HSBC Mortgage Corporation (USA), No. C-07-2446 MMC, 2010 WL 3833952 (N.D. Cal. Sept. 29, 2010).  Plaintiff HSBC loan officers allege that HSBC improperly classified them as exempt under the Federal Labor Standards Act (“FLSA”), and, consequently, violated the FLSA by failing to pay them overtime compensation. Id. *1. The Court granted plaintiffs’ motion for an order conditionally certifying, for purposes of the FLSA, a class of persons who, as of May 7, 2004, had been employed by HSBC as loan officers within the United States. Id. Notice of the action was sent to the class, and 120 class members filed consent forms, joining the action as plaintiffs.  Id.

Decertification Motion

HSBC argued that individualized factual determinations will be necessary regarding HSBC’s affirmative defense that plaintiffs are/were properly classified as “outside” salespersons and, consequently, are exempt under the FLSA. Id. *2 (citing 29 U.S.C. § 213(a)(1) (providing “maximum hour requirements” in FLSA do not apply to “any employee employed … in the capacity of outside salesman”)). Read the rest of this entry »

Judge Lucy H. Koh Invalidates 38 “Opt-Out” Forms, Grants Curative Notice, and Orders Defendants to Show Cause Why They Should Not be Sanctioned Pursuant to Rule 11

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Issuing a robust opinion in a putative wage and hour class and FLSA collective action, Judge Lucy H. Koh invalidated opt-out forms solicited by defendants, granted plaintiff’s request for a curative notice at defendants’ expense, and ordered defendants to show cause why they should not be sanctioned pursuant to Rule 11.  Li v. A Perfect Day Franchise, Inc., No. 10-CV-01189-LHK, 2010 WL 3835596 (N.D. Cal. Sept. 29, 2010).  The court concluded that based on the record, it appeared likely that “the opt-out forms submitted by Defendants on September 7, 2010 were fraudulently created after the September 2, 2010 hearing on the underlying motions.”  Id. *11.  The court admonished that “Defendants will not be permitted to defraud this Court by submitting false testimony.” Id. *12.

Background

Named plaintiffs are former workers for A Perfect Day Franchise, Inc., which owns and operates spas. Id. *1. Named plaintiffs describe themselves and the majority of the putative class as being native Chinese speakers, with limited English proficiency and little or no formal education. Id. Plaintiffs claim that they paid for a massage training course offered by an entity related to Perfect Day, the Minjian Hand Healing Institute.  Id. Plaintiffs allege they paid for the course based on promises, contained in advertisements for the training program, that they would be employed by Perfect Day and would earn a minimum income once it was completed, but that these promises were not honored by Perfect Day, and that Perfect Day has miscategorized them as independent contractors rather than employees. Id. Read the rest of this entry »