CALIFORNIA CLASS ACTION LAW

Category: Wage & Hour

Second District Affirms Denial of Class Certification, Finding Trial Court Appropriately Decided Threshold Legal Issue Re Provision of Meal Breaks

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In a putative meal and rest break class action, the Second District denied class certification, holding that “employers must provide employees with breaks, but need not ensure employees take breaks.”  Hernandez v. Chipotle Mexican Grill, Inc., No. B216004, 2010 WL 3789012 (Cal. Ct. App. 2d Dist. Sept. 30, 2010).  Plaintiff and appellant Rogelio Hernandez (Hernandez) Hernandez filed a class action lawsuit against Chipotle Mexican Grill, Inc. (Chipotle) alleging that Chipotle violated labor laws by denying employees meal and rest breaks. Id. *1. The trial court denied class certification, and plaintiff appealed.  Id. The Court of Appeal affirmed, holding that it would not be “practical” to require “enforcement of meal breaks” since it “would place an undue burden on employers whose employees are numerous or who … do not appear to remain in contact with the employer during the day.”  Id. *7. “It would also create perverse incentives, encouraging employees to violate company meal break policy in order to receive extra compensation under California wage and hour laws.” Id.

The Court of Appeal also held that: (1) It was appropriate for the trial court to decide the threshold legal issue of whether employers must provide meal breaks rather than ensure they be taken as it could not otherwise assess whether class treatment was warranted; (2) a party seeking to introduce sampling of employee testimony to support certification must explain how the procedure will effectively manage the issues in question; and (3) there was substantial conflicts of interest among the putative class members were some employees moved in and out of supervisory roles with the responsibility to provide meal and rest breaks for themselves and other employees on the shift. Read the rest of this entry »

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Second District Compels Arbitration of Individual Claims in a Class Action Where Arbitration Agreement Contained an Unenforceable Class Arbitration Waiver

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The Second District compelled a class action plaintiff to arbitrate his individual claims in Maiorano v. Professional Community Management, Inc., No. B220127, 2010 WL 3786721 (Cal. Ct. App. 2d Dist. Sept. 30, 2010).  Defendant, Professional Community Management, Inc., appealed from an order denying its petition to compel arbitration of a putative class action filed by plaintiff, Ray A. Maiorano.  Id. *1.  The Second District held that “based solely on the parties’ agreement, we conclude they cannot be compelled to arbitrate on a class basis”, but it directed the trial court to compel arbitration of plaintiff’s individual claims. Id. The court reasoned that the “presence of a provision limiting arbitration to individual rather than joined or representative claims did not present a basis upon which the trial court could conclude the present arbitration agreement was permeated by an unlawful purpose.”  Id. *4.

Background

Plaintiff brought a class action complaint alleging violations of statutory meal and rest breaks, wage reporting and overtime requirements, and unlawful and unfair business practices.  Id. *2.  Plaintiff also asserted a cause of action for penalties under the Labor Code Private Attorneys General Act of 2004–Labor Code sections 2698 and 2699.  Id. Defendant filed a petition to compel arbitration. The trial court denied defendant’s petition, ruling that: Read the rest of this entry »

Ninth Circuit Affirms in All Respects Trial Court’s Entry of Judgment and Award of Attorneys Fees After Jury and Bench Trial of California Labor Code Class Action and FLSA Collective Action Claims

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On Monday, the U.S. Court of Appeals for the Ninth Circuit affirmed in “all respects” the trial court’s grant of partial summary judgment to plaintiffs, a judgment after jury and bench trials, and an award of attorney’s fees to plaintiffs.  Wang v. Chinese Daily News, Inc., Nos. 08-55483, 08-56740, — F.3d —-, 2010 WL 3733568 (9th Cir. Sept. 27, 2010).  Among other things, the Ninth Circuit held that plaintiff newspaper reporters were non-exempt. (Thank you to Randy Renick for bringing this case to my attention.)

Background

Employees of Chinese Daily News, Inc. (“CDN”), a Chinese-language newspaper, filed suit against CDN on behalf of current, former, and future CDN employees based in CDN’s San Francisco and Monterey Park (Los Angeles), California locations.  Id. *1.  Plaintiffs claimed violations of the FLSA, California’s Labor Code, and California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, alleging that employees were made to work in excess of eight hours per day and forty hours per week. Id. They further alleged that they were wrongfully denied overtime compensation, meal and rest breaks, accurate and itemized wage statements, and penalties for wages due but not promptly paid at termination. Id. The district court certified the FLSA claim as a collective action, and it certified the state-law claims as a class action under Rule 23(b)(2) and, alternatively, under Rule 23(b)(3). Id. Read the rest of this entry »

Eastern District Denies First to File Transfer of Class Action

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The United States District Court for the Eastern District of California denied defendant employer’s motion to transfer pursuant to the “first-to file” rule.  Wilkie v. Gentiva Health Services, Inc., Civ. No. 10-1451 FCD/GGH, 2010 WL 3703060 (E.D. Cal. Sept. 16, 2010) (slip op.).  Plaintiff filed a putative nation-and California-wide class action/collective action against plaintiff’s former employer Gentiva for alleged violations of the Federal Labor and Standards Act (“FLSA”) and the California Labor Code § 201 et seq. for: (1) misclassification as exempt from overtime pay and failure to pay overtime; (2) willful failure to pay wages due within the time specified by the Code; (3) violation of California Wage Order No. 4 for knowingly and intentionally failing to provide timely, accurate, itemized wage statements including request for an injunction and damages; (4) failure to give proper rest and meal breaks; and (5) violation of California’s Business & Professions Code § 17200 et seq.  Id. *1

A prior FLSA collective action and New York and North Carolina state law class action against Gentiva was filed in the United States District Court for the Eastern District of New York, entitled Rindfleisch, et al. v. Gentiva Health Services, Inc., No. CV10-2111 (E.D.N.Y.) (“Rindfleisch”). Defendant moved to transfer plaintiff’s complaint under the “first-to-file rule,” on the ground plaintiff’s claims are the subject of the Rindfleisch action. Plaintiff opposed the motion, arguing the parties and claims are not substantially similar in the two actions and other equitable factors militate against transfer under the first-to-file rule.  Id. The court denied Gentiva’s motion.  Id. Read the rest of this entry »

Second District Reverses Judgment in a Class Action of $99,000 and Attorneys Fees of $881,715

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The Second District reversed a trial court’s judgment in favor of employees in a class action trial.  Pearline Zalewa v. Tempo Research Corporation, B210429, 2010 WL 3735240 (Cal. Ct. App. 2d Dist. Sept. 27, 2010).  Defendant  fiber-optic equipment manufacturer was sued in a class action by its former employees who claimed that the manufacturer breached an obligation to pay them annual bonuses, an obligation that allegedly continued for years after they were laid off from work during a business downturn.  Id. The court concluded that the employees are not entitled to any recovery: “All but two of the employees relinquished their right to sue when they were laid off, in return for compensation that exceeded their earned severance pay. In any event, there was no promise made to pay bonuses to the employees after they were laid off.”  Id.

The Trial Court’s Judgment

The trial court conducted a bench trial in January 2008, finding that plaintiffs were entitled to recover a direct bonus under theories of breach of contract, promissory estoppel, accounting, and unfair business practices. Id. The court deemed the bonus payments to be “wages” under the Labor Code. Id. And because the bonus payments are wages, plaintiffs were awarded prejudgment interest and attorney fees under the Labor Code. Id. The court enumerated the amount of the award for each employee, less offsets for monies already paid by defendants, plus interest. Id. The total amount of the award, including interest, was approximately $99,000, and plaintiffs’ counsel was awarded attorney fees of $881,715.  Id. Read the rest of this entry »

Southern District Grants Class Certification Granted in Labor Code Class Action

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The Southern District of California granted class certification in a vacation, uniform, paycheck, wage and contract class action.  Lopez v. G.A.T. Airline Ground Support, Inc., No. 09cv2268-IEG(BGS), 2010 WL 3633177 (S.D. Cal. Sept. 13, 2010) (slip op.).

Background

Former employees of Defendant G.A.T. Airline Ground Support, Inc. (“GAT”) sued for systematic wage and hour violations in violation of federal and state law. Id. *1.  GAT provides services to airlines, including ground transportation, aircraft maintenance, and cargo operations management.  Id. The four named Plaintiffs are former ramp agents employed by GAT in California.  Id.

Rule 23(a) Commonality

The court found questions of law or fact common to the class with respect to plaintiffs’ vacation, uniform, paycheck, wage, and contract claims:

Here, as explained in detail below, Plaintiffs present both factual evidence of GAT’s company-wide policies and practices as well as anecdotal evidence in the form of class member declarations regarding the application of those challenged policies and practices. Read the rest of this entry »

Northern District Holds That No Aiding and Abetting Liability Exists Under UCL

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The Northern District of California granted a motion to strike aiding and abetting allegations from a class action complaint.  Toy v. Triwire Engineering Solutions, Inc.,  No. C 10-1929 SI, 2010 WL 3448535 (N.D. Cal. Sept. 1, 2010) (slip op.).

Background

Plaintiff Jason Toy filed a putative class action in state court against defendants TriWire Engineering Solutions, Inc., Comcast Corporation, and Comcast Cable Communications Management LLC, alleging that TriWire and Comcast employed Toy as a cable technician to install, disconnect, and upgrade cable television and computer services for consumers throughout California.  Id. *1.  Plaintiff contended he was not exempt from overtime requirements, and was not paid overtime in accordance with the law. Id. Read the rest of this entry »

Central District Remands Class Action for Defendant’s Failure to Prove Amount in Controversy Under CAFA

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The Central District remanded a putative minimum wage and overtime class action suit in Munoz v. Central Parking Sys., Inc., No. CV 10-6172 PA (RCx), 2010 WL 3432239 (C.D. Cal. Aug. 30, 2010) (unpublished).

Plaintiff’s Complaint attempted to avoid removal, stating “[i]t is believed that the total sum owed to the Class alleged herein is less than $5 million, based upon the anticipated size of the Class and the amount in controversy for each member of the Class.”  Id. *1. Read the rest of this entry »

Plaintiffs in Wage & Hour Class Action Granted Temporary Restraining Order

A farm, Bethel, Vt. (LOC)
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In an unusual move, plaintiffs in Arrendondo v. Delano Farms Company, No. CV F 09-1247 LJO DLB, 2010 WL 3212000 (E.D. Cal. Aug. 10, 2010), sought and were granted atemporary restraining order.  Plaintiffs filed an Application pursuant to  Fed. R. Civ. P. 65 requesting a Temporary Restraining Order (“TRO”) against defendant Delano Farms Company to restrain potential retaliation and threats to witnesses and putative class members by defendant.  The Application was supported by declarations of three witnesses and potential class members who heard threats by a supervisor of Delano Farms as well as declarations from Jessica Arciniega and Thomas P. Lynch, attorneys representing plaintiffs, and Aida Sotelo, a paralegal who investigated the threats. Read the rest of this entry »

Morgan Stanley Wage and Hour Class Action Remanded to San Diego Superior Court for Failure to Show Diversity or Amount in Controversy

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Judge James Lorenz faced a remand motion in Martinez v. Morgan Stanley & Co., Inc., Civil No. 09cv2937-L(JMA), 2010 WL 3123175 (S.D. Cal. Aug. 9, 2010).  The court remanded, holding that Defendants did not meet their burden of showing that it is more likely than not that the matter in controversy for the class action exceeds $5 million or that Plaintiff’s individual claims exceed $75,000.

Defendants removed this wage and hour class action from state court based on 28 U.S.C. Sections 1332 and 1441, or in the alternative, on the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332(d) and 1453.  Plaintiff filed a motion to remand arguing that Defendants failed to establish the requisite diversity of citizenship and the jurisdictional amount in controversy. Read the rest of this entry »