Lubin v. Wackenhut Corp. , 5 Cal. App. 5th 926 ( 2016 )

Filed 11/21/16
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
NIVIDA LUBIN et al., B244383
Plaintiffs and Appellants, (Los Angeles County
Super. Ct., JCCP No. 4545.)
v.
THE WACKENHUT
CORPORATION,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los
Angeles County, William F. Highberger, Judge. Reversed and
remanded.
Weinberg, Roger & Rosenfeld, Emily P. Rich, Theodore
Franklin, Manuel A. Boigues; Posner & Rosen, Howard Z. Rosen,
Jason C. Marsili, Brianna M. Primozic; James R. Hawkings,
James R. Hawkings, and Gregory E. Mauro, for Plaintiffs and
Appellants.
Gibson Dunn & Crutcher, Theodore J. Boutrous, Jr.,
Theane Evangelis, Bradley J. Hamberger, Jennifer E. Rosenberg;
Gordon & Rees, Stephen E. Ronk, Mollie Burks-Thomas, and
Michelle L. Steinhardt for Defendant and Respondent.
Horvitz & Levy, John A. Taylor, Jr., Felix Shafir, and
Robert H. Wright for Chamber of Commerce of the United States
of America, National Association of Security Companies, and
California Association of Licensed Security Agencies as Amici
Curiae on behalf of Defendant and Respondent.
___________________________
Appellants Nivida Lubin, Sylvia M. Maresca, and Kevin
Denton (together plaintiffs) filed this action on behalf of
themselves and similarly situated persons, alleging defendant
and respondent The Wackenhut Corporation (Wackenhut)1
violated California labor laws by failing to provide employees
with off-duty meal and rest breaks and by providing inadequate
wage statements. The trial court initially granted plaintiffs’
motion for class certification. However, as the case approached
trial, the United States Supreme Court reversed a grant of class
certification in Wal-Mart Stores, Inc. v. Dukes (2011) 564 U.S.
338 (Wal-Mart). Relying on Wal-Mart, Wackenhut moved for
decertification. The trial court granted the motion. Plaintiffs
appeal, contending that decertification was not warranted by a
change in circumstances or case law and that the court used
improper criteria in granting the motion for decertification. We
1
In 2010, the Wackenhut Corporation officially changed its
name to G4S Secure Solutions (USA) Inc.
2
conclude that the trial court erred in granting the motion.
FACTUAL AND PROCEDURAL SUMMARY
Wackenhut is an international security solutions company,
employing thousands of private security officers who are assigned
to provide physical security services to a variety of clients,
including commercial businesses, governmental entities, gated
communities, industrial facilities, oil refineries, banks,
warehouses, medical clinics, schools, and retail centers. In
California, Wackenhut delivers security services from eight area
branch offices: San Diego, Orange County, Los Angeles, San
Fernando Valley, Riverside, San Jose, San Francisco, and
Sacramento. These offices are overseen by general managers,
who report to a single regional vice-president responsible for the
California region.
Plaintiffs are former security officers employed by
Wackenhut. In the operative pleading, they allege that
Wackenhut violated the California Labor Code by failing to
provide off-duty meal periods, failing to authorize and permit off-
duty rest breaks, and providing inadequate wage statements.
Employers generally are required to provide a 30-minute off-duty
meal break for employees working more than five hours. (Cal.
Code Regs., tit. 8, § 11040, subd. (11)(A).) An on-duty meal
period is permitted only when the nature of the work prevents an
employee from being relieved of all duty and the parties agree in
writing to an on-duty paid meal break. The written agreement
must include a provision allowing the employee to revoke it at
any time. (Ibid.) Labor Code Section 226, subdivision (a)
requires employers to provide an accurate itemized wage
statement in writing to each employee. Among other things, the
statement must show the total hours worked by the employee,
3
the inclusive dates of the period for which the employee is paid,
all applicable hourly rates in effect during the pay period, and the
corresponding number of hours the employee worked at each
hourly rate.
Prior to class certification, plaintiffs moved to compel
production of the on-duty meal agreements for all Wackenhut
security officers working in California. The trial court denied the
motion, finding the production would be burdensome and
oppressive. Its denial was without prejudice to “further, more
specific requests or interrogatories.” In September 2009,
plaintiffs, on behalf of themselves and all others similarly
situated, moved for class certification. Their motion proposed the
following five subclasses: “(a) All non-exempt Security Officers
employed by Wackenhut in California from January 7, 2001
through on or about May 23, 2008 who at the time of hire did not
sign an on-duty meal period agreement that stated that the
Security Officers could revoke the agreement and who were not
provided with an off-duty meal period; [¶] (b) All non-exempt
Security Officers employed by Wackenhut in California during
the Class Period to work at one-officer posts and who, in
accordance with the agreement between Wackenhut and its
clients, were not provided an off-duty meal period; [¶] (c) All
non-exempt Security Officers employed by Wackenhut in
California during the Class Period to work at posts with multiple
officers and who, in accordance with the agreement between
Wackenhut and its clients, were not provided an off-duty meal
period; [¶] (d) All non-exempt Security Officers employed by
Wackenhut in California during the Class Period who were not
authorized and permitted to take rest breaks; [and] [¶] (e) All
non-exempt Security Officers employed by Wackenhut in
4
California who were not provided itemized wage statements
during each pay period of the Class Period that contained all
information specified in Labor Code section 226, subd. (a).”
On March 3, 2010, the trial court granted plaintiffs’ motion,
certifying the class as “‘all non-exempt Security Officers
employed by Wackenhut in California during the Class Period of
2
January 7, 2001 to the present,’” excepting proposed subclasses
which the court found were unascertainable. Plaintiffs
propounded an interrogatory on March 10, 2010, asking
Wackenhut to provide the date on which each class member
signed a meal period agreement that included revocation
language. In a tentative ruling on May 6, 2010, the court stated
that “[m]erits discovery in a certified class action which involves
as many current and former employees as this case will
inevitably be burdensome and time consuming. The parties may
want to consider whether an agreement for statistically valid
sampling might be acceptable in lieu of full discovery.”
On November 19, 2010, Wackenhut objected to plaintiffs’
interrogatory as unduly burdensome and instead offered
plaintiffs a reasonable opportunity to inspect responsive
documents. After several meet and confer sessions between
November 2010 and January 2011, the parties agreed to use
statistical sampling in lieu of document production or inspection.
They entered into a stipulation under which Wackenhut agreed
not to challenge the sampling on the grounds that a less than
statistically significant number of personnel files were sampled
or that there was a bias in the sample. Wackenhut “reserve[d] all
rights to challenge, contest, dispute and/or object to the original
2
The class consists of approximately 10,000-13,000 security
officers.
5
1,200 files selected by Plaintiffs for sampling as being an
inappropriate sample for any [other] reason.”
On June 20, 2011, the United States Supreme Court
reversed a class certification order in Wal-Mart, supra, 564 U.S.
338. Subsequently, on September 23, 2011, Wackenhut moved
for decertification, citing Wal-Mart as a significant change in law
justifying reconsideration of class certification. In their
opposition to Wackenhut’s motion, plaintiffs again proposed five
subclasses as a way to obviate some of the concerns raised in
Wackenhut’s motion.3
Following hearings on Wackenhut’s motion, the trial court
directed Wackenhut to submit a proposed order granting
decertification. Before the court entered a formal order, the
3
Plaintiffs proposed the following five subclasses: “(1)
INVALID MEAL PERIOD AGREEMENT SUBCLASS: All non-
exempt Security Officers employed by Wackenhut in California
from January 7, 2001 through on or about May 23, 2008 who did
not sign a valid on-duty meal period agreement and worked at a
post with an on-duty meal period; [¶] (2) SINGLE-OFFICER
SITE SUBCLASS: All non-exempt Security Officers employed by
Wackenhut in California during the Class Period at single-officer
sites with an on-duty meal period; [¶] (3) MULTI-OFFICER
SITE SUBCLASS: All non-exempt Security Officers employed by
Wackenhut in California during the Class Period at multi-officer
sites with an on-duty meal period; [¶] (4) REST PERIOD
SUBCLASS: All non-exempt Security Officers employed by
Wackenhut in California during the Class Period who were
required to remain at their post during their on-duty meal period;
[¶] [and] (5) ITEMIZED WAGE STATEMENT SUBCLASS: All
non-exempt Security Officers employed by Wackenhut in
California who were not provided itemized wage statements
during each pay period of the Class Period that contained all
information specified in Labor Code section 226, subd. (a).”
6
California Supreme Court issued its decision in Brinker
Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004(Brinker), resolving issues in the handling of wage and hour class
certification motions. The parties stipulated to further briefing
on application of Brinker and decertification of the class. The
court conducted an additional hearing on the Brinker briefings
but declined to modify its previous ruling decertifying the class.
The court’s order granting Wackenhut’s decertification motion
stated two main bases for its ruling: (1) that individualized
issues predominated; and (2) that there was no way to conduct a
manageable trial of plaintiffs’ claims.4 The order was entered on
August 1, 2012. An order denying certification to an entire class
is an appealable order. (Linder v. Thrifty Oil Co. (2000) 23
Cal.4th 429, 435.)
This timely appeal followed.
DISCUSSION
I
A. Standard of Review
“The party advocating class treatment must demonstrate
the existence of an ascertainable and sufficiently numerous class,
a well-defined community of interest, and substantial benefits
from certification that render proceeding as a class superior to
the alternatives. [Citations.] ‘In turn, the “community of interest
requirement embodies three factors: (1) predominant common
questions of law or fact; (2) class representatives with claims or
defenses typical of the class; and (3) class representatives who
4
Because the trial court issued an extensive 24-page order,
we discuss the specific reasoning for granting decertification as to
each claim in the pertinent discussion subsection.
7
can adequately represent the class.”’ [Citation.]” (Brinker,
supra, 53 Cal.4th at p. 1021.)
The factor at issue in this appeal is predominance. “The
‘ultimate question’ the element of predominance presents is
whether ‘the issues which may be jointly tried, when compared
with those requiring separate adjudication, are so numerous or
substantial that the maintenance of a class action would be
advantageous to the judicial process and to the litigants.’
[Citations.] The answer hinges on ‘whether the theory of
recovery advanced by the proponents of certification is, as an
analytical matter, likely to prove amenable to class treatment.’
[Citation.] A court must examine the allegations of the complaint
and supporting declarations [citation] and consider whether the
legal and factual issues they present are such that their
resolution in a single class proceeding would be both desirable
and feasible. ‘As a general rule if the defendant’s liability can be
determined by facts common to all members of the class, a class
will be certified even if the members must individually prove
their damages.’ [Citations.]” (Brinker, supra, 53 Cal.4th at pp.
1021-1022, fn. omitted.)
Any party may file a motion to decertify a class. (Cal.
Rules of Court, rule 3.764(a)(4).) In Green v. Obledo (1981) 29
Cal.3d 126, 147, the California Supreme Court held that “a class
should be decertified ‘only where it is clear there exist changed
circumstances making continued class action treatment
improper.’ [Citation.]” (Id. at p. 148; see also Weinstat v.
Dentsply Internat., Inc. (2010) 180 Cal.App.4th 1213, 1226
[decertification requires new law or newly discovered evidence
showing changed circumstances].) The court also pointed out
that “if unanticipated or unmanageable individual issues do
8
arise, the trial court retains the option of decertification.” (Sav-
on Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 335
(Sav-on).)
We review a decertification order for abuse of discretion.
(Brinker, supra, 53 Cal.4th at p. 1022; Sav-On, supra, 34 Cal.4th
at p. 326.) A trial court ruling supported by substantial evidence
generally will not be disturbed unless improper criteria were
used or erroneous legal assumptions were made. (Sav-On, at pp.
326-327.) “An appeal from an order denying class certification
presents an exception to customary appellate practice by which
we review only the trial court’s ruling, not its rationale. If the
trial court failed to conduct the correct legal analysis in deciding
not to certify a class action, ‘“an appellate court is required to
reverse an order denying class certification . . . , ‘even though
there may be substantial evidence to support the court’s order.’”’
[Citation.] In short, we ‘“consider only the reasons cited by the
trial court for the denial, and ignore other reasons that might
support denial.” [Citation.]’ [Citations.]” (Alberts v. Aurora
Behavioral Health Care (2015) 241 Cal.App.4th 388, 399
(Alberts).)
“Nearly a century ago, the Legislature responded to the
problem of inadequate wages and poor working conditions by
establishing the [Industrial Welfare Commission (IWC)] and
delegating to it the authority to investigate various industries
and promulgate wage orders fixing for each industry minimum
wages, maximum hours of work, and conditions of labor.
[Citations.] Pursuant to its ‘broad statutory authority’ [citation],
the IWC in 1916 began issuing industry-and occupation-wide
wage orders specifying minimum requirements with respect to
wages, hours, and working conditions [citation]. In addition, the
9
Legislature has from time to time enacted statutes to regulate
wages, hours, and working conditions directly. Consequently,
wage and hour claims are today governed by two complementary
and occasionally overlapping sources of authority: the provisions
of the Labor Code, enacted by the Legislature, and a series of 18
wage orders, adopted by the IWC. [Citations.]” (Brinker, supra,
53 Cal.4th at p. 1026.) “[T]he IWC’s wage orders are entitled to
‘extraordinary deference, both in upholding their validity and in
enforcing their specific terms.’ [Citation.]” (Id. at p. 1027.)
“[T]he meal and rest period requirements [at issue] ‘have long
been viewed as part of the remedial worker protection
framework.’ [Citation.] Accordingly, the relevant wage order
provisions must be interpreted in the manner that best
effectuates that protective intent.” (Ibid.)
B. Wal-Mart
The trial court found that Wackenhut’s decertification
motion was supported by changed circumstances because the
Supreme Court decision in Wal-Mart, supra, 564 U.S. 338 created
significant new case law, warranting a reassessment of class
certification. We begin with a brief overview of Wal-Mart, then
address each of plaintiffs’ claims and the court’s application of
Wal-Mart in its decertification order.
Wal-Mart, supra, 564 U.S. 338, involved class certification
of some 1.5 million current and former female employees,
alleging that their employer, Wal-Mart, discriminated against
them based on sex by denying them equal pay and promotions, in
violation of Title VII of the Civil Rights Act of 1964 (Title VII), as
amended, Title 42 United States Code section 2000e-1 et seq.
(Wal-Mart, at p. 343.) The Supreme Court reversed class
certification because the plaintiffs did not offer significant proof
10
that Wal-Mart operated under a general policy of discrimination.
(Id. at p. 353.) “The only corporate policy that the plaintiffs’
evidence convincingly establishe[d was] Wal-Mart’s ‘policy’ of
allowing discretion by local supervisors over employment
matters”; and even as to that, the plaintiffs could not identify “a
common mode of exercising discretion that pervade[d] the entire
company.” (Id. at p. 355, italics omitted.)
Also at issue in Wal-Mart was the means by which the
plaintiffs planned to establish liability and damages. Plaintiffs
proposed to select a sample of class members for whom liability
and damages would be determined. (Wal-Mart, supra, 564 U.S.
at p. 367.) The percentage of those sample claims deemed to be
valid would then be extrapolated to the remaining class and
multiplied by the average back pay award in the sample set to
determine the entire class recovery. (Ibid.) The Supreme Court
disapproved this method, which it termed “Trial by Formula,”
finding it would prevent Wal-Mart from litigating its statutory
defenses to individual claims. (Ibid.) Under Title VII, once a
plaintiff makes a prima facie showing of discrimination, the
burden shifts to the employer, which may avoid liability by
showing that it took an adverse employment action against the
employee for some reason other than discrimination. (Wal-Mart,
at p. 366.)
As discussed below, the trial court’s reliance on Wal-Mart
to support decertification for each of plaintiffs’ claims
overextended holdings in that case. The crux of Wackenhut’s
motion for decertification and the court’s subsequent order was
Wal-Mart’s treatment of statistical sampling, even though
statistical sampling had been introduced only in relation to one of
plaintiffs’ three claims, the meal period claim. Thus, although
11
the court had urged the parties to consider using statistical
sampling to make the class action more manageable as to the
meal period claim, it determined that this method was
disapproved in Wal-Mart.
After the trial court issued its decertification order, the
Supreme Court clarified that Wal-Mart does not “stand for the
broad proposition that a representative sample is an
impermissible means of establishing classwide liability.” (Tyson
Foods, Inc. v. Bouaphakeo (2016) ___ U.S. ___, ___ [136 S.Ct.
1036, 1048] (Tyson).) “A representative or statistical sample, like
all evidence, is a means to establish or defend against liability.
Its permissibility turns not on the form a proceeding takes—be it
a class or individual action—but on the degree to which the
evidence is reliable in proving or disproving the elements of the
relevant cause of action.” (Id. at p. 1046.) Thus, “[w]hether and
when statistical evidence can be used to establish classwide
liability will depend on the purpose for which the evidence is
being introduced and on ‘the elements of the underlying cause of
action[]’ [citation].” (Ibid.) In Tyson, a case involving a class of
employees claiming that they did not receive statutorily
mandated overtime pay for time spent “donning and doffing
protective gear,” the court upheld the use of statistical evidence
to calculate the additional time class members spent donning and
doffing, even though differences in the type of gear worn meant
that plaintiffs may have taken different amounts of time to don
and doff. (Id. at pp. 1042, 1048-1409.) The court distinguished
Wal-Mart, explaining that “[w]hile the experiences of the
employees in Wal-Mart bore little relationship to one another, in
this case each employee worked in the same facility, did similar
work, and was paid under the same policy. . . . [U]nder these
12
circumstances the experiences of a subset of employees can be
probative as to the experiences of all of them.” (Tyson, supra, at
p. 1048.)
Here, statistical evidence was proposed only for the limited
purpose of determining how many employees had signed on-duty
meal agreements lacking revocation language during the class
period. Plaintiffs already had established through deposition
testimony that Wackenhut required all employees to sign on-duty
meal agreements; that prior to 2004, most of the meal
agreements lacked the required revocation language; that
between 2004 and 2008 only new employees signed meal
agreements with revocation language; and that it was only in
2008 and thereafter that all employees signed meal agreements
with the required revocation language. As in Tyson, under these
circumstances the percentage of the subset of employees who
signed meal agreements lacking the required revocation language
during a given time period is probative as to the percentage of the
class that signed meal agreements lacking the required
revocation language. Although, as Tyson has made clear, Wal-
Mart does not prohibit the broad use of statistical sampling in
class action lawsuits, as we discuss below, the decision whether
to allow statistical evidence ultimately is within the discretion of
the trial court.
Throughout its order the court also found that
individualized inquiries were necessary because, pursuant to
Wal-Mart, Wackenhut was entitled to defend by proving that,
even if plaintiffs presented evidence that it had a general policy
of not providing valid meal or rest breaks, in practice some
employees were afforded an off-duty meal or rest break. This
rationale misapplies Wal-Mart. In Wal-Mart, the Supreme Court
13
found that plaintiffs failed to present evidence establishing the
existence of a common policy of discrimination. In this case,
when it originally certified the class, the trial court found that
plaintiffs had presented sufficient evidence that Wackenhut had
policies and practices that violated wage and hour laws. Because
plaintiffs met their burden of establishing a common policy,
whether an individual was permitted to take a valid meal or rest
break on any given day is a question of damages. (See Brinker,
supra, 53 Cal.4th at p. 1022 [“‘As a general rule if the defendant’s
liability can be determined by facts common to all members of the
class, a class will be certified even if the members must
individually prove their damages’”].)
The distinctive nature of Title VII liability also
distinguishes Wal-Mart from the facts of this case.
Individualized inquiries were necessary in Wal-Mart because
under Title VII, once the plaintiff has made a prima facie
showing of a discriminatory action, the burden shifts to the
defendant to show that the adverse employment action was made
for a nondiscriminatory employment reason. A defendant’s right
to prove that an adverse employment action as to a specific
employee was taken for a nondiscriminatory reason, will
necessarily have to be individualized. The wage order governing
meal and rest breaks at issue in this case does not have the same
individualized burden-shifting mechanism as Title VII. If
plaintiffs have made a showing that Wackenhut had a policy or
practice that violated California wage and hour laws, any defense
asserted by Wackenhut can also be presented on a classwide
basis. (See Bradley v. Networkers International, LLC (2012) 211
Cal.App.4th 1129, 1150 (Bradley) [employer’s defense that meal
14
and rest break policy was legally sufficient was also matter of
common proof].)
II
A. Meal Period Claim
IWC wage order No. 4-2001, codified in California Code of
Regulations, title 8, section 11040, subdivision (11)(A), governs
an employer’s obligation to provide meal breaks to hourly
security guard employees. (Faulkinbury v. Boyd & Associates,
Inc. (2013) 216 Cal.App.4th 220, 233 (Faulkinbury).) Under that
order, “[n]o employer shall employ any person for a work period
of more than five (5) hours without a meal period of not less than
30 minutes, except that when a work period of not more than six
(6) hours will complete the day’s work the meal period may be
waived by mutual consent of the employer and the employee.
Unless the employee is relieved of all duty during a 30-minute
meal period, the meal period shall be considered an ‘on duty’
meal period and counted as time worked. An ‘on duty’ meal
period shall be permitted only when the nature of the work
prevents an employee from being relieved of all duty and when by
written agreement between the parties an on-the-job paid meal
period is agreed to. The written agreement shall state that the
employee may, in writing, revoke the agreement at any time.”
(Cal. Code Regs., tit. 8, § 11040, subd. (11)(A).)
“An employer’s duty with respect to meal breaks . . . is an
obligation to provide a meal period to its employees. The
employer satisfies this obligation if it relieves its employees of all
duty, relinquishes control over their activities and permits them
a reasonable opportunity to take an uninterrupted 30-minute
break, and does not impede or discourage them from doing so.”
(Brinker, supra, 53 Cal.4th at p. 1040.)
15
Wackenhut’s standard practice was to have all new security
officers sign an on-duty meal agreement during orientation. It
then allowed its clients to determine whether Wackenhut
security officers would be provided an on-duty or off-duty meal
period at each site. The vast majority of clients preferred to
provide on-duty meal periods.
In its decertification order, the trial court explained that it
previously had found that common questions predominated as to
plaintiffs’ meal period claim because evidence supported
plaintiffs’ allegation that Wackenhut had a uniform practice of
allowing clients to decide whether meal periods would be on-duty
or off-duty, rather than Wackenhut performing the required
analysis of determining whether the nature of the work at each
site prevented employees from being relieved of all duties for
their 30-minute meal period. The court explained that plaintiffs’
theory was no longer viable because, pursuant to Wal-Mart, the
question of how the employer decides which meal period to
provide is not a “‘common contention’ that when answered will
‘resolve an issue that is central to the validity of each one of the
[class members’] claims in one stroke.’ (Wal-Mart, supra, [564
U.S. at p. 350].)”
The trial court also found the testimony of Wackenhut
managers was not sufficient to prove that in every case class
members were provided with on-duty meal periods. Instead, the
evidence only supported the conclusion that as a general matter,
Wackenhut managers intended to provide on-duty meal periods
5
at most, although not all, worksites.
5
In a footnote, the court commented that “[i]n fact, the class
as certified includes several worksites whose employees [were]
undisputedly . . . provided with off-duty meal periods.” We note
16
Accordingly, the court found that liability depended on an
individualized assessment of the meal periods taken by each class
member at each site. The court explained that individual
inquiries were necessary pursuant to Wal-Mart because
Wackenhut had a “right to defend itself by proving that, in
practice, even at worksites that typically had on-duty meal
periods, some class members were actually authorized to take off-
6
duty meal periods, as evidence in the record suggest[ed].”
In Brinker, the court instructed that for purposes of class
certification, the focus must be on the policy the plaintiffs are
challenging and whether the legality of that policy can be
resolved on a classwide basis. (Brinker, supra, 53 Cal.4th. at pp.
that had the court granted plaintiffs’ proposed subclasses, the
outlier sites that provided off-duty meal periods (example: the
San Francisco Conservatory of Music and Cricket
Communications) would have been excluded from the class.
6
The trial court cited to four employee declarations and one
deposition as evidence that in practice some class members were
authorized to take off-duty meal periods. However, in three of
the declarations (those of Chowdhary, Call, and Kotov), the class
members stated they were permitted to leave the premises or
take their lunch where they wanted but that they understood
they needed to be available to respond or assist in case of an
emergency. (See Brinker, supra, 53 Cal.4th at p. 1040
[employer’s duty to provide off-duty meal period satisfied if
employer relieves “employees of all duty, relinquishes control
over their activities and permits them a reasonable opportunity
to take an uninterrupted 30-minute break, and does not impede
or discourage them from doing so”].) The deposition was of
named plaintiff Nadin, who stated that on occasion, when she
was relieved from her position working at City Hall East, she
could leave to buy lunch.
17
1023-1024.) The court then considered the scope of an employer’s
duties under the relevant statutes and the IWC wage orders to
afford rest and meal periods to employees. (Id. at pp. 1027-1028.)
Regarding the meal period claim, the court concluded that “an
employer’s obligation when providing a meal period is to relieve
its employee of all duty for an uninterrupted 30-minute period”
and that an employee “‘must be free to attend to any personal
business he or she may choose during the unpaid meal periods.’”
(Id. at pp. 1036, 1038, italics added.) Thus, the employee must be
free to leave the premises. (Ibid.)
Here, rather than focusing on whether plaintiffs’ theory of
liability as described in their complaint – that Wackenhut
violated wage and hour requirements by not providing officers
with off-duty meal periods – was susceptible to common proof, the
court focused on whether individualized inquiries would be
required to determine whether in practice, officers ever received
an off-duty meal period. (See Benton v. Telecom Network
Specialists, Inc. (2013) 220 Cal.App.4th 701, 725 (Benton) [trial
court employed improper criteria by focusing on whether
individualized inquiry required to determine which technicians
missed meal and rest periods, rather than focusing on plaintiffs’
theory of liability, that employer violated wage and hour
requirements by failing to adopt a meal and rest period policy].)
Wal-Mart, supra, 564 U.S. at page 350, requires class
claims to depend on a common contention which “must be of such
a nature that it is capable of classwide resolution – which means
that determination of its truth or falsity will resolve an issue that
is central to the validity of each one of the claims in one stroke.”
Here, plaintiffs’ theory at class certification was based on a
common contention: that Wackenhut violated California labor
18
laws by failing to provide employees with off-duty meal periods.
This violation resulted from Wackenhut’s policy of requiring all
employees to sign on-duty meal agreements and allowing client
preference to dictate whether an employee had an off-duty or on-
duty meal period, rather than itself determining, as the
employer, whether the nature of the work at each site prevented
its employees from having an off-duty meal period. Whether
plaintiffs’ theory has merit is a common question that is “capable
of classwide resolution.” (Ibid., see Faulkinbury, supra, 216
Cal.App.4th at p. 234 [employer’s blanket policy requiring all new
employees, regardless of individualized job duties, to sign an on-
duty meal agreement is a classwide issue].)
Nor was the trial court correct in determining that Wal-
Mart required individualized inquiries. In Brinker, supra, 53
Cal.4th at page 1022, the California Supreme Court explained
that “‘[a]s a general rule if the defendant’s liability can be
determined by facts common to all members of the class, a class
will be certified even if the members must individually prove
their damages.’” California appellate authority subsequent to the
trial court’s decertification order makes clear that, in the context
of meal breaks, whether a specific employee actually had a valid
meal break on a given day is a question of damages, and does not
preclude class certification. “Under the logic of [Brinker’s]
holdings, when an employer has not authorized and not provided
legally required meal and/or rest breaks, the employer has
violated the law and the fact that an employee may have actually
taken a break or was able to eat food during the workday does
not show that individual issues will predominate in the
litigation.” (Bradley, supra, 211 Cal.App.4th at p. 1151, italics
omitted.)
19
In Alberts, supra, 241 Cal.App.4th at page 407, the Court of
Appeal held the trial court erred in requiring, at the certification
stage, that plaintiffs demonstrate a “‘universal practice’ on the
part of management to deny nursing staff the benefit of the
Hospital’s written break policy” and that the proper question was
“whether plaintiffs had articulated a theory susceptible to
common resolution.” (Ibid.) Alberts explained that requiring
plaintiffs to prove class members missed all breaks to which they
were entitled was an “incorrect standard for certification that, as
other courts have also found, if correct, would prevent
certification of virtually any wage and hour class. (See, e.g., Bufil
v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193,
1207 (Bufil) [‘a class is not inappropriate merely because each
member at some point may be required to make an individual
showing as to eligibility for recovery’]); Benton, supra, 220
Cal.App.4th at pp. 725–728 [reversing order denying certification
despite evidence that some putative class members received
breaks].)” (Alberts, at p. 407.)
As Faulkinbury, supra, 216 Cal.App.4th at page 235
explains, “the employer’s liability arises by adopting a uniform
policy that violates the wage and hour laws. Whether or not the
employee was able to take the required break goes to damages,
and ‘[t]he fact that individual [employees] may have different
damages does not require denial of the class certification motion.’
[Citation.]”
1. Nature of the Work Exception
A key issue driving the court’s decertification order on the
meal period claim was its finding that Wackenhut’s affirmative
defense, the nature of the work exception, could not be
adjudicated on a classwide basis, even if the class were divided
20
into subclasses as proposed by the plaintiffs, because common
issues did not predominate. The nature of the work exception
has three express conditions: (1) the nature of the work must
prevent the employee from being relieved of all duty; (2) the
employee must agree to the on-duty meal period in writing; and
(3) the written agreement must provide that the employee may,
in writing, revoke the agreement at any time. (Cal. Code Regs.,
tit. 8, § 11040, subd. (11)(A).) The nature of the work exception is
an affirmative defense, and thus the burden is on the employer to
plead and prove facts justifying on-duty meal periods. (Abdullah
v. U.S. Security Associates, Inc. (9th Cir. 2013) 731 F.3d 952, 958-
959 (Abdullah).)
In the class certification order, the court found that
common questions predominated because plaintiffs had shown
Wackenhut had a uniform practice allowing clients to determine
whether to provide on-duty meal periods, but in its decertification
order, the court concluded that whether Wackenhut allowed
client preference to dictate whether an officer was provided an
on-duty meal period was not the correct inquiry. Rather, the
court concluded, even if Wackenhut had not made a
determination whether the nature of the work prevented its
employees from taking an off-duty meal period before allowing its
clients to provide on-duty meal periods, it still was entitled to
prove at trial whether on-duty meal periods actually were
permissible due to the nature of the work.
In analyzing whether the nature of the work permitted on-
duty meal periods, the trial court found that “because the duties
and work environments differ dramatically amongst the class,
the nature of the work performed by Wackenhut security officers
[could not] be resolved on a classwide basis.” In reaching its
21
determination, the court considered a five factor test outlined by
7
the Division of Labor Standards Enforcement (DLSE), noting
that California courts have yet to delineate the scope of the
nature of the work exception. The five factors are (1) the type of
work; (2) the availability of other employees to provide relief to
an employee during a meal period; (3) potential consequences to
the employer if the employee is relieved of all duty during the
meal period; (4) the ability of the employer to anticipate and
mitigate the consequences; and (5) whether work product or
process will be destroyed or damaged by relieving the employee of
all duty. The court explained that this was not an exhaustive list
of factors and that the “‘critical determination . . . whether an on-
duty meal period may be lawfully provided by an employer is
whether the employer can establish that the facts and
circumstances in the matter point to the conclusion that the
nature of the work prevents the employee from being relieved of
all duty.”’
Plaintiffs argued that the differences among the class
members were not significant because all security officers
“‘observe, patrol, protect, assist, and report’” and that differences
in duties performed by class members did not prevent Wackenhut
from taking steps to relieve class members of all duty for a 30-
minute meal period. The court found that the DLSE test could
not be applied on a classwide basis because even if class members
7
“‘The DLSE “is the state agency empowered to enforce
California’s labor laws, including IWC wage orders.”’ [Citation.]
The DLSE’s opinion letters, ‘“‘“while not controlling upon the
courts by reason of their authority, do constitute a body of
experience and informed judgment to which courts and litigants
may properly resort for guidance.”’”’ [Citations.]” (Brinker,
supra, 53 Cal.4th at p. 1029, fn. 11.)
22
shared some basic duties, Wackenhut “presented substantial
evidence illustrating the profound differences among the various
worksites and the nature of the work performed by its security
officers.”
Citing an opinion letter from the DLSE, the court also
found that plaintiff’s theory that Wackenhut could relieve
workers at almost every work site was “based on the incorrect
premise that if an employer can theoretically remake its business
operations to provide an off-duty meal period, it should be
required to do so and precluded from taking advantage of the
nature of the work exception.” The court also noted that even if
plaintiffs’ theory were correct, an analysis of what steps
Wackenhut could have taken to provide off-duty meal periods
would require numerous individualized inquiries.
Finally, the court found that plaintiffs’ proposed subclasses
did not make their meal-break claim more amenable to classwide
treatment because the subclasses did not “eliminate the need for
numerous individualized inquiries to determine whether the
nature of the work performed by class members allowed for on-
duty meal periods.”
Two appellate decisions in class action cases particularly
have analyzed the nature of the work defense in the context of
the DLSE opinion letter: Faulkinbury, supra, 216 Cal.App.4th
220 and Abdullah, supra, 731 F.3d 952. Neither was available to
the trial court in this case since both were published after the
court granted Wackenhut’s decertification motion. Each clarifies
the scope of the nature of the work defense in the class action
context. In Faulkinbury, as here, the plaintiffs were employees
who worked for a private security guard company, Boyd. Boyd
provided security services to a range of clients, including gated
23
residential communities, hospitals, commercial buildings, and
retail stores. (Faulkinbury, at p. 225.) The plaintiffs alleged that
when hired, they had to sign an agreement to take on-duty meal
periods, and that they never took an off-duty meal break. “As a
defense to class certification, Boyd asserted the nature of the
work exception.” (Id. at p. 234.) In response, plaintiffs argued
“[l]iability turns on the issue whether Boyd’s policy requiring all
security guard employees to sign blanket waivers of off-duty meal
breaks is lawful. That issue can be resolved on a classwide basis.”
(Ibid.)
In light of Brinker, the Court of Appeal found that whether
Boyd’s policy requiring all security guard employees to sign
blanket waivers of off-duty meal breaks was lawful “can be
resolved on a classwide basis.” (Faulkinbury, supra, 216
Cal.App.4th at p. 234.) This is because “by requiring blanket off-
duty meal break waivers in advance from all security guard
employees, regardless of the working conditions at a particular
station, Boyd treated the off-duty meal break issue on a classwide
basis.” (Id. at p. 234.) “Whether or not the employee was able to
take the required break goes to damages, and “‘[t]he fact that
individual [employees] may have different damages does not
require denial of the class certification motion.”’ [Citation.]” (Id.
at p. 235.)
In Abdullah, supra, 731 F.3d 952, the Ninth Circuit
reached the same conclusion in a case with strikingly similar
facts. There, a class of private security guards working for U.S.
Security Associates, Inc. (USSA) alleged violations of California
labor laws. (Id. at pp. 954-956.) USSA guards worked at over
700 locations in California, including hotels, hospitals,
warehouses, and construction sites. (Id. at p. 954.) USSA
24
challenged the district court’s certification of a meal period
subclass on the grounds that the plaintiffs had “not established
‘commonality,’ as required under Federal Rule of Civil Procedure
23(a)(2), or ‘predominance,’ as required under Rule 23(b)(3).” (Id.
at p. 956.)
After noting that California courts had not addressed the
substantive scope of the “nature of the work” exception, the Ninth
Circuit reviewed several DLSE opinion letters concerning the
parameters of that exception. (Abdullah, supra, 731 F.3d at pp.
958-959.) The court explained that the “DLSE has emphasized
that the ‘on-duty’ meal period is a ‘limited [] alternative’ to the
off-duty meal period requirement. DLSE Opinion Letter
2009.06.09 at 8. Critically, it is ‘not described or defined as
a waiver of an off-duty meal period,’ id. (emphasis added), but
rather as ‘a type of meal period that can be lawfully provided only
in those circumstances in which the three express conditions set
forth in [the regulation] are satisfied.’” (Abdullah, at p. 959, fn.
omitted.) The court identified two categories of work where the
DLSE has found that the “nature of the work” exception applies:
“(1) where the work has some particular, external force that
requires the employee to be on duty at all times, and (2) where
the employee is the sole employee of a particular employer.”
(Ibid.)
The court concluded that “the plaintiffs’ claims [would]
yield a common answer that [was] ‘apt to drive the resolution of
the litigation,’” as required by Federal Rules of Civil Procedure,
rule 23(a)(2) and Wal-Mart, supra, 564 U.S. at pages 349-350.
(Abdullah, supra, 731 F.3d. at p. 962.) The court explained:
“[T]he DLSE letters make clear that ‘the showing
necessary to establish the “nature of the work”
25
exception is a high one.’ In order to make such a
showing, USSA had to demonstrate not just that its
employees’ duties varied, but that they varied to an
extent that some posts would qualify for the ‘nature
of the work’ exception, while others would not. It
failed to do so. Indeed, USSA’s sole explanation for
why it requires on-duty meal periods is that its
guards are staffed at single-guard locations. It does
not argue that any particular posts would qualify for
the ‘nature of the work’ exception absent the single-
guard staffing model. In fact, when asked if he could
think of ‘examples’ where ‘the nature of the work
requires an on-duty meal break,’ [USSA’s person
most knowledgeable] testified that he could not.
Thus, the crux of the issue is that the class members’
duties do not allow for a meal break solely because no
other guards are available to cover for them during
their meal periods.
“Consider, for example, the illustrative list of duties
that USSA has provided to demonstrate the variety
of its employees duties:
“[T]he duties performed by security guards include
patrolling parking lots; checking receipts; signing in
and out trucks; setting up school parking lots and
assisting with student drop-offs and pick-ups;
inspecting vehicles; restraining unruly patients;
escorting dead bodies; checking the inventory,
mileage, and temperature of trucks; working
undercover to catch shoplifters; monitoring
26
psychiatric patients; checking in employees and
answering phones at a front desk; performing
surveillance; and enforcing hotel quiet hours.
“These duties are undoubtedly distinct from one
another, but the only reason any of them ‘prevent’ the
employee from taking a meal period is because USSA
has chosen to adopt a single-guard staffing model.
See Cal. Code Regs., tit. 8, § 11040, subd. 11(A)
(stating that an ‘on-duty’ meal period is permitted
‘only when the nature of the work prevents an
employee from being relieved of all duty’ (emphasis
added)).
“On this basis, we conclude that the merits inquiry
will turn on whether USSA is permitted to adopt a
single-guard staffing model that does not allow for
off-duty meal periods—namely, whether it can invoke
a ‘nature of the work’ defense on a class-wide basis,
where the need for on-duty meal periods results from
its own staffing decisions. Such an inquiry is
permissible under Brinker and Faulkinbury; the
latter clarified that an employer may be held liable
under state law ‘upon a determination that [its]
uniform on-duty meal break policy [is] unlawful,’
with the ‘nature of the work’ defense being relevant
only to damages. Faulkinbury, [supra,] 216
Cal.App.4th at [p.] 235. Thus, the legality of USSA’s
policy is a ‘significant question of law,’ Mazza [v. Am.
Honda Motor Co. (2012)] 666 F.3d [581,] 589, that is
27
‘apt to drive the resolution of the litigation’ in this
case, Wal-Mart, [supra, 654 U.S.] at [pp. 349-350].”
(Abdullah, supra, 731 F.3d at pp. 962-963, fns.
omitted.)
Wackenhut, as the employer, was required to provide 30-
minute off-duty meal periods to its employees. Because an “‘on
duty’ meal period shall be permitted only when the nature of the
work prevents an employee from being relieved of all duty and
when by written agreement between the parties an on-the-job
paid meal period is agreed to” (Cal. Code Regs., tit. 8, § 11040,
subd. (11)(a)), it is the employer’s obligation to determine
whether the nature of the work prevents an employee from being
relieved before requiring an employee to take an on-duty meal
period.
In this case, Wackenhut, not its clients, is the employer and
hence was responsible for determining whether the nature of the
work at each site prevented its employees from being relieved of
all duty during the meal break. Wackenhut offered no evidence
that it made the determination on the basis of the five-factor test
required by the DLSE: the “type of work, the availability of other
employees to provide relief to an employee during a meal period,
the potential consequences to the employer if the employee is
relieved of all duty, the ability of the employer to anticipate and
mitigate these consequences such as by scheduling the work in a
manner that would allow the employee to take an off-duty meal
break, and whether the work product or process will be destroyed
or damaged by relieving the employee of all duty.” (Dept.
Industrial Relations, DLSE Opn. Letter No. 2002.09.04 (Sep. 4,
2002) p. 2.) Rather, the record indicates that Wackenhut allowed
28
client preference to dictate whether officers were provided on-
duty or off-duty meal periods. Client preference cannot be
determinative under the wage order. In the 2002 DLSE opinion
letter, the department concluded that “an off-duty meal period
must be provided unless [the five] factors, taken as a whole,
decisively point to the conclusion that the nature of the work
makes it virtually impossible for the employer to provide the
employee with an off-duty meal period.” (Id. at p. 2.) Thus,
plaintiffs’ claim that Wackenhut’s common practice of allowing
client preference to dictate whether meal periods were on-duty or
off-duty, resulting in the vast majority of plaintiffs receiving on-
duty meal periods in violation of IWC wage order No. 4-2001, is
amenable to class treatment.
Wackenhut cannot discharge its duty by arguing that its
clients who requested on-duty meal periods determined that the
nature of the work prevented officers from being relieved of all
duty. A similar issue was discussed in Benton, supra, 220
Cal.App.4th at page 729. In that case the court concluded that
an employer’s “affirmative obligation to authorize and permit
meal and rest breaks” could not be discharged, even if a co-
employer staffing company had adopted a lawful meal and rest
break policy, in the “absence of any evidence showing that [the
employer] took steps to ensure that the staffing company had
such a policy in place.” (Ibid.) We agree with that analysis.
Thus, Wackenhut could not discharge its affirmative duty to
provide lawful meal and rest breaks without presenting evidence
that it had precautions in place to ensure that its clients
considered and applied the five-factor test outlined by the DLSE
in determining whether the “nature of the work” at each site
29
necessitated an on-duty meal period before requiring class
8
members to take such meal periods.
Wackenhut also has failed to show that individual issues
predominate in this case. Plaintiffs argue that the nature of the
work defense can be litigated on a classwide basis by showing
8
The general manager of Wackenhut’s San Diego branch
office and former acting general manager of the Orange County
and Long Beach branches testified in deposition that the decision
whether to provide an on-duty or off-duty meal period is directed
by the client, and that if the client says that an off-duty meal
period is not acceptable he [the Wackenhut manager] does not
discuss with the client why an off-duty meal period is not
acceptable. The general manager of the San Francisco and San
Jose branches testified that Wackenhut does discuss with clients
which type of meal periods will be provided to Wackenhut
employees, and that the reason for the discussion is that
Wackenhut seeks to comply with the law and regulations. He
explained, however, that the determination is made by looking at
the “best interest of the security operations and operational
continuity of the site,” that Wackenhut does not have a
preference as to whether its clients provide an on-duty or off-duty
meal period, and that “if the customer says . . . [the employee]
can leave the site, they can turn their radio off, they can sleep,
whatever. They’re not getting paid for it, I don’t care. That’s
their unpaid meal period. As long as that is understood between
Wackenhut and the customer, that’s fine. That way we would go
with the unpaid meal period.” Similarly, Wackenhut’s person
most knowledgeable testified that at the Riverside branch, on-
duty meal periods are determined by the client contract: if the
client wants security for eight hours, then the employee will get a
paid lunch in that period. There is no evidence that the proper
test, whether the nature of the work prevented an employee from
being relieved of all duty, was discussed with clients. (Cal. Code
Regs., tit. 8, § 11040, subd. (11)(A).)
30
that regardless of variations in specific job assignments,
Wackenhut could have relieved class members of all duty for
meal periods. Specifically, plaintiffs’ security expert explained
that Wackenhut could relieve officers for off-duty meal periods by
(1) having officers and supervisors at multi-officer sites relieve
each other; (2) having field supervisors who already travel from
site to site, relieve officers for breaks; (3) increasing the current
number of rover officers that Wackenhut already uses to report to
different locations throughout the day to relieve officers for
breaks; and (4) where clients agree, having employees of
Wackenhut’s clients relieve officers for breaks.
Wackenhut argues that individual issues predominate
because the nature of the work exception can only be determined
by inquiring into the details of each individual client, worksite,
job post, and shift. If an employer, with employees working at
multiple sites, with various job duties, had made individualized
determinations regarding the nature of the work, and employees
challenged whether those determinations were correctly made,
class certification might be inappropriate because the employer
should have an opportunity to defend each of those individualized
determinations. But, in this case, since the employer did not
analyze whether the nature of the work exception applies before
requiring employees to take on-duty meal periods, it cannot rely
on the nature of the work defense to bar class certification.
Individual issues also do not predominate because
Wackenhut has treated the nature of the work exception on a
classwide basis. As in Faulkinbury, supra, 216 Cal.App.4th 220,
Wackenhut had all officers sign an on-duty meal agreement
during orientation, regardless of each officer’s job site or duties.
And, similar to Abdullah, supra, 731 F.3d 952, although
31
Wackenhut presented evidence demonstrating the variety of
duties that class members perform at different sites and even
within a given site, it offered no evidence that the duties varied
so that some posts would qualify for the “nature of the work”
exception, while others would not.9 Nor has it shown why
particular duties at any site would necessitate an on-duty meal
period. Deposition testimony of Wackenhut managers shows that
clients were given the option of providing either on-duty or off-
duty meal periods and, similar to Abdullah, the only explanation
articulated for providing an on-duty meal period was a staffing
decision - a client’s preference for continuous coverage.
2. Invalid Meal Agreements
The second and third conditions of the affirmative defense
require that the employee sign a written agreement that specifies
on-duty meal breaks and that also provides that the employee
may, in writing, revoke the agreement at any time. (Cal. Code
Regs., tit. 8, § 11040.) Plaintiffs’ theory of liability is that “[e]ven
if Wackenhut could meet the first prong of the nature of the work
9
Wackenhut offers the following examples of how duties
vary from site to site: a security officer stationed at the gate of
an environmental facility is primarily concerned with controlling
the flow of goods, people, and vehicles through the gate; a
security officer stationed at a hotel is responsible for remaining
visible and regularly patrolling the property; an officer stationed
at a nuclear energy facility is required to check for leaks, odors,
or other signs of damages that may indicate potential hazards;
firearm-carrying officers are typically stationed outside certain
bank branches and are responsible for deterring bank robberies;
officers serving as jailers process inmates and engage in detail-
specific tasks such as photographing and fingerprinting inmates;
and armed officers who transport detainees perform pat downs to
prevent contraband items from entering vehicles.
32
defense, [by proving] that it was unable to provide off-duty meal
periods to its employees,” it would still be liable for violations of
the wage order under the second element because prior to 2004,
the on-duty meal agreements did not contain the required
revocation clause; beginning in 2004, only new hires signed meal
agreements with revocation language; and it was not until 2008
that Wackenhut required all security officers to sign a meal
agreement with a revocation clause.
In its decertification order, the trial court found that the
plaintiffs’ plan to use statistical sampling to determine the
percentage of agreements that lacked revocation language was
essentially indistinguishable from the method of proof rejected in
Wal-Mart. Specifically, the court noted that Wal-Mart, supra,564 U.S. at pages 366-367, held “that the use of statistical
sampling as a shortcut to create commonality where none exists
is improper because it robs a defendant of the opportunity to
defend against each individual claim and therefore impermissibly
alters substantive law.” The court also noted that statistical
sampling would “lead to imprecise individual recoveries
. . . resulting in a windfall for some class members and leaving
other class members under compensated.” Finally, the court
noted that the Brinker concurrence recognized that under
California law, a trial court has discretion to weigh the potential
advantages and disadvantages of statistical inferences.
Accordingly, the court explained that it was exercising its
discretion in not allowing the use of statistical sampling because
Wal-Mart illustrated that a significant disadvantage of statistical
sampling is the elimination of a defendant’s ability to raise
defenses to individual claims.
33
The trial court also concluded that even if plaintiffs were to
obtain every meal period agreement and attempt to prove
liability without relying on statistical sampling, individual issues
would still predominate. It explained that although examining
each agreement and determining whether it contained revocation
language would be nothing more than a “tedious and extensive
audit that is not likely to result in many factual disputes,”
proving class members had signed invalid agreements would not,
on its own, establish liability because plaintiffs would still have
to prove that class members who signed invalid agreements also
had “on-duty” meal periods.
Plaintiffs had proposed a subclass consisting of class
members who signed meal agreements lacking a revocation
clause who also worked at a post with an on-duty meal period.
The trial court found the proposed subclass was not “readily
ascertainable” because plaintiffs failed to define the class in
objective terms without regard to the merits of the claim. The
court noted that the “proposed subclass definition includes
elements necessary to establish liability, and thus determining
who is in the subclass would require an evaluation” of whether an
agreement was invalid and whether meal periods were on-duty,
which would require answering numerous individualized
questions.
Even without statistical sampling, determining which
employees signed a meal agreement that lacked a revocation
clause can be ascertained. As discussed, the parties agreed to
statistical sampling as an alternative to Wackenhut producing
meal agreements for all class members or allowing plaintiffs to
inspect Wackenhut’s files. During the hearings on Wackenhut’s
decertification motion, the court warned Wackenhut that by
34
arguing, pursuant to Wal-Mart, that statistical sampling violated
its due process rights, it waived its objection to limiting discovery
of the meal agreements. In response, Wackenhut agreed to
produce all of the meal agreements and engage in full discovery,
noting that it was “not asking to have it both ways.” The court
acknowledged in its order that determining which class members
signed a valid agreement would require nothing more than a
“tedious and extensive” audit that is not likely to result in many
factual disputes. Because California Code of Regulations, title 8,
section 11040, subdivision (11)(A) provides that “[t]he written
agreement shall state that the employee may, in writing, revoke
the agreement at any time,” determining whether an agreement
is invalid would require nothing more than checking whether the
agreement had a revocation clause.
Additionally, determining whether an employee, who
signed a meal agreement that is invalid on this ground, also had
“on-duty” meal periods, does not require numerous individualized
questions. At the hearing on the motion for decertification,
plaintiffs introduced a spreadsheet produced by Wackenhut. The
spreadsheet was generated by a Wackenhut computer program
and includes each employee’s name, the client for whom the
employee worked, address, start time, stop time, and a column on
the right for nonpaid breaks. Plaintiffs argued that the
spreadsheet could be sorted by the nonpaid break column,
making it easy to ascertain which employees had a paid on-duty
meal period. Wackenhut did not challenge the accuracy of the
spreadsheet for determining which employees had off-duty meal
periods. (See Brinker, supra, at p. 1053 (conc. opn. of Werdegar,
J.) [“[i]f an employer’s records show no meal period for a given
shift over five hours, a rebuttable presumption arises that the
35
employee was not relieved of duty and no meal period was
provided”]; see also Cicairos v. Summit Logistics, Inc. (2005) 133
Cal.App.4th 949, 963 [employers have duty to record their
employees’ meal periods].) Thus, the proposed subclass was
ascertainable.
Further, the use of statistical sampling in this case is
distinguishable from the method rejected by the Supreme Court
in Wal-Mart because, in that case, the plaintiffs proposed to use
representative evidence as a means of overcoming the absence of
a common policy. (Tyson, supra,136 S.Ct. at p. 1048.) In Wal-
Mart, the only policy that plaintiffs were able to identify was that
managers and supervisors had discretion in making employment
decisions, a policy that in itself does not establish liability. (Wal-
Mart, supra, 564 U.S. at p. 355.) Here, when the trial court
originally certified the class, it found that plaintiffs had met their
burden. They did so by proffering substantial evidence of a
common practice by showing (through deposition testimony of
Wackenhut managers) that meal agreements distributed between
January 2001 and April or May 2004 lacked the required
revocability clause, that meal agreements distributed between
April or May 2004 and May 2008 contained the revocability
clause but were signed only by new employees, and that it was
not until May 2008, that Wackenhut distributed agreements with
a revocability clause to all employees. Thus, unlike Wal-Mart,
where the use of statistical sampling was the only evidence
establishing liability, here, the results of the statistical sampling
(calculating an average percentage of meal agreements lacking
revocation language for each year between 2001-2008) served as
a manageability tool – an alternative to burdensome production.
36
This case also is distinguishable from Wal-Mart because of
the remedial nature of the Title VII claims at issue in that case.
Title VII claims are susceptible to individualized determination
of remedies because if a plaintiff prevails in showing that an
employer has discriminated, the employer may be ordered to
reinstate or hire the employee, with or without backpay. (Wal-
Mart, supra, 564 U.S. at p. 366.) Thus, the determination of any
given employee’s remedy is highly individualized. Here, on the
other hand, Wackenhut has not made a showing that allowing
individualized inquiries as to which employees had signed an
invalid meal agreement, rather than using a statistical analysis,
would result in a significantly different aggregate liability.
At oral argument, Wackenhut relied on Duran v. U.S. Bank
National Assn. (2014) 59 Cal.4th 1 (Duran). Duran was a wage
and hour class action involving alleged misclassification that
proceeded through trial to a verdict. (Id. at p. 12.) On appeal,
the California Supreme Court concluded that sampling errors
required reversal. (Id. at p. 49.) Specifically, the court found
that the sample was not sufficiently representative or random
and that there was an intolerably large margin of error. (Id. at
pp. 42, 43, 46.) The court explained that “without following a
valid statistical model developed by experts, the [trial] court
improperly extrapolated liability findings from a small, skewed
sample group to the entire class.” (Id. at p. 33.) The court noted
that individual issues may be managed through surveys and
statistical sampling as long as “some glue” binds class members
together apart from statistical evidence. (Id. at p. 31.)
Here, Wackenhut entered into a stipulation by which it
agreed not to challenge the sample on grounds that a less than
statistically significant number of personnel files were sampled
37
or that there was a bias in the sample. Wackenhut does not
challenge the accuracy or reliability of the proposed sampling
method. Additionally, the statistical sample provided a
secondary source of proof and was agreed to as a manageability
tool, not as plaintiffs’ only form of proof. As discussed, at class
certification plaintiffs offered testimony by Wackenhut managers
that prior to 2004, the on-duty meal agreements did not contain
the required revocation clause; beginning in 2004, only new hires
signed meal agreements with revocation language; and it was not
until 2008 that Wackenhut required all security officers to sign a
meal agreement with a revocation clause. Thus, the testimony of
Wackenhut managers and the meal agreements themselves
constitute “some glue” that binds class members together apart
from the statistical evidence.
The trial court’s conclusion that statistical sampling will
lead to over and under recovery has not been explicitly resolved
by California courts, but statistical sampling has been approved
as a method of determining damages. (Williams v. Superior
Court (2013) 221 Cal.App.4th 1353, 1366, fn. 6; see also Duran,
supra, 59 Cal.4th at p. 40 [statistical sampling to prove damages
is less controversial than to prove liability because “the law
tolerates more uncertainty with respect to damages than to the
existence of liability”].)
In Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th
715, 750, the court found that “from the perspective of the
administration of justice, . . . an important negative consequence
of the use of statistical sampling to calculate damages [is that] it
necessarily yields an average figure that will overestimate or
underestimate the right to relief of individual employees.” (Ibid.)
“Weighing against this disadvantage is the consideration that
38
statistical inference offers a means of vindicating the policy
underlying the Industrial Welfare Commission’s wage orders
without clogging the courts or deterring small claimants with the
cost of litigation. In a particular case, the alternative to the
award of classwide aggregate damages may be the sort of random
and fragmentary enforcement of the overtime laws that will fail
to effectively assure compliance on a classwide basis.” (Id. at p.
751, fn. omitted.) The court found that it was “within the
discretion of the trial court to weigh the disadvantage of
statistical inference—the calculation of average damages
imperfectly tailored to the facts of particular employees—with
the opportunity it afforded to vindicate an important statutory
policy without unduly burdening the courts.” (Ibid.)
Here, even if the trial court used its discretion to find that
the disadvantages of statistical sampling outweighed the
advantages, class certification of the meal break subclass was
still appropriate because Wackenhut can produce the meal
agreements or allow plaintiffs to inspect them.
B. Rest Break Claim
“Every employer shall authorize and permit all employees
to take rest periods, which insofar as practicable shall be in the
middle of each work period. The authorized rest period time
shall be based on the total hours worked daily at the rate of ten
(10) minutes net rest time per four (4) hours or major fraction
thereof. . . . Authorized rest period time shall be counted as
hours worked for which there shall be no deduction from wages.”
(Cal. Code Regs., tit. 8, § 11040, subd. (12)(A).) “If an employer
fails to provide an employee a rest period in accordance with the
applicable provisions of this order, the employer shall pay the
employee one (1) hour of pay at the employee’s regular rate of
39
compensation for each workday that the rest period is not
provided.” (Id., subd. (12)(B).)
Plaintiffs’ complaint alleges that Wackenhut failed to
permit and authorize employees off-duty rest breaks. Prior to
May 23, 2008, Wackenhut did not have a written policy
10
authorizing or permitting rest breaks. Wackenhut argues that
it did have such a policy, citing as evidence its policy under the
Fair Labor Standards Act (29 U.S.C. § 201 et seq.) (FLSA), which
became effective on August 3, 2005. That policy provides that
“Field and Headquarters management are responsible for
scheduling employees; ensuring that employees accurately report
their time worked; and maintaining accurate pay records of
employees who report to them. Field management is also
responsible for complying with any applicable state or local law
that provides employees with greater benefits and protections
than the FLSA in the locations in which they operate.”
When the trial court initially granted class certification, it
“found that common issues predominated with respect to the rest
period claim because . . . Wackenhut managers had testified in
depositions that Wackenhut had a policy not to provide off-duty
10
Wackenhut created a California Addendum to its security
officer handbook, which became effective on May 23, 2008. The
addendum included a provision that “[a]ll non-exempt employees
of the Company are authorized and permitted to take one 10-
minute rest break for every four hours worked.” The policy
explains that “[r]est breaks are paid breaks and [the employee]
will be compensated for the time spent on these breaks. As a
result, [the employee] may on occasion be called upon to perform
work related activities during [the employee’s] rest breaks. If [a
rest] break[] is interrupted because of such work related
activities, [the employee] may take a ‘make-up break,’ for a full
ten minutes as soon as practicable under the circumstances.”
40
rest periods, and there is no nature of the work exception for off-
duty rest periods.” In its motion for decertification, Wackenhut
did not present new evidence rebutting plaintiffs’ evidence that
prior to 2008, it had a uniform policy of not authorizing and
permitting employees to take off-duty rest periods. Rather,
Wackenhut challenged whether requiring employees to remain on
the premises or be reachable by phone or radio, in the event that
the rest period had to be interrupted in case of an emergency,
meant that the rest period was “on-duty.” Wackenhut also
argued that “even if [it] had a policy not to provide off-duty rest
periods (which it did not), in practice Wackenhut security officers
overwhelmingly were able to take rest breaks.”
In its decertification order, the court found that the
deposition testimony of Wackenhut managers on which it had
relied in its original class certification order did not “conclusively
establish that Wackenhut had a policy of providing on-duty rest
periods at every worksite, but instead show[ed] only that
Wackenhut intended to place certain restrictions on rest periods
at some worksites, and [that those] restrictions may or may not
have rendered such rest periods on duty.”
Application of the wage and hour order did not require
plaintiffs to conclusively establish that Wackenhut had a policy of
not providing rest periods at every worksite. (See Brinker, supra,53 Cal.4th at p. 1022 [certification order relying on improper
criteria reversible].) A standard requiring plaintiffs to
“conclusively establish” that Wackenhut had a policy that
violated wage and hour laws is improper because plaintiffs’
burden at class certification is to produce substantial evidence.
(See Evans v. Lasco Bathware, Inc. (2009) 178 Cal.App.4th 1417,
1422 [plaintiffs have burden of producing substantial evidence of
41
class action requisites, including predominance].) The proper
inquiry for a predominance analysis is whether “‘questions of law
or fact common to the class predominate over the questions
affecting the individual members.’ [Citation.]” (Sav-on, supra, 34
Cal.4th at p. 329.) Predominance does not require plaintiffs to
show that an employer’s policy affected all members of the class.
(Id. at p. 338; see also Alberts, supra 241 Cal.App.4th at p. 407
[trial court incorrect to require plaintiffs show at certification
stage “‘universal practice’”].)
The court also found that resolution of the rest period claim
would involve numerous individualized inquiries because
evidence in the record showed class members at many
Wackenhut worksites were provided with rest periods that lacked
any restrictions and appeared to be fully off-duty. Applying the
same reasoning it applied to the meal period claim and again
relying on Wal-Mart, the court explained that common issues no
longer predominated because Wackenhut had a due process right
to prove on an individualized basis that it provided off-duty rest
periods to class members. The court cited declarations from two
security officers and deposition testimony from plaintiff Lubin to
support its finding that class members at many Wackenhut
worksites were provided with rest periods that lacked any
restrictions and appeared to be fully off-duty. The court also
explained that “analyzing whether any restrictions placed on rest
periods made them on-duty would require unmanageable
individualized inquiries into the nature of the rest periods for
each distinct worksite, shift, and security officer position.” The
court rejected plaintiffs’ theory that if employees were required to
remain on-duty for their meal break, it would follow that they
also were required to remain on-duty for their rest periods.
42
Instead, the court found it was entirely possible for an employer
to provide an off-duty rest break even if it chose to provide an on-
duty meal period.
As we have discussed, Wal-Mart does not support
Wackenhut’s claim that it had a due process right to prove on an
individualized basis that it provided off-duty rest periods to every
class member. (See Duran, supra, 59 Cal.4th at p. 38 [“[n]o case,
to our knowledge, holds that a defendant has a due process right
to litigate an affirmative defense as to each individual class
member”].) If plaintiffs had a policy or practice that violates
labor laws, then class treatment is appropriate. (Brinker, supra,53 Cal.4th at p. 1032.) Individualized inquiries into whether an
employee had a required break on a specific day is relevant to
damages, and “[t]he fact that individual [employees] may have
different damages does not require denial of the class
certification motion.” (Jaimez v. Daiohs USA, Inc. (2010) 181
Cal.App.4th 1286, 1301.)
In Faulkinbury, supra, 216 Cal.App.4th at page 237, the
defendant submitted declarations from employees in opposition to
a motion for class certification. “Some declarations stated the
employee was relieved of duties in order to take off-duty rest
breaks; other declarations stated breaks were taken during
periods of inactivity; at least one declaration stated the employee
determined, based on the circumstances, when to take a rest
break; and another declaration stated the employee frequently
took rest breaks at her post.” (Ibid.) The court explained that “in
light of Brinker, this evidence at most establishes individual
issues of damages, which would not preclude class certification”
and that the defendant’s “liability, if any, would arise upon a
finding that its uniform rest break policy, or lack of policy, was
43
unlawful.” (Ibid.) Similarly, because the trial court in this case
found that plaintiffs had made a showing that Wackenhut had a
policy or practice of not providing off-duty rest breaks, anecdotal
evidence that some employees had valid off-duty rest breaks does
not preclude class certification; rather, it is evidence that is
relevant to damages.
Determining whether restrictions placed on class members’
rest breaks made them “on-duty” also is amendable to classwide
treatment. A DLSE opinion letter of February 2, 2002 explains
that the 10-minute rest break must be consecutive and must be
“duty-free.” (DLSE Opinion Letter of Feb. 2, 2002, Re: Rest
Period Requirements.)11 However, unlike meal periods, there is
no “on-duty” exception for rest breaks. Thus, whether the
restrictions Wackenhut placed on rest break made them “on-
duty” (for example, requiring employees to remain “on-call”) does
not require individualized inquires; rather, it is a merits question
that can be resolved on a classwide basis. (See Brinker, supra,53 Cal.4th at p. 1034 [whenever possible, courts should
“determine class certification independent of threshold questions
disposing of the merits”].) Similarly, plaintiffs’ theory that
employees who were required to work on-duty for their meal
periods, also were required to remain on-duty for rest breaks is a
merits question that can be resolved on a classwide basis.
11
The Supreme Court has granted review in Augustus v.
ABM Security Services, Inc., review granted April 29, 2015,
S224853, in which the certified issues are (1) whether Labor Code
section 226.7 and IWC wage order 4-2001 require that employees
be relieved of all duties during meal breaks, and (2) whether
security guards who remain on call during rest breaks are
“performing work” during that time under the analysis in
Mendiola v. CPS Security Solution, Inc. (2015) 60 Cal.4th 833.
44
The trial court distinguished the facts of this case from
Brinker, explaining that in Brinker “there was no dispute that
the policy and the practice were one and the same. By contrast,
Wackenhut denies that the written documents Plaintiffs focus on
[the FLSA policy and the 2008 addendum] represent the full
extent of the rest periods that it provided to class members.” The
court found that evidence in the record supported Wackenhut’s
position that although its written policies only provided guidance
regarding the requirements of the FLSA, each region
supplemented the policy with local requirements. As support, the
court cited to deposition testimony from Michael Goodboe,
Wackenhut’s vice-president of human resources. Goodboe
testified that the FLSA policy contained only “‘a basic policy’ that
was ‘not exhaustive in the sense that it’s a policy for everybody
everywhere.’” “Rather, Wackenhut ‘offices would be expected to
add to it’ because ‘there are state and local . . . enhancements to
the legislation.’” The court also explained that “contrary to
Plaintiffs’ contention, . . . Mr. Goodboe did not testify that there
were no enhancements for California, but only that he was
personally unaware of the California enhancements.”
Accordingly, the court found that plaintiffs failed to prove, and
Wackenhut had not conceded, that its written guidance
concerning the FLSA represented the full extent of the rest
periods that it authorized in California.
At class certification, plaintiffs presented deposition
testimony from Wackenhut managers that the trial court credited
as establishing that Wackenhut had a policy of not providing off-
duty rest breaks. Wackenhut did not present evidence rebutting
plaintiffs’ evidence and has not shown that it had an informal
policy or practice of authorizing and permitting employees to take
45
10-minute rest breaks. (See Brinker, supra, 53 Cal.4th at p. 1033
[employer is required to permit and authorize required rest
breaks, and if it adopts uniform policy that does not do so, then
“it has violated the wage order and is liable”]; see also Bufil,
supra, 162 Cal.App.4th at p. 1199 [onus is on employer to clearly
communicate authorization and permission to employees].)
Wackenhut may rebut plaintiffs’ evidence of a lack of policy
authorizing and permitting rest breaks by providing evidence of a
uniform policy or practice. However, while Mr. Goodboe did not
testify that there are no enhancements for California, he did
testify that he was unaware of any California enhancements, and
Wackenhut has not presented any other evidence demonstrating
that there were in fact California enhancements authorizing and
permitting rest breaks. Anecdotal evidence that some employees
had rest breaks goes to damages and is not evidence of a uniform
policy or practice. (Faulkinbury, supra, 216 Cal.App.4th at p.
237.) Further, Wackenhut’s defense that it had a policy or
practice authorizing rest breaks is susceptible to classwide
resolution. (See Bradley, supra, 211 Cal.App.4th at p. 1150
[plaintiffs’ theory that employer lacked rest break policy and
failed to authorize breaks are matters of common proof—
although employer could potentially defend claims by arguing it
had informal or unwritten rest break policy, this defense is also
matter of common proof].)
C. Wage Statement Claim
Labor Code section 226, subdivision (a) provides: “[e]very
employer shall, semimonthly or at the time of each payment of
wages, furnish each of his or her employees . . . an accurate
itemized statement in writing showing (1) gross wages earned, (2)
total hours worked by the employee . . . (6) the inclusive dates of
46
the period for which the employee is paid . . . , and (9) all
applicable hourly rates in effect during the pay period and the
corresponding number of hours worked at each hourly rate by the
employee.”
Pursuant to Labor Code section 226, subdivision (e)(1), an
employee who suffers injury “as a result of a knowing and
intentional failure by an employer to comply with subdivision (a)
is entitled to recover the greater of all actual damages or fifty
dollars ($50) for the initial pay period in which a violation occurs
and one hundred dollars ($100) per employee for each violation in
a subsequent pay period, not to exceed an aggregate penalty of
four thousand dollars ($4,000), and is entitled to an award of
costs and reasonable attorney’s fees.”
An employee is deemed to suffer injury for purposes of
Labor Code section 226, subdivision (e)(2)(B) “if the employer
fails to provide accurate and complete information as required”
by subdivision (a), items (1) to (9) “and the employee cannot
promptly and easily determine from the wage statement alone”
the inclusive dates of the period for which the employee is paid or
the applicable hourly rates in effect during the pay period and
the corresponding number of hours worked at each hourly rate by
the employee. (Ibid.)
In support of class certification, plaintiffs advanced two
theories of liability regarding wage statements. First, that wage
statements provided by Wackenhut lacked three items required
by Labor Code section 226, subdivision (a): the inclusive dates of
the pay period, regular rates of pay, and overtime rates of pay
and second, that the wage statements failed to include premium
wages earned for missed meal and rest breaks. The court
originally granted class certification on the itemized wage
47
statement claim, pursuant to plaintiffs’ second theory of liability,
finding the claims were derivative of plaintiffs’ meal and rest
break claims.
In its decertification order, the trial court explained that
because the wage statement claim was derivative and individual
issues now predominated with respect to the meal and rest break
claims, the wage statement claim was no longer suitable for class
treatment. The court also found that plaintiffs’ first theory of
liability was not suited for class treatment because “[a]lthough
determining whether Wackenhut’s wage statements contained
the required elements under Labor Code section 226(a) is a
common question, proving that a required element was missing
does not automatically establish liability. Instead, Plaintiffs
must also prove that class members suffered injury as a result of
the defect.” The order went on to explain that plaintiffs had not
identified a way in which the injury element could be proven on a
classwide basis, “other than by making the unwarranted
assumption that a mathematical injury necessarily results
whenever a wage statement is deficient (which, if accepted would
render Labor Code section 226(e)’s injury requirement
meaningless).”
Subsequent to the court’s order, the Legislature enacted
Senate Bill No. 1255 to clarify what constitutes “suffering injury”
for purposes of Labor Code section 226. (Sen. Com. on Judiciary,
Analysis of Sen. Bill No. 1255 (2011-2012 Reg. Sess.) as amended
Apr. 30, 2012, p. 1.) The legislative history of this statute is
instructive. The enacting statute was a response to the
“contradictory and inconsistent interpretations of what
constitute[d] ‘suffering injury’ under Labor Code section 226 in
the various court cases that ha[d] been litigated in recent years,”
48
which the Legislature found “threaten[ed] effective public and
private enforcement of, and compliance with, wage statement
requirements.” (Sen. Rules Com., Off. of Sen. Floor Analyses,
analysis of Sen. Bill No. 1255 (2011-2012 Reg. Sess.) as amended
Aug. 23, 2012, p. 6; Sen. Com. on Judiciary, Analysis of Sen. Bill
No. 1255 (2011-2012 Reg. Sess.) as amended Apr. 30, 2012, p. 4.)
The bill, codified in Labor Code section 226, subdivision
(e)(2)(B), clarifies that injury for purposes of recovery under
subdivision (e)(1) is established if “the employee cannot promptly
and easily determine from the wage statement alone” the
inclusive dates of the period for which the employee is paid or the
applicable hourly rates in effect during the pay period and the
corresponding number of hours worked at each hourly rate by the
employee.
Accordingly, we conclude that plaintiffs’ wage statement
claim is amenable to class treatment under both of plaintiffs’
theories of liability. First, the question whether Wackenhut’s
wage statements contained the required elements under Labor
Code section 226, subdivision (a) is a common question, and
Labor Code section 226, subdivision (e)(2)(B)(i) clarifies that
injury arises from defects in the wage statement, rather than
from a showing that an individual experienced harm as a result
of the defect. “An amendment which merely clarifies existing law
may be given retroactive effect even without an expression of
legislative intent for retroactivity. [Citations.]” (Negrette v.
California State Lottery Com. (1994) 21 Cal.App.4th 1739, 1744;
see also Sandoval v. M1 Auto Collisions Centers (N.D. Cal. 2015)
309 F.R.D. 549, 568 [whether defendants’ statements were
inaccurate and injured plaintiffs under Lab. Code, § 226 presents
common questions].) Second, because plaintiffs’ meal and rest
49
period claims are suitable for class treatment, their theory that
the wage statements failed to include premium wages earned for
missed meal and rest periods also is suitable for class treatment.
DISPOSITION
The order is reversed, and the case is remanded as to off-
duty meal break, rest brake, and wage statement issues, and for
further proceedings consistent with this opinion. Appellants are
entitled to their costs on appeal.
CERTIFIED FOR PUBLICATION.
EPSTEIN, P. J.
We concur:
WILLHITE, J.
MANELLA, J.
50