Wilson v. The La Jolla Group ( 2021 )

Filed 3/12/21
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
MOSANTHONY WILSON et al., D077134
Plaintiffs and Appellants,
v. (Super. Ct. No. 37-2018-
00046934-CU-OE-CTL)
THE LA JOLLA GROUP,
Defendant and Respondent.
APPEAL from an order of the Superior Court of San Diego County,
Richard E.L. Strauss, Judge. Affirmed in part; reversed in part and
remanded with directions.
Parris Law Firm, R. Rex Parris, Kitty K. Szeto, John M. Bickford, Ryan
A. Crist, and Alexander Wheeler, for Plaintiffs and Appellants.
Manning & Kass, Ellrod, Ramirez, Trester, Kenneth Kawabata, Tonya
N. Mora, and Ladell Hulet Muhlestein, for Defendant and Respondent.
Plaintiffs Mosanthony Wilson and Nancy Urschel brought a putative
wage-and-hour class action against defendant The La Jolla Group (LJG).
Plaintiffs worked for LJG as signature gatherers on behalf of political
campaigns and political action committees. LJG classified them as
independent contractors and paid them per signature submitted. In the
underlying lawsuit, plaintiffs alleged that LJG misclassified them and, as
employees, they were entitled to a minimum wage, overtime pay, meal and
rest breaks, expense reimbursement, timely final wage payment, and
itemized wage statements. Plaintiffs moved for certification of a class of LJG
signature gatherers, which the trial court denied.
Plaintiffs appeal the order denying class certification. They contend
the trial court erred by finding common questions did not predominate and
the class action procedure was not superior to individual actions. They also
contend the court erred by not granting a related motion for reconsideration.
We agree on the current record that the trial court erred by declining to
certify a class for one cause of action, for failure to provide written and
accurate itemized wage statements. We therefore reverse the order denying
class certification in part, as to that cause of action only, and remand for
reconsideration. Otherwise, we disagree that the trial court erred and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
LJG is a legal and political consulting firm. More than 50 percent of its
political work is related to signature gathering. It acts as a broker or
intermediary between organizations seeking signatures, typically political
campaigns and political action committees, and the signature gatherers
themselves. The political organizations generate blank signature sheets and
other materials, which LJG provides to the signature gatherers. The political
organizations pay for collected signatures, and LJG receives a percentage,
typically 10 to 15 percent. LJG may also be paid an up-front fee in some
cases.
LJG works with individual signature gatherers, who actually collect
the signatures from registered voters. LJG requires the signature gatherers
to sign an independent contractor agreement. LJG does not provide training
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to signature gatherers (except to explain the legal requirement for registered
voter signatures) and does not tell them where or when to collect signatures.
LJG does not require the signature gatherers to work a certain number of
hours or collect a certain number of signatures. The signature gatherers
choose which collection efforts to join and how much time to work on them.
They call a hotline maintained by LJG to find out if there are any active
signature collection efforts. Other brokers maintain their own hotlines.
The signature gatherers return collected signatures to LJG’s office.
LJG verifies the validity of the signatures and pays the signature gatherer
based on the number of signatures, typically when the signature gatherer is
next in LJG’s office. The signature gatherers do not submit any record of
their hours worked, and LJG does not maintain any such records.
The relationship between LJG and the signature gatherers is not
exclusive. Signature gatherers may collect signatures for multiple brokers at
the same time. And, if multiple brokers are working with the same political
campaign or political action committee, a signature gatherer can obtain blank
signature sheets from one broker and submit them to a different broker once
completed.
Plaintiffs worked with LJG over a period of years. In their complaint,
they alleged that LJG was “a for-profit petition drive management firm” and
its usual course of business was “collecting signatures from registered voters
so [that] a proposed initiative can qualify for placement on the election
ballot.” LJG hired signature gatherers for this effort, which plaintiffs alleged
were misclassified as independent contractors under the “ABC test” for
employment. (See Dynamex Operations West, Inc. v. Superior Court (2018)
4 Cal. 5th 903, 957 (Dynamex).)
3
Plaintiffs alleged that, as a consequence of this misclassification, LJG
did not comply with various provisions of the Labor Code and the applicable
Industrial Welfare Commission (IWC) wage order governing the terms and
conditions of the signature gatherers’ employment. On behalf of themselves
and a putative class of LJG signature gatherers, plaintiffs alleged causes of
action for (1) failure to pay employees a minimum wage for all hours worked
(Lab. Code, §§ 1194, 1197, 1197.1), (2) failure to pay overtime (id., § 1198),
(3) failure to provide meal and rest breaks (id., § 226.7), (4) failure to timely
pay final wages upon termination or resignation (id., §§ 201, 202), (5) failure
to provide written and accurate itemized wage statements (id., § 226,
subd. (a)), and (6) failure to reimburse employees for necessary expenditures
(id., §§ 2800, 2802). They also alleged a cause of action under the Unfair
Competition Law (UCL; Bus. & Prof. Code, § 17200 et seq.) based on these
violations. They sought damages, penalties, restitution, and attorney fees,
among other relief.
After nine months of litigation, plaintiffs moved to certify a class
consisting of all individuals who worked for LJG as signature gatherers in
California at any time from September 14, 2014 through the date of class
certification. Plaintiffs argued the primary issue in the litigation was the
alleged misclassification of signature gatherers as independent contractors,
which was common to all class members and could be proved on a classwide
basis. They maintained, “Plaintiffs’ theory of classwide liability is based
solely upon the ‘B’ prong [under Dynamex]—i.e., whether [LJG] can prove the
signature gatherers perform work that is outside the usual course of its
business.” Resolution of this issue “turns solely on: (1) what the usual course
of [LJG’s] business is; and (2) whether the signature gatherers perform work
that is part of this business. Since all the signature gatherers perform the
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same work for [LJG]—i.e., ‘circulating, collecting, and turning in petitions’—
the court can compare this to [LJG’s] usual course of business [to] collectively
determine whether the signature gatherers are properly classified.”
Plaintiffs supported their motion with declarations from the named
plaintiffs. Both named plaintiffs stated that they were paid by LJG based on
the number of signatures collected. They asserted that they “only received a
fraction of pay for the hours [they] actually spent working,” they did not
“receive minimum wage or overtime,” and they were “not provided with meal
or rest breaks, nor any form of payment for not being able to take those
breaks.”
Plaintiffs also supported their motion with discovery responses served
by LJG. In those responses, LJG admitted that it did not pay the signature
gatherers a minimum wage or overtime, or provide them with meal breaks,
because they were classified as independent contractors. LJG also admitted
that it did not provide itemized wage statements or reimburse signature
gatherers for expenses.
LJG opposed the motion for class certification. LJG primarily
contended that, even if the signature gatherers were employees under
Dynamex, their individual circumstances were so variable that plaintiffs
could not prove LJG’s liability for any wage-and-hour violations on a
classwide basis. LJG argued that signature gatherers had no set work days
or hours, and they chose when and how long to work. Some worked a few
hours per day or week, others worked many hours. Signature gatherers also
worked in many different local jurisdictions, with differing minimum wage
rates. Thus, in LJG’s view, “there is no common proof by which a class-wide
violation of overtime or minimum wage laws can be established.” Similarly,
LJG argued that the signature gatherers were free to stop work for a meal or
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rest break at any time (or not) and free to purchase supplies for their own use
(or not). There was no common proof by which LJG’s liability on these claims
could be established. LJG also maintained that there was no termination or
resignation event that would trigger a final wage payment, since signature
gatherers were free to resume collecting signatures at any time.1
Moreover, as relevant here, LJG contended that the class action
procedure was not superior to individual actions. LJG noted that an
individual signature gatherer could obtain blank signature forms from
multiple brokers and collect signatures for multiple campaigns and
committees at the same time. LJG argued, “Plaintiffs here also fail to
explain how they will ascertain how long a [signature] gatherer worked in a
given day or given week and whether or not he or she worked exclusively for
LJG, when the evidence establishes that gatherers are free to sell the
signatures they collect to any company working that petition and that
gatherers frequently gathered signatures on multiple petitions at a time for
multiple companies at a time.”
LJG supported its opposition with declarations from a dozen signature
gatherers. They confirmed they had no set hours or work locations. They
worked for different brokers at the same time and did not have to turn in
collected signatures to the same broker they obtained the blank petitions
from. Their pay per signature varied wildly, from less than one dollar per
signature to 10 or 20 dollars per signature. Many stated they could normally
collect 10 or 20 signatures in an hour. A few worked more than eight hours
1 In a footnote, LJG stated that “[e]ven if employee versus independent
contractor status were the only issue, common questions would likely not
predominate under Dynamex, which applies only to claims based on wage
orders, and hence not to plaintiffs’ business expense, final pay, and [UCL]
claims.”
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per day or 40 hours per week. Most rarely or never worked such hours. The
signature gatherers felt free to take breaks whenever they wanted, and they
chose whether to take a meal or rest break according to their own wants and
needs.
LJG also supported its opposition with excerpts from the depositions of
the named plaintiffs. Wilson had done work as a signature gatherer for a
number of brokers. He had several other businesses over the years and was
paid by the State of California as a full-time caregiver for his special-needs
child. As a signature gatherer, Wilson had the flexibility to care for his child
at the same time. He could work when and where he wanted. He could
collect signatures for multiple brokers and multiple campaigns or committees
at the same time. He could also submit signatures to a different broker, even
if he obtained blank forms from LJG. When he collected signatures outside
San Diego County, he went with a partner. Wilson spent money on supplies
like pens and clipboards, but he did not request reimbursement from LJG.
He brought other supplies from home. Wilson claimed he worked as a
signature gatherer for LJG for 10 to 12 hours per day, seven days per week,
since 2014, in addition to his other jobs.
Urschel worked as a signature gatherer for a number of brokers as
well. She confirmed that she could turn collected signatures into any broker
handling a certain campaign or committee. She could pick up blank
signature sheets from LJG but turn the collected signatures in to another
broker. Urschel would try to work on issues she liked because they were
more interesting. There were some issues she would not work on. LJG never
told her to go to a specific location to collect signatures. Urschel would
typically work six to eight hours at a time. She was free to take lunch breaks
when she wanted.
7
On reply, plaintiffs argued that LJG’s opposition focused improperly on
individualized proof of damages. In plaintiffs’ view, the signature gatherers’
wage and hour claims depended primarily on their misclassification, which
was an issue common to them all. They maintained that differing local
minimum wages were immaterial because their claims were predicated on
the state minimum wage only. To rebut LJG’s argument that the class action
procedure was not superior to individual actions, plaintiffs argued that
classwide estimates of hours worked could be based on testimony from a
representative group of signature gatherers or on records of signatures
collected. Plaintiffs also argued that LJG did not specifically address their
wage statement claim. They noted that LJG admitted in discovery it does not
provide itemized wage statements. They asserted, “Therefore, if the
signature gatherers were misclassified, they are all entitled to wage
statement penalties.”
In a tentative ruling, the trial court stated its intention to deny the
motion for class certification on the grounds that plaintiffs had not shown
that common questions of fact or law predominate or that class treatment
was superior. At the hearing, the trial court noted that misclassification was
“one issue” but there were others. Signature gatherers worked all over the
state, at different wage rates, there were no time records, and “everybody’s
got a different story.” After hearing argument, the court confirmed its
tentative ruling. In a subsequent order, the court reiterated its grounds for
denial and repeated its comments from the hearing.
Soon after, plaintiffs moved for reconsideration. They argued that two
recently-published appellate opinions constituted “new law” requiring
reconsideration because they allegedly conflicted with the order. LJG
opposed. In a tentative ruling, the court noted that the California Supreme
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Court had recently granted review of both opinions. The opinions were
therefore no longer binding on the trial court. In the trial court’s view, the
opinions were not new law for purposes of reconsideration. At the hearing,
the court confirmed its tentative. The court does not appear to have filed a
formal minute order denying reconsideration.2
DISCUSSION
I
Class Certification Principles
“Originally creatures of equity, class actions have been statutorily
embraced by the Legislature whenever ‘the question [in a case] is one of a
common or general interest, of many persons, or when the parties are
numerous, and it is impracticable to bring them all before the court.’ ”
(Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal. 4th 1004, 1021
(Brinker).) “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 can adequately
represent the class.” ’ ” (Ibid.) The primary issues in this appeal are the
predominance of common questions of fact or law and the superiority of the
class action procedure.
2 We grant plaintiffs’ unopposed motion to augment the record with the
transcript of the hearing on their motion for reconsideration. (Cal. Rules of
Court, rule 8.155(a)(1)(B).)
9
Our Supreme Court has observed “that the ‘ultimate question’ for
predominance 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.] . . . “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.]’
[Citations.] However, [our Supreme Court has] cautioned that class
treatment is not appropriate ‘if every member of the alleged class would be
required to litigate numerous and substantial questions determining his
individual right to recover following the “class judgment” ’ on common
issues.” (Duran v. U.S. Bank N.A. (2014) 59 Cal. 4th 1, 28 (Duran).)
“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.” (Brinker, supra, 53 Cal.4th at pp. 1021-1022.)
“As one commentator has put it, ‘what really matters to class certification’ is
‘not similarity at some unspecified level of generality but, rather,
dissimilarity that has the capacity to undercut the prospects for joint
resolution of class members’ claims through a unified proceeding.’ ” (Id. at
p. 1022, fn. 5.)
“Although predominance of common issues is often a major factor in a
certification analysis, it is not the only consideration. In certifying a class
action, the court must also conclude that litigation of individual issues,
10
including those arising from affirmative defenses, can be managed fairly and
efficiently.” (Duran, supra, 59 Cal.4th at pp. 28-29.) “Defenses that raise
individual questions about the calculation of damages generally do not defeat
certification. [Citation.] However, a defense in which liability itself is
predicated on factual questions specific to individual claimants poses a much
greater challenge to manageability. This distinction is important.” (Id. at
p. 30.) “ ‘Only in an extraordinary situation would a class action be justified
where, subsequent to the class judgment, the members would be required to
individually prove not only damages but also liability.’ ” (Ibid.)
“On review of a class certification order, an appellate court’s inquiry is
narrowly circumscribed. ‘The decision to certify a class rests squarely within
the discretion of the trial court, and we afford that decision great deference
on appeal, reversing only for a manifest abuse of discretion: “Because trial
courts are ideally situated to evaluate the efficiencies and practicalities of
permitting group action, they are afforded great discretion in granting or
denying certification.” [Citation.] A certification order generally will not be
disturbed unless (1) it is unsupported by substantial evidence, (2) it rests on
improper criteria, or (3) it rests on erroneous legal assumptions.’ ” (Brinker,
supra, 53 Cal.4th at p. 1022.)
“Under this standard, an order based upon improper criteria or
incorrect assumptions calls for reversal ‘ “even though there may be
substantial evidence to support the court’s order.” ’ [Citations.] Accordingly,
we must examine the trial court’s reasons for denying class certification.
‘Any valid pertinent reason stated will be sufficient to uphold the order.’ ”
(Linder v. Thrifty Oil Co. (2000) 23 Cal. 4th 429, 436 (Linder); accord, Ayala v.
Antelope Valley Newspapers, Inc. (2014) 59 Cal. 4th 522, 530 [“We review the
trial court’s actual reasons for granting or denying certification; if they are
11
erroneous, we must reverse, whether or not other reasons not relied upon
might have supported the ruling.”].) Nonetheless, for the underlying factual
issues, “[w]e must ‘[p]resum[e] in favor of the certification order . . . the
existence of every fact the trial court could reasonably deduce from the
record.’ ” (Brinker, supra, 53 Cal.4th at p. 1022.)
II
Plaintiffs’ Claims and Theory of Liability
A
Plaintiffs allege they were misclassified as independent contractors by
LJG and, as a consequence, they were deprived of various wage-and-hour
protections. These protections include a minimum wage, overtime pay, meal
and rest breaks, expense reimbursement, timely final wage payment, and
itemized wage statements. Echoing a recent appellate opinion, plaintiffs
contend the “overarching inquiry” in this litigation is misclassification.
(See Gonzales v. San Gabriel Transit, Inc. (2019) 40 Cal. App. 5th 1131, 1163
(Gonzales), review granted Jan. 15, 2020, S259027.) To demonstrate
misclassification, they rely solely on “part B” of Dynamex’s ABC test, i.e., in
order to properly be treated as independent contractors, plaintiffs must
perform work that is outside the usual course of LJG’s business. (Dynamex,
supra, 4 Cal.5th at p. 961.) This issue can present a common question
sufficient to support class certification. (Id. at pp. 965-966.)
As a threshold matter, LJG disputes that the Dynamex test applies to
most of plaintiffs’ claims. It asserts that only plaintiffs’ overtime and meal
break claims are based on IWC wage orders and the remainder are based on
the Labor Code. For the latter, LJG contends plaintiffs must satisfy the test
for employment described in S.G. Borello & Sons, Inc. v. Department of
Industrial Relations (1989) 48 Cal. 3d 341, 350-351. Plaintiffs respond that
12
the trial court did not rely on this argument and that it is wrong on the
merits. We need not resolve these issues. It is plaintiffs’ theory of recovery
that determines whether class certification is appropriate. (Brinker, supra,
53 Cal.4th at p. 1025.) The primary question on class certification is whether
plaintiffs’ theory of recovery is amenable to class treatment, not whether the
theory of recovery is correct. (Ibid.) Plaintiffs’ theory of recovery here is
based on Dynamex.
B
Plaintiffs’ primary contention on appeal is that the trial court
erroneously denied class certification only because it believed each class
member would have to individually prove his or her damages. Plaintiffs
correctly state the applicable law: “ ‘ “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.” ’ ” (Duran, supra, 59 Cal.4th at p. 28; accord, Sav-On Drug Stores,
Inc. v. Superior Court (2004) 34 Cal. 4th 319, 332-333 (Sav-On).)
Plaintiffs point out that the trial court specifically referenced the fact
that signature gatherers worked all over the state, at different wage rates,
there were no time records, and “everybody’s got a different story.” In
plaintiffs’ view, these comments show that the individual issues identified by
the trial court were damages issues. We disagree. First, neither the
underlying briefing nor the trial court’s order denying class certification were
limited to these comments. The court correctly articulated the legal
standards governing class certification and found that “Plaintiffs have not
met their burden that common questions of law and fact predominate. In
addition, Plaintiffs have not established that class treatment is superior in
this case.” The court explained its reasoning “in part” with the comments
13
cited by the plaintiffs. The legal grounds cited by the court, predominance
and superiority, were broader and are the correct subjects for our review.
(See Dailey v. Sears, Roebuck & Co. (2013) 214 Cal. App. 4th 974, 985-987.)
Second, even limiting ourselves to the specific comments cited by plaintiffs,
the court’s observation that “everybody’s got a different story” is not limited
to damages. The “stor[ies]” told by each signature gatherer in the record
include issues of liability as well, which were in part the basis for LJG’s
opposition.3
Moreover, with the exception of plaintiffs’ wage statements claim, the
trial court could reasonably conclude that plaintiffs had not shown that
common issues predominated over individual issues on each of their claims
against LJG. Each of these claims would require an individual showing of
liability, not merely damages, given the wide variation of work experiences in
the record.
The opinion in Sotelo v. MediaNews Group, Inc. (2012) 207 Cal. App. 4th
639 (Sotelo) is instructive in this context. In Sotelo, plaintiffs brought a
putative wage-and-hour class action against a newspaper publisher. (Id. at
p. 645.) They alleged they were misclassified as independent contractors and
asserted claims similar to those at issue here. (Ibid.) They sought to certify
a class of individuals who worked for any newspaper owned by the publisher
and were involved in “folding, inserting advertising materials into, bagging,
bundling, loading, and/or delivering said newspaper to its residential
subscribers, and/or in overseeing such work by other individuals on any such
3 The court’s order did not adopt other aspects of LJG’s opposition,
including that the class was not ascertainable and that the named plaintiffs
were not adequate class representatives. This additional fact confirms the
breadth of the court’s reasoning.
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newspaper’s behalf[.]” (Ibid.) The trial court denied their motion for class
certification. (Id. at p. 647.)
On appeal, plaintiffs argued that the primary issue was
misclassification and any variability in class members’ work hours or
schedules went to damages. (Sotelo, supra, 207 Cal.App.4th at p. 654.) The
reviewing court disagreed. It explained, “[S]imply having the status of an
employee does not make the employer liable for a claim for overtime
compensation or denial of breaks. An individual employee establishes
liability by proving actual overtime hours worked without overtime pay, or by
proving that he or she was denied rest or meal breaks. A class, on the other
hand, . . . may establish liability by proving a uniform policy or practice by
the employer that has the effect on the group of making it likely that group
members will work overtime hours without overtime pay, or to miss rest/meal
breaks.” (Ibid.) Because plaintiffs did not identify a common policy or
practice requiring overtime or denying meal and rest breaks, which could be
proved by common evidence, the trial court could properly deny class
certification. (Id. at pp. 654-655.)
More recently, in McCleery v. Allstate Insurance Co. (2019)
37 Cal. App. 5th 434, 438 (McCleery), plaintiffs identified a putative class of
property inspectors. The property inspectors worked for three services
companies to perform property inspections for two major insurers. (Ibid.)
Plaintiffs alleged they were misclassified as independent contractors and
brought various wage-and-hour claims based on that misclassification.
(Ibid.) The trial court found that “common issues existed as to the class
members’ employment status,” but it denied class certification on the ground
that plaintiffs’ trial plan was “unworkable because it failed to address
individualized issues and deprived defendants of the ability to assert
15
defenses.” (Id. at p. 439.) It determined that the working hours and
practices of the class members varied widely: “The trial court found that
inspectors fell into several subgroups: those who essentially worked full time
for defendants; those who worked part time for defendants—either because
they performed inspections only part time or sometimes worked for nonparty
companies; those who worked with others to perform the assigned
inspections; and those who interspersed inspections with other activities,
such as school or parenting.” (Id. at p. 448.) Although plaintiffs had
surveyed the class members in an attempt to produce an expert report that
could be used as common proof, the court found the survey inadequate.
(Ibid.) Moreover, the court found that “plaintiffs’ trial plan failed to address
the wide work-practice variations among inspectors and offered no way to
manage individualized issues, but simply ignored them.” (Ibid.)
The reviewing court affirmed. (McCleery, supra, 37 Cal.App.5th at
p. 439.) It explained that “the trial court reasonably concluded plaintiffs’
trial plan failed to address how they could fairly establish defendants’
liability on a classwide basis as to any claim.” (Id. at p. 451.) The insurers’
liability for wage-and-hour violations depended on the nature and extent of
work performed by each inspector for each insurer, but there was no way to
prove such work without individualized evidence. (Id. at pp. 451-452.)
Crucially, in response to a petition for rehearing, the McCleery court
rejected plaintiffs’ assertion that the individualized evidence at issue was
relevant only to damages, not liability. (McCleery, supra, 37 Cal.App.5th at
p. 454.) It explained, “Actually, we held, as discussed above, that although
the trial court found common proof predominated as to ‘defendants’ status as
employers,’ ‘ “simply having the status of an employee does not make the
employer liable.” ’ . . . We went on to hold that plaintiffs had failed to adduce
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predominately common evidence as to liability against any defendant under
any cause of action.” (Ibid.)4
Here, as in Sotelo and McCleery, the record shows the work habits and
practices of the signature gatherers vary widely. LJG does not tell signature
gatherers where or how long to work. Some signature gatherers work long
hours; others do not. Some work alone; others with partners. Many work
other jobs. Almost all appear to work for other signature brokers. The
signature gatherers can collect signatures for multiple brokers at the same
time. And, because the signature gatherers can turn their collected
signatures in to any broker handling that petition drive, it may be unknown
during the work day which broker the signature gatherer is “working for” in
any meaningful sense. As the trial court noted, each signature gatherer’s
“story” is different, and the court could reasonably reject class certification on
that basis. For reasons we explain, the trial court could reasonably find that
individual issues of liability predominate for the non-wage statement claims,
notwithstanding the common question of misclassification. “[C]lass
treatment is not appropriate ‘if every member of the alleged class would be
required to litigate numerous and substantial questions determining his
individual right to recover following the “class judgment” ’ on common
issues.” (Duran, supra, 59 Cal.4th at p. 28.)
Plaintiffs point out that the underlying question of misclassification is
a question common to all class members. But the existence of a common
4 Plaintiffs attempt to limit McCleery to its specific context, i.e., an
inadequate litigation plan. But the litigation plan in McCleery was
inadequate because it “failed to address how they could fairly establish
defendants’ liability on a classwide basis as to any claim.” (McCleery, supra,
37 Cal.App.5th at p. 451.) Its discussion of classwide liability is therefore
relevant to the circumstances here.
17
question does not compel class certification. Plaintiffs must show that
common questions predominate, i.e., “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.’ ” (Brinker, supra,
53 Cal.4th at p. 1021.) Misclassification “is only part of the equation.”
(Sotelo, supra, 207 Cal.App.4th at p. 654.) The trial court could reasonably
find that the common issue of misclassification did not predominate over the
individual issues that would actually establish LJG’s liability on the non-
wage statement claims. (See Kizer v. Tristar Risk Management (2017)
13 Cal. App. 5th 830, 843 (Kizer).) And it could, in its discretion, decline to
certify a class action as to misclassification only for these claims.
(See McCleery, supra, 37 Cal.App.5th at p. 456.)
Plaintiffs rely heavily on Gonzales, supra, 40 Cal. App. 5th 1131, review
granted, to argue that misclassification alone generally compels a finding of
predominance in the wage-and-hour context. Plaintiffs read too much into
Gonzales’s holding. In that case, a plaintiff brought a putative wage-and-
hour class action alleging misclassification. (Id. at pp. 1141-1142.) Plaintiff
sought certification of a class of taxi and van drivers who drove vehicles for
the defendant. (Id. at p. 1142.) In a pre-Dynamex ruling, the trial court
denied class certification. (Id. at pp. 1140, 1146.) On appeal, the trial court
reversed and remanded for reconsideration in light of Dynamex. (Id. at
p. 1141.)
In so doing, the Gonzales court offered guidance for the trial court on
remand. Regarding one disputed element, typicality, the plaintiff alleged
that, as independent contractors, class members “were required at their own
expense to install equipment and provide tools to access [defendant’s]
18
dispatch system, and to obtain insurance and perform maintenance, all
expenses [plaintiff] contends should properly be borne by their employer and
were denied the benefits of wage order protections.” (Gonzales, supra,
40 Cal.App.5th at p. 1163, review granted.) The defendant argued that some
class members leased and others owned their vehicles, which would cause a
“variation” in the expenses incurred by each member. (Ibid.) The Gonzales
court noted that “such a difference would likely be a function of the damages
to which an individual driver was entitled. That a calculation of individual
damages will, at some point, be required does not foreclose the possibility of
taking common evidence on the issue of misclassification questions.
[Citation.] The overarching inquiry is whether class members were
misclassified during the class period. If so, as discussed in the overlapping
analysis of commonality above, the class members are entitled to a
determination as to whether [defendant] misclassified them as independent
contractors. The fact that individual members of the class have different
damages does not preclude class certification.” (Ibid.)
Plaintiffs here argue that, like Gonzales, the “overarching inquiry” is
misclassification and therefore common issues predominate. (Gonzales,
supra, 40 Cal.App.5th at p. 1163, review granted.) But Gonzales did not
imply, much less hold, that every putative wage-and-hour class alleging
misclassification must be certified. In context, it appears the class members
in Gonzales were all required by the defendant to incur business expenses to
some extent; defendants’ liability would be subject to classwide proof on the
basis of its policies and practices. (See ibid. [“For instance, regardless of a
driver’s status as lessee or owner/operator, drivers were charged weekly
‘lease’ fees to perform services under the [defendant’s] umbrella.”].) The
counterarguments raised by the defendant would cause, at most, a
19
“variation” in the rates or amounts. (Ibid.) As such, the “overarching
inquiry” was misclassification, not the defendant’s liability if the class
members were misclassified, and any individual issues were limited to
damages. Here, unlike Gonzales, LJG’s liability for most wage-and-hour
violations does not simply flow from misclassification. The trial court could
reasonably find that individual proof must be considered. We consider each
of plaintiffs’ claims in the next part.
C
Plaintiffs’ claims for overtime pay and meal and rest break violations
are dependent on hours worked. “An individual employee establishes
liability by proving actual overtime hours worked without overtime pay, or by
proving that he or she was denied rest or meal breaks.” (Sotelo, supra,
207 Cal.App.4th at p. 654; accord, McCleery, supra, 37 Cal.App.5th at p. 451.)
Plaintiffs have not shown that LJG’s liability for overtime pay and meal and
rest break violations can be proven by classwide proof. For example,
plaintiffs have not shown that LJG had any policy or practice requiring
certain work hours by signature gatherers. (See Kizer, supra, 13 Cal.App.5th
at pp. 843-844 [“Plaintiffs presented no evidence to show [defendant] had a
written or de facto policy requiring claims examiners to work overtime, or
that working overtime by claims examiners otherwise was subject to common
proof.”].) Instead, individual signature gatherers were free to work, or not,
according to their own desires. They could work for LJG and another broker
on the same day or even simultaneously. As such, the trial court could
reasonably find that LJG’s liability for overtime pay and meal and rest break
violations will depend on individual proof of how long each signature
gatherer worked for LJG on a given day or week.
20
Plaintiffs argue that “there is more than enough [in the record] to
suggest the signature gatherers likely worked uncompensated overtime
hours.” But the fact that individual signature gatherers might have overtime
claims is insufficient. (See Kizer, supra, 13 Cal.App.5th at p. 844.) It does
not address the relevant issue, i.e., whether plaintiffs’ theory of liability is
common to the class by, for example, relying on “a uniform policy or practice
by the employer that has the effect on the group of making it likely that
group members will work overtime hours without overtime pay, or to miss
rest/meal breaks.” (Sotelo, supra, 207 Cal.App.4th at p. 654.) Plaintiffs have
shown, at most, that some class members chose to work hours that would
entitle them to overtime or meal and rest breaks. They have not alleged any
policy or practice by LJG that prompted such work hours. (Cf. Sav-On,
supra, 34 Cal.4th at p. 327 [plaintiffs’ theory of recovery was, in part, that
“defendant required all class members to work more than 40 hours per
week”]; Jaimez v. Daiohs USA, Inc. (2010) 181 Cal. App. 4th 1286, 1302
[identifying as a “common factual issue[]” whether defendant “had a uniform
policy of requiring [class members] to work overtime, but failing to pay them
for their overtime hours”].) The trial court was therefore entitled to find that
common issues of liability did not predominate.5
5 Plaintiffs criticize the trial court for referencing the lack of time records
as a reason to deny certification. While plaintiffs are correct that the lack of
time records does not preclude certification, the trial court did not make such
a broad finding. It was one of several reasons why certification was
unwarranted. Plaintiffs’ own authorities show that they must still come
forward with some evidence tending to show uncompensated work (see, e.g.,
Duran, supra, 59 Cal.4th at p. 41), and plaintiffs have not shown the court
abused its discretion by rejecting their plans for representative testimony or
statistical analysis to satisfy their burden in this context.
21
Plaintiffs rely on Bradley v. Networkers International, LLC (2012)
211 Cal. App. 4th 1129 (Bradley), but its factual circumstances were very
different. In Bradley, the plaintiffs sought certification of a putative class of
skilled technicians who were hired to provide repair and installation services
at cell tower sites. (Id. at p. 1136.) Plaintiffs alleged they were misclassified
as independent contractors and the defendant was liable for meal and rest
break violations, among other wage-and-hour claims. (Ibid.) In a
declaration, one named plaintiff asserted they received “daily assignments”
from the defendant and the defendant required them to “follow specific
directions as to the scheduling and priority of the work.” (Ibid.) Once at a job
site, they were “ ‘not permitted to leave the site until the problem was fully
resolved,’ ” which precluded any meal or rest breaks. (Id. at p. 1137.) The
plaintiff believed he would be fired if he took a rest break. (Ibid.) Other
named plaintiffs and class members recounted similar experiences. (Id. at
pp. 1137-1139.)
Bradley held that plaintiffs’ theory of liability was amenable to class
treatment. (Bradley, supra, 211 Cal.App.4th at p. 1149.) It explained, “ ‘An
employer is required to authorize and permit the amount of [rest and meal]
break time[s] called for under the wage order for its industry. If it does
not . . . it has violated the wage order and is liable.’ [Citation.] Claims
alleging a ‘uniform policy consistently applied to a group of employees is in
violation of the wage and hour laws are of the sort routinely, and properly,
found suitable for class treatment.’ ” (Ibid.) “[P]laintiffs’ theory of recovery is
based on [defendant’s] (uniform) lack of a rest and meal break policy and its
(uniform) failure to authorize employees to take statutorily required rest and
meal breaks. The lack of a meal/rest break policy and the uniform failure to
authorize such breaks are matters of common proof.” (Id. at p. 1150.)
22
Here, by contrast, the trial court could reasonably find that plaintiffs’
experiences were too varied to allow common proof of meal and rest break
violations. While LJG did not have a meal or rest break policy, it also did not
have a work policy. Unlike in Bradley, it did not impose any work hours or
tasks on the signature gatherers. They were free to work (or not) and free to
take breaks (or not), according to their own desires. This appeal is also
unlike Naranjo v. Spectrum Security Services, Inc. (2019) 40 Cal. App. 5th 444
(Naranjo), review granted Jan. 2, 2020, S258966, where the employer had an
explicit policy prohibiting off-duty breaks. (Id. at pp. 476, 480.) Plaintiffs
have not shown “a uniform policy or practice by the employer that has the
effect on the group of making it likely that group members will . . . miss
rest/meal breaks.” (Sotelo, supra, 207 Cal.App.4th at p. 654.) While some
signature gatherers may have worked a sufficient number of hours for LJG to
entitle them to a rest or meal break, the trial court could find that such
23
liability was predominantly a matter of individual rather than common
proof.6
LJG’s liability for minimum wage violations will also depend on
individual proof. (See McCleery, supra, 37 Cal.App.5th at p. 452.) LJG paid
the signature gatherers per signature collected. They did not work any set
days or hours, and the payment per signature varied wildly. Each signature
gatherer would have to prove how many hours they worked for LJG, and
what LJG paid them, to establish a minimum wage violation—even setting
aside the issue of LJG’s liability when a signature gatherer is simultaneously
collecting signatures for another broker as well. The trial court could
reasonably find that these individual issues predominate over the common
issue of misclassification.
6 Plaintiffs prominently cite the unpublished federal district court
opinion in Johnson v. Serenity Transportation, Inc. (N.D.Cal. Aug. 1, 2018)
2018 WL 3646540 (Johnson), but it does not support their position on these
claims. Johnson considered a putative class of mortuary drivers. (Id. at *1.)
It noted that certification of minimum wage, overtime, and meal and rest
break claims would be appropriate if plaintiffs’ “on-call time,” i.e., the
uniform 24-hour shifts worked by each class member, were compensable. (Id.
at *34.) But, if on-call time were not compensable, “then Plaintiffs’
underlying minimum wage and overtime claims are not suitable for class
certification because the actual number of hours worked by each driver other
than on-call time must be determined on an individual basis” by reviewing
various records and “then determining whether that particular driver worked
in excess of eight hours or whether the per delivery fee was less than the
minimum wage that driver was entitled to for the number of hours the driver
worked.” (Id. at *37.) For the same reason, whether the Johnson plaintiffs’
meal and rest break claims are certifiable “also turn[ed] on whether on-call
time is compensable.” (Id. at *38.) Here, there is no on-call time. Plaintiffs’
claims depend on their individual hours worked. As such, the trial court did
not err in finding that individual issues predominated.
24
Plaintiffs argue that all class members have a minimum wage claim
because LJG admits it does not pay a minimum hourly wage and “an
employer cannot satisfy its minimum wage obligations by averaging an
employee’s piece-rate pay [here, pay per signature] over the hours they
worked to determine in hindsight if they received [the] minimum wage for
each hour worked.” Plaintiffs’ argument misstates the general rule. Our
Supreme Court discussed wage averaging and wage borrowing in Oman v.
Delta Air Lines, Inc. (2020) 9 Cal. 5th 762, 779 (Oman). Although there are
exceptions, the general rule is that wage averaging is permissible: “For
purposes of evaluating whether an employee has received at least the hourly
minimum wage for tasks or periods compensated under the contract, it is
generally permissible to translate the contractual compensation—whether it
be done by task, work period, or other reasonable basis—into an hourly rate
by averaging pay across those tasks or periods.” (Id. at p. 782.) Plaintiffs are
therefore incorrect that LJG is liable to all class members merely by virtue of
its piece-rate compensation scheme.
Plaintiffs rely on Gonzalez v. Downtown LA Motors, LP (2013)
215 Cal. App. 4th 36, but it discussed a specific exception to the general rule.
The plaintiffs in Gonzalez were service technicians who were paid on a “piece-
rate” basis for automotive repair work. (Id. at p. 40.) Their actual working
hours were spent on both productive time, when they were performing repair
work, and nonproductive time, when they were waiting for assignment.
(Ibid.) They sought minimum wage compensation for their nonproductive
time. (Ibid.) Their employer argued that their compensation should be
averaged over both productive and nonproductive time to determine whether
they were paid the minimum wage. (Ibid.) On appeal, the reviewing court
held that such averaging was impermissible. (Ibid.) “[C]lass members were
25
entitled to separate hourly compensation for time spent waiting for repair
work or performing other nonrepair tasks directed by the employer during
their workshifts . . . .” (Id. at pp. 40-41.) As our Supreme Court has
explained, the rule is not against averaging, per se, but against borrowing
compensation paid for one category of work and applying it to a different
category: “State law prohibits borrowing compensation contractually owed
for one set of hours or tasks to rectify compensation below the minimum wage
for a second set of hours or tasks, regardless of whether the average of paid
and unpaid (or underpaid) time exceeds the minimum wage.” (Oman, supra,
9 Cal.5th at p. 781.)
Plaintiffs also argue that they were entitled to a separate minimum
wage for time spent on rest breaks. (See Bluford v. Safeway, Inc. (2013)
216 Cal. App. 4th 864, 872 [“[A] piece-rate compensation formula that does not
compensate separately for rest periods does not comply with California
minimum wage law.”].) But this argument assumes that class treatment of
plaintiffs’ rest break claims would be appropriate. It is therefore
unpersuasive for the same reasons as discussed above. 7
LJG’s liability for unreimbursed business expenses likewise depends on
individual proof. “An employer shall indemnify his or her employee for all
necessary expenditures or losses incurred by the employee in direct
consequence of the discharge of his or her duties.” (Lab. Code, § 2802.)
7 On appeal, for the first time, plaintiffs argue that they engaged in
unproductive time that should be separately compensated, such as picking up
and returning signature sheets. Because this argument was not presented to
the trial court, we will not consider it for the first time on appeal. (See Nellie
Gail Ranch Owners Association v. McMullin (2016) 4 Cal. App. 5th 982, 997;
Fairbanks v. Farmers New World Life Insurance Co. (2011) 197 Cal. App. 4th
544, 547 [“Plaintiffs cannot argue now that the trial court erred in failing to
rule on a theory plaintiffs failed to pursue before that court.”].)
26
Plaintiffs agree that “before an employer’s duty to reimburse is triggered, it
must either know or have reason to know that the employee has incurred an
expense. Once the employer has such knowledge, then it has the duty to
exercise due diligence and take any and all reasonable steps to ensure that
the employee is paid for the expense.” (Stuart v. RadioShack Corp.
(N.D.Cal. 2009) 641 F. Supp. 2d 901, 904.) LJG’s liability therefore depends
on, for each signature gatherer and each expense, whether (1) the expense
was incurred in direct consequence of the signature gatherer’s work for LJG
(rather than some other broker or for some other purpose) and (2) LJG knew
or had reason to know that the signature gatherer incurred such an expense
in his or her work for LJG. Plaintiffs have not shown that LJG had any
policy or practice requiring signature gatherers to incur expenses.
(Cf. Gonzales, supra, 40 Cal.App.5th at p. 1163, review granted.) While LJG
admitted it knew that signature gatherers often used furniture and materials
such as pens and clipboards, it did not admit that it knew or should have
known of any specific expenditures as a direct consequence of their work for
LJG—or that any such expenditures were necessary. Even if some signature
gatherers incurred reimbursable expenses, the trial court could reasonably
find that individual issues predominate based on the widely varying
experiences and work habits of each class member.
Similarly, LJG is only liable for failure to pay timely final wages if the
wages are, in fact, final. Individual proof is required to determine whether
any signature gatherer was discharged or otherwise openly ended his or her
relationship with LJG, which triggered the duty to pay final wages. LJG is
likewise liable for failure to pay final wages only if it did not pay. Each
individual signature gatherer would have to prove such a violation. The fact
that, in the abstract, “some signature gatherers have a claim” is insufficient.
27
For substantially the same reasons as discussed above, the trial court
could also reasonably find that the class action procedure was not superior to
separate individual actions for these claims. The experiences of each
signature gatherer were so varied that the benefits of a class action would be
undermined by numerous individual issues. (See Ali v. U.S.A. Cab Ltd.
(2009) 176 Cal. App. 4th 1333, 1353.) Because these experiences were
fundamentally driven by the signature gatherers’ own desires, rather than
LJG’s policies or practices, we will not disturb the trial court’s determination
that a class action was not superior. As our Supreme Court explained,
“Unless an employer’s uniform policy or consistent practice violates wage and
hour laws [citation], California courts have been reluctant to certify class
actions alleging misclassification.” (Duran, supra, 59 Cal.4th at pp. 30-31.)
The foregoing discussion, however, does not apply to plaintiffs’ itemized
wage statement claim. LJG has a uniform policy of not providing signature
gatherers with itemized wage statements. The statute likewise establishes a
uniform standard of liability: An employee is “deemed to suffer injury” if an
employer fails to provide a wage statement or if the wage statement fails to
include certain information. (Lab. Code, § 226, subd. (e)(2)(A)-(B).) Such an
employee may recover statutory penalties or actual damages for each
knowing and intentional failure to provide a proper wage statement. (Id.,
§ 226, subd. (e)(1).) LJG’s wage statement liability therefore depends on
whether the signature gatherers were misclassified as independent
contractors. (See Johnson, supra, 2018 WL 3646540, at *45 [“[A]s the Court
understands it, [defendant] did not provide statements identifying any hours
worked; thus, if the drivers are employees, [defendant] violated the wage
statement law regardless of how many hours any particular driver
28
worked.”].) Indeed, LJG’s counsel appeared to concede this point during oral
argument.
Because LJG’s liability on plaintiffs’ wage statement claim depends on
misclassification, which under plaintiffs’ theory of liability is a common
question, the trial court abused its discretion by determining that common
questions did not predominate on this claim. (See Sali v. Corona Regional
Medical Center (9th Cir. 2018) 909 F.3d 996, 1011 [reversing order denying
class certification for wage statement claim]; Gomez v. J. Jacobo Farm Labor
Contractor, Inc. (E.D.Cal. 2019) 334 F.R.D. 234, 264-265 [denying class
certification for most wage-and-hour claims but granting class certification
for wage statement claim]; Johnson, supra, 2018 WL 3646540, at *45
[granting class certification for wage statement claim].)
In its briefing, LJG cites McCleery, supra, 37 Cal.App.5th at page 452,
for the proposition that even wage statement claims could be “unmanageable”
under certain circumstances. Here, however, neither the trial court’s order
nor the briefing provides any grounds to refuse certification of the wage
statement claim on the basis of manageability or superiority. We therefore
cannot affirm on this basis.
“We are not, however, prepared to say that class treatment necessarily
is proper.” (Linder, supra, 23 Cal.4th at p. 448.) Class treatment of
plaintiffs’ itemized wage statement claim may present problems of
manageability or superiority that the trial court, in its discretion, may find
compelling. We therefore will not simply direct the trial court to certify a
class. (See Benton v. Telecom Network Specialists, Inc. (2013)
220 Cal. App. 4th 701, 731.) On remand, the trial court should have the
opportunity to consider the superiority of class treatment for this claim,
standing alone, in the first instance. (See generally Gonzales, supra,
29
40 Cal.App.5th at pp. 1163-1164, review granted.) We express no opinion on
the issue.
III
Motion for Reconsideration
Plaintiffs contend the trial court erred by denying their motion for
reconsideration. The basis for their motion was the publication of two new
appellate opinions, Gonzales, supra, 40 Cal. App. 5th 1131, review granted,
and Naranjo, supra, 40 Cal. App. 5th 444, review granted. Plaintiffs argued
that Gonzales and Naranjo “hold that individual issues relating to how
individual class members were harmed by an alleged unlawful policy does not
preclude class certification.” The trial court denied reconsideration. In a
tentative ruling, which was never formally entered, the court noted that the
Supreme Court had granted review of both opinions. It therefore found that
the cases were not new law for purposes of reconsideration. Although an
order denying a motion for reconsideration is not separately appealable, we
may review it as part of plaintiffs’ appeal from the underlying order denying
class certification. (See Code Civ. Proc., § 1008, subd. (g).)
Code of Civil Procedure section 1008, subdivision (a) authorizes a party
to seek reconsideration of an adverse order “based upon new or different
facts, circumstances, or law.” We review the court’s order denying
reconsideration for abuse of discretion. (Graham v. Hansen (1982)
128 Cal. App. 3d 965, 971.)
Plaintiffs have not shown an abuse of discretion. The trial court was
not required to find that Gonzales, supra, 40 Cal. App. 5th 1131, review
granted, and Naranjo, supra, 40 Cal. App. 5th 444, review granted, were “new
law” for purposes of reconsideration. Both relied on longstanding class
certification principles. And, as discussed above, they were factually
30
dissimilar to the dispute before the court. While plaintiffs are correct that
the Supreme Court’s grant of review did not preclude a finding that Gonzales
and Naranjo were new law, they have not shown the court was required to
make such a finding. Nor have they substantiated their claim that the trial
court was required to “explain why it did not find Gonzales and Naranjo
persuasive.” They have not established reversible error. We therefore affirm
the order denying reconsideration, to the extent it is not mooted by our
partial reversal of the underlying class certification order.
DISPOSITION
The order denying class certification is reversed in part as to plaintiffs’
wage statement claim under Labor Code section 226. The trial court shall
reconsider certification for this claim and conduct further proceedings
consistent with this opinion. In all other respects, the order denying class
certification is affirmed. Plaintiffs’ challenge to the order denying
31
reconsideration is moot as to the wage statement claim, but the order is
otherwise affirmed. The parties shall bear their own costs on appeal.
GUERRERO, J.
WE CONCUR:
BENKE, Acting P. J.
IRION, J.
32