Joseluis Alcantar v. Hobart Service

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOSÉLUIS ALCANTAR, on behalf of No. 13-55400
himself and all others similarly
situated, D.C. No.
Plaintiff-Appellant, 5:11-cv-01600-
PSG-SP
v.
HOBART SERVICE; ITW FOOD OPINION
EQUIPMENT GROUP, LLC,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, District Judge, Presiding
Argued and Submitted
June 3, 2015—Pasadena, California
Filed September 3, 2015
Before: Milan D. Smith, Jr. and N. Randy Smith, Circuit
Judges and Joan Humphrey Lefkow,* Senior District Judge.
Opinion by Judge Lefkow;
Partial Concurrence and Partial Dissent by Judge N.R.
Smith
*
The Honorable Joan Humphrey Lefkow, Senior District Judge for the
U.S. District Court for the Northern District of Illinois, sitting by
designation.
2 ALCANTAR V. HOBART SERVICE
SUMMARY**
Labor Law / Class Certification
The panel affirmed in part, and reversed and remanded in
part, the district court’s orders denying class certification and
granting partial summary judgment in an action brought by a
putative class of service technicians, alleging violations of
California Labor Code § 1194 and derivative claims under
California’s Unfair Competition Law and Private Attorney
General Act.
The district court denied plaintiff’s motion for class
certification because plaintiff failed to satisfy the
commonality requirement of Fed. R. Civ. P. 23(a)(2) and the
predominance requirement of Fed. R. Civ. P. 23(b)(3).
Addressing the commonality requirement and plaintiffs’
commute-time claim, the panel held that the district court
erred in denying class certification because it evaluated the
merits rather than focusing on whether the questions
presented – meritorious or not – were common to the class.
Addressing the predominance requirement and plaintiff’s
meal- and rest-break claim, the panel held that the district
court did not abuse its discretion in concluding that the
proposed class failed under Fed. R. Civ. P. 23(b), where the
district court held that questions as to why service technicians
missed their meal and rest breaks would predominate over
questions common to the class.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
ALCANTAR V. HOBART SERVICE 3
The panel reversed the district court’s summary judgment
in favor of the employer on plaintiff’s commute-time claim
because there was a genuine dispute of material fact as to
whether technicians were required to commute in the
employer’s vehicles.
The panel affirmed the district court’s summary judgment
in favor of the employer on plaintiff’s Private Attorney
General Act claim because the letter in which plaintiff
disclosed his allegations against the employer did not contain
sufficient facts to comply with the statute’s notice
requirements.
Judge N.R. Smith concurred in the majority’s rejection of
plaintiff’s contentions regarding the denial of class
certification on his meal break claim and the grant of
summary judgment to the employer on his Private Attorney
General Act claim. Judge N.R. Smith dissented in part, and
would hold there is no genuine issue of material fact on the
commute time claim, and he would not remand the case.
COUNSEL
Robin G. Workman (argued), Daniel H. Qualls, and Aviva N.
Roller, Qualls & Workman, LLP, San Francisco, California,
for Plaintiff-Appellant.
Thomas E. Hill (argued) and Mara D. Matheke, Reed Smith
LLP, Los Angeles, California, for Defendants-Appellees.
4 ALCANTAR V. HOBART SERVICE
OPINION
LEFKOW, Senior District Judge:
Joséluis Alcantar wishes to represent a class of service
technicians in his suit against his employer, Hobart Service
(“Hobart”), and its parent company, ITW Food Equipment
Group (“ITW”). Alcantar alleges that Hobart did not
compensate its technicians for the time they spent commuting
in Hobart’s service vehicles from their homes to their job
sites and from those job sites back home. Alcantar also
alleges that Hobart failed to provide its technicians with meal
and rest breaks.
Alcantar appeals from the district court’s denial of class
certification and its grant of partial summary judgment, as
well as its determination that Alcantar did not comply with
the notice requirements of California’s Private Attorneys
General Act (“PAGA”). We have jurisdiction under
28 U.S.C. § 1291. We affirm the judgment in part and
reverse and remand in part.
BACKGROUND
I. Factual Background
ITW, Hobart’s parent company, designs and manufactures
commercial food equipment. Hobart provides after-sale
maintenance and repair services to ITW’s customers.
Alcantar works for Hobart as a service technician.
Alcantar and other service technicians provide most
services on-site. They drive to and from customer locations
in vehicles Hobart provides, carrying the tools and
ALCANTAR V. HOBART SERVICE 5
replacement parts necessary to make repairs. Although they
spend most of their time at customer locations, each
technician is assigned to one of Hobart’s thirteen California
branch offices.
As hourly employees, the technicians are compensated for
the time they spend fixing equipment and the time they spend
driving to and from different assignments. If they commute
in the service vehicles, they are also compensated for the time
spent driving from their homes to their first assignments and
from their last assignments back home, but only to the extent
it falls outside their “normal commute.”
A normal commute is the time it takes a technician to
drive from his home to his branch location. Thus, if a job site
is farther from a technician’s home than his branch office, the
technician is compensated for the extra time it takes him to
reach the job site. But if a job site is the same distance or
closer to a technician’s home than his branch office, the
technician is not compensated for time spent driving to the
job site. Alcantar claims that California law requires Hobart
to compensate technicians for their normal commute. The
crux of this claim is the allegation that, while commuting to
and from work in Hobart’s vehicles, the service technicians
are under Hobart’s control.
As a condition of their employment, Hobart’s service
technicians must sign an agreement governing their use of the
vehicles. The agreement states that the technicians have the
option either to commute in their vehicles or leave the
vehicles at their branch offices:
I understand that I have the option of driving
the company vehicle to my home at the end of
6 ALCANTAR V. HOBART SERVICE
the work day and from my home to my first
work assignment of the day. I also understand
I may park the company vehicle at the office
to which I am assigned.
Alcantar maintains this choice is illusory. The branch offices
do not have enough secured parking spaces for technicians’
vehicles. Because the technicians are responsible for the
tools and parts inside the vehicles, they risk having to pay for
any stolen tools and parts if the vehicles are burglarized at the
branch offices.
The agreement also places numerous restrictions on the
service technicians’ use of the vehicles, including prohibiting
personal use without prior approval:
Personal use of the service vehicle, other than
commuting from home to the first work
assignment and from the last work assignment
to home, is strictly prohibited unless prior
written approval is granted by management.
(An example of personal use for which prior
approval could be granted would be in case of
a dental appointment which cannot be
scheduled after hours or on a weekend.)
The agreement also prohibits service technicians from
carrying passengers without prior approval. Transporting or
storing alcohol is also forbidden, and the agreement does not
give service technicians the option to seek permission from
management to do so. By signing the agreement, the
technicians acknowledge that “any infraction of these rules
will result in disciplinary action up to and including
termination.” Hobart’s personnel manual echoes the
ALCANTAR V. HOBART SERVICE 7
agreement, listing the “[o]peration of a service vehicle for
personal use” as grounds for termination. In addition to these
limitations, Hobart also expects service technicians to
respond to calls on their company-issued cell phones while
driving to and from their first and last assignments of the
day.1 Alcantar alleges that, as a result of these restrictions
and requirements, service technicians are under Hobart’s
control when commuting to and from work and thus must be
compensated for their time.
As hourly employees, the technicians are also required to
take meal and rest breaks throughout the day. Alcantar
alleges that Hobart failed to provide these breaks.
II. District Court Proceedings
Alcantar’s complaint, filed October 5, 2011, alleges
violations of California Labor Code § 1194. The complaint
also alleges derivative claims under the Unfair Competition
Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq., and
PAGA, Cal. Lab. Code §§ 2698 et seq. Alcantar sought
certification of a class of service technicians employed by
Hobart in the four years preceding the filing of the lawsuit.2
1
Hobart changed its policy less than a year after Alcantar filed suit,
announcing to service technicians that it would neither control their
“ability to use the vehicle for personal purposes” nor require them “to
perform any services for Hobart” during the drive to and from work.
2
Alcantar actually sought certification of a class of persons employed
by Hobart in the four years preceding the filing of the lawsuit, with two
subclasses: persons employed as service technicians and persons who
worked overtime and were paid an hourly wage and additional
compensation in the same work week. Only the first subclass is relevant
here.
8 ALCANTAR V. HOBART SERVICE
Hobart and ITW opposed class certification and moved for
summary judgment on all claims.
The district court denied Alcantar’s motion for class
certification, explaining that Alcantar failed to satisfy the
commonality requirement of Federal Rule of Procedure
23(a)(2) and the predominance requirement of Federal Rule
of Procedure 23(b)(3). The court then granted the motion for
summary judgment as to Alcantar’s overtime claim for
commute time but held that there was a genuine issue of
material fact as to whether Hobart complied with California’s
meal- and rest-break requirements. The district court
concluded that the derivative UCL and PAGA claims
survived to the same extent as the overtime claim.
Hobart and ITW moved for summary judgment a second
time, arguing that Alcantar had not complied with PAGA’s
notice requirements. The district court agreed. The parties
stipulated to dismissal of the § 1194 claim and the UCL claim
and Alcantar timely appealed, challenging the district court’s
orders denying certification, granting in part the first motion
for summary judgment, and granting the second motion for
summary judgment.
STANDARD OF REVIEW
We review de novo the district court’s decision to grant
or deny summary judgment, viewing the facts in the light
most favorable to the non-moving party. Alexander v. FedEx
Ground Package Sys., 765 F.3d 981, 987 (9th Cir. 2014).
“[S]ummary judgment is appropriate when ‘there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”’ Albino v. Baca,
ALCANTAR V. HOBART SERVICE 9
747 F.3d 1162, 1168 (9th Cir. 2014) (en banc) (quoting Fed.
R. Civ. P. 56(a)).
We review orders granting or denying class certification
for abuse of discretion. Parra v. Bashas’, Inc., 536 F.3d 975,
977 (9th Cir. 2008). “An abuse of discretion occurs when the
district court, ‘in making a discretionary ruling, relies upon an
improper factor, omits consideration of a factor entitled to
substantial weight, or mulls the correct mix of factors but
makes a clear error of judgment in assaying them.”’ Id. at
977–78 (quoting Waste Mgmt. Holdings, Inc. v. Mowbray,
208 F.3d 288, 295 (1st Cir. 2000)).
DISCUSSION
I. Class Certification
Alcantar contends that the district court improperly
reached the merits of his claims in denying class certification
under Rule 23(a)(2) and Rule 23(b)(3).
“The class action is ‘an exception to the usual rule that
litigation is conducted by and on behalf of the individual
named parties only.”’ Wal-Mart Stores, Inc. v. Dukes, 131 S.
Ct. 2541, 2550 (2011) (quoting Califano v. Yamasaki,
442 U.S. 682, 700–01 (1979)). This exception is justified
where the class members and the class representative possess
the same interest and have suffered the same injury. Id. Rule
23(a) seeks to ensure that the class claims are limited to those
‘“fairly encompassed by the named plaintiff’s claims.”’ Id.(quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 156
(1982)). To that end, Rule 23(a) conditions certification on
a demonstration that
10 ALCANTAR V. HOBART SERVICE
(1) the class is so numerous that joinder of all
members is impracticable; (2) there are
questions of law or fact common to the class;
(3) the claims or defenses of the
representative parties are typical of the claims
or defenses of the class; and (4) the
representative parties will fairly and
adequately protect the interests of the class.
Fed. R. Civ. P. 23(a).
Courts must perform a “rigorous analysis” of these
prerequisities before concluding that Rule 23(a) is satisfied.
Wal-Mart, 131 S. Ct. at 2551 (quoting Falcon, 457 U.S. at
161). The analysis may “entail some overlap with the merits
of the plaintiff’s underlying claim,” id., but Rule 23 “grants
courts no license to engage in free-ranging merits inquiries at
the certification stage.” Amgen Inc. v. Conn. Ret. Plans &
Trust Funds, 133 S. Ct. 1184, 1194–95 (2013). Instead,
“[m]erits questions may be considered to the extent—but only
to the extent—that they are relevant to determining whether
the Rule 23 prerequisites for class certification are satisfied.”
Id. at 1195. Once these prerequisites are satisfied, the
proposed class must meet at least one of the three
requirements set forth in Rule 23(b).
A. Commute-Time Claim
Although Rule 23(a)(2) refers to common “questions of
law or fact” in the plural, even a single common question will
do. Wal-Mart, 131 S. Ct. at 2556. But because “‘[a]ny
competently crafted class complaint literally raises common
questions,’” id. at 2551 (alteration in original) (quoting
Richard A. Nagareda, Class Certification in the Age of
ALCANTAR V. HOBART SERVICE 11
Aggregate Proof, 84 N.Y.U. L. REV. 97, 131–32 (2009)),
courts should look for a “common contention” in determining
whether putative class members’ claims can be litigated
together. Id. “That common contention, moreover, 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.” Id. Thus, it is not just
the common contention, but the answer to that contention,
that is important: “What matters to class certification . . . is
not the raising of common ‘questions’—even in droves —but,
rather the capacity of a classwide proceeding to generate
common answers apt to drive the resolution of the litigation.”
Id. (alterations in original) (quoting Nagareda, supra, at 132).
A common contention need not be one that “will be
answered, on the merits, in favor of the class.” Amgen,
133 S. Ct. at 1191. It only “must be of such a nature that it is
capable of classwide resolution.” Wal-Mart, 131 S. Ct. at
2551 (emphasis added); see Eisen v. Carlisle & Jacquelin,
417 U.S. 156, 178 (1974) (“In determining the propriety of a
class action, the question is not whether the plaintiff or
plaintiffs have stated a cause of action or will prevail on the
merits, but rather whether the requirements of Rule 23 are
met.” (quoting Miller v. Mackey Int’l, 452 F.2d 424, 427 (5th
Cir. 1971)). Thus, “whether class members could actually
prevail on the merits of their claims” is not a proper inquiry
in determining the preliminary question “whether common
questions exist.” Ellis v. Costco Wholesale Corp., 657 F.3d
970, 983 n.8 (9th Cir. 2011). “To hold otherwise would turn
class certification into a mini-trial,” id., when the purpose of
class certification is merely “to select the ‘metho[d]’ best
suited to adjudication of the controversy ‘fairly and
12 ALCANTAR V. HOBART SERVICE
efficiently.”’ Amgen, 133 S. Ct. at 1191 (alteration in
original).
In denying certification, the district court observed that
Alcantar had not offered any evidence demonstrating that
Hobart had a uniform policy requiring technicians to
commute in the service vehicles and stated, “Absent proof of
a company-wide policy, the commonality requirement is not
met.” The court then concluded that, “because there is no
evidence to suggest that technicians were required to drive
the service vehicles to their homes, the lack of a potential
legal argument precludes a common issue of fact or law for
purposes of Rule 23(a)(2).”
The district court’s conclusion is incorrect for two
reasons. First, as explained below, there is a question of fact
as to whether Hobart requires technicians to use its vehicles
for their commute. See infra Part II. Second, it asks too
much of Alcantar, who need only show that there is a
common contention capable of classwide resolution—not that
there is a common contention that “will be answered, on the
merits, in favor of the class.” See Amgen, 133. S. Ct. at 1191.
His contention is that service technicians, by virtue of their
inability to park at Hobart’s facilities, must drive Hobart’s
vehicles to work and, as a result of the rules applicable to
their use of the vehicles, are sufficiently controlled during
that commute to render the time compensable under
California law. If it should ultimately be determined that
Hobart did not exercise sufficient control over the
technicians, that determination would not amount to ‘“some
fatal dissimilarity”’ among class members that would make
use of the class action device inefficient or unfair. Id. at 1197(quoting Nagareda, supra, at 107). Instead, it would generate
“a fatal similarity—failure of proof as to an element of the
ALCANTAR V. HOBART SERVICE 13
plaintiff’s [claim].” Id. (alteration in original) (emphasis
added) (quoting Nagareda, supra, at 107). A determination
either way is inappropriate at the certification stage.
We conclude that the district court erred in denying class
certification because it evaluated the merits rather than
focusing on whether the questions presented—meritorious or
not—were common to the class. By doing so, the district
court made an error of law, thereby abusing its discretion.
B. Meal- and Rest-Break Claim
Alcantar contends that the district court also improperly
evaluated the merits in denying certification of the meal- and
rest-break claim. We need not reach this issue, however,
because we conclude that the district court did not abuse its
discretion in concluding that the proposed class also failed
under Rule 23(b).
In addition to Rule 23(a)’s four prerequisites, a proposed
class must satisfy at least one of the requirements listed in
Rule 23(b). Fed. R. Civ. P. 23(b). Alcantar moved for
certification under Rule 23(b)(3), which requires a court find
that “questions of law or fact common to class members
predominate over any questions affecting only individual
members” and that “a class action is superior to other
available methods for fairly and efficiently adjudicating the
controversy.” Fed. R. Civ. P. 23(b)(3). The district court
held that even if the class met Rule 23(a)’s prerequisites, the
class would still fail under Rule 23(b)(3) because questions
as to why service technicians missed their meal and rest
breaks, whether because of their employer’s failure to provide
them or their own choice to forgo them, would predominate
14 ALCANTAR V. HOBART SERVICE
over questions common to the class. This conclusion is well
within the district court’s discretion.
II. Summary Judgment on Commute-Time Claim
Alcantar challenges the district court’s decision to grant
summary judgment in favor of Hobart on Alcantar’s
commute-time claim. The district court’s decision was based
on its conclusion that § 1194 does not require Hobart to
compensate Alcantar for commute time where there is no
dispute that Hobart does not expressly require the technicians
to commute in its vehicles.
An employee’s commute is not typically compensable
under California labor law, even “when the employee
commutes in a vehicle that is owned, leased, or subsidized by
the employer.” Cal. Lab. Code § 510(b). The time may be
compensable, however, if the employee can classify it as
“hours worked.” The Industrial Welfare Commission has
defined “hours worked” as “the time during which an
employee is subject to the control of an employer,” including
“all the time the employee is suffered or permitted to work,
whether or not required to do so.” See Cal. Code Regs. tit. 8,
§ 11040(2)(K).
In Morillion v. Royal Packing Co., the California
Supreme Court elaborated on what constitutes control.
995 P.2d 139 (Cal. 2000), as modified (May 10, 2000). The
plaintiff in Morillion represented a class of agricultural
laborers. Their employer, Royal Packing Company, required
them to meet at specific departure points each morning so
that it could transport them to the fields where they worked.
At the end of the day, Royal took them back to the departure
points. Id. Royal prohibited the workers from using their
ALCANTAR V. HOBART SERVICE 15
own transportation to get to and from the fields. The
California Supreme Court held that the workers were entitled
to compensation for the time they spent traveling to and from
the fields, reasoning that they “were foreclosed from
numerous activities in which they might otherwise engage if
they were permitted to travel to the fields by their own
transportation.” Id. at 146. The court rejected Royal’s
argument that its decision would render all activities an
employer requires (even grooming) compensable. The court
explained that “[t]he level of the employer’s control over its
employees, rather than the mere fact that the employer
requires the employees’ activity, is determinative.” Id.Alcantar does not assert that Hobart exercises control over
him should he commute in his own vehicle. Therefore, to
prevail at trial he must prove not only that Hobart’s
restrictions on him during his commute in Hobart’s vehicle
are such that he is under Hobart’s control, but also that,
despite Hobart’s profession that use of its vehicles is
voluntary, employees are, as a practical matter, required to
commute in Hobart’s vehicles. The first is a question of law
which we return to the district court. The second is a
question of fact, which we find is appropriate for a jury as
Alcantar has raised a genuine issue of material fact.
Alcantar acknowledges that Hobart has no official policy
requiring technicians to commute in the service vehicles but
argues that, in reality, service technicians have no meaningful
choice. Each vehicle is equipped with tools and service parts.
Although the parties dispute the value of the tools and parts
(Hobart argues that the value ranges from $5,000 to $12,000;
Alcantar insists a stock inventory places it at over $80,000),
they agree that the technicians are responsible for them.
Thus, Alcantar argues, if the tools or parts are stolen, the
16 ALCANTAR V. HOBART SERVICE
technicians must pay for them. Alcantar contends that
because Hobart does not provide sufficient secure parking
spaces, the technicians have to take the vehicles home or risk
theft of the tools and service parts.
Alcantar submits numerous declarations from service
technicians supporting this contention. The declarations state
that even though Hobart did not have a policy requiring
technicians to drive the vehicles home, the technicians could
not risk having to pay for stolen tools or parts. In addition to
the declarations, Alcantar offers deposition testimony from
Hobart’s Rule 30(b)(6) representative, who conceded that
although there is enough unsecured parking at each branch,
there is not enough secured parking for every technician to
leave a service vehicle overnight. Alcantar also submits an
excerpt from Hobart’s personnel manual in which Hobart
acknowledges the value of the tools and service parts:
This vehicle is provided to you for business
purposes only. When you consider the high
dollar value of the truck parts inventory, the
value of the tools, along with the information
contained in the technical bulletins you are
required to carry, you can understand why the
use of the vehicle is limited to business
purposes only.
Alcantar has gone beyond the pleadings and has pointed
to declarations and deposition testimony that raise a genuine
dispute of material fact as to whether technicians are, as a
practical matter, required to commute in Hobart’s vehicles.
It is not for the court to evaluate the persuasiveness of this
evidence. Alcantar need only show that a reasonable jury
ALCANTAR V. HOBART SERVICE 17
could find for him at trial. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 257 (1986).
Hobart maintains that Alcantar’s claim cannot survive
summary judgment because the agreement between Hobart
and the technicians gives technicians the choice to commute
in their vehicles or leave them at their branch office. But as
we explained above, there is a dispute of material fact as to
whether that choice is genuine or illusory. To the extent
Hobart argues that Alcantar’s claim is foreclosed as a matter
of law, the court is unpersuaded. Hobart cites no precedent
stating that an employer must expressly require employees
commute in their vehicles for the employees’ commute time
to be compensable. Nor does the court read Morillion or the
cases interpreting it as imposing such a condition. Indeed,
Morillion’s chief concern was with what happened in
practice—that Royal determined “when, where, and how” the
laborers commuted to work. See Morillion, 995 P.2d at 146.
Cases applying Morillion have looked at employees’ behavior
in evaluating plaintiffs’ claims that their employer required
them to take certain transportation. See Overton v. Walt
Disney Co., 136 Cal. App. 4th 263, 271 (Ct. App. 2006), as
modified (Feb. 1, 2006) (concluding that the employer did not
require its employees to take an employer-provided shuttle
where there was evidence that some employees used
alternative means of transportation); see also Rodriguez v.
SGLC, Inc., No. 2:08-CV-01971, 2012 WL 5705992, at *18
(E.D. Cal. Nov. 15, 2012) (finding that because there was
evidence that all employees took employer-provided
transportation, even though the employer did not explicitly
require they take it, there was a genuine dispute of material
fact as to whether plaintiffs were free to choose their mode of
transportation). Thus, we conclude that Alcantar’s argument
is not foreclosed as a matter of law.
18 ALCANTAR V. HOBART SERVICE
Nor are we persuaded by the reasoning of the dissent,
which relies on a provision of Hobart’s Personnel Policies
and Procedures. That provision states that technicians are
responsible for the replacement of any tool lost or stolen
through the technicians’ negligence and directs technicians
to ensure that their vehicles are locked when left unattended.
Relying on this provision, the dissent contends that “any
argument that the employees are somehow required to drive
their service vehicles home for the security of the vehicle’s
contents has no basis in the record. ” Citing the lack of
evidence that Hobart has ever held a technician liable for a
break-in at the facility, the dissent overlooks the fact that no
one has ever actually parked there.
In contrast to the provision on which the dissent relies, the
“Service Technician Rules/Understandings” document states
that technicians are absolutely responsible for the tools,
regardless of culpability. It provides that service technicians
“accept full responsibility” if tools are “lost, misplaced or . . .
not . . . available when regularly inventoried.” In addition, as
noted above, Alcantar has submitted numerous declarations
from other technicians, stating that they could not risk leaving
the vehicles at Hobart’s facilities because they would be
forced to pay for stolen tools or parts. These declarations say
nothing of negligence, and suggest that technicians have
received the message from Hobart, implicitly or explicitly,
that they are absolutely responsible for the tools. Hobart’s
apparently inconsistent policies make the testimony of
witnesses necessary to resolve the extent to which technicians
are held responsible for the tools and parts. This is unlike the
employees in Overton, who demonstrably had options other
than riding a shuttle bus to work.
ALCANTAR V. HOBART SERVICE 19
III. Summary Judgment on PAGA Claim
Alcantar also contends that the district court erred in
ruling that Hobart was entitled to summary judgment on
Alcantar’s PAGA claim because the letter in which Alcantar
disclosed his allegations against Hobart did not contain
sufficient facts to comply with the statute’s notice
requirements.
PAGA allows an employee to bring an action against an
employer to recover civil penalties for violations of the
California Labor Code. Cal. Lab. Code § 2699(a). First,
however, the employee must give “written notice by certified
mail to the Labor and Workforce Development Agency and
the employer of the specific provisions of [the California
Labor Code] alleged to have been violated, including the facts
and theories to support the alleged violation.” Cal. Lab. Code
§ 2699.3(a)(1). ITW and Hobart argue that the letter Alcantar
sent them and the Labor and Workforce Development
Agency does not include sufficient facts or theories.3 We
agree.
Alcantar’s letter is a series of legal conclusions:
Our offices have been retained by Joseluis
Alcantara [sic] (Plaintiff). Plaintiff is a
former employee of ITW Food Equipment
3
Alcantar asks us not to reach this issue, arguing that Hobart and ITW
waived this affirmative defense or, in the alternative, that it was
insufficiently pleaded. We have no difficulty concluding that the district
court did not abuse its discretion in finding the defense preserved. Hobart
and ITW asserted in their responsive pleading that Alcantar “failed to
satisfy the jurisdictional prerequisites mandated by California Labor Code
Sections 2698, et seq.”
20 ALCANTAR V. HOBART SERVICE
Group, LLC aka Hobart Service (Defendant).
Plaintiff contends that Defendant (1) failed to
pay wages for all time worked; (2) failed to
pay overtime wages for overtime worked;
(3) failed to include the extra compensation
required by California Labor Code section
1194 in the regular rate of pay when
computing overtime compensation, thereby
failing to pay Plaintiff and those who earned
additional compensation for all overtime
wages due; (4) failed to provide accurate
wage statements to employees as required by
California Labor Code section 226; (5) failed
to provide reimbursement for work related
expenses as required by Labor Code § 2802;
and, (6) failed to provide off-duty meal
periods and to pay compensation for work
without off-duty meal periods to its California
employees in violation of California Labor
Code sections 226.7 and 512, and applicable
Industrial Welfare Commission orders. Said
conduct, in addition to the forgoing, violated
each Labor Code section as set forth in
California Labor Code section 2699.5.
The only facts or theories that could be read into this letter
are those implied by the claimed violations of specific
sections of the California Labor Code—that Hobart failed to
pay wages for time worked, failed to pay overtime wages for
overtime worked, failed to include the extra compensation
required by § 1194 in the regular rate of pay when computing
overtime compensation, and so on. This is insufficient.
ALCANTAR V. HOBART SERVICE 21
Section 2699.3(a)(1) was adopted as part of an
amendment to PAGA, intended to cure perceived abuses of
the Act. As the California Court of Appeal observed,
The Senate floor analysis stated “[the
amendment] improves [the Act] by allowing
the Labor Agency to act first on more serious
violations such as wage and hour violations
and give employers an opportunity to cure
less ‘serious’ violations. The bill protects
businesses from shakedown lawsuits, yet
ensures that labor laws protecting California’s
working men and women are enforced—
either through the Labor Agency or through
the courts.”
Dunlap v. Superior Court, 142 Cal. App. 4th 330, 338–39,
47 Cal. Rptr. 3d 614 (2006) (quoting Calif. S. Rules Comm.,
Off. of S. Floor Analyses, Bill Analysis for SB1809, at 5–6
(Aug. 27, 2004)). Plaintiff’s letter—a string of legal
conclusions with no factual allegations or theories of liability
to support them—is insufficient to allow the Labor and
Workforce Development Agency to intelligently assess the
seriousness of the alleged violations. Neither does it provide
sufficient information to permit the employer to determine
what policies or practices are being complained of so as to
know whether to fold or fight. Thus, we affirm. This
conclusion is consistent with our unpublished opinion in
Archila v. KFC U.S. Properties, Inc., 420 F. App’x 667, 669
(9th Cir. 2011), in which we affirmed a district court’s
dismissal of a PAGA claim, observing that “none of the
materials Archila submitted to KFC or the LWDA contain
‘facts and theories’ to support his allegations” and the
demand letter “merely lists several California Labor Code
22 ALCANTAR V. HOBART SERVICE
provisions Archila alleges KFC violated and requests that
KFC conduct an investigation.” See also Amey v. Cinemark
USA Inc., No. 13-CV-05669, 2015 WL 2251504, at **13–14
(N.D. Cal. May 13, 2015); Soto v. Castlerock Farming &
Transp. Inc., No. CIV-F-09-0701, 2012 WL 1292519, at
**7–8 (E.D. Cal. Apr. 16, 2012).
CONCLUSION
For the foregoing reasons, the judgment of the district
court is affirmed in part, reversed in part, and remanded for
further proceedings consistent with this opinion.
AFFIRMED in part, REVERSED in part, and
REMANDED.
The parties shall bear their own costs on appeal.
N.R. SMITH, concurring in part and dissenting in part:
This case should be over. The majority correctly rejects
Alcantar’s contentions regarding (a) the denial of class
certification on his meal break claim, and (b) the grant of
summary judgment to Hobart on his PAGA claim.1 Then, for
reasons quite unclear to me, the majority fails to affirm the
grant of summary judgment on the commute time claim.
1
The majority also correctly concludes that the district court erred in
denying Alcantar class certification on his commute time claim.
However, as I would affirm the district court’s grant of summary judgment
to Hobart on the commute time claim, I would not remand the case,
because remand would be futile.
ALCANTAR V. HOBART SERVICE 23
Even viewing the facts in the light most favorable to
Alcantar, as we must when reviewing a grant of summary
judgment, see Leisek v. Brightwood Corp., 278 F.3d 895, 898
(9th Cir. 2002), there is no genuine issue of material fact on
this issue.
Under California law, Alcantar may only succeed on his
commute time claim if he can show that he is subject to
Hobart’s control during his commute. See Cal. Code Regs.
tit. 8, § 11040(2)(K). If an employer requires its employees
to commute in employer provided vehicles and “prohibit[s]
them from effectively using their travel time for their own
purposes,” then the employer must compensate the employees
for their time as “hours worked.” See Morillion v. Royal
Packing Co., 995 P.2d 139, 146 (Cal. 2000). However, if the
employees are “free to choose—rather than required— to”
utilize employer provided transportation, then they are not
under their employer’s control, regardless if they ultimately
use the employer provided transportation. See id. at 148 n.5;
Overton v. Walt Disney Co., 38 Cal. Rptr. 3d 693, 699 (Ct.
App. 2006).
Here, Alcantar and all Hobart employees can choose to
either commute in their own personal vehicles or commute in
Hobart provided service vehicles. Nothing prevents Hobart
employees from utilizing either option. Thus, because Hobart
employees are free to choose their method to commute, they
are not under Hobart’s control during their commutes and
Hobart is not obligated to pay them for their commute time.
The facts, as alleged by Alcantar, confirm this result:
• No one disputes that Hobart has a written policy that
allows its employees to either (1) park their service
vehicles at Hobart’s facilities at the end of their shift
24 ALCANTAR V. HOBART SERVICE
and commute home in their personal vehicles or
(2) commute in their service vehicles.
• No one disputes that, if Hobart employees choose to
park their service vehicles at a Hobart facility
overnight and commute in their own personal
vehicles, they are not subject to any Hobart policies
that limit how the employees can use their commute
time; i.e., they are not under Hobart’s control.
• Alcantar alleges that, if Hobart employees commute
in their service vehicles, they cannot use the commute
time for their own benefit because of Hobart’s
policies restricting the use of the service vehicles.
Thus, the employees are under Hobart’s control
during their normal commute if they commute in their
service vehicles.
• No one disputes that Hobart facilities do not have
enough secured parking spaces (i.e., parking spaces in
a locked area, either inside a building or in a fenced
area) to allow all Hobart employees to leave their
vehicles overnight in a secured parking area.
However, there is enough unsecured parking for all
vehicles, should every employee choose to park their
vehicle overnight at the Hobart facility.
• No one disputes that Hobart has a general policy
declaring Hobart employees responsible for their tools
and equipment. The “Service Technicians
Rules/Understanding” form (which all Hobart service
technicians sign) states: “Should any of the tools be
lost, misplaced or should they not be available when
regularly inventoried, or returned by me at the request
ALCANTAR V. HOBART SERVICE 25
of the company, then I accept full responsibility for
such tools, and agree to pay for such tools.”
However, it is also undisputed that Hobart has a
separate provision addressing an employee’s liability
for the theft of tools and equipment from their service
vehicles. Hobart’s Personnel Policies and Procedures
Handbook (which is also provided to each Hobart
employee) states: “You are responsible for the
replacement of any tool lost or stolen through your
negligence. . . . Hobart tools are insured against theft
but only when theft results from forced entry to a
vehicle or workshop. Consequently, you must ensure
that your vehicle is securely locked when it is left
unattended.”2
Given these facts (viewed in the light most favorable to
Alcantar), the commute time is not compensable as “hours
worked.” See Morillion, 995 P.2d at 148 n.5; Overton,
38 Cal. Rptr. 3rd at 699. Hobart employees have the choice
to either (1) park their service vehicles overnight at Hobart’s
facilities in a secured area (if spots are available) or in an
unsecured area with locked doors, and commute in their own
personal vehicle (outside of Hobart’s control), or
(2) commute in their service vehicles (under Hobart’s
2
Alcantar admits that this is Hobart’s policy. In fact, Alcantar quotes
the written policy in his opening brief and specifically recognizes that
Hobart’s Regional Director for the Central West and Southern California
Regions confirmed that the written policy was accurate. Additionally,
Alcantar has not argued that Hobart fails to follow its written policy. Nor
has he presented evidence that Hobart has ever held an employee liable for
the cost of stolen tools even though the employee was not negligent.
Therefore, based upon the record before us, it is undisputed that Hobart
only holds its employee liable for the cost of tools stolen from his or her
service vehicle if the employee’s negligence facilitated the theft.
26 ALCANTAR V. HOBART SERVICE
control). Nothing prevents Hobart employees from leaving
their service vehicles overnight at Hobart’s facilities.
Alcantar first argues (and the majority buys his argument)
that the option to leave the service vehicles overnight at
Hobart’s facilities may be illusory, because the vehicles
would be left in unsecured parking lots and the Hobart
employees would be liable for the cost of replacing any stolen
tools or equipment, should the vehicles be burglarized.
However, this argument contradicts the undisputed facts in
the record and Hobart’s policy. Hobart’s undisputed policy
regarding equipment stolen from service vehicles states that
employees are only liable for tools and equipment stolen out
of their vehicles if the theft occurred because of the
employees’ negligence. Hobart’s policy further clarifies the
duty of care that its employees must follow when leaving
their vehicles; they must lock their doors. If tools or
equipment are stolen out of a locked vehicle, Hobart’s
insurance covers the loss, not the employee. Further, Hobart
has expressly authorized its employees to leave their vehicles
overnight at its facilities. Therefore, because Hobart has
established the requisite duty for its employees, it cannot be
negligence to do exactly as Hobart has directed. Because
Hobart employees would not be held liable for tools or
equipment stolen from service vehicles left overnight at
Hobart facilities (either in the secured area or locked in the
unsecured area), any argument that the employees are
somehow required to drive their service vehicles home for the
security of the vehicle’s contents has no basis in the record.
Alcantar has not provided any evidence that Hobart does not
follow its theft policy or has informed its employees that they
would be liable for the cost of tools stolen out of locked
vehicles. Alcantar has not shown that Hobart has ever
required an employee to pay for tools stolen out of his or her
ALCANTAR V. HOBART SERVICE 27
service vehicle when the tools were stolen after the employee
had locked the doors to his or her vehicle.3 Therefore, the
option of leaving service vehicles overnight at Hobart
facilities cannot be illusory. There is no genuine issue of
material fact on this issue.
To contradict this conclusion, the majority manufactures
the argument that Hobart’s policies are “inconsistent.”
Alcantar has never even made that argument. Instead, in his
opening brief, Alcantar recognized Hobart’s undisputed
policy, as conveyed in both the Rules/Understandings form
and Hobart’s Manual:
The Rules/Understandings explain that
Technicians are responsible for tools assigned
to them, stating:
3
The majority responds by suggesting that Alcantar shouldn’t be
required to provide evidence that Hobart holds its employees liable for
stolen tools even if they were not negligent. Not true. Alcantar is
responding to a motion for summary judgment. He has the burden to
support his claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)
(holding that summary judgment is appropriate against a “[p]arty who fails
to make a showing sufficient to establish the existence of an element
essential to that party’s case”). Evidence of any occurrence, regardless of
the location, when Hobart has held an employee liable for the cost of tools
stolen out of a locked vehicle would be sufficient to show that Hobart does
not follow its theft policy. Such evidence would show that Alcantar’s
alleged reason for employees not leaving vehicles overnight at Hobart’s
facilities is valid. But Alcantar has not provided any such evidence.
Therefore, we must conclude that Hobart follows its stated policy. Any
fear that Hobart employees would be held liable for tools stolen out of
their vehicle if they left their vehicles overnight at a Hobart facility is
completely unsupported by the record.
28 ALCANTAR V. HOBART SERVICE
. . . I assume full responsibility for the
tools as well as any service manuals . . .
Should any of the tools be lost, misplaced or
should they not be available when regularly
inventoried, or returned by me at the request
of the company, then I accept full
responsibility for such tools, and agree to pay
for such tools.
Hobart’s Manual also explains:
We feel that a Service Technician cannot
properly service the equipment unless the
proper tools are available at all times.
Therefore, it is your responsibility to ensure
that the full inventory of assigned tools be
maintained . . . You are responsible for the
replacement of any tool lost or stolen through
your negligence.
[Hobart’s representative] confirmed that
this is an accurate statement of Hobart’s
policy.
Alcantar clearly saw no inconsistency between these two
provisions, but instead viewed them as one complete policy.
By manufacturing its own argument, the majority again
attempts to create a genuine issue of fact where there is none.
Because Alcantar has presented both the
Rules/Understandings form and Hobart’s Manual as an
“accurate statement” of Hobart’s policy, we must give both
provisions effect. This is not hard to do, because the
ALCANTAR V. HOBART SERVICE 29
provisions are not inconsistent.4 Hobart’s employees are
responsible for the cost of their tools if they are lost,
misplaced, or otherwise unavailable when requested.
However, if the tools were stolen, the employees will only be
held liable for their cost if the theft occurred because of the
employees negligence. The only portion of Hobart’s policy
that discusses an employee’s liability for stolen tools remains
the provision contained in Hobart’s Manual. This is an
undisputed fact that the majority cannot ignore.
Alcantar argues (and the majority buys the argument) that
the lack of secured parking somehow renders illusory the
option to leave service vehicles overnight at Hobart facilities.
However, the availability of secured parking areas at Hobart
facilities does not matter in this analysis. A Hobart
employee’s liability for stolen tools does not depend on
whether the vehicles were parked in a secured parking area.
Instead, the employee’s liability occurs only when the theft
was facilitated by the employee’s negligence. Parking a
locked vehicle at a location specifically authorized by Hobart
cannot be negligence, because Hobart has expressly
authorized such conduct.
The majority responds by again trying to manufacture a
disputed issue of fact. The majority emphasizes that some
4
And even if the majority were correct in declaring the two provisions
inconsistent, general contract principles dictate that the more specific theft
provision outlined in Hobart’s manual should qualify the meaning of the
more general provision contained on the Rules/Understandings form. See
Brinderson–Newberg Joint Venture v. Pacific Erectors, Inc., 971 F.2d
272, 279 (9th Cir.1992) (“It is well settled that ‘[w]here there is an
inconsistency between general provisions and specific provisions, the
specific provisions ordinarily qualify the meaning of the general
provisions.’” (quoting Restatement of Contracts § 236(c))).
30 ALCANTAR V. HOBART SERVICE
Hobart employees have provided declarations asserting that
they thought that commuting in their service vehicles was
their only practical option, because of the concern for the
safety of their tools. According to the majority, this
subjective belief renders the option of leaving the vehicles
overnight at Hobart facilities illusory. However, the
California Court of Appeal rejected similar arguments in
Overton, 38 Cal. Rptr. 3d at 699. In Overton, Disney
employees at the Disneyland Resort in California, who
commuted to work in their own vehicles, were required to
park at a parking lot one mile from the Resort. Id. at 694.
Disney provided a shuttle bus for the employees that ran from
the parking lot to the Resort. Id. Relying on Morillion v.
Royal Packing Co., the Disney employees sued for unpaid
wages, claiming that the time they spent waiting for and
riding the shuttle bus was compensable time, because they
were required to use the shuttle for their commute. Overton,
38 Cal. Rptr. 3d at 695. The California Court of Appeal
rejected the Disney employees’ claim, holding that the
employees were not required to ride the shuttle bus. Id. at
699. Instead, the court noted that the Disney employees
could use any number of alternative methods to commute,
including riding the train or bus, being dropped off, or
walking or riding their bikes. Id. The court then rejected the
argument that commute time was compensable for
“employees who, as a practical matter, are required to use an
employer-provided shuttle because no alternative
transportation is available or feasible.” Id. at 700. The court
reasoned that the dispositive inquiry in Morillion is not
whether the individual employees had a meaningful
alternative, but whether the employees (as a whole) “were
free to choose—rather than required—to ride their
employer’s buses.” Id. (quoting Morillion, 995 P.2d at 148
n.5).
ALCANTAR V. HOBART SERVICE 31
Just like the employees in Overton (who thought that
utilizing the shuttle bus was the only practical method of
commuting), Alcantar argues that commuting in his service
vehicle home was the only practical method of commuting,
because it ensured the safety of the tools and equipment for
which he was responsible. However, viewing the undisputed
facts, Alcantar and all other Hobart employees were free to
choose to leave their service vehicles at Hobart facilities and
commute in their own personal vehicles, because there would
be absolutely no negative consequences for doing so.
Therefore, no reasonable jury could conclude that the option
is illusory. See Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986) (reasoning that a genuine issue of material
fact exists if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party”).
Under both Morillion and Overton, Hobart is not required
by California law to compensate its employees for their
normal commute time, because employees are free to choose
to commute in their own personal vehicles outside of
Hobart’s control. Hobart is entitled to judgment as a matter
of law. Accordingly, this case should be over.