Faulkinbury v. Boyd & Associates, Inc.

Filed 5/10/13
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
JOSIE FAULKINBURY et al.,
Plaintiffs and Appellants, G041702
v. (Super. Ct. No. 05CC00107)
BOYD & ASSOCIATES, INC., OPINION
Defendant and Respondent.
Appeal from an order of the Superior Court of Orange County,
Gail Andrea Andler, Judge. Reversed and remanded with directions.
Marlin & Saltzman, Stanley D. Saltzman, Christina A. Humphrey,
Craig Pynes; Class Action Litigation Group, Renee L. Barge; Law Office of Lawrence A.
Witsoe, Lawrence A. Witsoe; White & Roseman and Leslie Roseman for Plaintiffs and
Appellants.
LightGabler, Jonathan Fraser Light and Angela V. Lopez for Defendant and
Respondent.
* * *
INTRODUCTION
Plaintiffs Josie Faulkinbury and William Levene (together, Plaintiffs), on
behalf of themselves and all others similarly situated, appealed from the order denying
their motion for class certification. They sought to represent and certify a class of about
4,000 current and former employees of defendant Boyd & Associates, Inc. (Boyd), which
provides security guard services throughout Southern California. Plaintiffs and the
putative class members work or worked for Boyd as security guards. They asserted Boyd
denied off-duty meal breaks and off-duty rest breaks, and failed to include certain
reimbursements and an annual bonus payment in calculating the hourly rate of overtime
pay. Plaintiffs proposed three subclasses, which we will refer to as the Meal Break Class,
the Rest Break Class, and the Overtime Class.
We issued an opinion affirming the order denying certification of the Meal
Break Class and the Rest Break Class, and reversing the order denying certification of the
Overtime Class. (Faulkinbury v. Boyd & Associates, Inc. (2010) 185 Cal.App.4th 1363,
review granted Oct. 13, 2010, S184995 (Faulkinbury I).) We issued our opinion before
the California Supreme Court issued its opinion in Brinker Restaurant Corp. v. Superior
Court (2012) 53 Cal.4th 1004 (Brinker). The California Supreme Court granted review
of Faulkinbury I, decided Brinker, and then transferred this case “with directions to
vacate [our] decision and to reconsider the cause in light of Brinker[, supra,] 53 Cal.4th
1004.” Following transfer, the parties submitted supplemental briefs on the effect of
Brinker on this case, and we again entertained oral argument.
As the Supreme Court directed, we have reconsidered the cause in light of
Brinker, reexamined the record, and analyzed the issues anew. We now conclude, in
light of Brinker, that the trial court erred by denying class certification of all three
subclasses and therefore reverse and remand with directions to certify all three
subclasses.
2
FACTS AND PROCEDURAL HISTORY
I.
Facts
Boyd is a private security guard company providing security services
throughout Southern California. Boyd‟s clients include gated residential communities,
hospitals, commercial buildings, and retail stores.
Faulkinbury was employed by Boyd as a security guard from October 2003
to November 2004, and Levene was employed by Boyd as a security guard from January
2003 to February 2005. In declarations, Plaintiffs asserted that, when hired by Boyd,
each had to sign an agreement to take on-duty meal periods and that, while employed by
Boyd, neither ever took an uninterrupted, off-duty meal break. They also asserted that,
while employed by Boyd, they were instructed not to leave their posts and never took any
off-duty rest breaks. Levene added that he was told the on-duty meal break applied to all
posts at which he worked.
In support of the motion for class certification, Plaintiffs submitted
declarations from 46 potential class members. Many declarations state the employee was
not given a 30-minute, uninterrupted, off-duty meal period. Some employees did not
recall signing an agreement regarding on-duty meal breaks. Some acknowledged signing
the agreement; others declared they “w[ere] instructed” to sign the agreement.
II.
Procedural History
A. The Complaint
Plaintiffs brought this action on behalf of themselves and about 4,000
current and former employees of Boyd, who had been employed in the position of
security guard, post commander, or post supervisor, or a similar position at any time
during the class period. The class period was defined as the period beginning four years
preceding the filing of the original complaint and ending on the date a class is certified.
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The third amended complaint, the operative pleading, asserted causes of action under the
Labor Code and Business and Professions Code section 17200 et seq. for alleged failure
to pay wages and nondiscretionary bonus wages, and failure to provide meal and rest
breaks.
B. Class Certification Motion
Plaintiffs moved for class certification in October 2008. After the trial
court denied the motion, Plaintiffs brought a second motion for class certification. They
sought certification of a class of all “current and former security guards employed by
Boyd at any time during a four-year statute of limitations period consisting of
approximately 4,000 putative class members.” Plaintiffs proposed these three subclasses:
“(1) All current and former Security Guards, Security Guard Supervisors,
Post Commanders, Rovers and other similar hourly paid job positions, who were required
by Boyd to take an „on-duty‟ meal break and therefore were not provided mandated,
uninterrupted meal periods and who worked for Boyd in California at any time between
March 19, 2003 and the date class certification is granted. . . . ([Meal Break Class]).
“(2) All current and former Security Guards, Security Guard Supervisors,
Post Commanders, Rovers and other similar hourly paid job positions, who worked for
Boyd at any time between March 19, 2003 and the date class certification is granted . . .
who were not provided with mandated rest periods. („Rest Break Class‟)
“(3) All current and former Security Guards, Security Guard Supervisors,
Post Commanders, Rovers and other similar hourly paid job positions, who worked for
Boyd at any time from May 13, 2001 and the date class certification is granted . . . and
were not paid overtime wages to reflect annual bonus payments and allowances. . . .
([Overtime Class]).”
In February 2009, the trial court issued an order stating: “The Motion for
Class Certification is denied. Moving party has not met its burden of establishing the
requisites for class treatment. It is not clear, for the reasons stated by defendant, that the
4
proposed classes are ascertainable. Additionally, it appears that individual questions of
fact predominate, as set forth by defendant. These individual issues prevail over the
common issues.” Plaintiffs appealed from the order denying class certification.
THE CALIFORNIA SUPREME COURT OPINION IN BRINKER
In Brinker, the trial court certified a class of about 60,000 current and
former nonexempt employees of defendant corporations that owned and operated several
restaurant chains. (Brinker, supra, 53 Cal.4th at pp. 1017-1018, 1019, fn. 4) The class
action complaint alleged the defendants violated state laws requiring meal and rest breaks
for nonexempt hourly employees and accurate recording of employee work time. (Id. at
pp. 1018-1019.) The class definition included several subclasses, three of which were
(1) a rest period subclass comprising “all „Class Members who worked one or more work
periods in excess of three and a half (3.5) hours without receiving a paid 10 minute break
during which the Class Member was relieved of all duties‟” during the subclass period;
(2) a meal period subclass comprising “all „Class Members who worked one or more
work periods in excess of five (5) consecutive hours, without receiving a thirty (30)
minute meal period during which the Class Member was relieved of all duties‟” during
the subclass period; and (3) an off-the-clock subclass comprising “all „Class Members
who worked “off-the-clock” or without pay‟” during the subclass period. (Id. at p. 1019.)
The Court of Appeal held the trial court erred in certifying each of the
subclasses and granted writ relief to reverse class certification. (Brinker, supra, 53
Cal.4th at p. 1021.) The California Supreme Court granted review “to resolve
uncertainties in the handling of wage and hour class certification motions.” (Ibid.)
In its opinion, the Supreme Court concluded the trial court properly
certified a rest break subclass, remanded the question of certification of the meal break
subclass for reconsideration by the trial court, and concluded the trial court erred by
certifying the off-the-clock subclass. (Brinker, supra, 53 Cal.4th at p. 1017.) After
reviewing general class action principles, the Supreme Court addressed the extent to
5
which a trial court must address the elements and merit of a plaintiff‟s claim when
deciding whether to certify a class. (Id. at p. 1023.)
The Supreme Court confirmed a class certification motion should not be a
vehicle for resolving the merits of a claim, but recognized too that “[w]hen evidence or
legal issues germane to the certification question bear as well on aspects of the merits, a
court may properly evaluate them.” (Brinker, supra, 53 Cal.4th at pp. 1023-1024.) The
court concluded: “Presented with a class certification motion, a trial court must examine
the plaintiff‟s theory of recovery, assess the nature of the legal and factual disputes likely
to be presented, and decide whether individual or common issues predominate. To the
extent the propriety of certification depends upon disputed threshold legal or factual
questions, a court may, and indeed must, resolve them. Out of respect for the problems
arising from one-way intervention, however, a court generally should eschew resolution
of such issues unless necessary. [Citations.] Consequently, a trial court does not abuse
its discretion if it certifies (or denies certification of) a class without deciding one or more
issues affecting the nature of a given element if resolution of such issues would not affect
the ultimate certification decision.” (Id. at p. 1025.)
The Supreme Court then considered the scope of an employer‟s duties
under relevant statutes and the Industrial Welfare Commission (IWC) wage orders to
afford rest and meal periods to employees and whether, in light of those duties, the Court
of Appeal erred in reversing the trial court‟s certification of the three subclasses.
(Brinker, supra, 53 Cal.4th at pp. 1027-1028.)
As to the rest break claim and subclass, the Brinker court clarified that the
applicable wage order requires an employer to provide an employee with a 10-minute rest
break for shifts from three and one-half hours to six hours in length, a 20-minute rest
break for shifts of more than six hours up to 10 hours, and a 30-minute rest break for
shifts of more than 10 hours up to 14 hours. (Brinker, supra, 53 Cal.4th at p. 1029.) The
defendant employers had a written rest period policy, applicable to all employees, under
6
which employees were provided only one 10-minute rest break for every four hours
worked, when they should be provided a second break after six hours. (Id. at p. 1033.)
The California Supreme Court held the trial court properly certified a rest break subclass
because “[c]lasswide liability could be established through common proof if [the
plaintiffs] were able to demonstrate that, for example, [the employers] under this uniform
policy refused to authorize and permit a second rest break for employees working shifts
longer than six, but shorter than eight, hours.” (Ibid.) The court emphasized that
“[c]laims alleging that 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
1
for class treatment.” (Ibid.)
Finally, as to the rest break subclass, the Supreme Court observed that class
certification did not depend on resolution of “threshold legal disputes over the scope of
the employer‟s rest break duties.” (Brinker, supra, 53 Cal.4th at p. 1033.) The Supreme
Court emphasized it addressed the merit of those substantive disputes only at the parties‟
request. (Id. at pp. 1033-1034.) In general, and absent such a request, “[i]t is far better
from a fairness perspective” to decide class certification independently from the merits.
(Id. at p. 1034.)
1
In support of this statement, the Brinker court cited three Court of Appeal cases:
Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286 (Jaimez); Ghazaryan v. Diva
Limousine, Ltd. (2008) 169 Cal.App.4th 1524 (Ghazaryan); and Bufil v. Dollar Financial
Group, Inc. (2008) 162 Cal.App.4th 1193 (Bufil). In Jaimez, Ghazaryan, and Bufil, the
Court of Appeal held the trial court abused its discretion by denying class certification.
(Jaimez, supra, at pp. 1299-1307; Ghazaryan, supra, at pp. 1534-1538; Bufil, supra, at
pp. 1205-1206.) These courts reasoned that the plaintiffs were challenging a uniform
employment policy that allegedly violated California law, and, therefore, this violation
could be proved (or disproved) through common facts and law. (Jaimez, supra, at
pp. 1299-1300; Ghazaryan, supra, at pp. 1536-1538; Bufil, supra, at p. 1206.) The courts
in Jaimez and Ghazaryan also concluded that common issues predominated even if the
employment policy did not affect each employee in the same way and damages would
need to be proved individually. (Jaimez, supra, at pp. 1301, 1303-1305; Ghazaryan,
supra, at p. 1536.)
7
As to a meal break claim and subclass, the Brinker court first considered
the nature and scope of an employer‟s duty to provide a meal period. (Brinker, supra, 53
Cal.4th at p. 1034.) The court concluded that under the applicable statute and wage
order, “an employer‟s obligation when providing a meal period is to relieve its employee
of all duty for an uninterrupted 30-minute period.” (Id. at p. 1038.) Resolving
conflicting appellate decisions, the Supreme Court held: “An employer‟s duty with
respect to meal breaks [citations] is an obligation to provide a meal period to its
employees. The employer satisfies this obligation if it relieves its employees of all duty,
relinquishes control over their activities and permits them a reasonable opportunity to
take an uninterrupted 30-minute break, and does not impede or discourage them from
doing so. What will suffice may vary from industry to industry, and we cannot in the
context of this class certification proceeding delineate the full range of approaches that in
each instance might be sufficient to satisfy the law. [¶] On the other hand, the employer
is not obligated to police meal breaks and ensure no work thereafter is performed. Bona
fide relief from duty and the relinquishing of control satisfies the employer‟s obligations,
and work by a relieved employee during a meal break does not thereby place the
employer in violation of its obligations and create liability for premium pay [citations].”
(Id. at pp. 1040-1041.)
The Supreme Court also resolved substantive issues regarding the timing of
meal breaks. The court held: “[A]n employer‟s obligation is to provide a first meal
period after no more than five hours of work and a second meal period after no more than
10 hours of work.” (Brinker, supra, 53 Cal.4th at p. 1049.)
Returning to the issue of class certification, the Supreme Court remanded
the matter to the trial court to reconsider certification of the meal break subclass in light
of the Supreme Court‟s clarification of the law. (Brinker, supra, 53 Cal.4th at
pp. 1049-1051.) The Supreme Court explained: “Our subsequent ruling on [the
plaintiffs‟] meal timing theory, solicited by the parties, has changed the legal landscape;
8
whether the trial court may have soundly exercised its discretion before that ruling is no
longer relevant. At a minimum, our ruling has rendered the class definition adopted by
the trial court overinclusive: The definition on its face embraces individuals who now
have no claim against [the employers]. In light of our substantive rulings, we consider it
the prudent course to remand the question of meal subclass certification to the trial court
for reconsideration in light of the clarification of the law we have provided.” (Id. at
pp. 1050-1051.)
As to the off-the-clock claim and subclass, the plaintiffs had asserted the
defendant employers required employees to perform work while clocked out during meal
periods and did not afford them an uninterrupted 30 minutes. (Brinker, supra, 53 Cal.4th
at p. 1051.) The Supreme Court concluded substantial evidence did not support the trial
court‟s conclusion that common issues predominated the off-the-clock subclass. (Ibid.)
For the off-the-clock claim and subclass, the plaintiffs had presented no evidence of a
uniform policy allegedly in conflict with the Labor Code and relevant IWC wage order.
(Brinker, supra, at p. 1051.) The only formal employer policy disavowed off-the-clock
work, and the plaintiffs presented no evidence of “a systematic company policy to
pressure or require employees to work off-the-clock.” (Ibid.)
The Supreme Court also based its decision on the plaintiff‟s failure to
present evidence rebutting the presumption that an employee who has clocked out is
performing no work. (Brinker, supra, 53 Cal.4th at p. 1051.) An employer‟s liability is
contingent on proof the employer knew or should have known off-the-clock work was
occurring, and “[n]othing before the trial court demonstrated how this could be shown
through common proof, in the absence of evidence of a uniform policy or practice.” (Id.
at pp. 1051-1052.) “Instead, the trial court was presented with anecdotal evidence of a
handful of individual instances in which employees worked off-the-clock, with or without
knowledge or awareness by [the employers‟] supervisors. On a record such as this,
where no substantial evidence points to a uniform, companywide policy, proof of
9
off-the-clock liability would have had to continue in an employee-by-employee fashion,
demonstrating who worked off-the-clock, how long they worked, and whether [the
employers] knew or should have known of their work.” (Id. at p. 1052.)
In a concurrence to her own opinion, Justice Werdegar sought to provide
guidance on remand regarding the missed meal break issues. (Brinker, supra, 53 Cal.4th
at p. 1052 (conc. opn. of Werdegar, J.).) She stated the court did not endorse the
employers‟ argument that the question why a meal period was missed renders meal
period claims “categorically uncertifiable.” (Ibid.) Justice Werdegar stated that if an
employer‟s records show no meal period for a given shift, a rebuttable presumption arises
that the employee was not relieved of duty and no meal period was provided, shifting the
burden to the employer to show the meal period was waived. (Id. at p. 1053 (conc. opn.
of Werdegar, J.).)
STANDARD OF REVIEW
“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.
[Citations.]‟ [Citations.] Predominance is a factual question; accordingly, the trial
court‟s finding that common issues predominate generally is reviewed for substantial
evidence. [Citation.] We must „[p]resum[e] in favor of the certification order . . . the
existence of every fact the trial court could reasonably deduce from the record . . . .‟
[Citation.]” (Brinker, supra, 53 Cal.4th at p. 1022.)
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DISCUSSION
I.
Class Action Requirements
“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 . . . .‟ [Citations.]” (Brinker, supra, 53
Cal.4th at p. 1021.)
The California Supreme Court has identified three requirements for the
certification of a class: (1) “the existence of an ascertainable and sufficiently numerous
class”; (2) “a well-defined community of interest”; and (3) “substantial benefits from
certification that render proceeding as a class superior to the alternatives.” (Brinker,
supra, 53 Cal.4th at p. 1021.) The community of interest requirement in turn has three
factors: (1) common questions of law or fact predominate over individual questions;
(2) the class representatives have claims or defenses typical of the class; and (3) the class
representatives can adequately represent the class. (Ibid.)
II.
Community of Interest
In this case, only the first factor of the community of interest requirement—
predominance of common questions—is in dispute. In Brinker, supra, 53 Cal.4th at
pages 1021-1022, the California Supreme Court set forth this standard for determining
whether common issues predominate: “The „ultimate question‟ the element of
predominance presents is whether „the issues which may be jointly tried, when compared
with those requiring separate adjudication, are so numerous or substantial that the
maintenance of a class action would be advantageous to the judicial process and to the
litigants.‟ [Citations.] The answer hinges on „whether the theory of recovery advanced
by the proponents of certification is, as an analytical matter, likely to prove amenable to
11
class treatment.‟ [Citation.] A court must examine the allegations of the complaint and
supporting declarations [citation] and consider whether the legal and factual issues they
present are such that their resolution in a single class proceeding would be both desirable
and feasible. „As a general rule if the defendant‟s liability can be determined by facts
common to all members of the class, a class will be certified even if the members must
individually prove their damages.‟ [Citations.]” (Fn. omitted.)
A. The Meal Break Class
Following the methodology of Brinker, we conclude common issues of fact
predominate over individual issues in determining whether Boyd was liable for not
providing off-duty meal breaks for its security guard employees. As we shall explain,
Brinker teaches that we must focus on the policy itself and address the issue whether the
legality of the policy can be resolved on a classwide basis.
As Brinker instructs, we begin our analysis of the Meal Break Class by
examining Plaintiffs‟ theory of legal liability. The third amended complaint alleged
Boyd is liable under Labor Code section 226.7 for requiring all class members to take
on-duty meal breaks and to sign on-duty meal period agreements without regard for the
job duties or locations where the class members worked. Plaintiffs‟ theory of legal
liability, as expressed in the third amended complaint, is that “Plaintiffs and Class
Members routinely worked more than 8 hours and often more than 12 hours, yet Class
Members were never offered a meal break during shifts longer than five hours or a
second meal break during shifts longer than 10 hours, and did not validly waive their
entitlement to said meal periods, and were not offered any mandatory 10 minute rest
breaks.”
The evidence established Boyd had a uniform policy of requiring all
security guard employees to take paid, on-duty meal breaks and to sign an agreement by
which the employee agreed that he or she “shall work an on-the-job meal period, which
shall be paid for by the Employer.” Boyd agreed to pay the employee “the regular rate of
12
pay” for the on-duty meal period. The agreement for on-duty meal periods stated that
Boyd and the employee agreed the nature of the employee‟s work prevented the
employee from being relieved of all duties during the employee‟s meal period. James
Romano, Boyd‟s vice-president, testified at his deposition the meal period agreement
constituted Boyd‟s policy regarding meal breaks and confirmed every employee is
required to sign the agreement when hired by Boyd.
The claim made by Plaintiffs is that Boyd‟s policy is unlawful; the question
as framed by Brinker is whether that claim is amenable to class treatment. We conclude
it is. The evidence presented in connection with the motion for class certification
established Boyd‟s on-duty meal break policy was uniformly and consistently applied to
all security guard employees. As Brinker states, “[c]laims alleging that 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.” (Brinker, supra,
53 Cal.4th at p. 1033.)
The lawfulness of Boyd‟s policy of requiring all security guard employees
to sign the on-duty meal break agreement can be determined on a classwide basis. To
determine whether that policy is lawful, it must be measured against the meal period
requirements of Labor Code section 226.7 and the applicable wage orders of the IWC.
Under Labor Code section 226.7, subdivision (a), “[n]o employer shall
require any employee to work during any meal or rest period mandated by an applicable
order of the [IWC].” Meal and rest break requirements are contained in orders of the
IWC and are issued on an industry-by-industry basis. (Brinker, supra, 53 Cal.4th at
p. 1018, fn. 1.) Plaintiffs assert, and Boyd does not dispute, that IWC wage order
No. 4-2001 (Wage Order No. 4-2001), codified at California Code of Regulations, title 8,
section 11040, subdivision 11(A), governs an employer‟s obligation for providing meal
breaks to hourly security guard employees. Wage Order No. 4-2001 provides: “No
employer shall employ any person for a work period of more than five (5) hours without
13
a meal period of not less than 30 minutes, except that when a work period of not more
than six (6) hours will complete the day‟s work the meal period may be waived by mutual
consent of the employer and the employee. Unless the employee is relieved of all duty
during a 30 minute meal period, the meal period shall be considered an „on duty‟ meal
period and counted as time worked.” (Cal. Code Regs., tit. 8, § 11040, subd. 11(A); see
also Bufil, supra, 162 Cal.App.4th at pp. 1197-1198.)
As Brinker instructs, we do not determine at this stage whether Boyd‟s
policy of requiring on-duty meal breaks violates the law. Instead, the question we
address is whether Boyd‟s legal liability under the theory advanced by Plaintiffs can be
determined by facts common to all class members. The theory advanced by Plaintiffs is
that “Class Members were never offered a meal break during shifts longer than five hours
or a second meal break during shifts longer than 10 hours.” Under this theory, Boyd‟s
legal liability can determined on a class basis.
As a defense to class certification, Boyd asserted the nature of the work
exception, under which “[a]n „on duty‟ meal period shall be permitted only when the
nature of the work prevents an employee from being relieved of all duty and when by
written agreement between the parties an on-the-job paid meal period is agreed to.” (Cal.
Code Regs., tit. 8, § 11040, subd. 11(A).) In response, Plaintiffs argued, “[t]he nature of
the work of the Plaintiffs and all Class Members is not such that the employee is
prevented from being relieved of all duties.” Liability turns on the issue whether Boyd‟s
policy requiring all security guard employees to sign blanket waivers of off-duty meal
breaks is lawful. That issue can be resolved on a classwide basis. “The theory of
liability—that [the employer] has a uniform policy, and that that policy, measured against
wage order requirements, allegedly violates the law—is by its nature a common question
eminently suited for class treatment.” (Brinker, supra, 53 Cal.4th at p. 1033.)
Indeed, by requiring blanket off-duty meal break waivers in advance from
all security guard employees, regardless of the working conditions at a particular station,
14
Boyd treated the off-duty meal break issue on a classwide basis. Boyd took the same
position in discovery responses. In support of the motion for class certification, Plaintiffs
submitted interrogatory responses in which Boyd stated: “During the four years
preceding the filing of plaintiffs‟ Third Amended Complaint, the job duties of the
positions of Post Commander, Assistant Post Commander, and Security Officer
prevented employees from being relieved of all duties to take off-duty meal periods. [¶]
Employees who worked in a guard booth worked alone, and employees who worked on
patrol also worked alone.” Boyd stated in other interrogatory responses that, after
making reasonable inquiry, it did not believe any “„unpaid “off-duty” meal periods‟ were
taken during the relevant time period” and did not believe “any employee „missed‟ any
„off-duty‟ meal period.” In response to requests for admission, Boyd denied the putative
class members‟ job duties were not of such a nature to prevent them from taking unpaid
meal periods during their work shifts and stated it did not believe any unpaid, off-duty
meal periods were taken during the relevant time period.
In Faulkinbury I, we concluded that even if Boyd‟s on-duty meal break
policy was unlawful, Boyd would be liable only when it actually failed to provide a
required off-duty meal break. Brinker leads us now to conclude Boyd would be liable
upon a determination that Boyd‟s uniform on-duty meal break policy was unlawful. In
Brinker, the Court of Appeal, in reversing class certification, had concluded that because
rest breaks could be waived, any showing on a class basis that class members missed or
took shortened rest breaks would not “„necessarily establish, without further
individualized proof,‟” that the employers had violated the Labor Code and the relevant
IWC wage order. (Brinker, supra, 53 Cal.4th at p. 1033.) The Supreme Court stated that
conclusion was error. An employer is required to permit and authorize the required rest
breaks, and if it adopts a uniform policy that does not do so, then “it has violated the
wage order and is liable.” (Ibid.) In other words, the employer‟s liability arises by
adopting a uniform policy that violates the wage and hour laws. Whether or not the
15
employee was able to take the required break goes to damages, and “[t]he fact that
individual [employees] may have different damages does not require denial of the class
certification motion.” (Jaimez, supra, 181 Cal.App.4th at p. 1301.)
In a similar procedural status, the Court of Appeal in Bradley v. Networkers
Internat., LLC (2012) 211 Cal.App.4th 1129, 1150-1151 (Bradley), interpreted Brinker in
a fashion similar to our analysis. The plaintiffs in Bradley had alleged the employer
failed to provide legally required meal and rest breaks for the putative class members.
(Bradley, supra, at p. 1135.) In opposing class certification, the employer had argued,
and the Court of Appeal had agreed in its initial opinion, the issue of which employees
had missed meal and rest breaks, how many breaks were missed, and whether the missed
breaks resulted from the employer‟s uniform policy was “highly dependent” on each
class member‟s testimony. (Id. at p. 1151.) On remand after Brinker, the Court of
Appeal reconsidered, and determined its initial conclusion conflicted with Brinker:
“Under the logic of [Brinker‟s] holdings, when an employer has not authorized and not
provided legally required meal and/or rest breaks, the employer has violated the law and
the fact that an employee may have actually taken a break or was able to eat food during
the workday does not show that individual issues will predominate in the litigation.”
(Bradley, supra, at p. 1151.)
B. The Rest Break Class
As we did for the Meal Break Class, we follow the methodology set forth in
Brinker in reexamining whether common issues predominate over individual issues in the
Rest Break Class. We conclude common issues predominate.
We again begin by examining Plaintiffs‟ theory of legal liability. Plaintiffs
asserted Boyd did not have a policy regarding the provision of rest breaks to security
guards and had an express policy requiring all security guards to remain at their posts at
all times. In support of the motion for class certification, Plaintiffs presented evidence
that Boyd had no formal rest break policy, other than the employee could take a break “if
16
there is nothing to do at that moment.” Faulkinbury declared she was told “there are no
breaks for security guard employees” and she believed all security guards employed by
Boyd were required to remain at their posts and were not provided with relief to take rest
breaks. Levene similarly declared he was prohibited from leaving his post to take rest
breaks and frequently did not have enough time to use the bathroom. The 46 declarations
that Plaintiffs submitted from putative class members state the employee was not given or
was rarely given a rest break, or could not leave the assigned post for a rest break except
to use the bathroom. Plaintiffs submitted a portion of the Boyd employee handbook
identifying “unacceptable behavior” to include “[l]eaving work station without
permission of supervisor or proper relief during absence.”
Brinker focuses on whether the lawfulness of an employer‟s lack of a rest
break policy can be determined on a classwide basis. To determine whether that policy,
or lack thereof, is lawful, it must be measured against the relevant rest break
requirements. “Wage Order No. 4-2001 states that every employer must „authorize and
permit all employees to take rest periods . . . . The authorized rest period time shall be
based on the total hours worked daily at the rate of ten (10) minutes net rest time per four
(4) hours or major fraction thereof. However, a rest period need not be authorized for
employees whose total daily work time is less than three and one-half (3½) hours.‟ ([Cal.
Code Regs., tit. 8, ]§ 11040, subd. 12(A).)” (Bufil, supra, 162 Cal.App.4th at
pp. 1198-1199.) An employer has a duty to authorize and permit rest breaks. (Brinker,
supra, 53 Cal.4th at pp. 1029-1031.) An employer must authorize and permit the break
or pay the employee one hour of pay at the employee‟s regular rate for each workday the
rest break is not provided. (Cal. Code Regs., tit. 8, § 11040, subd. 12.)
There does not appear to be an on-duty rest break exception as there is for
meal breaks. The California Department of Industrial Relations, Division of Labor
Standards Enforcement (DLSE), is empowered to enforce California‟s labor laws,
including IWC wage orders. (Tidewater Marine Western, Inc. v. Bradshaw (1996) 14
17
Cal.4th 557, 561-562.) A DLSE opinion letter, dated February 22, 2002, states, “there
must be a net 10 minutes of rest provided in each „work period‟ and the rest period must
2
be, as the language [of Wage Order No. 4-2001] implies, duty-free.” (Dept. of Industrial
Relations, DLSE, Acting Chief Counsel Anne Stevason, Opn. Letter No. 2002.02.22,
Rest Period Requirements (Feb. 22, 2002) p. 1 [as of May 10, 2013].)
Measured against these legal standards, the lawfulness of Boyd‟s lack of
rest break policy and requirement that all security guard employees remain at their posts
can be determined on a classwide basis. In Bradley, supra, 211 Cal.App.4th at
pages 1150-1151, the court concluded the legality of an employer‟s lack of a meal and
rest break policy could be resolved on a classwide basis. The court explained: “Brinker
instructs that in ruling on the predominance issue in a certification motion, the court must
focus on the plaintiff‟s theory of recovery and assess the nature of the legal and factual
disputes likely to be presented and determine whether individual or common issues
predominate. [Citation.] Here, plaintiffs‟ theory of recovery is based on [the employer]‟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.
Although an employer could potentially defend these claims by arguing that it did have
an informal or unwritten meal or rest break policy, this defense is also a matter of
common proof.” (Id. at p. 1150.) We find this reasoning to be persuasive.
In opposition to the motion for class certification, Boyd submitted
declarations from current employees. Some declarations stated the employee was
relieved of duties in order to take off-duty rest breaks; other declarations stated breaks
2
The DLSE‟s opinion letters, though not controlling on the courts, are considered to be
a source of guidance for interpreting IWC wage orders. (Brinker, supra, 53 Cal.4th at
p. 1029, fn. 11.)
18
were taken during periods of inactivity; at least one declaration stated the employee
determined, based on the circumstances, when to take a rest break; and another
declaration stated the employee frequently took rest breaks at her post. While, in
Faulkinbury I, we concluded this evidence established individual issues of liability, we
are now convinced, in light of Brinker, this evidence at most establishes individual issues
of damages, which would not preclude class certification. Boyd‟s liability, if any, would
arise upon a finding that its uniform rest break policy, or lack of policy, was unlawful.
C. The Overtime Class
As to the Overtime Class, we conclude the trial court erred to the extent it
3
decided common issues did not predominate.
Boyd paid its employees an allowance for the cost of cleaning and
maintaining work uniforms and for the cost of gasoline. Plaintiffs asserted Boyd had a
practice of excluding those allowances in calculating overtime wages. In addition,
Plaintiffs asserted an annual bonus paid by Boyd to employees who had been employed
for 12 consecutive months was nondiscretionary and, therefore, Boyd‟s policy of
excluding the bonus from the calculation of overtime wages was unlawful.
In support of the motion for class certification, Plaintiffs presented
evidence that Boyd had a uniform policy of paying security guard employees an
allowance for maintenance of work uniforms and of reimbursing the cost of gasoline.
The nature of, purpose of, entitlement to, and rate of reimbursement for both the work
3
The order denying the motion for class certification did not distinguish between the
three theories of recovery asserted by Plaintiffs. The trial court offered no particular
reason for denying certification of the Overtime Class other than the general reference to
lack of ascertainability and commonality. In its respondent‟s brief, Boyd argued only the
merits of the Overtime Class claims and asserted, “[i]n over four years of litigation,
[Plaintiffs] have never cited a case that supports their theory that expense reimbursement
should be treated as wages.”
19
uniform maintenance and gasoline reimbursements are the same for every Boyd security
guard employee.
Thus, whether the work uniform maintenance allowance and gasoline
reimbursement must be included in calculating the overtime rate of pay can be decided on
a classwide basis as a legal matter based on common proof. (See In re Work Uniform
Cases (2005) 133 Cal.App.4th 328, 338.) Eligibility for recovery and damages, if any,
would have to be shown on an individual basis, but that would not preclude class
certification. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 334.)
Plaintiffs also presented evidence that Boyd had uniform, companywide
policies for determining entitlement to an annual bonus. The Boyd employee handbook
in effect between January 2001 and March 2006 provided that “[y]early bonuses shall be
granted on the basis of the employee‟s length of employment. This period must be
continuous from the last date of hire. Bonus pay shall be the straight time rate of pay at
the time the bonus is given. [¶] A full-time employee, having completed one year of
continuous service, shall receive a bonus equal to the average hours worked per week, not
to exceed forty (40) hours.” Boyd‟s employee handbook adopted in March 2006
provided: “Attendance Bonus: Hourly employees who maintain excellent attendance by
reporting for duty at their assigned post on a daily basis will be rewarded with an
Attendance Bonus. . . . The amount of the bonus will be determined by the following
criteria: A full-time employee having completed one full year of continuous employment
and having two (2) or less excused absences during a 12 month period beginning with the
hire date will receive an amount equal to the average hours worked per week, not to
exceed 40 hours, times their base rate of pay at the time of the payment.”
In his declaration, Daniel Boyd explained: “Boyd has a general policy that
employees who remain with the company for one year receive an annual attendance
bonus. Prior to 2006, Boyd‟s employee handbook did not set forth any other
requirements for receiving that bonus. However, the Branch Managers in each of Boyd‟s
20
branches have always had the authority and discretion to, and did, utilize factors such as a
poor record of attendance in deciding on the amount of the bonus. . . . [¶] . . . Given this
historic practice, Boyd included within its thorough revisions in 2006 to the 2001
employee handbook the additional guidelines concerning the annual attendance bonus.
This was done to better apprise employees of the eligibility issues that were part of the
4
bonus program.”
The legality of Boyd‟s policy of excluding the bonus from calculating
overtime wages can be determined on a class-wide basis. The DLSE, in an opinion letter
dated March 6, 1991, stated: “Bonus payments, with certain exceptions[,] are included in
the calculation of overtime. Bonuses based on incentive must be calculated into the
employee‟s wages to determine the „regular rate of pay[.‟]” (Dept. of Industrial
Relations, DLSE, Chief Counsel H. Thomas Cadell, Jr., Opn. Letter No. 1991.03.06,
Calculation of Regular Rate of Pay (Mar. 6, 1991) p. 1, fn. omitted [as of May 10, 2013].) The DLSE
identified an exception to that rule: “Bonus payments which are discretionary or
payments in the nature of gifts on special occasions, and contributions by the employer to
certain welfare plans and payments made by the employer pursuant to a profit-sharing,
thrift and savings plan . . . are not to be considered as part of the „regular rate of pay‟ for
purposes of determining overtime compensation.” (Id. at p. 1, fn. 1.) Because the criteria
for awarding bonuses are uniform and applied consistently to all Boyd security guard
employees, the issue whether those bonuses “are discretionary or payments in the nature
of gifts on special occasions” (ibid.) can be determined on a classwide basis.
4
Boyd also declared, “[t]he conditions contained in the handbook are not exhaustive
and Branch Managers are still free to consider additional circumstances when deciding on
the amount of the bonus.” Whether and to what extent the bonus is discretionary is not
an issue affecting class certification because the degree of discretion that Boyd accords
its branch managers is a factor in determining on a classwide basis whether the bonus
must be included in calculating overtime rate of pay.
21
III.
Ascertainability
We conclude the requirement of ascertainability has been met for all three
subclasses. The purpose of the ascertainability requirement is to ensure notice is given to
putative class members as to whom a judgment in the class action would be res judicata.
(Bufil, supra, 162 Cal.App.4th at p. 1206.) Class members are ascertainable when they
may be readily identified without unreasonable expense or time by reference to official
records. (Ibid.) “In determining whether a class is ascertainable, the trial court examines
the class definition, the size of the class and the means of identifying class members.”
(Id. at p. 1207.)
The Meal Break Class and the Rest Break Class may be ascertained from
Boyd‟s employment records. Since Plaintiffs alleged Boyd had uniform policies that it
applied to all security guard employees, the putative classes consist of all Boyd security
guard employees during the class period.
The trial court found the Meal Break Class and the Rest Break Class were
not ascertainable “for the reasons stated by defendant.” Boyd had argued those classes
were not ascertainable because membership depended on individual questions whether
the nature of the work at each post prevented an employee from being relieved of all duty
in order to take a meal or rest break. As we have explained, those questions do not
prevent certification of the classes.
The Overtime Class can be readily identified without unreasonable expense
or time by reference to Boyd‟s payroll records. Employee paycheck stubs submitted in
support of the motion for class certification have separate entries for gasoline
reimbursement and work uniform cleaning reimbursement. Boyd‟s payroll records also
show the amounts paid for gasoline reimbursements and work uniform maintenance
allowance.
22
As to annual bonuses, Plaintiffs are not asserting Boyd wrongly denied any
employee an annual bonus. The issue is whether, as to those employees who received a
bonus, the bonus must be included in calculating overtime wages. Those employees who
received an annual bonus, and the amount of the bonus, may be determined readily from
Boyd‟s payroll records. Accordingly, the Overtime Class is ascertainable.
DISPOSITION
The order denying class certification is reversed and the matter is remanded
with directions to grant the motion for class certification and to certify the Meal Break
Class, the Rest Break Class, and the Overtime Class. Appellants shall recover costs
incurred on appeal.
FYBEL, J.
WE CONCUR:
RYLAARSDAM, ACTING P. J.
MOORE, J.
23