Court of Appeal Issues Class Certification Decision

In Faulkinbury v. Boyd & Associates, Inc. (June 24, 2010) --- Cal. App. 4th ---, the Court of Appeal affirmed in part and reversed in part a trial court order denying certification of a class of approximately 4,000 security guards.

The plaintiffs moved for certification of a class of all employees during the applicable period, plus eight sub-classes, and the trial court denied certification without prejudice. The plaintiffs' second motion sought certification of a broad class of all employees and three sub-classes for the following: (1) meal period violations; (2) rest period violations; and (3) failure to include certain expenses and bonus compensation in the class members' regular rates for overtime compensation purposes. The trial court again denied certification.

The Court of Appeal held as follows:

1. The order denying plaintiffs' first motion was not res judicata as to plaintiffs' second motion because the court's ruling was made without prejudice. Slip op. at 4-5.
2. Plaintiffs' motion to re-designate the case as non-complex following denial of class certification did not evidence an intent to abandon the class action remedy and did not render the appeal moot. Slip op. at 5-6.
3. The fact that defense counsel made arguments as to the merits of plaintiffs' claims at the certification hearing did not mean that the Court improperly relied on such arguments in denying certification. The trial court expressed permissible reasons for denying certification. Slip op. at 6-8.
4. On plaintiffs' meal period claim, substantial evidence supported the trial court's finding that common issues of law or fact did not predominate over individual issues. Although the defendant required all class members to sign on-duty meal period agreements and take on-duty meal periods, defendant's evidence established that "the conditions and nature of security guard services vary from location to location and often from shift to shift," such that individual issues predominated. Slip op. at 10-16.
5. On plaintiffs' rest period claims, substantial evidence also supported the trial court's finding that common issues did not predominate. The defendant's declarations showed that employees sometimes took rest periods, destroying commonality. Slip op. at 16-17.
6. The trial court abused its discretion in refusing to certify the overtime sub-class, as the overtime sub-class claims "are governed by common legal principles set forth in the Labor Code and case authority." Whether an employer must include reimbursement items and bonus compensation in the calculation of its employees' overtime rate of pay "can be decided on a class-wide basis as a legal matter based on common proof." The fact that damages must be calculated individually does not destroy commonality. Slip op. at 17-18.