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Wednesday, September 19, 2012

Lamps Plus Overtime Cases: On Remand Following Brinker, Court of Appeal Again Affirms Order Denying Certification

In Lamps Plus Overtime Cases (2011) 195 Cal.App.4th 389 (discussed here), the Court of Appeal held that the trial court did not abuse its discretion in denying class certification of a wage and hour action alleging, among other causes of action, violation of California's meal and rest period requirements. The California Supreme Court granted review and held pending its decision in Brinker v. Superior Court (4/12/12) 53 Cal.4th 1004 (discussed here).

On remand, the Court of Appeal has found that its earlier decision was consistent with Brinker and again affirmed the trial court's order. Lamps Plus Overtime Cases (8/20/12) --- Cal.App.4th ---, Slip op. at 2. The decision comes from the same panel (Second District, Division Eight, Justices Bigelow, Flier, and Grimes) that issued Hernandez v. Chipotle Mexican Grill, Inc. (8/21/12) --- Cal.App.4th --- (discussed here), and the two decisions parallel each other.

First, the Court held that the trial court correctly concluded that employers must "provide employees with meal and rest breaks, not to ensure the breaks are taken." Slip op. at 10-14. The Court distinguished Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, on grounds that: "Unlike the employer in Cicairos, in this case, there is overwhelming evidence that Lamps Plus's policies allowed and encouraged meal periods." Slip op. at 14-15. The Court also found that requiring employers to ensure that meal periods are taken would be "utterly impractical." Slip op. at 15-16.

Second, the Court found that the trial court did not improperly reach the merits of the plaintiffs' meal and rest period claims. "No case prevents a court from examining a legal issue when ruling on a certification motion." Slip op. at 16. The Court distinguished Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, on grounds that the employer's practices there -- giving the employees more work than they could do if they took meal periods, auto-deducting 30 minutes per day whether employees took meal periods or not, and requiring employees to acknowledge that they received their meal periods in order to be paid their wages -- "presented the predominant common factual issues on the meal and rest break claims." Slip op. at 17.

Third, the Court held that substantial evidence supported the trial court's ruling on the meal and rest period claims. "Lamps Plus did not have a universal practice of denying employees their breaks." Slip op. at 17. Its meal and rest period policies conformed to the law, and it disciplined employees for violating those policies. Slip op. at 18. The evidence of violations was "widely variable." Ibid. The Court rejected the plaintiffs' theory that chronic understaffing led to classwide violations. Slip op. at 19. The trier of fact would have to determine whether people actually missed breaks or just failed to record them. Slip op. at 19-20.

Fourth, the court did not err in declining to stay the case pending Brinker. Slip op. at 19.

With regard to the off-the-clock claims, the fact that approximately half of respondents to a survey said they worked off the clock did not "lead to an inference there was a companywide policy requiring such work." Slip op. at 21. Nor did the plaintiffs show that Lamps Plus knew or should have known of such off-the-clock work. Ibid.

With regard to the claim for waiting time penalties, the Court began by finding that Lamps Plus had a policy to pay wages upon termination. Slip op. at 22. The Court then held that "California employers are not obligated to keep a record of the date of final pay for each employee, or of the date on which each employee gave notice of termination." Ibid. Because the evidence that the plaintiffs submitted "varied widely," the trial court did not err in finding that individual issues predominated. Slip op. at 22-23.

The Court held that the trial court also was correct in denying certification of the claim for wage statement violations because class members would have to show "actual injury from the noncomplying pay stubs." Slip op. at 23. Also, the pay stub claims was derivative of the plaintiffs' other claims, which were not suitable for class treatment. Ibid.

The Court held that the plaintiffs' claims for violation of the Unfair Competition Law ("UCL"), Cal. Lab. & Prof. section 17200 et seq., also were derivative of their other claims and also were not suitable for class treatment. Slip op. at 24.

Having found that common questions did not predominate, the Court went on to discuss adequacy and typicality. Slip op. at 24-26. The Court found that one class representative was not adequate because he lied in deposition about his criminal records. Slip op. at 25. Another was not adequate because the Court found that his memory and "sincerity in trying to honestly answer questions under oath" was "unreliable." Ibid. The third was not adequate because "by his own testimony, Lamps Plus provided all the rights to which he was entitled by law." Ibid.

The Court also found that the plaintiffs had not established that class treatment was superior to litigation of individual claims because "there could be thousands of mini-trials to address the factual issues" identified by the Court in its ruling. Slip op. at 26.

The opinion is available here.

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