The legal viability of the plaintiffs' theory of recovery is not at issue on the motion for class certification, unless the merits are enmeshed with class action requirements. "Nonetheless, that determination may be proper when the defendants cannot attack the claim by demurrer or summary judgment following certification, or the parties jointly request a merits determination." The defendants did not show that either of these conditions applied.
The plaintiffs' theory of liability -- that the defendants had a system-wide practice of failing to pay meal break premium wages when required -- was capable of common proof. A UCL claim may be predicated on a practice of not paying premium wages for missed, shortened, or delayed meal periods "attributable to the employer’s instructions or undue pressure, and unaccompanied by a suitable employee waiver or agreement." Although an employer's failure to pay accrued meal period premiums, standing alone, does not violate section 226.7, nothing in the law "clearly permits" an employer to fail to pay meal period premiums. A UCL claim for failure to pay meal period premiums when required may stand even in the absence of an underlying claim for failure to provide meal periods.
The plaintiffs demonstrated that they could prove the alleged systemic unlawful practice and the damage caused thereby on a class-wide basis. The plaintiffs "did not seek accrued meal break premium wages owed to individual class members, but rather the loss of the 'compensation guarantee and enhanced enforcement' implemented by section 226.7."
In our view, real parties demonstrated that the existence of the practice and the fact of damage were matters suitable for class treatment. Real parties’ evidence supports the reasonable inference that in the context of a class action, they could establish that petitioners engaged in the alleged practice, that is, they never paid meal break premium wages, even though a significant number of employees accrued them. Furthermore, in view of real parties’ theory of restitution, those facts would also suffice to demonstrate the fact of damage. Under that theory, the fact of damage does not require a showing that all -- or virtually all -- class members accrued unpaid meal break premium wages, but only that on a system-wide basis, petitioners denied the class members the benefits of the compensation guarantee and enhanced enforcement implemented by section 226.7.The plaintiffs' proposed method of determining the amount of restitution did not create a barrier to certification. The plaintiffs argued that they could recover the "market value" of the loss of their statutory protections, rather than the value of the meal periods themselves. Although not entirely clear, it appears that the plaintiffs would measure this market value by the amounts that defendant paid when it began paying its employees meal period premiums. This measure did not require litigation of issues unsuitable for class treatment.
The opinion is available here.