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Friday, October 29, 2010

Hernandez v. Chipotle: Court of Appeal Jumps Into Brinker Breach

Lately we've been hearing about some trial court judges wanting to stay cases that include meal and rest period claims until the Supreme Court decides Brinker v. Superior Court (Hohnbaum). Never mind that no one knows when the Court will decide Brinker or exactly what issues it will decide. People seem to forget that the Court has no deadline for hearing cases on its docket, as demonstrated by the fact that it took more than five years to decide Martinez v. Combs.

The trial court in Hernandez v. Chipotle Mexican Grill, Inc. (October 28, 2010) --- Cal.App.4th ---, 2010 WL 4244583, decided not to wait for Brinker.

Rogelio Hernandez worked at a Chipotle restaurant as an hourly worker. He sued Chipotle for failure to provide meal and rest periods to hourly employees. Chipotle moved to deny class certification, and Hernandez moved to certify the class. The Court found Hernandez had established numerosity, ascertainability, typicality, and adequacy, but denied certification on the grounds that individual issues predominated over common issues, and class treatment was not superior to individual actions.
The trial court held that with regard to rest breaks, as conceded by Hernandez, employers need only authorize and permit such breaks, which means to make them available. The trial court recognized that the California Supreme Court had granted review of two cases to decide whether California law required employers to ensure employees take meal breaks, or if the proper standard was that employers need only provide employees with the opportunity to take such breaks. The trial court concluded the Supreme Court likely was to decide California employers were required to provide employees with the ability to take breaks, not to ensure breaks be taken. The trial court further ruled that although there were common questions regarding whether Chipotle's policy was to provide breaks, whether employees “missed or received shorten[ed] meal and rest breaks[,] and whether such constituted an unfair business practice, these questions do not predominate.” The trial court stated that if the Supreme Court held employers had to ensure employees take breaks, class action treatment of this case would be appropriate.

The trial court found that class adjudication of the wage and hour break claims was not manageable, nor would it provide a substantial benefit to the court or parties. Rather, individual inquiry was “required to determine if [Chipotle] is liable for denying proper meal and rest breaks to each of its thousands of employees.” Further, adjudication of these individual issues rendered classwide adjudication unmanageable because, even if an employee's time record indicated a break was missed, that in and of itself did not establish that Chipotle failed to provide, authorize or permit the employee to take a meal or rest break. Additionally, Hernandez failed to present a clear outline of how the court and parties could use a sampling of testimony to address all of the individual questions that had to be answered.
Slip op. at 3-4.

The Court of Appeal affirmed. First, the Court held that employers must make meal and rest periods available, not ensure that they are taken. Slip op. at 5-6. The Court distinguished Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949 on grounds that Cicairos relied on a now withdrawn DLSE opinion letter and that the employer in Cicairos effectvely precluded its employees from taking their meal and rest periods. Slip op. at 6-7.

The Court next held that California law did not foreclose the trial court from addressing the "make available v. ensure" issue in the context of class certification.
[N]either Linder [v. Thrifty Oil Co. (2000) 23 Cal.4th 429] nor other Supreme Court authority forecloses courts from examining a legal issue in addressing certification. “[Linder] said only that a plaintiff need not establish a likelihood of success on the merits in order to obtain class certification. It does not follow that, in determining whether the criteria of Code of Civil Procedure section 382 are met, a trial or appellate court is precluded from considering how various claims and defenses relate and may affect the course of the litigation, considerations that may overlap the case's merits.
Slip op. at 8. The Court distinguished the recent decision in Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, on the following grounds:
In Jaimez, Division One of this district reversed the denial of class certification in a case that, like Cicairos, involved employees who were on the road most of the day or at customers' places of business. Jaimez found it unnecessary to decide whether employers need only “provide” meal breaks and not ensure employees take them. The declarations established there were predominant common factual issues whether the employees missed meal breaks because of the employer's practice of designating delivery schedules and routes that made it impossible for employees to both take their breaks and complete their deliveries on time. Before 2006, the employer had a practice of deducting 30 minutes per shift for meal breaks even if no break was taken, and after 2006, employees had to sign a manifest indicating they took a meal break, regardless of whether they took the break, in order to get paid. Since the employer's practices presented the predominant common factual issues on the meal and rest break claims, Jaimez did not have to consider whether the employer violated a duty to provide or to ensure breaks. Jaimez does not hold that in every wage-and-hour case, even those presenting entirely different factual issues, courts may not consider the merits of a legal issue in order to rule on class certification. The trial court appropriately decided the threshold legal issue as it could not otherwise assess whether class treatment was warranted.
Slip op. at 8.

Given the foregoing, the Court held that the trial court did not abuse its discretion in denying class certification. The Court held that: substantial evidence supported the trial court's finding that individual issues predominate (slip op. at 8); the employer's time records did not demonstrate that Hernandez could prove classwide failure to provide meal and rest periods (slip op. at 9); Hernandez's evidence did not undermine the trial court's ruling (slip op. at 9); and there was substantial evidence of conflicts of interest among the putative class members because some class members also acted as supervisors and some class members may accuse others of violating the wage laws (slip op. at 10).

People have asked me whether this decision gives any indication of which way the Supreme Court will decide Brinker or might influence the Court in Brinker. The answer to both questions is no.

A few years ago, when we were all waiting for a decision in Murphy v. Kenneth Cole, several appellate courts and federal district courts published decisions on the same issue. The strong majority held that meal and rest period compensation was a penalty, not a wage. The Supreme Court granted review of the California cases and held pending its decision in Murphy.

I remember being on an MCLE panel with a well-known defense attorney the day after the Murphy oral argument. He boldly predicted that the Court would hold that meal period compensation was a penalty.

Of course, the majority of courts and my colleague were wrong. The Supreme Court in Murphy held that meal and rest period compensation is a wage.

I assume that the Supreme Court will grant the plaintiff's petition for review in Hernandez and hold pending Brinker. If the Court ultimately decides that employers need only make meal and rest periods available, it will be because the Court finds that to be the most reasonable and persuasive interpretation of the law, not because appellate courts or district courts said so.

The opinion is available here.

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