Judge: Peter Wilson, Case: 2017-00952534, Date: 2022-09-15 Tentative Ruling
Plaintiff Gerardo Soto seeks certification of the classes identified below. For the reasons which follow, the motion for class certification is DENIED.
Proposed classes:
· Class: Any and all persons who are or were employed in a non-exempt production position, however titled, by Defendants in the state of California between October 30, 2013 until the date of certification and through judgment of this lawsuit (hereinafter collectively referred to as the “Class” or “Class Members”).
· Subclass 1 (Rounding Class): Any and all persons who are or were employed in a nonexempt production position, however titled, by Defendants in the state of California within four (4) years prior to the filing of the complaint in this action until resolution of this lawsuit (hereinafter collectively referred to as the “Class” or “Class Members”) and were subject to Defendant’s rounding policy;
· Subclass 2 (Meal Period Premium Shift Differential Class): Any and all persons who are or were employed in a non-exempt production position, however titled, by Defendants in the state of California within four (4) years prior to the filing of the complaint in this action until resolution of this lawsuit (hereinafter collectively referred to as the “Class” or “Class Members”) and worked a shift differential and meal period premium was paid in the same workweek.
· Subclass 3: Any and all persons who are or were employed in a non-exempt production position, however titled, by Defendants in the state of California within four (4) years prior to the filing of the complaint in this action until resolution of this lawsuit (hereinafter collectively referred to as the “Class” or “Class Members”) and were subject to Defendant’s rounding policy and have separated employment at anytime between October 30, 2013 and the present.
· Subclass 4 (Wage Statement Class): Any and all persons who are or were employed in a non-exempt production position, however titled, by Defendants in the state of California since October 30, 2016 to the present, and were subject to Defendant’s rounding policy and received a wage statement.
· Subclass 5 (17200 Class): Any and all persons who are or were employed in a nonexempt production position, however titled, by Defendants in the state of California during the time period of October 17, 2013 and the present who were subjected to Defendant’s unlawful, unfair, or fraudulent business acts or practices in the form of Labor Code violations regarding payment of all wages, wage statements, and payment of final wages.
ROA 257, NOM.
Plaintiff explains that the “crux” of this case lies in his theory of unlawful rounding practice of employees’ time, which results in the failure to pay accurate meal period premiums and the other derivative claims. Plaintiff contends the rounding practice was not neutral and favored Defendant Greif Packaging LLC. ROA 257, P&A, pp. 4, 10. Plaintiff argues that Defendant’s timekeeping policy and attendance policy, the depositions of its Person Most Qualified, Christine Trocellier (Trocellier), and its Payroll Manager, Lorin Stamper (Stamper), and the data from Plaintiff’s expert, Brian Kreigler, Ph.D. (Kreigler), show that Defendant had a practice of rounding its employees’ start and stop times to the nearest quarter of an hour, that once the employees clocked in they were expected to immediately start work and were disciplined if they did not, and that based on a sample size of 140 employees, 86.5% of the sampled employees were underpaid, 68.4% of all shifts of the sampled employees were underpaid and an average of 3.15 minutes per putative class member shift was underpaid. ROA 257, P&A, pp.5-8; Kreigler Decl., ¶¶24, 26; Mauro Decl., Exs. B and F. Thus, Plaintiff concludes that this common proof demonstrates statistically, over time, Defendant’s policies and practice resulted in the failure to compensate its employees properly for all the time they actually worked.
Defendant argues in Opposition that Plaintiff’s evidence is insufficient to demonstrate that common questions of fact and law predominate because Plaintiff has not presented evidence that the employees were actually under Defendant’s control in that period of time after they clocked in and before they actually started work. Defendant presents declarations from 31 employees at its various locations in California to show that there was a “grace” period of 7 minutes prior the scheduled time in which employees could clock in but they were not permitted to start work and did not actually start working until after their shifts began. Defendant’s declarations show most employees were required to attend a morning meeting that began at the start of the shift before any work could begin and that most production machines were not turned on until after the completion of the morning meeting. Despite clocking in early, employees were free to attend to their personal business prior to the shift start time. As a result, Defendant contends that liability will require individualized proof to determine which employees were under Defendant’s control and required to work during the “grace period”. Similarly, Defendant argues individualized proof is required to establish liability for the failure to properly pay a premium for meal periods.
For the reasons explained below, the Court agrees with Defendant.
Relevant Authority:
“The party advocating class treatment must demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives. [Citations.] In turn, the community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021 [internal quotations and citations omitted].) These elements are typically referred to as: (1) ascertainability; (2) numerosity; (3) commonality; (4) typicality; (5) adequacy; and (6) superiority. (See e.g. Capitol People First v. State Dept. of Developmental Services (2007) 155 Cal.App.4th 676, 681.)
Plaintiff bears the burden of proof on these elements. This must be established by admissible evidence; the parties may not rely on allegations in their complaint. (Soderstedt v. CBIZ Southern Calif., LLC (2011) 197 Cal.App.4th 133, 154-155 [where plaintiffs submitted only 3 declarations of proposed class members, in the absence of admissible evidence re size of class, moving party failed to meet burden to show numerosity]; Barriga v. 99 Cents Only Stores LLC (2020) 51 Cal.App.5th 299, 322-323 [trial court has duty to scrutinize declarations re class certification to ensure they are not the product of “coercion or deception”].)
The Merits:
Ascertainability and Numerosity
There is no dispute that Plaintiff has met ascertainability and numerosity. The putative classes can be determined through Defendant’s records and approximately 423 non-exempt, production employees have been employed in California, including 322 non-exempt, production former employees in California who have separated from Defendant. ROA 258, Mauro Decl., Ex. E, Response Nos. 21 and 22.
As discussed above, the parties primarily dispute commonality and superiority. Defendant also disputes that Plaintiff meets the typicality and adequacy requirements.
Commonality and Superiority
1. Rounding
There is no dispute that Defendant’s timekeeping system in its California locations rounds the clock in/out times for the shifts of its non-exempt, production employees. See ROA 255, Ex. E, Response No. 30. Specifically, since at least October 2013, when an employee clocks in within 7 minutes of the nearest quarter hour, the time is rounded up or down and the employee is paid based on the rounded time. ROA 255, Ex. A, Trocellier Depo., pp. 7:22-9:4, 14:4-9, 16:22-17:7; ROA 255, Ex. C, Stamper Depo., pp. 46:9-47:1; ROA 253, Kreigler Decl., ¶16.a; ROA 255, Ex. B, Timekeeping Policy, p. 4, ¶1.a “General” [“Supervisors will take appropriate corrective action for employees … and who are not following the 7-minute rounding rule guidelines…”].
Rounding is permitted under California law provided a company’s rounding policy is “neutral, both facially and as applied.” (See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 903.) Plaintiff contends that as applied, Defendant’s rounding policy systematically works in its favor and to the detriment of the non-exempt, production employees as shown by the sample data analyzed by his expert, Dr. Kriegler. ROA 253, Kriegler Decl., ¶¶ 26, 27 [86.5% of putative class members were disadvantaged due to rounding, 7.8% of the putative class members were advantaged, and 5.7% were neither advantaged or disadvantaged; 68.4% of putative class member’s shifts included less rounded time than actual time, 14.2% included more rounded time than actual time, and 17.4% were not impacted]. Further, Plaintiff argues that Defendant’s rounding practice, in conjunction with the Defendant’s strict attendance policy, which imposes progressive discipline for being even 1 minute late in clocking in (ROA 255, Ex. F, p. 3), causes the non-exempt, production employees to clock in a few minutes before their scheduled start time to ensure they are not tardy.
Defendant argues that Plaintiff’s “liability model assumes that employees were working (i.e., under Defendant’s control) during the grace period…”). ROA 292, Opp., p. 15:1-2. See also, ROA 294, Ex. 34, Kriegler Depo., pp. 47:7-25 and 48:1-25. Defendant presents unrebutted evidence from 31 non-exempt production employees that, in practice, employees were not permitted to work until after their scheduled shift time. See ROA 294, Exs. 1-31. For the vast majority of employees, the common practice at each of Defendant’s locations was to prohibit work until after the morning meeting, which occurs once the shift starts. Except for the blow machine at the La Palma location, the production lines are turned off until after completion of the morning meeting or the start of the shift. But even those employees who are not required to attend the morning meeting, or in the La Palma location where it does not appear there was a morning meeting, the employees would not start work until after their shifts began even if they clocked in early. See e.g., ROA 294, Ex. 1, Smith Decl., ¶¶5-16, 17-18 [Fontana and Merced locations]; Ex. 3, Ponce Decl., ¶¶6-14 [Fontana location]; Ex. 4, Garcia Decl., ¶¶6-11 [Fontana location]; Ex. 5, Ruiz Decl., ¶¶5-13 [Fontana location]; Ex. 6, Orellana Decl., ¶¶5-12 [Fontana location]; Ex. 7, Cardoza Decl., ¶¶5-12 [Fontana location]; Ex. 10, Mackie Decl., ¶¶4, 5, 24-27 [La Palma location]; Ex. 17, Sanchez Decl., ¶¶4, 5, 25-28 [La Palma location]; Ex. 18, Nguyen Decl., ¶¶4, 5, 21-24 [La Palma location]; Ex. 19, Alexander Decl., ¶¶5-10 [Merced location]; Ex. 21, Martinez Decl., ¶¶5-9 [Merced location]; Ex. 23, Hernandez Decl., ¶¶5-10 [Merced location]; Ex. 27, Barroso Decl., ¶¶5-10 [Morgan Hill location]; Ex. 28, Gonzalez Decl., ¶¶5-9 [Morgan Hill location]; Ex. 29, Hernandez Decl., ¶¶5-8 [Morgan Hill location]; Ex. 31, Viveros Decl., ¶¶5-9.
As explained in Mejia v. DHL Express (USA), Inc., No. CV 15-890-GHK (JCX), 2016 WL 9450680, at *6 (C.D. Cal. Feb. 25, 2016), a case cited by Defendant, which Plaintiff has not sought to distinguish:
“California law requires that employees be compensated for all time ‘during which an employee is subject to the control of an employer.’ ” Rutti v. Lojack Corp., 596 F.3d 1046, 1061 (9th Cir. 2010) (separate opinion by Silverman, J.) (quoting Morillion v. Royal Packing Co., 22 Cal. 4th 575, 578 (2000)). “In defining ‘control,’ the [California Supreme Court] held employees were subject to the control of their employers when they are prevented from using ‘the time effectively for [their] own purposes.’ ” See's Candy, 210 Cal. App. 4th at 910 (quoting Morillion, 22 Cal. 4th at 586). Accordingly, a common time rounding policy can serve as a classwide method of proof only if class members were uniformly under Defendant's control when they clocked in before their shift start time. Otherwise, an individualized inquiry would be required to determine whether class members were working during grace periods.
As a result, the Meija court found that “[t]he commonality requirement of Rule 23 is not met because whether Defendant had a common time rounding policy does not answer whether Defendant illegally deprived employees of wages earned. Only an individualized inquiry focusing on Defendant’s control of each employee during the grace periods would answer this question. Because of the need for this individualized inquiry, Plaintiff also has not shown that the predominance requirement is met.” (Id. at *7. See also, See’s Candy, supra, 210 Cal.App.4th at 907-908 [citing Alonzo, 832 F. Supp.2d at 1129 (“employee’s reliance on time records improper where employee did not present foundational evidence addressing whether employees were working during the grace period”)]; Forrand v. Federal Express Corp. (C.D. Cal. 2013) 2013 WL 1703051, at *3 [“While clocking in and clocking out are relevant to and probative of whether an employee is under an employer’s control, they are far from dispositive and, standing alone, do not prove that an employee must be paid for the time spent off-the-clock but outside of the employee’s scheduled start time.”])
In his Reply, Plaintiff argues that Defendant’s grace period argument is a “new theory of defense” and may not counter its PMQ’s testimony. ROA 296, Reply, pp. 2-3, 8. However, Trocellier was not asked whether employees were under Defendant’s control or actually performed any work once they clocked in and prior to their shift time. Trocellier’s testimony is not inconsistent with the employees’ declarations.
And although Plaintiff attempts to undermine Defendant’s employee declarations by arguing they are all current employees, Plaintiff fails to recognize that at least 17 of the employees who provided declarations (those cited in this ruling) were employed by Defendant during the relevant period (i.e. post October 2013). Aside from himself, Plaintiff has not presented evidence that other employees were asked to or did any work after clocking in and before their shifts started. As such, there is no basis for Plaintiff’s argument that any of the employee declarations presented by Defendant are atypical or uncommon.
Plaintiff also argues that Levya v. Medline Industries, Inc. (9th Cir. 2013) 716 F.3d 510 requires class certification here. ROA 296, Reply, at p. 7. Not so.
In Levya, the district court expressly found that Plaintiff had shown “common questions exist with respect to Defendant's liability under state law” regarding its rounding policy but denied certification because “the damages inquiry will be highly individualized” and alternative methods were superior because of the difficulty in managing a class of that size. (Id. at 513.) But as the Appellate Court explained, individualized inquiry to damages alone is insufficient to deny certification because that is always the case in every class action, and further, the calculation of damages, once liability was established, would be feasible and efficient. (Id. at 513-514.)
Here, individualized proof is necessary to prove liability, before the question of damages is even reached. Given the proof regarding the grace period and common practice in each location not to start work until after the morning meeting or after the start of each shift, there is no efficient or feasible way to obtain evidence regarding Defendant’s control over each employee absent testimony from each employee. (See Meek v. SkyWest, Inc. (N.D. Cal. 2021) 562 F. Supp. 3d 488, 495-496 [quoting See’s Candy, 210 Cal.App.4th at 909 (“For grace period policies like these, “[t]o the extent an employee claims that he or she was not properly paid …, this claim raises factual questions involving whether the employee was in fact working and/or whether the employee was under the employer’s control during the grace period.”) and explaining plaintiffs could not satisfy commonality for class certification].) Further, it is telling that Plaintiff makes no attempt in his Reply to distinguish this case from the cases cited by Defendant that an individualized inquiry on the issue of control is necessary.
Manageability and superiority are not shown, in light of the individualized proof necessary for Plaintiff’s rounding theory.
2. Meal Periods
Plaintiff argues that Defendant failed to include shift differentials into the regular rate for meal period premiums. ROA 257, P&A, p. 15:15-16. Plaintiff presents Defendant’s admissions that when an employee was entitled to a meal period premium in the same workweek the employee received a shift differential, the meal period premium was paid at the employee’s hourly rate and did not take into account the shift differential. ROA 257, P&A, p. 17:9-11; ROA 258, Ex. G, Response Nos. 3-8. Plaintiff also presents its expert’s analysis of data regarding underpaid meal premium payments. ROA 253, Kriegler Decl., ¶30 and Ex. 4.
In its Opposition, Defendant correctly points out that Plaintiff has failed to present evidence that, on a classwide basis, employees were legally entitled to meal period premiums. ROA 292, Opp., p. 15. Plaintiff has not presented any policies or practices that prevented employees from taking their full, meal periods. Significantly, Defendant presented unrebutted evidence that the production lines shut down for meal periods, that employees were able to take their full meal breaks, that its meal break policies and practices were lawful, and that its timekeeping system automatically paid premiums. E.g., ROA 294, Ex. 1, Smith Decl., ¶5, Ex. 17, Sanchez Decl., ¶¶6-17, Ex. 18, Nguyen Decl., ¶¶8-9, Ex. 36, Stamper Depo., p. 34. Additionally, Defendant faults the data from Plaintiff’s expert because he used an incorrect measure, i.e. biweekly pay period instead of work weeks, for his statistics regarding the meal period premiums. ROA 292, Opp., pp. 17-18.
Again, individualized proof is necessary to prove premium payments were due.
Since all of the classes are dependent on Plaintiff’s rounding and meal period theories, Plaintiff fails to establish commonality and superiority for any of them.
Typicality and Adequacy
The “test of typicality is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiff, and whether other class members have been injured by the same course of conduct.” (Martinez v. Joe's Crab Shack Holdings (2014) 231 Cal.App.4th 362, 375 (internal quotes omitted).) Further, the class representative, through qualified counsel, must show he or she can adequately represent the class by being capable of “vigorously and tenaciously” protecting the interests of class members. (Simons v. Horowitz (1984) 151Cal.App.3d 834, 846.)
“The adequacy inquiry ... serves to uncover conflicts of interest between named parties and the class they seek to represent.” (Global Minerals & Metals Corp. v. Superior Court (2003) 113 Cal.App.4th 836, 851.) “Where there is a conflict that goes to the very subject matter of the litigation, it will defeat a party’s claim of class representative status. Thus, a finding of adequate representation will not be appropriate if the proposed class representative’s interests are antagonistic to the remainder of the class.” (Ibid.
[internal quotes and citations omitted].)
Plaintiff had the unique position of working on the blow mold machine, which was only located in the La Palma location and ran continuously unlike the other production lines. ROA 294, Ex. 35, Soto Depo., pp. 17:11-3, 17:22-25, 19:14-17, 86:19-23; ROA 294, Ex. 17, Sanchez Decl., ¶¶4-5. Plaintiff has provided the only evidence that his supervisor ordered him to arrive prior to his shift start time and began working before his shift start time. ROA 294, Soto Depo., pp. 38:1-13. Even Plaintiff’s Reply appears to acknowledge that Plaintiff is an exception in this regard. ROA 296, Reply, p. 11:28. Similarly, Plaintiff has provided the only testimony that he was required to work during his meal breaks. ROA 294, Soto Depo., pp. 53:14-55:9; ROA 255, Ex. H, Soto Depo., pp. 58:22-59:21.
Plaintiff was also disciplined for his failure to consistently clock in / out in violation of Defendant’s policies. ROA 294, Soto Depo., pp. 55:10-22; ROA 255, Ex. H, Soto Depo., pp. 75:21-86:8.
Given Plaintiff’s unique position and experiences, and failure to follow Defendant’s policies subjecting him to discipline, he also does not meet the typicality and adequacy requirements.
Based on the foregoing, Plaintiff has failed to discharge his burden that any of the classes he seeks to certify are subject to common proof, and that he is a typical and adequate class representative.
The status conference is continued to February 3, 2023 at 9:00 a.m. and the parties are Ordered to file a joint status report not later than January 27, 2023.
Plaintiff is ordered to give notice.