Plaintiff and appellant Rogelio Hernandez (Hernandez) appeals from the order denying his motion for class certification and granting the motion to deny class certification of defendant and respondent Chipotle Mexican Grill, Inc. (Chipotle). We hold that the trial court did not abuse its discretion and affirm. In doing so, we conclude that employers must provide employees with breaks, but need not ensure employees take breaks.
Chipotle is a fast-food restaurant chain, currently employing about 3,000 hourly employees in its approximately 130 California restaurants. All Chipotle employees are nonexempt, hourly workers entitled to overtime compensation when earned, including managers, except for the salaried position of "restaurateur." Each Chipotle restaurant is managed by either a restaurateur or a general manager. Some employees move in and out of supervisory roles. For example, employees may be responsible for scheduling meal and rest breaks on some shifts and weeks, but not on others. The average Chipotle employee earns $8.37 per hour. The number of employees at each Chipotle restaurant
Chipotle's corporate headquarters establishes employment policies for its restaurants. Chipotle's written policies require managers to provide employees with meal and rest breaks. Managers are to determine when, or if, employees are permitted to take breaks. Employees are not permitted to self-initiate breaks and are prohibited from skipping breaks. Chipotle mandates employees take one uninterrupted 30-minute meal break if they work over five hours, and two 30-minute meal breaks if they work more than 10 hours. Managers are to provide employees with a 10-minute rest break if they work three and one-half hours or more. If employees work more than six hours a day, they are to take two paid rest breaks of at least 10 minutes each.
Chipotle directs employees to record their breaks. Chipotle pays employees for the time they take for breaks even though they are relieved of duty and free to leave the restaurant, so there is no financial incentive for employees to record all breaks accurately. Chipotle provides free food and beverages to encourage employees to take their meal breaks and provides comfortable break facilities. Paying for meal periods and providing free food is part of Chipotle's culture and helps Chipotle recruit and retain employees.
Hernandez worked in the Chipotle Manhattan Beach restaurant from February 2002 until it closed in May 2003. Soon thereafter, he worked in the Hawthorne restaurant, where he remained until Chipotle terminated his employment in July 2006. During his employment, Hernandez was an hourly worker.
Hernandez filed this lawsuit against Chipotle on his behalf and on behalf of a proposed class of similarly situated nonmanagerial employees. Hernandez alleged Chipotle violated labor laws by denying employees meal and rest breaks.
Chipotle moved to deny class certification and strike the class allegations. Chipotle contended it had met its responsibility under California law to provide (authorize and permit) employees with meal and rest breaks.
Chipotle also submitted the declaration of Human Resource Director Brian Brown, who explained Chipotle's organization and methods of operation. He declared in part: "Because crew members are paid for meal and rest breaks, they do not have a financial incentive to record their breaks accurately and occasionally fail to do so. . . . [I]f a crew member records the start of a meal break and forgets to record the time it ends, the meal break is still fully paid." Several Chipotle crew members and managers corroborated Mr. Brown's testimony that employees do not always remember to "clock-out" before going on a break. For example, David Pineda, the service manager at Chipotle's Hawthorne location testified, "Although we emphasize that employees should clock in and out for their meal and rest periods, I am aware that some employees do not always do so. Because the company pays employees for their meal and rest period time, employees do not always think to clock-out before going on a break."
About two weeks after Chipotle filed its motion, Hernandez moved for class certification. Hernandez estimated that the class consisted of thousands of current and former employees who worked millions of shifts for Chipotle beginning in July 2003. The proposed class excluded those individuals in managerial positions. Hernandez conceded that California employers need only provide employees with rest breaks. However, Hernandez cited Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949 [35 Cal.Rptr.3d 243] to support his theory that California employers were obligated to ensure employees took meal breaks.
Hernandez submitted a compilation of his time records. He also submitted excerpts from his deposition in which he testified to the following: While
Hernandez additionally submitted declarations from a total of 23 nonmanagement, hourly employees who worked at Chipotle restaurants in California. The employees declared that sometimes their managers denied or interrupted their breaks, in varying degrees.
Pursuant to court order, Chipotle served a computerized spreadsheet with statistics relating to employee time records. Thereafter, Hernandez filed a supplemental expert declaration from professor of statistics Richard Kakigi, Ph.D. He had analyzed Chipotle's clock-in and clock-out data from July 1, 2003, through February 9, 2009, for nonexempt employees, "excluding employees who exclusively occupied any of the five management positions for the entire class period." (Fn. omitted, italics added.) Professor Kakigi concluded as follows: Ninety-two percent of the employees had missed at least one meal break. On average, each employee missed meal breaks on 20.5% of his or her workdays. "All stores (100%) had at least one missed meal break. On average, each employee had a missed meal break on 20.5% of his or her workdays." Eighty-eight percent of employees had at least one missed rest break, and on average each employee had a missed rest break on 13.0% of his or her workdays. All stores (100 percent) had at least one missed rest break, and on average each store had a missed rest break on 13.0 percent of its employee workdays.
In response, Chipotle argued the professor's conclusions had no value because (1) he counted as a missed break any employee who refused to take a break, as well as those who might have reported back to work one minute early; (2) the employee records included those who worked occasionally as managers, thereby creating an inherent conflict of interest among putative class members; (3) the records did not establish a universal policy or practice as they demonstrated that on the "vast majority of workdays and for the vast majority of employees, meal periods were taken"; and (4) the records did not establish why breaks were not taken or were too short.
After a lengthy hearing, the trial court issued a comprehensive written ruling. The court found Hernandez had established the factors of numerosity, ascertainability of the class, typicality of Hernandez's claims, and adequacy of Hernandez and his counsel as representatives. However, the court 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 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.
A ruling on certification is reviewed for abuse of discretion. (Sav-On Drug Stores, supra, 34 Cal.4th at p. 326.) "Because trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, they are afforded great discretion in granting or denying certification. The denial of certification to an entire class is an appealable order [citations], but in the absence of other error, a trial court ruling supported by substantial evidence generally will not be disturbed `unless (1) improper criteria were used [citation]; or (2) erroneous legal assumptions were made [citation]' [citation]. Under this standard, an order based upon improper criteria or incorrect assumptions calls for reversal `"even though there may be substantial evidence to support the court's order."' [Citations.]" (Linder v. Thrifty Oil Co.
Thus, "[t]he appeal of an order denying class certification presents an exception to the general rule that a reviewing court will look to the trial court's result, not its rationale. If the trial court failed to follow the correct legal analysis when deciding whether to certify a class action, `an appellate court is required to reverse an order denying class certification . . ., "even though there may be substantial evidence to support the court's order."' [Citations.] In other words, we review only the reasons given by the trial court for denial of class certification, and ignore any other grounds that might support denial." (Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 828-829 [97 Cal.Rptr.2d 226].) "`[W]here a certification order turns on inferences to be drawn from the facts, "`the reviewing court has no authority to substitute its decision for that of the trial court.'"' [Citations.]" (Sav-On Drug Stores, supra, 34 Cal.4th at p. 328.)
The trial court first held that California law requires that employers provide, but not ensure, employees take meal and rest breaks. Since we must ascertain if the trial court's ruling was based upon an erroneous legal analysis (Linder, supra, 23 Cal.4th at pp. 435-436), we turn to this legal issue.
Hernandez relies on Cicairos v. Summit Logistics, Inc., supra, 133 Cal.App.4th 949 (Cicairos) to argue employers must ensure meal breaks are taken. In Cicairos, an employer did not schedule meal breaks for its truck driver employees, established a system whereby drivers were pressured to make a certain number of trips during a workday, had a monitoring system to track drivers, and did not include a code for rest stops in its computer system. (Id. at p. 962.) These and other aspects of the work environment effectively deprived drivers of an opportunity to take breaks. In reversing a summary judgment granted to the employer with regard to meal break claims, the appellate court relied upon a January 28, 2002 opinion letter from the Division of Labor Standards Enforcement (DLSE). Cicairos stated, "Under the facts presented . . . the [employer's] obligation to provide the plaintiffs with an adequate meal period is not satisfied by assuming that the meal periods were taken, because employers have `an affirmative obligation to ensure that workers are actually relieved of all duty.' (Dept. of Industrial Relations, DLSE, Opinion Letter No. 2002.01.28 (Jan. 28, 2002) p. 1.)" (Cicairos, supra, at pp. 962-963.) With regard to rest breaks, Cicairos held "the [employer] could . . . be liable if the plaintiffs did not take their full 10-minute rest breaks because, as a practical matter, the defendant did not permit the plaintiffs to take their rest breaks. (See Cal. Code Regs., tit. 8, § 11090, subd. 12(A) [employer must authorize and permit rest period].) . . .
Cicairos does not assist Hernandez. The DLSE has withdrawn the opinion letter upon which Cicairos based its analysis. (Dept. of Industrial Relations, DLSE, Opn. Letter (Oct. 23, 2008) ["Court Rulings on Meal Periods"].) In doing so, the division stated: "Taken together, the language of the statute and the regulation, and the cases interpreting them demonstrates compelling support for the position that employers must provide meal periods to employees but do not have an additional obligation to ensure that such meal periods are actually taken." (Dept. of Industrial Relations, DLSE, Opn. Letter (Oct. 23, 2008) at p. 2.) Further, Cicairos's conclusion relating to meal breaks did not depend upon an "ensure" standard. Rather, the facts in Cicairos were such that the employer's business practices effectively deprived employees of the ability to take meal breaks. (Dept. of Industrial Relations, DLSE, Opn. Letter (Oct. 23, 2008) at p. 5.)
Hernandez's position also is not practical. "Requiring enforcement of meal breaks would place an undue burden on employers whose employees are numerous or who . . . do not appear to remain in contact with the employer during the day. See White v. Starbucks Corp., 497 F.Supp.2d 1080, 1088-89 (N.D.Cal. 2007). It would also create perverse incentives, encouraging employees to violate company meal break policy in order to receive extra compensation under California wage and hour laws. [Citation.]" (Brown v. Federal Express Corp., supra, 249 F.R.D. at p. 585.) Thus, although the Supreme Court has yet to decide the issue, we hold that the trial court used the correct legal analysis with regard to meal breaks.
Citing Linder, supra, 23 Cal.4th 439, Hernandez argues the trial court should not have addressed whether employers must provide meal breaks rather than ensure they be taken because a certification issue is "essentially a procedural one that does not ask whether an action is legally or factually meritorious." (Id. at pp. 439-440; accord, Sav-On Drug Stores, supra, 34 Cal.4th at p. 326.)
Hernandez also points to Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286 [105 Cal.Rptr.3d 443] (Jaimez) to support his argument that the trial court should not have examined the provide versus ensure legal issue. 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. (Jaimez, supra, at pp. 1303-1304.) 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. (Id. at pp. 1300-1301.) 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. (Id. at p. 1304.) 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.
The evidence before the trial court suggested that in order to prove Chipotle violated break laws, Hernandez would have to present an analysis restaurant by restaurant, and perhaps supervisor by supervisor. Given the variances in the declarations, Hernandez did not demonstrate a common practice or policy. (E.g., Ali v. U.S.A. Cab Ltd. (2009) 176 Cal.App.4th 1333, 1350 [98 Cal.Rptr.3d 568] ["When variations in proof of harm require individualized evidence, the requisite community of interest is missing and class certification is improper."]; compare with Bufil v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193 [76 Cal.Rptr.3d 804] [certification appropriate where there were allegations employer had policy of prohibiting certain employees from taking breaks].) Even if Chipotle managers directed when employees could take breaks, there was substantial evidence that Chipotle's supervisory personnel did not uniformly handle breaks. The only evidence of a companywide policy and practice was Chipotle's evidence that it provided employees with meal and rest breaks as required by law.
Hernandez argues he can prove Chipotle has not provided meal and rest breaks by using employee time records that show employees did not clock in and out for meal and rest breaks. However, there is substantial evidence the time records may be unreliable, because Chipotle paid employees for breaks
Professor Kakigi did not show a sampling of testimony would simplify a trial. He found that 92 percent of Chipotle's employees missed at least one meal break. We have already noted there are reasons to doubt whether the time records on which his analysis was based are reliable proof of missed breaks. As the trial court noted, "What percentage of the 92% have innocent explanations? If, for example, 75% of the 92% have innocent explanations
Additionally, Professor Kakigi premised his conclusions on the erroneous legal standard that Chipotle had to ensure employees took breaks. He assumed a break was missed if an employee clocked back in one minute early from a break, without accounting for why that occurred. As a practical matter, employees may have voluntarily chosen to return to work early. There was evidence some employees occasionally forgot to record their breaks and sometimes they recorded breaks inaccurately. Even if the employee records showed an employee did not take a break at all, the reason for that "missed" break must be ascertained, because, for example, if that employee willingly decided to forgo a break, there was no unlawful conduct.
Further, the professor's conclusions did not demonstrate Chipotle had a practice of denying breaks. Professor Kakigi stated that 92 percent of employees missed a break and all restaurants showed missed breaks. However, Professor Kakigi did not demonstrate a pattern or practice of missed breaks, for example, with evidence that missed breaks occurred more frequently at certain times, in specific restaurants, during certain seasons or shifts; nor did he offer any explanation why some employees at the same restaurant had different experiences.
The last reason provided by the court to deny certification was that members of the putative class had conflicts of interests. There was substantial evidence that some employees move in and out of supervisory roles with the responsibility to provide meal and rest breaks for themselves and other employees on the shift, without a change of title or other indicia of managerial status. Therefore, some putative class members may accuse other putative class members of violating their meal and rest period rights. The trial court did not abuse its discretion in concluding the likelihood that some class members might testify against other class members demonstrated antagonism of so substantial a degree as to defeat the purpose of class certification. (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 472 [174 Cal.Rptr. 515, 629 P.2d 23].)
Because there is substantial evidence to support the trial court's discretionary ruling, we affirm the order denying certification. Chipotle is awarded costs on appeal.
Flier, Acting P. J., and O'Connell, J.,