BANKE, J. —
Eva Vidal Mies seeks to bring a class action against her former employer, Sephora U.S.A., Inc. (Sephora), on behalf of employees who, like her, worked as "Specialists" in Sephora's California retail stores. Mies claims Sephora misclassified Specialists as exempt from certain provisions of California labor law and, as a result, failed to pay overtime wages and failed to compensate them for missed meal periods. However, after crediting evidence that all Specialists do not engage in the same tasks to the same extent, the trial court denied class certification, concluding individualized issues, not common ones, would predominate the determination of liability. We conclude the trial court used proper legal criteria in assessing class certification and substantial evidence supports the trial court's findings. We therefore also conclude the court did not abuse its discretion in denying class certification.
Sephora operates 47 retail cosmetics stores in California. Each store has a "Store Director," who runs the store, and one to four Specialists. Specialists manage "Cast Members" (sales associates) and "Leads" (lead consultants, floor leads, or sales leads who take on greater responsibilities and who typically seek promotion to Specialist), and may manage between 10 and 45 subordinates at any given time.
In her February 27, 2012, complaint, Mies alleges Sephora has misclassified Specialists as exempt and paid them lower wages than required by law. She further alleges Sephora failed to pay overtime wages in violation of Labor Code section 1194, and engaged in unfair competition in violation of Business
Mies seeks to certify a class of the 99 California-based Specialists employed between February 22, 2006, and the present.
In support of her class certification motion, Mies presented evidence she maintains shows the Specialist position is standardized, and thus amenable to class treatment.
The job description also refers to companywide policies covering innumerable tasks to be performed in Sephora stores, whether completed by a Specialist or some other employee. Additionally, some tasks are assigned from above "store level" via e-mail or an electronic planning system, and Specialists review these communications and assure task completion. There is also a training program for all new Specialists, to ensure consistency in
In making her case for class certification, Mies also pointed to a 2010 in-house survey of how Sephora leadership (Store Directors, Specialists and Leads) spent nonselling time, which relied upon a single list of activities to analyze leadership time at all stores. The survey found leadership employees, collectively, generally spent the same percentage of time tackling nonselling tasks regardless of their store's sales volume.
Mies also asserted the trial court could look to statistical evidence to determine liability on a classwide basis. Mies did not propose or justify any particular statistical method of her own, however, and submitted no expert testimony. In her opening memorandum in the trial court, Mies simply stated "[g]iven we know the universe of tasks Sephora believes a Specialist can perform (based on its [2010] survey)," Mies "will present evidence through a statistical sample of the class, which will determine how much time Specialists spend on specified tasks" and "therefore establish, on a collective basis, whether [they] spend more than 50% of their time" doing nonexempt work. In her reply memorandum, Mies clarified she was not offering a statistical method of her own, but relying on Sephora's expert's deposition testimony, which she believed was evidence statistical sampling would give proof of classwide liability. She cited Sephora's expert's testimony about the usefulness of time and motion studies (essentially, employee monitoring) to ascertain what time a given employee spends on certain tasks. Moreover, the expert testified he had used such a study in connection with a class certification motion in a different case involving the question of employee classification. According to e-mails between Sephora and its expert, Sephora had considered conducting an observation study of 10 Specialists for its own purposes in this case, but apparently decided it was not then worth the cost.
Sephora opposed class certification with evidence the duties of Specialists varied. A Sephora district manager, Kelly Guerriero, declared company policies do not dictate everything a Specialist does, and Specialists "constantly have to use good judgment" to resolve situations with clients and with the employees they manage. She further stated the work of a Specialist varies with the size of the store, the number of Specialists employed at the store, the skills and experience of the Specialists, and the management style of the Store Director. Additionally, some stores have operation specialists and HR (human resources) specialists. In stores without such employees, Specialists also perform these functions. In stores with operation and HR specialists, regular Specialists "spend more time coaching, training and developing their subordinates" on the sales floor.
Both Mies and Sephora submitted declarations from Specialists who estimated the time they spent performing various tasks. On the whole, Mies's declarants testified to spending most of their time selling to clients on the sales floor (activity Mies contends is not exempt from the labor laws). One Specialist stated she was selling 90 percent of her time and taking directions from the Store Director the remaining 10 percent and never "really engage[d] in any training" of employees. Another said she spent 75 percent of her time on the sales floor, while another said she spent 95 percent of her day in direct contact with clients.
Sephora's declarants related different experiences. For example, one said she spent 80 to 90 percent of her time on management tasks, including working as director in charge (in the Store Director's absence), preparing the store schedule, hiring, and human resources development, and only 10 to 20 percent of her time selling, an activity which was to be avoided. Another Specialist estimated spending 60 to 70 percent of her time on management and back office tasks, and 30 to 40 percent of her time on sales tasks. And another testified to spending 70 to 80 percent of her time on back office management and 20 to 30 percent on sales as a director in charge and coaching/training staff. Deposition testimony of a Sephora designee most knowledgeable about the duties of Specialists stated "in an ideal world" Specialists "would be out there [selling] all the time" but "it's not realistic" because of the job's "operational and people development ... responsibilities." The witness continued, the percentage of time selling "would range by store size and volume etc.... and so one expectation wouldn't even be realistic."
According to Sephora's district manager, it was common for Specialists to take charge of a store because, given the long retail hours, Store Directors were not always present. Sephora's Specialist declarants, likewise, reported spending differing amounts of time as "Director in Charge" (for example, between seven and 15 hours per week, or 10 and 16 hours per week, or 15 and 20 hours per week, or up to 25 hours during holidays). Many noted they exercised their independent judgment while Director in Charge, and also while eliminating applicants from hiring pools or recommending them, deciding what employee conduct to discipline, when to coach staff, or whether to bend rules for customers (e.g., regarding sales promotions).
In ruling on the class certification motion, the trial court focused on whether common or individual issues would predominate. It found there would be some common issues, such as "how to define non-exempt v. exempt tasks, as well as the law that applies to those found to be working over 50% at non-exempt tasks." It also acknowledged the existence of companywide policies applicable to Specialists (and numerous other categories of Sephora employees) suggesting how Specialists might spend portions of their time, at least in theory. These policies governed, for example, how to work the selling floor (when to greet customers, what to wear, and how to price and arrange many of the products).
The court concluded, however, the "central issue for trial" would be "how the Specialists spend their time, not whether a given task" is exempt. It further concluded the generally applicable company policies, alone (which applied to Specialists and other employees alike), could not "at least in this case" provide a common basis for determining whether a given Specialist was exempt, because the Specialists' declarations — the trial court credited declarations submitted by Mies and Sephora equally — showed Specialists "handled their time very differently" in performing a wide variety of tasks.
Sephora maintains Specialists are exempt because they are employed in an executive or administrative capacity. Under IWC wage order No. 7-2001, a person "employed in an executive capacity means any employee" earning a certain minimum amount "(a) Whose duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof; and [¶] (b) Who customarily and regularly directs the work of two or more other employees therein; and [¶] (c) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and [¶] (d) Who customarily and regularly exercises discretion and independent judgment; and [¶] (e) Who is primarily engaged[
Similarly, a "person employed in an administrative capacity means any employee" earning a certain minimum amount whose duties involve "office or non-manual work directly related to management policies or general business operations of his/her employer or their employer's customer[]." (Cal. Code Regs., tit. 8, § 11070, subd. 1(A)(2)(a).) The employee also must be one "(b) Who customarily and regularly exercises discretion and independent judgment; and [¶] (c) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity (as such terms are defined for purposes of this section); or [¶] (d) Who performs
The inquiry into what work is actually done, however, can be heavily individualized. (See Duran, supra, 59 Cal.4th at p. 27 ["the outside salesperson exemption [to overtime pay] has the obvious potential to generate individual issues because the primary considerations are how and where the employee actually spends his or her workday"]; Sav-On, supra, 34 Cal.4th at pp. 336-337 ["Any dispute over `how the employee actually spends his or her time' [citation], of course, has the potential to generate individual issues."]; Soderstedt v. CBIZ Southern California, LLC (2011) 197 Cal.App.4th 133, 148 [127 Cal.Rptr.3d 394] (Soderstedt) ["evaluation of whether the elements of the administrative exemption have been established requires a fact-intensive inquiry, including an examination of the actual work performed by the employee"].)
When there are both common and individual issues, the question for the trial court is which sort of issues predominate. (Duran, supra, 59 Cal.4th at
One distinction the Supreme Court has drawn with respect to an employer's defense of exempt classification is whether the defense merely raises questions about individuals' recovery ("questions about the calculation of damages generally do not defeat certification") or whether the defense hinges on the employer's liability and the determination of "factual questions specific to individual claimants," which can present a "greater challenge to manageability." (Duran, supra, 59 Cal.4th at p. 30 ["`Only in an extraordinary situation would a class action be justified where, subsequent to the class judgment, the members would be required to individually prove not only damages but also liability.'"].)
Whether to grant or deny class certification is a matter within a trial court's discretion. (Dunbar v. Albertson's, Inc. (2006) 141 Cal.App.4th 1422, 1430-1431 [47 Cal.Rptr.3d 83].) That said, "appellate review of orders denying class certification differs from ordinary appellate review. Under ordinary appellate review, we do not address the trial court's reasoning and consider only whether the result was correct. [Citation.] But when denying class certification, the trial court must state its reasons, and we must review those reasons for correctness. [Citation.] We may only consider the reasons stated by the trial court and must ignore any unexpressed reason that might support the ruling. [Citations.] [¶] We will affirm an order denying class certification if any of the trial court's stated reasons was valid and sufficient to justify the order, and it is supported by substantial evidence. [Citations.]
The Court of Appeal in Dailey, supra, 214 Cal.App.4th at pages 991-992, applied the same deferential standard of review to affirm denial of certification. It saw "nothing inappropriate in the trial court's examination of the parties' substantially conflicting evidence of Sears's business policies and practices and the impact those policies and practices had on the proposed
Given the deference owed to the trial court (Sav-On, supra, 34 Cal.4th at p. 331; Dailey, supra, 214 Cal.App.4th at pp. 991, 997), we have no trouble concluding substantial evidence supports the trial court's finding that individual issues are likely to predominate and there was no abuse of discretion in denying class certification.
The trial court reasonably credited the declarations of Specialists from both sides, which, read together, suggest Specialists' exempt duties vary significantly from store to store and Specialist to Specialist, despite there being an understanding as to what tasks Specialists are likely to perform and despite Sephora having companywide operational policies. (Dailey, supra, 214 Cal.App.4th at p. 997 ["In light of [the] ... substantial evidence disputing the uniform application of its business policies and practices, and [the] showing [of] a wide variation in proposed class members' job duties, the trial court was acting within its discretion in finding that plaintiff's theory of ... liability was not susceptible of common proof at trial."]; see Walsh v. IKON Office Solutions, Inc. (2007) 148 Cal.App.4th 1440, 1458 [56 Cal.Rptr.3d 534] ["record suggests that the `dispute over "how the employee actually spends his or her time"' does `generate individual issues' which, in the trial court's estimation, rendered commonality so lacking as to destroy the justification for class ..."]; Dunbar v. Albertson's, Inc., supra, 141 Cal.App.4th at p. 1431 ["the significant variation in the grocery managers' work from store to store and week to week" required "very particularized individual liability determinations"].)
Mies claims the trial court did not consider her theory that, to be exempt, a Specialist must "customarily and regularly exercise[] discretion and independent judgment." (See Cal. Code Regs., tit. 8, § 11070, subd. 1(A)(1)-(2).) She then faults the court for not evaluating whether every Specialist uniformly could not, and did not, perform exempt work requiring such independence, because Sephora's detailed policies governed all aspects of store operations and curtailed all Specialists' independence.
Mies would have us, from Sephora's detailed policies, draw inferences about what every Specialist actually does and how much independence every Specialist actually exercises, while essentially ignoring the declarations from both sides, which the trial court credited on those very subjects — declarations that indicate a lack of classwide uniformity.
Mies also claims the trial court erroneously reviewed the evidence for success on the merits, and not merely for commonality or individuality of class members' issues. (See Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, 1300 [105 Cal.Rptr.3d 443] (Jaimez) ["The determination of whether to certify a class does not contemplate an evaluation of the merits."].)
The order denying class certification is affirmed.
Margulies, Acting P. J., and Dondero, J., concurred.
In Martinez, 182 mangers (including general managers and several types of assistant managers) at 13 California "Joe's Crab Shack" eateries sought class treatment in an overtime case, which, like this one, appears to hinge on the employee classification question. (Martinez, supra, 231 Cal.App.4th at pp. 369-371, fn. 4.) According to the Martinez plaintiffs, "[w]hat was common to [the manager] plaintiffs, in addition to ... standard policies implemented ... at each of their restaurants, was their assertions their tasks did not change once they became managers; they performed a utility function and routinely filled in for hourly workers in performing nonexempt tasks; and they worked far in excess of 40 hours per week without being paid overtime wages." (Id. at p. 376.)
Martinez did not view all the managers equally. The appellate court distinguished between the assistant managers, where "many of the tasks [they] performed ... are identical to those performed by nonexempt employees" (Martinez, supra, 231 Cal.App.4th at p. 376), and the general managers (a large number of whom opposed certification), where many mainly performed "higher rung" functions, manifestly exempt, and spent a minority of their time on tasks that nonexempt employees typically completed (yet the general managers asserted these tasks were done in a training or supervisory role). The appellate court suggested the trial court had erred in its analysis as to the "subordinate managerial employees" and remanded for reconsideration of certification. (Id. at p. 377, 380-381.) As to these subordinate managers, who continued to perform the same sorts of tasks they did when nonexempt employees, the appellate court viewed "[t]he crux of the matter" — the key question for trial — as "whether a typically nonexempt task becomes exempt when performed by a managerial employee charged with supervision of other employees." (Id. at p. 381.) As to general managers, however, whose tasks were more varied and "higher rung," the appellate court indicated the trial court could, on remand, "exercise its discretion ... to exclude [them] entirely from the class definition" (id. at p. 376).
The record in the instant case differs. There is substantial evidence Specialists do not share the same level of uniformity in work as the subordinate managers in Martinez. Rather, the evidence, as permissibly credited by the trial court, shows Specialists, depending on their individual situation, engaged in various amounts of higher-level managerial tasks, tasks like those done by the general managers in Martinez. Moreover, the key question in this case need not be viewed as "whether a typically nonexempt task becomes exempt" when performed by a Specialist, but whether individual Specialists engaged in management more than half of their time. (Martinez, supra, 231 Cal.App.4th at p. 381; see Duran, supra, 59 Cal.4th at p. 27 [exemption depends first and foremost upon what an employee actually does on the job].) We also note Martinez approved the outcomes in Dailey, supra, 214 Cal.App.4th 974, and Arenas, supra, 183 Cal.App.4th 723, which we conclude, for the reasons discussed above, support affirmance in this case.