SAMUEL CONTI, District Judge.
Plaintiffs Crelencio Chavez ("Chavez") and Jose Zaldivar ("Zaldivar") (collectively, "Plaintiffs") bring this action against Defendant Lumber Liquidators, Inc. ("LLI") for failure to pay overtime wages, failure to provide meal breaks, failure to pay vested vacation wages, and failure to reimburse work-related expenses. Now before the Court is Plaintiffs' Motion for Class Certification. ECF No. 51 ("Mot."). Plaintiffs seek to certify five classes, each of which includes past and present LLI employees who worked at LLI California stores from September 3, 2005 through the present ("the Class Period"). Plaintiffs' Motion is fully briefed. ECF Nos. 66 ("Opp'n"), 76 ("Reply"). Having considered all of the papers submitted by both parties, the Court concludes that the matter is appropriate for decision without oral argument. As detailed below, the motion is GRANTED in part and DENIED in part.
LLI sells flooring products, including pre-finished and unfinished hardwood, laminate, glue, moldings, and cleaning kits. Morrison Decl.
Chavez worked as a Store Manager at LLI's retail store in Commerce, California from 2000 to April 2009. ECF No. 56 ("Chavez Decl.") ¶ 2. Chavez was classified as exempt from overtime wages, but Plaintiffs allege that he was misclassified since he spent more than 50 percent of his time performing non-exempt tasks. ECF No. 12 ("FAC") ¶ 8. Chavez estimates that he spent over 85 percent of his workday on such manual duties as "checking in new material and moving it into the warehouse off of trucks . . ., `pulling' orders from the warehouse for customers, driving, checking material, [and] separating material and shipping material." Chavez Decl. ¶ 3. Chavez also states that LLI never presented him with an itemization or breakdown of how his bonuses or commissions were calculated and, when he quit his job, LLI did not pay him for all of his accrued vacation time.
Zaldivar worked at LLI's retail store in City of Industry, California from July 2007 to June 2010 as a non-exempt hourly Assistant Manager. Garcia Decl. Ex. C. ("Zaldivar Dep.") at 11-12, 35, 41-42. Zaldivar testified that he earned a commission in addition to his hourly pay, but never got a breakdown of the commissions and did not understand how LLI calculated his commission or bonus.
On September 8, 2009, Plaintiffs filed this putative class action in California state court. ECF No. 1 ("Not. of Removal"). LLI removed under 28 U.S.C. § 1441(b), and Plaintiffs subsequently filed a First Amended Complaint ("FAC") in federal court. Seven causes of action are asserted in the FAC: (1) & (2) failure to pay overtime wages in violation of California Labor Code ("Labor Code") § 1194 and 29 U.S.C. § 207; (3) failure to pay meal period wages in violation of Labor Code § 226.7; (4) failure to pay vested vacation wages in violation of Labor Code § 227.3
Plaintiffs now seek to certify five classes, each of which is limited to persons who were employed at LLI's California retail stores during the Class Period, September 3, 2005 through the present: (1) the "Misclassif[ied] Unpaid Overtime Class," represented by Chavez; (2) the "Unpaid Overtime Class," represented by Zaldivar; (3) the "Missed Meal Break Class," represented by Chavez and Zaldivar; (4) the "Unpaid Vacation Class" represented by Chavez; and (5) and the "Unpaid Reimbursement Class," represented by Chavez and Zaldivar. Mot. at 1.
"The class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only."
Under Rule 23(a), four prerequisites must be satisfied for class certification:
Fed. R. Civ. P. 23(a).
A plaintiff also must satisfy one or more of the separate prerequisites set forth in Rule 23(b): (1) there is a risk of substantial prejudice from separate actions; (2) declaratory or injunctive relief benefiting the class as a whole would be appropriate; or (3) common questions of law or fact predominate and the class action is superior to other available methods of adjudication. Fed. R. Civ. P. 23(b).
"Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively demonstrate his compliance with the Rule — that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc."
In support of their briefs, both Plaintiffs and LLI submitted a number of declarations from current and former employees. ECF Nos. 53-57, 59-62 ("Pls.' Emp. Decls."); 67 ("LLI Emp. Decls."). Plaintiffs have also submitted declarations by Chavez and Zaldivar. Plaintiffs' employee declarants state that Store Managers worked overtime and performed non-exempt tasks, that employees often worked through meal breaks, and that LLI failed to reimburse employees for work-related expenses and unused vacation time. In contrast, LLI's employee declarants state that Store Managers primarily performed non-exempt tasks and that LLI complied with the law with respect to meal breaks, expense reimbursement, and vacation time.
These employee declarations have triggered a number of objections on both sides. LLI submitted forty-seven pages of objections to Plaintiffs' employee declarations and additional objections to evidence submitted by Plaintiffs in support of their reply brief. ECF No. 72 ("LLI Objs."); 86 ("LLI Reply Objs."). The Court notes that most of LLI's objections lack merit. For example, LLI frequently objects that an employee declarant's statement concerning his or her own job responsibilities "lacks foundation." These repetitive and lengthy objections might have been better presented as affirmative (and succinct) arguments in LLI's opposition brief. In any event, the Court need not and does not address each individual objection because they were filed in violation of the page limits set forth in the Civil Local Rules. Moreover, to the very limited extent that the evidence targeted by LLI is in fact objectionable, the Court does not rely on it.
Plaintiffs have objected to LLI's employee declarants on the grounds that they started working for LLI sometime after 2009 and, therefore, are somehow irrelevant to class certification. ECF No. 78 ("Pls.' Objs."). This argument lacks merit since all of Plaintiffs' proposed classes include employees who worked for LLI from 2005 through the present. If, as Plaintiffs suggest, LLI changed its policies to comply with the law sometime after 2009, then Plaintiffs should not have extended the class period "through the present."
The parties also dispute the veracity of various declarations filed by Carlos Alva, a LLI Store Manager who happens to be Chavez's brother-in-law. Alva initially filed a declaration in support of LLI's opposition to class certification, but later recanted, claiming that he was intimidated into signing this first declaration. ECF No. 67-1 ("Alva 1st Decl."); ECF No. 73 ("Alva 2nd Decl."). Plaintiffs filed a second and then a third declaration by Alva in support of their Motion, both of which differ significantly from Alva's first declaration.
Plaintiffs define the Misclassified Unpaid Overtime Class as: "All of [LLI's] past and present California employees who formerly worked or are currently working for [LLI] in the position of `Store Manager' from September 3, 2005 through the present." Mot. at 1. Plaintiffs estimate that at least forty-three LLI employees may fall within this class.
As the Supreme Court explained in
Here, Plaintiffs assert that LLI's uniform policy of classifying Store Managers as exempt presents a common question. Mot. at 12-13. Plaintiffs also contend that the following questions are common to the class: "Plaintiff's job requirements, Defendant's realistic expectations regarding Store Managers' job requirements, whether Defendant had a policy and practice of having Store Managers work without overtime pay, which of the tasks performed by Plaintiff are `managerial' . . ., whether Plaintiff is exempt from overtime as a `Manager' . . . ."
Several courts, including this one, have denied class certification in the face of similar "common questions." In
The Court finds that none of the "common questions" offered up by Plaintiffs are capable of class-wide resolution. The only class-wide policy identified by Plaintiffs — the classification of Store Managers as exempt — is insufficient to raise a common question.
In their reply brief, Plaintiffs raise a number of additional "common questions." These new arguments do nothing to change the Court's analysis. First, Plaintiffs argue that LLI's "planograms," detailed schematics which dictate "where products are placed on the shelf, how many items are placed there, and how much space the product takes up," may serve as common proof. Reply at 6. However, there is no indication that these planograms have anything to do with Store Managers' job responsibilities. Next, Plaintiffs argue that "whether more than 50% of the employees' [sic] time is spent on nonexempt tasks may be subject to common resolution based on the testimony of LLI regional managers, volume of sales per store, LLI's employment records of staffing stores."
For these reasons, the Court declines to certify Plaintiffs' proposed Misclassified Unpaid Overtime Class.
Plaintiffs define the Unpaid Overtime Class as:
Mot. at 1. Plaintiffs' theory is that LLI failed to account for non-discretionary pay or bonuses when calculating class members' overtime.
The Court finds that the Unpaid Overtime Class meets all of the requirements set forth by Rule 23. As an initial matter, Rule 23(a)'s numerosity requirement is satisfied since the Unpaid Overtime Class is comprised of at least 130 current and former nonexempt LLI employees.
Rule 23(a)'s commonality requirement is satisfied because Plaintiffs' claim is capable of class-wide resolution and is subject to common proof since Plaintiffs have identified a uniform policy or practice. LLI's Rule 30(b)(6) deponent indicated that, prior to May 2010, it was LLI's nationwide practice to pay time-and-a-half at an employee's regular hourly rate, without regard to bonuses that an employee may have earned during the relevant pay period. Garcia Decl. Ex. A ("Morrison Dep.").
Zaldivar's claims are typical of the 130 non-exempt employees' claims because all were subject to the common pay practices of LLI. Zaldivar has stated that he regularly worked more than forty hours per week and that he received $12,282.87 in sales bonuses that were not incorporated in his regular rate of pay for the purposes of calculating his overtime rate. Zaldivar Decl. ¶¶ 4-5. LLI objects that Zaldivar has failed to prove that his overtime was ever calculated incorrectly. Opp'n at 25. Plaintiffs respond that LLI has failed to produce adequately detailed records and LLI's argument is not relevant to whether class certification is appropriate. Reply at 10. The Court concludes that the evidence presented by Plaintiffs is sufficient for the purposes of class certification. At this stage, it is enough that Plaintiffs have shown that LLI had a uniform practice for calculating overtime pay, that LLI's uniform practice did not account for bonuses and other non-discretionary pay, and that Zaldivar received $12,282.87 in bonuses and claims to have worked more than forty hours per week on several occasions. "In determining the propriety of a class action, the question is not whether the plaintiff[s] . . . have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met[.]"
As to adequacy, for the time being, the Court is satisfied that Plaintiffs and their attorneys will fairly and adequately protect the interests of the class. There is no indication that Zaldivar has interests antagonistic to the rest of class or that he will be unable to prosecute this action vigorously through qualified counsel.
Accordingly, the Court certifies the proposed Unpaid Overtime Class.
Plaintiffs define the Missed Meal Period Class as: "All past and current California employees of LLI classified by LLI as non-exempt employees (including, but not limited to assistant store managers, sales associates, and warehouse associates) who worked more than 6 hours in any shift from September 3, 2005 through the present." Mot. at 1.
Under Section 512 of the Labor Code, employers are required to provide a thirty-minute meal period to employees who work more than five hours per day. Cal. Lab. Code § 512(a). If an employee works no more than six hours per day, the meal period may be waived by mutual consent of the employer and employee.
Plaintiffs allege that LLI regularly required employees to work through their thirty-minute meal periods and that LLI failed to compensate those employees for one additional hour of work in accordance with Section 226.7 of the Labor Code. FAC ¶¶ 48-51. In their moving papers, Plaintiffs claim that these missed meal periods were the result of understaffing and a statewide policy that required employees to remain on the premises and close to the showroom throughout their shifts so that they could respond to phone calls and customer questions. Mot. at 18. In other words, Plaintiffs claim that LLI employees were constantly "on-duty," even during their meal breaks.
Zaldivar has testified that LLI rarely provided him with a thirty-minute meal period and that "most of the time it was working, eating, working, eating." Zaldivar Dep. at 102. Chavez testified: "We just didn't have time to have lunches." Chavez Dep. at 244. Additionally, Plaintiffs submitted declarations from seven other LLI employees, each of whom stated: "During my workday I never got a meal break of 30 minutes free to eat without interruption from work or customers. I could never leave the Store for at least 30 minutes of my own free time due to my job duties." Pls.' Emp. Decls. ¶ 10.
LLI asserts that it has implemented a uniform meal policy in compliance with California Law. Opp'n at 12. LLI's employee handbook requires non-exempt employees to record the time they begin and end each meal period and states that "employees are expected to take [their] lunch/meal times within the time limits set by [their] supervisor." Matherne Decl.
The Court finds that the Missed Meal Period class fails to meet the predominance requirements of Rule 23(b). LLI has a lawful meal break policy and the Court would need to engage in individual factual inquiries to determine whether certain stores or Store Managers deviated from that policy. Specifically, for each alleged violation, the Court would need to determine, among other things: (1) whether an employee actually took a meal break; (2) whether that employee worked more than a five- or six-hour shift; (3) whether LLI forced that employee to work through the meal break; and (4) whether that employee was compensated for the missed meal period in accordance with Section 226.7 of the Labor Code.
Plaintiffs argue that these individual questions are trumped by common questions concerning staffing levels and LLI's requirement that on-duty employees remain available to work during meal breaks. Reply at 12. The Court disagrees. There is no indication that LLI's staffing levels are uniform from store-to-store. To determine whether staffing levels resulted in missed meal periods, the Court would need to engage in individualized questions concerning the staffing requirements at each of LLI's twenty-four California locations. Additionally, these staffing requirements could vary from day to day. Likewise, there is no indication that LLI implemented a uniform policy that required employees to remain on duty throughout their meal breaks. The Court is unwilling to infer the existence of such a uniform policy from the declarations of a handful of employees from a fraction of LLI's twenty-four California locations. Moreover, Plaintiffs' assertion that this policy was uniform is undercut by the employee declarations submitted by Defendants.
Plaintiffs also argue that the Ninth Circuit's decision in
For the reasons set forth above, the Court DENIES Plaintiffs' motion for class certification with respect to the Missed Meal Period Class.
Plaintiffs define the unpaid vacation class as: "All past employees of [LLI] employed in California from September 3, 2005 through the present who accrued vacation wages that were not cashed out or used." Mot. at 1. Under California Law, employers are required to pay employees for vested vacation time upon termination of employment. Cal. Lab. Code § 227.3. Chavez, the class representative for Plaintiffs' unpaid vacation claim, asserts that LLI failed to pay him for all vacation time owed after he quit in April 2009. Chavez Decl. ¶ 5.
As LLI points out, it is unclear whether Chavez suffered an injury and, thus, whether he has standing to bring this claim.
While the Court may not assess the merits of Chavez's claim at this stage of the litigation, the evidence before the Court indicates a lack of typicality, commonality, and predominance under Rule 23. Chavez's claims are not typical because they are subject to a unique defense, specifically, that Chavez has already been paid for accrued vacation time.
Plaintiffs argue that "[p]roof of the vacation pay claims requires only comparison of LLI's records reflecting the amount of vacation pay owed against LLI's records reflecting the amount of wages owed at termination." Reply at 15. However, the dispute over Chavez's vacation pay indicates that the factual inquiry will be much more complicated than Plaintiffs make it out to be. LLI's records show that Chavez was paid for all of the vacation time he was owed. Accordingly, evaluation of Chavez's vacation claim will require the Court to determine the accuracy of those records through testimony or other evidence — a highly individualized inquiry that would need to be repeated for each class member if the Court were to certify the class.
For these reasons, the Court DENIES certification for Plaintiffs' Unpaid Vacation Class.
Plaintiffs define the Unpaid Reimbursement Class as: "All past and current employees of Defendants who were employed in California from September 3, 2005 through the present who were not reimbursed for all work-related expenses." Mot at 2. This class is tied to Plaintiffs' claim under Section 2802 of the Labor Code, which provides that an employer must indemnify an employee "for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties." Cal. Lab. Code § 2802(a). Plaintiffs assert that Chavez and Zaldivar, along with a number of other LLI employees who filed declarations in support of Plaintiffs' Motion, used their personal vehicles and cellular phones to perform their jobs, without any reimbursement from LLI. Mot. at 21.
The Court finds that certification is inappropriate for the Unpaid Reimbursement Class because, under Rule 23(b), common issues do not predominate. Plaintiffs have not shown that LLI instituted a uniform policy resulting in the denial or reimbursement requests. In fact, LLI's Travel and Entertainment policy (T&E Policy) allows for reimbursement of a number of business-related expenses, including mileage. Matherne Decl. Ex. 13 ("LLI T&E Policy") § 4.7.5. Accordingly, to assess the merits of Plaintiffs' reimbursement claim, the Court would need to scrutinize each class member's claimed expenses. Specifically, the Court would need to make individualized factual determinations concerning: (1) whether the claimed expenses were "necessary" and incurred in direct consequence of the discharge of the employee's duties; (2) whether the employee actually sought reimbursement from LLI for the expenses; and (3) whether LLI reimbursed the employee for the expense.
Accordingly, the Court DENIES Plaintiffs' motion for class certification with respect to the Unpaid Reimbursement Class.
For the reasons set forth above, the Court GRANTS in part and DENIES in part Plaintiffs Crelencio Chavez and Jose Zaldivar's Motion for Class Certification. The Court CERTIFIES Plaintiffs' proposed Unpaid Overtime Class, and DENIES certification of the Misclassified Unpaid Overtime Class, the Missed Meal Break Class, the Unpaid Vacation Class, and the Unpaid Reimbursement Class.