California Appellate Court Rules Class Certification Appropriate in Wage and Hour Violation Lawsuit

California Appellate Court Rules Class Certification Appropriate in Wage and Hour Violation Lawsuit

November 30, 2016
Paul K. Schrieffer, Esq.

On November 21, 2016, the California Court of Appeal, Second Appellate District, Division Four, in a published decision, reversed the Trial Court’s Order decertifying a class in a lawsuit for violations of the California Labor Code. See, Lubin v. The Wackenhut Corporation, Case No. B244383 (November 21, 2016) ( (hereinafter “Lubin”).

The Court of Appeal held class certification was appropriate in a lawsuit alleging the employer-defendant failed to provide its employees with off-duty meal and rest breaks, notwithstanding the ruling from the U.S. Supreme Court in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (hereinafter “Dukes”). In contrast to the plaintiffs in Dukes, the plaintiffs in Lubin presented evidence of the defendant’s common policy of failing to provide off-duty rest and meal breaks to employees. As such, individual determinations as to whether a given employee was provided with a proper rest or meal break on a given day was only a question for damages, not liability. The Appellate Court also held that Dukes does not automatically bar the use of statistical evidence to establish class-wide liability.

Plaintiffs were former employees of the Wackenhut Corporation (hereinafter “Wackenhut”), a security solutions company. Wackenhut provides physical security services to a variety of clients from government entities to gated communities to industrial and commercial facilities. Wackenhut had a company-wide policy requiring all employees to sign on-duty meal agreements. The on-duty meal agreements signed by Wackenhut employees prior to 2004 failed to contain the required revocation language1. Beginning in 2004, only new hires signed meal agreements with revocation language. It was not until 2008 that Wackenhut required all security officers to sign a meal agreement with a revocation clause. Additionally, Wackenhut’s policy allowed its client’s preference to dictate whether an employee had an off-duty or on-duty meal period rather than determining itself whether the nature of the work at each site prevented its employees from having an off-duty meal period.

Wackenhut argued individual inquiries were necessary to establish if some of Wackenhut’s employees were, in fact, provided with off-duty meal and rest breaks at times. The Court of Appeal rejected this argument, holding the fact an employee may have actually taken a break or was able to eat food during the workday is insufficient to prove individual issues predominate when an employer has a general policy of not authorizing or providing the legally required breaks.2 Further, while the distinctive burden shifting mechanism for Title VII cases required individual determinations in Dukes, there is no similar mechanism in wage and hour violation cases. Therefore, an employer is able to defend wage and hour violation claims on a class-wide basis. The Appellate Court found the Trial Court erred in focusing on whether some employees may have received off-duty rest or meal breaks on occasion instead of whether Wackenhut generally violated wage and hour requirements.

The Court of Appeal also held the nature of work exception to meal break violations (there is no such exception with respect to rest breaks) may also be adjudicated on a class-wide basis. This exception, which is an affirmative defense for which the defendant-employer bears the burden of proof, requires proof that (1) the nature of the work prevents the employee from being relieved of all duty during the meal break; (2) the employee agrees to the on-duty meal period in writing; and (3) the writing advises the employee that it may, in writing, revoke the agreement at any time. The Court of Appeal held this defense does not bar class certification, as it may be evaluated on a class-wide basis. Specifically, in cases such as Lubin, where the employer required blanket off-duty meal break waivers in advance from all employees, class-wide treatment is permitted since the employer has shown it treated the off-duty meal break issue on a class-wide basis.3 As such, without evidence that the employer evaluated individual relevant factors4 permitting on-duty meal breaks, the individual issues were not dominant, and thus the class should been certified.

The Court of Appeal also re-affirmed other recent law that statistical sampling to establish class liability is not barred by the holding in Dukes.5 Whether a statistical sample is permissible depends on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action.6 Here, the Appellate Court held the statistical evidence, which was presented for the limited purpose of determining the number of employees who signed on-duty meal agreements that lacked the required revocation language, was reliable because plaintiffs presented supporting deposition testimony as to when the agreements were signed. The testimony helped establish the use of the revocation language at issue occurred over relevant time periods.

This recently decided appellate case re-enforces the point that a California employer should ensure that if its employees wish to waive their right to a meal break, those employees should be signing written waiver agreements that contain the proper revocation language. Additionally, California employers should ensure they properly evaluate the DSLE factors with respect to each employee instead of permitting client preference or some other impermissible factor to determine whether such a break is permissible. Finally, California employers should ensure there is a proper rest break policy in place and non-exempt employees are provided off-duty rest breaks, as there is no nature of work exemption for rest breaks.

1 To comply with the Labor Code, an employee must agree in writing to waive the right to an off-duty meal break. The writing must also advise the employee that it may, in writing, revoke the agreement at any time.

2 See, Bradley v. Networkers International, LLC, 211 Cal. App. 4th 1129, 1151 (2012), citing, Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004, 1022 (2012); Alberts v. Aurora Behavioral Healthcare, 241 Cal. App. 4th 388, 407 (2015).

3 Abdullah v. U.S. Security Associates, Inc., 731 F.3d 952, 958-959 (9th Cir. 2013); Faulkinbury v. Boyd Associates, Inc., 216 Cal. App. 4th 220 (2013).

4 The appellate court held the relevant factors are outlined in the Division of Labor Standards Enforcement’s (hereinafter “DSLE”) five factor test: (1) the type of work; (2) the availability of other employees to provide relief to an employee during a meal period; (3) potential consequences to the employer; (4) the ability of the employer to anticipate and mitigate the consequences; (5) whether work product or process will be destroyed or damaged by relieving an employee of all duty.

5 Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1048 (2016) (holding Dukes does not stand for the broad proposition that a representative sample is an impermissible means to establishing class-wide liability).

6 Tyson, at 1046.

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