Source: http://www.baileydaily.com/2012/04/
Timestamp: 2019-04-22 04:17:37+00:00

Document:
We granted review to consider when, if ever, a party who prevails on a section 226.7 action for an alleged failure to provide rest breaks may be awarded attorney’s fees. We conclude, in light of the relevant statutory language and legislative history, that neither section 1194 nor section 218.5 authorizes an award of attorney’s fees to a party that prevails on a section 226.7 claim. We accordingly reverse the judgment of the Court of Appeal on this claim and affirm the judgment on plaintiffs‟ other claims.
As held by the Court, “the most plausible inference to be drawn from [the relevant legislative] history is that the Legislature intended section 226.7 claims to be governed by the default American rule that each side must cover its own attorney’s fees.” See id., at 17.
IMPORTANT NOTE: It is important to highlight that the Court’s ruling will not preclude the recovery of attorneys fees by plaintiff’s counsel pursuing break claims on a class-wide basis. Although “[t]he general rule is that a party is entitled to an award of attorney fees if there is specific authorization therefor by statute or private agreement…[,][t]here are… three well-established equitable exceptions to the general rule, known as the common fund, substantial benefit, and private attorney general theories.” See Consumers Lobby Against Monopolies v. Public Utilities Com., 25 Cal. 3d 891, 906 (1979) (citing Serrano v. Priest, 20 Cal. 3d 25 (1977)). Any of these doctrines may be asserted by a prevailing plaintiff in the class context to justify an award of fees.
Thus, as the Court of Appeal's opinion (which upheld an award of attorney's fees to the employer) stood to forclose employees from even attempting to bring a break claim in the first instance (due to the chilling impact of having to pay the employer's attorneys fees), the Kirby decision is unquestionably a positive ruling for employees.
04/27/2012 Notice of forthcoming opinion posted To be filed on Monday, April 30, 2012 at 10 a.m.
As previously discussed here, the issue on review in Kirby pertains to whether meal and rest period claims are governed by Labor Code 218.5’s two-way fee shifting provisions, rather than the one way fee shifting of Section 1194.
Because there are no grounds to declare the arbitration agreement unenforceable and because the arbitration provision contained no agreement to classwide arbitration, Kinecta argues that Concepcion and Stolt-Nielsen require reversal of the order denying its request to dismiss class claims from Malone's complaint. We agree.
As promised, this final post will examine the Brinker Court’s meal and rest break certification analysis (previous posts are located here and here). As demonstrated below, the common thread running throughout the Court’s opinion centered largely on the Court of Appeal’s finding that individualized issues relating to waiver rendered certification of meal and rest period claims inappropriate.
In reversing class certification, the Court of Appeal concluded that because rest breaks can be waived—as all parties agree—“any showing on a class basis that plaintiffs or other members of the proposed class missed rest breaks or took shortened rest breaks would not necessarily establish, without further individualized proof, that Brinker violated” the Labor Code and Wage Order No. 5. This was error. An employer is required to authorize and permit the amount of rest break time called for under the wage order for its industry. If it does not—if, for example, it adopts a uniform policy authorizing and permitting only one rest break for employees working a seven-hour shift when two are required—it has violated the wage order and is liable. No issue of waiver ever arises for a rest break that was required by law but never authorized; if a break is not authorized, an employee has no opportunity to decline to take it. As Hohnbaum pleaded and presented substantial evidence of a uniform rest break policy authorizing breaks only for each full four hours worked, the trial court’s certification of a rest break subclass should not have been disturbed.
Slip Opinion, at 25-26 (emphasis added).
Thus, the Brinker opinion confirms that the issue of waiver is irrelevant to theories of liability alleging that employees were deprived access to a legally compliant break in the first instance (this would seem to be a matter of common sense, as you cannot waive what you never had).
In returning the case for reconsideration, the opinion of the court does not endorse Brinker’s argument, accepted by the Court of Appeal, that the question why a meal period was missed renders meal period claims categorically uncertifiable. Nor could it, for such a per se bar would be inconsistent with the law governing reporting obligations and our historic endorsement of a variety of methods that render collective actions judicially manageable.
Concurring Opinion (Werdegar, J.), at 1 (emphasis in original).
Here, significant emphasis was placed on the employer’s obligation to record meal breaks relative to an employer asserting the defense of waiver. Specifically, Justice Werdegar highlighted that when an employer fails to record a meal break, a “presumption arises that the employee was not relieved of duty and no meal period was provided” [id., at 1], and thereafter, “[a]n employer’s assertion that it did relieve the employee of duty, but the employee waived the opportunity to have a work-free break, … is an affirmative defense, and thus the burden is on the employer, as the party asserting waiver, to plead and prove it.” See id., at 2.
This statement of presumption and burden is material to certification, as it precludes the automatic categorization of all missed meal periods as implicating an individualized issue of waiver. To establish the presence of individualized issues, an employer seemingly must now affirmatively introduce evidence for each individual employee to place the presumption in dispute as to that employee. In turn, this forecloses a court from making a generalized, freewheeling assumption from a handful of employee declarations that individualized issues relating to waiver will predominate as to the entire class. Such an interpretation is consistent with Justice Werdegar’s discussion, which noted that the employer cannot be permitted to reap a reward for failing to record breaks. See id., at 2 fn. 1 (“[t]o place the burden elsewhere would offer an employer an incentive to avoid its recording duty and a potential windfall from the failure to record meal periods.”).
In addition – as discussed in the final paragraph of my previous post – an employer’s invocation of a generalized waiver defense in the break context is properly construed as a damages issue. See Concurring Opinion (Werdegar, J.), at 3 (“For purposes of class action manageability, a defense that hinges liability vel non on consideration of numerous intricately detailed factual questions, … is different from a defense that raises only one or a few questions and that operates not to extinguish the defendant’s liability but only to diminish the amount of a given plaintiff’s recovery.”) (emphasis added).
Finally, it is important to highlight that the elements of waiver – which requires an employer evidence that the right to breaks was both known and voluntarily released [Waller v. Truck Ins. Exchange, Inc., 11 Cal. 4th 1, 31 (1995) (“waiver is the intentional relinquishment of a known right after knowledge of the facts”)] – in many cases may lend themselves to issues that are common to the class. By way of example, an employer that fails to communicate any break policies to its employees will necessarily be legally foreclosed from subsequently seeking to invoke a waiver defense. See e.g. Concurring Opinion, at 2 fn. 1 (“the burden is on the employer to show that the agricultural employee had been advised of his or her legal right to take a meal period and has knowingly and voluntarily decided not to take the meal period.”); See also Bufil v. Dollar Financial Corp., 162 Cal. App. 4th 1193, 1199 (2008) (“Dollar does not notify its employees that they are authorized and permitted to take a 10-consecutive-minute off-duty rest break …. The onus is on the employer to clearly communicate the authorization and permission to its employees.”).
As I indicated in my prior post (located here), the real value of the Brinker opinion, at least from the plaintiff’s perspective, lays in the Court’s certification analysis. The Court’s analysis in this regard has two components which track the two separate grounds on which the Court of Appeal reversed the trial court’s certification order: “First, the Court of Appeal held the trial court committed error per se by ruling on certification without first resolving legal disputes over the scope of Brinker’s duties to provide meal and rest periods.” See Slip Opinion, at 10. “Second, it held that any court, upon resolving those disputes, could only have concluded certification was inappropriate.” See id. This Blog Post will examine the first of these issues, which is focused on aspects of the element of predominance in general. I will explore the second issue set – which involves certification issues particular to meal and rest period claims – in a subsequent post (contained here).
With regard to this first issue, “[t]he trial court [had] concluded it could certify a class without resolving disputes over the scope of Brinker’s duty to provide breaks because common questions would predominate even if Brinker’s legal positions were correct.” See Slip Opinion, at 10. The Court of Appeal deemed this an abuse of discretion, concluding that “the trial court ‘was required to determine the elements of plaintiffs’ claims’ because the court ‘could not determine whether individual or common issues predominate in this case, and thus whether a class action was proper, without first determining this threshold issue.’” See id.
On this issue, the Brinker Court found the Court of Appeal’s absolute position to itself be an abuse of discretion, concluding that “[w]hile … trial courts must resolve any legal or factual issues that are necessary to a determination whether class certification is proper, the Court of Appeal went too far by intimating that a trial court must as a threshold matter always resolve any party disputes over the elements of a claim.” See id. (emphasis in original). As explained by the Court, “[a] class certification motion is not a license for a free-floating inquiry into the validity of the complaint’s allegations” [Id., at 11], and in fact, “[s]uch inquiries are closely circumscribed.” See Id., at 12. Such inquiry, according to the Court, “must ‘be limited to those aspects of the merits that affect the decisions essential ’ to class certification” [See Id., at 12-13 (emphasis added)], and even then, “a court generally should eschew resolution of such issues unless necessary.” See id., at 13 (emphasis added).
At this point, it is important to again highlight (as discussed in my prior post) that the Brinker Court deemed a threshold legal determination of the elements of plaintiffs’ break claims unnecessary to the predominance analysis in the Brinker case, and that it was engaging in review of such issues only because the parties had requested the Court to address the substantive merits. See id., at 2, 15 and 26. Thus, the Brinker opinion not only serves to establish that a trial court is not per se obligated to make threshold merits based determinations at the certification stage when the proper interpretation of the legal elements are in dispute, it also serves as an important instructive tool in delineating the boundaries of when such threshold resolution of the legal merits is permissible.
We observe in closing that, contrary to the Court of Appeal’s conclusion, the certifiability of a rest break subclass in this case is not dependent upon resolution of threshold legal disputes over the scope of the employer’s rest break duties. The theory of liability—that Brinker has a uniform policy, and that that policy, measured against wage order requirements, allegedly violates the law—is by its nature a common question eminently suited for class treatment.
Slip Opinion, at 12 (emphasis added).
Thus, the Court’s decision provides important guidance on the element of predominance by not only limiting when a merits based determination can occur, it expressly confines that inquiry to the issues raised by the plaintiff’s theory of liability put forward for certification.
In addition to the forgoing, the Brinker opinion also contains a second significant component – bolstered by Justice Werdegar’s concurring opinion – which draws into question the reach of the First District’s recent opinion in Duran v. United States Bank National Assn., 203 Cal. App. 4th 212 (2012) disapproving the use of representative/sampling evidence in establishing class-wide liability (an opinion which I discussed previously, here). This component is found within the clause of the Court’s rule analysis stating that a court “must determine whether the elements necessary to establish liability are susceptible of common proof or, if not, whether there are ways to manage effectively proof of any elements that may require individualized evidence.” See Slip Opinion, at 12 (citing Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal. 4th 319, 334 (2004)). This statement plainly communicates that an inability to establish liability entirely by way of common proof is not the end of a court’s predominance inquiry. Indeed, closer examination of the portion of the Sav-On opinion cited states that “[i]ndividual issues do not render class certification inappropriate so long as such issues may effectively be managed.” See Sav-On, 34 Cal. 4th at 334.
Given these settled principles, Brinker has not shown the defense it raises, waiver, would render a certified class categorically unmanageable.
Concurring Opinion (Werdegar, J.), at 4.
For purposes of class action manageability, a defense that hinges liability vel non on consideration of numerous intricately detailed factual questions, as is sometimes the case in misclassification suits, is different from a defense that raises only one or a few questions and that operates not to extinguish the defendant’s liability but only to diminish the amount of a given plaintiff’s recovery.
Concurring Opinion (Werdegar, J.), at 3.
Having had some time to digest the Court’s opinion, the most surprising aspect (at least in my mind), is that the Court’s opinion is largely non-surprising. Rather than engaging in a broad analysis of the meaning of the Wage Order’s various meal and rest break provisions, the Court has strictly limited its analysis to only those issues necessary to resolve the certification questions in the case at hand. In this regard, the real value of the Brinker opinion, at least from the plaintiff’s perspective, appears to lay in the Court’s certification analysis, which unquestionably disposes of the common belief held by many in the defense bar that meal and rest period claims are “hopelessly uncertifiable.” Due to the number of issues in play, today’s post will be limited to the Court’s analysis relating to the construction of the meal and rest break provisions, with subsequent posts addressing the Court’s analysis regarding certification.
Meal Period Requirements: With regard to meal periods, the Court concluded that “[a]n employer’s duty ... under both section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees” [Slip Opinion, at 36 (emphasis added)], which the Court concluded “is satisfied if the employee (1) has at least 30 minutes uninterrupted, (2) is free to leave the premises, and (3) is relieved of all duty for the entire period.” See Slip Opinion, at 30; id., at 36 (“The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.”).
[A]n employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks. (Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 962-963; see also Jaimez v. Daiohs USA, Inc., supra, 181 Cal.App.4th at pp. 1304-1305 [proof of common scheduling policy that made taking breaks extremely difficult would show violation]; Dilts v. Penske Logistics, LLC (S.D.Cal. 2010) 267 F.R.D. 625, 638 [indicating informal anti-meal-break policy “enforced through ‘ridicule’ or ‘reprimand’ ” would be illegal].) The wage orders and governing statute do not countenance an employer’s exerting coercion against the taking of, creating incentives to forego, or otherwise encouraging the skipping of legally protected breaks.
Finally, with regard to the issue of timing, the Court rejected a “rolling” 5 hour construction, concluding “that, absent waiver, section 512 requires a first meal period no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s 10th hour of work.” See Slip Opinion, at 37; id., at 50 (“we conclude that Wage Order No. 5 imposes no meal timing requirements beyond those in section 512.”).
Thus, as for meal periods, the Court’s decision appears to essentially track the status quo in terms of an employer’s meal break obligations.
Rest Period Obligations: With regard to rest periods, it is important to highlight that the Court’s analysis regarding the scope of an employer’s duty did not examine the issue of what constituted a legally compliant rest break, but rather, was expressly confined to two limited issues: (1) the amount of rest period time required, and (2) when rest periods must be provided. See Slip Opinion, at 17-18 (“Preliminary to its assessment of the trial court’s certification of a rest period subclass, the Court of Appeal addressed two threshold legal questions: the amount of rest time that must be authorized, and the timing of any rest periods. We consider these same two questions.”).
With regard the amount of rest period time required, the Court harmonized the three sentences comprising Section 12(A) of the Wage Order to conclude that “[e]mployees are entitled to 10 minutes’ rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on.” See Slip Opinion, at 20.
As for when rest periods must be provided, the Court rejected a construction that would impose on employers “a legal duty to permit their employees a rest period before any meal period.” See Slip Opinion, at 22. As reasoned by the Court, “[n]either text nor logic dictates an order for these, nor does anything in the policies underlying the wage and hour laws compel the conclusion that a rest break at the two-hour mark and a meal break at the four-hour mark of such a shift is lawful, while the reverse, a meal break at the two-hour mark and a rest break at the four-hour mark, is per se illegal.” See Slip Opinion, at 23. According to the Court, “[t]he only constraint on timing is that rest breaks must fall in the middle of work periods ‘insofar as practicable’” and thereon, “[e]mployers are thus subject to a duty to make a good faith effort to authorize and permit rest breaks in the middle of each work period, but may deviate from that preferred course where practical considerations render it infeasible.” See Slip Opinion, at 22. Yet, the Court left open the question that an employer may nonetheless violate the Wage Order by failing to make a good faith effort to authorize and permit rest breaks in the middle of each work period, concluding that “[a]t the certification stage, we have no occasion to decide, and express no opinion on, what considerations might be legally sufficient to justify such a departure.” See id.
Thus, as for rest periods, the Court’s decision appears to leave many important questions unresolved. As these questions, in the Court’s view, are not necessarily pertinent to the certification question, such issues will live on to debate for the immediate future.
On the ultimate question of class certification, we review the trial court’s ruling for abuse of discretion. In light of the substantial evidence submitted by plaintiffs of defendants’ uniform policy, we conclude the trial court properly certified a rest break subclass. On the question of meal break subclass certification, we remand to the trial court for reconsideration. With respect to the third contested subclass, covering allegations that employees were required to work “off-the-clock,” no evidence of common policies or means of proof was supplied, and the trial court therefore erred in certifying a subclass. Accordingly, because the Court of Appeal rejected certification of all three subclasses, we will affirm in part, reverse in part, and remand for further proceedings.
See Slip Opinion, at 2.
I am working on reviewing and unpacking the Court’s analysis, and will have a more detailed review shortly.
04/11/2012 Notice of forthcoming opinion posted To be filed on Thursday, April 12, 2012 at 10 a.m.

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