Source: http://www.impactlitigation.com/2014/11/
Timestamp: 2019-04-19 17:24:17+00:00

Document:
Earlier in November, the California Court of Appeal revived a proposed overtime class action brought by Joe’s Crab Shack managers against their employer, reversing the trial court’s denial of class certification. Martinez v. Joe’s Crab Shack Holdings, No. B242807 (Second Dist. Div. 7 Nov. 10, 2014) (slip op. available here). The court initially had remanded the case back to the lower court to reconsider issues regarding the commonality of the managers. Martinez v. Joe’s Crab Shack Holdings, No. B242807 (Second Dist. Div. 7 Nov. 12, 2013). The prior decision was issued while Duran v. U.S. Bank National Assn. (59 Cal.4th 1 (2014)) was pending before the California Supreme Court; following the Duran decision, the Martinez matter was transferred back to the court of appeal for reconsideration in light of the case.
The court of appeal again remanded because it found the trial court had erred in denying certification because it had failed to adequately analyze the adequacy and typicality of the plaintiffs, as well as the commonality and predominance prongs under Brinker Rest. Corp. v. Superior Court (273 P.3d 513 (2012)), Duran, and Ayala v. Antelope Valley Newspapers, Inc. (59 Cal. 4th 522 (2014)). It reaffirmed that classwide relief remains “the preferred method” for resolving wage-and-hour claims, even in cases with difficult issues of proof, such as misclassification. Slip op. at 23. The court concluded, “[b]y refocusing its analysis on the policies and practices of the employer and the effect those policies and practices have on the putative class, as well as narrowing the class if appropriate, the trial court may in fact find class analysis a more efficient and effective means of resolving plaintiffs’ overtime claim.” Id.
The employees alleged that they worked overtime, were denied uninterrupted meal and rest breaks, and were misclassified as exempt despite having spent a majority of their time performing non-exempt “utility” tasks. The trial court had denied class certification, holding that, because the employees were unable to accurately estimate how much time they had spent doing exempt versus non-exempt tasks, individual inquiries were necessary. This finding meant that common issues did not “predominate” over individual issues, and that class treatment would not be the superior method for resolving the claims. Slip op. at 2.
The court of appeal’s second opinion in this case followed the California Supreme Court’s decision in Duran, a class action filed by former bank salespersons who alleged they had been misclassified. The Duran opinion addressed issues of class action manageability, ruling that individual issues do not necessarily overwhelm common issues when a case involves overtime exemptions premised on how employees spend the workday. Citing Duran, the Martinez court found that “courts in overtime exemption cases must proceed through analysis of the employer’s realistic expectations and classification of tasks rather than asking the employee to identify in retrospect whether, at a particular time, he or she was engaged in an exempt or nonexempt task.” Slip op. at 21.
The trial judge in the Santa Clara Superior court, Judge Peter H. Kirwan, certified a class of employees who alleged that Ma Laboratories Inc. failed to pay for all “hours worked” pursuant to 8 Cal. Code Regs., § 11070(2)(G). The wage-and-hour lawsuit claimed that the defendant was shaving time off employees’ actual hours worked; the judge found that time-shaving is a “one-way” practice and that workers are under their employers’ control as soon as they are on the clock, even if they are not performing any actual work. Tian v. Ma Laboratories Inc., No. 1-11-cv-195373 (Cal. Super. Ct. Oct. 9, 2014) (slip op. available here).
The court certified the time-shaving class and several subclasses, finding that even workers who are sitting around before their shifts smoking cigarettes and waiting for instructions are considered on the clock and working and thus must be paid. The class consisted of approximately 550 employees who worked at Ma Labs’ headquarters in San Jose or in its facility in Los Angeles. Stating, “even those who are waiting for instructions in the morning are clocked in and subject to Ma Labs’ control/suffered or permitted to work, whether or not required to do so,” the court held that, per the plaintiffs’ theory, “this still constitutes ‘hours worked’ for purposes of compensation, and the necessary findings can be made from the timekeeping alone.” Slip op. at 7.
Ma Labs allegedly had a strict start and end time for each employee, so that if and when workers clocked in before that set time starts or clocked out after it ends, the extra time needed to be approved and manually revised by a system administrator. The plaintiffs also alleged that this time-shaving practice allowed Ma Labs to not always pay for the extra time when workers arrived early or stayed late, but consistently docked their pay if they came in late or clocked out early. Approval for pre-shift time was “rarely if ever” granted, and post-shift time was not typically approved unless it was less than ten minutes. Slip op. at 6. The defendant argued that the plaintiffs were unable demonstrate that each particular employee was not incorrectly reporting his or her time or individual reasons for each individual’s denial of overtime or time card adjustment. Ma Labs also contended that workers would sometimes swipe their cards to clock in, then eat breakfast or perform personal tasks, rather than begin work right away. However, the court declined to address the merits of the plaintiffs’ time-shaving theory and stated that “[defendant’s] evidence that some employees occasionally engaged in personal activities after clocking in does not defeat certification because the record does not suggest that such instances would predominate over common ones.” Slip op. at 7 (emphasis added).
The court granted certification as to the time-shaving subclass, the auto-deduct lunch policy subclass consisting of employees from March 1, 2007 to February 15, 2010, the second meal period policy subclass, the rest period policy subclass from March 1, 2007 to February 15, 2010, the derivative wage statement class, and derivative waiting time penalty subclass. However, it denied the certification motion as to a drivers subclass within the auto-deduct lunch policy theory and a broader rest period policy subclass after February 15, 2010.

References: v. 
 v. 
 v. 
 v. 
 v. 
 § 11070
 v.