Most California casewatchers are focusing their attention this week on In re Marriage Cases. Wage and hour lawyers, however, are also busy talking about Bufil v. Dollar Financial Group, Inc. (2008) __ Cal.App.4th __.
Do you remember Alvarez v. May Department Stores Co. (2006) 143 Cal.App.4th 1223, the case that held collateral estoppel could apply to prevent future class actions once a court, any court, denies certification of a class? Well, what if the certification motion was denied because the group was too big and its putative members were too different to warrant certifying a class. Can you file a new class action and seek to pursue a smaller class, chosen from within the larger class that was denied certification? San Francisco Judge Peter Busch thought you could not. The Court of Appeal in Bufil suggests that you can and perhaps should.
On the heels of the denial of class certification against employer and respondent Dollar Financial Group, Inc. (Dollar), in a suit alleging violation of meal and rest break labor laws, appellant Caren Bufil pursued class certification in a new suit which significantly narrowed the class definition. Relying on the doctrine of collateral estoppel, the trial court granted judgment on the pleadings in favor of Dollar. Also relying on this doctrine as well as traditional concerns relevant to the issue of certification, the court denied Bufil’s motion for class certification. We reverse.
The trial court's two errors were (i) applying collateral estoppel to the earlier certification denial in another case and (ii) assuming that each class member would have to testify about their own understanding about meal period waivers.
Here the trial court denied the motion for class certification on the same basis it granted judgment on the pleadings—that is, on collateral estoppel grounds. Continuing, the court additionally indicated that liability as to the class involved substantial and numerous individual factual questions, giving, as the sole example, each employee’s understanding of his or her rights under the meal plan. Elaborating, the court explained: “Similar to the class in Nguyen, employees would have to individually testify as to their perceptions of their rights in signing or refusing to execute the meal agreement without suffering adverse consequences. These issues apply to both the rest period and meal period components of the class, thus the individual issues predominate over Plaintiff’s [claim that common issues predominate].” Finally, the court held that Bufil did not prove the existence of an ascertainable class of employees who purportedly missed off-duty rest periods.
The meal period waiver issue is one we often see. Trial courts don't seem to buy it, but defendants always argue that you can't litigate meal period claims as a class because they will be forced to frogmarch every single class member into court to cross-examine them to determine whether their intent to waive a meal period was the same as every other employees' intent. Bufil busts this myth.
The court made an erroneous assumption that each class member would need to testify as to his or her understanding of the meal period waiver. This was an issue in Chin/Nguyen but it is irrelevant to Bufil’s lawsuit. Bufil’s theory is that the two circumstances—single employee on duty or providing training—do not come within the “nature of the work” exception set forth in Wage Order No. 4-2001, so as to permit an “on-duty” meal period. This is a legal question concerning the liability of Dollar to each putative class member. Bufil is not concerned with whether a given employee signed a meal period waiver, does not assert that anyone was forced to sign anything, and does not attack the execution of the agreements or the intent and understanding of the parties regarding the same. Her position is that either the putative class employees were denied an off-duty meal for an improper purpose, or they were not. Under Bufil’s structuring of the case, the court could identify the class from Dollar’s records and determine liability as a matter of law. In this case Bufil proposes a class that on its face attempts to correct flaws identified in the Chin/Nguyen lawsuit resulting in denial of certification. The trial court here erred in ruling that the class proposed by Bufil involved “the same class problems involving liability” as were implicated in Chin/Nguyen, and thus erroneously concluded that issue preclusion should bar her quest for class certification. (See OShana v. Coca-Cola Bottling Co. (N.D. Ill. 2005) 225 F.R.D. 575, 579.)
The court also pointed out that one could ascertain a class of rest period claimants even though there are no records kept for the rest periods.
Arguing that the proposed class was not ascertainable as to rest period claims, Dollar states there are no records identifying whether any employee missed a rest period and it has no obligation to maintain such records. There is no disagreement on these points, but they are not pertinent to the issue of ascertainability because Bufil has defined a class precisely identified by Dollar records.
We loved this language:
Dollar does not notify its employees that they are authorized and permitted to take a 10 consecutive minute off-duty rest break every four hours. Nor does Dollar instruct supervisory personnel to take steps to provide employees with the opportunity to take the required rest breaks. The onus is on the employer to clearly communicate the authorization and permission to its employees. (citing Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 963.)
The myth that class actions are not superior ways to adjudicate wage and hour claims is also busted.
The trial court made a passing, perfunctory reference to superiority in its order denying class certification, finding that plaintiffs did not establish that the class action is a superior method for resolving the litigation. Courts regularly certify class actions to resolve wage and hour claims. (See Pressler v. Donald L. Bren Co. (1982) 32 Cal.3d 831, 837; see also Sav-On, supra, 34 Cal.4th at p. 340; Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 579-580; Earley v. Superior Court (2000) 79 Cal.App.4th 1420, 1423.) In this arena the class action mechanism allows claims of many individuals to be resolved at the same time, eliminates the possibility of repetitious litigation and affords small claimants with a method of obtaining redress for claims which otherwise would be too insignificant to warrant individual litigation. (Sav-On, supra, 34 Cal.4th at p. 340.)
Bufil was originally issued in April as an unpublished opinion, but the California Employment Lawyers Association prevailed Tuesday in a request to have the opinion published. You can download the full text of the opinion here in pdf or word format.