Back in October, we reviewed a number of California cases that, for the most part, denied certification in cases in which certification would have largely been a foregone conclusion only a few years ago. The first few days of 2014 have been quiet on the class action front so far, so let’s review a few more from the waning days of 2013. By coincidence, both of these cases involve less claims that the employer intentionally violated the wage and hour laws but, rather, that they should have known that violations were taking place despite its formal policies.
In Ortiz v. CVS Caremark Corp., Case No. C-12-05859 EDL (N.D. Cal., Dec. 2, 2013), the company asked non-exempt employees to transport medications and other goods between its 850 California stores. The suit alleged that the manner in which the transfers were requested resulted in employees not reporting the time spent on the transfers for payroll purposes, and that they were not properly reimbursed for mileage.
The employer’s defense was helped considerably by evidence that its policies flatly prohibited off the clock time, and that it asked employees to review their pay statements and to report inaccuracies. The plaintiffs’ primary argument was that the company “should have known” that time was not reported and should have taken affirmative steps to ensure proper reimbursement.
The devil for the plantiffs was in the details. They could not point to a single off-the-clock policy but, rather, to a collection of policies such as those for manual overrides of checks. They also could not identify which class members, if any, had requested reimbursement but had not received it.
Faced with what inevitably would result in a series of individual inquiries, the court found no commonality or typicality, and denied certification.
The second case, perhaps apropos to the resolution-filled early New Year, relates to the Jenny Craig weight loss company. Coleman v. Jenny Craig, Inc., Case No. 3:11-cv-01301 (S.D. Cal., Nov. 27, 2013). In Coleman, the plaintiffs brought a series of claims on behalf of approximately 1,000 consultants or directors claiming, essentially, that they were not paid for all hours worked. Many of the class members had signed arbitration agreements, although that was scarcely noted in the court’s analysis. Similar to the the Ortiz case discussed above, the employer’s formal policies also explicitly required taking of required rest and meal periods and the payment for all hours worked.
The plaintiffs argued that policies such as the company’s policy of putting its customers first and engaging them immediately encouraged them to miss rest and meal periods. Similarly, for safety reasons the company policy encourage for there to be at least two employees in a weight loss center at any time, although the policy did explain what to do in the case of a required rest or meal period. Again, like Ortiz, the plaintiffs contended that the company’s payroll employees should have been aware that hours were being worked or rest and meal periods missed without being reported.
Ultimately, the court found that, as in Ortiz, that there was no systemic company policy of forcing employees to work extra hours or to miss rest or meal periods without compensation but that the case would involve a series of individualized inquiries. It thus found that the class issues did not predominate and denied certification.
The bottom line: Even in California, potential classes face serious obstacles when challenging practices prohibited by company policy based on the claim that the employer “should have known” that violations were taking place on the local level.