The Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), seems to be taking hold in meal and rest period cases in California, as shown by two decisions handed down this month.
The most recent casualty of the holding in Dukes is Cortez v. Best Buy Stores, LP, Case No. CV-11-05053 SJO (FFMx) (C.D. Cal. Jan. 25, 2012). The Cortez case was a putative class action against electronics retailer Best Buy. To meet the Dukes requirement of a common policy, the plaintiffs contended that the company’s policy of not budgeting for overtime or for missed meal and rest periods at the store level resulted in employees being pressured to falsify their time records by local managers and thus not being paid properly under California law.
This is actually a pretty clever theory, but the court didn’t buy it. It noted that the company’s policy was compliance with applicable law and the company could certainly direct its managers to manage their stores in a way that did not incur unnecessary overtime or other obligations above straight time pay. It found that the plaintiffs’ claims all boiled down to reliance on one-on-one oral statements (or possibly store-wide, but no greater), that rendered a state-wide class unavailable under Dukes. Indeed, the court’s opinion casts doubt on whether a case relying on oral statements should ordinarily ever be certified.
The court similarly found that any claims that time records were falsified would have to be evaluated on a case-by-case basis as there are many legitimate reasons why time records could be changed, such as an employee forgetting to punch in or out, etc. Applying Dukes, the court denied the plaintiffs’ motion for class certification.
Earlier this month, in Hughes v. Winco Foods.pdf, Case No. ED CV11-00644 JAK (Opx), (C.D. Cal. Jan. 4, 2012), a different judge of the same court reached the same conclusion with respect to a proposed class of grocery store workers at approximately 30 stores. In Hughes, the plaintiffs brought run-of-the-mill California claims for missed meal and rest periods. They relied on electronic payroll data that showed that over one-third of the time employees did not receive their initial meal period within 5 hours as required under California law. They argued that the company policy requiring employees to obtain approval from a supervisor before taking a break resulted in employees not receiving the time to which they were entitled.
The court, relying on evidence from the employer (and a dose of common sense), found that the issue of management approval of breaks necessarily came down to the individual manager. Management differed between stores, departments, and employee functions, as well as other factors. Further, significantly in light of Dukes, the employer’s formal policies required compliance with California law. The court found that the only truly uniform policy was one of management discretion, which was, of course, the very argument rejected in Dukes. The court concluded that the plaintiffs could not meet the requirement of commonality under Rule 23(a)(2) and Dukes, and further could not demonstrate either predominance or superiority under Rule 23(b)(3). Thus, it denied certification.
The Bottom Line: California district courts are applying Dukes to bar certification of California meal and rest period claims based on conduct attributable to individual managers.