Monday, December 2, 2013

Second District Concludes That Issue of Whether a Uniform Policy Exists is Itself a Common Issue Amenable to Class-Wide Adjudication: Jones v. Farmers Ins. Exchange

On November 26, 2013, the Second District (Division 3) ordered publication of its opinion in Jones v. Farmers Ins. Exchange, __ Cal. App. 4th __ (2013) [2013 Cal. App. LEXIS 955], which concluded the trial court erred in denying certification of an unpaid wage claim based on employee declarations disputing the existence of the alleged uniform company policy underpinning the plaintiff's theory of liability.

At issue was the trial court’s finding that the plaintiff had failed to prove the employer maintained a “company-wide” policy of refusing to compensate employees for certain preliminary tasks despite proffering an employer-issued memo specially stating: “Computer sync time which ordinarily takes minimal time to perform and is not compensable. For example, taking a few minutes to sync your computer, obtaining assignments/driving directions before getting in your car and driving to your first appointment.”  See Slip Opinion, at 3, 6.  In opposing certification, the defendant denied the memo established a uniform company policy of its refusal to pay wages, submitting declarations from 11 current employees asserting that they (1) regularly received their first assignment of the day on the afternoon of the previous workday (i.e. during shift-time which was compensated), (2) were prohibited by company policy from working outside of their scheduled shifts without prior authorization, and (3) could request approval for compensation for additional time if they needed to prepare for an early morning appointment.  Id., at 6-7.  Relying on such declaration testimony, the trial court concluded that common issues did not predominate because such testimony negated the plaintiff’s assertion that the defendant had employed a uniform policy of refusing to compensate employees for such tasks.  Id., at 8. 

For several reasons, this analysis was deemed to be in error.

First, as explained by the Court, testimony from individual employees denying having been subjected to an alleged policy does not alter the common “liability” issue of whether a uniform policy exists; rather, such evidence only establishes that there may be individualized issues relating to damages:
[Farmers] filed declarations by APD claims representatives and others stating generally that they were not required to perform unpaid preshift work, that they requested and received approval to work overtime if necessary, and that the time required to start up their computers in the morning and access the ServicePower program was minimal.
Farmers's evidence concerns the existence of a uniform policy denying compensation for preshift work, which is a common question amenable to class treatment, as we have stated.  Its evidence also goes to individual issues concerning the right to recover damages, which do not preclude class certification. (Sav-On, supra, 34 Cal.4th at p. 334; Faulkinbury v. Boyd & Associates, Inc. (2013) 216 Cal.App.4th 220, 235, 237 []; Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, 1301–1307 [] (Jaimez); Ghazaryan v. Diva Limousine, Ltd. (2008) 169 Cal.App.4th 1524, 1536 [].)
Slip Opinion, at 13-14.

Second, the Court further reasoned that by relying upon such employee testimony to conclude that a uniform policy did not exist, the trial court not only improperly disregarded the plaintiff’s theory of liability in evaluating the element of predominance, it improperly rendered a ruling on the merits of that theory:
We conclude that the trial court applied improper criteria by focusing on individual issues concerning the right to recover damages rather than evaluating whether the theory of recovery is amenable to class treatment. (Jaimez, supra, 181 Cal.App.4th at p. 1299 [“The trial court misapplied the criteria, focusing on the potential conflicting issues of fact or law on an individual basis, rather than evaluating ‘whether the theory of recovery advanced by the plaintiff is likely to prove amenable to class treatment’”].)  We also conclude that substantial evidence does not support the court's finding that common issues do not predominate. (Bluford v. Safeway, Inc. (2013) 216 Cal.App.4th 864, 871 [] [held that in light of the plaintiff's theory of recovery based on uniform policies and procedures denying drivers compensation for rest periods, the trial court's conclusion that common issues did not predominate was not supported by substantial evidence].)  Plaintiffs' theory of recovery based on the existence of a uniform policy denying compensation for preshift work presents predominantly common issues of fact and law.  Farmers's liability depends on the existence of such a uniform policy and its overall impact on its APD claims representatives, rather than individual damages determinations. (Jaimez, supra, at p. 1300.)  Moreover, the trial court erred to the extent that its ruling was based on its evaluation of the merits of Plaintiffs' claim as to the existence of such a uniform policy. (Ibid.)
Slip Opinion, at 14-15.

Thus, the Jones opinion not only reinforces the well settled proposition that employee declaration testimony at best can establish the presence of individualized damages issues where a uniform policy is alleged [see prior discussion of the decisions in Benton v. Telecom Network Specialists,   Faulkinbury v. Boyd & Associates, Inc., and Bradley v. Networkers International, LLC], it underscores the logical proposition that a theory of liability premised on the existence of an alleged uniform policy is by nature a common issue, even if disputed by the employer.

Tuesday, October 22, 2013

A Third Court of Appeal Finds the “Death-By-Declarations” Strategy To Defending Wage And Hour Class Actions To Be Reversible Error: Benton v. Telecom Network Specialists

On October 16, 2013, the Second District (Division 7) reversed an order denying certification of meal period, rest period and overtime claims in Benton v. Telecom Network Specialists, __ Cal. App. 4th __ (2013), joining what now appears to be a chorus of post-Brinker appellate decisions rejecting the strategic use of employee declarations to defeat certification.

In this case, certification was sought on behalf of a proposed class comprised of cell-phone tower technicians, most of whom were hired and paid by staffing companies that contracted with the defendant, based on the defendant’s purported failure to adopt policies authorizing and permitting breaks, and paying overtime.  Certification was denied based on the trial court’s reliance on employee declarations submitted by the employer focusing on varying “working conditions”, as opposed the employer’s lack of a policy authorizing and permitting off-duty meal/rest breaks, which was the theory of liability put forward by the plaintiff:
The trial court concluded that class certification was improper because the parties' evidence showed that some technicians' working conditions permitted them to take meal and rest breaks, while others did not. More specifically, the court found that while TNS's declarations showed that some technicians worked “on their own and at complete liberty to take breaks as they pleased, with no time or management pressure,” plaintiffs' declarations showed that other technicians worked under severe time constraints that precluded them from taking “proper” meal and rest periods.  According to the court, as a result of these diverse “working conditions,” there was no “single way to determine whether TNS is liable to the class for failure to provide breaks.”
Slip Opinion, at 26.

Relying on the recent decisions in Bradley v. Networkers Internat., LLC, 211 Cal. App. 4th 1129 (2012) and Faulkinbury v. Boyd & Associates, Inc., 216 Cal. App. 4th 220 (2013), the Court held the trial court’s failure to evaluate the theory of liability put forward by the plaintiff was reversible error, stating that “the trial court employed improper criteria [when it] … improperly focused on whether individualized inquiry would be required to determine which technicians had missed their meal and rest periods”:
As in Bradley and Faulkinbury, the trial court employed improper criteria in assessing whether plaintiffs' meal and rest break claims were amenable to class treatment.  Rather than focusing on whether plaintiffs' theory of liability—that TNS violated wage and hour requirements by failing to adopt a meal and rest period policy — was susceptible to common proof, the court improperly focused on whether individualized inquiry would be required to determine which technicians had missed their meal and rest periods. The written order (as well as statements made at the motion hearing) make clear that the trial court did not believe TNS would be liable upon a determination that its lack of a meal and rest policy violated applicable wage and hour requirements; rather, it concluded that TNS would become liable only upon a showing that a technician had missed breaks as a result of TNS's policies.
Slip Opinion, at 26-27.

As explained by the Court, the issue of whether employees took breaks is not only a “damages” issue [Slip Opinion, at 27], “under Brinker, the fact that individual inquiry might be necessary to determine whether individual employees were able to take breaks despite the defendant's allegedly unlawful policy (or unlawful lack of a policy) is not a proper basis for denying certification”:
We agree with Bradley and Faulkinbury's conclusion that, under Brinker, the fact that individual inquiry might be necessary to determine whether individual employees were able to take breaks despite the defendant's allegedly unlawful policy (or unlawful lack of a policy) is not a proper basis for denying certification. Rather, for purposes of certification, the proper inquiry is “whether the theory of recovery advanced by the plaintiff is likely to prove amenable to class treatment.” (Ghazaryan, 169 Cal.App.4th at p. 1531.) In this case, the plaintiffs' theory of recovery is that TNS violated wage and hour requirements by failing to adopt a policy authorizing and permitting meal and rest breaks to its technicians.
Slip Opinion, at 27-28.

Although the Court stopped short of ordering certification (due to unresolved issues concerning the defendant’s status as a joint-employer), the opinion is nonetheless a positive sign that our courts of appeal are finally appreciating that permitting an employer to reap a potential windfall for its alleged unlawful policies simply because it can trot out a handful of employees claiming they were not impacted rests squarely upon fallacious logic.

Thursday, October 3, 2013

Ninth Circuit Finds On-Duty Meal Break Exemption Appropriate for Class Adjudication: Abdullah v. U.S. Security Associates, Inc.

On September 27, 2013, the Ninth Circuit issued an opinion in Abdullah v. U.S. Sec. Assocs., __ F.3d __ (2013) [2013 U.S. App. LEXIS 19793], which upheld a district court order certifying a meal period claim on behalf of a class of security guards employed at approximately 700 California locations, almost always as the sole guard on duty for a given shift.  At issue was the employer’s “on-duty” meal policy, which authorized only “on-duty” meal periods (under the exception enumerated under subpart 11 of the Wage Order) because the “nature of the work” purportedly precluded a release of duty when guards worked alone.  The district court certified the plaintiff’s theory of liability challenging the lawfulness of this policy, which the employer asserted was error, claiming that adjudication of the “nature of the work” element purportedly “requires ‘an individualized, fact-specific analysis’ of each employee's work history, including ‘a day-by-day examination of an employee's job duties.’”  See Slip Opinion, at 10.  The Ninth Circuit disagreed – engaging in perhaps the most comprehensive appellate examination of the on-duty meal exemption to date – concluding that the “nature of the work” issue was not only common in light of the employer’s single-employee staffing policies, but the predominate issue to be adjudicated as to the class as a whole.

First, the Court began by examining the DLSE’s construction and application of the “nature of the work” exception contained in various DLSE opinion letters [Slip Opinion, at 12-17], which the Court concluded “make clear that ‘the showing necessary to establish the 'nature of the work' exception is a high one.’”  See id. at 21.  As explained by the Court, the “[DLSE] starts with the premise that the general requirement for an off-duty meal period is remedial in nature, and any exception to that general requirement must be narrowly construed, so as to avoid frustrating the remedial purpose of the regulation.”  See id. at 13.  Moreover, the DLSE has determined that “[t]he employer has the burden to ‘establish[] the facts that would justify an on-duty meal period”, which places “the onus is on the employer to show that the work involved prevents the employee from being relieved of duty.’”  See id. (emphasis in original).  Furthermore, the DLSE’s application of the exemption has been very limited, as the Court “characterize[d] the instances in which [the] DLSE has found that the ‘nature of the work’ exception applies into two categories: (1) where the work has some particular, external force that requires the employee to be on duty at all times, and (2) where the employee is the sole employee of a particular employer.”  See id., at 14.

Second, applying the forgoing standards to the evidence underpinning the plaintiff’s theory of liability, the Court rejected the defendant’s assertion that varying duties from location to location undermined the trial court’s finding of commonality under Rule 23(a)(2). 

As explained by the Court, for defendant’s challenge on such grounds to be meaningful defendant “had to demonstrate not just that its employees' duties varied, but that they varied to an extent that some posts would qualify for the ‘nature of the work’ exception, while others would not.”  See id., at 21.  The Court concluded that the defendant could never make this showing, as “USSA's sole explanation for why it requires on-duty meal periods is that its guards are staffed at single-guard locations.”  See id.  Specifically, because the defendant “does not argue that any particular posts would qualify for the ‘nature of the work’ exception absent the single-guard staffing model” [See id., at 21], “the only reason any of [the required duties] ‘prevent’ the employee from taking a meal period is because USSA has chosen to adopt a single-guard staffing model.”  See id., at 22.  This rendered the defendant’s justification “distinct from, for example, a truck driver who is required by federal regulation to attend to his vehicle at all time [], or a worker whose job involves the ‘continuous operation of machinery requiring monitoring[.]’”  See id., at 22 fn. 17.

Based thereon, the Court held that the district court did not abuse its discretion in concluding that Rule 23(a)(2) commonality was satisfied, as “the merits inquiry will turn on whether USSA is [legally] permitted to adopt a single-guard staffing model that does not allow for off-duty meal periods—namely, whether it can invoke a ‘nature of the work’ defense on a class-wide basis, where the need for on-duty meal periods results from its own staffing decisions.”  See id., at 23.

Significantly, the Court further concluded that the same analysis established the element of predominance [id, at 24 (“our analysis of the ‘nature of the work’ exception, supra, drives our conclusion that Rule 23(b)(3) is satisfied here.”)], as the fact the defendant’s “nature of the work” justification necessarily rested on its practice of single-employee staffing rendered irrelevant any argument that individual inquiry into each employee/jobsite was required:
[W]here, as here, "there are no relevant distinctions between the worksites," we agree with the district court that "the 'nature of the work' inquiry would be a common one," focused on the legality of a single-guard staffing model, "rather than a site-by-site" inquiry. Viewing the meal break sub-class' claims in this manner undercuts USSA's primary argument that individual issues will predominate due to its need to present an individual "nature of the work" defense for each plaintiff and each worksite.
Slip Opinion, at 25.

Importantly, while the Court “concluded that the ‘nature of the work’ defense can, and will, be applied on a class-wide basis in this case” [id. at 24], the Court made very clear that it was “offer[ing] no opinion on whether USSA's ‘single-guard’ staffing model will qualify for the ‘nature of the work’ exception” [id.], specifically noting that even the DLSE’s analysis on this point was indefinite, presenting an open legal question:
[T]he DLSE opinion letters do not provide a definite metric for deciding in what circumstances a lone employee may be permitted to take an on-duty meal break—for example, it is not clear if an employee must be (1) the sole employee on duty at a particular time, (2) the sole employee staffed at a particular location, or (3) the sole employee working for the employer in order to qualify for the "nature of the work" exception. Cf. DLSE Opinion Letter 2003.11.03 (concluding that the "nature of the work" exception would apply to an "isolated" gas station with "a single employee," but not if "another employee [is] employed at the worksite"); DLSE Opinion Letter 1994.09.28 (explaining that the "nature of the work" exception might apply where "the employee is the only person employed in the establishment and closing the business would work an undue hardship on the employer").
Slip Opinion, at 24 n. 18.

[Even then, it bears noting that the DLSE’s interpretations are not controlling.  See Mendiola v. CPS Security Solutions, Inc., 217 Cal. App. 4th 851, 863 (2013) (“Although DLSE opinion letters are due ‘consideration and respect,’ it is ultimately the judiciary's role to construe the language [of the applicable wage order].’”); Lazarin v. Superior Court, 188 Cal. App. 4th 1560, 1569 (2010) (“the court does not defer to the agency's interpretation of the law under which the regulation issued, but rather exercises its own independent judgment.”).  Regardless, resolution of the legal merit of predicating an on-duty meal on an employer’s decision to schedule employees to work alone is reserved for another day.]

Friday, May 24, 2013

Third District Order’s Rest Period Claim To Be Certified Based on Employer’s Use of Unlawful “Piece Rate” Policy: Bluford v. Safeway Stores

On May 24, 2013, the Third District ordered publication of the rest period component of its opinion in Bluford v. Safeway Stores, __ Cal.App.4th __ (2013), which addressed the trial court’s denial of certification based on a purported lack of predominance. In finding that that the trial court erred, the Court followed the lead of various Federal District Court opinions to hold that California law categorically prohibits “piece rate” compensation policies which fail to separately compensate employees for rest period time:
[C]ontrary to Safeway’s argument, a piece-rate compensation formula that does not compensate separately for rest periods does not comply with California minimum wage law. (See Reinhardt v. Gemini Motor Transport (E.D. Cal. 2012) 869 F.Supp.2d 1158, 1168 [piece-rate pay system that did not separately pay truck drivers for non-driving duties violates California law requiring compensation for each hour worked]; Cardenas v. McLane FoodServices, Inc. (C.D. Cal. 2011) 796 F.Supp.2d 1246, 1252 [piece-rate pay system that did not separately pay truck drivers for non-driving duties and rest periods violates California law requiring compensation for each hour worked].)
See Slip Opinion, at 9 ¶1. 

In reaching this conclusion, the Court extended the analysis in Armenta v. Osmose, Inc., (i.e. that employers have an obligation to compensate employees for “non-productive” time) to cover “rest period” time, which under subpart 12 of the Wage Orders, cannot result in a “deduction of wages”:
However, under the rule of Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314, 323 (Armenta), rest periods must be separately compensated in a piece-rate system.  Rest periods are considered hours worked and must be compensated. (Cal. Code Regs., tit. 8, §§ 11070, subd. 12; 11090, subd. 12.) Under the California minimum wage law, employees must be compensated for each hour worked at either the legal minimum wage or the contractual hourly rate, and compliance cannot be determined by averaging hourly compensation. (Ibid.; Sheppard v. North Orange County Regional Occupational Program (2010) 191 Cal.App.4th 289, 297, fn. 5.).
See Slip Opinion, at 8 ¶4.

Boiled to its essence, the Bluford opinion stands for the proposition that because rest period time is by definition time that precludes the employee from completing the compensable “piece rate” event (i.e. it is time away from the task, which affirmatively precludes completion of the task), rest period compensation cannot be “lumped-in” as a component of a piece-rate task under California law.  This is a legal theory which I personally obtained certification on last year, and having this opinion would have been great, as the Court’s analysis directly examines the rest period issue, unlike the Federal District Court opinions that currently exist.

Monday, May 13, 2013

Fourth District Reverses Prior Meal/Rest Period Certification Opinion Based On Brinker, Orders “On-Duty” Break Theories To Be Certified On Behalf of Security Guard Class: Faulkinbury v. Boyd & Associates, Inc.

On May 10, 2013, the Fourth District Court of Appeal (Division Three) reversed its prior opinion in Faulkinbury v. Boyd & Associates, Inc., 185 Cal. App. 4th 1363 (2010), which had affirmed the trial court’s denial of certification of meal and rest break claims, premised largely on the employer’s use of on-duty meal agreements, on behalf of a proposed class of approximately 4000 security guards.  The opinion is the second among the bevy of “grant-and-hold” appellate decisions which the Fourth District has reversed based on the California Supreme Court decision in Brinker. [The first was Bradley v. Networkers Internat., LLC, 211 Cal.App.4th 1129 (2012), which is discussed here].

The Court’s subsequent Opinion – Faulkinbury v. Boyd & Associates, Inc, __ Cal.App.4th __ (2013) [2013 Cal. App. LEXIS 370] – reversed and remanded the trial court’s denial of certification, with directions to certify all of the theories of liability assert by the plaintiffs.  The Opinion contains significant analysis favorable to the plaintiff’s perspective on several issues, including the two issues discussed below.

First, the Court held that the trial court erred in denying certification of a meal break theory predicated upon the employer’s uniform use of a standardized “on-duty” meal agreement, reasoning that the employer’s “blanket use” of such an agreement was the very type of policy which Brinker deemed suitable for class-wide adjudication:
Liability turns on the issue whether Boyd's policy requiring all security guard employees to sign blanket waivers of off-duty meal breaks is lawful. That issue can be resolved on a classwide basis. "The theory of liability—that [the employer] 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." (Brinker, supra, 53 Cal.4th at p. 1033.)
Indeed, by requiring blanket off-duty meal break waivers in advance from all security guard employees, regardless of the working conditions at a particular station, Boyd treated the off-duty meal break issue on a classwide basis.
 See Slip Opinion, at 14-15.

Material to this finding, the Court acknowledged that it had erred in its prior opinion by improperly conflating issues of individual class member “damages” with the overarching issue of whether the employer’s alleged unlawful policy gave rise to “liability.”  As the Court explained, Brinker mandates that determination of an employer's liability focus exclusively on whether the employer’s policy violates the wage and hour laws, whereas the issue of whether the employee was able to take a legally compliant break despite the employer’s policy goes to damages:
In Faulkinbury I, we concluded that even if Boyd's on-duty meal break policy was unlawful, Boyd would be liable only when it actually failed to provide a required off-duty meal break. Brinker leads us now to conclude Boyd would be liable upon a determination that Boyd's uniform on-duty meal break policy was unlawful. In Brinker, the Court of Appeal, in reversing class certification, had concluded that because rest breaks could be waived, any showing on a class basis that class members missed or took shortened rest breaks would not "'necessarily establish, without further individualized proof,'" that the employers had violated the Labor Code and the relevant IWC wage order. (Brinker, supra, 53 Cal.4th at p. 1033.) The Supreme Court stated that conclusion was error. An employer is required to permit and authorize the required rest breaks, and if it adopts a uniform policy that does not do so, then "it has violated the wage order and is liable." (Ibid.) In other words, the employer's liability arises by adopting a uniform policy that violates the wage and hour laws. Whether or not the employee was able to take the required break goes to damages, and "[t]he fact that individual [employees] may have different damages does not require denial of the class certification motion." (Jaimez, supra, 181 Cal.App.4th at p. 1301.)
 See Slip Opinion, at 15-16.

Second, the Court held that the trial court erred in denying certification of plaintiffs rest break theory, which, boiled to its essence, was based upon the employer’s lack of policy explaining how a rest break was to occur in the face of (1) “an express policy requiring all security guards to remain at their posts at all times” and (2) employee handbook policy “identifying ‘unacceptable behavior’ to include ‘[l]eaving work station without permission of supervisor or proper relief during absence.’”  See Slip Opinion, at 16-17.  As reasoned by the Court, because “[t]here does not appear to be an on-duty rest break exception as there is for meal breaks” and because “the rest period must be … duty-free’” [Slip Opinion, at 17-18], that “[m]easured against these legal standards, the lawfulness of Boyd's lack of rest break policy and requirement that all security guard employees remain at their posts can be determined on a classwide basis.” See Slip Opinion, at 18.

Moreover, like its meal break analysis above, the Court acknowledged that it had erred in its prior opinion by improperly conflating issues of individual class member “damages” with the overarching issue of whether the employer’s alleged unlawful policy gave rise to “liability”:
In opposition to the motion for class certification, Boyd submitted declarations from current employees. Some declarations stated the employee was relieved of duties in order to take off-duty rest breaks; other declarations stated breaks were taken during periods of inactivity; at least one declaration stated the employee determined, based on the circumstances, when to take a rest break; and another declaration stated the employee frequently took rest breaks at her post. While, in Faulkinbury I, we concluded this evidence established individual issues of liability, we are now convinced, in light of Brinker, this evidence at most establishes individual issues of damages, which would not preclude class certification. Boyd's liability, if any, would arise upon a finding that its uniform rest break policy, or lack of policy, was unlawful.
See Slip Opinion, at 18-19.

Wednesday, March 20, 2013

Northern District Certifies Unpaid Wage Claims on Behalf of Technicians Alleging Required Commute Time in Company-Issued Vehicles Was Not Compensated: Gonzales v. Simplexgrinnell LP

On February 12, 2013, Northern District Court Judge Richard Seeborg granted certification of unpaid wage claims in Gonzales v. Simplexgrinnell LP, 2013 U.S. Dist. LEXIS 31627 (N.D. Cal. Feb. 12, 2013) on behalf of a class comprised of “Field Technicians” which plaintiff alleged were not paid for commute time in company-issued vehicles. 

Specifically, plaintiff pursued certification on a “control-based” theory of liability, alleging that defendant maintained a standardized company policy “requiring its ‘Field Technicians’ to drive company-supplied vehicles to and from work, but then declining to compensate them for the time they spend driving those vehicles at the beginning and end of the work day.”  See id., at 1.  Defendant maintained that certification was improper under standards set forth in Dukes, claiming that “plaintiffs cannot show there is any uniform policy regarding travel time, and that therefore individual inquiries would be necessary to determine whether any class members might have viable claims for unpaid wages and overtime.”  See id., at 1-2.  The Court disagreed, concluding that plaintiff had framed a singular “rifle-shot” issue wherein Defendant’s liability would turn exclusively on proving or disproving the existence of the alleged policy:
Here, while SimplexGrinnell has pointed to substantial hurdles plaintiffs will face in showing there to be uniform policies and practices regarding FTs use of company cars and compensation for travel time, the issue is significantly different than that presented in Dukes. There are no questions here as to whether individual managers acted with improper motive, as intent is not an element of plaintiffs' claims. This is, at core, primarily a legal dispute as to whether California law requires compensation for travel time under these general facts.  If SimplexGrinnell is correct that plaintiffs will be unable to show the policies and practices they allege even exist, the claims will fail, on a class-wide basis.
Even if plaintiffs' characterization as to the uniformity of SimplexGrinnell's policies and practices is supported, the question will still remain as to whether California law requires compensation for travel time in such circumstances. In their briefing on this motion, the parties dispute whether Morillion v. Royal Packing Co., 22 Cal.4th 575, 94 Cal. Rptr. 2d 3, 995 P.2d 139 (2000) and Rutti v. LoJack Corp., Inc., 596 F.3d 1046 (9th Cir. 2010) on the one hand, or Overton v. Walt Disney Co., 136 Cal.App.4th 263, 38 Cal. Rptr. 3d 693 (2006) on the other hand, will govern the result on the merits of this case. In both Morillion and Rutti the facts were found to support a claim for travel time compensation; under the facts in Overton the employer was found not liable to pay such compensation. Overton and Rutti were both decided on summary judgment, Morillion on demurrer. None of the cases addressed class certification standards.[] The dispute as to whether the facts here are more like those in Morillion and Rutti, or more akin to the circumstances of Overton, is one that can be resolved on a class-basis.
See Gonzales, 2013 U.S. Dist. LEXIS 31627, at 7-8.

Friday, January 25, 2013

California Supreme Court Concludes That UCL Is Governed by Common Law Accrual Rules, Including Doctrine Of “Continuous Accrual”: Aryeh v. Canon Business Solutions

On January 24, 2013, the California Supreme Court issued its opinion in Aryeh v. Canon Business Solutions, Inc., __ Cal. 4th __ (2013) [2013 Cal. LEXIS 480], which – as previously discussed here – addressed the Second District’s finding that (1) the continuing violations doctrine does not apply to claims brought under the UCL, and (2) this required a UCL claim predicated on reoccurring conduct that commenced more than four years prior to the date of filing to be barred in its entirety.  The Court held that this was error, finding that “(1) the text and legislative history of the UCL leave UCL claims as subject to the common law rules of accrual as any other cause of action, and (2) continuous accrual principles prevent Aryeh's complaint from being dismissed at the demurrer stage on statute of limitations grounds.” See Slip Opinion, at 1, 12, 20.

With regard to the “continuous accrual” doctrine, the Court held that each breach of a continuing or recurring obligation must be treated as an independent claim, and as such, only those breaches falling outside of the UCL’s four year statute can generally be excluded based on statute-of-limitations grounds:
Generally speaking, continuous accrual applies whenever there is a continuing or recurring obligation: "When an obligation or liability arises on a recurring basis, a cause of action accrues each time a wrongful act occurs, triggering a new limitations period." (Hogar Dulce Hogar v. Community Development Commission (2003) 110 Cal.App.4th 1288, 1295.) Because each new breach of such an obligation provides all the elements of a claim-wrongdoing, harm, and causation (Pooshs v. Philip Morris USA, Inc., supra, 51 Cal.4th at p. 797)-each may be treated as an independently actionable wrong with its own time limit for recovery.
However, unlike the continuing violation doctrine, which renders an entire course of conduct actionable, the theory of continuous accrual supports recovery only for damages arising from those breaches falling within the limitations period. In Jones v. Tracy School Dist. (1980) 27 Cal.3d 99, for example, an employee sued for sex discrimination in her wages. The unlawful practice had gone on for six years. While the applicable two-year statute of limitations did not bar suit, because the obligation not to discriminate in setting  wages was an ongoing one, we concluded it limited the employee to recovery only of those lost wages owed during the preceding two years. (Id. at pp. 103-107; see also Green v. Obledo, supra, 29 Cal.3d at p. 141 [recovery limited to payments that accrued within the limitations period preceding suit]; Dryden v. Board of Pension Commrs., supra, 6 Cal.2d at p. 582 [same].) "[T]he continuing accrual rule effectively limits the amount of retroactive relief a plaintiff or petitioner can obtain to the benefits or obligations which came due within the limitations period." (Hogar Dulce Hogar v. Community Development Commission, supra, 110 Cal.App.4th at p. 1296.) n7 Consequently, if applicable here, the theory would permit Aryeh to sue, but only for those discrete acts occurring within the four years immediately preceding the filing of his suit.
See Slip Opinion, at 15-16.

Based on this construction, the Court concluded that the Second District erred in finding that the plaintiff’s UCL claim was barred in its entirety because the complaint had admitted that the reoccurring conduct commenced outside of the four year statutory period of the UCL:
To determine whether the continuous accrual doctrine applies here, we look not to the claim's label as a UCL claim but to the nature of the obligation allegedly breached. [] Canon billed Aryeh on a recurring monthly basis. Accepting the truth of the complaint's allegations solely for purposes of resolving Canon's limitations defense on demurrer, those bills periodically included test copy charges that were unfair or fraudulent. By its nature, the duty Canon owed-the duty not to impose unfair charges in monthly bills-was a continuing one, susceptible to recurring breaches. Accordingly, each alleged breach must be treated as triggering a new statute of limitations. (Hogar Dulce Hogar v. Community Development Commission, supra, 110 Cal.App.4th at p. 1295 ["When an obligation or liability arises on a recurring basis, a cause of action accrues each time a wrongful act occurs, triggering a new limitations period."]; see also Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co., supra, 116 Cal.App.4th at pp. 1388-1391 [treating each disputed monthly bill as triggering a new statute of limitations]; Tsemetzin v. Coast Federal Savings & Loan Assn., supra, 57 Cal.App.4th at p. 1344 [same].) Aryeh cannot recover alleged excess charges preceding the four-year limitations period, but is not foreclosed from seeking recovery for charges to the extent they fall within that period.  Because the complaint alleges excess charges within the four years preceding suit, it is not completely barred by the statute of limitations.
See Slip Opinion, at 17-18.