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.

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