Class Actions

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Plaintiff Rogelio Hernandez brought a putative class action lawsuit for Chipotle’s alleged failure to provide meal and rest breaks to its non-managerial employees pursuant to California Labor Code Section 226.7. The California Court of Appeal held that the Supreme Court’s decision in Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal. 4th 1004, precluded class certification because the Labor Code only requires that employers provide, not ensure, that breaks are taken. In the context of this case, the Court held that Chipotle did not have a universal practice with regard to breaks. “Some employees declared they always missed breaks; some declared they received meal breaks but not rest breaks; one declared his meal and rest breaks were combined; some did not declare they were denied meal breaks; and others declared their breaks were delayed.” Even the Plaintiff admitted that Chipotle’s break practices varied. Concluding that class certification was inappropriate, the Court stated, “in order to prove Chipotle violated break laws, Hernandez would have to present an analysis restaurant-by-restaurant, and perhaps supervisor-by-supervisor.

Hernandez v. Chipotle Mexican Grill, Inc., 2012 WL 3579567 (Cal. Ct. App. 2012)

Rogelio Hernandez appealed from the order denying his motion for class certification and granting Chipotle’s motion to deny class certification as to his claims that Chipotle denied non-exempt employees their meal and rest breaks. Chipotle moved to deny class certification on the ground that it had met its responsibility under California…

Peabody v. Time Warner Cable, Inc., 2012 WL 3538753 (9th Cir. 2012)

Susan J. Peabody was employed as a commissioned salesperson by Time Warner Cable (“TWC”) for approximately 10 months. Peabody’s commissions were based on the revenue generated by advertising that was aired every broadcast month, which lasted four or five weeks. Peabody also received a base salary of $20,000 per year. During her…

Truly Nolen of America v. Superior Court, 2012 WL 3222211 (Aug. 13, 2012)

California law involving classwide wage-and-hour arbitration continues to evolve in the aftermath of the United States Supreme Court’s landmark decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), which generally prohibits states from requiring additional due process guarantees (not required under the Federal Arbitration Act) for enforcing arbitration agreements. (See our prior blog post here.) Since Concepcion, lawyers and jurists have called into question the continuing viability of Gentry v. Superior Court – in which the California Supreme Court delineated a four-factor test for invalidating class arbitration waivers – as well as other cases subjecting employment arbitration agreements to special (employee-friendly) rules. Some courts have continued to apply Gentry while others have declared it dead, holding that “[a] rule like the one in Gentry – requiring courts to determine whether to impose class arbitration on parties who contractually rejected it – cannot be considered consistent with [Concepcion’s] objective of enforcing arbitration agreements according to their terms.” See, e.g., Iskanian v. CLS Transp. Los Angeles, LLC, 206 Cal. App. 4th 949 (2012).

In its recent decision in Truly Nolen of America v. Superior Court, the California Court of Appeal gave a nod to Iskanian and other cases invalidating Gentry, but ultimately held that in the absence of an express or implied agreement among the parties regarding class arbitration, ordering the arbitration of non-waivable employment claims on a classwide basis was “questionable” though not erroneous, since this is a narrow issue on which the California Supreme Court has not yet opined. The plaintiffs, who worked as pest control technicians for Truly Nolen of America (“Truly Nolen”), alleged on behalf of themselves and other current and former employees that they had been misclassified as exempt from California’s stringent overtime pay requirements. Truly Nolen moved to compel arbitration of the plaintiffs’ claims based on an arbitration agreement between the parties which was silent on the issue of whether class claims would be arbitrated on an individual or classwide basis. The trial court, relying on Gentry, ordered classwide arbitration, over Truly Nolen’s objections.

The plaintiff in Iskanian v. CLS Transp. Los Angeles, LLC, brought a putative class action and a representative action under California’s Private Attorney General Act (PAGA) for various wage and hour violations. During his employment, Iskanian agreed that he would not assert class action or representative action claims against his employer and, instead, agreed to submit any legal claims he had to binding arbitration.

The California Court of Appeal for the Second District held that the employee was bound by his agreement. Relying on the United States Supreme Court’s 2011 decision in AT&T Mobility LLC v. Concepcion, the Court held that the Federal Arbitration Act (FAA) preempts any state law prohibiting class action waivers in arbitration agreements. The Court also found that Concepcion overruled Gentry v. Superior Court – a California Supreme Court decision which held that class action waivers in arbitration agreements are unenforceable if class arbitration would be more efficient than individual litigation. Rejecting this notion, the Court stated, “a rule like Gentry – requiring Courts to determine whether to impose class arbitration on parties who contractually rejected it – cannot be considered consistent with the objective of enforcing arbitration agreements according to their terms.”

Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004 (2012)

In this long-awaited opinion, the California Supreme Court determined several important issues of law regarding meal and rest breaks. First and foremost, the Supreme Court determined that “an employer’s obligation is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he…

This morning, the California Supreme Court issued its long awaited opinion in Brinker Restaurant Corp. v. Superior Court. Taking up two crucial issues that have spawned dozens of class action suits across the state, the Court answered the questions: (1) must an employer merely provide a meal break to employees or must it ensure that its employees actually take such breaks, and (2) when during the workday must meal and rest breaks be taken and how many must be provided?

With respect to the first issue of what “providing the employee with a meal period” means, the Court concluded that “an employer’s obligation is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he or she desired, but the employer need not ensure that no work is done.”

Creative Artists Agency (CAA) and representatives of a class of television writers today announced the settlement of a case alleging age discrimination in the representation of television writers.

The case was the last of 23 separate class actions that were filed a decade ago by the writers against the major television networks, production studios, and talent agencies. The other 22 cases settled over the past six years for a combined amount of $74.5 million. The announcement of today’s news – wherein CAA has agreed to make a $150,000 donation and provide limited consulting services to a non-profit entity that assists older television writers – was made jointly by CAA and counsel for the 115 named plaintiffs and the settlement class. The settlement is subject to final approval by the California Superior Court in and for the County of Los Angeles.

Duran v. U.S. Bank Nat’l Ass’n, No. A125557, 2012 WL 366590 (Feb. 6, 2012)

In a decision destined to have significant statewide ramifications, the California Court of Appeal for the First District reversed a trial court’s certification of a wage-hour class and determination of liability, concluding that the trial court had failed to follow “established statistical procedures” in adopting the trial management plan under which class-wide liability was determined by the testimony of only a relative handful of the class members.

Four current and former U.S. Bank Business Banking Officers (BBO) filed suit on behalf of themselves and all current and former BBOs within the relevant period, alleging that they had been misclassified as exempt outside sales people and therefore illegally deprived of overtime pay. After certifying the class, the trial court, over U.S. Bank’s strenuous objections, adopted a trial management plan in which a random sample of 20 (out of 260) class members would testify as representatives of the class, and the court would use this testimony to determine class-wide liability. After bench trials, the court awarded the class members $15 million in unpaid overtime and prejudgment interest, as well as $18 million in attorney’s fees.

Ruiz v. Affinity Logistics Corp., 667 F.3d 1318 (9th Cir. 2012)

Fernando Ruiz and similarly situated drivers filed a class action against Affinity alleging violations of the Fair Labor Standards Act and California law for failure to pay overtime, failure to pay wages, improper charges for workers’ compensation insurance and unfair business practices. To work for Affinity, the drivers had to enter into an…