Flordeliza Escano et al v. Kindred Healthcare Operating Company, Inc. et al, No. 2:2009cv04778 - Document 141 (C.D. Cal. 2013)
Court Description: ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS JOINT MOTION FOR CLASS CERTIFICATION 80 by Judge Dean D. Pregerson: The Court certifies Classes 1, 2, 4, 5B, and 6, and does not certify Classes 5 or 5C. (lc). Modified on 3/5/2013 .(lc).
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Flordeliza Escano et al v. Kindred Healthcare Operating Company, Inc. et al Doc. 141 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 13 FLORDELIZA ESCANO, MARILA P. MAXIMO, JOEL T. CATUBLAS on behalf of themselves and on behalf of all others similarly situated, 14 15 16 17 18 19 Plaintiffs, v. KINDRED HEALTHCARE OPERATING COMPANY, INC., a Delaware corporation; KINDRED HEALTHCARE INC., a Delaware corporation; SPECIALTY HOSPITALS OF SOUTHERN CALIFORNIA, a business form unknown, 20 21 Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 09-04778 DDP (CTx) ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ JOINT MOTION FOR CLASS CERTIFICATION [Dkt. No. 80] 22 23 Presently before the court is Plaintiffs Flordeliza Escano, 24 Marila P. Maximo, Joel T. Catublas, and Penny Burney (collectively 25 “Escano Plaintiffs”) and Plaintiffs Debbie Fitzpatrick-Seckler and 26 Richard Silva (collectively “Fitzpatrick Plaintiffs”)’s Joint 27 Motion for Class Certification.1 Having considered the parties’ 28 1 The two actions have not been consolidated but the court has (continued...) Dockets.Justia.com 1 submissions and heard oral argument, the court adopts the following 2 order. 3 I. BACKGROUND 4 The Escano Plaintiffs and the Fitzpatrick Plaintiffs are 5 hourly employees at hospitals owned by Kindred Healthcare Operating 6 Group, Inc. (“KHOI” or “Kindred”). 7 Ballard PMQ-KHW Depo. 13:9-10.) 8 at Kindred Santa Ana as a licensed vocational nurse from 2004 to 9 2008. (Ballard Depo. 16:16-19; Plaintiff Flordeliza Escano worked (Escano Depo. 31:17-19; 43:1-9.) Plaintiff Marila Maximo 10 worked from 1997 to October 2008 at Kindred Santa Ana, first as a 11 monitor tech and later as a licensed vocational nurse. 12 Depo. 57:8-10; 84:16-19; 34:15-18.) 13 from June 20, 1997, to November 2007 at Kindred La Mirada as a 14 supervisor of respiratory therapists. 15 33:15-20; 145:2-146:19.) 16 worked from 1995 to approximately 2000 and then from 2008 to the 17 present at Kindred Westminster as a licensed vocational nurse. 18 (Fitzpatrick Depo. 15:23-16:4.) 19 as a respiratory therapist from 1993 to the present at Kindred 20 Westminster. 21 actions on a class basis. 22 (Maximo Plaintiff Penny Burney worked (Burney Depo. 40:13-15; Plaintiff Debbie Fitzpatrick-Seckler Plaintiff Richard Silva has worked (Depo. Silva 58:12-24.) Plaintiffs filed their The Escano and Fitzpatrick Plaintiffs collectively allege 23 violations of wage and hour laws, specifically failure to pay 24 appropriate overtime compensation, failure to provide meal periods, 25 and failure to furnish accurate itemized wage statements. 26 II. LEGAL STANDARD 27 1 28 (...continued) been addressing them together. 2 1 The party seeking class certification bears the burden of 2 showing that each of the four requirements of Rule 23(a) and at 3 least one of the requirements of Rule 23(b) are met. 4 Dataprods. Corp., 976 F.2d 497, 508-09 (9th Cir. 1992). 5 sets forth four prerequisites for class certification: See Hanon v. Rule 23(a) 6 (1) the class is so numerous that joinder of all members is 7 impracticable; (2) there are questions of law or fact 8 common to the class; (3) the claims or defenses of the 9 representative parties are typical of the claims or 10 defenses of the class; and (4) the representative parties 11 will fairly and adequately protect the interests of the 12 class. 13 Fed. R. Civ. P. 23(a); Hanon, 976 F.2d at 508. 14 requirements are often referred to as numerosity, commonality, 15 typicality, and adequacy. 16 Falcon, 457 U.S. 147, 156 (1982). 17 a class action, the question is not whether the plaintiff has 18 stated a cause of action or will prevail on the merits, but rather 19 whether the requirements of Rule 23 are met.” 20 Jacquelin, 417 U.S. 156, 178 (1974) (internal quotation and 21 citations omitted). 22 the underlying claim to the extent that the merits overlap with the 23 Rule 23(a) requirements, but will not conduct a “mini-trial” or 24 determine at this stage whether Plaintiffs could actually prevail. 25 Ellis v. Costco Wholesale Corp., 657 F.3d 970, 981, 983 n.8 (9th 26 Cir. 2011). 27 /// 28 /// These four See Gen. Tel. Co. of Southwest v. “In determining the propriety of Eisen v. Carlisle & This court, therefore, considers the merits of 3 1 III. DISCUSSION 2 A. Joint Employer Liability 3 The court finds that Plaintiffs have sufficiently alleged that 4 Kindred is a joint employer for the purposes of class 5 certification. 6 in question, Kindred enters into “Administrative and Support 7 Services Agreements” with the hospitals or groups of hospitals 8 where Plaintiffs work. 9 Exhs. 4, 5.) In addition to owning all shares of the hospitals (Ballard Depo. 117:17-18; Carney Decl., Kindred performs payroll functions (Thommen Depo. 10 35:19-23), distributes a uniform employee handbook to employees 11 (Jasnoff Depo. 16:7-13; Carney Decl., Exhs. 1-3), plays a role in 12 setting overtime policy (Thommen Depo. 65:23-66:10), maintains the 13 Kronos timekeeping system (Wilson Depo. 25:19-29:10), provides 14 orientation to newly hired CEOs (Tharasri Depo. 93:2-16; 94:5-8, 15 24-25), and screens employees prior to hiring. (Bibal Depo. 21:23- 16 25; 22:1-10; 28:15-25; 29:1-2.) 17 hospitals under the Kindred umbrella have different policies, this 18 will be addressed in the consideration of the 23(a) commonality 19 requirement. To the extent that different 20 B. AWS Overtime Class 21 Plaintiffs propose the following definition for their 22 Alternative Work Schedule Overtime Class (Class 1): 23 All current and former California-based hourly 24 employees who work or worked for defendants pursuant 25 to an alternative workweek schedule (AWS), at 26 defendants’ California hospitals from June 1, 2005, 27 through the present who left work between the 8th 28 4 1 and 12th hour of their shift, and were not paid 2 daily overtime. 3 4 1. Applicable Law Under California law, a “regularly scheduled alternative 5 workweek” schedule is allowed when adopted by vote of the 6 employees. 7 in the health care industry an acceptable alternative workweek 8 schedule (“AWS”) includes “work days exceeding ten (10) hours but 9 not more than 12 hours within a 40-hour workweek.” Cal. Labor Code § 511. Under the relevant Wage Order, Cal. Code Regs. 10 tit. 8, § 11050(3)(B)(8). “If an employer . . . requires an [AWS] 11 employee to work fewer hours than those that are regularly 12 scheduled by the agreement, the employer shall pay the employee 13 overtime compensation at a rate of one and one-half (1 1/2) times 14 the employee’s regular rate of pay for all hours worked in excess 15 of (8) hours . . . for the day the employee is required to work the 16 reduced hours.” 17 essence, the employer must pay a ‘short-shift penalty’ if AWS 18 employees are required to work fewer hours than scheduled.” 19 Huntington Memorial Hosp. v. Superior Court, 131 Cal. App. 4th 893, 20 909 (2005). 21 the benefit of an AWS while protecting employees by requiring 22 regular shifts.2 Cal. Code Regs. tit. 8, § 11050(3)(B)(2). “In The short-shift penalty is intended to give employers 23 2 24 25 26 27 28 “The phrase ‘regularly scheduled,’ as set forth in Labor Code § 511(a), means that the employer must schedule the actual work days and the starting and ending time of the shift in advance, providing the employees with reasonable notice of any changes, wherein said changes, if occasional, shall not result in a loss of the overtime exemption. However, in no event does Labor Code § 511(a) authorize an employer to create a system of ‘on-call’ employment in which the days and hours of work are subject to continual changes, depriving employees of a predictable work (continued...) 5 1 2 2. Plaintiffs’ Allegations Plaintiffs allege that AWS employees are frequently required 3 to leave after working eight hours but before completing their full 4 twelve-hour shift. 5 “flexing off” employees when there is a low patient census and not 6 compensating them at the overtime rate for any hours they worked 7 over eight on days when they were flexed off. 8 propose comprises all AWS employees who worked more than eight but 9 fewer than twelve hours and did not receive overtime compensation 10 The class they for the hours in excess of eight. 11 12 They assert that Defendants have a practice of 3. Standing Defendants argue that this Class is overbroad because it 13 includes employees who voluntarily cut their shifts short as well 14 as employees who were required to leave early. (Response to 15 Plaintiff’s Revised Class Definitions (“Resp. to Rev’d Class 16 Defs.”) 1.) 17 overtime only if an AWS employee is required to work fewer hours 18 than her full shift. 19 Defendants argue that because the Class includes employees who left 20 voluntarily after eight hours, the class includes members without 21 standing and is therefore unascertainable. 22 Inc., 672 F. Supp. 2d 978, 991 (N.D. Cal. 2009)(“No class may be 23 certified that contains members lacking Article III standing. . . . 24 The class must therefore be defined in such a way that anyone 25 within it would have standing.”) Under the relevant Wage Order, an employer must pay Cal. Code Regs. tit.8, § 11050(3)(B)(2). See Sanders v. Apple, 26 2 27 28 (...continued) schedule.” (California Department of Industrial Relations, Industrial Welfare Commission, Statement as to the Basis, http://www.dir.ca.gov/iwc/statementbasis.htm.) 6 1 The court agrees that the proposed class definition is 2 overbroad, but finds that it can be remedied by restricting the 3 Class to those employees who were required to leave work between 4 the 8th and 12th hour. 5 following definition for Class 1: Henceforward the court will use the 6 All current and former California-based hourly 7 employees who work or worked for Defendants pursuant 8 to an alternative workweek schedule (AWS), at 9 Defendants’ California hospitals from June 1, 2005, 10 through the present who were required to leave work 11 between the eighth and twelfth hour of their shift, 12 and were not paid daily overtime. 13 14 15 (Emphasis added to indicate court’s modification.) 4. Predominance (23(b)) Because Defendants’ primary objections to this Class pertain 16 most directly to predominance, the court will address Rule 23(b) 17 before turning to the 23(a) analysis. 18 Under Rule 23(b)(3), a plaintiff seeking to certify a class 19 must show that questions of law or fact common to the members of 20 the class “predominate over any questions affecting only individual 21 members, and that a class action is superior to other available 22 methods for fairly and efficiently adjudicating the controversy.” 23 Fed. R. Civ. P. 23(b)(3). Defendants argue that this Class does not 24 meet the predominance requirement because there is a question in 25 each instance as to whether an employee chose to leave early or was 26 required to do so. 27 since employees who leave voluntarily after eight hours are not 28 entitled to compensation. This, they assert, is the dispositive issue, According to Defendants, Plaintiffs have 7 1 not proposed a manageable method of answering the individual 2 question of whether in each instance an employee was “required” to 3 leave early. 4 Plaintiffs present evidence that tends to show that Defendants 5 had a policy of not paying overtime to AWS employees working more 6 than eight hours but less than a full AWS shift. 7 deponents indicated an awareness of the legal requirement to do so. 8 Payroll coordinators and officers indicated that they were not 9 aware of the law regarding short-shift penalties. None of the Nancy Wilson, 10 Chief Financial Officer at Kindred La Mirada, testified that the 11 only time AWS employees are entitled to overtime is when they work 12 over 12 hours in a day or 40 hours in a week. 13 9.) 14 121:2-3.) 15 employee had left voluntarily or was required to leave and that no 16 overtime was paid as a rule in such situations. 17 30:18-31-8.) 18 (Wilson Depo. 109:1- She had never heard of a “short shift premium.” (Wilson Depo. Defendants apparently did not record whether an AWS (Davies Depo. Plaintiffs also present evidence that there is no code in the 19 Kronos time keeping system that a payroll officer could use to 20 indicate that an employee was entitled to a short-shift penalty. 21 Renay Thommen, Senior Director of Payroll at KHOI, testified that 22 there was no code to indicate whether an employee had voluntarily 23 left under those circumstances or if she had been required to 24 leave. 25 (Thommen Depo. 210:23-211:5.) Plaintiffs also present evidence that employees were not 26 informed that they are entitled to a short-shift premium if they 27 are required to leave before the end of their AWS shift. 28 employment agreement states that AWS employees working more than 40 8 While the 1 hours in a week or 12 hours in a day will receive overtime for 2 excess hours, it makes no mention of the short-shift penalty. 3 Exhs. 34, 40, 46.) Because the employment policies deal with other 4 details pertaining to AWS overtime, the failure to address short 5 shift penalties tends to indicate a policy of not paying such 6 premiums.3 7 (See Defendants argue that even if Kindred Human Resources is not 8 equipped to handle the short shift penalty, individualized 9 questions predominate because in each instance of a short shift, 10 the court would have to determine whether an employee was required 11 to leave or left voluntarily. 12 to depositions from the named Plaintiffs that are in tension with 13 Plaintiffs’ claim that AWS employees were required to leave early. 14 Defendants point to Burney’s statement that she was never required 15 to leave a shift early nor did she require the employees she 16 supervised to leave early. 17 Escano’s testimony that some days (“few and far between”) she left 18 early to pick her son up from school, although she does not have a 19 record of those days. 20 mixed testimony, Defendants argue that there is neither substantial In support of this, Defendants point (Burney Depo. 62:15-24.) (Escano Depo. 142:22-144:1.) They point to Based on this 21 22 23 24 25 26 27 28 3 Defendants cite Gonazlez v. Millard Mall Servs, Inc., 281 F.R.D. 455, 464 (S.D. Cal. 2012), in support of the proposition that the lack of a policy does not establish a violation or constitute evidence that common issues predominate. The two cases are distinguishable. In Millard Mall, there was an express policy against spilt shifts, as stated in the union agreement. The employer’s lack of a policy regarding split shifts could not be taken as evidence of a violation because split shifts were not permitted by the CBA. Here, in contrast, there is no mention of a short-shift penalty for AWS employees in their employment agreements, and no other indication of a stated policy of paying the short-shift penalty, but there is also no stated prohibition on short-shifts. 9 1 evidence of requiring employees to leave nor a class-wide means of 2 answering this question. 3 The California Supreme Court addressed a similar issue in the 4 context of misclassification of employees in Sav-On Drugstores, 5 Inc. v. Superior Court of Los Angeles County, 34 Cal. 4th 319 6 (2004). 7 individual member of the class is exempt or nonexempt from the 8 overtime requirements depends on which tasks that person actually 9 performed and the amount of time he or she actually spent on which 10 tasks” and that therefore “no meaningful generalizations about the 11 employment circumstances of its managers could be made.” 12 325. 13 disputed, evidence that deliberate misclassification was 14 defendant’s policy and practice.” 15 evidence, the court concluded that “to the extent plaintiffs are 16 able to demonstrate . . . that misclassification was the rule 17 rather than the exception, a class action would be the most 18 efficient means of resolving class members’ overtime claims.” 19 at 330. “Even if some individualized proof of such facts ultimately 20 is required to parse class members’ claims, that such will 21 predominate in the action does not necessarily follow.” Id. at 334. 22 The issue here is whether determining that an employee was 23 required to leave depends on individual or class-wide evidence. 24 Plaintiffs appear to argue that they can present objective evidence 25 that Kindred has a policy of requiring employees to leave when the 26 patient census is low, what they refer to as the employees being 27 “flexed off.” 28 patient census, determines the number of employees required by The defendants in that case argued that “whether any Id. at That court found that “[t]he record contains substantial, if Id. at 329. Based on such The theory is that the supervisor looks at the 10 Id. 1 statute, and then determines how many employees, if any, will be 2 required to leave. 3 employees who among them wishes to leave. 4 question should result in an employee either leaving voluntarily or 5 being required to leave. 6 paid at her usual hourly rate for the hours worked beyond eight. 7 If she is required to leave, she should be compensated at the 8 overtime rate (time-and-a-half) for the hours she worked over eight 9 but under twelve. 10 At that point, the supervisor may ask the Theoretically, that If she leaves voluntarily, she should be Here, however, it appears that neither employees nor human 11 resources staff know that employees who are required to leave are 12 entitled to a short-shift penalty. 13 information, even if the supervisor asks for volunteers, the choice 14 to leave is not truly voluntary since employees are not aware that 15 they would be entitled to overtime pay if they were required to 16 leave, but not if they volunteer. 17 rights, employees might, for instance, collectively agree not to 18 volunteer, such that the employer would have to require employees 19 to leave and pay the short-shift penalty if they wished to reduce 20 the staffing roster at a given time. 21 In the absence of this With this knowledge of their In the absence of such knowledge of rights, an employee’s 22 decision to “volunteer” to take a short shift cannot be considered 23 voluntary. 24 proof in the form of time and patient census records to show that 25 requiring employees to leave based on low patient census was “the 26 rule rather than the exception.” 27 individualized questions may remain, as evidenced in certain 28 depositions where Plaintiffs testified to their occasional need to Plaintiffs are likely to be able to use class-wide Sav-On, 34 Cal. 4th at 330. 11 Some 1 leave early for specific reasons. 2 class treatment. 3 certification inappropriate so long as such issues may effectively 4 be managed.” 5 Such questions do not preclude “Individual issues do not render class Id. at 334. “[I]f unanticipated or unmanageable individual issues do 6 arise, the trial court retains the option of decertification.” 7 at 335. Decertification of this class would be appropriate if, for 8 instance, Plaintiffs were not able to use time and patient census 9 records to demonstrate a policy of “flexing off,” or if Plaintiffs 10 could demonstrate such a policy only at some of the Kindred 11 Id. hospitals. 12 13 14 15 The court therefore finds that this Class meets the Rule 23(b) predominance requirement. 5. Rule 23(a) Requirements Defendants contend that this Class does not meet the 16 requirement of commonality. 17 23(a)(2) “requires the plaintiff to demonstrate that the class 18 members have suffered the same injury. 19 that they have all suffered a violation of the same provision of 20 the law . . . . Their claims must depend upon a common contention.” 21 Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (internal 22 quotation marks and citation omitted). 23 similar to their argument with respect to predominance, namely that 24 Plaintiffs fail to present evidence of a uniform policy or practice 25 and that statistical evidence from time records cannot explain why 26 an employee left early. 27 Plaintiffs have presented sufficient evidence of a policy of not 28 compensating Plaintiffs for short shifts, which is equally evidence Commonality for purposes of Rule This does not mean merely Defendants make an argument As discussed above, the court finds that 12 1 of Plaintiffs’ common injury. 2 commonality. 3 The court thus finds that there is Defendants do not dispute that this Class meets the 4 requirements of numerosity, typicality, and adequacy. 5 finds that these requirements are satisfied and the AWS Class is 6 suitable for certification. The court 7 C. Regular Rate Class 8 Plaintiffs propose the following definition for their Regular 9 Rate Class (Class 2): 10 All California based hourly employees who work or 11 worked for Defendants’ hospitals at any time between 12 June 1, 2005, and the present who were paid a double 13 time premium and/or paid for at least one missed 14 meal period payment. (These payments are made by 15 defendant at the base rate and not the legally 16 required regular rate.) 17 18 1. Applicable Law Under California law, work in excess of 12 hours per day is 19 compensated at double the employee’s “regular rate of pay.” 20 Labor Code § 510. California also requires that when an employer 21 fails to provide an employee a mandated meal or rest period, the 22 employee is entitled to one additional hour of pay at the 23 employee’s “regular rate of compensation.” 24 226.7. 25 the Fair Labor Standards Act. 26 v. Superior Court, 77 Cal. Rptr. 3d 757, 762-63 (2008). 27 FLSA, the “regular rate” includes “all remuneration for employment 28 paid to, or on behalf of, the employee,” with some exceptions. Cal. Cal. Labor Code § California law uses the definition of “regular rate” from See Advanced-Tech Sec. Servs., Inc. 13 Under the 29 1 U.S.C. § 207. 2 shift differentials and education and bonus compensations, as 3 mandated by 29 C.F.R. 778.110, and 778.200, 778.208. 4 Plaintiffs assert that their regular rate includes 2. Plaintiffs’ Allegations 5 Plaintiffs present evidence that the double time premium and 6 missed meal period payments are paid at the base rate, not the 7 regular rate. 8 statistician Dwight Steward who determined that “employees were 9 compensated for their double time hours and their missed meal Plaintiffs offer a declaration from economist and 10 penalty payments at the employees’ standard hourly rate,” not at 11 the regular rate. 12 Human Resources employees likewise indicated in their depositions 13 that double time and missed meal period penalties are paid at the 14 base rate, not the regular rate. 15 25.) 16 a meal penalty is paid, “the additional hour will be paid at base 17 rate of pay . . . .” (Carney Decl., Exh. 31, “Missed Meal – 18 California.”) 19 20 (RJN Exh. 12; Decl. Steward ¶¶ 3-5.) Kindred (Thommen Dep. 223:10-13, 224: 22- Indeed, Kindred’s missed meal period policy states that when 3. Rule 23(a) and (b) Requirements Defendants do not assert, nor does the court find, that this 21 class fails to meet any of the Rule 23(a) or (b) requirements. 22 Their sole critique is that the class includes employees who do not 23 receive any of the bonuses or other benefits that enter into the 24 calculation of the regular rate and thus whose compensation for 25 missed meal periods and double time at the base rate was proper. 26 The court finds that the class can be limited so as to narrow 27 the class to those employees with standing. 28 shall be defined as follows: 14 Henceforth Class Two 1 All California-based hourly employees who work or 2 worked for Defendants’ hospitals at any time between 3 June 1, 2005, and the present who were paid a double 4 time premium and/or paid for at least one missed 5 meal period payment at the base rate instead of the 6 regular rate to which they were entitled. 7 So limited, the Class is appropriate for certification. 8 D. Waiting Time Class 9 Plaintiffs propose the following definition for their Waiting 10 Time Class (Class 4): 11 All current and former California-based hospital 12 employees employed as hourly, non-exempt employees 13 by Defendants who work or worked for Defendants from 14 June 1, 2006, through the present who left 15 Defendants’ employ during this period and are a 16 member of either Class 1, 2, Class 5, Subclasses 5, 17 5B, 5C, this is a derivative claim only. 18 Under California law, if an employer willfully fails to pay 19 the wages of an employee who is discharged, the wages shall 20 continue as a penalty until paid but for not more than 30 days. 21 Cal. Labor Code § 203. 22 classes. 23 certifies the other classes. 24 25 26 27 This Class is derivative of the other The court certifies it to the same extent that it E. Meal Period Classes 1. Failure to Provide All Meal Periods Plaintiffs propose the following definition for their Failure to Provide Meal Periods Class (Class 5): 28 15 1 All current and former California-based hourly 2 hospital employees employed by Defendants from June 3 1, 2005, to the present, who were not provided 4 legally compliant meal periods within the first 5 5 hours of their shift. 6 7 a. Applicable Law California law requires that employers “provide a first meal 8 period after no more than five hours of work . . . .” 9 Rest. Corp. v. Superior Court, 53 Cal. 4th 1004, 1049 (2012). In Brinker 10 Brinker, the California Supreme Court held that “an employer must 11 relieve the employee of all duty for the designated period, but 12 need not ensure that the employee does no work.” 13 meal period requirement is only “satisfied if the employee (1) has 14 at least 30 minutes uninterrupted, (2) is free to leave the 15 premises, and (3) is relieved of all duty for the entire period.” 16 Id. at 1036. 17 18 Id. at 1034. The b. Plaintiffs’ Allegations Plaintiffs allege that Kindred has a policy of failing to 19 provide meal breaks within the first five hours. As evidence of 20 this policy, they present Defendants’ meal period policy documents 21 which do not state that meals are to be taken in the first five 22 hours of the shift. 23 provided a one-half hour unpaid meal break in accordance with state 24 law. . . . If you are a non-exempt employee, you must clock out 25 unless your facility allows for an automatic meal deduction.” 26 (Carney Decl., Exh. 2.) 27 from Laurie Yamamori, Payroll Benefits Coordinator at Kindred 28 Hospital Baldwin Park, stating that she does not review time cards Those policies state that “[e]mployees will be They also present deposition testimony 16 1 to determine whether the meal break was taken at a certain time of 2 the day. 3 reviewed time cards (Decl. Carney, Exhs. 12, 13, and 14) and 4 determined that Maximo had 13 late meal periods, Burney had 134 5 late meal periods, and Escano had 28 late meal periods. 6 Decl. RE: Reply ¶ 5.) 7 correlate employee time records with patient census records, they 8 will show whether Plaintiffs’ late lunches coincide with times when 9 the hospital had insufficient staff coverage to relieve employees (Yamamori Depo. 55:22-25.) Additionally, Plaintiffs (Carney Finally, Plaintiffs assert that when they 10 of all duties for a meal period while maintaining the mandated 11 patient-to-staff ratio. 12 13 c. Predominance This court has previously indicated its agreement with 14 Justices Wedegar and Liu that if a meal period is not taken by the 15 employee, the burden falls on the employer to rebut the presumption 16 that meal periods were not adequately provided. 17 Cal. 4th at 1053 (Werdegar, J., concurring)(“If an employer’s 18 records show no meal period for a given shift over five hours, a 19 rebuttable presumption arises that the employee was not relieved of 20 duty and no meal period was provided.”). “Otherwise, employers 21 would have an incentive to ignore their recording duty, leaving 22 employees the difficult task of proving that the employer either 23 failed to advise them of their meal period rights, or unlawfully 24 pressured them to waive those rights.” 25 Investigations Servs., LLC, 878 F. Supp. 2d 1038, 1044 (C.D. Cal. 26 2012). 27 28 See Brinker, 53 Ricaldai v. U.S. Here, the records offered by Plaintiffs show that a meal period was sometimes not provided to named Plaintiffs within the 17 1 five hours. Under this court’s holdings, for an individual 2 plaintiff the burden would fall on the employer to rebut the 3 presumption of inadequate meal periods. 4 the burden lies for the purposes of class certification. 5 court addressed a similar issue with respect to the 6 misclassifcation of employees in Marlo v. United Parcel Serv., 7 Inc., 251 F.R.D. 476 (C.D. Cal. 2008). The issue here is where This This court held: 8 As to any individual, UPS would have the burden of 9 proving the exemption was proper. However, as to a 10 class-wide finding of misclassification which is the 11 result Plaintiff seeks here, Plaintiff would have 12 the ultimate burden of showing misclassification on 13 a class-wide basis. 14 at trial, or to otherwise maintain a class action, 15 that Plaintiff is required to show that all or 16 substantially all FTS were misclassified. 17 Plaintiff must show that it is more likely than not 18 that UPS’s exemption as applied to FTS was a policy 19 or practice of misclassification. 20 plaintiff must provide common evidence of 21 misclassification to maintain class certification 22 and proceed with a class action trial. 23 24 This does not mean to succeed Rather, In any event, a Id. at 482-83. The issue here is similar. Although the burden falls on 25 Kindred to rebut the presumption of inadequate meal periods for an 26 individual employee, Plaintiffs have the ultimate burden to prove 27 that Defendants have a policy of inadequate meal provision. 28 Plaintiffs must provide common evidence of inadequate meal periods 18 1 to satisfy the 23(b) predominance requirement and obtain class 2 certification. 3 To satisfy the 23(b) predominance requirement, “it is not 4 enough simply that common questions of law or fact exist; 5 predominance is a comparative concept that calls for measuring the 6 relative balance of common issues to individual ones.” 7 F.R.D. at 483. “The need for common proof recognizes that a 8 plaintiff’s evidence should have some common application to class 9 members in order to provide a basis for the jury to find that [the Marlo, 251 10 policy] ‘was the rule rather than the exception.’” 11 (quoting Sav-On, 34 Cal. 4th at 330). 12 is not met “when a plaintiff brings a claim on a class-wide basis 13 that raises individualized issues, but fails to provide common 14 proof that would have allowed a jury to determine those issues on a 15 class-wide basis.” 16 Id. at 484 The predominance requirement Marlo, 251 F.R.D. at 485. Plaintiffs’ proposed proof of correlating missed meals with 17 patient census records may be common proof that would allow the 18 issue of missed meal periods to be determined on a class-wide 19 basis. 20 attempted, so far as the court knows, to obtain patient census 21 records and perform a sample of the necessary analysis. 22 analysis could conceivably demonstrate that it was more likely than 23 not that in a given instance of a missed meal, Plaintiff was not 24 provided with that meal because of Defendants’ policy. 25 Plaintiffs have not provided such evidence. 26 However, Plaintiffs have not provided any such proof or Such However, The only common evidence before the court is evidence that the 27 meal policy does not specifically mention a review for a meal 28 within the first five hours and that the named Plaintiffs did miss 19 1 some (but not all) meals. In contrast, Defendants have emphasized 2 evidence of disparate processes that different hospital facilities 3 and departments had of handling meal period scheduling and 4 coverage. 5 supervisors, while others sometimes had such schedules, and still 6 others never had them. (See, e.g., Escano Depo. 124:4-125:4; Burney 7 Depo. Vol. I, 55:8-56:3, 61:1-9, 62: 19-22, 65:6-66:15; and Silva 8 Depo. 92:20-94:12.) Facilities and departments also differed in how 9 coverage was provided for employees during meal periods. Some facilities had written meal schedules posted by Maximo 10 testified that if she wanted to take a break but was with a 11 patient, she had to wait until somebody could cover for her. 12 (Maximo Depo. 90:5-12.) 13 therapists were instructed to give their pager to another therapist 14 when ready to take a meal break. 15 testified that as a supervisor, she would cover for employees who 16 wanted to take their break or help find them coverage. 17 Depo. Vol. 1, 88:19-91:20.) 18 Silva testified that respiratory (Silva Depo. 97:4-98:4.) Burney (Burney These differences would not necessarily overcome common 19 evidence of a Kindred-wide policy to delay meal periods for 20 purposes of staff coverage, but the evidence that Plaintiffs have 21 in fact put forward is insufficient to meet their burden of 22 establishing predominance. 23 Plaintiffs do not argue, nor does the court find, that they 24 meet any of the other 23(b) requirements. 25 not appropriate for certification. 26 27 28 This class is therefore 2. Meal Waiver Subclass Plaintiffs propose the following definition for their Meal Waiver Class (Class 5B): 20 1 All current and former California-based hourly 2 hospital employees regularly scheduled to work 12 3 hour shifts who worked for Defendants from June 1, 4 2005, to the date of judgment who signed a meal 5 waiver as a condition of employment when hired by 6 Defendants. 7 8 9 a. Predominance (23(b)) Under California law, AWS employees may waive their right to one of two meal periods.4 Plaintiffs present evidence that all or 10 nearly all AWS employees do sign the second meal waiver. 11 Kindred Missed Meal Policy, produced in both Fitzpatrick and 12 Escano, states: “Employees are entitled to a second meal after 12 13 hours. 14 also have an agreement to waive their right to the second meal. 15 The Missed Meal penalty is not automated for a 2nd meal in a 16 shift.” The Most 12-hour employees who have signed a 12-hour agreement, (Carney Decl., Exh. 31.) Annette Bibal, Human Resources 17 4 18 19 20 21 22 23 24 25 26 27 28 “Notwithstanding any other provision of this order, employees in the health care industry who work shifts in excess of eight (8) total hours in a workday may voluntarily waive their right to one of their two meal periods. In order to be valid, any such waiver must be documented in a written agreement that is voluntarily signed by both the employee and the employer. The employee may revoke the waiver at any time by providing the employer at least one (1) day's written notice. The employee shall be fully compensated for all working time, including any on-the-job meal period, while such a waiver is in effect.” Cal. Code Regs., tit. 8, § 11050. “[H]ealth care representatives persuaded the IWC to at least preserve expanded waiver rights for their industry, along the lines of those originally afforded in 1993. (See IWC statement as to the basis (Jan. 1, 2001) pp. 19–20.) Accordingly, wage order No. 4–2001 and No. 5–2001 each contains a provision absent from other wage orders, permitting health care employees to waive one of two meal periods on longer shifts. (IWC wage order No. 4–2001 (Jan. 1, 2001) (Cal.Code Regs., tit. 8, § 11040, subd. 11(D)); Wage Order No. 5, subd. 11(D).)” Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004, 1047 (2012). 21 1 Director at Kindred Hospital Baldwin Park, testified that no AWS 2 employees who were hired since she was at Kindred have not signed 3 the meal waiver. 4 testified that because “our employees sign a meal waiver for their 5 second meal” and that “[t]hey sign it when they’re hired.” 6 Depo. 16:12-17:1.) (Bibal Depo. 31:13-32:24.) Kristen Davies (Davies 7 More explicitly, the declarations of Maximo, Escano, and 8 Burney state that Plaintiffs must sign the waiver as a condition of 9 employment. (Maximo Decl., Exh 1 ¶ 4 (“As an LVN at Kindred, I was 10 required to waive one of my two meal periods as a condition of 11 employment. 12 there was no option but to sign it.”); Escano Decl. ¶ 5 (same); 13 Burney Decl. ¶ 5 (same).) 14 their deposition testimony. (See, e.g., Escano Depo. 76:24-77:6 15 (saying she did not recall anybody ever telling her that she had to 16 sign the waiver); 17 her she had to sign the waiver even if she didn’t want to); Seckler 18 Depo. 55:25-56:9, (saying that at the orientation, they explained 19 that “I could have taken a second 30-minute break, but I put on 20 here that I waived it. I recall being asked to sign the waiver and felt that Defendants assert that this contradicts Maximo Depo. 70:6-17 (saying that nobody told But they didn’t get in-depth.”).) 21 The court finds that the apparently universal signing of the 22 second meal waiver lends itself to the inference that signing the 23 waiver is a condition of employment and gives rise to a class 24 question.5 Although the deposition testimony indicates that there 25 5 26 27 28 Defendants cite Washington v. Joe’s Crab Shack, 271 F.R.D. 629, 641 (N.D. Cal. 2010), for the proposition that whether an employee signed a meal period waiver voluntarily is inherently an individualized issue. That case is distinguishable from the current case, however, because there some employees signed a waiver (continued...) 22 1 may not have been an overt requirement of signing the meal waiver, 2 the pressure may have been implicit but nonetheless strong enough 3 for Plaintiffs to believe that if they did not sign the meal 4 waiver, they would not be hired. 5 their burden of demonstrating predominance under 23(b). 6 7 Plaintiffs have therefore met b. Rule 23(a) Requirements Defendants do not challenge the numerosity, typicality, or 8 adequacy of this class. 9 meet the Rule 23(a) commonality requirement because whether an They do argue that this class does not 10 employee signed a meal waiver voluntarily is an inherently 11 individualized issue. 12 there is sufficient evidence of a common question of fact, namely, 13 whether employees were required to waive their second meal period 14 as a condition of employment. 15 This class is appropriate for certification. 16 17 18 As articulated above, the court finds that 3. Third Meal Subclass Plaintiffs propose the following definition for their Third Meal Subclass (Class 5C): 19 All current and former California-based hospital 20 hourly employees who worked for Defendants June 1, 21 2005, to the date of judgment and worked over a 22 twelve (12) hours in a shift without being provided 23 an additional meal period or requisite payment for 24 said meal. 25 26 27 28 5 (...continued) and some did not. Here, all employees signed a waiver, making the issue of the waiver a common question of fact. 23 1 Brinker explained that the second meal period does not have to 2 be five hours after the first, but instead “after no more than 10 3 hours of work.” 4 IWC abandoned any requirement that work intervals be limited to 5 five hours following the first meal break.” 6 the wage order, as under the statute, an employer’s obligation is 7 to provide a first meal period after no more than five hours of 8 work and a second meal period after no more than 10 hours of work.” 9 Id. at 1049. Brinker, 53 Cal. 4th at 1042. “[W]e conclude the Id. at 1046. “Under By Brinker’s logic that there are no additional 10 timing requirements, it appears that the third meal would be due 11 after no more than 15 hours of work. 12 The court is aware that given the universal waiver of the 13 second meal, AWS employees working overtime could go ten hours 14 without a meal break. 15 or other authority to require meal periods under these 16 circumstances. 17 shifts in excess of 12 hours are permitted.6 18 However, the court cannot see any statutory The current law is clear that meal waivers on Because there is no requirement to provide a third meal period 19 until the end of hour 15, Plaintiffs have not established a common 20 legal question for this subclass. It is therefore not certified. 21 22 23 24 25 26 27 28 6 “Notably, the waiver provisions permit meal waivers even on shifts in excess of 12 hours and thus conflict with language in the standard subdivision regulating second meal periods in other wage orders that limits second meal waivers to shifts of 12 hours or less (see, e.g., IWC wage order No. 2–2001 (Jan. 1, 2001) ( Cal.Code Regs., tit. 8, § 11020, subd. 11(B))). For this reason, the IWC elected to omit that standard subdivision from these two wage orders. (See IWC statement as to the basis (Jan. 1, 2001) pp. 19–20.) Because the omission related to waiver and was not the product of any intent to include different meal timing requirements in Wage Order No. 5, we interpret that order as imposing the same timing requirements as those in most of the IWC's other wage orders and in Labor Code section 512.” Brinker, 53 Cal. 4th at 1047-48. 24 1 F. Wage Statement Class 2 Plaintiffs propose the following definition for their Wage 3 Statement Class (Class 6): 4 All current and former California-based hourly 5 hospital employees who worked for Defendants June 1, 6 2008, to the date of judgment who were not provided 7 pay stubs that complied with California Labor Code § 8 226, which failed to include: total hours worked, 9 all applicable hourly rates, and the gross wages. 10 11 1. Applicable Law California law places a number of requirements on employee pay 12 stubs. 13 which include, among other things, a statement of gross wages, 14 total hours, and deductions. Cal. Labor Code § 226(a). 15 same provision, “[a]n employee suffering injury as a result of a 16 Section 226(a) of the Labor Code states those requirements, Under the knowing and intentional failure by an employer to comply with [§ 17 226(a)] is entitled to recover the greater of all actual damages or 18 fifty dollars ($50) for the initial pay period in which a violation 19 occurs and one hundred dollars ($100) per employee for each 20 violation in a subsequent pay period, not exceeding an aggregate 21 penalty of four thousand dollars ($4,000), and is entitled to an 22 award of costs and reasonable attorney's fees.” 23 Id. § 226(e). The parties, and courts, disagree on the nature of the injury 24 requirement. 25 226(a) is not per se an injury making the employee eligible for 26 compensation; it argues that the issue is whether the pay stub 27 provides sufficient information to enable an employee to confirm Kindred asserts that a paycheck deficiency under § 28 25 1 whether she is properly paid. 2 Inc., 186 Cal. App. 4th 1136 (2010). 3 See, e.g., Morgan v. United Retail, Plaintiffs cite cases holding that the injury requirement is 4 minimal. 5 (2010)(“While there must be some injury in order to recover 6 damages, a very modest showing will suffice.”) 7 Transport, Inc., 258 F.R.D. 361, 374 (C.D. Cal. 2009) 8 Elliot v. Serion Pacific Work, LLC, 572 F. Supp. 2d 1169, 1181 9 (C.D. Cal.2008))(“[T]he types of injuries on which a Section 226 10 claim may be premised include ‘the possibility of not being paid 11 overtime, employee confusion over whether they received all wages 12 owed them, difficulty and expense involved in reconstructing pay 13 records, and forcing employees to make mathematical computations to 14 analyze whether the wages paid in fact compensated them for all 15 hours worked.’”) 16 1042, 1050-51 (C.D. Cal. 2006) (“Additionally, this lawsuit, and 17 the difficulty and expense Plaintiffs have encountered in 18 attempting to reconstruct time and pay records, is further evidence 19 of the injury suffered as a result of CDN's wage statements. 20 Plaintiffs' ability to calculate unpaid and miscalculated overtime 21 is complicated by the missing information required by Section 22 226(a). The purpose of the requirement is that employees need not 23 engage in the discovery and mathematical computations to analyze 24 the very information that California law requires.”) 25 agrees that the injury requirement should be interpreted as minimal 26 in order to effectuate the purpose of the wage statement statute; 27 if the injury requirement were more than minimal, it would nullify 28 the impact of the requirements of the statute. Jaimez v. DAIOHS USA, Inc., 181 Cal. App. 4th 1286, 1306 Ortega v. J.B. Hunt (quoting Wang v. Chinese Daily News, Inc., 435 F. Supp. 2d 26 This court 1 The court is reinforced in this interpretation of the injury 2 requirement by the recent statutory amendment to Section 226 3 clarifying the injury requirement by providing a statutory 4 definition. Section 226(e) now states that “[a]n employee is deemed 5 to suffer injury . . . if the employer fails to provide accurate 6 and complete information as required by one or more of [the section 7 (a) requirements] and if the employee cannot promptly and easily 8 determine from the wage statement alone . . . (i) The amount of 9 gross wages or net wages . . . (ii) Which deductions the employer 10 made from gross wages to determine the net wages . . .” 11 Code § 226(e). 12 the “contradictory and inconsistent interpretations of what 13 constitutes ‘suffering injury’ . . . in the various court cases . . 14 . it is necessary to provide further clarity on the issue . . .” 15 SB 1255 Bill Analysis, 16 http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_1251-1300/sb_1255_c 17 fa_20120828_175021_sen_floor.html. 18 modification is not dispositive of the issue, the court finds it 19 persuasive. 20 21 Cal. Labor The Senate Bill Analysis indicates that because of Although this statutory 2. Plaintiffs’ Allegations All Kindred pay stubs have the same format, regardless of the 22 hospital. 23 did not contain the total number of hours worked and do not include 24 the various rates of pay. 25 (PMQ) 16:12-17:9; Carney Decl., Exhs. 8-10; 17-18; 27; RJN Exh. 12, 26 Steward Decl. ¶ 4.) 27 (Thommen Depo. 228:1-3.) Until June 2010, the pay stubs (Thommen Depo. 228:1-234:15; Thommen 3. Rule 23(a) and (b) Requirements 28 27 1 The court finds that the minimal injury requirement has been 2 met by Plaintiffs’ inability to determine whether they have been 3 paid appropriately, and finds that this class is appropriate for 4 certification, with one modification. 5 stubs were modified in June 2010 to include the missing 226(e) 6 items, the Class should be limited to claims prior to that date, 7 with the exception of claims that Defendant failed to include the 8 appropriate pay rate (i.e. regular rate). 9 ongoing. Because the Kindred pay The latter claims are 10 The Class definition is therefore revised as follows: 11 All current and former California-based hourly 12 hospital employees who worked for Defendants at the 13 base rate only from June 1, 2008, to June 1, 2010, 14 or who worked for Defendants at the base and regular 15 rate from June 1, 2008, to the date of judgment, who 16 were not provided pay stubs that complied with 17 California Labor Code § 226, which failed to 18 include: total hours worked, all applicable hourly 19 rates, and the gross wages. 20 (Emphasis added to indicate the court’s modifications.) 21 22 IV. CONCLUSION For these reasons, the Court certifies Classes 1, 2, 4, 5B, 23 and 6, and does not certify Classes 5 or 5C. 24 are defined as follows: 25 26 27 The certified Classes 1. All current and former California-based hourly employees who work or worked for Defendants pursuant to an alternative workweek schedule (AWS), at Defendants’ California hospitals from June 1, 2005, through the present who were required to leave work between the eighth and twelfth hour of their shift, and were not paid daily overtime. 28 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 2. All California-based hourly employees who work or worked for Defendants’ hospitals at any time between June 1, 2005, and the present who were paid a double time premium and/or paid for at least one missed meal period payment at the base rate instead of the regular rate to which they were entitled. 3. All current and former California-based hospital employees employed as hourly, non-exempt employees by Defendants who work or worked for Defendants from June 1, 2006, through the present who left Defendants’ employ during this period and are a member of another certified Class. 4. All current and former California-based hourly hospital employees regularly scheduled to work 12 hour shifts who worked for Defendants from June 1, 2005, to the date of judgment who signed a meal waiver as a condition of employment when hired by Defendants. 5. All current and former California-based hourly hospital employees who worked for Defendants at the base rate only from June 1, 2008, to June 1, 2010, or who worked for Defendants at the base and regular rate from June 1, 2008, to the date of judgment, who were not provided pay stubs that complied with California Labor Code § 226, which failed to include: total hours worked, all applicable hourly rates, and gross wages. IT IS SO ORDERED. 15 16 17 Dated:March 5, 2013 DEAN D. PREGERSON United States District Judge 18 19 20 21 22 23 24 25 26 27 28 29
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