Cacho v. Eurostar, Inc.

43 Cal.App.5th 885

256 Cal.Rptr.3d 547

David CACHO et al., Plaintiffs and Appellants,

v.EUROSTAR, INC., Defendant and Respondent.

B284827

Court of Appeal, Second District, Division 7, California.

Filed December 4, 2019

As Modified December 23, 2019

Matern Law Group, Matthew J. Matern and Dalia Khalili, Manhattan Beach, for Plaintiffs and Appellants.

Manatt, Phelps & Phillips, Andrew L. Satenberg, Benjamin G. Shatz, Los Angeles, and Cherise S. Latortue for Defendant and Respondent.

FEUER, J.

Plaintiffs David Cacho and Regina Silva assert class claims against their former employer, Eurostar, Inc., alleging Eurostar violated California wage and hour laws by failing to provide employees with required meal and rest breaks and compelling employees to work off the clock at Eurostar's Warehouse Shoe Sale (WSS) retail shoe stores in California. Plaintiffs appeal from the trial court's order denying their motion for class certification, in which the court found plaintiffs failed to demonstrate common issues of law or fact predominated over individual issues and plaintiffs' claims were not typical of the class. Plaintiffs contend Eurostar maintained uniform break and overtime policies that are facially inconsistent with the labor laws, and therefore the claims are "eminently suited" for class adjudication under Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 139 Cal.Rptr.3d 315, 273 P.3d 513 ( Brinker ).

This case presents the question whether in the wake of Brinker , if the employer has a break policy (here, a meal break policy) that is compliant with the applicable wage order but silent as to certain requirements, does the omission of those requirements support class certification in the absence of evidence of a uniform unlawful policy or practice? Similarly, where an employer has a uniform written break policy that on its face is unlawful (here, a rest break policy), but in practice the policy has not been applied to company employees, is it nonetheless suitable for class certification? The answer to both questions is no. Although trial courts must be wary of analyzing evidence of wage and hour violations at the class certification stage in a manner that prejudges the merits, they may properly consider the evidence to determine whether classwide liability can be established through common proof.

Because plaintiffs failed to show they could prove Eurostar's liability for meal break, rest break, and off-the-clock violations by common proof at trial, the trial court did not abuse its discretion in denying class certification. In reaching its determination, the trial court did not err in considering the evidence submitted by the parties as to Eurostar's policy and practices to assist the court in making the threshold determination whether plaintiffs could prove liability for the alleged violations with common proof. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Parties

1. Eurostar and its WSS stores¹

Eurostar operates approximately 69 WSS retail shoe stores in California and has more than 2,500 hourly employees in the state.² At each WSS store, Eurostar employs three categories of managerial employees: store manager, assistant manager, and supervisor. The store manager is a salaried position, while the assistant manager and supervisor are nonexempt hourly positions. Nonmanagement hourly employees include head cashiers, cashiers, sales associates, apparel assistants, and loss prevention personnel. An individual store may have from nine to 26 employees.

The store manager is responsible for overseeing all operational aspects of each WSS store, including scheduling employee shifts, scheduling and implementing employee meal breaks, and implementing company policies and procedures. The assistant manager and supervisor assist the store manager in these responsibilities. Store managers, assistant managers, and supervisors work to ensure individual stores adhere to company policies. The duties of the managerial and nonmanagerial employees are generally the same at all WSS locations.

Each WSS store manager reports to a regional district manager. All district managers report to Eurostar's Vice President of Store Operations, Plutarco Mendoza.

2. Plaintiff David Cacho

David Cacho was hired in January 2010 as a loss prevention officer in the San Bernardino store, then was promoted that year to sales associate, and later to cashier. At the end of 2010 Cacho transferred to the Rialto store where he worked first as a cashier, then a supervisor. In late 2011 Cacho transferred to the Riverside store, where he worked as a supervisor for approximately nine months. In September 2012 he transferred to the Fontana store where he worked as a supervisor until he was promoted to assistant manager in approximately January 2013. Cacho reported to a different store manager at each of these locations; however, the stores were all within the same district, under the supervision of district manager Juan Carlos Mancera. Eurostar terminated Cacho's employment in August 2013 for violating company policy. According to Cacho, Mancera and Fontana store manager Luis Arzate told Cacho he was terminated for tampering with the store security system.

3. Plaintiff Regina Silva

Regina Silva was hired in November 2009 as a sales associate at the Fontana store while she was still in high school, and over the next three and a half years she held multiple nonexempt nonmanagerial positions, including sales associate, cashier, and head cashier. Silva worked at the Fontana store throughout her employment, except for six months in 2013 when she worked at the San Bernardino store. From about August 2012 to August 2013 Silva reported to Cacho in his role as a supervisor or assistant manager for the Fontana store. Eurostar terminated Silva's employment in August 2013 for violating company policy. Silva believed she was terminated in connection with Eurostar's allegation Cacho had tampered with the store security system to steal money.

B. Eurostar's Break and Timekeeping Policies

Eurostar maintains an employee handbook setting forth the company's policies for meal breaks, rest breaks, timekeeping, and overtime. The handbook is provided to new hires at their orientation training and to all employees whenever the policies are updated. At issue in this case are the 2007 handbook (titled "Revised 04/30/2007") and the revised 2013 handbook (titled "Revised 10/2013"). The policies in the handbooks apply to all WSS stores. Individual stores are not allowed to create their own break policies.

The company's six district managers attended periodic in-person meetings at corporate headquarters, where they discussed policies and reviewed the employee handbook. They also received uniform training regarding payroll systems, store standards, and employee scheduling. The district managers were responsible, in turn, for training store managers and ensuring store managers implemented company policies, including those set forth in the employee handbooks.

1. Meal break policies

Eurostar's 2007 and 2013 handbooks provide that employees working more than five hours per day are entitled to at least one off-duty, unpaid meal break. The 2007 handbook states: "Employees working over five (5) hours in any workday qualify for at least one-half (1/2) hour, unpaid, off-duty meal break during that workday. But, the meal period may be waived by mutual consent of management and employee if the employee's work period of less than six (6) hours completes the employee's workday. The meal period for most employees scheduled to work eight (8) hours is usually one (1) hour. [¶] Employees must clock out at the beginning of the meal period and clock back in at the end of the meal period. No supervisor is permitted to instruct an employee to skip their meal period. In certain circumstances, if an employee must take a meal break and remain on the premises, the employee is paid for the meal break. Only a supervisor can authorize an ‘on-duty’ meal break."

The 2013 handbook contains an identical meal break policy, except it provides as to paid on-duty meal breaks, "If the nature of an employee's work requires the employee to take a meal break on the premises, and the employee has signed a written on-duty meal period consent form, then the employee will be paid for the meal break."

2. Rest break policies

The 2007 handbook provides as to rest breaks: "Employees who work a minimum of four (4) hours per day are authorized to receive one (1) paid ten (10) minute rest period. Employees who work six (6) hours or more per day are authorized to receive two (2) paid ten (10) minute rest periods, one (1) in the morning before the meal break and one (1) in the afternoon."

In 2013 Eurostar revised its handbook to provide a first rest break for employees who worked at least three and a half hours of work and an additional break if they work over 10 hours: "Employees who work a minimum of three and one half (3 1/2) hours per day are authorized to receive one (1) paid ten (10) minute rest period. Employees who work six (6) hours or more per day are authorized to receive two (2) paid ten (10) minute rest periods, one (1) in the morning before the meal break and one (1) in the afternoon. Employees who work more than ten (10) hours on a given day are entitled to a third rest period of ten (10) minutes."

Both the 2007 and 2013 handbooks state, "A rest period also includes time at your workstation when you make or receive a personal telephone call, eat a snack, attend to personal business or otherwise ‘relax.’ The company prefers employees to take their breaks by leaving their workstation. If a break is taken at the work station, a professional atmosphere must be maintained at all times."

3. Timekeeping policies and prohibition of off-the-clock work

Eurostar employees are responsible for clocking in and out for their shifts and meal breaks and for accurately recording all hours worked, including overtime. The 2007 and 2013 handbooks both...