Target Corporation recently defeated class certification in a case pending in United States District Court for the Central District of California in Montgomery, et al. v. Target Corp., et al. The decision, authored by the Honorable Jesus G. Bernal, highlights the importance of the evidence presented in a motion for class certification, particularly in federal court.
In this case, the plaintiffs alleged, among other things, that meal break premiums were not paid at the regular rate of pay (RROP), that managers adjusted meal break time punches to cover up non-compliant breaks, that Target required on-premises rest breaks for a period of time, that employees were required to use their personal cell phones to look up items for customers without reimbursement, that employees were forced to clock out for meal breaks and continue working during the busy holiday periods, and that employees were forced to wait long periods to clock in for work without pay. In support of the motion for class certification, the plaintiffs submitted declarations from the two named plaintiffs, 21 former Target employees, plaintiffs’ expert, and plaintiffs’ counsel. Target’s opposition included the declarations of 549 current Target employees, Target’s expert, and Target’s counsel.
The Court began its analysis by noting that the plaintiffs were required to affirmatively demonstrate that all requirements for class certification under Federal Rule of Civil Procedure (FRCP) 23 had been met, and the court must perform a “rigorous analysis” of those factors. The Court examined the Rule 23 factors for each of the eight proposed classes before denying class certification.
One interesting part of the Court’s ruling is that the Court found that the plaintiffs failed to provide sufficient evidence of numerosity for certain of the proposed classes. This is an area that is sometimes given short shrift, particularly when dealing with large employers where the class size will presumably be numerous. The Court found that plaintiffs submitted insufficient evidence of numerosity for certain of the proposed classes where the plaintiffs’ expert extrapolated from a smaller subset of time punch and pay data showing a low (less than 2%) potential violation rate.
The Court noted that “[a] higher level of proof than mere common sense impression or extrapolation from cursory allegations is required” to establish numerosity, citing Schwartz v. Upper Deck. Co., 183 F.R.D. 672, 681 (S.D. Cal. 1999). The key takeaway from this part of the decision for employment defense counsel is to closely scrutinize the plaintiff’s evidence of numerosity because the issue is not whether numerosity can potentially be satisfied, but rather whether the plaintiff has provided sufficient evidence of numerosity in the certification motion.
Next, the Court examined whether common issues of fact predominated over individual issues of fact for each proposed class. For the proposed RROP class, Target argued that because it voluntarily paid a meal break premium each time the employee’s time records showed a non-compliant meal break, that included instances when the failure to take a meal break was not Target’s fault. Target argued that even though the premium pay was not paid at the RROP for all instances, individual issues predominated because each meal break would need to be reviewed to determine whether the non-compliant break was Target’s fault before it would be responsible to pay the penalty at the RROP. Target presented 69 declarations in which employees stated that it was not Target’s fault that the employee had non-compliant meal breaks. Plaintiffs argued that if meal break premium pay was paid, it had to be paid at the RROP regardless of who was at fault for the non-compliant break. The Court agreed with Target’s argument, finding that because determining whether Target correctly paid a meal premium would require individualized determinations, the RROP class lacked commonality and predominance.
For the proposed Missing Punch Best Practices Class – non-exempt employees who worked more than five hours where a manager adjusted the meal period time punch – the Court also found no commonality and predominance. While Plaintiffs pointed to manager-adjusted meal breaks that seemed suspect, they failed to submit evidence showing whether the manager adjusted the time punch based on a time punch correction form completed by the employee. Plaintiffs’ declarants also failed to state that they had been improperly paid as a result of the manager-corrected time punches. Thus, Plaintiffs failed to provide the Court with a class-wide means for determining which edits were unlawful, which is required for the commonality and predominance factors.
For the proposed Holiday Meal Period Premium Class, which alleged that employees were forced to clock out for a meal period and continue working during holiday seasons, the Court also found commonality and predominance were not established. Because time punch records would not show which employees were allegedly required to clock out and continue working, and Target’s written meal break policy was lawful, individualized inquiries would be required at trial.
For the proposed On-Premises Rest Break Class, plaintiffs sought to certify a class of all non-exempt employees who worked a shift of at least 3.5 hours during the time period that Target’s policy required employees to stay on premises for the rest break. The Court declined to find commonality and predominance because there was no evidence that the “on premises” policy was implemented or enforced uniformly for class-wide proof, similar to a prior district court decision in Target’s favor on this issue in a prior case.
For the proposed Cell Phone Reimbursement Class, the Court found that it lacked commonality and predominance because Target’s policy stated that it was the employees’ choice whether to use their personal cell phones and because employees could instead choose to activate a flashing light at checkout to call a leader to perform the price check instead of using a personal device. Target also presented deposition testimony of differing reasons for using personal cell phones, also supporting the individualized inquiry argument.
For the proposed Closed-Location Lock-In Class, where Plaintiffs alleged that employees should be paid for their time waiting to be let into the store to clock in, the Court found no commonality or predominance, where one of the Plaintiffs admitted that she submitted time punch correction forms to be paid for her waiting time and where there was not a uniform policy to require employees to show identification to be let into the building. Plaintiffs’ proposed Open-Location Clock-In Class similarly did not provide evidence supporting a finding of commonality and predominance.
The Court’s ruling in this case emphasizes the need for defense counsel to closely scrutinize and challenge the evidence submitted by plaintiffs in a motion for class certification. For California employers, it also highlights the need for employers to ensure that they have legally compliant policies and procedures in place that are designed to prevent and/or defeat wage and hour class actions. Contact your favorite CDF attorney for wage and hour questions.
