Class Certified on Claim That Employer Lacked a Policy of Paying Meal Period Premium Pay
California courts unfortunately have issued a number of poor class certification decisions in wage and hour cases, and now there's another one to add to the list. In one of the most unbelievable class certification cases this author has read, the court in Safeway Inc. v. Superior Court (Esparza) ruled that the trial court correctly certified a class action against Safeway for its lack of a policy or practice of paying meal break premium pay to employees whose time records reflected lunches of less than 30 minutes on one or more occasions. Of course, it is firmly established in California that a short lunch does not automatically translate into liability for premium pay on the part of the employer. This is because employers do not have an obligation to ensure that its employees take their full 30-minute lunches. The employer’s obligation simply is to provide employees the opportunity to take a full 30-minute lunch; if the employee chooses to clock back in a few minutes early (or chooses to skip lunch entirely), the employer is not liable for any meal break premium to the employee. The employer is only liable for meal break premiums if the employer fails to provide an employee the opportunity to take a 30-minute lunch break (i.e. prevents them from taking the break, forces them to work through all or part of lunch, etc.) For this reason, time records reflecting lunches of less than 30 minutes do not alone mean that an employer is liable for premium pay for failing to provide employees with required meal breaks. There has to be some evidence that the short lunches were due to the employer's fail to provide a real opportunity to take the lunch breaks. If a case is brought as a class action, that means there generally must be class-wide evidence that the employer had a class-wide practice of denying meal breaks to the members of the class. Well, in this case against Safeway, the plaintiff class did not even allege a class claim for failure to provide meal breaks, nor did they submit evidence that Safeway systematically denied meal breaks to the class. Instead, they sought class certification based only on the theory that Safeway’s lack of a policy or practice of automatically paying employees premium pay for short lunches violated California law. Crazily, both the trial court and the Court of Appeal (Second Appellate District) agreed that a class should be certified on this theory. This was the case even though Safeway submitted declarations of 2,000 employees stating that they consistently were provided the opportunity to take a full 30-minute meal break (meaning that Safeway could not, as a matter of law, owe any premium pay to these 2,000 employees).
Safeway meritoriously opposed the grant of class certification, arguing that the plaintiff’s legal theory was invalid and could not support class certification because a claim for failure to provide premium pay necessarily depends on predicate proof that the employer failed to provide meal periods in the first instance. The court rejected this argument, reasoning that a practice of never paying premium pay could somehow be unlawful or unfair under California’s Unfair Competition Law (Business and Professions Code section 17200) even without predicate proof of a classwide failure to provide meal breaks. The court relied on class time records submitted by the plaintiff showing many instances of short lunches, along with some declarations submitted by the plaintiff, wherein some class members testified that they were sometimes unable to take a full 30-minute lunch due to work demands. The court reasoned that this evidence could support a finding that a policy of never paying premium pay for a missed lunch violated California law because the policy applied in some instances where evidence might show that premium pay had actually been owed due to an employee being prevented from taking a full lunch break (even though the policy also applied to many instances where premium pay was NOT owed because, e.g., employees voluntarily chose to short their lunches). The court rejected Safeway’s valid position that individualized inquiries would be required to determine whether Safeway failed to provide any meal breaks to any particular class member.
The court also rejected Safeway’s argument that individualized inquiries would be required to determine restitution to the class. The court reasoned that the plaintiff was not seeking restitution of any actual accrued, unpaid meal break premiums to the class, but rather was seeking the value of the loss of “statutory protections” to the class (referring to the value of the Labor Code provision requiring premium pay for denied meal breaks). [This is about the strangest proposed measure of class recovery I’ve seen in a wage and hour case.] If you are wondering how in the world this bizarre “loss of value” could even be measured or proven, well, the plaintiff argued (and the trial court and Court of Appeal seemingly agreed, at least for purposes of class certification) that a market approach could be used to determine the “market value” of the general cost of premium pay to an employer who actually pays it. Plaintiff argued that in 2007, Safeway adopted a new policy of paying premium pay for short breaks (whereas prior to 2007 – the time period at issue on plaintiff’s claims – Safeway had no such policy). As such, there was evidence as to the amount of premium pay wages that Safeway actually paid out after it adopted this policy. According to plaintiff, that number could be extrapolated to the pre-2007 time period to generally show the amount of premium pay that Safeway would have had to pay to the class during that time period. The court essentially dodged the obvious problem with the fact that this approach would not show (1) whether any class member was actually denied any meal breaks in order to be owed any premium pay in the first instance, or (2) how much premium pay was actually owed to any class member—both of which necessarily hinge on individualized proof. Moreover, this novel market-based measure of recovery plainly is not “restitution” under California’s unfair competition law, and is not a valid remedy on this type of claim.