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The Fair Labor Standards Act and Class Action Suits in California
There are many public policy considerations that favor the use of class actions in the employment context in California. First, individual awards in employment cases tend to be modest so the availability of a class action claim plays an important function by permitting employees a relatively inexpensive way to resolve their disputes. Additionally, class actions allow many employees, who may not otherwise file an individual suit due to fear of retaliation, to safely have their day in court as a member of the class. Class actions also serve to inform and protect employees who, for one reason or another, may not otherwise become aware that their rights are even being violated.Meal and rest break claims are specifically suited to class treatment. See Brinker Rest. Corp., 53 Cal.4th at 1033 (certifying a California class with meal and rest break claims).
California Employer Duties and Employee Rights
California Labor Code section 510 requires employers to pay overtime compensation for hours worked over 8 per day and 40 per week. An employer may avoid paying overtime for hours worked over 8 per day by adopting a valid Alternative Workweek Schedule ("AWS"). The procedures for adopting a valid AWS are set forth in Labor Code § 511 and the relevant Industrial Welfare Commission (“IWC”) Wage Order No. 4 at California Code of Regulations, title 8, § 11040, subd. 3(B). Among other things, the law requires an employer to hold a secret ballot election regarding the AWS amongst its employees and to file the results of the election with the State. Prior to the election, the employer must issue a written notification to the affected employees, explaining the election process and the effects of the AWS on the employees’ work schedule and compensation.
Ex Parte Application for Temporary Restraining Order Regarding Communications with Class Members
“In the context of a class action, it is the court's authority and duty to exercise control over the class action to protect the rights of all parties, and to prevent abuses which might undermine the proper administration of justice.” Howard Gunty Profit Sharing Plan v. Superior Court (2001) 88 Cal.App.4th 572, 581 (citing Gulf Oil Co. v. Bernard (1981) 452 U.S. 89, 100–103).
Collective Action Under the Fair Labor Standards Act
The Fair Labor Standards Act (FLSA) is a remedial statute that protects the rights of workers and should not be applied narrowly. Tennessee Coal Iron & R. Co., v. Muscoda Local No. 123, 321 U.S. 590, 597-98 (1944). The FLSA’s purpose is to “eliminate” unfair labor practices because their existence “burdens commerce,” “constitutes an unfair method of competition,” and “leads to labor disputes.” 29 U.S.C. § 202(a)(b). It prohibits “customs and contracts which allow an employer to claim all of an employee’s time while compensating him for only a part of it” and provides employees a private right of action to recover their unpaid wages. Tennessee Coal Iron & R. Co.,321 U.S. at 602.
Rest Breaks and the Duty of the Court to Protect Class Members
California Labor Code section 226.7 prohibits employers from requiring its employees to work during any rest period mandated by the Industrial Welfare Commission (“IWC”) Wage Orders. “[I]n light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection.” Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 702. “[T]he IWC’s wage orders are entitled to ‘extraordinary deference, both in upholding their validity and in enforcing their specific terms.’” Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1027 (quoting Martinez v. Combs (2010) 49 Cal.4th 35, 61). Rest break requirements “have long been viewed as part of the remedial worker protection framework.” Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1105.
The Definition of "On-Duty" and "Off-Duty" Periods
Employees must be relieved of all duty during their meal and rest breaks. Brinker, 53 Cal.4th at 1035–1036; Faulkinbury v. Boyd & Associates (2013) 216 Cal.App.4th 220, 236. During breaks, an employee “must be free to attend to any personal business he or she may choose.” Brinker, 53 Cal.4th at 1036. An employee is working and “on duty” when he is “subject to the control of an employer,” “including all the time the employee is suffered or permitted to work, whether or not required to do so.” Wage Order No. 9 § 2(H). Time spent by an employee waiting on standby for the benefit of the employer is considered to be on duty. Madera Police Officers Assn. v. City of Madera (1984) 36 Cal.3d 403.
Certification of a Class Under California Law
The California Supreme Court has identified three requirements for the certification of a class: (1) “the existence of an ascertainable and sufficiently numerous class”; (2) a well-defined community of interest”; and (3) “substantial benefits from certification that render proceeding as a class superior to the alternatives.” Brinker Restaurant Corp. v. Superior Court (Hohnbaum) (2012) 53 Cal.4th 1004, 1021. The community of interest requirement in turn has three factors: (1) common questions of law or fact predominate over individual questions; (2) the class representatives have claims or defenses typical of the class; and (3) the class representatives can adequately represent the class. Id.
Meal and Rest Breaks for "On Call" Health Care Employees
As the California Supreme Court has noted, an employer meets the requirements of the applicable Wage Order’s meal period requirement if the employee (1) has at least 30 minutes uninterrupted, (2) is free to leave the premises, and (3) is relieved of all duty for the entire period. Id. at 1036.However, in the health care industry, as discussed in a Division of Labor Standards Enforcement ("DLSE") Opinion Letter approved by the Brinker Court, an employer may require an employee to remain on its premises, “so long as the worker is relieved of all duties during the meal period.” Dept. Industrial Relations, DLSE Opinion Letter No. 1996.07.12 (July 12, 1996) p. 1 (“1996 Opinion Letter”). In that Opinion Letter, the DLSE discussed whether an employee that is required to carry a pager during a purported meal period must be compensated. The DLSE determined that: "[s]o long as the employee who is simply required to wear the pager is not called upon during the meal period to respond, there is no requirement that the meal period be paid for. On the other hand, if the employee responds, as required to a pager call during the meal period, the whole of the meal period must be compensated."
California Wage and Hour Laws for Large Corporations
“Meal and rest periods have long been viewed as part of the remedial worker protection framework.” Murphy, infra. California law requires employers to authorize and permit rest breaks for every four hours of work or major fraction thereof. The California Supreme Court in Brinker, infra, explained that the “major fraction thereof” requirement means one break for a shift greater than 3.5 but less than 6 (“3.5>6”) hours long, two breaks for a shift greater than 6 but less than 8 (“6>8”) hours long, and three breaks for a shift greater than 10 but less than 12 (“10>12”) hours long.California Labor Code section 226.7 prohibits employers from requiring its employees to work during any rest period mandated by the Industrial Welfare Commission (“IWC”) Wage Orders. “[I]n light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection.” Industrial Welfare Com. v. Superior Court, 27 Cal.3d 690, 702 (1980). “[T]he IWC’s wage orders are entitled to ‘extraordinary deference, both in upholding their validity and in enforcing their specific terms.’” Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004, 1027 (2012) (quoting Martinez v. Combs, 49 Cal.4th 35, 61 (2010)). Rest break requirements “have long been viewed as part of the remedial worker protection framework.” Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4th 1094, 1105 (2007).
The Class Certification Process
Under the Fair Labor Standards Act ("FLSA"), individuals may bring suit “on behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. §216(b). Neither the statute itself nor the Ninth Circuit have defined the term “similarly situated,” Luque v. AT&T Corp., 2010 WL 4807088 (N.D.Cal. Nov. 19, 2010) at *3, citing Lewis v. Wells Fargo & Co., 669 F.Supp.2d 1124, 1127 (N.D.Cal. 2009). Courts in the Ninth Circuit take a two-step approach to determine whether plaintiffs are “similarly situated.” Id.The Court’s first step is to make an initial, conditional determination of whether the plaintiffs are similarly situated, “deciding whether a collective action should be certified for the purpose of sending notice to potential class members.” Luque, supra, at *3, quoting Lewis, supra, at 1127. The initial notice stage determination utilizes a lenient standard that typically results in certification. Wynn v. National Broad Co., Inc., 234 F.Supp.2d 1067, 1082 (C.D.Cal. 2002). While the initial inquiry is not a mere formality, plaintiffs seeking conditional certification need only provide “substantial allegations, supported by declarations or discovery.” Luque, supra, at *3, citing Kress v. PriceWaterhouseCoopers, LLP, 263 F.R.D. 623, 627 (E.D.Cal. 2009). Indeed, “Courts need not even consider evidence provided by defendants at this stage.” Luque, supra, at *3 (emphasis in original), quoting Kress, supra, at 628.