Another Win for Workers in the War over Sampling and Damages in Class Actions

As workers have increasingly turned to class actions in order to combat wage theft and other unlawful actions in the workplace, employers have fought back on a number of fronts.  Two issues that have gotten a lot of attention lately are (1) the use of sampling and (2) the role of individualized damages.

How courts rule on the issue of sampling is important because it is often an effective way for workers to manage issues that arise in the class context.  How courts rule on the issue of individualized damages is critical because sometimes employers have unlawful policies or practices, but not all employees are damaged by them.  Under those circumstances, should the employees who have been damaged be able to bring a class action to vindicate their rights?

On November 21, 2016, workers in California won a significant victory with respect to both sampling and damages.  In Lubin v. Wackenhut (Second App. Dist.,  case no. B344383), the court of appeal reversed an order decertifying the class in a case brought by private security officers.  As a result, those workers will be able to proceed to trial and to bring their claims on a class-wide basis.

The security officers in Lubin brought claims for missed meal and rest breaks, as well as for inadequate wage statements.  The missed meal break claims were based upon Wackenhut’s practice of requiring its security officers to agree to take on-duty meal breaks.  On-duty meal breaks are allowed only:

[W]hen the nature of the work prevents an employee from being relieved of all duty and when by written agreement between the parties an on-the-job paid meal period is agreed to.

The trial court initially certified five classes based upon the plaintiffs’ claims.  However, after Wal-Mart v. Dukes (2011) 564 U.S. 338, the trial court reversed course and decertified the classes.  The trial court read Wal-Mart broadly, finding that it both sharply limited the role of statistics in class actions and barred class actions where there are questions regarding individual damages.

The court of appeal reversed the trial court’s decertification, and found that it had made significant mistakes, as follows.

The Nature of the Work Requirement for On-Duty Meal Breaks

The plaintiffs’ first theory of liability was that the nature of the class members’ work did not prevent them from being relieved of all duty during their meal breaks.  The court of appeal found that this theory was amenable to class treatment for three reasons.

First, the trial court had erred in focusing on the issue of whether individual class members had received their breaks.  Instead, the trial court should have focused on the plaintiffs’ theory of liability, and whether it was susceptible of proof by common methods.  In Lubin, the plaintiffs’ theory was that Wackenhut had a policy of (1) requiring employees to sign on-duty meal agreements and (2) allowing its clients to determine whether to provide an on-duty or off-duty meal period.  The court found that this was a common question that was capable of classwide resolution.

Second, the trial court erred in holding that Wal-Mart barred class certification where there were individualized inquiries regarding damages.  California law is clear that whether or not a specific employee had a meal break on a given day is a question of damages, and does not impact class certification.  See Bradley v. Networkers International, LLC (2012) 211 Cal.App.4th 1129, 1151; Alberts v. Aurora Behavioral Health Care (2015) 241 Cal.App.4th 388, 407.

Third, on-duty meal breaks are only permitted when the nature of the work prevents an employee from being relieved of all duties.  Therefore, it is an employer’s duty to determine whether the nature of the work prevents its employees from being relieved of all duty before requiring an employee to take an on-duty meal break.  Wackenhut had failed to do this.

The Revocation Language

The court of appeal then turned to the plaintiffs’ second theory, that Wackenhut had not allowed security officers to revoke their on-duty meal agreements.  Here, the plaintiffs sought to use sampling for the limited purpose of determining the percentage of agreements that lacked the revocation language.  The trial court held that such sampling was improper under Wal-Mart.  The appellate court rejected this reasoning.

First, the court found that it was possible to determine which employees had signed a meal period that lacked the revocation clause without sampling.  (The parties could simply review the agreement for each of the class members.)  Moreover, Wackenhut’s own records showed which employees had off-duty meal agreements.

Second, the proposed sampling was appropriate.  The court distinguished this case from Wal-Mart, in which the use of statistical sampling was the only evidence establishing liability.  Instead, in Lubin, sampling was a manageability tool that served as an alternative to burdensome production.  The court also distinguished Wal-Mart on the grounds that in discrimination claims brought under Title VII, the remedies were much more highly individualized, as they could include hiring, promotion, or reinstatement.

The court also distinguished Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1.  In Duran, the court found that the sample was not sufficiently representative or random, and that even the plaintiffs had conceded that the margin of error was too large.  However, the court noted that surveys were an appropriate tool to manage individual issues so long as there was “some glue” binding the class members together.

Third, the court noted that California courts had approved statistical sampling as a method of determining damages.  See, e.g., Williams v. Superior Court (2013) 221 Cal.App.4th 1353, 1366, n. 6; Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 750.

The Rest Break Claim

The plaintiffs’ rest break claim was based on the argument thaton-duty rest breaks are not permitted under California law.  The trial court decertified the rest break class because it found that some class members were able to take, and did take, off-duty rest breaks.  The court of appeal found that the plaintiffs had presented evidence of a policy of not providing off-duty rest breaks.  The fact that some class members may have taken rest breaks did not require decertification.

The Wage Statement Claims

Finally, the court of appeal found that the plaintiffs’ wage statement claims were amenable to class certification for two reasons.  First, with respect to the omission of certain information from those statements, that was a common question because it was the same for all class members.  This is particularly true because Labor Code section 226(e)(2)(B)(i) defines injury under the wage statements as the defects themselves, not the harm that may result from the defects.  Second, the plaintiffs’ theory that Wackenhut has failed to include meal and rest break premium pay also presented a common question.

Lubin is therefore very helpful for workers seeking to bring class action claims.  In holding that statistics may be relied upon in seeking class certification, it is consistent with Tyson v. Bouaphakeo (2016) __ U.S. __, 136 S.Ct. 1036, 1048.  In holding that issues regarding individual damages do not normally defeat class actions, it is similarly consistent with the holdings of other California courts as well as the Ninth Circuit.  See, e.g., Vaquero v. Ashley Furniture (9th Cir.2016) 824 F.3d 1150.