NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
PERLUSS, P. J.
Litigation by class action has long been recognized as a superior method of resolving wage and hour claims in California (see Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1033 (Brinker)), including those seeking redress for unpaid overtime wages. Nonetheless, when confronted with the myriad individual facts asserted by employers in support of the executive exemption as a defense to a wage claim, courts at all levels have struggled to answer the question central to certification of a class—that is, "whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment." (Sav-on Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 327 (Sav-on); accord, Ghazaryan v. Diva Limousine, Ltd. (2008) 169 Cal.App.4th 1524, 1531.)
factual and procedural background
Roberto Martinez, Lisa Saldana, Craig Eriksen and Chanel Rankin-Stephens are current or former employees of different Joe's Crab Shack (JCS) restaurants in California. Martinez filed the original complaint in September 2007, seeking to represent a class of salaried managerial employees who worked at JCS restaurants in California on claims they had been misclassified as exempt employees and were entitled to overtime pay.
The trial court permitted Saldana, Eriksen and Rankin-Stephens to join the lawsuit as named plaintiffs. In June 2011 plaintiffs moved for certification of a class consisting of "[a]ll persons employed by Defendants in California as a salaried restaurant employee in a Joe's Crab Shack restaurant at any time since September 7, 2003." In support of their motion plaintiffs presented training and operations manuals, as well as deposition testimony from various witnesses employed by CAI and Landry's. According to this evidence, JCS's hiring and training practices are uniform throughout the chain; it utilizes an operations manual that applies to all restaurants and every employee; each restaurant offers the same menu; and managerial employees are evaluated using the same form and procedure. All managerial employees are classified as exempt employees and are expected to work a minimum of 50 hours per week.
Plaintiffs also filed 22 declarations from current and former salaried employees who held managerial positions during the relevant time period.
CAI and Landry submitted declarations from approximately 27 putative class members, each of whom reported significant variance among the duties associated with specific management positions, the amount of time they routinely spent on particular tasks and the total amount of time worked each week. More than half of the declarations were provided by general managers, most of whom had served in subordinate managerial positions in the past.
CAI and Landry's also submitted evidence impeaching the statements of the named plaintiffs. In deposition testimony the named plaintiffs each conceded he or she was unable to estimate the amount of time spent on exempt tasks as opposed to nonexempt tasks and that every day was different. Eriksen testified it would be "unrealistic" to guess how much time he spent on particular tasks and admitted there were weeks when he devoted more than 50 percent of his time to managerial tasks.
Presented with this evidence, the trial court denied the motion for class certification on the grounds plaintiffs had failed to establish (1) their claims were typical of the class, (2) they could adequately represent the class, (3) common questions predominated the claims, and (4) a class action is the superior means of resolving the litigation. The first two findings were based on plaintiffs' inability to estimate the number of hours spent on individual exempt and nonexempt tasks and their admission the amount of time spent on particular tasks varied from day to day. As to the third and fourth findings, the court acknowledged the existence of common questions of law and fact,
1. The Standard of Review for a Ruling on Class Certification
Class actions are statutorily authorized "when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court. . . ." (Code Civ. Proc., § 382.) The party seeking class certification must establish (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, supra, 53 Cal.4th at p. 1021.) The community of interest requirement in turn requires three additional inquiries: (1) whether common questions of law or fact predominate; (2) whether the class representatives have claims or defenses typical of the class; and (3) whether the class representatives can adequately represent the class. (Ibid.)
"The certification question is `essentially a procedural one'" (Sav-on, supra, 34 Cal.4th at p. 326) that examines "whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment" (id. at p. 327). A certification motion "`does not ask whether an action is legally or factually meritorious' [citation]," but rather whether the common issues it presents "`are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.'" (Id. at p. 326; see Mora v. Big Lots Stores, Inc. (2011) 194 Cal.App.4th 496, 507 ["the central issue in a class certification motion is whether the questions that will arise in the action are common or individual, not plaintiffs' likelihood of success on the merits of their claims"].) The court must assume the class claims have merit and resolve disputes regarding the claims' merits only when necessary to determine whether an element for class certification is satisfied. (Brinker, supra, 53 Cal.4th at pp. 1023-1025.) "`As a general rule if the defendant's liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.'" (Id. at pp. 1021-1022; see also Sav-on, at p. 334 ["`the necessity for class members to individually establish eligibility and damages does not mean individual fact questions predominate'"].)
A trial court is generally afforded great latitude in granting or denying class certification, and we normally review a ruling on certification for an abuse of discretion. (Sav-on, supra, 34 Cal.4th at pp. 326-327; see Brinker, supra, 53 Cal.4th at p. 1022 ["`[b]ecause trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, they are afforded great discretion in granting or denying certification'"].) This deferential standard of review, however, is inapplicable if the trial court has evaluated class certification using improper criteria or an incorrect legal analysis: "[A] trial court ruling supported by substantial evidence generally will not be disturbed `unless (1) improper criteria were used [citation]; or (2) erroneous legal assumptions were made.'" (Sav-on, at pp. 326-327; accord, Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089; Ghazaryan v. Diva Limousine, Ltd., supra, 169 Cal.App.4th at p. 1530.) In conducting our review, we "`must examine the trial court's reasons for denying class certification.' [Citation.] . . . [We] `consider only the reasons cited by the trial court for the denial, and ignore other reasons that might support denial.'" (Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, 1297-1298; accord, Benton, supra, 220 Cal.App.4th at p. 716.)
2. The Class Is Adequately Represented by Plaintiffs, Whose Claims Are Typical of the Class
Although the questions whether a plaintiff has claims typical of the class and will be able to adequately represent the class members are related, they are not synonymous. The typicality requirement's purpose "`is to assure that the interest of the named representative aligns with the interests of the class. [Citation.] "`Typicality refers to the nature of the claim or defense of the class representative, and not to the specific facts from which it arose or the relief sought.'" [Citations.] The test of typicality "is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct."'" (Seastrom v. Neways, Inc. (2007) 149 Cal.App.4th 1496, 1502.) A class representative who does not have a claim against the defendants cannot satisfy the typicality requirement. (Medrazo v. Honda of North Hollywood (2008) 166 Cal.App.4th 89, 98.)
"The adequacy of representation component of the community of interest requirement for class certification comes into play when the party opposing certification brings forth evidence indicating widespread antagonism to the class suit." (Capitol People First v. State Dept. of Developmental Services (2007) 155 Cal.App.4th 676, 696; see J.P. Morgan & Co., Inc. v. Superior Court (2003) 113 Cal.App.4th 195, 212 ["`[t]he adequacy inquiry . . . serves to uncover conflicts of interest between named parties and the class they seek to represent'"].) "To resolve the adequacy question the court `will evaluate "the seriousness and extent of conflicts involved compared to the importance of issues uniting the class; the alternatives to class representation available; the procedures available to limit and prevent unfairness; and any other facts bearing on the fairness with which the absent class member is represented."'" (Capitol People First, at p. 697, quoting J.P. Morgan & Co., at p. 213.) A party's claim of representative status will only be defeated by a conflict that "`goes to the very subject matter of the litigation. . . .'" (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470.)
Citing the identical rationale for finding plaintiffs' claims were not typical of the class and, consequently, they would not be adequate class representatives, the trial court stated plaintiffs' claims would be "vulnerable to the defense that each of them performed exempt tasks more than 50% of their work time. This contrasts with the putative class members who [allegedly] spent more than 50% of their work time performing non-exempt tasks."
With respect to typicality, this analysis suffers from an overly focused examination of the facts that looked toward individual differences rather than commonality. In essence, the trial court resolved the factual conflict between plaintiffs' declarations, in which they stated nonexempt tasks routinely occupied more than 50 percent of their time, and their deposition testimony that they could not estimate the number of hours they spent on individual tasks because those tasks varied day to day. The inability of the witnesses to specify time spent on particular tasks is hardly surprising, however, and does not create an issue that must be resolved on a motion for class certification. What was common to plaintiffs, in addition to the standard policies implemented by CAI at each of their restaurants, were their assertions their tasks did not change once they became managers; they performed a utility function and routinely filled in for hourly workers in performing nonexempt tasks; and they worked far in excess of 40 hours per week without being paid overtime wages. Their claims—and the defense of executive exemption to those claims—are thus typical of the class. (See Sav-on, supra, 34 Cal.4th at pp. 336-337.)
The larger problem with the adequacy of plaintiffs to represent the class as defined arises from the antagonism voiced by general managers, who overwhelmingly opposed the litigation. Again, this conflict is not unexpected: A general manager is hardly likely to share the duties of assistant managers, many of whom worked exclusively as kitchen- or front-managers. CAI stresses the fact that JCS restaurants vary in size and volume and were staffed according to need by three to seven managers. It is not hard to conceive that the lower the rung occupied by a particular manager the more likely he or she is to engage in tasks common to the hourly employee. This apparent conflict, however, is not fatal. In the interest of preserving the claims of subordinate managerial employees, the trial court may on remand exercise its discretion to create a general managers subclass or to exclude general managers entirely from the class definition. (See, e.g., Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at pp. 470-471 [class action need not be dismissed when trial court can use subclasses to remove any antagonism among members of the putative class]; Medrazo v. Honda of North Hollywood, supra, 166 Cal.App.4th at p. 99 [when class representative's "`"interests are antagonistic to or in conflict with the objectives of those [s]he purports to represent'" [citation], . . . court should determine if it would be feasible to divide the class into subclasses to eliminate the conflict and allow the class action to be maintained"]; Capitol People First v. State Dept. of Developmental Services, supra, 155 Cal.App.4th at p. 697 ["where factual circumstances differ, or class members disagree as to the proper theory of liability, the trial judge, through resort to subclasses, intervention, and the like, may incorporate class differences into the litigation process and afford all members their due in deciding the proper outcome"]; Aguiar v. Cintas Corp. No. 2 (2006) 144 Cal.App.4th 121, 133 ["[t]he use of subclasses is an appropriate device to facilitate class treatment"].)
3. The Trial Court Failed To Assess Means by Which Plaintiffs' Theory of Recovery Could Be Proved Through Resolution of Common Questions of Fact and Law
In Benton, supra, 220 Cal.App.4th 701, we considered whether a proposed class of cell-phone tower technicians asserting meal and rest break violations and failure to pay overtime could establish the employer's liability through common proof.
We extended this rationale to the claim for overtime compensation. We reasoned the trial court had "failed to evaluate whether plaintiffs' theory of recovery could be proved (or disproved) through common facts and law" (Benton, supra, 220 Cal.App.4th at p. 731) and had apparently concluded each technician would be required to make an "individualized showing that he or she incurred overtime" (ibid.). As we explained, however, "Those issues . . . relate to the existence and amount of each technician's damages." (Ibid.; see also Bradley, supra, 211 Cal.App.4th at p. 1155 [certification was proper despite evidence that "the amount of overtime pay damages potentially due each class member [would] require individualized analysis because the number of hours worked each day was not uniform"].)
Admittedly, the overtime exemption claim in this case differs from the overtime claims in Benton and Bradley; nonetheless, it raises similar questions of proof. Rather than engage in a post hoc calculation for each employee of hours worked in excess of the mandated 40-hour work week, the factfinder here will ultimately have to decide whether CAI and Landry properly classified the members of the class as exempt from overtime pay requirements. Defendants contend this is a question of liability rather than damages and assert individual mini-trials will be required to establish whether each member of the class was properly treated as exempt.
The trial court, however, by accepting defendants' argument and focusing on the employer's affirmative defense of exemption failed to consider Sav-on's explicit direction on issues of proof in such cases: "Any dispute over `how the employee actually spends his or her time' [citation] . . . has the potential to generate individual issues. But considerations such as `the employer's realistic expectations' [citation] and `the actual overall requirements of the job,' [citation] are likely to prove susceptible of common proof." (Sav-on, supra, 34 Cal.4th at pp. 336-337; see Sotelo v. Medianews Group, Inc. (2012) 207 Cal.App.4th 639, 654 ["[a] class . . . may establish liability by proving a uniform policy or practice by the employer that has the effect on the group of making it likely that group members will work overtime hours without overtime pay, or to miss rest/meal breaks"].) Thus, Sav-on instructs courts in overtime exemption cases to proceed through analysis of the employer's realistic expectations and classification of tasks rather than whether the employee can identify in retrospect whether, at a particular time, he or she was engaged in an exempt or nonexempt task. (Sav-on, at p. 330 ["task classification is a mixed question of law and fact appropriate for a court to address separately from calculating the amount of time specific employees actually spend on specific tasks"].)
The trial court's failure here to focus on the impact of JCS policies and practices on its managerial employees essentially shifted the burden of disproving the executive exemption to plaintiffs. Indeed, although the court recognized the evidence established the existence of a finite task list that could aid in the identification of common issues among the putative class members, its analysis effectively omitted any consideration of this potential class-wide proof.
A recent decision from our colleagues in Division Two of this court simplifies this endeavor and illustrates the enormous cost of resolving these claims on an individual, rather than a class-wide basis. (See Heyen v. Safeway Inc. (2013) 216 Cal.App.4th 795 (Heyen).)
Applying these principles to the tasks identified by CAI and Landry's, inventory, restocking, serving, cooking, bussing tables, cleaning and other tasks ordinarily performed by nonexempt employees remain nonexempt when performed by a managerial employee. Likewise, when a managerial employee fills in for a nonexempt employee, the task remains nonexempt. On the other hand, if the managerial employee is performing the task for the purpose of supervisory training or demonstration, the task is exempt. California law does not recognize a hybrid category in which the employee is deemed to be performing an exempt task at the same time he or she is performing a nonexempt task. (Heyen, supra, 216 Cal.App.4th at p. 826.)
As in Heyen, the gist of plaintiffs' claim here is that regardless of the patina of managerial discretion expressed in their job description, they functioned consistently as utility workers, cross-trained in all tasks, who could be assigned to fill in where needed without affecting the labor budget or requiring overtime compensation. Assessing whether modes of proof exist that will allow common resolution of these claims does not require that we evaluate whether plaintiffs are likely to prevail on those claims. Indeed, the trial court's rejection of the statistical evidence proffered by plaintiff's expert is essentially flawed because it imputes to that evidence a weight it need not bear. Rather than constrain a factfinder, such evidence is simply an additional mode of proof of the essential question whether CAI's and Landry's policies exploited subordinate managers. (Cf. Mora v. Big Lots Stores, Inc., supra, 194 Cal.App.4th at pp. 509-510 [trial court did not abuse its discretion by considering observational survey proffered by defendants to refute plaintiff's theory of misclassification]; see also Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 750 [statistical sampling in an overtime class action "does not dispense with proof of damages but rather offers a different method of proof"].)
4. The Trial Court Must Reconsider Whether Class Certification Provides a Superior Method of Resolving Plaintiffs' Claim
We have not ignored the substantial case authority, including our own, upholding trial court decisions not to certify class actions for claims similar to those raised here (see, e.g., Dailey v. Sears, Roebuck & Co. (2013) 214 Cal.App.4th 974; Mora v. Big Lots Stores, Inc., supra, 194 Cal.App.4th 496; Arenas v. El Torito Restaurants, Inc. (2010) 183 Cal.App.4th 723); nor do we express any disagreement with the outcome of those cases. However, we understand from Brinker, supra, 53 Cal.4th 1004, a renewed direction that class-wide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof. By refocusing its analysis on the policies and practices of the employer and the effect those policies and practices have on the putative class, as well as narrowing the class if appropriate, the trial court may in fact find class analysis a more efficient and effective means of resolving plaintiffs' overtime claim.
The order denying class certification is reversed, and the cause is remanded for proceedings not inconsistent with this opinion. Plaintiffs are to recover their costs on appeal.
WOODS, J. and SEGAL, J.
The parties agree the executive exemption exception applies only if employees spend more than half their working time engaged in exempt work.