1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 LILIA ALI, on behalf of herself and all No. 1:19-cv-00959-JLT-BAM others similarly situated, 12 ORDER ADOPTING IN PART AND Plaintiff, DECLINING TO ADOPT IN PART 13 FINDINGS AND RECOMMENDATIONS v. REGARDING PLAINTIFF’S MOTION FOR 14 CLASS CERTIFICATION SETTON PISTACHIO OF TERRA 15 BELLA, INC., a California corporation, (Docs. 61, 77) and DOES 1 through 100, inclusive, 16 Defendants. 17 18 Lilia Ali filed suit against a pistachio grower and processor, Setton Pistachio of Terra 19 Bella, Inc., alleging that Setton Pistachio violated California wage-and-hour laws by enforcing an 20 unlawful rounding policy that failed to compensate hourly employees for all hours worked. Ali 21 filed a motion for class certification, seeking to certify a class consisting of “[a]ll California-based 22 hourly employees employed by Defendant during the time period from April 27, 2012 to the 23 present to whom Defendant paid based on their rounded rather than actual hours worked; which 24 was referred to the assigned magistrate judge for issuance of findings of recommendations,” 25 (“Rounding Class”), as well as several classes premised upon theories of liability that are 26 derivative of the Rounding Class. (See Doc. 60-1 at 9.) The parties also filed various evidentiary 27 objections. (See Docs. 72-2, 72-3, 73.) 28 On February 9, 2023, the assigned magistrate judge issued findings and recommendations 1 recommending as follows: (1) Ali’s motions to strike (Docs. 72-2 and 72-3) be denied; (2) Setton 2 Pistachio’s motion to strike (Doc. 73) be denied; and (3) Ali’s motion for class certification be 3 denied. (Doc. 77.) The findings and recommendations were served on the parties and contained 4 notice that any objections thereto were to be filed within fourteen (14) days after service. (Id.) On 5 February 23, 2023, Ali filed objections and a request to stay this matter pending a ruling from the 6 California Supreme Court. (Doc. 78.) Setton Pistachio filed a response to the objections and 7 request to stay on March 9, 2023. (Doc. 79.) 8 According to 28 U.S.C. § 636 (b)(1)(c), this Court has conducted a de novo review of the 9 case. Having carefully reviewed the entire file, including the objections, the Court finds that the 10 findings and recommendations are supported by the record and proper analysis in part, but departs 11 from the findings and recommendations in one respect, which warrants granting the motion for 12 class certification in part. 13 Ali raises two primary objections. First, Ali complains that the findings and 14 recommendations considered only whether employees were working once they clocked in, not 15 whether they were under the control of Setton Pistachio. (Doc. 78 at 7–15.) This objection is not 16 well founded. Plaintiff is correct that employer control can serve as a pathway to liability in a 17 case like this. As the Ninth Circuit explained in Sali v. Corona Regional Medical Center, 909 18 F.3d 996, 1010 (9th Cir. 2018): 19 California’s compensable-time standard encompasses two categories of time. First, time is compensable if an employee is “under the 20 control” of his or her employer, whether or not he or she is engaging in work activities, such as by being required to remain on the 21 employer's premises or being restricted from engaging in certain personal activities. Second, time is compensable if an employee “is 22 suffered or permitted to work, whether or not required to do so.” 23 (internal citations omitted). But the findings and recommendations expressly considered the issue 24 of employer control, distinguishing this action from Sali on that issue. (See Doc. 77 at 22–23.) 25 More persuasively, Ali objects to the magistrate judge’s application of Sali to the record. 26 (Doc. 78 at 11–12.) The Court agrees with Plaintiff in part. As to the question of whether 27 employees were in fact working, and therefore whether they were “suffered or permitted to 28 work,” the magistrate judge correctly concluded that individualized determinations would 1 predominate the question of whether employees did in fact perform work during the few minutes 2 between when they clocked in and when their shift started. (Doc. 77 at 21.) Plaintiff does not 3 seriously contest this. Plaintiff does directly contest the magistrate judge’s findings on the 4 employer control theory of liability. Sali, 909 F.3d at 1010. Per Sali, the “employer control” 5 question “necessarily requires an employer-focused inquiry into whether [the employer] had a 6 policy or practice that restricted [the employees’] in a manner that amounted to employer control 7 during the period between their clock-in and clock-out times and their rounded shift-start and 8 shift-end times.” Id. Sali specifically indicated that control could be shown where an employee 9 is “required to remain on the employer’s premises or [is] restricted from engaging in certain 10 personal activities.” Id. 11 Defendant’s HR Manager testified at deposition that there was a company-wide policy 12 that prohibited employees from leaving the premises once they were clocked in: 13 Q . . . And once somebody clocks in, are they free to leave the premise or must they stay on the premises? 14 A Well, we ask that they not leave the premises ·if they are clocked 15 in.· But we – 16 Q So once – I’m sorry. Go ahead. 17 A But we don’t have actual control of that. 18 Q Understand. But it’s the company’s policy and practice once an employee clocks in to start their workday, they are required to 19 remain on premises; correct? 20 MR. MILLER: I'm just going to object as vague and ambiguous. 21 THE WITNESS: I would say that is correct. 22 (Doc. 61-2 at 70–71 (emphasis added).) 23 The magistrate judge thoughtfully reviewed the conflicting evidence on the existence of 24 such a policy as follows: 25 Setton Pistachio presents evidence that while employees were asked to remain on the premises once they had clocked in, they were not 26 prohibited from leaving the premises. (See, e.g., Doc. 67-2; Ex. 10, Decl. of Neldy Castaneda at ¶ 11 (“During this 7-minute window 27 before my shift, I understand that I am free to go where I want to and not prohibited to exit the worksite if I wanted to.”); Ex. 11, Decl. of 28 Kathy Kennel at ¶ 11 (“I understand that I am free to go where I want 1 to and not prohibited to exit the building prior to the beginning of my work shift.”); Ex. 13, Decl. of Modesto Gonzalez at ¶ 9 (“In fact, the 2 company has informed us that we are not allowed to work prior to the start of our work shift. An employee can do whatever they want 3 during that window during that 7 minute window.”); Ex. 14, Decl. of Jocelyn Evans at ¶ 10 (“During this 7-minute window before my 4 shift, I understand that I am free to go where I want to and not prohibited to exit the worksite if I wish.”); Ex. 16, Ramirez Decl. at 5 ¶ 8 (“During this 7-minute window before my shift, I understand that I am free to go where I want to and not prohibited to exist the 6 worksite or go to my car.”); Ex. 17, Decl. of Rosa Villalobos at ¶ 10 (“During this 7-minute window before my shift, I understand that I 7 am free to go where I want to and not prohibited to exit the worksite or go to my car if I wish to.”); Ex. 18, Decl. of Catalina Rodriguez at 8 ¶ 10 (“During this 7-minute window before my shift, I understand that I am free to go where I want to and have never been told that I 9 could not exit the worksite or go to my car if I wished to.”); Ex. 23, Flores Decl.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 LILIA ALI, on behalf of herself and all No. 1:19-cv-00959-JLT-BAM others similarly situated, 12 ORDER ADOPTING IN PART AND Plaintiff, DECLINING TO ADOPT IN PART 13 FINDINGS AND RECOMMENDATIONS v. REGARDING PLAINTIFF’S MOTION FOR 14 CLASS CERTIFICATION SETTON PISTACHIO OF TERRA 15 BELLA, INC., a California corporation, (Docs. 61, 77) and DOES 1 through 100, inclusive, 16 Defendants. 17 18 Lilia Ali filed suit against a pistachio grower and processor, Setton Pistachio of Terra 19 Bella, Inc., alleging that Setton Pistachio violated California wage-and-hour laws by enforcing an 20 unlawful rounding policy that failed to compensate hourly employees for all hours worked. Ali 21 filed a motion for class certification, seeking to certify a class consisting of “[a]ll California-based 22 hourly employees employed by Defendant during the time period from April 27, 2012 to the 23 present to whom Defendant paid based on their rounded rather than actual hours worked; which 24 was referred to the assigned magistrate judge for issuance of findings of recommendations,” 25 (“Rounding Class”), as well as several classes premised upon theories of liability that are 26 derivative of the Rounding Class. (See Doc. 60-1 at 9.) The parties also filed various evidentiary 27 objections. (See Docs. 72-2, 72-3, 73.) 28 On February 9, 2023, the assigned magistrate judge issued findings and recommendations 1 recommending as follows: (1) Ali’s motions to strike (Docs. 72-2 and 72-3) be denied; (2) Setton 2 Pistachio’s motion to strike (Doc. 73) be denied; and (3) Ali’s motion for class certification be 3 denied. (Doc. 77.) The findings and recommendations were served on the parties and contained 4 notice that any objections thereto were to be filed within fourteen (14) days after service. (Id.) On 5 February 23, 2023, Ali filed objections and a request to stay this matter pending a ruling from the 6 California Supreme Court. (Doc. 78.) Setton Pistachio filed a response to the objections and 7 request to stay on March 9, 2023. (Doc. 79.) 8 According to 28 U.S.C. § 636 (b)(1)(c), this Court has conducted a de novo review of the 9 case. Having carefully reviewed the entire file, including the objections, the Court finds that the 10 findings and recommendations are supported by the record and proper analysis in part, but departs 11 from the findings and recommendations in one respect, which warrants granting the motion for 12 class certification in part. 13 Ali raises two primary objections. First, Ali complains that the findings and 14 recommendations considered only whether employees were working once they clocked in, not 15 whether they were under the control of Setton Pistachio. (Doc. 78 at 7–15.) This objection is not 16 well founded. Plaintiff is correct that employer control can serve as a pathway to liability in a 17 case like this. As the Ninth Circuit explained in Sali v. Corona Regional Medical Center, 909 18 F.3d 996, 1010 (9th Cir. 2018): 19 California’s compensable-time standard encompasses two categories of time. First, time is compensable if an employee is “under the 20 control” of his or her employer, whether or not he or she is engaging in work activities, such as by being required to remain on the 21 employer's premises or being restricted from engaging in certain personal activities. Second, time is compensable if an employee “is 22 suffered or permitted to work, whether or not required to do so.” 23 (internal citations omitted). But the findings and recommendations expressly considered the issue 24 of employer control, distinguishing this action from Sali on that issue. (See Doc. 77 at 22–23.) 25 More persuasively, Ali objects to the magistrate judge’s application of Sali to the record. 26 (Doc. 78 at 11–12.) The Court agrees with Plaintiff in part. As to the question of whether 27 employees were in fact working, and therefore whether they were “suffered or permitted to 28 work,” the magistrate judge correctly concluded that individualized determinations would 1 predominate the question of whether employees did in fact perform work during the few minutes 2 between when they clocked in and when their shift started. (Doc. 77 at 21.) Plaintiff does not 3 seriously contest this. Plaintiff does directly contest the magistrate judge’s findings on the 4 employer control theory of liability. Sali, 909 F.3d at 1010. Per Sali, the “employer control” 5 question “necessarily requires an employer-focused inquiry into whether [the employer] had a 6 policy or practice that restricted [the employees’] in a manner that amounted to employer control 7 during the period between their clock-in and clock-out times and their rounded shift-start and 8 shift-end times.” Id. Sali specifically indicated that control could be shown where an employee 9 is “required to remain on the employer’s premises or [is] restricted from engaging in certain 10 personal activities.” Id. 11 Defendant’s HR Manager testified at deposition that there was a company-wide policy 12 that prohibited employees from leaving the premises once they were clocked in: 13 Q . . . And once somebody clocks in, are they free to leave the premise or must they stay on the premises? 14 A Well, we ask that they not leave the premises ·if they are clocked 15 in.· But we – 16 Q So once – I’m sorry. Go ahead. 17 A But we don’t have actual control of that. 18 Q Understand. But it’s the company’s policy and practice once an employee clocks in to start their workday, they are required to 19 remain on premises; correct? 20 MR. MILLER: I'm just going to object as vague and ambiguous. 21 THE WITNESS: I would say that is correct. 22 (Doc. 61-2 at 70–71 (emphasis added).) 23 The magistrate judge thoughtfully reviewed the conflicting evidence on the existence of 24 such a policy as follows: 25 Setton Pistachio presents evidence that while employees were asked to remain on the premises once they had clocked in, they were not 26 prohibited from leaving the premises. (See, e.g., Doc. 67-2; Ex. 10, Decl. of Neldy Castaneda at ¶ 11 (“During this 7-minute window 27 before my shift, I understand that I am free to go where I want to and not prohibited to exit the worksite if I wanted to.”); Ex. 11, Decl. of 28 Kathy Kennel at ¶ 11 (“I understand that I am free to go where I want 1 to and not prohibited to exit the building prior to the beginning of my work shift.”); Ex. 13, Decl. of Modesto Gonzalez at ¶ 9 (“In fact, the 2 company has informed us that we are not allowed to work prior to the start of our work shift. An employee can do whatever they want 3 during that window during that 7 minute window.”); Ex. 14, Decl. of Jocelyn Evans at ¶ 10 (“During this 7-minute window before my 4 shift, I understand that I am free to go where I want to and not prohibited to exit the worksite if I wish.”); Ex. 16, Ramirez Decl. at 5 ¶ 8 (“During this 7-minute window before my shift, I understand that I am free to go where I want to and not prohibited to exist the 6 worksite or go to my car.”); Ex. 17, Decl. of Rosa Villalobos at ¶ 10 (“During this 7-minute window before my shift, I understand that I 7 am free to go where I want to and not prohibited to exit the worksite or go to my car if I wish to.”); Ex. 18, Decl. of Catalina Rodriguez at 8 ¶ 10 (“During this 7-minute window before my shift, I understand that I am free to go where I want to and have never been told that I 9 could not exit the worksite or go to my car if I wished to.”); Ex. 23, Flores Decl. at ¶ 9 (“During this 7-minute window before my shift, I 10 understand that I am free to go where I want to and not prohibited to exit the worksite or go to the car.”) 11 In her reply, Ali submits evidence that employees are required to 12 clock out when they leave the premises for personal reasons, such as going to their cars, and that once they clock in, they are required to 13 remain on Setton Pistachio’s premises. (Doc. 72 at p. 6; see, e.g., Doc. 72-1, Ex. 26, Flores Depo., 25:6-23 (aware of policy that 14 requires employees to punch out when they leave the premises or the production for personal reasons; Ex. 27, Navarette Depo., 13:7-14:11 15 (same); Ex. 28, Toledo Depo., 18:2-24 (confirming he must clock out when he leaves the premises for personal reasons). 16 17 (Doc. 77 at 22–23.) The findings and recommendations concluded that this “conflicting evidence 18 suggests that individualized inquiries predominate.” (Id. at 23.) On this narrow point, the Court 19 departs from the findings and recommendations, because Sali calls for an “employer-focused” 20 inquiry into the issue of control. The fact that some employees may not have known of the 21 company policy or had a subjective understanding of the policy that differed from the HR 22 Manager’s own description of the policy creates a dispute of fact, but not one that requires an 23 individualized determination related to liability, and not in any way that would predominate over 24 general/global determinations. Though testimony from various employees regarding their 25 subjective understandings might be relevant to establish or refute the existence of a policy or 26 practice, whether there was a policy or practice is capable of global determination as to the entire 27 class. In other words, the employer-focused question of whether such a policy or practice existed 28 would only need to be established once, not re-examined in relation to each potential class 1 member’s situation. For this reason, the Court believes that certification is appropriate as to the 2 employer control theory of liability only. 3 The findings and recommendations correctly narrow this case in another way. As the 4 findings and recommendations point out, Plaintiff contends generally that Defendant applied 5 rounding time-keeping practices to both beginning of shift/ending of shift timekeeping and to 6 beginning of meal break/ending of meal break timekeeping. (Doc. 77 at 16.) However, Setton 7 Pistachio presented evidence demonstrating that the rounding policy, as applied to meal breaks, 8 operates only to the employees’ benefit.1 (Id. at 24 (“If an employee bypasses the system, by 9 clocking back in after the meal break, using a different clock than where they clocked out, then 10 the machine will allow the employee to clock back in before the 30-minutes, but the clock-in will 11 be flagged to notify payroll that a lunch premium needs to be paid.”).) Plaintiff did not account 12 for this practice in its briefing, so the magistrate judge concluded that Ali failed to meet its burden 13 with respect to class certification as to this species of rounding claim. (Id.) Plaintiff did not 14 address this specific issue in her objections, and the Court finds the magistrate judge’s reasoning 15 on this point to be correct. 16 In sum, because individualized determinations predominate as to liability premised upon 17 whether employees were in fact working, the Rounding Class claims may only proceed on the 18 theory of employee control. Relatedly because there is no evidence of harm caused by any 19 rounding at meal breaks, the Rounding Class will be certified only as to start of shift/end of shift 20 timekeeping. The derivative classes will be limited similarly. The Court leaves for another day 21 the question of whether the classes need to be formally re-defined to conform to this ruling. 22 Considering the above conclusions, and the fact that Plaintiff’s substantive objections 23 focus on the “control” prong of Sali, the Court finds it unnecessary to address Plaintiff’s 24 challenge to the magistrate judge’s consideration of the employee declarations. Relatedly, 25 because it is unclear whether Plaintiffs will still wish to stay this case given the Court’s ruling 26 herein, the Court will denies without prejudice Plaintiff’s request to stay the matter in light of the 27 1 “[A]n employer’s rounding practices comply with [the relevant law] if the employer applies a consistent rounding policy that, on average, favors neither overpayment nor underpayment.” Alonzo v. Maximus, Inc., 832 F. Supp. 2d 28 1122, 1126 (C.D. Cal. 2011) (citations omitted). 1 | California Supreme Court’s grant of review in Camp v. Home Depot U.S.A., Inc. 84 Cal.App.5th 2 | 638 (2022). Accordingly, 3 1. The findings and recommendations issued on February 9, 2023 (Doc. 77) are 4 ADOPTED IN PART. 5 2. Ali’s motions to strike (Docs. 72-2 and 72-3) are DENIED. 6 3. Setton Pistachio’s motion to strike (Doc. 73) is DENIED. 7 4. Ali’s motion for class certification (Doc. 61) is GRANTED IN PART AND 8 DENIED IN PART AS SET FORTH ABOVE. 9 5. Ali’s request to stay is DENIED WITHOUT PREJUDICE. 10 6. The matter is referred to the magistrate judge for further proceedings consistent 11 with this order. 12 B IT IS SO ORDERED. 14 | Dated: _ March 28, 2023 Cerin | Tower TED STATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28