Arenas v. El Torito Restaurants, Inc.

183 Cal. App. 4th 723, 108 Cal. Rptr. 3d 15, 2010 Cal. App. LEXIS 474
CourtCalifornia Court of Appeal
DecidedMarch 15, 2010
DocketB211301
StatusPublished
Cited by30 cases

This text of 183 Cal. App. 4th 723 (Arenas v. El Torito Restaurants, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arenas v. El Torito Restaurants, Inc., 183 Cal. App. 4th 723, 108 Cal. Rptr. 3d 15, 2010 Cal. App. LEXIS 474 (Cal. Ct. App. 2010).

Opinion

Opinion

WEISMAN, J. *

I. INTRODUCTION

Plaintiffs, Hermilo Arenas et al., * 1 on behalf of themselves and others similarly situated, appeal from an order denying a motion to certify a class of restaurant managers allegedly misclassified as exempt from overtime wage laws. The defendants are El Torito Restaurants, Inc., and Real Mex Restaurants, Inc. We find no abuse of discretion. We conclude the trial court could properly rule the action was not suitable for class treatment because the common questions of law and fact did not predominate over individualized issues. Accordingly, we affirm the order.

H. BACKGROUND

A. Exempt Employees

Overtime pay is required under Labor Code section 510, subdivision (a). (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 324 [17 Cal.Rptr.3d 906, 96 P.3d 194].) However, the Industrial Welfare Commission is authorized to establish exemptions from the requirement. (Lab. Code, § 515, subd. (a).) An exempt employee does not earn overtime pay. Labor Code section 515, subdivision (a) states: “The Industrial Welfare Commission may establish exemptions from the requirement that an overtime rate of compensation be paid pursuant to Sections 510 and 511 for executive, administrative, and professional employees, provided that the employee is *727 primarily engaged in the duties that meet the test of the exemption, customarily and regularly exercises discretion and independent judgment in performing those duties . . . .” (Italics added.) The Industrial Welfare Commission’s wage order No. 5-2001 (Cal. Code Regs., tit. 8, § 11050) governs overtime pay exemptions in the public housekeeping industry, which includes restaurants. {Id., subd. 2(F)(1).) Wage order No. 5-2001 states: “Order Regulating Wages, Hours, and Working Conditions in the Public Housekeeping Industry. [ft] 1. Applicability of Order[.] This order shall apply to all persons employed in the public housekeeping industry [including restaurants] whether paid on a time, piece rate, commission, or other basis, except that: [ft] . . . [ft] (B) Provisions of Sections 3 through 12 [governing overtime pay] shall not apply to persons employed in administrative, executive, or professional capacities. The following requirements shall apply in determining whether an employee’s duties meet the test to qualify for an exemption from those sections: [ft] (1) Executive Exemption].] A person employed in an executive capacity means any employee: [ft] (a) Whose duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof; and [ft] (b) Who customarily and regularly directs the work of two or more other employees therein; and [ft] (c) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and [ft] (d) Who customarily and regularly exercises discretion and independent judgment; and [ft] (e) Who is primarily engaged in duties which meet the test of the exemption.” (Cal. Code Regs., tit. 8, § 11050, italics added.)

B. The First Amended Complaint

This action was commenced on May 17, 2006. The operative first amended complaint alleged as follows. Plaintiffs are individuals who were employed as salaried managers at El Torito, El Torito Grill and GuadalaHarry’s restaurants in California from May 17, 2002, to the present. Defendants, pursuant to corporate policy, automatically classified plaintiffs as exempt based on their job description alone when they did not so qualify; failed to pay overtime wages; failed to provide meal and rest breaks, and timely and accurate wage and hour statements; failed to pay timely compensation upon termination or resignation; failed to maintain complete and accurate payroll records; wrongfully withheld wages and compensation due; and committed unfair business practices in an effort to increase profits at plaintiffs’ expense. Plaintiffs alleged they routinely spent more than half their working hours performing duties delegated to nonexempt employees including but not limited to: “opening, operating and closing cash registers, preparing food products, cooking, preparing drinks, tending bar, waiting on tables, stocking shelves, *728 moving products, furniture and equipment, unloading trucks, bussing tables, cleaning, sweeping, dishwashing, and other general tasks.” Plaintiffs further alleged they routinely spent less than half their working hours “performing work which was primarily intellectual, managerial or creative, or which required the regular and customary exercise of discretion and independent judgment with respect to matters of significance . . . .” Plaintiffs specifically alleged, “The exercise of discretion and independent judgment on matters of significance was given to employees on a level above that of Plaintiffs.” Defendants’ conduct was alleged to violate Labor Code sections 201, 202, 203, 226, 226.7, 510, 512, 515, 551, 552, 1194 and 1198; Industrial Welfare Commission (IWC) wage orders Nos. 5-1998, 5-2000 and 5-2001 (found at Cal. Code Regs., tit. 8, § 11050); and Business and Professions Code section 17200 et seq. Plaintiffs asserted seven causes of action: preliminary and permanent injunction; failure to pay overtime compensation (Lab. Code, §§ 510, 1194); failure to provide meal and rest periods (Lab. Code, §§ 226.7, 512); failure to furnish wage and hour statements (Lab. Code, § 226); for waiting time penalties (Lab. Code, §§ 201-203); conversion (Civ. Code, §§ 3336, 3294); and unfair competition (Bus. & Prof. Code, § 17200 et seq.).

With respect to class certification, plaintiffs alleged common questions of law and fact including but not limited to: “(a) What are the overall realistic requirements of the Manager job; [ft (b) Do the Defendants have expectations for the job performed by the Managers; [ft (c) If so, are those expectations realistic; [ft (d) Are Defendants required by law to pay Managers overtime based on the duties assigned to them; [ft (e) Did Defendants implement a systematic program of automatically classifying certain employees as Managers and then failing to pay them overtime; [ft (f) Did Defendants devise a scheme and plan to circumvent California wage and horn laws; [ft (g) Was Defendants’ conduct fraudulent and deceitful; [ft (h) Does Defendants’ conduct violate the Employment Laws and Regulations; and [ft (i) Do Defendants’ systematic acts and practices violate, inter alia, California Business & Professions Code sections 17200, et seq.” Plaintiffs alleged they could represent the class because: “[A]ll Managers share the same or similar employment duties and activities, all are automatically classified by Defendants as exempt employees, and all are denied the benefits and protections of the Employment Laws and Regulations in the same manner.

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Bluebook (online)
183 Cal. App. 4th 723, 108 Cal. Rptr. 3d 15, 2010 Cal. App. LEXIS 474, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arenas-v-el-torito-restaurants-inc-calctapp-2010.