Nucci v. Rite Aid Corporation

District Court, N.D. California·Decided June 14, 2020·No. 3:19-cv-01434·Unknown

Opinion

NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

KRISTAL NUCCI, et al., Case No. 19-CV-01434-LHK

Plaintiffs, ORDER DENYING MOTION TO STRIKE AND GRANTING CLASS v. CERTIFICATION

RITE AID CORPORATION, et al., Re: Dkt. Nos. 45, 58 Defendants. Plaintiffs Kristal Nucci, Ana Goswick, and Kelly Shaw (“Plaintiffs”) bring this putative class action against Defendants Rite Aid Corporation and Thrifty Payless, Inc. (collectively, “Defendants” or “Rite Aid”). Plaintiffs allege that Defendants required Plaintiffs and putative class members to purchase their own uniforms in violation of California law. Before the Court is Defendants motion to strike Plaintiffs’ expert report and Plaintiffs’ motion for class certification. Having considered the parties’ briefing, the relevant law, and the record in this case, the Court DENIES Defendants’ motion to strike and GRANTS Plaintiffs’ motion for class certification. A. Factual Background Defendants operate retail drug stores throughout the United States, including approximately 544 stores in California. ECF No. 54 (“Robinson Decl.”), Ex. 1 at 11. Plaintiffs are non-exempt employees who worked in California Rite Aid stores at some point during the alleged Class Period from March 13, 2015 through any trial date. Plaintiffs allege that Defendants required non-exempt employees—excluding pharmacists, pharmacy interns, and asset protection agents—to purchase work uniforms without reimbursement in violation of California law. ECF No. 45 at 6-7. In June 2012, Defendants implemented a written company policy concerning dress standards. ECF No. 57-5 (“Ceballos Decl.”), Exs. A and B. According to Defendants’ Store Dress Standards, employees must wear clothing consistent with Defendants’ “Team Colors” of navy blue tops and khaki bottoms. See id.; see also ECF No. 54 (“Robinson Decl.”), Ex. 4 at 11 (“Rite Aid has adopted a contemporary ‘Team Colors’ approach for associates who interact with our customers. Our signature navy blue and khaki Team Colors look focuses on comfort, team unity, and helps to project a friendly, neighborhood environment in our stores . . . .”). Rite Aid’s Handbook devotes an entire section to “Team Colors” and provides that “Team Colors attire is mandatory in our store environment.” Robinson Decl., Ex. 4 at 11. Defendants’ Team Colors policy also required employees to wear either a polo, button-down shirt, blouse, sweater, skirt, or slacks and prohibited employees from wearing T-shirts and jeans. Ceballos Decl., Ex. A at 3, 5, 9. Defendants’ official written policies also explain that “[a]ssociates who report to work inappropriately . . . dressed may be asked to leave and change into acceptable clothing or to otherwise correct the violation. In such instances, the time away from work may be without pay.” Robinson Decl., Ex. 4 at 12. Furthermore, Defendants’ written company policy charges store managers and field leaders to communicate and enforce dress standards. Ceballos Decl., Ex. B at 1 (“Store and Pharmacy Managers along with Field Leaders will primarily be responsible for monitoring and enforcing this policy.”). As Defendants’ own corporate representative noted, Defendants’ New Hire Orientation kit is intended to be reviewed by management with every new employee, Ceballos Dep. 38:9– 40:7, and the New Hire Orientation kit also admonishes employees to “remember to wear your name badge and dress in Team Colors during working hours,” Robinson Decl., Ex. 10 at 2. At the same time, Defendants’ written company policy allows for what the parties call the “blue vest” alternative. Defendants’ written company policy notes that “[i]n the event an associate is unable to report to work in team colors, Rite Aid will make available a company issued vest, which he/she will be required to wear.” Ceballos Decl., Ex. A at 9; id., Ex. B at 1 (“Each store will be supplied with company issue vests (navy blue) that will be available for those associates who are unable to meet Rite Aid’s navy blue requirement or report to work wearing a color other than navy blue.”). Employees “can wear a blue vest at any time,” and if an associate is not dressed according to Team Colors, wearing a blue vest puts that associate in compliance with Defendants’ dress standards. Ceballos Dep. at 42:9-12, 54:8-10; see also ECF No. 57-6, Ex. 2 at 1640 (2012 email regarding Defendants’ Team Colors policy that explains that “[i]t is ok if an associate can’t or won’t convert to team color. They may wear the navy blue vest. These vests will remain available on an ongoing basis.”). Plaintiffs contend, however, that the blue vest policy is not a real alternative to Defendants’ Team Colors approach. In support of this argument, Plaintiffs point to two pieces of evidence. First, Plaintiffs emphasize a recent survey conducted by Defendants that asks Rite Aid California store managers how many blue vests are present in their stores. 471 of 544 California stores responded to this survey. According to those stores, there were no blue vests in 337 stores, only one blue vest in 23 stores, and two blue vests in 26 stores. Second, Plaintiffs point to the expert report of Dr. Jeffery S. Peterson, Ph.D., who conducted a survey of 49 Rite Aid employees in California. ECF No. 54, Ex. 7 (“Peterson Decl.”). Dr. Peterson explained that “[t]he sample size of 49 survey responses is large enough to draw statistical inferences about the population of potential class members” and that “[t]he survey responses are valid and reliable.” Id. ¶ 4. Of the 49 survey responses, 100 percent of respondents said they were required to wear a navy-blue shirt, 98.0 percent of respondents said they were required to wear khaki-colored pants, 95.9 percent of respondents said they purchased a navy-blue shirt to comply with the dress code, 91.8 percent of respondents said they purchased khaki-colored pants to comply with the dress code, 6.1 percent thought they could wear a Rite Aid blue vest instead of a blue shirt on a regular basis, and 30.6 percent of respondents said they saw a Rite Aid blue vest in a store where they worked. Id. ¶ 3. Therefore, Plaintiffs contend that Dr. Peterson’s report demonstrates that Defendants’ blue vest policy was not put into practice such that Plaintiffs and putative class members were required to purchase their own uniforms in violation of California law. In response, Defendants dispute the reliability of this evidence. With respect to the survey of blue vests available in California Rite Aid stores, Defendants argue that the survey only covers “a single date in late 2019,” which “says nothing about vest availability on a classwide basis over the five-year class period.” ECF No. 57. at 17. Defendants also contend that the one-day survey was flawed because store managers answered the survey questions incorrectly and sought to update or modify their responses after the responses were finalized. Id. at 13. Additionally, Defendants argue the survey questions were flawed because the responses did not note that some associate may have taken their vests home, “which means that though they are not present in stores, they are still available for use.” Id. In terms of Dr. Peterson’s expert report, Defendants argue that the report “should be stricken in whole because it is inadmissible, unreliable, and improper pursuant to Federal Rules of Evidence, Rule 702.” ECF No. 58 at 1. Defendants put forth their own expert, Dr. Joseph A. Krock, Ph.D., who objects to Dr. Peterson’s report. ECF No. 57-6, Ex. 1 (“Krock Decl.”). Defendants thus argue that Dr. Peterson’s opinions are “unreliable as they are premised on assumptions and a biased survey.” ECF No. 58 at 2. Moreover, in addition to challenging the validity of Plaintiffs’ evidence, Defendants proffer their own evidence to argue that class certification is unwarranted. Regarding the availability of blue vests

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