Sanchez v. Martha Green's Doughlectibles CA4/1

California Court of Appeal·Decided May 26, 2016·No. D069677·Unpublished

Opinion

Filed 5/26/16 Sanchez v. Martha Green’s Doughlectibles CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE

STATE OF CALIFORNIA

TRISHA LYNN SANCHEZ, D069677 Plaintiff and Appellant, v. (Super. Ct. No. CIVDS1302043)

MARTHA GREEN'S DOUGHLECTIBLES, INC.,

Defendant and Respondent.

APPEAL from an order of the Superior Court of San Bernardino County, David Cohn, Judge. Affirmed.

Valencia & Cywinska, Mark Joseph Valencia and Izabela Cywinska Valencia for Plaintiff and Appellant.

Reid & Hellyer and Michael G. Kerbs for Defendant and Respondent.

Trisha Lynn Sanchez brought a putative class action against her former employer Martha Green's Doughlectibles, Inc. (MGD) alleging violations of California's labor and unfair competition laws. Sanchez asserts the trial court erred in concluding settlement

agreements MGD entered into with the majority of the putative class members after her complaint was filed were valid. Sanchez also asserts the court improperly denied her motion for class certification. We reject these arguments and affirm.

FACTUAL AND PROCEDURAL BACKGROUND Sanchez worked as a waitress for MGD at its restaurant in Redlands, California, from 2007 to 2012. In early 2013, Sanchez filed a putative class action asserting violations of the Labor Code, including claims for failure to offer rest breaks (Lab. Code, § 226.7),1 failure to offer meal periods (§ 226.7), failure to pay overtime compensation (§ 510), and failure to provide accurate itemized wage statements (§ 226, subd. (a)). Sanchez also asserted the Labor Code violations supported a claim under the unfair competition law (Bus. & Prof. Code, § 17200 et seq.) and sought to represent all aggrieved employees under the Private Attorney General Act of 2004 (§ 2698, et seq.).

MGD answered the complaint and the parties engaged in discovery. In December 2014, Sanchez filed her motion for class certification of a class she described as consisting of approximately 105 former and current MGD employees. Sanchez's motion identified three subclasses: (1) nonexempt hourly employees who were not provided overtime wages in the four years prior to the date Sanchez's complaint was filed; (2) nonexempt hourly employees who were not provided rest and meal periods in the four years prior to the date Sanchez's complaint was filed; and (3) nonexempt hourly

1 Undesignated statutory references are to the Labor Code.

employees who were not provided with accurate itemized statements in the four years prior to the date Sanchez's complaint was filed.

In support of the motion, Sanchez submitted her declaration, which attached: (1)

her timecards; (2) wage statements that showed the hours worked and rate of pay for each pay period; and (3) an employee detail earnings report showing the hours worked and rate of pay for each pay period during the entire time Sanchez was employed by MGD. In her declaration Sanchez asserted that her wage statements and the employee detail earnings report showed she was not paid at the overtime rate even though her timecards showed that on some occasions she worked more than eight hours in one day. Sanchez also submitted excerpted deposition testimony of MGD's manager, J.R. Green. Green testified the restaurant's employee handbook, which went into effect in 2010, stated, "Each employee must clock out at the beginning of their lunch period and clock back in when they return to work." Green also testified that the handbook stated, "The length of—the time of [an employee's] lunch period would be determined by [a] supervisor."

Sanchez's motion was also supported by time cards and employee detail earnings reports for 18 other employees. Sanchez asserted the time cards for 10 employees in this sample showed overtime pay was required, but the employee detail earning reports indicated it was not paid. Sanchez also argued the records of four other employees showed the employees were entitled to meal breaks based on the hours on their time cards, but the employees did not clock out to take a break.

MGD filed its opposition to the motion for class certification in March 2015. In support MGD submitted settlement agreements it had entered into with 76 of the putative

class members after being served with Sanchez's complaint.2 Each agreement specifically referenced Sanchez's claims and contained a statement that the employee "agrees that there is a dispute with [MGD] as to whether rest periods, meal periods, overtime pay and accurate itemized statements were provided in accordance with [the] law." By signing the agreement, the individual released his or her claims against MGD and agreed not to participate in Sanchez's purported class action in exchange for $150. The agreement stated explicitly there would be no retaliation or adverse action taken if the employee chose not to sign the agreement.

In support of its opposition, MGD also provided evidence that after Sanchez's complaint was filed it undertook an audit of its employment practices. Specifically, MGD asserted it located or attempted to locate all putative class members and began a review of each employee's payroll records. Additionally, MGD asked each member of the putative class that it located to sign an audit memo, which explained the nature of Sanchez's claims and requested that the employee (or former employee) advise MGD of any occasion he or she was not provided with rest or meal breaks, or worked more than eight hours in one shift or 40 hours in one week and was not paid overtime. The audit memo indicated MGD would review the information provided and conduct further investigation if necessary, and that MGD would "promptly provide the employee with appropriate remuneration to pay for any shortfall or penalties, as may be appropriate . . . ." At the time it filed its opposition, MGD had obtained 92 signed audit

2 MGD's opposition stated the number of current and former employees in Sanchez's proposed class was between 105 and 115.

memos from putative class members. None indicated they were denied meal or rest breaks, or were owed overtime pay.

MGD also submitted declarations of 11 other MGD employees who stated they had worked with Sanchez and each had personally observed her taking meal and rest breaks between eight and 150 times. Each of these declarants also stated they had been provided with meal and rest breaks, were relieved of all work duties during those breaks, and were paid for the time they were on breaks. Green and assistant manager Laura Leyvas each provided declarations stating that, "[a]lthough MGD's employee handbook did state for a period of time that employees were to clock in and out to take their meal breaks and that employees would not be paid for meal breaks, MGD did not follow either of these guidelines. Instead, MGD did not require its employees to clock out/in when they took their meal breaks, and in fact paid the employees during their meal breaks even though they were relieved of all duties."

MGD argued in its opposition that as a result of the settlement agreements, the total number of potential class members was not so numerous that it was impracticable for each to bring his or her own claim. MGD also asserted that, in light of the evidence that there was no uniform policy to prohibit meal and rest breaks, individual questions predominated over common ones. Sanchez filed a reply asserting the settlement agreements were invalid under section 206.5 and therefore class adjudication of her claims was superior. Before the hearing on Sanchez's motion, MGD submitted an additional 13 settlement agreements with putative class members, bringing the total to 89.

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