Ser Lao v. H&M Hennes & Mauritz, L.P.

District Court, N.D. California·Decided December 30, 2019·No. 5:16-cv-00333·Unknown

Opinion

SER LAO, Case No. 5:16-cv-00333-EJD Plaintiff, ORDER DENYING MOTION TO v. DECERTIFY CLASS H&M HENNES & MAURITZ, L.P., Re: Dkt. No. 122 Defendant.

This matter is a wage and hour class action against the clothing retailer H&M. Last August, the court certified the class “[a]ll current and former non-exempt retail store employees who were employed by [H&M] in the State of California at any time from December 11, 2011, through the present” with respect to Plaintiff’s claims predicated on security checks, and any associated wait times, performed at the end of an employee’s shifts or at closing. Dkt. No. 81 (the “Certification Order”). H&M now moves to decertify that class. The court has considered the parties’ briefing and exhibits, their oral arguments, and the relevant law. The court now denies the motion. I. Background The court previously certified two classes in this litigation. Certification Order at 23. One class concerns former employees of H&M that received their final wages in the form of a Money Network Paycard. This class is not at issue here. The other class encompasses all H&M retail employees, and its claims turn on H&M’s alleged policy of requiring all retail employees to undergo a visual inspection by a manager (or other designated person) after they clock out—either at the end of a shift or at closing—but before they leave the H&M store where they work (the “Class”). Plaintiff contends that H&M uses two types of security checks: (1) bag inspections, where only retail employees that have a bag must allow a manager to check the bag before leaving, and (2) visual inspections, where every retail employee—regardless of whether they have a bag—must inform a manager of when they leave, allowing the manager to observe their person. Plaintiff argues that, under California law, the time taken for the visual inspections and for any waiting prior to the inspections is compensable. In the Certification Order, the court considered H&M’s written Internal Theft Prevention Policy (the “Policy”), and the depositions of H&M’s witnesses and various class members. The Policy, in relevant part, provides:

All employees, regardless of position or assignment, that have entered a store carrying a bag, purse, briefcase, backpack, etc., will have that bag visually searched by a member of management (or Uniformed Guard where applicable) prior to exiting the store. The only exception is when an employee is only shopping on the sales floor. If an employee goes into an ‘employee only’ area (breakroom, manager’s office, etc.) then they must be inspected before exiting the work location if they have a bag, purse, briefcase, backpack, etc. It is very important that all staff understand that when they leave the store, if a manager or security officer is not at the door, they need to seek out a manager and have their bag inspected. If an employee does not have a bag, purse, briefcase, backpack, etc., they do not need to wait for a member of management before exiting the store but inform a member of management that they are leaving the store for their safety. Any coats or jackets worn while exiting the store without a bag must be unzipped and unbuttoned. Certification Order at 3 (emphasis added). H&M’s corporate designee on the security check policy, Corey May, testified, “If an employee in California was wearing outerwear, I suppose they would need to have it open as they walked out.” May Dep. at 156:12-22. Another H&M witness testified that retail employees had to check in with the appropriate manager before leaving, and, at that point, the manager would see whether the employee had a bag, jacket, or coat. Fritt Dep. at 34:17-35:6. Class members testified to H&M’s policy of requiring employees to be seen by a manager before leaving. Bynes Depo at 30:13-24 (manager must visually see the employee before the employee leaves); Lalas Depo at 47:12-22, 48:2-6 (manager must see the employee leave); Loke Depo at 58:23-59:3, 63:16-19 (H&M’s policy requires manager to check outerwear when they are leaving); Pund Depo at 35:7- 11 (employee leaving store with a coat or jacket but no bag must be inspected before leaving); Vergara Depo at 36:2-24 (manager must confirm that an employee is not exiting the store with a zipped jacket or coat). These checks occur after the employees are off the clock. May Dep. at 107:6-11, 123:5-19. Based on this evidence, the court found that H&M had a common practice of requiring employees to undergo a visual inspection after clocking out and before leaving, regardless of whether they brought a bag to work. Whether H&M was required to compensate employees for the time in between clocking out and completing the visual inspection is a question common to the Class. Certification Order at 14-15. Because the evidence indicated that this policy and procedure applied to all H&M employees, the court found that Plaintiff had satisfied the requirements for commonality and predominance under Rule 23. Id. at 11-16, 18-19. The court also found that H&M’s arguments that individual questions— e.g., whether an employee brought a bag on a particular day, whether the manager on duty followed the policy, how long the wait and/or inspection took—primarily related to damages and did not defeat the predominance arising from H&M’s purported companywide policy of requiring uncompensated visual inspections. Id. at 19. Both parties moved for summary judgment on the claims connected to the Class. Dkt. Nos. 112, 113. The court found that whether H&M mandated security checks for all retail employees or only retail employees with bags was a disputed question of material fact. Dkt. No. 139 at 5. This dispute was sufficient to deny H&M’s motion. Id. It was also sufficient to deny Plaintiff’s motion because if a reasonable fact finder concluded that the Policy only applied to bags, then whether the checks occurred with such irregularity as to make it unreasonable to expect employers to compensate employees for the time was also a disputed question of material fact. Id. at 6. The court based its reasoning on the 25 depositions of class members that were conducted after the court issued the Certification Order. Id. at 1-2. II. Legal Standard A district court may exercise its sound discretion to decertify a class. O’Connor v. Boeing N. Am., Inc., 197 F.R.D. 404, 409 (C.D. Cal. 2000) (citing Knight v. Kenai Peninsula Borough School Dist., 131 F.3d 807, 816 (9th Cir.1997); see Fed. R. Civ. P. 23(c)(1)(C). The “party seeking decertification of a class bears the burden of demonstrating that the elements of Rule 23 have not been established.” Zakaria v. Gerber Prod. Co., 2017 WL 9512587, at *16 (C.D. Cal. Aug. 9, 2017) (collecting cases). “This burden is relatively heavy, since any doubts regarding the propriety of class certification should be resolved in favor of certification.” Sandoval v. M1 Auto Collisions Ctrs, 2016 WL 6561580, at *12 (N.D. Cal. Sept. 23, 2016) (quoting Rosales v. El Rancho Farms, 2014 WL 321159, at *4 (E.D. Cal. Jan. 29, 2014)). Decertification should not be granted “‘except for good cause,’ such as ‘discovery of new facts or changes in the parties or in the substantive or procedural law.’” Morales, et al. v. Kraft Foods Grp., Inc., 2017 WL 2598556, at *20 (C.D. Cal. June 9, 2017) (quoting Ramirez v. Trans Union, LLC, 2016 WL 6070490, at *2 (N.D. Cal. Oct. 17, 2016). On a motion to decertify, the court must engage in a “rigorous analysis into whether the prerequisites of Rule 23 are met.” O’Connor, 197 F.R.D. at 409 (quotation and citation omitted); see also Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Rule 23(a) requires that (1) the members of the class must be so numerous that joinder is impracticable, (2) there must be questions of law or fact common to the class, (3) the representative’s claims and defenses must be typical of the class memb

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Ser Lao v. H&M Hennes & Mauritz, L.P., (N.D. Cal. 2019).

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