Wage and Hour Case Notes

• Publication year: 2016
• Author: By Leonard H. Sansanowicz

Wage and Hour Case Notes

By Leonard H. Sansanowicz

Leonard H. Sansanowicz is a senior associate with Feldman Browne Olivares, APC and represents employees in all aspects of employment law. He has been a Southern California Rising Star each year since 2013 and in 2015 was named to the Up-and-Coming 100 list. He can be contacted at: leonard@leefeldmanlaw.com.

UCL Class Claim Predicated on Unpaid Meal Period Premium Wages May Be Certified Even Absent Proof of Failure to Provide the Meal Periods

Safeway, Inc. v. Super. Ct., 238 Cal. App. 4th 1138 (2015)

Four employees brought a class action for failure to provide meal and rest periods,¹ failure to provide itemized pay statements,² unfair business practices under the Unfair Competition Law (UCL),³ and civil penalties under the Labor Code Private Attorneys General Act of 2004 (PAGA).⁴

The UCL defines "unfair competition" broadly, encompassing "any unlawful, unfair or fraudulent business act or practice."⁵ The employees sought class certification for over 200,000 store-level hourly employees, alleging that the company's policy of not paying meal premium wages⁶constituted both an "unlawful" and an "unfair" business practice under the UCL. The employees sought restitution for the class-wide loss of their statutory benefits under section 226.7 but not the actual premium wages accrued by the class members. The trial court granted certification of the meal period class.

On appeal, the key questions were whether common issues predominated and whether litigation of individual issues could be managed "fairly and efficiently."⁷ The Second District concluded that an employer's failure to pay meal period premium wages when required (i.e., when it impermissibly pressures employees to miss, shorten or delay meal periods) could serve as the predicate act of a UCL claim.⁸ The appellate court rejected Safeway's argument that a UCL claim for an unfair practice could not survive absent an underlying claim for a Labor Code violation,⁹ because a statutory violation was not required to find that a business practice was "unfair," and in any event the court found that the alleged practice was unfair.

PAGA Claims May Not Satisfy CAFA's Amount in Controversy Requirement, Nor May CAFA's Diversity Provisions Create Federal Jurisdiction for PAGA Claims

Yocupicio v. PAE Group, LLC, 795 F.3d 1057 (9th Cir. 2015)

Plaintiff filed a class action in superior court alleging various wage and hour violations under the Labor Code, as well as a representative cause of action for PAGA civil penalties. The class claims satisfied the numerosity and minimal diversity requirements of the Class Action Fairness Act of 2005 (CAFA),¹⁰ but in the aggregate did not exceed the $5 million threshold. Although the PAGA claim was not a class claim,¹¹ the district court considered the amount of the PAGA claim in deciding whether the claims met the CAFA amount in controversy threshold. The Ninth Circuit rejected this aggregation, finding that while district courts may take supplemental jurisdiction of claims over which they normally would not have jurisdiction, shoehorning PAGA, a representative action, within Rule 23's class action requirements would undermine CAFA's central purpose to have large class actions heard in federal courts.

Similarly, the Ninth Circuit held that federal jurisdiction over class claims could not create federal diversity jurisdiction over PAGA claims brought by a California employee against a California employer where complete diversity was lacking.

Class Waiver in Arbitration Agreement Was Enforceable, but Did Not Limit Unconscionability Defenses to Other Agreement Provisions

Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 899 (2015)

Although this was a consumer class action, in deciding it the California Supreme Court relied on its prior decisions in wage and hour class actions, which makes this case instructive. The arbitration agreement at issue contained a class action waiver and provided that if the class waiver was deemed unenforceable, then the entire arbitration agreement would be unenforceable.

The state high court held that the U.S. Supreme Court's decision in AT&T Mobility, LLC v. Concepcion¹² required enforcement of the consumer class action waiver, but that enforcement did not limit plaintiff's unconscionability defenses to other provisions of the contract. In so doing, the California Supreme Court relied on its precedents in Armendariz v. Foundation Health Psychcare Servs., Inc.,¹³ Sonic-Calabasas A, Inc. v. Moreno,¹⁴ and Little v. Auto Stiegler, Inc.,¹⁵ thereby reaffirming concepts developed in employment law such as the procedural...