Lubin v. Wackenhut Corp.

Filed 11/21/16

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

NIVIDA LUBIN et al., B244383

Plaintiffs and Appellants, (Los Angeles County

Super. Ct., JCCP No. 4545.)

v.

THE WACKENHUT

CORPORATION,

Defendant and Respondent.

APPEAL from an order of the Superior Court of Los

Angeles County, William F. Highberger, Judge. Reversed and

remanded.

Weinberg, Roger & Rosenfeld, Emily P. Rich, Theodore

Franklin, Manuel A. Boigues; Posner & Rosen, Howard Z. Rosen,

Jason C. Marsili, Brianna M. Primozic; James R. Hawkings,

James R. Hawkings, and Gregory E. Mauro, for Plaintiffs and

Appellants.

Gibson Dunn & Crutcher, Theodore J. Boutrous, Jr.,

Theane Evangelis, Bradley J. Hamberger, Jennifer E. Rosenberg;

Gordon & Rees, Stephen E. Ronk, Mollie Burks-Thomas, and

Michelle L. Steinhardt for Defendant and Respondent.

Horvitz & Levy, John A. Taylor, Jr., Felix Shafir, and

Robert H. Wright for Chamber of Commerce of the United States

of America, National Association of Security Companies, and

California Association of Licensed Security Agencies as Amici

Curiae on behalf of Defendant and Respondent.

___________________________

Appellants Nivida Lubin, Sylvia M. Maresca, and Kevin

Denton (together plaintiffs) filed this action on behalf of

themselves and similarly situated persons, alleging defendant

and respondent The Wackenhut Corporation (Wackenhut)1

violated California labor laws by failing to provide employees

with off-duty meal and rest breaks and by providing inadequate

wage statements. The trial court initially granted plaintiffs’

motion for class certification. However, as the case approached

trial, the United States Supreme Court reversed a grant of class

certification in Wal-Mart Stores, Inc. v. Dukes (2011) 564 U.S.

338 (Wal-Mart). Relying on Wal-Mart, Wackenhut moved for

decertification. The trial court granted the motion. Plaintiffs

appeal, contending that decertification was not warranted by a

change in circumstances or case law and that the court used

improper criteria in granting the motion for decertification. We

1

In 2010, the Wackenhut Corporation officially changed its

name to G4S Secure Solutions (USA) Inc.

2

conclude that the trial court erred in granting the motion.

FACTUAL AND PROCEDURAL SUMMARY

Wackenhut is an international security solutions company,

employing thousands of private security officers who are assigned

to provide physical security services to a variety of clients,

including commercial businesses, governmental entities, gated

communities, industrial facilities, oil refineries, banks,

warehouses, medical clinics, schools, and retail centers. In

California, Wackenhut delivers security services from eight area

branch offices: San Diego, Orange County, Los Angeles, San

Fernando Valley, Riverside, San Jose, San Francisco, and

Sacramento. These offices are overseen by general managers,

who report to a single regional vice-president responsible for the

California region.

Plaintiffs are former security officers employed by

Wackenhut. In the operative pleading, they allege that

Wackenhut violated the California Labor Code by failing to

provide off-duty meal periods, failing to authorize and permit off-

duty rest breaks, and providing inadequate wage statements.

Employers generally are required to provide a 30-minute off-duty

meal break for employees working more than five hours. (Cal.

Code Regs., tit. 8, § 11040, subd. (11)(A).) An on-duty meal

period is permitted only when the nature of the work prevents an

employee from being relieved of all duty and the parties agree in

writing to an on-duty paid meal break. The written agreement

must include a provision allowing the employee to revoke it at

any time. (Ibid.) Labor Code Section 226, subdivision (a)

requires employers to provide an accurate itemized wage

statement in writing to each employee. Among other things, the

statement must show the total hours worked by the employee,

3

the inclusive dates of the period for which the employee is paid,

all applicable hourly rates in effect during the pay period, and the

corresponding number of hours the employee worked at each

hourly rate.

Prior to class certification, plaintiffs moved to compel

production of the on-duty meal agreements for all Wackenhut

security officers working in California. The trial court denied the

motion, finding the production would be burdensome and

oppressive. Its denial was without prejudice to “further, more

specific requests or interrogatories.” In September 2009,

plaintiffs, on behalf of themselves and all others similarly

situated, moved for class certification. Their motion proposed the

following five subclasses: “(a) All non-exempt Security Officers

employed by Wackenhut in California from January 7, 2001

through on or about May 23, 2008 who at the time of hire did not

sign an on-duty meal period agreement that stated that the

Security Officers could revoke the agreement and who were not

provided with an off-duty meal period; [¶] (b) All non-exempt

Security Officers employed by Wackenhut in California during

the Class Period to work at one-officer posts and who, in

accordance with the agreement between Wackenhut and its

clients, were not provided an off-duty meal period; [¶] (c) All

non-exempt Security Officers employed by Wackenhut in

California during the Class Period to work at posts with multiple

officers and who, in accordance with the agreement between

Wackenhut and its clients, were not provided an off-duty meal

period; [¶] (d) All non-exempt Security Officers employed by

Wackenhut in California during the Class Period who were not

authorized and permitted to take rest breaks; [and] [¶] (e) All

non-exempt Security Officers employed by Wackenhut in

4

California who were not provided itemized wage statements

during each pay period of the Class Period that contained all

information specified in Labor Code section 226, subd. (a).”

On March 3, 2010, the trial court granted plaintiffs’ motion,

certifying the class as “‘all non-exempt Security Officers

employed by Wackenhut in California during the Class Period of

2

January 7, 2001 to the present,’” excepting proposed subclasses

which the court found were unascertainable. Plaintiffs

propounded an interrogatory on March 10, 2010, asking

Wackenhut to provide the date on which each class member

signed a meal period agreement that included revocation

language. In a tentative ruling on May 6, 2010, the court stated

that “[m]erits discovery in a certified class action which involves

as many current and former employees as this case will

inevitably be burdensome and time consuming. The parties may

want to consider whether an agreement for statistically valid

sampling might be acceptable in lieu of full discovery.”

On November 19, 2010, Wackenhut objected to plaintiffs’

interrogatory as unduly burdensome and instead offered

plaintiffs a reasonable opportunity to inspect responsive

documents. After several meet and confer sessions between

November 2010 and January 2011, the parties agreed to use

statistical sampling in lieu of document production or inspection.

They entered into a stipulation under which Wackenhut agreed

not to challenge the sampling on the grounds that a less than

statistically significant number of personnel files were sampled

or that there was a bias in the sample. Wackenhut “reserve[d] all

rights to challenge, contest, dispute and/or object to the original

2

The class consists of approximately 10,000-13,000 security

officers.

5

1,200 files selected by Plaintiffs for sampling as being an

inappropriate sample for any [other] reason.”

On June 20, 2011, the United States Supreme Court

reversed a class certification order in Wal-Mart, supra, 564 U.S.

338. Subsequently, on September 23, 2011, Wackenhut moved

for decertification, citing Wal-Mart as a significant change in law

justifying reconsideration of class certification. In their

opposition to Wackenhut’s motion, plaintiffs again proposed five

subclasses as a way to obviate some of the concerns raised in

Wackenhut’s motion.3

Following hearings on Wackenhut’s motion, the trial court

directed Wackenhut to submit a proposed order granting

decertification. Before the court entered a formal order, the

3

Plaintiffs proposed the following five subclasses: “(1)

INVALID MEAL PERIOD AGREEMENT SUBCLASS: All non-

exempt Security Officers employed by Wackenhut in California

from January 7, 2001 through on or about May 23, 2008 who did

not sign a valid on-duty meal period agreement and worked at a

post with an on-duty meal period; [¶] (2) SINGLE-OFFICER

SITE SUBCLASS: All non-exempt Security Officers employed by

Wackenhut in California during the Class Period at single-officer

sites with an on-duty meal period; [¶] (3) MULTI-OFFICER

SITE SUBCLASS: All non-exempt Security Officers employed by

Wackenhut in California during the Class Period at multi-officer

sites with an on-duty meal period; [¶] (4) REST PERIOD

SUBCLASS: All non-exempt Security Officers employed by

Wackenhut in California during the Class Period who were

required to remain at their post during their on-duty meal period;

[¶] [and] (5) ITEMIZED WAGE STATEMENT SUBCLASS: All

non-exempt Security Officers employed by Wackenhut in

California who were not provided itemized wage statements

during each pay period of the Class Period that contained all

information specified in Labor Code section 226, subd. (a).”

6

California Supreme Court issued its decision in Brinker

Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004

(Brinker), resolving issues in the handling of wage and hour class

certification motions. The parties stipulated to further briefing

on application of Brinker and decertification of the class. The

court conducted an additional hearing on the Brinker briefings

but declined to modify its previous ruling decertifying the class.

The court’s order granting Wackenhut’s decertification motion

stated two main bases for its ruling: (1) that individualized

issues predominated; and (2) that there was no way to conduct a

manageable trial of plaintiffs’ claims.4 The order was entered on

August 1, 2012. An order denying certification to an entire class

is an appealable order. (Linder v. Thrifty Oil Co. (2000) 23

Cal.4th 429, 435.)

This timely appeal followed.

DISCUSSION

I

A. Standard of Review

“The party advocating class treatment must demonstrate

the existence of an ascertainable and sufficiently numerous class,

a well-defined community of interest, and substantial benefits

from certification that render proceeding as a class superior to

the alternatives. [Citations.] ‘In turn, the “community of interest

requirement embodies three factors: (1) predominant common

questions of law or fact; (2) class representatives with claims or

defenses typical of the class; and (3) class representatives who

4

Because the trial court issued an extensive 24-page order,

we discuss the specific reasoning for granting decertification as to

each claim in the pertinent discussion subsection.

7

can adequately represent the class.”’ [Citation.]” (Brinker,

supra, 53 Cal.4th at p. 1021.)

The factor at issue in this appeal is predominance. “The

‘ultimate question’ the element of predominance presents is

whether ‘the issues which may be jointly tried, when compared

with those requiring separate adjudication, are so numerous or

substantial that the maintenance of a class action would be

advantageous to the judicial process and to the litigants.’

[Citations.] The answer hinges on ‘whether the theory of

recovery advanced by the proponents of certification is, as an

analytical matter, likely to prove amenable to class treatment.’

[Citation.] A court must examine the allegations of the complaint

and supporting declarations [citation] and consider whether the

legal and factual issues they present are such that their

resolution in a single class proceeding would be both desirable

and feasible. ‘As a general rule if the defendant’s liability can be

determined by facts common to all members of the class, a class

will be certified even if the members must individually prove

their damages.’ [Citations.]” (Brinker, supra, 53 Cal.4th at pp.

1021-1022, fn. omitted.)

Any party may file a motion to decertify a class. (Cal.

Rules of Court, rule 3.764(a)(4).) In Green v. Obledo (1981) 29

Cal.3d 126, 147, the California Supreme Court held that “a class

should be decertified ‘only where it is clear there exist changed

circumstances making continued class action treatment

improper.’ [Citation.]” (Id. at p. 148; see also Weinstat v.

Dentsply Internat., Inc. (2010) 180 Cal.App.4th 1213, 1226

[decertification requires new law or newly discovered evidence

showing changed circumstances].) The court also pointed out

that “if unanticipated or unmanageable individual issues do

8

arise, the trial court retains the option of decertification.” (Sav-

on Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 335

(Sav-on).)

We review a decertification order for abuse of discretion.

(Brinker, supra, 53 Cal.4th at p. 1022; Sav-On, supra, 34 Cal.4th

at p. 326.) A trial court ruling supported by substantial evidence

generally will not be disturbed unless improper criteria were

used or erroneous legal assumptions were made. (Sav-On, at pp.

326-327.) “An appeal from an order denying class certification

presents an exception to customary appellate practice by which

we review only the trial court’s ruling, not its rationale. If the

trial court failed to conduct the correct legal analysis in deciding

not to certify a class action, ‘“an appellate court is required to

reverse an order denying class certification . . . , ‘even though

there may be substantial evidence to support the court’s order.’”’

[Citation.] In short, we ‘“consider only the reasons cited by the

trial court for the denial, and ignore other reasons that might

support denial.” [Citation.]’ [Citations.]” (Alberts v. Aurora

Behavioral Health Care (2015) 241 Cal.App.4th 388, 399

(Alberts).)

“Nearly a century ago, the Legislature responded to the

problem of inadequate wages and poor working conditions by

establishing the [Industrial Welfare Commission (IWC)] and

delegating to it the authority to investigate various industries

and promulgate wage orders fixing for each industry minimum

wages, maximum hours of work, and conditions of labor.

[Citations.] Pursuant to its ‘broad statutory authority’ [citation],

the IWC in 1916 began issuing industry-and occupation-wide

wage orders specifying minimum requirements with respect to

wages, hours, and working conditions [citation]. In addition, the

9

Legislature has from time to time enacted statutes to regulate

wages, hours, and working conditions directly. Consequently,

wage and hour claims are today governed by two complementary

and occasionally overlapping sources of authority: the provisions

of the Labor Code, enacted by the Legislature, and a series of 18

wage orders, adopted by the IWC. [Citations.]” (Brinker, supra,

53 Cal.4th at p. 1026.) “[T]he IWC’s wage orders are entitled to

‘extraordinary deference, both in upholding their validity and in

enforcing their specific terms.’ [Citation.]” (Id. at p. 1027.)

“[T]he meal and rest period requirements [at issue] ‘have long

been viewed as part of the remedial worker protection

framework.’ [Citation.] Accordingly, the relevant wage order

provisions must be interpreted in the manner that best

effectuates that protective intent.” (Ibid.)

B. Wal-Mart

The trial court found that Wackenhut’s decertification

motion was supported by changed circumstances because the

Supreme Court decision in Wal-Mart, supra, 564 U.S. 338 created

significant new case law, warranting a reassessment of class

certification. We begin with a brief overview of Wal-Mart, then

address each of plaintiffs’ claims and the court’s application of

Wal-Mart in its decertification order.

Wal-Mart, supra, 564 U.S. 338, involved class certification

of some 1.5 million current and former female employees,

alleging that their employer, Wal-Mart, discriminated against

them based on sex by denying them equal pay and promotions, in

violation of Title VII of the Civil Rights Act of 1964 (Title VII), as

amended, Title 42 United States Code section 2000e-1 et seq.

(Wal-Mart, at p. 343.) The Supreme Court reversed class

certification because the plaintiffs did not offer significant proof

10

that Wal-Mart operated under a general policy of discrimination.

(Id. at p. 353.) “The only corporate policy that the plaintiffs’

evidence convincingly establishe[d was] Wal-Mart’s ‘policy’ of

allowing discretion by local supervisors over employment

matters”; and even as to that, the plaintiffs could not identify “a

common mode of exercising discretion that pervade[d] the entire

company.” (Id. at p. 355, italics omitted.)

Also at issue in Wal-Mart was the means by which the

plaintiffs planned to establish liability and damages. Plaintiffs

proposed to select a sample of class members for whom liability

and damages would be determined. (Wal-Mart, supra, 564 U.S.

at p. 367.) The percentage of those sample claims deemed to be

valid would then be extrapolated to the remaining class and

multiplied by the average back pay award in the sample set to

determine the entire class recovery. (Ibid.) The Supreme Court

disapproved this method, which it termed “Trial by Formula,”

finding it would prevent Wal-Mart from litigating its statutory

defenses to individual claims. (Ibid.) Under Title VII, once a

plaintiff makes a prima facie showing of discrimination, the

burden shifts to the employer, which may avoid liability by

showing that it took an adverse employment action against the

employee for some reason other than discrimination. (Wal-Mart,

at p. 366.)

As discussed below, the trial court’s reliance on Wal-Mart

to support decertification for each of plaintiffs’ claims

overextended holdings in that case. The crux of Wackenhut’s

motion for decertification and the court’s subsequent order was

Wal-Mart’s treatment of statistical sampling, even though

statistical sampling had been introduced only in relation to one of

plaintiffs’ three claims, the meal period claim. Thus, although

11

the court had urged the parties to consider using statistical

sampling to make the class action more manageable as to the

meal period claim, it determined that this method was

disapproved in Wal-Mart.

After the trial court issued its decertification order, the

Supreme Court clarified that Wal-Mart does not “stand for the

broad proposition that a representative sample is an

impermissible means of establishing classwide liability.” (Tyson

Foods, Inc. v. Bouaphakeo (2016) ___ U.S. ___, ___ [136 S.Ct.

1036, 1048] (Tyson).) “A representative or statistical sample, like

all evidence, is a means to establish or defend against liability.

Its permissibility turns not on the form a proceeding takes—be it

a class or individual action—but on the degree to which the

evidence is reliable in proving or disproving the elements of the

relevant cause of action.” (Id. at p. 1046.) Thus, “[w]hether and

when statistical evidence can be used to establish classwide

liability will depend on the purpose for which the evidence is

being introduced and on ‘the elements of the underlying cause of

action[]’ [citation].” (Ibid.) In Tyson, a case involving a class of

employees claiming that they did not receive statutorily

mandated overtime pay for time spent “donning and doffing

protective gear,” the court upheld the use of statistical evidence

to calculate the additional time class members spent donning and

doffing, even though differences in the type of gear worn meant

that plaintiffs may have taken different amounts of time to don

and doff. (Id. at pp. 1042, 1048-1409.) The court distinguished

Wal-Mart, explaining that “[w]hile the experiences of the

employees in Wal-Mart bore little relationship to one another, in

this case each employee worked in the same facility, did similar

work, and was paid under the same policy. . . . [U]nder these

12

circumstances the experiences of a subset of employees can be

probative as to the experiences of all of them.” (Tyson, supra, at

p. 1048.)

Here, statistical evidence was proposed only for the limited

purpose of determining how many employees had signed on-duty

meal agreements lacking revocation language during the class

period. Plaintiffs already had established through deposition

testimony that Wackenhut required all employees to sign on-duty

meal agreements; that prior to 2004, most of the meal

agreements lacked the required revocation language; that

between 2004 and 2008 only new employees signed meal

agreements with revocation language; and that it was only in

2008 and thereafter that all employees signed meal agreements

with the required revocation language. As in Tyson, under these

circumstances the percentage of the subset of employees who

signed meal agreements lacking the required revocation language

during a given time period is probative as to the percentage of the

class that signed meal agreements lacking the required

revocation language. Although, as Tyson has made clear, Wal-

Mart does not prohibit the broad use of statistical sampling in

class action lawsuits, as we discuss below, the decision whether

to allow statistical evidence ultimately is within the discretion of

the trial court.

Throughout its order the court also found that

individualized inquiries were necessary because, pursuant to

Wal-Mart, Wackenhut was entitled to defend by proving that,

even if plaintiffs presented evidence that it had a general policy

of not providing valid meal or rest breaks, in practice some

employees were afforded an off-duty meal or rest break. This

rationale misapplies Wal-Mart. In Wal-Mart, the Supreme Court

13

found that plaintiffs failed to present evidence establishing the

existence of a common policy of discrimination. In this case,

when it originally certified the class, the trial court found that

plaintiffs had presented sufficient evidence that Wackenhut had

policies and practices that violated wage and hour laws. Because

plaintiffs met their burden of establishing a common policy,

whether an individual was permitted to take a valid meal or rest

break on any given day is a question of damages. (See Brinker,

supra, 53 Cal.4th at p. 1022 [“‘As a general rule if the defendant’s

liability can be determined by facts common to all members of the

class, a class will be certified even if the members must

individually prove their damages’”].)

The distinctive nature of Title VII liability also

distinguishes Wal-Mart from the facts of this case.

Individualized inquiries were necessary in Wal-Mart because

under Title VII, once the plaintiff has made a prima facie

showing of a discriminatory action, the burden shifts to the

defendant to show that the adverse employment action was made

for a nondiscriminatory employment reason. A defendant’s right

to prove that an adverse employment action as to a specific

employee was taken for a nondiscriminatory reason, will

necessarily have to be individualized. The wage order governing

meal and rest breaks at issue in this case does not have the same

individualized burden-shifting mechanism as Title VII. If

plaintiffs have made a showing that Wackenhut had a policy or

practice that violated California wage and hour laws, any defense

asserted by Wackenhut can also be presented on a classwide

basis. (See Bradley v. Networkers International, LLC (2012) 211

Cal.App.4th 1129, 1150 (Bradley) [employer’s defense that meal

14

and rest break policy was legally sufficient was also matter of

common proof].)

II

A. Meal Period Claim

IWC wage order No. 4-2001, codified in California Code of

Regulations, title 8, section 11040, subdivision (11)(A), governs

an employer’s obligation to provide meal breaks to hourly

security guard employees. (Faulkinbury v. Boyd & Associates,

Inc. (2013) 216 Cal.App.4th 220, 233 (Faulkinbury).) Under that

order, “[n]o employer shall employ any person for a work period

of more than five (5) hours without a meal period of not less than

30 minutes, except that when a work period of not more than six

(6) hours will complete the day’s work the meal period may be

waived by mutual consent of the employer and the employee.

Unless the employee is relieved of all duty during a 30-minute

meal period, the meal period shall be considered an ‘on duty’

meal period and counted as time worked. An ‘on duty’ meal

period shall be permitted only when the nature of the work

prevents an employee from being relieved of all duty and when by

written agreement between the parties an on-the-job paid meal

period is agreed to. The written agreement shall state that the

employee may, in writing, revoke the agreement at any time.”

(Cal. Code Regs., tit. 8, § 11040, subd. (11)(A).)

“An employer’s duty with respect to meal breaks . . . is an

obligation to provide a meal period to its employees. The

employer satisfies this obligation if it relieves its employees of all

duty, relinquishes control over their activities and permits them

a reasonable opportunity to take an uninterrupted 30-minute

break, and does not impede or discourage them from doing so.”

(Brinker, supra, 53 Cal.4th at p. 1040.)

15

Wackenhut’s standard practice was to have all new security

officers sign an on-duty meal agreement during orientation. It

then allowed its clients to determine whether Wackenhut

security officers would be provided an on-duty or off-duty meal

period at each site. The vast majority of clients preferred to

provide on-duty meal periods.

In its decertification order, the trial court explained that it

previously had found that common questions predominated as to

plaintiffs’ meal period claim because evidence supported

plaintiffs’ allegation that Wackenhut had a uniform practice of

allowing clients to decide whether meal periods would be on-duty

or off-duty, rather than Wackenhut performing the required

analysis of determining whether the nature of the work at each

site prevented employees from being relieved of all duties for

their 30-minute meal period. The court explained that plaintiffs’

theory was no longer viable because, pursuant to Wal-Mart, the

question of how the employer decides which meal period to

provide is not a “‘common contention’ that when answered will

‘resolve an issue that is central to the validity of each one of the

[class members’] claims in one stroke.’ (Wal-Mart, supra, [564

U.S. at p. 350].)”

The trial court also found the testimony of Wackenhut

managers was not sufficient to prove that in every case class

members were provided with on-duty meal periods. Instead, the

evidence only supported the conclusion that as a general matter,

Wackenhut managers intended to provide on-duty meal periods

5

at most, although not all, worksites.

5

In a footnote, the court commented that “[i]n fact, the class

as certified includes several worksites whose employees [were]

undisputedly . . . provided with off-duty meal periods.” We note

16

Accordingly, the court found that liability depended on an

individualized assessment of the meal periods taken by each class

member at each site. The court explained that individual

inquiries were necessary pursuant to Wal-Mart because

Wackenhut had a “right to defend itself by proving that, in

practice, even at worksites that typically had on-duty meal

periods, some class members were actually authorized to take off-

6

duty meal periods, as evidence in the record suggest[ed].”

In Brinker, the court instructed that for purposes of class

certification, the focus must be on the policy the plaintiffs are

challenging and whether the legality of that policy can be

resolved on a classwide basis. (Brinker, supra, 53 Cal.4th. at pp.

that had the court granted plaintiffs’ proposed subclasses, the

outlier sites that provided off-duty meal periods (example: the

San Francisco Conservatory of Music and Cricket

Communications) would have been excluded from the class.

6

The trial court cited to four employee declarations and one

deposition as evidence that in practice some class members were

authorized to take off-duty meal periods. However, in three of

the declarations (those of Chowdhary, Call, and Kotov), the class

members stated they were permitted to leave the premises or

take their lunch where they wanted but that they understood

they needed to be available to respond or assist in case of an

emergency. (See Brinker, supra, 53 Cal.4th at p. 1040

[employer’s duty to provide off-duty meal period satisfied if

employer relieves “employees of all duty, relinquishes control

over their activities and permits them a reasonable opportunity

to take an uninterrupted 30-minute break, and does not impede

or discourage them from doing so”].) The deposition was of

named plaintiff Nadin, who stated that on occasion, when she

was relieved from her position working at City Hall East, she

could leave to buy lunch.

17

1023-1024.) The court then considered the scope of an employer’s

duties under the relevant statutes and the IWC wage orders to

afford rest and meal periods to employees. (Id. at pp. 1027-1028.)

Regarding the meal period claim, the court concluded that “an

employer’s obligation when providing a meal period is to relieve

its employee of all duty for an uninterrupted 30-minute period”

and that an employee “‘must be free to attend to any personal

business he or she may choose during the unpaid meal periods.’”

(Id. at pp. 1036, 1038, italics added.) Thus, the employee must be

free to leave the premises. (Ibid.)

Here, rather than focusing on whether plaintiffs’ theory of

liability as described in their complaint – that Wackenhut

violated wage and hour requirements by not providing officers

with off-duty meal periods – was susceptible to common proof, the

court focused on whether individualized inquiries would be

required to determine whether in practice, officers ever received

an off-duty meal period. (See Benton v. Telecom Network

Specialists, Inc. (2013) 220 Cal.App.4th 701, 725 (Benton) [trial

court employed improper criteria by focusing on whether

individualized inquiry required to determine which technicians

missed meal and rest periods, rather than focusing on plaintiffs’

theory of liability, that employer violated wage and hour

requirements by failing to adopt a meal and rest period policy].)

Wal-Mart, supra, 564 U.S. at page 350, requires class

claims to depend on a common contention which “must be of such

a nature that it is capable of classwide resolution – which means

that determination of its truth or falsity will resolve an issue that

is central to the validity of each one of the claims in one stroke.”

Here, plaintiffs’ theory at class certification was based on a

common contention: that Wackenhut violated California labor

18

laws by failing to provide employees with off-duty meal periods.

This violation resulted from Wackenhut’s policy of requiring all

employees to sign on-duty meal agreements and allowing client

preference to dictate whether an employee had an off-duty or on-

duty meal period, rather than itself determining, as the

employer, whether the nature of the work at each site prevented

its employees from having an off-duty meal period. Whether

plaintiffs’ theory has merit is a common question that is “capable

of classwide resolution.” (Ibid., see Faulkinbury, supra, 216

Cal.App.4th at p. 234 [employer’s blanket policy requiring all new

employees, regardless of individualized job duties, to sign an on-

duty meal agreement is a classwide issue].)

Nor was the trial court correct in determining that Wal-

Mart required individualized inquiries. In Brinker, supra, 53

Cal.4th at page 1022, the California Supreme Court explained

that “‘[a]s a general rule if the defendant’s liability can be

determined by facts common to all members of the class, a class

will be certified even if the members must individually prove

their damages.’” California appellate authority subsequent to the

trial court’s decertification order makes clear that, in the context

of meal breaks, whether a specific employee actually had a valid

meal break on a given day is a question of damages, and does not

preclude class certification. “Under the logic of [Brinker’s]

holdings, when an employer has not authorized and not provided

legally required meal and/or rest breaks, the employer has

violated the law and the fact that an employee may have actually

taken a break or was able to eat food during the workday does

not show that individual issues will predominate in the

litigation.” (Bradley, supra, 211 Cal.App.4th at p. 1151, italics

omitted.)

19

In Alberts, supra, 241 Cal.App.4th at page 407, the Court of

Appeal held the trial court erred in requiring, at the certification

stage, that plaintiffs demonstrate a “‘universal practice’ on the

part of management to deny nursing staff the benefit of the

Hospital’s written break policy” and that the proper question was

“whether plaintiffs had articulated a theory susceptible to

common resolution.” (Ibid.) Alberts explained that requiring

plaintiffs to prove class members missed all breaks to which they

were entitled was an “incorrect standard for certification that, as

other courts have also found, if correct, would prevent

certification of virtually any wage and hour class. (See, e.g., Bufil

v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193,

1207 (Bufil) [‘a class is not inappropriate merely because each

member at some point may be required to make an individual

showing as to eligibility for recovery’]); Benton, supra, 220

Cal.App.4th at pp. 725–728 [reversing order denying certification

despite evidence that some putative class members received

breaks].)” (Alberts, at p. 407.)

As Faulkinbury, supra, 216 Cal.App.4th at page 235

explains, “the employer’s liability arises by adopting a uniform

policy that violates the wage and hour laws. Whether or not the

employee was able to take the required break goes to damages,

and ‘[t]he fact that individual [employees] may have different

damages does not require denial of the class certification motion.’

[Citation.]”

1. Nature of the Work Exception

A key issue driving the court’s decertification order on the

meal period claim was its finding that Wackenhut’s affirmative

defense, the nature of the work exception, could not be

adjudicated on a classwide basis, even if the class were divided

20

into subclasses as proposed by the plaintiffs, because common

issues did not predominate. The nature of the work exception

has three express conditions: (1) the nature of the work must

prevent the employee from being relieved of all duty; (2) the

employee must agree to the on-duty meal period in writing; and

(3) the written agreement must provide that the employee may,

in writing, revoke the agreement at any time. (Cal. Code Regs.,

tit. 8, § 11040, subd. (11)(A).) The nature of the work exception is

an affirmative defense, and thus the burden is on the employer to

plead and prove facts justifying on-duty meal periods. (Abdullah

v. U.S. Security Associates, Inc. (9th Cir. 2013) 731 F.3d 952, 958-

959 (Abdullah).)

In the class certification order, the court found that

common questions predominated because plaintiffs had shown

Wackenhut had a uniform practice allowing clients to determine

whether to provide on-duty meal periods, but in its decertification

order, the court concluded that whether Wackenhut allowed

client preference to dictate whether an officer was provided an

on-duty meal period was not the correct inquiry. Rather, the

court concluded, even if Wackenhut had not made a

determination whether the nature of the work prevented its

employees from taking an off-duty meal period before allowing its

clients to provide on-duty meal periods, it still was entitled to

prove at trial whether on-duty meal periods actually were

permissible due to the nature of the work.

In analyzing whether the nature of the work permitted on-

duty meal periods, the trial court found that “because the duties

and work environments differ dramatically amongst the class,

the nature of the work performed by Wackenhut security officers

[could not] be resolved on a classwide basis.” In reaching its

21

determination, the court considered a five factor test outlined by

7

the Division of Labor Standards Enforcement (DLSE), noting

that California courts have yet to delineate the scope of the

nature of the work exception. The five factors are (1) the type of

work; (2) the availability of other employees to provide relief to

an employee during a meal period; (3) potential consequences to

the employer if the employee is relieved of all duty during the

meal period; (4) the ability of the employer to anticipate and

mitigate the consequences; and (5) whether work product or

process will be destroyed or damaged by relieving the employee of

all duty. The court explained that this was not an exhaustive list

of factors and that the “‘critical determination . . . whether an on-

duty meal period may be lawfully provided by an employer is

whether the employer can establish that the facts and

circumstances in the matter point to the conclusion that the

nature of the work prevents the employee from being relieved of

all duty.”’

Plaintiffs argued that the differences among the class

members were not significant because all security officers

“‘observe, patrol, protect, assist, and report’” and that differences

in duties performed by class members did not prevent Wackenhut

from taking steps to relieve class members of all duty for a 30-

minute meal period. The court found that the DLSE test could

not be applied on a classwide basis because even if class members

7

“‘The DLSE “is the state agency empowered to enforce

California’s labor laws, including IWC wage orders.”’ [Citation.]

The DLSE’s opinion letters, ‘“‘“while not controlling upon the

courts by reason of their authority, do constitute a body of

experience and informed judgment to which courts and litigants

may properly resort for guidance.”’”’ [Citations.]” (Brinker,

supra, 53 Cal.4th at p. 1029, fn. 11.)

22

shared some basic duties, Wackenhut “presented substantial

evidence illustrating the profound differences among the various

worksites and the nature of the work performed by its security

officers.”

Citing an opinion letter from the DLSE, the court also

found that plaintiff’s theory that Wackenhut could relieve

workers at almost every work site was “based on the incorrect

premise that if an employer can theoretically remake its business

operations to provide an off-duty meal period, it should be

required to do so and precluded from taking advantage of the

nature of the work exception.” The court also noted that even if

plaintiffs’ theory were correct, an analysis of what steps

Wackenhut could have taken to provide off-duty meal periods

would require numerous individualized inquiries.

Finally, the court found that plaintiffs’ proposed subclasses

did not make their meal-break claim more amenable to classwide

treatment because the subclasses did not “eliminate the need for

numerous individualized inquiries to determine whether the

nature of the work performed by class members allowed for on-

duty meal periods.”

Two appellate decisions in class action cases particularly

have analyzed the nature of the work defense in the context of

the DLSE opinion letter: Faulkinbury, supra, 216 Cal.App.4th

220 and Abdullah, supra, 731 F.3d 952. Neither was available to

the trial court in this case since both were published after the

court granted Wackenhut’s decertification motion. Each clarifies

the scope of the nature of the work defense in the class action

context. In Faulkinbury, as here, the plaintiffs were employees

who worked for a private security guard company, Boyd. Boyd

provided security services to a range of clients, including gated

23

residential communities, hospitals, commercial buildings, and

retail stores. (Faulkinbury, at p. 225.) The plaintiffs alleged that

when hired, they had to sign an agreement to take on-duty meal

periods, and that they never took an off-duty meal break. “As a

defense to class certification, Boyd asserted the nature of the

work exception.” (Id. at p. 234.) In response, plaintiffs argued

“[l]iability turns on the issue whether Boyd’s policy requiring all

security guard employees to sign blanket waivers of off-duty meal

breaks is lawful. That issue can be resolved on a classwide basis.”

(Ibid.)

In light of Brinker, the Court of Appeal found that whether

Boyd’s policy requiring all security guard employees to sign

blanket waivers of off-duty meal breaks was lawful “can be

resolved on a classwide basis.” (Faulkinbury, supra, 216

Cal.App.4th at p. 234.) This is because “by requiring blanket off-

duty meal break waivers in advance from all security guard

employees, regardless of the working conditions at a particular

station, Boyd treated the off-duty meal break issue on a classwide

basis.” (Id. at p. 234.) “Whether or not the employee was able to

take the required break goes to damages, and “‘[t]he fact that

individual [employees] may have different damages does not

require denial of the class certification motion.”’ [Citation.]” (Id.

at p. 235.)

In Abdullah, supra, 731 F.3d 952, the Ninth Circuit

reached the same conclusion in a case with strikingly similar

facts. There, a class of private security guards working for U.S.

Security Associates, Inc. (USSA) alleged violations of California

labor laws. (Id. at pp. 954-956.) USSA guards worked at over

700 locations in California, including hotels, hospitals,

warehouses, and construction sites. (Id. at p. 954.) USSA

24

challenged the district court’s certification of a meal period

subclass on the grounds that the plaintiffs had “not established

‘commonality,’ as required under Federal Rule of Civil Procedure

23(a)(2), or ‘predominance,’ as required under Rule 23(b)(3).” (Id.

at p. 956.)

After noting that California courts had not addressed the

substantive scope of the “nature of the work” exception, the Ninth

Circuit reviewed several DLSE opinion letters concerning the

parameters of that exception. (Abdullah, supra, 731 F.3d at pp.

958-959.) The court explained that the “DLSE has emphasized

that the ‘on-duty’ meal period is a ‘limited [] alternative’ to the

off-duty meal period requirement. DLSE Opinion Letter

2009.06.09 at 8. Critically, it is ‘not described or defined as

a waiver of an off-duty meal period,’ id. (emphasis added), but

rather as ‘a type of meal period that can be lawfully provided only

in those circumstances in which the three express conditions set

forth in [the regulation] are satisfied.’” (Abdullah, at p. 959, fn.

omitted.) The court identified two categories of work where the

DLSE has found that the “nature of the work” exception applies:

“(1) where the work has some particular, external force that

requires the employee to be on duty at all times, and (2) where

the employee is the sole employee of a particular employer.”

(Ibid.)

The court concluded that “the plaintiffs’ claims [would]

yield a common answer that [was] ‘apt to drive the resolution of

the litigation,’” as required by Federal Rules of Civil Procedure,

rule 23(a)(2) and Wal-Mart, supra, 564 U.S. at pages 349-350.

(Abdullah, supra, 731 F.3d. at p. 962.) The court explained:

“[T]he DLSE letters make clear that ‘the showing

necessary to establish the “nature of the work”

25

exception is a high one.’ In order to make such a

showing, USSA had to demonstrate not just that its

employees’ duties varied, but that they varied to an

extent that some posts would qualify for the ‘nature

of the work’ exception, while others would not. It

failed to do so. Indeed, USSA’s sole explanation for

why it requires on-duty meal periods is that its

guards are staffed at single-guard locations. It does

not argue that any particular posts would qualify for

the ‘nature of the work’ exception absent the single-

guard staffing model. In fact, when asked if he could

think of ‘examples’ where ‘the nature of the work

requires an on-duty meal break,’ [USSA’s person

most knowledgeable] testified that he could not.

Thus, the crux of the issue is that the class members’

duties do not allow for a meal break solely because no

other guards are available to cover for them during

their meal periods.

“Consider, for example, the illustrative list of duties

that USSA has provided to demonstrate the variety

of its employees duties:

“[T]he duties performed by security guards include

patrolling parking lots; checking receipts; signing in

and out trucks; setting up school parking lots and

assisting with student drop-offs and pick-ups;

inspecting vehicles; restraining unruly patients;

escorting dead bodies; checking the inventory,

mileage, and temperature of trucks; working

undercover to catch shoplifters; monitoring

26

psychiatric patients; checking in employees and

answering phones at a front desk; performing

surveillance; and enforcing hotel quiet hours.

“These duties are undoubtedly distinct from one

another, but the only reason any of them ‘prevent’ the

employee from taking a meal period is because USSA

has chosen to adopt a single-guard staffing model.

See Cal. Code Regs., tit. 8, § 11040, subd. 11(A)

(stating that an ‘on-duty’ meal period is permitted

‘only when the nature of the work prevents an

employee from being relieved of all duty’ (emphasis

added)).

“On this basis, we conclude that the merits inquiry

will turn on whether USSA is permitted to adopt a

single-guard staffing model that does not allow for

off-duty meal periods—namely, whether it can invoke

a ‘nature of the work’ defense on a class-wide basis,

where the need for on-duty meal periods results from

its own staffing decisions. Such an inquiry is

permissible under Brinker and Faulkinbury; the

latter clarified that an employer may be held liable

under state law ‘upon a determination that [its]

uniform on-duty meal break policy [is] unlawful,’

with the ‘nature of the work’ defense being relevant

only to damages. Faulkinbury, [supra,] 216

Cal.App.4th at [p.] 235. Thus, the legality of USSA’s

policy is a ‘significant question of law,’ Mazza [v. Am.

Honda Motor Co. (2012)] 666 F.3d [581,] 589, that is

27

‘apt to drive the resolution of the litigation’ in this

case, Wal-Mart, [supra, 654 U.S.] at [pp. 349-350].”

(Abdullah, supra, 731 F.3d at pp. 962-963, fns.

omitted.)

Wackenhut, as the employer, was required to provide 30-

minute off-duty meal periods to its employees. Because an “‘on

duty’ meal period shall be permitted only when the nature of the

work prevents an employee from being relieved of all duty and

when by written agreement between the parties an on-the-job

paid meal period is agreed to” (Cal. Code Regs., tit. 8, § 11040,

subd. (11)(a)), it is the employer’s obligation to determine

whether the nature of the work prevents an employee from being

relieved before requiring an employee to take an on-duty meal

period.

In this case, Wackenhut, not its clients, is the employer and

hence was responsible for determining whether the nature of the

work at each site prevented its employees from being relieved of

all duty during the meal break. Wackenhut offered no evidence

that it made the determination on the basis of the five-factor test

required by the DLSE: the “type of work, the availability of other

employees to provide relief to an employee during a meal period,

the potential consequences to the employer if the employee is

relieved of all duty, the ability of the employer to anticipate and

mitigate these consequences such as by scheduling the work in a

manner that would allow the employee to take an off-duty meal

break, and whether the work product or process will be destroyed

or damaged by relieving the employee of all duty.” (Dept.

Industrial Relations, DLSE Opn. Letter No. 2002.09.04 (Sep. 4,

2002) p. 2.) Rather, the record indicates that Wackenhut allowed

28

client preference to dictate whether officers were provided on-

duty or off-duty meal periods. Client preference cannot be

determinative under the wage order. In the 2002 DLSE opinion

letter, the department concluded that “an off-duty meal period

must be provided unless [the five] factors, taken as a whole,

decisively point to the conclusion that the nature of the work

makes it virtually impossible for the employer to provide the

employee with an off-duty meal period.” (Id. at p. 2.) Thus,

plaintiffs’ claim that Wackenhut’s common practice of allowing

client preference to dictate whether meal periods were on-duty or

off-duty, resulting in the vast majority of plaintiffs receiving on-

duty meal periods in violation of IWC wage order No. 4-2001, is

amenable to class treatment.

Wackenhut cannot discharge its duty by arguing that its

clients who requested on-duty meal periods determined that the

nature of the work prevented officers from being relieved of all

duty. A similar issue was discussed in Benton, supra, 220

Cal.App.4th at page 729. In that case the court concluded that

an employer’s “affirmative obligation to authorize and permit

meal and rest breaks” could not be discharged, even if a co-

employer staffing company had adopted a lawful meal and rest

break policy, in the “absence of any evidence showing that [the

employer] took steps to ensure that the staffing company had

such a policy in place.” (Ibid.) We agree with that analysis.

Thus, Wackenhut could not discharge its affirmative duty to

provide lawful meal and rest breaks without presenting evidence

that it had precautions in place to ensure that its clients

considered and applied the five-factor test outlined by the DLSE

in determining whether the “nature of the work” at each site

29

necessitated an on-duty meal period before requiring class

8

members to take such meal periods.

Wackenhut also has failed to show that individual issues

predominate in this case. Plaintiffs argue that the nature of the

work defense can be litigated on a classwide basis by showing

8

The general manager of Wackenhut’s San Diego branch

office and former acting general manager of the Orange County

and Long Beach branches testified in deposition that the decision

whether to provide an on-duty or off-duty meal period is directed

by the client, and that if the client says that an off-duty meal

period is not acceptable he [the Wackenhut manager] does not

discuss with the client why an off-duty meal period is not

acceptable. The general manager of the San Francisco and San

Jose branches testified that Wackenhut does discuss with clients

which type of meal periods will be provided to Wackenhut

employees, and that the reason for the discussion is that

Wackenhut seeks to comply with the law and regulations. He

explained, however, that the determination is made by looking at

the “best interest of the security operations and operational

continuity of the site,” that Wackenhut does not have a

preference as to whether its clients provide an on-duty or off-duty

meal period, and that “if the customer says . . . [the employee]

can leave the site, they can turn their radio off, they can sleep,

whatever. They’re not getting paid for it, I don’t care. That’s

their unpaid meal period. As long as that is understood between

Wackenhut and the customer, that’s fine. That way we would go

with the unpaid meal period.” Similarly, Wackenhut’s person

most knowledgeable testified that at the Riverside branch, on-

duty meal periods are determined by the client contract: if the

client wants security for eight hours, then the employee will get a

paid lunch in that period. There is no evidence that the proper

test, whether the nature of the work prevented an employee from

being relieved of all duty, was discussed with clients. (Cal. Code

Regs., tit. 8, § 11040, subd. (11)(A).)

30

that regardless of variations in specific job assignments,

Wackenhut could have relieved class members of all duty for

meal periods. Specifically, plaintiffs’ security expert explained

that Wackenhut could relieve officers for off-duty meal periods by

(1) having officers and supervisors at multi-officer sites relieve

each other; (2) having field supervisors who already travel from

site to site, relieve officers for breaks; (3) increasing the current

number of rover officers that Wackenhut already uses to report to

different locations throughout the day to relieve officers for

breaks; and (4) where clients agree, having employees of

Wackenhut’s clients relieve officers for breaks.

Wackenhut argues that individual issues predominate

because the nature of the work exception can only be determined

by inquiring into the details of each individual client, worksite,

job post, and shift. If an employer, with employees working at

multiple sites, with various job duties, had made individualized

determinations regarding the nature of the work, and employees

challenged whether those determinations were correctly made,

class certification might be inappropriate because the employer

should have an opportunity to defend each of those individualized

determinations. But, in this case, since the employer did not

analyze whether the nature of the work exception applies before

requiring employees to take on-duty meal periods, it cannot rely

on the nature of the work defense to bar class certification.

Individual issues also do not predominate because

Wackenhut has treated the nature of the work exception on a

classwide basis. As in Faulkinbury, supra, 216 Cal.App.4th 220,

Wackenhut had all officers sign an on-duty meal agreement

during orientation, regardless of each officer’s job site or duties.

And, similar to Abdullah, supra, 731 F.3d 952, although

31

Wackenhut presented evidence demonstrating the variety of

duties that class members perform at different sites and even

within a given site, it offered no evidence that the duties varied

so that some posts would qualify for the “nature of the work”

exception, while others would not.9 Nor has it shown why

particular duties at any site would necessitate an on-duty meal

period. Deposition testimony of Wackenhut managers shows that

clients were given the option of providing either on-duty or off-

duty meal periods and, similar to Abdullah, the only explanation

articulated for providing an on-duty meal period was a staffing

decision - a client’s preference for continuous coverage.

2. Invalid Meal Agreements

The second and third conditions of the affirmative defense

require that the employee sign a written agreement that specifies

on-duty meal breaks and that also provides that the employee

may, in writing, revoke the agreement at any time. (Cal. Code

Regs., tit. 8, § 11040.) Plaintiffs’ theory of liability is that “[e]ven

if Wackenhut could meet the first prong of the nature of the work

9

Wackenhut offers the following examples of how duties

vary from site to site: a security officer stationed at the gate of

an environmental facility is primarily concerned with controlling

the flow of goods, people, and vehicles through the gate; a

security officer stationed at a hotel is responsible for remaining

visible and regularly patrolling the property; an officer stationed

at a nuclear energy facility is required to check for leaks, odors,

or other signs of damages that may indicate potential hazards;

firearm-carrying officers are typically stationed outside certain

bank branches and are responsible for deterring bank robberies;

officers serving as jailers process inmates and engage in detail-

specific tasks such as photographing and fingerprinting inmates;

and armed officers who transport detainees perform pat downs to

prevent contraband items from entering vehicles.

32

defense, [by proving] that it was unable to provide off-duty meal

periods to its employees,” it would still be liable for violations of

the wage order under the second element because prior to 2004,

the on-duty meal agreements did not contain the required

revocation clause; beginning in 2004, only new hires signed meal

agreements with revocation language; and it was not until 2008

that Wackenhut required all security officers to sign a meal

agreement with a revocation clause.

In its decertification order, the trial court found that the

plaintiffs’ plan to use statistical sampling to determine the

percentage of agreements that lacked revocation language was

essentially indistinguishable from the method of proof rejected in

Wal-Mart. Specifically, the court noted that Wal-Mart, supra,

564 U.S. at pages 366-367, held “that the use of statistical

sampling as a shortcut to create commonality where none exists

is improper because it robs a defendant of the opportunity to

defend against each individual claim and therefore impermissibly

alters substantive law.” The court also noted that statistical

sampling would “lead to imprecise individual recoveries

. . . resulting in a windfall for some class members and leaving

other class members under compensated.” Finally, the court

noted that the Brinker concurrence recognized that under

California law, a trial court has discretion to weigh the potential

advantages and disadvantages of statistical inferences.

Accordingly, the court explained that it was exercising its

discretion in not allowing the use of statistical sampling because

Wal-Mart illustrated that a significant disadvantage of statistical

sampling is the elimination of a defendant’s ability to raise

defenses to individual claims.

33

The trial court also concluded that even if plaintiffs were to

obtain every meal period agreement and attempt to prove

liability without relying on statistical sampling, individual issues

would still predominate. It explained that although examining

each agreement and determining whether it contained revocation

language would be nothing more than a “tedious and extensive

audit that is not likely to result in many factual disputes,”

proving class members had signed invalid agreements would not,

on its own, establish liability because plaintiffs would still have

to prove that class members who signed invalid agreements also

had “on-duty” meal periods.

Plaintiffs had proposed a subclass consisting of class

members who signed meal agreements lacking a revocation

clause who also worked at a post with an on-duty meal period.

The trial court found the proposed subclass was not “readily

ascertainable” because plaintiffs failed to define the class in

objective terms without regard to the merits of the claim. The

court noted that the “proposed subclass definition includes

elements necessary to establish liability, and thus determining

who is in the subclass would require an evaluation” of whether an

agreement was invalid and whether meal periods were on-duty,

which would require answering numerous individualized

questions.

Even without statistical sampling, determining which

employees signed a meal agreement that lacked a revocation

clause can be ascertained. As discussed, the parties agreed to

statistical sampling as an alternative to Wackenhut producing

meal agreements for all class members or allowing plaintiffs to

inspect Wackenhut’s files. During the hearings on Wackenhut’s

decertification motion, the court warned Wackenhut that by

34

arguing, pursuant to Wal-Mart, that statistical sampling violated

its due process rights, it waived its objection to limiting discovery

of the meal agreements. In response, Wackenhut agreed to

produce all of the meal agreements and engage in full discovery,

noting that it was “not asking to have it both ways.” The court

acknowledged in its order that determining which class members

signed a valid agreement would require nothing more than a

“tedious and extensive” audit that is not likely to result in many

factual disputes. Because California Code of Regulations, title 8,

section 11040, subdivision (11)(A) provides that “[t]he written

agreement shall state that the employee may, in writing, revoke

the agreement at any time,” determining whether an agreement

is invalid would require nothing more than checking whether the

agreement had a revocation clause.

Additionally, determining whether an employee, who

signed a meal agreement that is invalid on this ground, also had

“on-duty” meal periods, does not require numerous individualized

questions. At the hearing on the motion for decertification,

plaintiffs introduced a spreadsheet produced by Wackenhut. The

spreadsheet was generated by a Wackenhut computer program

and includes each employee’s name, the client for whom the

employee worked, address, start time, stop time, and a column on

the right for nonpaid breaks. Plaintiffs argued that the

spreadsheet could be sorted by the nonpaid break column,

making it easy to ascertain which employees had a paid on-duty

meal period. Wackenhut did not challenge the accuracy of the

spreadsheet for determining which employees had off-duty meal

periods. (See Brinker, supra, at p. 1053 (conc. opn. of Werdegar,

J.) [“[i]f an employer’s records show no meal period for a given

shift over five hours, a rebuttable presumption arises that the

35

employee was not relieved of duty and no meal period was

provided”]; see also Cicairos v. Summit Logistics, Inc. (2005) 133

Cal.App.4th 949, 963 [employers have duty to record their

employees’ meal periods].) Thus, the proposed subclass was

ascertainable.

Further, the use of statistical sampling in this case is

distinguishable from the method rejected by the Supreme Court

in Wal-Mart because, in that case, the plaintiffs proposed to use

representative evidence as a means of overcoming the absence of

a common policy. (Tyson, supra,136 S.Ct. at p. 1048.) In Wal-

Mart, the only policy that plaintiffs were able to identify was that

managers and supervisors had discretion in making employment

decisions, a policy that in itself does not establish liability. (Wal-

Mart, supra, 564 U.S. at p. 355.) Here, when the trial court

originally certified the class, it found that plaintiffs had met their

burden. They did so by proffering substantial evidence of a

common practice by showing (through deposition testimony of

Wackenhut managers) that meal agreements distributed between

January 2001 and April or May 2004 lacked the required

revocability clause, that meal agreements distributed between

April or May 2004 and May 2008 contained the revocability

clause but were signed only by new employees, and that it was

not until May 2008, that Wackenhut distributed agreements with

a revocability clause to all employees. Thus, unlike Wal-Mart,

where the use of statistical sampling was the only evidence

establishing liability, here, the results of the statistical sampling

(calculating an average percentage of meal agreements lacking

revocation language for each year between 2001-2008) served as

a manageability tool – an alternative to burdensome production.

36

This case also is distinguishable from Wal-Mart because of

the remedial nature of the Title VII claims at issue in that case.

Title VII claims are susceptible to individualized determination

of remedies because if a plaintiff prevails in showing that an

employer has discriminated, the employer may be ordered to

reinstate or hire the employee, with or without backpay. (Wal-

Mart, supra, 564 U.S. at p. 366.) Thus, the determination of any

given employee’s remedy is highly individualized. Here, on the

other hand, Wackenhut has not made a showing that allowing

individualized inquiries as to which employees had signed an

invalid meal agreement, rather than using a statistical analysis,

would result in a significantly different aggregate liability.

At oral argument, Wackenhut relied on Duran v. U.S. Bank

National Assn. (2014) 59 Cal.4th 1 (Duran). Duran was a wage

and hour class action involving alleged misclassification that

proceeded through trial to a verdict. (Id. at p. 12.) On appeal,

the California Supreme Court concluded that sampling errors

required reversal. (Id. at p. 49.) Specifically, the court found

that the sample was not sufficiently representative or random

and that there was an intolerably large margin of error. (Id. at

pp. 42, 43, 46.) The court explained that “without following a

valid statistical model developed by experts, the [trial] court

improperly extrapolated liability findings from a small, skewed

sample group to the entire class.” (Id. at p. 33.) The court noted

that individual issues may be managed through surveys and

statistical sampling as long as “some glue” binds class members

together apart from statistical evidence. (Id. at p. 31.)

Here, Wackenhut entered into a stipulation by which it

agreed not to challenge the sample on grounds that a less than

statistically significant number of personnel files were sampled

37

or that there was a bias in the sample. Wackenhut does not

challenge the accuracy or reliability of the proposed sampling

method. Additionally, the statistical sample provided a

secondary source of proof and was agreed to as a manageability

tool, not as plaintiffs’ only form of proof. As discussed, at class

certification plaintiffs offered testimony by Wackenhut managers

that prior to 2004, the on-duty meal agreements did not contain

the required revocation clause; beginning in 2004, only new hires

signed meal agreements with revocation language; and it was not

until 2008 that Wackenhut required all security officers to sign a

meal agreement with a revocation clause. Thus, the testimony of

Wackenhut managers and the meal agreements themselves

constitute “some glue” that binds class members together apart

from the statistical evidence.

The trial court’s conclusion that statistical sampling will

lead to over and under recovery has not been explicitly resolved

by California courts, but statistical sampling has been approved

as a method of determining damages. (Williams v. Superior

Court (2013) 221 Cal.App.4th 1353, 1366, fn. 6; see also Duran,

supra, 59 Cal.4th at p. 40 [statistical sampling to prove damages

is less controversial than to prove liability because “the law

tolerates more uncertainty with respect to damages than to the

existence of liability”].)

In Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th

715, 750, the court found that “from the perspective of the

administration of justice, . . . an important negative consequence

of the use of statistical sampling to calculate damages [is that] it

necessarily yields an average figure that will overestimate or

underestimate the right to relief of individual employees.” (Ibid.)

“Weighing against this disadvantage is the consideration that

38

statistical inference offers a means of vindicating the policy

underlying the Industrial Welfare Commission’s wage orders

without clogging the courts or deterring small claimants with the

cost of litigation. In a particular case, the alternative to the

award of classwide aggregate damages may be the sort of random

and fragmentary enforcement of the overtime laws that will fail

to effectively assure compliance on a classwide basis.” (Id. at p.

751, fn. omitted.) The court found that it was “within the

discretion of the trial court to weigh the disadvantage of

statistical inference—the calculation of average damages

imperfectly tailored to the facts of particular employees—with

the opportunity it afforded to vindicate an important statutory

policy without unduly burdening the courts.” (Ibid.)

Here, even if the trial court used its discretion to find that

the disadvantages of statistical sampling outweighed the

advantages, class certification of the meal break subclass was

still appropriate because Wackenhut can produce the meal

agreements or allow plaintiffs to inspect them.

B. Rest Break Claim

“Every employer shall authorize and permit all employees

to take rest periods, which insofar as practicable shall be in the

middle of each work period. The authorized rest period time

shall be based on the total hours worked daily at the rate of ten

(10) minutes net rest time per four (4) hours or major fraction

thereof. . . . Authorized rest period time shall be counted as

hours worked for which there shall be no deduction from wages.”

(Cal. Code Regs., tit. 8, § 11040, subd. (12)(A).) “If an employer

fails to provide an employee a rest period in accordance with the

applicable provisions of this order, the employer shall pay the

employee one (1) hour of pay at the employee’s regular rate of

39

compensation for each workday that the rest period is not

provided.” (Id., subd. (12)(B).)

Plaintiffs’ complaint alleges that Wackenhut failed to

permit and authorize employees off-duty rest breaks. Prior to

May 23, 2008, Wackenhut did not have a written policy

10

authorizing or permitting rest breaks. Wackenhut argues that

it did have such a policy, citing as evidence its policy under the

Fair Labor Standards Act (29 U.S.C. § 201 et seq.) (FLSA), which

became effective on August 3, 2005. That policy provides that

“Field and Headquarters management are responsible for

scheduling employees; ensuring that employees accurately report

their time worked; and maintaining accurate pay records of

employees who report to them. Field management is also

responsible for complying with any applicable state or local law

that provides employees with greater benefits and protections

than the FLSA in the locations in which they operate.”

When the trial court initially granted class certification, it

“found that common issues predominated with respect to the rest

period claim because . . . Wackenhut managers had testified in

depositions that Wackenhut had a policy not to provide off-duty

10

Wackenhut created a California Addendum to its security

officer handbook, which became effective on May 23, 2008. The

addendum included a provision that “[a]ll non-exempt employees

of the Company are authorized and permitted to take one 10-

minute rest break for every four hours worked.” The policy

explains that “[r]est breaks are paid breaks and [the employee]

will be compensated for the time spent on these breaks. As a

result, [the employee] may on occasion be called upon to perform

work related activities during [the employee’s] rest breaks. If [a

rest] break[] is interrupted because of such work related

activities, [the employee] may take a ‘make-up break,’ for a full

ten minutes as soon as practicable under the circumstances.”

40

rest periods, and there is no nature of the work exception for off-

duty rest periods.” In its motion for decertification, Wackenhut

did not present new evidence rebutting plaintiffs’ evidence that

prior to 2008, it had a uniform policy of not authorizing and

permitting employees to take off-duty rest periods. Rather,

Wackenhut challenged whether requiring employees to remain on

the premises or be reachable by phone or radio, in the event that

the rest period had to be interrupted in case of an emergency,

meant that the rest period was “on-duty.” Wackenhut also

argued that “even if [it] had a policy not to provide off-duty rest

periods (which it did not), in practice Wackenhut security officers

overwhelmingly were able to take rest breaks.”

In its decertification order, the court found that the

deposition testimony of Wackenhut managers on which it had

relied in its original class certification order did not “conclusively

establish that Wackenhut had a policy of providing on-duty rest

periods at every worksite, but instead show[ed] only that

Wackenhut intended to place certain restrictions on rest periods

at some worksites, and [that those] restrictions may or may not

have rendered such rest periods on duty.”

Application of the wage and hour order did not require

plaintiffs to conclusively establish that Wackenhut had a policy of

not providing rest periods at every worksite. (See Brinker, supra,

53 Cal.4th at p. 1022 [certification order relying on improper

criteria reversible].) A standard requiring plaintiffs to

“conclusively establish” that Wackenhut had a policy that

violated wage and hour laws is improper because plaintiffs’

burden at class certification is to produce substantial evidence.

(See Evans v. Lasco Bathware, Inc. (2009) 178 Cal.App.4th 1417,

1422 [plaintiffs have burden of producing substantial evidence of

41

class action requisites, including predominance].) The proper

inquiry for a predominance analysis is whether “‘questions of law

or fact common to the class predominate over the questions

affecting the individual members.’ [Citation.]” (Sav-on, supra, 34

Cal.4th at p. 329.) Predominance does not require plaintiffs to

show that an employer’s policy affected all members of the class.

(Id. at p. 338; see also Alberts, supra 241 Cal.App.4th at p. 407

[trial court incorrect to require plaintiffs show at certification

stage “‘universal practice’”].)

The court also found that resolution of the rest period claim

would involve numerous individualized inquiries because

evidence in the record showed class members at many

Wackenhut worksites were provided with rest periods that lacked

any restrictions and appeared to be fully off-duty. Applying the

same reasoning it applied to the meal period claim and again

relying on Wal-Mart, the court explained that common issues no

longer predominated because Wackenhut had a due process right

to prove on an individualized basis that it provided off-duty rest

periods to class members. The court cited declarations from two

security officers and deposition testimony from plaintiff Lubin to

support its finding that class members at many Wackenhut

worksites were provided with rest periods that lacked any

restrictions and appeared to be fully off-duty. The court also

explained that “analyzing whether any restrictions placed on rest

periods made them on-duty would require unmanageable

individualized inquiries into the nature of the rest periods for

each distinct worksite, shift, and security officer position.” The

court rejected plaintiffs’ theory that if employees were required to

remain on-duty for their meal break, it would follow that they

also were required to remain on-duty for their rest periods.

42

Instead, the court found it was entirely possible for an employer

to provide an off-duty rest break even if it chose to provide an on-

duty meal period.

As we have discussed, Wal-Mart does not support

Wackenhut’s claim that it had a due process right to prove on an

individualized basis that it provided off-duty rest periods to every

class member. (See Duran, supra, 59 Cal.4th at p. 38 [“[n]o case,

to our knowledge, holds that a defendant has a due process right

to litigate an affirmative defense as to each individual class

member”].) If plaintiffs had a policy or practice that violates

labor laws, then class treatment is appropriate. (Brinker, supra,

53 Cal.4th at p. 1032.) Individualized inquiries into whether an

employee had a required break on a specific day is relevant to

damages, and “[t]he fact that individual [employees] may have

different damages does not require denial of the class

certification motion.” (Jaimez v. Daiohs USA, Inc. (2010) 181

Cal.App.4th 1286, 1301.)

In Faulkinbury, supra, 216 Cal.App.4th at page 237, the

defendant submitted declarations from employees in opposition to

a motion for class certification. “Some declarations stated the

employee was relieved of duties in order to take off-duty rest

breaks; other declarations stated breaks were taken during

periods of inactivity; at least one declaration stated the employee

determined, based on the circumstances, when to take a rest

break; and another declaration stated the employee frequently

took rest breaks at her post.” (Ibid.) The court explained that “in

light of Brinker, this evidence at most establishes individual

issues of damages, which would not preclude class certification”

and that the defendant’s “liability, if any, would arise upon a

finding that its uniform rest break policy, or lack of policy, was

43

unlawful.” (Ibid.) Similarly, because the trial court in this case

found that plaintiffs had made a showing that Wackenhut had a

policy or practice of not providing off-duty rest breaks, anecdotal

evidence that some employees had valid off-duty rest breaks does

not preclude class certification; rather, it is evidence that is

relevant to damages.

Determining whether restrictions placed on class members’

rest breaks made them “on-duty” also is amendable to classwide

treatment. A DLSE opinion letter of February 2, 2002 explains

that the 10-minute rest break must be consecutive and must be

“duty-free.” (DLSE Opinion Letter of Feb. 2, 2002, Re: Rest

Period Requirements.)11 However, unlike meal periods, there is

no “on-duty” exception for rest breaks. Thus, whether the

restrictions Wackenhut placed on rest break made them “on-

duty” (for example, requiring employees to remain “on-call”) does

not require individualized inquires; rather, it is a merits question

that can be resolved on a classwide basis. (See Brinker, supra,

53 Cal.4th at p. 1034 [whenever possible, courts should

“determine class certification independent of threshold questions

disposing of the merits”].) Similarly, plaintiffs’ theory that

employees who were required to work on-duty for their meal

periods, also were required to remain on-duty for rest breaks is a

merits question that can be resolved on a classwide basis.

11

The Supreme Court has granted review in Augustus v.

ABM Security Services, Inc., review granted April 29, 2015,

S224853, in which the certified issues are (1) whether Labor Code

section 226.7 and IWC wage order 4-2001 require that employees

be relieved of all duties during meal breaks, and (2) whether

security guards who remain on call during rest breaks are

“performing work” during that time under the analysis in

Mendiola v. CPS Security Solution, Inc. (2015) 60 Cal.4th 833.

44

The trial court distinguished the facts of this case from

Brinker, explaining that in Brinker “there was no dispute that

the policy and the practice were one and the same. By contrast,

Wackenhut denies that the written documents Plaintiffs focus on

[the FLSA policy and the 2008 addendum] represent the full

extent of the rest periods that it provided to class members.” The

court found that evidence in the record supported Wackenhut’s

position that although its written policies only provided guidance

regarding the requirements of the FLSA, each region

supplemented the policy with local requirements. As support, the

court cited to deposition testimony from Michael Goodboe,

Wackenhut’s vice-president of human resources. Goodboe

testified that the FLSA policy contained only “‘a basic policy’ that

was ‘not exhaustive in the sense that it’s a policy for everybody

everywhere.’” “Rather, Wackenhut ‘offices would be expected to

add to it’ because ‘there are state and local . . . enhancements to

the legislation.’” The court also explained that “contrary to

Plaintiffs’ contention, . . . Mr. Goodboe did not testify that there

were no enhancements for California, but only that he was

personally unaware of the California enhancements.”

Accordingly, the court found that plaintiffs failed to prove, and

Wackenhut had not conceded, that its written guidance

concerning the FLSA represented the full extent of the rest

periods that it authorized in California.

At class certification, plaintiffs presented deposition

testimony from Wackenhut managers that the trial court credited

as establishing that Wackenhut had a policy of not providing off-

duty rest breaks. Wackenhut did not present evidence rebutting

plaintiffs’ evidence and has not shown that it had an informal

policy or practice of authorizing and permitting employees to take

45

10-minute rest breaks. (See Brinker, supra, 53 Cal.4th at p. 1033

[employer is required to permit and authorize required rest

breaks, and if it adopts uniform policy that does not do so, then

“it has violated the wage order and is liable”]; see also Bufil,

supra, 162 Cal.App.4th at p. 1199 [onus is on employer to clearly

communicate authorization and permission to employees].)

Wackenhut may rebut plaintiffs’ evidence of a lack of policy

authorizing and permitting rest breaks by providing evidence of a

uniform policy or practice. However, while Mr. Goodboe did not

testify that there are no enhancements for California, he did

testify that he was unaware of any California enhancements, and

Wackenhut has not presented any other evidence demonstrating

that there were in fact California enhancements authorizing and

permitting rest breaks. Anecdotal evidence that some employees

had rest breaks goes to damages and is not evidence of a uniform

policy or practice. (Faulkinbury, supra, 216 Cal.App.4th at p.

237.) Further, Wackenhut’s defense that it had a policy or

practice authorizing rest breaks is susceptible to classwide

resolution. (See Bradley, supra, 211 Cal.App.4th at p. 1150

[plaintiffs’ theory that employer lacked rest break policy and

failed to authorize breaks are matters of common proof—

although employer could potentially defend claims by arguing it

had informal or unwritten rest break policy, this defense is also

matter of common proof].)

C. Wage Statement Claim

Labor Code section 226, subdivision (a) provides: “[e]very

employer shall, semimonthly or at the time of each payment of

wages, furnish each of his or her employees . . . an accurate

itemized statement in writing showing (1) gross wages earned, (2)

total hours worked by the employee . . . (6) the inclusive dates of

46

the period for which the employee is paid . . . , and (9) all

applicable hourly rates in effect during the pay period and the

corresponding number of hours worked at each hourly rate by the

employee.”

Pursuant to Labor Code section 226, subdivision (e)(1), an

employee who suffers injury “as a result of a knowing and

intentional failure by an employer to comply with subdivision (a)

is entitled to recover the greater of all actual damages or fifty

dollars ($50) for the initial pay period in which a violation occurs

and one hundred dollars ($100) per employee for each violation in

a subsequent pay period, not to exceed an aggregate penalty of

four thousand dollars ($4,000), and is entitled to an award of

costs and reasonable attorney’s fees.”

An employee is deemed to suffer injury for purposes of

Labor Code section 226, subdivision (e)(2)(B) “if the employer

fails to provide accurate and complete information as required”

by subdivision (a), items (1) to (9) “and the employee cannot

promptly and easily determine from the wage statement alone”

the inclusive dates of the period for which the employee is paid or

the applicable hourly rates in effect during the pay period and

the corresponding number of hours worked at each hourly rate by

the employee. (Ibid.)

In support of class certification, plaintiffs advanced two

theories of liability regarding wage statements. First, that wage

statements provided by Wackenhut lacked three items required

by Labor Code section 226, subdivision (a): the inclusive dates of

the pay period, regular rates of pay, and overtime rates of pay

and second, that the wage statements failed to include premium

wages earned for missed meal and rest breaks. The court

originally granted class certification on the itemized wage

47

statement claim, pursuant to plaintiffs’ second theory of liability,

finding the claims were derivative of plaintiffs’ meal and rest

break claims.

In its decertification order, the trial court explained that

because the wage statement claim was derivative and individual

issues now predominated with respect to the meal and rest break

claims, the wage statement claim was no longer suitable for class

treatment. The court also found that plaintiffs’ first theory of

liability was not suited for class treatment because “[a]lthough

determining whether Wackenhut’s wage statements contained

the required elements under Labor Code section 226(a) is a

common question, proving that a required element was missing

does not automatically establish liability. Instead, Plaintiffs

must also prove that class members suffered injury as a result of

the defect.” The order went on to explain that plaintiffs had not

identified a way in which the injury element could be proven on a

classwide basis, “other than by making the unwarranted

assumption that a mathematical injury necessarily results

whenever a wage statement is deficient (which, if accepted would

render Labor Code section 226(e)’s injury requirement

meaningless).”

Subsequent to the court’s order, the Legislature enacted

Senate Bill No. 1255 to clarify what constitutes “suffering injury”

for purposes of Labor Code section 226. (Sen. Com. on Judiciary,

Analysis of Sen. Bill No. 1255 (2011-2012 Reg. Sess.) as amended

Apr. 30, 2012, p. 1.) The legislative history of this statute is

instructive. The enacting statute was a response to the

“contradictory and inconsistent interpretations of what

constitute[d] ‘suffering injury’ under Labor Code section 226 in

the various court cases that ha[d] been litigated in recent years,”

48

which the Legislature found “threaten[ed] effective public and

private enforcement of, and compliance with, wage statement

requirements.” (Sen. Rules Com., Off. of Sen. Floor Analyses,

analysis of Sen. Bill No. 1255 (2011-2012 Reg. Sess.) as amended

Aug. 23, 2012, p. 6; Sen. Com. on Judiciary, Analysis of Sen. Bill

No. 1255 (2011-2012 Reg. Sess.) as amended Apr. 30, 2012, p. 4.)

The bill, codified in Labor Code section 226, subdivision

(e)(2)(B), clarifies that injury for purposes of recovery under

subdivision (e)(1) is established if “the employee cannot promptly

and easily determine from the wage statement alone” the

inclusive dates of the period for which the employee is paid or the

applicable hourly rates in effect during the pay period and the

corresponding number of hours worked at each hourly rate by the

employee.

Accordingly, we conclude that plaintiffs’ wage statement

claim is amenable to class treatment under both of plaintiffs’

theories of liability. First, the question whether Wackenhut’s

wage statements contained the required elements under Labor

Code section 226, subdivision (a) is a common question, and

Labor Code section 226, subdivision (e)(2)(B)(i) clarifies that

injury arises from defects in the wage statement, rather than

from a showing that an individual experienced harm as a result

of the defect. “An amendment which merely clarifies existing law

may be given retroactive effect even without an expression of

legislative intent for retroactivity. [Citations.]” (Negrette v.

California State Lottery Com. (1994) 21 Cal.App.4th 1739, 1744;

see also Sandoval v. M1 Auto Collisions Centers (N.D. Cal. 2015)

309 F.R.D. 549, 568 [whether defendants’ statements were

inaccurate and injured plaintiffs under Lab. Code, § 226 presents

common questions].) Second, because plaintiffs’ meal and rest

49

period claims are suitable for class treatment, their theory that

the wage statements failed to include premium wages earned for

missed meal and rest periods also is suitable for class treatment.

DISPOSITION

The order is reversed, and the case is remanded as to off-

duty meal break, rest brake, and wage statement issues, and for

further proceedings consistent with this opinion. Appellants are

entitled to their costs on appeal.

CERTIFIED FOR PUBLICATION.

EPSTEIN, P. J.

We concur:

WILLHITE, J.

MANELLA, J.

50