Articles from January 2019

Last November, a California federal court rejected Wal-Mart’s effort to decertify a class of employees who took late meal breaks or missed their meal breaks and were not paid adequately by Wal-Mart. Magadia v. Wal-Mart Associates, Inc., No. 17-CV-00062-LHK (N.D. Cal. Nov. 13, 2018) (slip op. available here). The court refused to disturb the prior certification order because the employer’s records, which included codes it generated after its investigation of a missed or late meal period, enabled the court to evaluate Wal-Mart’s liability on a class-wide basis. Slip op. at 8. Plaintiff employees should note that, following this example, certain employer records can be effectively used to answer the question of why meal periods were missed and avoid the need for an individualized, factual inquiry into the violations.

Earlier, the district court had certified three classes: a meal period class, an overtime/wage statement class, and a final wage statement class. Wal-Mart sought to decertify solely the meal period class. Under California law, employers may not employ employees for a work period of more than five hours per day without providing a 30-minute meal period. Cal. Lab. Code § 512(a). Pursuant to the Labor Code, when an employer fails to provide a meal period to an employee in accordance with state law, it must pay the employee one additional hour of pay at the employee’s regular rate of compensation—a meal period premium. Cal. Lab. Code § 226.7(c). The plaintiff alleged that, while Wal-Mart pays meal period premiums for non-compliant meal periods, the premiums are inadequate because they are paid at a straight hourly rate rather than at a higher, regular rate. The district court had certified the meal period class because it found that common questions predominated over individualized inquiries with respect to Wal-Mart’s liability to class members “because Wal-Mart’s own records ‘document why each meal exception [i.e., a late or missed meal period] happened.’” Slip op. at 8. In other words, “because Wal-Mart investigates and documents why each meal exception happened, ‘it would not be difficult to determine [Wal-Mart’s] liability to individual plaintiffs.’” Slip op. at 9.

Indeed, Wal-Mart’s practice included conducting an investigation, where its managers or human resource officials met with employees to determine why the meal period exception occurred, and then issuing Exception Management System (“EMS”) codes that Wal-Mart used to categorize the meal period exceptions. For certification, the district court found that such records could be used to extrapolate “whether each meal period premium that was paid to a class member was prompted by an actual failure by Wal-Mart to provide a compliant meal period.” Slip op. at 7.

In moving for decertification, Wal-Mart claimed that its investigations of meal period exceptions focused on documenting associate allegations rather than whether a meal premium was legally required. Wal-Mart contended that its own investigation worksheets were not reliable for determining whether or not Wal-Mart prevented a proper meal period; therefore, individual inquiries would predominate. The plaintiff argued that Wal-Mart’s own testimony demonstrated that it conducted significant and detailed investigations of meal period exceptions, logging the results, and it could not discredit its own documents. Ultimately, the district court denied Wal-Mart’s motion for decertification, finding that “[t]he evidence submitted . . . continues to demonstrate that Wal-Mart’s own records—specifically, the EMS codes generated after a meal period exception investigation—enable the Court to evaluate Wal-Mart’s liability to class members ‘on a class-wide basis,’ which warrants certification.” Slip op. at 8. Wal-Mart’s records appear to answer the question of why meal periods were missed and obviate the need for any heavily factual inquiry into the particular circumstances of each class member. Slip op. at 11.

Although decertification was improper, the district court nonetheless concluded that the question of the significance of Wal-Mart’s records could be revisited at the merits stage. For now, however, the certification order stands and the class’s “claims will ‘prevail or fail in unison,’ as required by Rule 23(b)(3).’” Id. Thus, a large class of Wal-Mart employees was able to utilize the employer’s records to support their theory of liability and could continue to proceed with their claims that the employer underpaid them for non-compliant meal breaks.

Authored By:
Liana Carter, Senior Counsel
CAPSTONE LAW APC