Batze v. Safeway, Inc.

• Decision Date: 04 April 2017
• Docket Number: B258732
• Citation: 216 Cal.Rptr.3d 390,10 Cal.App.5th 440
• Court: California Court of Appeals Court of Appeals
• Parties: Gary BATZE et al., Plaintiffs and Appellants, v. SAFEWAY, INC., et al., Defendants and Respondents.

10 Cal.App.5th 440

216 Cal.Rptr.3d 390

Gary BATZE et al., Plaintiffs and Appellants,

v.SAFEWAY, INC., et al., Defendants and Respondents.

B258732

Court of Appeal, Second District, Division 4, California.

Filed April 4, 2017

As Modified on Denial of Rehearing May 3, 2017

Daniels, Fine, Israel, Schonbuch & Lebovits, Paul R. Fine, Scott A. Brooks and Craig S. Momita, Los Angeles; Law Offices of Ian Herzog and Ian Herzog, Santa Monica; Law Offices of Stephen Glick and Stephen Glick, Los Angeles, for Plaintiffs and Appellants.

Littler Mendelson, J. Kevin Lilly, Los Angeles, R. Brian Dixon, San Francisco, and Philip L. Ross, Walnut Creek, for Defendants and Respondents.

MANELLA, J.

Appellants Gary Batze, Carlo Cesar and Justin Hayes brought suit against their employer, Safeway, Inc. and The Vons Companies, Inc. for failure to pay overtime wages.¹ Appellants claimed that in their positions as First and Second Assistant Managers (AMs) for respondent's stores they had been required to work long hours performing such non-managerial tasks as stocking shelves, checking customers' purchases and building product displays. After weeks of trial and the testimony of dozens of witnesses, the trial court ruled, for the most part, in respondent's favor, finding that appellants were engaged for more than 50 percent of their work week in managerial tasks, and that they met all the other qualifications to be exempt from the overtime rules. The court also ruled that during the five-month period when Batze and Hayes replaced striking hourly workers, they continued to be exempt employees. Finally, the court ruled that only those claims arising within the four years preceding appellants' respective complaints were cognizable, and declined to apply equitable tolling to relate their claims back to the filing of a proposed class action for which certification had been denied.

Appellants contend the court's findings that they spent the majority of their time at work engaged in managerial activities during the four-year period at issue was not supported by substantial evidence. Specifically, they contend that an employee's ratio of exempt to non-exempt activities must be determined on a week-by-week basis, that no inferences may be drawn from the employee's activities in surrounding weeks, and that because the employer bears the burden of proof, for any specific week in which no defense witness observed appellants' actions at work the court should have found in appellants' favor. We reject that contention and conclude the court drew reasonable inferences from the witnesses' testimony and other evidence that established how appellants spent the majority of their time.

Appellants also contend the court improperly found that the strike period constituted an emergency that permitted respondent to assign managerial employees to non-exempt tasks without losing their exempt status. We affirm the court's decision.

Finally, appellants contend the trial court erred in ruling that the statute of limitations precluded them from raising claims based on periods of employment more than four years prior to the filing of each of their complaints. We conclude the trial court reasonably found that the filing of the class action did not toll the statute of limitations.

FACTUAL AND PROCEDURAL BACKGROUND

A. Background Facts

In July 2002, a putative class action was filed by Peter Knoch and Jason Ritchey (the Knoch action) on behalf of all store managers and AMs employed by respondent. The claims included failure to pay overtime wages and violation of the unfair competition law (Bus. & Prof. Code, § 17200 et seq., UCL).² The motion for class certification was filed in November 2006. Class certification was denied in July 2007; the order denying certification was entered in September 2008.

Appellant Gary Batze, who had been a Second AM for respondent, filed his complaint for unpaid wages in February 2006. Appellants Carlo Cesar and Justin Hayes, who had been First AMs, filed their complaints in October 2008.³ Multiple other managerial employees filed related claims against respondent in 2005 and 2006. Appellants' claims were selected to be tried together.

B. Evidence at Trial⁴

1. Evidence Pertinent to Batze

a. Plaintiffs' Evidence

Batze worked for respondents from June 1987 through August 2006. In August 1998, he was promoted to a salaried managerial position at the Blackstone store.⁵ Between 2000 and 2006, he worked at the Clovis store, with a stint at Bakersfield and Lake Isabella stores during the five-month strike by union employees in 2003 and 2004. Throughout his tenure as a salaried employee, he was assigned to the night/early morning shift (4:00 a.m. to noon or 1:00 p.m.), and testified that he regularly worked 50 to 60 hours per week.

According to Batze, his primary duty was building and filling merchandise displays. He was given specifications as to the design of the displays, where they were to be placed in the store, and the merchandise to include, exercising little or no discretion. When products requiring display arrived, he might spend up to 12 hours in a single day moving pallets of products from the back room to the floor, physically tearing down the old displays and putting up the new ones. He also stocked shelves and was responsible for keeping the back room organized, which required him to personally move and stack pallets and merchandise some of the time. Although Batze was the sole managerial employee at the store during the late night hours and was titularly in charge, the night crew boss normally oversaw the hourly employees. Because few of his working hours took place when the store was open, he had little opportunity to supervise the clerks as they served customers. Batze estimated he spent 90 to 95 percent of his time as a Second AM "doing physical manual work."

Throughout the time Batze and the other appellants were employed by respondent, the stores were required to adhere to an "operating ratio" of sales to employee salary.⁶ In Batze's experience, meeting the operating ratio required salaried employees to perform the jobs of hourly workers because salaried employees could work overtime without causing the store to incur additional labor costs.

During the Southern California grocery clerks' strike that took place from October 2003 to the beginning of March 2004, Batze claimed to have worked at stores in Bakersfield and Lake Isabella for 14 to 16 hours a day for two or three weeks without a day off. He did everything the striking hourly employees would have done, except checking. He denied having responsibility for training the employees brought in to replace the striking workers.⁷

As a Second AM, Batze had no discretion over pricing, hours of operation, employee salary, the dress code, or the design and layout of stores. Batze was never enrolled in respondent's Retail Leadership Development (RLD) program.⁸ Batze did not deny that he performed some managerial tasks, including writing employee appraisals and preparing the work schedule for the night crew, but estimated he spent only a couple of hours a year writing appraisals and only 10 to 15 minutes a week writing the schedule. He acknowledged that he had discretion over the displays in "one [or] two" locations in the store, that he could add products he believed tied in to displays, and that at least some of the displays were built by vendors, under his supervision. Batze also was responsible for minimizing "out-of-stocks" (products carried by the store that sold out, leaving empty shelves) and for placing orders for the grocery department, which comprised the bulk of the store. Managing out-of- stocks required him to walk the aisles to see whether the store was low on any product, scan bar codes to trigger the warehouse to send more product, confirm that deliveries had come in, and work with the night crew to get products from the pallets on which they were delivered to the shelves. He used his discretion in taking tags off the shelves when he knew or believed the warehouse was out of the described products.

Batze called fellow employees, current and former, to support his claim. Thomas Moore, a store manager who worked with Batze from 1998 to 2000, testified Batze primarily built displays and stocked shelves, and that these were typical tasks for Second AMs during Moore's tenure with respondent (1967 to 2007). Debbie Lucio, a former Second AM who worked for respondent from 1990 to 2006, observed Batze building displays and working long hours when he was a Second AM. James Saubert worked with Batze at the Clovis store. From his observations, Batze appeared to be spending the majority of his time—90 percent, according to Saubert—building displays and stocking shelves. Saubert also observed Batze engaged in managerial tasks, such as talking to the receiver about organizing the back room and talking to the dairy manager about the status of orders. Tammy Baldridge worked with Batze from 1999 to 2006. She primarily observed him building displays. She took over the Second AM position when Batze left. She spent a significant part of her shifts "throw[ing] loads" (organizing products delivered to the back room) and building displays. Tom Dunehew worked as a Second AM for 12 years, and held that position at the Clovis store after Batze and Baldridge left. Dunehew testified that as a Second AM, he primarily built and filled displays and stocked shelves. Staci Dack worked with Batze at Clovis for six years. She recalled that Batze was at work before she arrived for her eight-hour shift and remained there after she left. She primarily observed him building displays or helping the night crew stock shelves.

2. Defense Evidence

Michelle Macaluso was the store manager who supervised Batze at the Clovis store from January 2004 to August 2006, when Batze left respondent's employ. The Clovis store was very large and busy. There were 115 to 125 employees, and weekly sales were approximately $600,000. It was open from 6:00...