Beaty v. Union Bank N.A. (In re Union Bank Wage & Hour Cases)

• Decision Date: 09 October 2020
• Docket Number: B295835
• Court: California Court of Appeals
• Parties: UNION BANK WAGE AND HOUR CASES (Coordinated) TIMOTHY BEATY, Plaintiff and Appellant, v. UNION BANK N.A. et al., Defendants and Respondents.

UNION BANK WAGE AND HOUR CASES (Coordinated)

TIMOTHY BEATY, Plaintiff and Appellant, v. UNION BANK N.A. et al., Defendants and Respondents.

B295835

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FOUR

October 9, 2020

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. Nos. BC596544 JCCP4866)

APPEAL from an order of the Superior Court of Los Angeles County, Ann I. Jones, Judge. Affirmed.

Matern Law Group, Matthew J. Matern, Andrew J. Sokolowski and Tagore O. Subramaniam for Plaintiff and Appellant.

Sheppard, Mullin, Richter & Hampton, Derek R. Havel, Matthew A. Tobias, Hilary A. Habib and Natasha L. Domek for Defendants and Respondents.

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INTRODUCTION

Plaintiffs and appellants Timothy Beaty and Natasha Cruz separately filed class action lawsuits asserting wage and hour claims against their former employer, defendant and respondent MUFG Union Bank, N.A., formerly known as Union Bank, N.A. (Union Bank). After their actions were coordinated, plaintiffs sought to certify an overarching class of all non-exempt employees who worked at defendant's California call centers at any time between October 2, 2011 and the date of class certification. Plaintiffs also sought to certify several subclasses of non-exempt employees; five of those subclasses are at issue here.

The "Minimum Wage and Overtime" subclass included customer service representatives (CSRs) allegedly subject to a policy denying them pay for time they spent logging into and out of their computers. The "On-Premises Rest Period" subclass included CSRs allegedly subject to a policy prohibiting them from leaving the premises during their rest periods. The "Third Rest Period" and "Second Meal Period" subclasses included CSRs allegedly subject to policies denying them a third rest period and second meal period during shifts exceeding 10 hours. Finally, the "Derivative Claims" subclass included all CSRs; plaintiffs alleged defendants would be liable to this subclass if any of plaintiffs' other theories prevailed.

The trial court denied class certification. It concluded that plaintiffs failed to carry their burden of demonstrating a well-defined community of interest because individual questionspredominated as to each of the substantive subclasses, plaintiffs were not typical of the Third Rest Period and Second Meal Period subclasses, and plaintiffs were not adequate representatives of all three meal and rest period subclasses. The trial court further concluded that plaintiffs failed to demonstrate that a class action was a superior and manageable means of adjudicating their claims.

Plaintiffs contend the trial court erred in declining to certify their proposed subclasses. They contend the trial court erroneously concluded there was no substantial evidence of a uniform policy requiring off-the-clock work by the Minimum Wage and Overtime Subclass, disregarded their policy-based theories of liability for the rest and meal period subclasses, erroneously concluded that plaintiffs were not typical or adequate representatives for the rest and meal period subclasses, and erred in rejecting their proposed trial plan as unmanageable.

We affirm. Although the trial court erred in connection with some of its predominance and adequacy determinations, its typicality finding was appropriate. Additionally, the trial court's conclusion that plaintiffs failed to demonstrate that their claims and defenses thereto could be managed efficiently at trial was supported by the record and well within the trial court's discretion.

FACTUAL BACKGROUND

Defendant is a bank that serves individual and business customers. Defendant formerly operated customer service call centers in Brea and Monterey Park; it relocated those call centers outside of California in approximately June 2014. Plaintiff Timothy Beaty worked as a CSR at the call centers between 2007 and January 4, 2013. Plaintiff Natasha Cruz worked as a CSRand online banking specialist at the call centers beginning in November 2005, and ended her career with Union Bank as a senior teller in Tehachapi on July 5, 2013.

CSRs who worked in the call centers were responsible for taking inbound calls from Union Bank customers. CSRs used computers and at least five different software programs to perform their duties; they had to log in to the computers and the programs at the beginning of their shifts. One of the software programs, Softphone, was used to route, handle, and track customer calls.

To ensure that calls were routed to available representatives, CSRs updated their "agent states" in Softphone throughout the day. Agent states included "Logged Out," "Call Inbound," "Call Outbound," "Wait for Next Call," "Not Ready for Next Call," "Call on Hold," and "After Call Work." CSRs could select a reason explaining at least some of the agent states from a drop-down menu. Reasons included "Email," "Training," "Meeting," "Project," "Coaching," "System Problem," "Break," and "Lunch." All of a CSR's daily log-ins, agent state updates, and log-outs in Softphone were recorded in an "Agent States Report."

Despite the detailed nature of the Agent States Reports, defendant did not use them to record employees' work time or for other payroll purposes.¹ Instead, defendant relied on separate time cards, which were handwritten until approximately December 14, 2013 and computerized thereafter. Employeesmanually completed the time cards under both systems, and were required to verify that their time entries were accurate. Defendant submitted several declarations indicating there was no such verification requirement for the entries made on Softphone. The employees who provided those declarations asserted they "did not need to track exactly which activity I was engaged in or be as precise as I was when filling out my timecards."

Defendant had written policies addressing timekeeping and punctuality. They will be discussed below, along with defendant's rest and meal period policies.

PROCEDURAL HISTORY

I. Complaints and Coordination

On October 2, 2015, plaintiff Beaty filed a wage and hour class action against defendant in Los Angeles Superior Court. Beaty's complaint asserted nine causes of action against defendant: failure to provide required meal periods, failure to authorize and permit required rest breaks, failure to pay overtime wages, failure to pay the minimum wage, failure to pay all wages due to separating employees, failure to maintain required records, failure to furnish accurate itemized wage statements, failure to indemnify employees for necessary expenditures incurred in the discharge of their duties, and unfair and unlawful business practices. Beaty filed a first amended complaint asserting the same causes of action on January 29, 2016.

On October 8, 2015, six days after Beaty filed his original complaint, plaintiff Cruz filed a similar class action complaint against defendant in San Francisco Superior Court. She asserted five causes of action: failure to pay wages owed, failure to payovertime compensation, failure to maintain accurate records and provide itemized wage statements, failure to pay all wages due upon termination, and unfair and unlawful business practices.

Defendant filed a petition to coordinate the cases on March 21, 2016. The Judicial Council granted the petition, and the coordinated proceeding was assigned to Los Angeles Superior Court in August 2016.

II. Motion for Class Certification

Plaintiffs jointly moved for class certification on March 2, 2018. They sought to certify a class of "All non-exempt employees who worked at one of Defendants'² call centers in California at any time between October 2, 2011 and the date of class certification, as determined by Defendants' records." Plaintiffs also sought to certify seven subclasses, including the five at issue in this appeal. Defendant opposed the motion.

A. Minimum Wage and Overtime Subclass

1. Plaintiffs' Arguments and Evidence in Support

Plaintiffs alleged defendant violated Labor Code sections 510 and 1194 by failing to pay class members for all hours worked. Specifically, they alleged they were required to be logged in to their computers and software programs and ready to take calls the moment their shifts started, which necessitated logging in prior to the start of their shifts. Similarly, they alleged they were required to remain ready to take calls until their shifts ended, and therefore had to log out of their computers and software programs after their shifts ended. Plaintiffs alleged theywere not paid for the time they spent logging in and logging out of their computer systems, which defendant's PMK testified was "actually work time." Plaintiffs sought to certify a Minimum Wage and Overtime subclass of "All non-exempt employees who worked as a customer service representative at one of Defendants' call centers in California at any time between October 2, 2011 and the date of class certification, as determined from Defendants' records."

To support certification of this class, plaintiffs cited the "Attendance & Punctuality" policy contained in defendant's 2006 Employee Handbook. It stated in relevant part: "Good attendance and punctuality are expected of employees at Union Bank. You are responsible for adhering to your scheduled hours. Frequent or excessive absences or tardiness create a hardship for your branch or department and should be avoided. Nonexempt employees should arrive ready for work at their scheduled starting time, return from lunch and breaks promptly, and work until the work period ends." In connection with a subclass not currently at issue, and in their appellate briefing concerning this subclass, plaintif...