Rainbow Group, Ltd. v. Johnson

• Decision Date: 04 March 1999
• Docket Number: No. 03-93-00431-CV,03-93-00431-CV
• Citation: 990 S.W.2d 351
• Parties: RAINBOW GROUP, LTD. and Alan Sager, Appellants, v. Josephine JOHNSON, Jennifer Casey, Seantel Wilmes and Ava Lott, Appellees.
• Court: Texas Court of Appeals

Page 351

990 S.W.2d 351

RAINBOW GROUP, LTD. and Alan Sager, Appellants, v. Josephine JOHNSON, Jennifer Casey, Seantel Wilmes and Ava Lott, Appellees.

No. 03-93-00431-CV.

Court of Appeals of Texas Austin.

March 4, 1999.

Released for Publication May 6, 1999.

Jennifer S. Riggs, Hill Gilstrap Adams & Graham, Austin, for Appellants.

Edward J. Tuddenham, Wiseman, Durst & Tuddenham, Austin, for Appellees.

Before Justices KIDD, PATTERSON and POWERS. ^*

KIDD, Justice.

Appellants, Rainbow Group, Ltd. and Alan Sager (collectively, "Rainbow Group"), bring this interlocutory appeal of an order certifying a class, represented by Josephine Johnson and others, of former and current hairstylists employed by Rainbow Group at the company's Supercuts stores. Class members allege that Rainbow Group breached the hairstylists' oral employment contracts by preventing them from clocking in during hours for which they were scheduled to work and refusing to pay them for attendance at mandatory store meetings. In six points of error, Rainbow Group charges the trial court with abuse of its discretion in (1) finding that the class is so numerous that joinder of all individual members is impracticable; (2) finding the required commonality necessary for maintenance of a class; (3) finding that the claims of the representative parties are typical of the claims of the class; (4) finding the named parties to be adequate representatives of the class; (5) finding that common questions of fact and law predominate; and (6) finding class certification to be a superior method of adjudicating the controversy. We will affirm the order of the trial court.

BACKGROUND

The underlying cause of action involves Rainbow Group's alleged breach of the employment contracts held by current and former hairstylists employed at Rainbow Group's Supercuts stores. ¹ Rainbow Group owns and operates a chain of hair care salons in several cities in Texas, including Abilene, Austin, San Angelo, and Tyler. Members of the hairstylist class claim that Rainbow Group failed to pay for all hours hairstylists were scheduled for work and required to be on the premises. In particular, the class members complain that (1) they were often prevented from "clocking in" at their scheduled work times if the stores were not sufficiently busy; and (2) they were not paid for attendance at mandatory employee meetings.

All hairstylists were employed on an at-will basis under individual, oral employment contracts. Although Rainbow Group did not provide a standard written employment contract, Supercuts had one employee manual, one employee orientation form and one set of employment policies applicable to all hairstylists. The Supercuts employee manual refers to Rainbow Group's clocking-in policy as follows:

Time Cards

Clocking in and Out is Mandatory!

Time cards are used as a means of accurately recording hours worked and calculating pay. They record regular hours worked, meal periods, overtime, absences, vacations and tips. Accordingly, employees should record the time they begin and end each work day, the beginning and end of each meal period, and the beginning and end of any split shift.

The dispute between Rainbow Group and the hairstylists involves alleged underpayment during 1988 and subsequent years. Members of the hairstylist class contend that store managers systematically refused to allow hairstylists to clock in at the beginning of their scheduled shifts, or after they had returned from lunch if there were not enough customers in the store. They allege that hairstylists had to wait on the premises, off the clock, until there were enough customers desiring hair cuts to justify paying the hairstylists' wages. The named plaintiffs, as well as the class as a whole, include hairstylists who sometimes acted as shift managers. Class members allege that they are entitled to compensation for the hours they were "held off the clock" and for hours they attended mandatory store meetings and were not paid.

Rainbow Group denies that there existed a policy to hold hairstylists off the clock and asserts that its policy was to pay hairstylists for attending all mandatory meetings.

Class members further contend that all employment contracts in Texas contain implicit requirements based upon the Fair Labor Standards Act, ² including the requirement that employees be paid for all hours they are required to be at work. Rainbow Group responds that the claims of the class must be based solely on Texas contract law or else the claims are removable to federal court. ³ The class contends that jurisdiction is proper because FLSA regulations are incorporated into Texas work contracts as a matter of law.

In June 1993, the trial court conducted a hearing to consider the hairstylists' motion to certify as a class all hairstylists employed by Rainbow Group since February 20, 1988. After hearing argument from both sides, the trial court certified the class. Rainbow Group brings this interlocutory appeal from the trial court's order certifying the class. ⁴

REQUIREMENTS OF CLASS CERTIFICATION

The plaintiffs have the burden of establishing their right to maintain an action as a class action, but an extensive evidentiary showing in support of a motion for class certification is generally not required. Morgan v. Deere Credit, Inc., 889 S.W.2d 360, 365 (Tex.App.--Houston [14th Dist.] 1994, no writ). Texas law favors class certification because a certified class may be amended or decertified at a later stage of the proceedings. Id. Texas Rule of Civil Procedure 42(a) sets out the following prerequisites for certification of a class action:

(1) the class is so numerous that joinder of all members is impracticable [numerosity ];

(2) there are questions of law or fact common to the class [commonality ];

(3) the claims or defenses of class representatives are typical of the claims or defenses of the class [typicality ]; and

(4) class representatives will fairly and adequately protect the interests of the class [adequacy of representation ].

Tex.R.Civ.P. 42(a).

An action may be maintained as a class action if the plaintiff establishes the four prerequisites of Rule 42(a), and proves at least one of the criteria for class maintenance in Rule 42(b). See Tex.R.Civ.P. 42(b); see also Forsyth v. Lake LBJ Inv. Corp., 903 S.W.2d 146, 149 (Tex.App.--Austin 1995, writ dism'd w.o.j.). The trial court certified this class under Rule 42(b)(4), finding "that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members [predominance ], and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy [superiority ]." See Tex.R.Civ.P. 42(b)(4).

The trial court found that the hairstylists met all the requirements of Rule 42(a). Moreover, the trial court found that the class also met the requirements of Rule 42(b)(4). Consequently, the trial court certified the class. Rainbow Group challenges the trial court's findings on each requirement of Rules 42(a) and 42(b)(4). We will address each of these criteria in turn.

STANDARD OF REVIEW

Our review of this cause is limited to a determination of whether the trial court abused its discretion in certifying the class. See Hutchins v. Grace Tabernacle United Pentecostal Church, 804 S.W.2d 598, 601 (Tex.App.--Houston [1st Dist.] 1991, no writ). A trial court has broad discretion in determining whether to grant or deny class certification, and an appellate court must not substitute its judgment for that of the trial court. American Express Travel Related Servs. Co. v. Walton, 883 S.W.2d 703, 707 (Tex.App.--Dallas 1994, no writ). Even if a trial court determines an issue differently than would an appellate court, the ruling does not necessarily constitute an abuse of discretion. Dresser Indus., Inc. v. Snell, 847 S.W.2d 367, 371 (Tex.App.--El Paso 1993, no writ) (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex.1985), cert. denied, 476 U.S. 1159, 106 S.Ct. 2279, 90 L.Ed.2d 721 (1986)); see also Vinson v. Texas Commerce Bank--Houston, 880 S.W.2d 820, 824 (Tex.App.--Dallas 1994, no writ). In determining whether a matter should be litigated as a class action, a trial court abuses its discretion if its decision is arbitrary, unreasonable or without reference to any guiding principles. Dresser Indus., 847 S.W.2d at 371. A trial court may also abuse its discretion by failing to apply the law to undisputed facts, but does not abuse its discretion if it bases its decision on conflicting facts. Vinson, 880 S.W.2d at 823.

In making its class certification decision, the trial court can consider the pleadings and other material in the record, along with any evidence presented at the hearing. Employers Cas. Co. v. Texas Ass'n of Sch. Bds. Workers' Compensation Self-Ins. Fund, 886 S.W.2d 470, 474 (Tex.App.--Austin 1994, writ dism'd w.o.j.). We view the evidence in the light most favorable to the trial court's action, entertaining every presumption that favors its judgment. Vinson, 880 S.W.2d at 823; see also Texas Dep't of Mental Health & Mental Retardation v. Petty, 778 S.W.2d 156, 160-61 (Tex.App.--Austin 1989, writ dism'd w.o.j); Brittian v. General Tel., 533 S.W.2d 886, 889 (Tex.Civ.App.--Fort Worth 1976, writ dism'd) (citing Richardson v. Kelly, 144 Tex. 497, 191 S.W.2d 857 (1945)).

DISCUSSION

Numerosity

In its first point of error, Rainbow Group contends that the trial court abused its discretion in certifying the hairstylists as a class because the class is not made up of sufficient numbers to require class certification. Rainbow Group specifically disagrees with the court's finding that the class consists of at least 400 current and former hairstylists. They argue that the total number of hairstylists employed is not determinative of the number affected and hence, eligible for inclusion in the class. Rainbow Group contends that actual...