Rodriguez v. Taco Bell Corp.

• Decision Date: 18 July 2018
• Docket Number: No. 16-15465,16-15465
• Citation: 896 F.3d 952
• Parties: Bernardina RODRIGUEZ, on behalf of herself, all others similarly situated, and the general public, Plaintiff-Appellant, v. TACO BELL CORP., a California corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

896 F.3d 952

Bernardina RODRIGUEZ, on behalf of herself, all others similarly situated, and the general public, Plaintiff-Appellant,

v.TACO BELL CORP., a California corporation, Defendant-Appellee.

No. 16-15465

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 7, 2017, San Francisco, California

Filed July 18, 2018

H. Scott Leviant (argued) and Shaun Setareh, Setareh Law Group, Beverly Hills, California, for Plaintiff-Appellant.

Nora K. Stiles (argued) and Tracey A. Kennedy, Sheppard Mullin Richter & Hampton LLP, Los Angeles, California; Morgan P. Forsey, Sheppard Mullin Richter & Hampton LLP, San Francisco, California; for Defendant-Appellee.

Before: Mary M. Schroeder and N. Randy Smith, Circuit Judges, and Sara Lee Ellis,^* District Judge.

SCHROEDER, Circuit Judge:

This case is about the meal breaks that California law requires an employer provide to employees after they have worked a certain number of hours. The Plaintiff-Appellant, Bernardina Rodriguez ("Plaintiff"), was for many years a restaurant employee of the Defendant-Appellee, Taco Bell Corp. ("Taco Bell"). During that time Taco Bell offered thirty-minute meal breaks that were fully compliant with California’s requirements, but with a special offer that employees could purchase a meal from the restaurant at a discount, provided they ate the meal in the restaurant. That policy was intended to prevent theft. Employees were not required to purchase the discounted meal. The purchase was voluntary. Plaintiff filed this putative class action contending that she was entitled to be paid a premium rate for the time spent on the employer’s premises eating the discounted meals during her meal breaks. Her theory is that because the employer required the discounted meal to be eaten in the restaurant, the employee was under sufficient employer control to render the time compensable.

The district court agreed with Taco Bell that California law was not violated because the employees were free to use the thirty minutes in any way they wished, subject only to the restriction that if they purchased a discounted meal, they had to eat it in the restaurant. We affirm. Taco Bell relieved their employees of all duties during the meal break period and exercised no control over their activities within the meaning of California law.

Background

Plaintiff worked for Taco Bell in its restaurant in Suisun City, California, from approximately August 2005 to December 2012. She was a "Team Member" whose duties included preparing and cooking food and cleaning. She received a copy of the Taco Bell Restaurant Orientation Handbook ("Handbook") that, along with other descriptions of various applicable procedures and policies, set forth the company’s discounted meal policy; it was contained in the Handbook section entitled "Rules for Rest Breaks, Meal Periods & Discounted Meals."

The introduction to that section stated that "[e]veryone needs and deserves a rest break or meal period when working. Taco Bell wants you to feel refreshed and productive while you work by following a few simple rules." The rules required employees take rest breaks and meal periods away from "[t]he food production area" and "[t]he cash register service area." The policy then provided that Taco Bell employees could receive discounted meals and complimentary drinks, provided employees observed the following rules:

When you work a shift of two (2) or more hours, you may eat one (1) discounted meal. Follow these rules:

• You can receive a discounted meal immediately before, during or after your shift.

• You must eat your discounted meal in the restaurant.

• You must go to the front counter and place your order as a Guest.

• You and your manager must sign the register receipt and place the signed receipt in the cash register drawer.

It is not disputed that the purchase of the discounted meals was on a voluntary basis, and that there was no requirement that employees ever purchase Taco Bell products. A Taco Bell representative explained the purpose of the discounted meal policy was to provide the meal as a benefit that employees could choose to take advantage of each shift. The requirement that the meal be eaten on the premises was to ensure that the benefit was utilized only by employees and that the food did not leave the premises to be given to friends and family. In other words, employees had to consume the discounted food in the restaurant to prevent theft. The policy apparently was popular. The Plaintiff availed herself of a discounted meal almost every shift, and brought lunch from home only about once a month.

Plaintiff filed this action in California State Court on May 16, 2013, and Taco Bell removed it to federal district court. The crux of Plaintiff’s theory is that Taco Bell’s on-premises discount policy subjected the employees to sufficient employer control to render the time employees spent consuming the meals as working time under California law. Plaintiff’s operative complaint alleges that Taco Bell violated California law by: (1) failing to provide uninterrupted, duty-free meal periods, or premium wages in lieu thereof; (2) failing to provide rest periods, or premium wages in lieu thereof; (3) failing to calculate regular hourly and overtime wages at a rate that reflected the value of the discount; (4) failing to provide accurate written wage statements; and (5) failing to timely pay all final wages to employees upon end of their employment with Taco Bell.

The district court granted summary judgment for Taco Bell on the first two claims. The court observed that under the discounted meal policy, employees were free to use the meal break time as they wished, and that a requirement to remain on the premises was imposed only if an employee voluntarily chose to purchase a discounted meal. Imposition of that condition does not satisfy the applicable test of control under California law as set forth in the leading California Supreme Court decision, Brinker Restaurant Corp. v. Superior Court , 53 Cal.4th 1004, 139 Cal.Rptr.3d 315, 273 P.3d 513 (2012). The district court denied Plaintiff’s motion for summary judgment on the third claim, the regular rate claim, on the ground that Plaintiff failed to provide any evidence of the reasonable cost or fair value to Taco Bell of the employee discount. The district court denied Plaintiff’s motion for summary judgment on her remaining claims on the ground that they were derivative of her other claims.

Appellate Jurisdiction

There is a threshold jurisdictional issue. When the district court granted summary judgment in October 2014 to Taco Bell on most of Plaintiff’s claims, the court also denied Plaintiff’s motion for summary judgment on the regular rate claim, so that it remained pending.

On March 2, 2016, Plaintiff requested "the Court dismiss with prejudice the [regular rate] claim[ ] that remained in th[e] case after the Court’s October 23, 2014 summary judgment order." The court did so and its dismissal resulted in a final judgment. We have jurisdiction pursuant to 28 U.S.C. § 1291, which grants an appeal as of right from a final judgment. See Concha v. London , 62 F.3d 1493, 1507–09 (9th Cir. 1995) (recognizing that a voluntary dismissal with prejudice of all remaining claims results in an appealable final judgment permitting review of all earlier orders).

That result is not affected here by the Supreme Court’s subsequent decision in Microsoft Corp. v. Baker , ––– U.S. ––––, 137 S.Ct. 1702, 198 L.Ed.2d 132 (2017). That case involved an attempt to use the voluntary dismissal mechanism to obtain an appeal as of right in order to review an earlier denial of class certification. The Supreme Court held the denial of class certification was not reviewable because plaintiffs had already been denied a discretionary appeal pursuant to Federal Rule of Civil Procedure 23(f). See Baker , 137 S.Ct. at 1714–15 ("If respondents’ voluntary-dismissal tactic could yield an appeal of right, Rule 23(f) ’s careful calibration ... would be severely undermined.") (citation and internal quotation marks omitted). This case does not involve an attempt to obtain review of a class certification issue. As we recognized in our post- Baker decision in Brown v. Cinemark USA, Inc. , 876 F.3d 1199, 1201 (9th Cir. 2017), a voluntary dismissal of remaining claims can render the earlier interlocutory order appealable, so long as the discretionary regime of Rule 23(f) is not undermined.

Since this is an appeal seeking review of a partial summary judgment order, not a class-certification denial, our decision in Brown , as well as our pre- Baker decision in Concha , control, and Plaintiff’s dismissal with prejudice creates a valid final judgment for purposes of 28 U.S.C. § 1291.

The Discounted Meal Policy

California requires non-exempt employees be afforded rest breaks and meal periods after working a certain number of hours. See Cal. Labor Code §§ 226.7, 512. Relevant to this case is the requirement that employees who work more than five hours in a day be afforded a meal period of "not less than 30 minutes." Id. § 512(a). Employees who work more than ten hours in a day must be provided a second meal period of the same duration. Id.

The applicable regulation governing meal periods, rest breaks, and overtime pay in the restaurant industry, California Wage Order 5–2001 ("Wage Order 5"), requires employees be relieved of "all duty" during the meal period. Cal. Code Regs., tit. 8, § 11050, subd. 11(A). It provides, in relevant part, that:

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.

Id . The remedy for failure to provide a meal or rest break required by statute or...