Opinion
2d Civil No. B226399
08-31-2011
MARK WANEK, ET AL., Plaintiffs and Appellants, v. URS CORPORATION, A Nevada Corporation, Defendant and Respondent.
Garry M. Tetalman. Lauren John Udden, for Appellants. Sheppard, Mullin, Richter & Hampton, Jeffrey A. Dinkin and Aaron W. Heisler, for Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. 1221043)
(Santa Barbara County)
Mark P. Wanek, Clare Polansky, Eathan McIntyre, O. Kelly Murphy, and Scott Bajza appeal from the trial court's order denying their motion for class certification. Appellants are current and former employees of URS Corporation (URS). They sued URS for violations of state labor laws. Appellants sought certification for six subclasses of employees. The trial court denied certification because appellants had failed to show that common issues of law or fact predominate over issues affecting the individual class members. We affirm.
Factual and Procedural Background
"URS is a full-service engineering and environmental services company with operations throughout California and around the world. It provides consulting services, including environmental permitting, operational planning, regulatory compliance auditing, structural design and remediation of environmental contamination."
In February 2008 appellants filed a second amended complaint (the operative complaint) against URS. Appellants brought their action on behalf of three different classes of scientists who were currently working or had formerly worked for URS. The complaint alleged that URS had failed to (1) pay the minimum wage for all hours worked, (2) pay overtime compensation, (3) provide meal and rest breaks. Appellants' requested relief included the recovery of unpaid minimum wage compensation, unpaid overtime compensation, and unpaid meal and rest break premiums.
In August 2009 appellants filed a motion for the certification of six subclasses: (1) Class I Scientists (77 members); (2) Class II Scientists (86 members), (3) Class III Scientists (76 members), (4) the "Off-the Clock Subclass" (Class I, II, and III scientists "who were not paid for all hours worked"), (5) the "Meal Period Subclass" (Class I, II, and III scientists "who were not provided proper meal breaks"), and (6) the "Rest Break Subclass" (Class I, II, and III scientists "who were not provided proper rest breaks"). Appellants claimed that URS had misclassified the scientists as salaried employees who were exempt from state laws requiring minimum wage and overtime compensation and meal and rest breaks.
As to the three subclasses of scientists, the trial court denied certification because appellants had failed to show that the scientists within each subclass had "such similar duties that the exemption inquiry is likely to be susceptible to common proof." As to Class I Scientists, the court reasoned: "What is clear is that determination of exempt status will require individual analyses of each employee's duties and tasks and the nature of those duties and tasks." The trial court employed similar reasoning as to Class II and III Scientists.
As to the remaining three subclasses, the trial court declared: "Because the court cannot certify Classes I, II and III with respect to the exemption issue, it cannot certify the 'classes' of off-the-clock work, meal periods and rest breaks. Those are really not classes but claims to be applied to any certified class." The court, therefore, also refused to certify these subclasses.
Regulatory Background
Labor Code section 1173 "grants the IWC [Industrial Welfare Commission] a broad mandate to regulate the working conditions of employees in California, including the setting of standards for minimum wages and maximum hours. [Citation.] To that end, the IWC has promulgated 17 different wage orders that apply to distinct groups of employees. [Citation.] [¶] The wage order at issue in this case is IWC Wage Order No. 4-2001, the provisions of which are codified in California Code of Regulations, title 8, section 11040." (Combs v. Skyriver Communications, Inc. (2008) 159 Cal.App.4th 1242, 1253, fn. omitted.)
"IWC Wage Order No. 4-2001 . . . governs wages and hours of employees in 'Professional, Technical, Clerical, Mechanical, and Similar Occupations.' " (Combs v. Skyriver Communications, Inc., supra, 159 Cal.App.4th at p. 1253.) It provides, inter alia, for minimum wage and overtime compensation, meal periods, and rest periods. (Cal.Code Regs., tit. 8, § 11040, subds. 3, 4, 11, & 12.) But these provisions do "not apply to persons employed in administrative . . . or professional capacities." (Id., subd. 1(A).)
"A person employed in an administrative capacity" is defined in part as " 'any employee: [¶] (a) Whose duties and responsibilities involve . . . [¶] [t]he performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his employer's customers . . . ; and [¶] (b) Who customarily and regularly exercises discretion and independent judgment; and [¶] . . . [¶] (d) Who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; . . . and [¶] (f) Who is primarily engaged in duties that meet the test of the exemption.' " (Combs v. Skyriver Communications, Inc., supra, 159 Cal.App.4th at p. 1254, quoting from Cal.Code Regs., tit. 8, § 11040, subd. 1(A)(2).) " 'Primarily' . . . means more than one-half the employee's work time." (Cal.Code Regs., tit. 8, § 11040, subd. 2(N).)
"A person employed in a professional capacity" is defined in part as "any employee who meets all of the following requirements: [¶] (a) Who is licensed or certified by the State of California and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or [¶] (b) Who is primarily engaged in an occupation commonly recognized as a learned or artistic profession. . . . '[L]earned or artistic profession' means an employee who is primarily engaged in the performance of: (i) Work requiring knowledge of an advanced type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to any of the above work; . . . . [¶] (c) Who customarily and regularly exercises discretion and independent judgment in the performance of duties set forth in subparagraphs (a) and (b)." (Cal.Code Regs., tit. 8, § 11040, subd. 1(A)(3).)
The exemptions for persons employed in administrative or professional capacities apply only if an employee earns "a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment." (Cal.Code Regs., tit. 8, § 11040, subds. 1(A)(2)(g), 1(A)(3)(d).) The exemptions "are affirmative defenses, and thus an employer bears the burden of proving that an employee is exempt. [Citation.]" (Combs v. Skyriver Communications, Inc., supra, 159 Cal.App.4th at p. 1254.)
General Principles of Class Certification
"Code of Civil Procedure section 382 authorizes class actions 'when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court . . . .' The party seeking certification has the burden to establish the existence of both an ascertainable class and a well-defined community of interest among class members. [Citation.] The 'community of interest' requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class. [Citation.]" (Sav-on Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.)
The first factor - predominant common questions of law or fact - is at issue here. "[T]he proponent of certification must show, inter alia, that questions of law or fact common to the class predominate over the questions affecting the individual members . . . . [Citation.]" (Washington Mutual Bank, FA v. Superior Court (2001) 24 Cal.4th 906, 913.) " ' "Class actions will not be permitted . . . where there are diverse factual issues to be resolved, even though there may be many common questions of law." [Citation.] "[A] class action cannot be maintained where each member's right to recover depends on facts peculiar to his case." ' " [Citations.]" (Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223, 1231.) " '[I]f a class action "will splinter into individual trials," common questions do not predominate and litigation of the action in the class format is inappropriate. [Citation.]' [Citations.]" (Arenas v. El Torito Restaurants, Inc. (2010)183 Cal.App.4th 723, 732.)
Standard of Review
"We review the trial court's ruling for abuse of discretion." (Sav-on Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.) "Because trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, they are afforded great discretion in granting or denying certification. . . . [I]n the absence of other error, a trial court ruling supported by substantial evidence generally will not be disturbed 'unless (1) improper criteria were used [citation]; or (2) erroneous legal assumptions were made [citation]' [citation]." (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435-436.)
"Ordinarily, appellate review is not concerned with the trial court's reasoning but only with whether the result was correct or incorrect. [Citation.] But on appeal from the denial of class certification, we review the reasons given by the trial court for denial of class certification, and ignore any unexpressed grounds that might support denial. [Citation.]" (Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 843-844.)
"Evidence of even one credible witness 'is sufficient for proof of any fact.' (Evid.Code, § 411.) And 'questions as to the weight and sufficiency of the evidence, the construction to be put upon it, the inferences to be drawn therefrom, the credibility of witnesses . . . and the determination of [any] conflicts and inconsistency in their testimony are matters for the trial court to resolve.' [Citation.]" (Sav-on Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 334.)
The Trial Court Did Not Abuse Its Discretion
"[I]n determining whether there is substantial evidence to support a trial court's certification order, we consider whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment. [Citations.]" (Sav-on Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.) Here, appellant's primary theory of recovery is that URS misclassified Class I, II, and III Scientists as exempt employees.
We reject appellants' contention that, because the existence of an exemption is an affirmative defense, the trial court could not deny certification on the ground that the exemption issue is not susceptible to common proof. "The affirmative defenses of the defendant must . . . be considered, because a defendant may defeat class certification by showing that an affirmative defense would raise issues specific to each potential class member and that the issues presented by that defense predominate over common issues. [Citations.] (Walsh v. IKON Office Solutions, Inc. (2007) 148 Cal.App.4th 1440, 1450.) "The issue of whether the work is exempt or nonexempt is not germane to a determination of class certification. [Citation.] But the further point that resolving this issue— determining whether the work is exempt or nonexempt—will require consideration of each individual class member's particular work circumstances is certainly relevant to whether a class action is an appropriate mechanism for resolution of the parties' dispute." (Id., at p. 1460.)
The trial court concluded that, because of variations in the "duties, responsibilities and required knowledge and/or education" of subclass members, the exemption issue is not "susceptible to common proof" and "will require individual analyses." As to the Class I Scientists, the trial court stated: "[Appellants'] declarations of Class I scientists reflect that they collect soil and water samples; enter data; gauge water levels; develop, install and maintain wells; monitor tests; remove wastewater, do sump remediation, digging and drilling; mark locations; update tables, excavate soil, deliver samples to a lab; log samples. . . . These tasks do not seem to fit in the administrative or professional categories. But they also are or were engaged in vegetation surveys, wetland delineations, vegetation mapping, habitat assessment, special status species searches, field surveying; rock fall analysis; characterization of underground hydrology and geology; oversight of well drilling, installation and abandonment; surveying of locations and acquifier testing. . . . It is not so clear that these duties do not fall into the professional category and particular and individualized evidence would be necessary to complete the analysis. Also, there is evidence that some of [appellants'] declarants have specialized as opposed to general instruction, such as Bachelor's Degrees in geography, geology, earth science and geoscience."
The court noted that the declarations of Class I Scientists submitted on behalf of URS "reflect professional and administrative duties." For example: "One declarant is a project geologist who is a task manager on the field components of multiple phases of a large remediation project, who manages data collection, writes work plans, and is responsible for all aspects of the task she manages. She works under only limited and general supervision. She has a BS in earth systems science, an MS in environmental hydrology and has eight years experience in environmental consulting." Another Class I declarant "has worked on projects to evaluate 19 water quality treatment options for controlling dispersal of storm water pollutants and a roadside vegetation treatment system study to assess the use of vegetation in removing pollutants. He is responsible for coordinating and supervising all aspects of the field work on these projects - currently four storm water monitoring sites. He supervises and assigns field teams - up to six sites at a time."
As to the Class II Scientists, the court stated: "The Class II declarations reflect similarly varied duties of various character and intellectual challenge. Tasks and duties include stream condition assessment; measuring the width of stream banks; recording vegetation, soil and water sampling; well installation monitoring; some report writing; data collection; site mapping with GPS; project management consisting of supervising resources, including staff from other offices, and coordinating subcontractors and reviewing their work; management of 'Phase I' environmental assessments . . . , including preparing proposals with scope of work, budget and schedule . . . ; delegation of tasks to other employees; project management for health and safety programs; developing and reviewing health and safety programs; scheduling; working under general or limited supervision; . . . ground water monitoring; project database maintenance and operation; . . . examining local agency requests to modify FEMA projects and making recommendations as to how FEMA should respond and development and implementation of a FEMA correspondence tracking database; project task management; . . . business development; negotiating budgets with clients; managing budgets; setting due dates; selecting and managing personnel and subcontractors; client and regulatory agency interaction; acting as environmental lead in charge of large and complicated engineering projects; completing field surveys; writing . . . permits; and acting as an independent technical reviewer."
As to Class III Scientists, the court declared, "URS's Class III scientist declarants indicate much more involvement in administrative and professional types of activities." The court went on to give a detailed description of the duties and education of Class III Scientists.
"Presuming in favor of the [order denying certification], as we must, the existence of every fact the trial court could reasonably deduce from the record [citation]," we conclude that the court reasonably determined that the exemption issue would require consideration of each class member's work circumstances. (Sav-on Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 329.) The exemption issue is not susceptible to common proof because the duties of class members are too diverse. Accordingly, "[w]e conclude the trial court's denial of class certification was not an abuse of discretion because substantial evidence supports the court's conclusion individual factual issues relating to each class member dominated -- i.e., common questions of fact and law did not predominate." (Kaldenbach v. Mutual of Omaha Life Ins. Co., supra, 178 Cal.App.4th at p. 844; see also Arenas v. El Torito Restaurants, Inc., supra, 183 Cal.App.4th at 735 [" 'If the duties between class members are similar, the exemption inquiry is likely susceptible to common proof, [citation], but if the duties are not sufficiently similar, then the inquiry is unlikely to be susceptible to common proof, [citation]' "].)
Appellants contend that the trial court erroneously sustained URS's objection to the declaration of their expert, Daniel Cornet, on the exemption issue. Because this contention is not supported by reasoned argument and citations to authority, it is forfeited. (Amerigas Propane, LP v. Landstar Ranger, Inc. (2010) 184 Cal.App.4th 981, 1001, fn. 4.) Accordingly, we disregard appellants' references in their briefs to Cornet's declaration.
Appellants fault the trial court for "completely fail[ing] to consider the propriety of certifying the off-the-clock, meal period and/or rest break subclasses." But the court considered the propriety of certifying these subclasses. The primary theory of recovery for these subclasses was the same as for the Class I, II, and III Scientists: that URS had misclassified the scientists as exempt employees. Thus, the exemption issue was relevant and would require individualized proof for members of all of the subclasses. The court recognized this when it declared, "Because the court cannot certify Classes I, II and III with respect to the exemption issue, it cannot certify the 'classes' of off-the-clock work, meal periods and rest breaks."
Appellants argue that, as a matter of law, the scientists were nonexempt because they "were really paid on an hourly basis and not a salary basis." Appellants assert that the scientists "had to record forty hours on their time sheet in order to receive their full salary. If they did not work forty hours that could be charged on their time sheet, vacation or sick pay had to be used up to provide them with forty hours for the week."
The exemptions for persons employed in administrative or professional capacities apply only if an employee earns "a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment." (Cal.Code Regs., tit. 8, § 11040, subds. 1(A)(2)(g), 1(A)(3)(d).) Substantial evidence supports the trial court's implied finding that the scientists were paid the requisite salary. In numerous declarations submitted by employees on behalf of URS, the declarants state that they received at least their "base salary" each week and that they were not paid less than their "regular salary because of time . . . spent . . . performing work that could not be billed back to a client of URS." Furthermore, "nothing in California law . . . precludes employers from following the federal rule that permits them to require the use of vacation leave for partial-day absences without causing otherwise exempt employees to become non-exempt under the salary basis test. [Citations.]" (Conley v. Pacific Gas and Elec. Co. (2005) 131 Cal.App.4th 260, 271, fn. omitted.)
Appellants assert: "It should also be noted that the URS standard policy of payment of overtime hours at the employee's hourly rate of pay is a further indication that the Class I Scientists . . . were actually paid on an hourly basis and not on a salary basis . . . ." We disagree. "State law must meet or exceed standards adopted under federal law, and California follows the federal salary basis test to a substantial degree. [Citation.]" (Kettenring v. Los Angeles Unified School Dist. (2008) 167 Cal.App.4th 507, 513.) Under federal law, "additional compensation in the form of hourly overtime payment does not defeat exempt status under the salary-basis test." (Boykin v. Boeing Co. (9th Cir. 1997) 128 F.3d 1279, 1281-1282.)
Appellants maintain that appellants Murphy and Bajza were not paid on a salary basis because URS "insisted that both use accrued vacation time for each of the four days they were absent from work for [their] deposition." This point is forfeited because it is not supported by reasoned argument and citations to authority. (Amerigas Propane, LP v. Landstar Ranger, Inc., supra, 184 Cal.App.4th at p. 1001, fn. 4.) In any event, a reduction in pay for attendance as a party at legal proceedings does not defeat exempt status under the salary-basis test. (See Shockley v. City of Newport News (4th Cir. 1993) 997 F.2d 18, 24.) "[A]ttendance as a witness . . . involve[s] performance of a civic duty. Attendance as a party does not." (Ibid.) Furthermore, there is no evidence that other scientists received similar treatment. Murphy and Bajza's personal experience cannot defeat the exempt status of all other members of the subclasses.
Appellants contend that the scientists were nonexempt because URS's classification was based not on an individualized assessment of a scientist's duties, but solely on whether the scientist worked full or part time. Appellants claim that full-time employees were classified as exempt, while part-time employees were classified as nonexempt.
We need not determine whether the scientists were classified as exempt based solely on their full-time or part-time status. "In arguing that [URS] could be liable without regard to the work the [scientists] performed, appellants assume that an employer is liable if it classifies employees without regard to the law or investigating what work they do, even if the employees were, in fact, subject to the exemption. While such action on the part of an employer may be 'deliberate' and 'willful,' it is not 'misclassification. [¶] In other words, appellants cannot recover . . . unless the . . . [s]ubclass members were not, in fact, subject to the [administrative or professional] exemption; that determination requires consideration of the individual circumstances of each . . . [s]ubclass member." (Walsh v. IKON Office Solutions, Inc., supra, 148 Cal.App.4th at p. 1461; see also Arenas v. El Torito Restaurants, Inc., supra, 183 Cal.App.4th at p. 735, quoting from Campbell v. PricewaterhouseCoopers, LLP (E.D.Cal. 2008) 253 F.R.D. 586, 603, fn. 17 ["It may be intuitively unfair to permit an employer, who has historically classified a particular group of employees as exempt based on a uniform rule, to argue in the context of litigation that the exemption inquiry will require an individualized analysis. But the assumption behind such an intuitively appealing argument is that an employer should somehow be bound by its prior position—which is foreclosed by Walsh."].)
Disposition
The order denying class certification is affirmed. URS shall recover its costs on appeal.
NOT TO BE PUBLISHED.
YEGAN, A.P.J. We concur:
COFFEE, J.
PERREN, J.
James W. Brown, Judge
Superior Court County of Santa Barbara
Garry M. Tetalman. Lauren John Udden, for Appellants.
Sheppard, Mullin, Richter & Hampton, Jeffrey A. Dinkin and Aaron W. Heisler, for Respondent.