California Court Reverses Order Denying Class Certification in Employment Law Class Action Because Bases for Trial Court’s Decision Could be Resolved Through Use of Subclasses
Plaintiffs, individuals and the international workers’ union UNITE, filed a putative employment law class action against Cintas for alleged violations of the Los Angeles Living Wage Ordinance (LWO), which “prescrib[es] a minimum level of compensation be paid to employees of private firms who work on service contracts benefiting the City” – as well as sick leave, vacation, etc. – provided that the employees worked on a service contract for at last 20 hours during the month. The LWO does not apply to employees who did not work on a service contract, or who worked on a service contract for less than 20 hours, during the month. Aguiar v. Cintas Corp. No. 2, ___ Cal.App.4th ___, 2006 WL 2744773, *1-*2 (Cal.App. September 27, 2006). The LWO requires employers awarded service contracts to provide the City with “forms listing all subcontractors and employees working on the agreement and notify each current employee, and each new employee at the time of hire, of his or her rights under the LWO.” Id., at *2. Defense attorneys opposed certification of the lawsuit as a class action. The trial court agreed with the defense that class action treatment was inappropriate because the class was not ascertainable, the class lacked community of interest, and class action treatment was not the superior method to resolve the dispute. Id., at *1. The Court of Appeal reversed.
Cintas leases and launders uniforms and other products, and obtained service contracts with the City in 1999 and 2003 covering the Department of Water and Power (DWP), and “[f]or each contract Cintas signed a declaration of compliance, certifying it would comply with the LWO and provide the City a list of all employees subject to the LWO,” Aguiar, at *3. Cintas picked up uniforms, rags, towels, blankets, etc., from numerous DWP locations, cleaned and repaired the items, and then returned them to the DWP job sites. Cintas processed these items at its facilities in Whittier, Pico Rivera and Ontario. Apparently, the items at these three facilities were commingled; Cintas did not keep track of which employees worked on DWP items, or the hours worked on DWP items. Id. In January 2004, the City terminated the Cintas contract for cause alleging, in part, that Cintas had failed to comply with the LWO. Id. and n.2. Plaintiffs’ original complaint did not seek class action relief and contained four causes of action. Aguiar, at *3. The first amended complaint added four new individual plaintiffs and two new causes of action, and proposed to proceed as a class action on behalf of Cintas employees “who have worked at least 20 hours per month” on City service contracts. Id., at *3-*4. Several months later, plaintiffs sought class certification, but less than one week later plaintiffs filed a second amended complaint that added four new causes of action and that sought to proceed as a class action on behalf of all Cintas employees, regardless of whether they worked more than 20 hours on service contracts. Id., at *4.
Defense attorneys opposed certification of the class, arguing that plaintiffs were not adequate representatives of the class, and that individual issues would predominate because each class member would be required to prove that they worked at least 20 per month on the DWP service contracts. Aguiar, at *5. The trial court refused to certify the class because plaintiffs had not identified any available means of determining the class members (because Cintas had not maintained records that reflected such information), plaintiffs were not adequate class representatives because their deposition testimony was “incompatible and contradictory” to the interests of the class, and plaintiffs failed to demonstrate that use of the class action device was the superior means of resolving the dispute. Id. The Court of Appeal rejected each basis for denial in turn.
With respect to the means of identifying class members, the appellate court rejected plaintiffs argument that the class was ascertainable because the LWO’s 20-hour rule was unenforceable; but the Court similarly rejected defense arguments that the LWO was enforceable thus requiring denial of class certification because the putative class included employees were covered by the LWO and those who were not covered by the LWO. Aguiar, at *7. The appellate court explained, “The parties’ focus on the validity of the 20-hour rule at the certification stage of the litigation is premature: Although the validity of the 20-hour rule will have to be addressed at some point in this litigation, it is not necessary to do so at the certification stage, nor the does the rule itself defeat class certification.” Id. The Court reasoned that the difficulties created by the 20-hour rule, if it is determined to be enforceable, were readily addressed by use of subclasses, one class of plaintiffs who worked at least 20 hours on service contracts, and one class of plaintiffs who did not. Id. The appellate court also explained at *8 that Cintas would bear the burden of determining which putative class members fell within each class because “[i]t was Cintas’s business decision to commingle DWP items with those of other customers and to allow all employees to work on the items at each substation (for example, sorting, hanging, folding) as they were processed through the plant.” This was particularly true because the agreements Cintas signed as part of the DWP contracts required it to keep track of employee time for those employees who worked at least 20 hours per month on service contracts. Id.
The Court of Appeal held that if the trial court had used subclasses, then it would have concluded that the classes were ascertainable and that each class had a well-defined community of interest. Aguiar, at *9. As to the latter point, the Court stated that the action “is replete with common questions of law and fact, a point not addressed by the trial court and not effectively disputed by Cintas.” Id., at 10. The Court also held that an adequate class representative could be found for the subclasses involving employees who worked less than 20 hours per month on service contracts. Id. This would eliminate the “inconsistency” and “incompatibility” created by the deposition testimony of present class representatives that they each worked more than 20 hours per month on the DWP service contracts. (In fact, defense attorneys argued that the hours claimed by the named plaintiffs, if true, would mean that no other employees worked on DWP items.) All of these concerns were redressed by the use of subclasses, according to the appellate court. Id.
“Finally, class treatment in this case is plainly the superior means for resolving the litigation for both the parties and the court.” Aguiar, at *11. Accordingly, the trial court erred in denying plaintiffs’ motion to certify the lawsuit as a class action.