Smith v. 9W Halo Western OpCo L.P.

Background

Kenneth C. Smith worked as a non-exempt, hourly employee for 9W Halo Western OpCo L.P., doing business as Angelica, from approximately November 9, 2017, through May 6, 2019. He alleged that Angelica maintained practices that violated California wage-and-hour law, including releasing employees for meals at the same time and requiring them to wait in clock-in and clock-out lines; treating operational shutdowns as meal periods; automatically deducting 30 minutes from pay; maintaining inaccurate time records; and failing to pay for some waiting time and overtime.

The operative complaint asserted claims concerning meal periods, rest periods, hourly wages, vacation wages, wage statements, final wages, unfair competition, and civil penalties under the Private Attorneys General Act. Smith sought certification of five Rule 23(b)(3) classes: the Recordkeeping Meal Period Class, Auto-Deduct Class, Second Meal Period Class, Overtime Class, and Off-the-Clock Class. He also referred to proposed wage-statement and waiting-time penalty classes as derivative classes, but the court noted that he had not defined or adequately supported those classes.

Class-Certification Standards

Federal Rule of Civil Procedure 23 requires a proposed class to satisfy four initial requirements: sufficient size, common legal or factual questions, claims typical of the class, and adequate representation. For the type of class action proposed here, common questions must predominate over individualized questions, and a class action must be the superior method for resolving the dispute. The plaintiff must prove these requirements with evidence; allegations alone are insufficient.

Meal Period Classes

The court found that Smith established a presumption of meal-period violations for the Recordkeeping Meal Period Class and Auto-Deduct Class under the California Supreme Court’s decision in Donohue v. AMN Services. Smith’s expert reviewed Angelica’s timekeeping and payroll records and identified presumptive meal-break violations in the records examined. Smith also submitted declarations from former employees stating that workloads sometimes prevented them from taking 30-minute meal breaks.

Angelica submitted declarations stating that employees voluntarily skipped or shortened meal periods, but the court found that Angelica had not shown that those declarations were representative of the thousands of potential class members. The court therefore found commonality and predominance for the Recordkeeping Meal Period and Auto-Deduct Classes.

The court reached a different conclusion for the Second Meal Period Class. Smith’s expert estimated fewer than 4% possible second-meal-break violations, and Smith did not sufficiently explain why the Donohue presumption should apply to that class. The court therefore found that Smith had not satisfied his burden for the Second Meal Period claims.

Overtime and Off-the-Clock Classes

For the Overtime and Off-the-Clock Classes, the court found no comparable presumption of wage violations. Smith had to show that Angelica had a policy or practice that caused employees to work off the clock or not receive proper overtime pay. The court found that Smith presented allegations and several individual examples, but not evidence of a common policy that could be established through common proof. It therefore found that Smith had not satisfied commonality or predominance for these classes.

Typicality, Adequacy, and Superiority

The court found Smith’s claims reasonably coextensive with those of the proposed members of the Recordkeeping Meal Period and Auto-Deduct Classes, even though employees worked in different roles, locations, and schedules. The court also found that Smith was an adequate representative, except as to proposed class members who served in supervisory or managerial roles. The court modified both class definitions to exclude those employees.

The court found that a class action was the superior method for resolving the certified claims. It noted that individual damages were not large, that the court was not aware of other related actions against the defendant, and that the case concerned California law and hourly employees in California.

Disposition

The court GRANTED IN PART AND DENIED IN PART Smith’s motion for class certification. It certified the following Rule 23(b)(3) classes, excluding employees in supervisory or managerial roles:

- Recordkeeping Meal Period Class: Non-exempt, hourly employees of the defendants who worked shifts exceeding five hours from September 26, 2017, through the date of final judgment, and whose timekeeping records showed a late, shortened, or missed meal period. - Auto-Deduct Class: Non-exempt, hourly employees of the defendants who worked shifts exceeding five hours during the same period and had a half-hour deducted from their pay on each shift.

The court DENIED Smith’s motion to certify the Second Meal Period Class, Overtime Class, and Off-the-Clock Class. It set a further case-management conference for May 15, 2025, at 10:00 a.m., and ordered the parties to file a conference statement by noon on May 8, 2025.