Ser Lao v. H&M Hennes & Mauritz, L.P.

Background

This wage-and-hour class action concerns H&M’s alleged practice of requiring California retail employees to undergo security checks after clocking out and before leaving the store. The court had previously certified a class covering all current and former non-exempt H&M retail-store employees employed in California from December 11, 2011, through the present, as to claims based on security checks and associated waiting time at the end of shifts or at closing. A separate class concerning final wages paid through Money Network Paycards was not at issue in this order.

The evidence included H&M’s written Internal Theft Prevention Policy, testimony from H&M witnesses, and depositions of class members. The policy required bag inspections for employees carrying bags or similar items. It also stated that employees without such items did not need to wait for a manager but had to inform a manager that they were leaving, and that coats or jackets had to be unzipped and unbuttoned. The court previously found evidence that H&M required all retail employees to undergo a visual inspection after clocking out and before leaving, regardless of whether they had a bag. The court also previously found that whether the time was compensable was a question common to the class.

The parties had also filed cross-motions for summary judgment. In a separate order, the court found a disputed material fact about whether H&M’s security checks applied to all retail employees or only employees with bags. That dispute led the court to deny both parties’ summary-judgment motions. The court explained that the different standards and evidentiary burdens for summary judgment and class certification did not conflict with maintaining the class.

H&M’s Decertification Arguments

H&M argued that the class should be decertified because it lacked commonality, failed the predominance requirement, was not ascertainable, and lacked a manageable trial plan. Under Federal Rule of Civil Procedure 23, commonality requires a significant question of law or fact shared by the class. Predominance requires common questions to outweigh questions affecting only individual members.

The court rejected H&M’s argument that the depositions showed no uniform policy for employees without bags. The testimony instead supported the conclusion that employees without bags still had to notify a manager before leaving, giving the manager an opportunity to observe them, while employees with bags faced an additional bag inspection. The court found that variations in how the visual checks occurred—such as notifying a manager, standing before a security camera, or being escorted to the exit—did not defeat commonality because the alleged requirement to notify a manager and submit to a visual inspection remained common.

The court also held that whether employees were under H&M’s control during the checks presented common questions. Under the applicable California wage-order definition of “hours worked,” control involves restraining the employee’s actions and making the activity mandatory rather than optional. The court found that whether the visual inspections met those requirements could be decided using common evidence.

H&M argued that the checks could be so brief or irregular that the time was not compensable under the California Supreme Court’s decision in Troester v. Starbucks Corp. The court agreed that whether the time was too brief or irregular to require compensation was a liability question, not merely a damages question. But it concluded that this issue still did not defeat commonality or predominance because the class could address common questions about what amount of time would be too brief to compensate and whether H&M could reasonably measure and pay for the time.

The court further held that differences in the length of bag inspections involved damages rather than liability. Because individualized damages calculations alone generally do not defeat class certification, those differences did not defeat predominance. H&M’s ascertainability argument repeated an argument it had previously made and that the court had rejected; H&M identified no newly discovered facts supporting decertification on that ground. Finally, the court held that Rule 23 and Ninth Circuit law did not require the plaintiff to provide a trial plan to maintain certification in this case.

Disposition

The court concluded that H&M had not shown that the later depositions or its other arguments justified decertifying the class. Judge Edward J. Davila therefore denied H&M’s motion to decertify the class. The order addressed whether the class should remain certified; it did not finally resolve whether the security-check time was compensable or whether H&M was liable.