Sandoval Ortega v. AHO Enterprises, Inc.

Background

The plaintiffs brought federal and California wage-and-hour claims against Aho Enterprises, Inc., doing business as Superior Body Shop, and Jack Aho, Issa Aho, and Hani Aho. They sought certification under Federal Rule of Civil Procedure 23 and conditional certification of a collective action under the Fair Labor Standards Act (FLSA), a federal law governing, among other things, overtime pay.

The proposed Rule 23 class covered non-exempt production employees employed by Aho Enterprises in California from January 23, 2015 through September 30, 2019. The proposed subclasses concerned overtime pay, meal periods, and rest periods. The plaintiffs also sought certification of related claims for inaccurate wage statements and failure to pay wages at termination or resignation. The proposed FLSA collective covered qualifying non-exempt production employees employed from January 23, 2016 through September 30, 2019 who worked more than 40 hours in a week.

The opinion describes evidence that Superior paid overtime only for hours exceeding 40 in a week, rather than also paying daily overtime for hours exceeding eight in a workday. It also describes cash payments at regular hourly rates for additional hours recorded on separate “cash cards.” Regarding breaks, the plaintiffs presented evidence that workers received one combined mid-day meal and rest break and were not permitted additional rest breaks. The defendants disputed the plaintiffs’ account and pointed to a written policy allowing paid rest periods.

Class Certification

The court concluded that the plaintiffs satisfied Rule 23’s requirements for the overtime-pay subclass. Defendants had admitted that production workers were not paid daily overtime and that cash-card hours were paid at regular rates. The court held that the common question of whether workers received the required overtime rate could be addressed on a class-wide basis. Individual calculations of hours and damages did not defeat certification.

The court also certified the rest-break subclass. It found that the legality of the alleged practice of combining rest and meal periods presented a common question. The defendants’ written rest-break policy and declarations from two workers raised issues about the merits of the plaintiffs’ allegations, but the court held that those issues did not prevent class certification. The court also noted that defendants had conceded they never paid an additional hour of pay for a missed rest break.

The court denied certification of the meal-break subclass. The submitted timecards generally showed mid-day breaks of at least 30 minutes, and the plaintiffs’ theory focused on defendants’ practice of labeling or paying for part of the break as working time. The court found that the plaintiffs had provided no authority showing that paying for part of an otherwise compliant 30-minute meal period violated California law. It therefore concluded that common questions did not predominate for that subclass.

Because the overtime-pay and rest-break subclasses were certified, the court also certified the related claims for allegedly inaccurate wage statements and allegedly unpaid wages at termination or resignation.

FLSA Collective Action

The court applied the first, comparatively lenient stage of the FLSA collective-action process. It found that the plaintiffs made substantial allegations that they and other production workers were subject to a single allegedly unlawful policy: being paid at regular rates, including in cash, for hours worked beyond 40 in a week. The court therefore conditionally certified the proposed FLSA collective action. Employees would need to opt in by filing written consent to participate.

Disposition

Judge Donna Ryu granted in part and denied in part the plaintiffs’ motion for class certification and conditional certification of an FLSA collective action. The court granted certification of the overtime-pay and rest-break subclasses and the related derivative claims, denied certification of the meal-break subclass, and granted conditional certification of the FLSA collective action. The court appointed the named plaintiffs as class representatives and Mallison & Martinez as class counsel. It also denied the plaintiffs’ evidentiary objections as moot because the court did not rely on the disputed evidence, and ordered the parties to submit a proposed class notice by August 25, 2020.