Showing laudable common sense in Bufil v. Dollar Financial Group, Inc., a California Court of Appeal limits Alvarez v. May Dept. Stores Co.

I must confess that, of all decisions for which I may take blame or credit, Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223 sticks in my craw as the most abhorrent and most memorable (by a slight margin).  Not that I didn't give Alvarez my all; I have no shame there.  But I lost the appeal.  Then my Petition for Review was denied by the California Supreme Court (though Justice Kennard was of the opinion that it should have been granted), and I even went so far as to file a Petition for Writ of Certiorari with the United States Supreme Court.  It was, of course, denied.  The oral argument in the Court of Appeal lasted something like 45 minutes (it went way over the allowed time), and about 40 minutes of it were non-stop questions from all three justices.  It was brutal, educational, and intensely disappointing.  Mostly disappointing.

Enter Bufil v. Dollar Financial Group, Inc. (April 17, 2008, ord. pub. May 13, 2008), issued by the First Appellate District, Division Four.  The introduction to the opinion summarizes the legal terrain:

“On the heels of the denial of class certification against employer and respondent Dollar Financial Group, Inc. (Dollar), in a suit alleging violation of meal and rest break labor laws, appellant Caren Bufil pursued class certification in a new suit which significantly narrowed the class definition. Relying on the doctrine of collateral estoppel, the trial court granted judgment on the pleadings in favor of Dollar. Also relying on this doctrine as well as traditional concerns relevant to the issue of certification, the court denied Bufil’s motion for class certification. We reverse.

(Slip op., at p. 1.) 

As the headline to this post suggests, there must be a precursor case to Bufil, and, in fact, there is.  In May 2003, in a suit entitled Chin v. Dollar Financial Group (Super. Ct. Los Angeles County, No. BC295343, hourly employee Chin sued Dollar, claiming to represent a class of California-based hourly employees who were (1) employed for a period of more than five hours without a meal period of not less than 30 minutes, and/or (2) not authorized or permitted to take a rest break for every four hours of work.  (Slip op., at p. 5.)  Certification was denied, and, in an unpublished opinion, the Court of Appeal affirmed (Nguyen v. Dollar Financial Group (May 18, 2006, B184137 [nonpub. opn.]). (Slip. op., at pp. 5-6.)

After the Nguyen opinion issued, Bufil was filed:

“Less than four months after the appellate court decision in Chin/Nguyen, Bufil filed the complaint in this action. She defined the putative class as two subclasses of hourly employees employed by Dollar in California between the period September 11, 2003, and the present, namely employees for whom Dollar’s records depicted a meal period not taken due to either (1) single employee per work shift or (2) in-store training. Like Nguyen, Bufil alleged causes of action for violation of the Labor Code and wage orders, as well as a UCL claim.

Bufil and Dollar thereafter moved, respectively, for class certification and judgment on the pleadings. Dollar asserted that Bufil was collaterally estopped from asserting class claims based on the earlier Chin/Nguyen litigation. The trial court agreed and dismissed appellant’s class action allegations. As well, it denied appellant’s motion for class certification.

(Slip op., at p. 7.)

On appeal, Bufil challenged the trial court’s collateral estoppel ruling, arguing that the classes in the two cases were not the same and thus the issues were different, and the Court of Appeal agreed.  (Slip op., at 9.)  At the very outset of its analysis, the Court of Appeal identified a clear path for containing the collateral damage (pun intended) of Alvarez:

“Unlike Alvarez, the class that Bufil asserts is not identical to the class asserted by Chin. Rather, it is a distinct subclass restricted to hourly employees who tracked Dollar’s recordkeeping system from September 2003 to the present with the designation of not having taken a meal period because the employee was the only employee in the store or was supervising a trainee who could not be left alone.

(Slip. op., at p. 9.)  The Bufil Court was particularly critical of the Trial Court's perception that commonality flaws from Nguyen were also present in Bufil:

“The court made an erroneous assumption that each class member would need to testify as to his or her understanding of the meal period waiver. This was an issue in Chin/Nguyen but it is irrelevant to Bufil’s lawsuit. Bufil’s theory is that the two circumstances—single employee on duty or providing training—do not come within the “nature of the work” exception set forth in Wage Order No. 4-2001, so as to permit an “on-duty” meal period. This is a legal question concerning the liability of Dollar to each putative class member. Bufil is not concerned with whether a given employee signed a meal period waiver, does not assert that anyone was forced to sign anything, and does not attack the execution of the agreements or the intent and understanding of the parties regarding the same. Her position is that either the putative class employees were denied an off-duty meal for an improper purpose, or they were not. Under Bufil’s structuring of the case, the court could identify the class from Dollar’s records and determine liability as a matter of law.

(Slip op., at pp. 9-10.)  In short, the Bufil opinion nicely avoids the consequences of Alvarez by noting the differences in the two classes proposed in Bufil and Alvarez.

The balance of the opinion concerns a fairly straightforward and very succinct discussion of certification issues.  The Court, in terse commentary, dispatches the Trial Court's denial of certification and reverses both that denial and the grant of the Motion for Judgment on the Pleadings.

Peppered throughout the opinion are a few choice comments for wage & hour practitioners:

“Dollar does not notify its employees that they are authorized and permitted to take a 10 consecutive minute off-duty rest break every four hours. Nor does Dollar instruct supervisory personnel to take steps to provide employees with the opportunity to take the required rest breaks. The onus is on the employer to clearly communicate the authorization and permission to its employees. (Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 963.)

(Slip op., at p. 4.)  Here we see re-affirmation that the employer, and not the employee, bears the burden of communicating break rights to employees and granting permission for same.  Cicairos needed a little shot in the arm, and here it is.  In that same discussion, the Court said: "The Dollar policy at the relevant times did not require consecutive 10-minute breaks. Rather, it permitted a 'net' 10 minutes of time that could be broken up during the course of a day. A 2002 Division of Labor Standards Enforcement opinion letter iterates that the 'net' 10 minutes had to be consecutive."  (Slip op. at p. 4.)  This sounds very much like an endorsement of the DLSE interpretation (which is not binding on Courts, only instructive).

It isn't the High Court killing Alvarez with a stake to the heart (at sunrise, while stuffing its mouth with garlic and holy water, and burning it), but given what I had before Bufil, I'll take it.

UPDATE:  The UCL Practitioner has also mentioned Bufil's limiting effect on Alvarez, saying that the Court "distinguished" Alvarez.  I conceive of Bufil as trying to wall in Alvarez so that it doesn't spread like a disease.  Whether you agree with Alvarez or not, the opinion in Alvarez is problematic in that it is imprecise as to the intended reach of the opinion.  Bufil helps in that regard.

UPDATE 2:  The California Labor & Employment Defense Blog has an extensive discussion of Bufil.  The discussion includes more analysis of the "on duty" meal period issue raised in the case.

UPDATE 3:  Wage Law also offers exentsive discussion of the wage & hour issues analyzed in Bufil.