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Sept. 3 — A California maintenance and repair company may not have given its service technicians a real choice about whether to use their service vehicles for their commutes, so it may have to pay them for their commute time, the U.S. Court of Appeals for the Ninth Circuit ruled 2-1 on Sept. 3.
Joséluis Alcantar, who sought to represent a class of service technicians for Hobart Service, claimed that company policy gave employees a choice between using their service vehicles or their personal vehicles to commute to and from home, but that choice was illusory.
The Ninth Circuit found that this was a genuine issue of material fact precluding summary judgment on Alcantar's claim under the California Labor Code that service technicians should be compensated for their normal commute time. The majority also held that the district court improperly denied class certification on this issue by reaching the merits of the case.
But the court held that class certification properly was denied on Alcantar's claim that service technicians aren't being given meal and rest breaks. Questions as to why individual service technicians were missing their meal and rest breaks would predominate over any questions common to the class, it found.
In addition, the majority affirmed the district court's dismissal of Alcantar's claim under California's Private Attorney General Act. The law allows employees to bring actions against their employers for civil penalties for violations of the California Labor Code, but only after proper written notice to the Labor and Workforce Development Agency and the employer.
Alcantar's letter was a “string of legal conclusions with no factual allegations or theories of liability to support them,” so it was insufficient to provide proper notice, the Ninth Circuit held.
Judge Joan Humphrey Lefkow wrote the decision, which was joined by Judge Milan D. Smith.
Judge N. Randy Smith wrote a separate decision concurring in part and dissenting in part. “This case should be over,” he said, arguing that there wasn't a genuine factual issue as to whether service technicians have the choice between commuting in their work vehicles versus their personal vehicles.
According to the court, Hobart Service provides after-sale maintenance and repair services to customers of its parent company, ITW Food Equipment Group, a commercial food equipment manufacturer. Its service technicians, who are hourly employees, are assigned to a branch office but spend most of their time working at the customer's location.
Service technicians are compensated for commute time only if driving to a job site from home takes longer than it would take to drive to the technician's branch office.
Alcantar claimed that California law requires Hobart to pay service technicians for all commute time. Although technicians sign an agreement providing that they have a choice as to whether to take their work vehicles home or to use their personal vehicles, Alcantar said that choice is illusory because technicians are liable for stolen tools and parts. Without sufficient secured parking at the branch offices, technicians feel that they must take their work vehicles home to avoid theft, he argued.
The agreement also places various restrictions on technicians' use of the work vehicles, the court said. Furthermore, Hobart requires technicians to respond to calls on their company-issued cell phones while driving to and from their first and last assignments of the day. These requirements put Hobart in control of the technicians during their commutes when driving the work vehicles, and they should be compensated for that time, Alcantar asserted.
Alcantar sought to certify a class of service technicians employed by Hobart in the four years preceding the filing of the lawsuit. The district court denied class certification, finding that he failed to meet the commonality requirement of Federal Rule of Civil Procedure 23(a)(2) and the predominance requirement of Rule 23(b)(3). The court granted summary judgment to Hobart on Alcantar's individual commute compensation claim, but found a genuine factual issue regarding meal and rest breaks.
Hobart and ITW moved for summary judgment a second time on the PAGA claim, arguing that notice was insufficient, and the district court agreed.
On appeal from the denial of class certification and grant of summary judgment, the Ninth Circuit found that the district court improperly reached the merits in evaluating whether common questions of law or fact made class certification appropriate. Whether a claim is common to the class doesn't turn on whether the class would prevail on that claim on the merits, the appeals court said.
Here, the district court reasoned that Alcantar didn't have proof of a uniform policy requiring technicians to commute in their work vehicles, so he failed to meet the commonality requirement for class certification.
“The district court's conclusion is incorrect for two reasons,” Lefkow wrote. “First, as explained below, there is a question of fact as to whether Hobart requires technicians to use its vehicles for their commute.”
“Second, it asks too much of Alcantar, who need only show that there is a common contention capable of classwide resolution—not that there is a common contention that ‘will be answered, on the merits, in favor of the class,' ” she said, quoting Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, 133 S. Ct. 1184 (U.S. 2013).
The Ninth Circuit affirmed the district court's finding that class certification was inappropriate on the meal and rest break claims under Rule 23(b)(3), which requires that common questions predominate over those affecting individuals, and a class action is the superior method for fairly adjudicating the controversy.
The Ninth Circuit, however, agreed with Alcantar that summary judgment on the commute claim was improper.
To prevail, the court said, Alcantar must prove that Hobart exercises control over service technicians when they are commuting in their work vehicles and that service technicians don't really have a choice as to whether to use those vehicles for commuting. “The first is a question of law which we return to the district court,” Lefkow said. “The second is a question of fact, which we find is appropriate for a jury as Alcantar has raised a genuine issue of material fact.”
But Judge N. Randy Smith said no such genuine issue exists. “Nothing prevents Hobart employees from leaving their service vehicles overnight at Hobart's facilities,” he said.
Smith said Hobart's policy provides that technicians only are liable for stolen tools and parts if they are stolen because of the technician's negligence.
Therefore, Smith said, if technicians leave their work vehicles at the branch office with locked doors, which they are authorized to do, they aren't negligent and thus won't be liable for stolen tools and parts. And because they wouldn't be liable, there is no genuine issue as to whether they really have a choice of vehicle for their commutes, he said.
Qualls & Workman LLP represented Alcantar. Reed Smith LLP represented Hobart and ITW.
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Text of the opinion is available at http://www.bloomberglaw.com/public/document/JOSLUIS_ALCANTAR_on_behalf_of_himself_and_all_others_similarly_si.
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