Ariana Miles worked for Kirkland’s, a chain of home décor stores, from about February 2011 to July 2018. She alleges that Kirkland’s unlawfully required employees to (1) remain in the stores during their rest breaks, and (2) work off-the-clock by getting their bags checked after they had clocked out. Based on these two claims, Miles sought class certification for various subclasses for the class period from May 2014 to the present.
The district court denied class certification because it found that common issues failed to predominate over individual ones under Rule 23(b)(3) of the Federal Rules of Civil Procedure for both the Rest Break and Bag Check Claims.
For the Rest Break Claim, the district court assumed in part that on-premises rest breaks do not automatically violate California law. It then held that in the “absence of evidence that Kirkland’s Stores’ rest period policy, as implemented class-wide, violates California law,” it “‘would have to conduct individualized inquiries’ into whether each Subclass member was denied a duty-free rest break while being required to stay on premises.”
And for the Bag Check Claim, the district court denied certification because “there is insufficient evidence to demonstrate a general practice across Kirkland’s Stores’ California facilities of unlawful bag checks that predominates over individualized inquiries.”
The 9th Circuit Court of Appeals reversed the district court’s denial of class certification for the Rest Break Claim, affirmed the denial of certification for the Bag Check Claim in the published case of Miles v Kirkland’s Stores Inc., 22-55522 (January, 2024).
With regard to the Rest Break Claim, under California law, employers may not require employees to work during rest periods. Cal. Lab. Code § 226.7(b). California’s Supreme Court has interpreted Section 226.7(b) to mean that employers must “relinquish any control over how employees spend their break time.” Augustus v. ABM Sec. Servs., Inc., 385 P.3d 823, 826 (Cal. 2016) (citing Brinker Rest. Corp. v. Superior Court, 273 P.3d 513, 535-36 (Cal. 2012)).
With regard to the Bag Check Claim, under California law, employers must pay employees for all hours worked. Cal. Lab. Code § 1194(a).
Rule 23 requires the district court to engage in a rigorous analysis before certifying a class. Rule 23 is designed to promote efficiency and economy of litigation. “A party cannot plead or speculate her way to class certification. She must marshal facts showing, by a preponderance of the evidence, that class issues predominate.” She must “show that the common question relates to a central issue in her claim.”
For a wage and hour claim, an employer’s official policies are relevant to the Rule 23(b)(3) analysis,” but a district court abuses its discretion by “rely[ing] on such policies to the near exclusion of other relevant factors touching on predominance.”
Kirkland’s admitted that it had a “uniform employee handbook policy requiring employees to remain on premises during their 10-minute paid rest breaks until sometime in 2018.” But a company’s policy by itself – even if it remains constant during the class period – “is not an elixir that turns canned allegations in a complaint into a pot of class action gold.” Courts still need to look at evidence of whether the company consistently implemented and enforced the policy across all employees during the class period.
The district court, after examining declarations of nine employees, determined that it “would have to conduct individualized inquiries into whether each Subclass member was denied a duty-free rest break while being required to stay on premises.”
“But the district court appears to have misinterpreted those declarations. The declarations cited by the district court only discuss store conditions in 2021, not the entire class period from 2014 to the present. These declarations do not establish that Kirkland’s employees could have left the store premises for their rest breaks from 2014 to 2018.” And “Kirkland’s consistently enforced that policy across its stores from at least May 2014 to sometime in 2018.”
The 9th Circuit concluded that the district court erred in denying class certification of the Rest Break Claim, but that it properly denied certification of the Bag Check Claim. It remanded the case back to the district court to reassess the evidence and apply the remaining Rule 23 requirements to the Rest Break Claim, consistent with this opinion.