The Second District Court of Appeal has reversed Los Angeles County Superior Court Judge Michael L. Stern's order denying certification of a class action brought by a limousine driver against his employer for wage and hour violations arising from on-call time and related claims. In Ghazaryan v. Diva Limousine, Ltd. (2009) __ Cal.App.4th __, the court held that a proposed class of all drivers employed by the company during a specific period was ascertainable; a sufficient community of interest existed for class certification; and that a class action was the superior method for resolving the dispute.
Diva operates a limousine service in the Greater Los Angeles area. At the time Ghazaryan filed his class certification motion in May 2006, Diva indicated it had employed approximately 190 drivers during the previous four years; approximately 100 still worked for the company. On any given day Diva places between 40 to 45 drivers in the field, and those drivers are dispatched on 140 to 150 trips or runs. However, the number of trips can fluctuate between 100 on a slow day and more than 200 on days when special events occur (for example, the Academy Awards). Typically, Diva notifies drivers of their first few assignments before their shift begins in part to allow them to plan their gap time. Approximately 75 percent of Diva's drivers have permission to take their Diva vehicles home and commute to their first run using their Diva vehicles. After these initial runs have been completed, drivers are assigned by the dispatcher to additional trips according to location, availability and fairness among drivers. On a busy day a driver may receive six to eight assignments. On a slow day that number often falls below five trips. Drivers have no way of predicting the length of any particular period of gap time although, on occasion, dispatchers may accommodate requests to schedule assignments around the drivers' personal appointments. According to anecdotal and statistical estimates submitted by both sides, it is clear drivers were placed on-call daily for substantial periods of time.
Ghazaryan filed his lawsuit in May 2006 alleging Diva by its practice of paying drivers by the job, not by the hour, had failed to pay earned wages and overtime or to provide required rest breaks and meal periods in violation of multiple provisions of the Labor Code and implementing administrative regulations. He further also alleged Diva had engaged in unlawful business practices under Business and Professions Code section 17200 et seq. Although Ghazaryan's complaint originally identified one broad class with four subclasses, his motion sought to certify only two overlapping subclasses: (1) based on Diva's alleged failure to pay earned overtime and straight time, “All current and former employees of Defendant who worked as Limousine Drivers during the period of May 10, 2002 to the present”; and (2) targeting Diva's failure to provide mandatory rest breaks, “All current and former employees of Defendant who work as Limousine Drivers at any time during the period of May 10, 2002 to the present, worked one or more four-hour increments of time without being given a rest break for each such increment and who were not properly compensated therefor[ ].”
Diva opposed class certification principally because of the purported difficulties in identifying eligible members of the class and assessing the validity of Diva's compensation policy as applied to different drivers who may or may not have used their gap time for personal pursuits. Diva explained it has several categories of drivers, some of whom are paid for gap time. Thus, dedicated event drivers, L'Ermitage Hotel drivers and organ transplant drivers are paid on a strictly hourly basis including any on-call time. Diva also submitted declarations from a number of drivers who typically use unpaid gap time for their own purposes, such as working out at the gym, napping or eating at home or running personal errands. Several of those drivers stated they are not in favor of Ghazaryan's lawsuit and do not want Diva to change the way it compensates its drivers.
The trial court found these declarations convincing and denied the motion on the ground certification would raise too many individualized issues.
Held: the trial court utilized improper criteria in analyzing the class certification request by evaluating class suitability as dependent on determination of the merits rather than evaluating whether the theory advanced by plaintiff was amenable to class treatment; and plaintiff proposed two classes which satisfied the ascertainability, community of interest and superiority of class treatment requirements. Reversed and remanded.
The court spent considerable time discussing the interpretation of the term “hours worked” under IWC Wage Order No. 9, which defined it as "time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.” The court also considered two opinion letters from the Division of Labor Standards Enforcement ("DLSE").
The letter dated March 31, 1993, acknowledges the inquiry is “highly fact-driven,” but “[t]he bottom line consideration is the amount of ‘control’ exercised by the employer over the activities of the worker.... [I]mmediate control by the employer which is for the benefit of the employer must be compensated.” In a subsequent advisory letter dated December 28, 1998,, the DLSE summarized the factors relevant to this inquiry: “1. Whether there are excessive geographic restrictions on the employee's movements[;][¶] 2. Whether the frequency of calls is unduly restrictive[;][¶] 3. Whether a fixed time limit for response is unduly restrictive[;][¶] 4. Whether the on-call employee can easily trade his or her on-call responsibilities with another employee[;] and [¶] 5. Whether and to what extent the employee engages in personal activities during on-call periods.”
There is no question class treatment constitutes the superior mode of resolving Ghazaryan's claims in this action. Based on the evidence submitted by Diva in opposition to the motion, its compensation policy has been carefully drafted; and Diva very well may find its policy upheld as reasonable under the existing DLSE standard. We see no advantage to either party to resolution of this question on a piecemeal basis and agree with Ghazaryan such a prospect would jeopardize the ability of employees to find competent representation if restricted to their own individual claims. (See Harper v. 24 Hour Fitness (2008)167 Cal.App.4th 966, 976, 84 Cal.Rptr.3d 532.) In light of this conclusion, we need not accept Ghazaryan's invitation to decide whether a trial court has a duty to modify the class definition put forth by counsel for the putative class.
You can download the full text of Ghazaryan here in Word or PDF. Perhaps in the next appeal, we will get an interesting ruling on the merits, answering the question of whether an employer is obligated to pay an employee for such on-call time.