Law360 (June 11, 2019, 10:32 PM EDT) -- A California appeals court on Monday handed a win to grocery chain Safeway Inc. in a suit brought by a group of former employees challenging the company's former policy on missed meal breaks, finding the workers hadn't shown they were entitled to the restitution they were after.
The Second Appellate District's published opinion - upholding a trial court's exoneration of Safeway - puts to rest the suit brought more than a decade ago by the former Safeway and Vons employees. The workers had taken issue with their employer's practice of failing to pay a premium rate to employees unlawfully dissuaded from taking meal breaks, according to the court filings.
The employees argued their jobs were worth less because of this practice deprived them of guaranteed premium wages, and they were therefore entitled to restitution. They sought no other remedy under California's unfair competition law, according to the filings.
But they proposed to demonstrate that value using time-punch data and the class members' hourly pay rates, a method that doesn't actually show that value, the three-judge panel said in the 37-page ruling Monday.
"Appellants attempt to conflate the remedy for a statutory violation with the value of the statutory guarantee to receive that remedy," the Second District said. "At the certification stage, they recognized this equivalence could not be established without evidence. However, appellants produced no evidence to support this equivalence in opposition to Safeway's motion for summary adjudication.
Plaintiffs Enrique Esparza, Cathy Burns, Levon Thaxton II, and Silvia Vezaldenos brought suit in 2007. Vons is owned by Safeway, which was acquired by Albertsons several years into litigation of the workers' case, according to the company.
Per California labor law, Safeway can't dissuade an employee from taking a meal break. If the company does, it is required to pay that employee a premium wage equal to one hour's pay. But prior to June 2007, Safeway didn't pay that premium wage to employees who missed meal periods, regardless of whether they were dissuaded from taking breaks, the former employees alleged in their suite.
The company has since amended that practice, according to the filings.
The workers claimed Safeway violated the unfair competition law, looking to establish liability for the policy, not the unpaid wages, according to the filings. Vezaldenos also alleged a violation of the Labor Code Private Attorneys General Act of 2004, which permits employees to recover civil penalties for labor code violations.
The employees successfully attained class certification for their unfair competition claim, and the Second District shot down a challenge from Safeway to that certification in 2015, according to the filings. At that time, the Second District declined to consider the merits of the employees' theory of restitution, ruling only that the class should indeed be certified.
The plaintiffs said the harm underlying their ability theory wasn't the unpaid premium wages, it was instead premised on Safeway's practice of ignoring the law. Such a practice harmed the class because its members were denied the value of working for an employer who abided by the law, they said.
Judge Nora M. Manella, who also penned Monday's opinion, wrote in the 2015 decision that the plaintiffs offered evidence that Safeway maintained a common practice or policy of failing to pay meal break premium wages when required, an allegation that indeed constitutes an unfair business practice, according to the filings. However, she emphasized at the time that they couldn't establish liability for the policy or practice without common proof of harm that would support recovering restitution.
"Our decision did not approve the appellants' theory of restitution," Manella wrote Monday. "Rather, it held that for purposes of class certification, appellants had adequately demonstrated their theory did not rely on individualized proof that class members had been improperly denied meal breaks."
Later, the trial court ruled in favor of Safeway on the unfair competition claim, finding that the appellants improperly sought recovery of premium wages without proving classwide meal period violations, per the filings. The court also ruled the Vezaldenos' PAGA claim was time-barred.
And the trial court made no mistake in its decision, the Second District found Monday, holding that the employees had "failed to submit evidence raising a triable issue of material fact regarding whether Safeway's no-premium-wages policy harmed the class members in a manner entitling them to ... restitution."
Jeff Brown, counsel for Safeway, told Law360 on Tuesday that he's thrilled with the decision, noting that it's "gratifying" that the judge who wrote Monday's decision also authored a decision upholding certification of the class several years ago.
"What this opinion does is really clarify the first Esparza decision back in 2015, what the court of appeal was doing was finding that certification was appropriate," he said. "They did not endorse a new theory of liability."
Counsel for the plaintiffs didn't immediately return requests for comment Tuesday.
Judges Nora M. Manella, Thomas L. Willhite Jr., and Audrey B. Collins sat on the panel for the Second Appellate District.
Esparza is represented by Matthew J. Matern and Mikael H. Stahle of Matern Law Group PC and James M. Finberg of Alrshuler Berzon LLP.
The defendants are represented by James L. Payne, Jeffrey K. Brown, and Ray E. Boggess of Payne & Fears LLP.
The case is Esparza, et al. v. Safeway Inc., et al., case number B287927, in the California Court of Appeals for the Second Appellate District.
-- Editing by Kelly Duncan.