July 29, 2019

Court of Appeal Affirms Complete Victory in Class Action/PAGA Case

The California Court of Appeal has affirmed a complete victory by Payne & Fears’ client, Safeway, Inc., over a certified class of wage-and-hour plaintiffs. Esparza v. Safeway Inc., et al., B287927 (Los Angeles County Super. Ct. No. BC369766, June 10, 2019).

Plaintiffs filed the Esparza action in 2007, alleging (among other claims) that Safeway failed to provide meal periods to its retail employees throughout California, and failed to pay one-hour premiums to those employees who did not receive meal periods. Plaintiffs stated claims directly under Labor Code 226.7, and also under the Unfair Competition Law, Business & Professions Code section 17200 et seq. (the “UCL”). In 2013, Plaintiffs obtained class certification on their UCL claim only, asserting that Safeway’s alleged failure to pay any meal period premiums prior to June 17, 2007, constituted an unfair business practice in itself, without regard to whether Safeway actually “provided” meal periods. Plaintiffs argued that the statutory protections of the meal period laws had a “market value” to employees, and that Safeway’s employees were deprived of that value by Safeway’s failure to pay premiums. Safeway challenged the ruling, but the Court of Appeals affirmed, finding that Plaintiffs had sufficiently identified common questions. Safeway, Inc. v. Superior Court (2015) 238 Cal.App.4th 1138, 1162-1163.

Back in the trial court, Safeway moved for summary adjudication against the certified class claim, arguing that Plaintiffs’ theories sought to impose liability against Safeway for every short, missed or late meal period that occurred, without regard to why it had occurred. Safeway also argued that the “market value” theory described damages (as opposed to restitution), which are not available as a remedy under the UCL. The trial court granted the motion. Safeway then moved to strike Plaintiffs’ companion claim under the Private Attorneys General Act of 2004, Labor Code section 2698, et seq. (“PAGA”), arguing that it was untimely because Plaintiffs did not fulfill the administrative prerequisite to a PAGA claim – giving notice to the state Labor and Workforce Development Agency (the “LWDA”) – until more than one year after the last alleged violation. The trial court granted that motion as well, effectively eliminating all of Plaintiffs’ class or representative claims.

On June 10, 2019, the Court of Appeal issued a published opinion affirming both defense rulings, noting that: (1) Plaintiffs were not entitled to classwide recovery of meal period premiums without proving, on a classwide basis, that Safeway failed to provide meal periods in the first place; (2) Plaintiffs’ novel “market value” theory did not support a claim for restitution under the UCL; and (3) the “relation-back” theory by which Plaintiffs attempted to save their PAGA claim could not cure their failure to give notice to the LWDA. 

Jeff Brown, Jim Payne and Ray Boggess handled Safeway’s successful defense.