The Northern District of California recently certified a class of employees in an action against an auto parts store for failure to reimburse expenses. Plaintiff alleged that the defendant required certain management-level employees—specifically, store managers, assistant store managers, and retail service specialists—to make daily bank deposits but did not reimburse them when they used personal vehicles to do so. Though the company had a standard policy regarding expense reimbursement, employees were required to submit a request in order to receive payment, and the defendant did not track which employees made bank deposits or otherwise ensure those employees were reimbursed. According to plaintiff, these practices violated California Labor Code § 2802. Importantly, the court had previously held that an employer’s duty to reimburse its employees under § 2802 does not depend on an employee making a reimbursement request but, rather, is triggered by the employer’s knowledge that the expense was incurred. Relatedly, the court noted that waiver, estoppel, and laches defenses based on an employee’s failure to make such a request were inapplicable to defeat such a claim.
Plaintiff sought to certify a class of all employees who worked in the pertinent managerial positions from the beginning of the relevant time period until the conclusion of the class action. The court found this definition overbroad in two ways. First, the court noted that the definition could not include an open-ended class period that continued through the end of the action. Such a definition was vague and especially problematic given that plaintiff sought certification under Rule 23(b)(3), which includes a notice and opt-out requirement. If the class period were open-ended, notice would have to be provided to new class members on an ongoing basis, a situation the court found unworkable. It therefore changed the definition to end the class period at the date of certification. Second, the court found that plaintiff’s class definition was not specifically tied to the wrongful act alleged; hence, the court redefined the class to include only those managers who certified that they had used a personal vehicle to make a bank deposit for the defendant and had not been reimbursed. In redefining the class, the court rejected arguments that the narrowed class definition created a “fail-safe class” and that the class was not ascertainable. The court found that self-identification could be used to determine class membership; defendant’s own failure to keep records regarding which employees made bank deposits could not be used to avoid certification.
The court then found that the commonality, predominance, manageability, and superiority requirements for certification were met, stating that whether defendant had knowledge that its employees were not being reimbursed could be determined through common evidence, and that other individualized issues would arise at the damages stage. Regarding adequacy and typicality, the court found that individualized defenses as to the named plaintiff did not render him an inadequate class representative, nor did store managers’ apparent conflict of interest defeat certification. Although store managers’ positions made them both putative class members as well as agents of the company whose actions and knowledge could be relevant to establishing liability, the court dealt with the potential conflict by creating two subclasses. Numerosity was not in dispute.