Why it matters

A putative class of Federal Express drivers was unable to persuade the Ninth Circuit Court of Appeals to reverse denial of a motion for class certification in their suit seeking overtime under California state law. Yvette Green and other drivers charged that the company illegally denied meal breaks and withheld overtime to workers in the state by requiring them to clock in prior to the start of their shift and then stay on the premises without payment until their shift started. In 2009, a federal district court judge denied class certification and the federal appellate panel reversed. On remand, the judge again denied certification and the employees again appealed. But the second time proved to be the charm for FedEx, with the Ninth Circuit finding that Green failed to establish that the company had a policy limiting what workers could do once they were clocked in but not officially on their shift. Instead, the evidence showed that once employees clocked in, they were allowed to leave the premises as long as they were at the worksite and ready to work when their shift started. In light of the company’s recent agreement to pay $228 million to a class of California FedEx drivers claiming that they were employees and not independent contractors, the unpublished ruling constitutes a resounding victory for the employer.

Detailed discussion

A driver for Federal Express, Yvette Green, alleged that the company failed to pay her for work performed during meal breaks and withheld overtime pay to its California workers. According to Green, the company had a policy that required workers to clock in prior to the start of their shift, and then remain on the premises without payment until their shift started, as well as remain on the premises at the end of their shift until they clocked out.

Green sought to certify two classes of workers in the suit: (1) an “Unpaid On-the-Clock Class” for those employees who were not paid for the time between when they clocked in until the time they actually started their shift and the time between when they ended their shift to the time they clocked out; and (2) a “Working Meal Break Class” for those employees that were not paid for work performed during unpaid meal breaks.

A federal court judge denied Green’s motion for class certification in 2009. She appealed to the Ninth Circuit Court of Appeals and a three-judge panel reversed. The court instructed the trial judge to stay its decision pending the California Supreme Court’s ruling in Brinker Restaurant Corp. v. Superior Court, 273 P.3d 515 (2012).

After Brinker was issued, the district court again denied the motion for class certification and Green again appealed to the Ninth Circuit.

This time, the federal appellate panel affirmed the denial of Green’s motion.

The court first examined the Unpaid On-the-Clock Class. In its first decision, the Ninth Circuit had instructed the district court to determine whether the level of FedEx’s control over employees within the proposed class “when they are on-the-clock but off-shift” was sufficient to render the time compensable.

Absent a policy that prevented the FedEx employees from using that time for their own benefit, Green could not show classwide control by the employer, the panel said—and without demonstrating classwide control, Green could not satisfy Federal Rule of Civil Procedure 23(b)(3), as individual fact inquiries concerning whether FedEx controlled each employee would predominate over any common question.

Unfortunately for Green, the testimony did not support classwide control. “The designees testified that they saw no reason why the employees would not be able to leave the FedEx premises (or use the time for any other purpose) after clocking in as long as they returned and were ready to work by the time their shift started,” the panel wrote. “Additionally, it is undisputed that if an employee worked during that time (whether before or after their shift), they would be compensated for that time if they notified their manager and had their time card adjusted.”

Green only presented testimony from some employees at the Los Angeles branch that they thought they could not leave the premises after clocking in. “At best, this evidence suggests that employees at that branch may have been under FedEx’s control after clocking in,” the court said. “However, this evidence must be contrasted with testimony from employees at the San Diego office indicating that they were free to leave the premises after clocking in.”

Taking the testimony from employees at both locations, the “evidence demonstrates that the district court’s conclusion, that FedEx did not have a uniform policy that automatically placed all of the potential class members under FedEx’s control as soon as they ‘clocked in,’ was not clearly erroneous,” the panel said.

The Working Meal Break Class similarly failed under the court’s scrutiny. While California employers are obligated to relieve employees of all duty for an uninterrupted 30-minute period, the employer is not required to actually ensure that its employees take meal breaks, the court said, citing Brinker.

“If a meal break is provided, and an employee works through the break, ‘the employer is liable only for straight pay, and then only when it knew or reasonably should have known that the worker was working through the authorized meal period,’ ” the court wrote. “However, ‘the employer is not obligated to police meal breaks and ensure no work thereafter is performed.’ ”

To certify a class, Green had to show that FedEx knew or should have known that some of its employees were working through their meal breaks. Green proposed that the class could be established by using electronic scans of packages during designated meal breaks, but the court rejected the suggestion.

“First, it is undisputed that FedEx did not regularly review the electronic data Green would use to show work performed during meal breaks. Therefore, Green’s evidence does not show that FedEx actually knew of uncompensated work being done,” the panel wrote. “Thus, FedEx had no obligation to sift through the volumes of electronic data produced by the scanning devices to determine whether its employees were actually taking their authorized breaks.”

Lacking a common method of proof that would require FedEx to compensate its employees on a classwide basis, the court held that individual issues as to whether an employee actually worked during a meal break—and brought that to FedEx’s attention—would predominate.

The Ninth Circuit affirmed denial of the motion to certify both classes in the suit.

To read the decision in Green v. Federal Express Corporation, click here.