Gammella v. P.F. Chang's China Bistro, Inc.
Gammella v. P.F. Chang's China Bistro, Inc.
Opinion of the Court
**2The plaintiff Felice Gammella worked greeting customers, helping out behind the bar, taking food to tables, and assembling delivery orders at several Boston-area restaurants operated by the defendant P.F. Chang's China Bistro, Inc. He alleges on behalf of himself and a putative class of similarly situated employees that the defendant had a common practice of violating the "reporting pay" or "three-hour" requirement of 454 Code Mass. Regs. § 27.04(1) (2015), which requires employers to pay employees three hours' wages at no less than the minimum wage **3if they report for a scheduled shift of three or more hours but are involuntarily dismissed before they have worked three hours. The plaintiff brings suit under the Wage Act, G. L. c. 149, § 150 (Wage Act), and what is known as the minimum fair wage law, *694G. L. c. 151, § 20 (collectively, wage laws).
At issue is whether (1) either of the wage laws specify a different standard for class certification from that set forth in Mass. R. Civ. P. 23, as amended,
We conclude that rule 23 provides the correct standard for determining class certification in a claim under the wage laws. Because we hold that the plaintiff met his burden of demonstrating numerosity under that rule, we reverse the denial of the plaintiff's motion for class certification on this ground. And because the plaintiff did not accept either of the defendant's offers and informed the court of his intention to appeal from the denial of class certification, we also hold that the defendant's motion to dismiss for mootness was improperly granted. We accordingly reverse the motion judges' orders and remand the case for further proceedings consistent with this opinion.
**41. Background and procedural history. The plaintiff worked at the defendant's restaurants for most of the period from 2007 to 2015. As required by the employer, the plaintiff and other employees clocked in and out of a timekeeping system. The hours recorded in the timekeeping system formed the basis for the employees' compensation. Like the servers, bartenders, hosts, and other staff employed by the defendant, the plaintiff was compensated on an hourly basis at the minimum wage.
The plaintiff brought suit in November 2014 under the wage laws on behalf of himself and a putative class of employees who allegedly had been denied pay for reporting to work (reporting pay) in violation of a regulation of the Division of Occupational Safety, issued pursuant to G. L. c. 151, requiring that "[w]hen an employee who is scheduled to work three or more hours reports for duty at the time set by the employer, and that employee is not provided with the expected hours of work, the employee shall be paid for at least three hours on such day at no less than the basic minimum wage."
*695454 Code Mass. Regs. § 27.04(1).
Although the defendant claimed that its policy was to comply with the three hour reporting pay requirement, it produced no evidence in discovery that it had ever done so.
In his deposition testimony, the defendant's regional vice-president of operations admitted that he had no way of knowing if the hundreds of employees on the report had been involuntarily dismissed. Nonetheless, the vice-president claimed that employees often voluntarily asked and were granted permission to leave before three hours of their shifts had elapsed. He further testified that the defendant's practice was not to provide reporting pay in those circumstances, or in cases where the defendant's managers decided to close a restaurant early due to inclement weather, *696ordered an employee to leave work early for violating company policy, or solicited volunteers to leave early because a restaurant was not busy.
Following discovery, the plaintiff moved to certify a class comprising "[a]ll [defendant's] hourly employees who worked in Massachusetts at any time from November 25, 2011 to the present, and who had at least one shift where they were scheduled to work three or more hours but worked less than three hours, including without limitation" all the employees identified by employee number on the defendant's report who had worked less **6than three hours of a scheduled shift without receiving reporting pay. The defendant opposed the motion.
In his written decision, the judge determined that the defendant neither provided the plaintiff with reporting pay nor, based on its timekeeping records, had it "identified a single instance" from 2011 to 2015 where it had provided reporting pay to any other Massachusetts employee who had been scheduled for a shift of three or more hours but worked less than three hours. The judge nonetheless concluded that, pursuant to an opinion letter from the Executive Office of Labor and Workforce interpreting the reporting pay requirement, an employer did not have to provide reporting pay where an employee chose to leave work before three hours of a scheduled shift had elapsed " 'completely on a voluntary basis,' free from any express or implied pressure from the employer."
After the plaintiff's class certification motion had been denied, the defendant made two offers to the plaintiff that purported to provide complete relief on his individual claim. Pursuant to rule 68, the defendant first made an offer ( rule 68 offer) to have judgment entered against it for $ 962.08 plus prejudgment interest as well as costs and attorney's fees associated with the plaintiff's individual claim, while expressly excluding any fees related to his class-based claims. In the rule 68 offer, the defendant "expressly denie[d] all ... liability and denie[d] [p]laintiff's allegations,"
**7and explained that the offer would "resolve, finally and fully, the claims and causes of action alleged by [p]laintiff" and that "[i]f this offer is accepted, no further relief shall be granted to [p]laintiff." The offer provided that it "shall expire if not accepted in the manner and within the timeframe provided in Rule 68," specifically that if the plaintiff did not accept the offer within ten days, "it is deemed withdrawn."
*697
Subsequently, the defendant made an offer in the form of a certified check for $ 1,732.50 and an accompanying letter (tender offer) that were both hand delivered to the plaintiff's counsel. The letter explained that the offer would "tender[ ] complete relief on the individual claim" because the "amount tendered is more than what [the plaintiff] could hope to obtain if he were to prevail at trial." Like the rule 68 offer, the letter stated that the defendant would pay reasonable attorney's fees, costs, and interest with respect to the plaintiff's individual claim. The letter further stated that "[s]hould you choose to not respond to or reject this tender, we will seek to dismiss this action." As with the rule 68 offer, the tender offer was rejected by the plaintiff.
The defendant then moved to dismiss the case on the grounds that through its rule 68 offer and tender offer it had "voluntarily presented [the plaintiff] all available statutory damages for his individual claims."
The motion judge held a hearing on the motion to dismiss. The defendant's counsel stated at the hearing that, if its motion were granted, the plaintiff still could take "an appeal of the denial of class certification." The judge granted the defendant's motion on the grounds that the "plaintiff has been provided with complete relief as to his individual claims by the defendant and accordingly those claims are moot. The court therefore lacks subject matter jurisdiction over this matter." The judge also noted that the plaintiff's motion for class certification had earlier been denied. In his order of dismissal, the judge instructed the plaintiff to submit an affidavit and documents supporting an award of fees and costs. The parties subsequently entered into a stipulation for attorney's fees and costs with respect to the plaintiff's individual claim. The stipulation was incorporated into the final judgment entered *698by the judge. We transferred the defendant's appeal from the Appeals Court on our own motion.
2. Discussion. a. Certification standard for class actions under Wage Act or minimum fair wage law. As a threshold matter, we address the plaintiff's argument that the wage laws "confer[ ] rights greater than those conferred more generally" under rule 23 with respect to class action litigation. To achieve class certification, rule 23 (a) requires plaintiffs to show that: "(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class." Additionally, under rule 23 (b), plaintiffs must show that the "questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." By contrast, G. L. cc. 149 and 151 simply authorize an allegedly aggrieved employee to "prosecute in his own name and on his own behalf, or for himself and for others similarly situated, a civil **9action for injunctive relief, for any damages incurred and for the full amount of the minimum wages less any amount actually paid to him by the employer" (emphasis added). G. L. c. 151, § 20. See G. L. c. 149, § 150. See also note 13, infra.
The plaintiff argues that a more lenient class certification standard should thus be inferred from these provisions of the wage laws. The defendant argues that the statutory authorization of a private right of action, including the right to bring a class action, does not alter the certification standards set out in rule 23, and thus that the motion judge correctly applied these standards to a class action brought under the wage laws. We agree with the defendant, and accordingly we hold that rule 23 provides the correct framework for analyzing a certification claim brought under the Wage Act or the minimum fair wage law.
We begin with the text of the wage laws. See Northeast Energy Partners, LLC v. Mahar Regional Sch. Dist.,
Moreover, nothing in the statutory text or legislative history suggests that the Legislature meant to create a lower standard for class certification than rule 23 when it added this provision to the wage laws. See Northeast Energy Partners, LLC,
Moreover, it is clear from our previous application of rule 23 to class actions brought under the wage laws in Salvas v. Wal-Mart Stores, Inc.,
In short, consistent with our decision in Salvas, we apply rule 23 to claims under the wage laws at issue here. There is no indication from the text or legislative history of these wage laws that the Legislature intended to modify the class certification criteria contained in rule 23. Additionally, we have recognized that the adaptable requirements of rule 23 well serve the policy rationales supporting class actions in the employment context. We thus hold that the motion judge correctly used the rule 23 factors to analyze a claim brought pursuant to the wage laws at issue here.
b. Denial of class certification. We review the judge's decision not to certify the plaintiff's proposed class under rule 23 for an abuse of discretion. Salvas,
The judge denied certification on the grounds that the plaintiff had failed to satisfy the numerosity requirement contained in rule 23 (a), which mandates that the class be "so numerous that joinder **12of all members is impracticable."
At the class certification stage, this is "information sufficient to enable the motion judge to form a reasonable judgment that the class meets the requirements of *701rule 23" with respect to the numerosity requirement (citation omitted). Salvas,
The motion judge should also have recognized that the dollar amount that each employee could potentially recover was likely to be too small for individual suits to be practicable and that employees bringing such individual suits had reason to fear retaliation.
**13See W.B. Rubenstein, 7 Newberg on Class Actions § 23.18 at 665 (5th ed. 2017) (7 Newberg on Class Actions) (discussing factors relevant to numerosity determination in employment context). See also Salvas,
The motion judge nonetheless concluded that it could not make the numerosity determination "[w]ithout a more specific numerical allegation or evidence, particularly considering that not all employee departures before three hours are necessarily eligible for reporting pay." He further concluded that such uncertainty meant that he could not "reasonably determine that there is a sufficient number of class members such that class certification would be a better approach than joinder of individual plaintiffs." As we have previously stated, however, the burden, at the class certification stage, "is of a different order than the party's burden of proof at trial." Salvas,
Indeed, this was the case in Salvas. There, the defendant employer likewise argued that class certification should be denied because some employees might have voluntarily skipped breaks, and hence would not have been injured by the employer's allegedly unlawful policy of denying breaks.
*702
In Salvas, we also rejected the motion judge's reliance on the defendant's own record-keeping deficiencies as a grounds to deny class certification. Salvas,
c. Mootness. We next consider whether the motion judge properly dismissed the plaintiff's case for lack of subject matter jurisdiction. As mentioned, the plaintiff's class certification motion had been denied and the plaintiff had not yet appealed when the defendant moved to dismiss the case. The judge dismissed the entire case on the grounds that the defendant's rule 68 offer and tender offer provided the plaintiff with "complete relief as to his individual claims ... and accordingly those claims are moot." We review dismissal for lack of subject matter jurisdiction de novo. See Indeck Me. Energy, LLC v. Commissioner of Energy Resources,
We begin by considering whether an unaccepted rule 68 settlement offer or a monetary tender designed to satisfy the individual claims of a named plaintiff in a putative class action can render those individual claims moot, thus leading to dismissal of the entire case, even when the class certification decision has not yet been appealed. Regarding the effect of a rule 68 offer, we are instructed by the United States Supreme Court's consideration of the issue in *704Campbell-Ewald Co. v. Gomez, --- U.S. ----,
Here, as mentioned, following the denial of the motion for class certification, the defendant first made a rule 68 offer and then made a tender offer to the plaintiff in amounts that purported to **17satisfy his individual monetary damages. The defendant concedes that the rule 68 offer "was not accepted" by the plaintiff. We see no reason to apply a different analysis to a lapsed and unaccepted offer under rule 68 from that which the Supreme Court in Campbell applied to an offer made pursuant to the analogous Federal rule: both rules, for example, state that an offer will expire within a certain time frame, explain that an offer not accepted is deemed withdrawn, and penalize a party who rejects an offer by requiring the rejecter to pay the offeror's costs from the date of the offer if the rejecter ultimately receives a less favorable judgment.
The defendant nonetheless argues that this case is distinguishable from Campbell because, in addition to its rule 68 offer, it made the plaintiff a tender offer in the form of a certified check that was also in an amount purportedly providing complete relief on the plaintiff's individual claim. It is true that the Supreme Court expressly left open in Campbell the question whether the defendant's deposit of the "full amount of the plaintiff's individual claim in an account payable to the plaintiff," followed by the court's entry of "judgment for the plaintiff in that *705amount," **18could render moot the individual claim of a named plaintiff who has not yet moved for class certification. Campbell,
Furthermore, it is well settled under Federal law that, even where a named plaintiff's individual claim is rendered *706moot, class claims may remain live where the plaintiff has yet to appeal from the denial of a motion for class certification. 1 Newberg on Class Actions, supra at § 2:15, at 74 (Supp. 2018) (describing "well-settled" Federal rule under which "mooting of the named plaintiff's claims after a decision on class certification" -- including denial of class certification -- "does not moot the class action" [emphasis omitted] ). See, e.g., United States Parole Comm'n v. Geraghty,
We recognize that the mootness issue is particularly important in this case because no other named plaintiff has yet been identified. Given the hundreds of potential plaintiffs affected by the failure to provide reporting pay, and the possibility of further discovery, we do not consider this to be a proper grounds to deny certification. 1 Newberg on Class Actions, supra at § 3:13, at 211 (not fatal to certification that the plaintiff did "not allege the ... specific identity of proposed class members." Cf.
*707Weld,
**21Although we conclude that neither the plaintiff's individual nor his class claims are moot, we emphasize that the remaining certification factors, for example whether the plaintiff is a typical class representative, still need to be decided on remand. And even if certification is granted, we further emphasize that a "decision as to class certification is not immutable" and that "after a certification order is entered, the judge remains free to modify it in the light of subsequent developments in the litigation" (citation omitted). Kwaak,
3. Conclusion. For the foregoing reasons, we reverse the denial of the plaintiff's motion for class certification and the granting of the defendant's motion to dismiss. We remand the matter to the trial court for further proceedings consistent with this opinion.
So ordered.
General Laws c. 149, § 150 (Wage Act), allows an employee to bring suit for wages wrongfully withheld under G. L. c. 149, § 148. General Laws c. 151, § 20, allows an employee who is paid by an employer "less than the minimum fair wage to which the person is entitled under or by virtue of a minimum fair wage regulation" to bring suit to recover "the full amount of the minimum wages less any amount actually paid to him by the employer."
We acknowledge the amicus briefs submitted in support of the plaintiff by the Center for Health Law & Policy Innovation of Harvard Law School, the Immigrant Worker Center Collaborative and the Massachusetts Employment Lawyers Association, and Mark D. Stern P.C; and in support of the defendant by the New England Legal Foundation.
This regulation was formerly 455 Code Mass. Regs. § 2.03(1) (2003).
The plaintiff stated that the defendant's managers would always tell him that "you're cut" or "we're not busy, you're cut." The plaintiff suggested that the managers involuntarily dismissed him in the hope that he would quit.
The defendant claimed that it posted the reporting pay requirement on posters in all its restaurants and distributed a manual to its managers explaining that, under Massachusetts law, employees were to receive three hours of "show up pay" at no less than the minimum wage "regardless of whether actual work is assigned," the only specified exception being if the "employee was originally scheduled to work for fewer than three hours." It also claimed that its managers were able to adjust the hours that an employee clocked into the time-keeping system so that the employee received reporting pay when appropriate.
The defendant produced the reports in response to discovery requests that sought to identify instances from 2011 to 2015 when the plaintiff and any other employees "were scheduled to work a shift of more than three hours but were instructed to clock out after working fewer than three hours of that shift." In response to a request for information concerning the "number of hours paid" in these circumstances, the defendant stated that its "employees are paid for the number of hours worked" (emphasis added).
The defendant provided the identities of the managers at the locations where the plaintiff worked to the plaintiff. Despite the plaintiff's discovery requests for the names of all the other employees, the defendant refused to provide the information on the grounds that it was "confidential," the plaintiff was not entitled to class-wide discovery with respect to the names, and the "[p]laintiff [did] not need the names and contact information of putative class members to advance class certification." Instead, the defendant proposed to provide "a random, representative sample of employee names and contact information." The plaintiff did not pursue this offer.
The defendant attached twenty affidavits from its managers and employees to its opposition to the plaintiff's motion for class certification. The plaintiff moved to have these affidavits struck or disregarded on the grounds that they had not previously been disclosed, despite his request for the identities of putative class members. The judge did not consider the affidavits in his decision, and accordingly we do not rely on them here.
See Minimum Wage Opinion Letter 1-26-09, available at https://www.mass.gov/files/documents/2017/10/26/MW%20Opinion%2001-26-09.pdf [https://perma.cc/9XNR-YU28].
The defendant's offer of judgment pursuant to Mass. R. Civ. P. 68,
The defendant calculated the plaintiff's total damages based on the twenty instances where its timekeeping records revealed that the plaintiff had been scheduled to work three or more hours but in fact worked less than three hours. The total came to $ 425.13, including trebling under the Wage Act. The plaintiff does not seem to dispute that the monetary amounts of the offers would be sufficient to satisfy his claimed individual damages.
The Legislature added this provision to several sections of the Wage Act in 1993. See St. 1993 c. 110, §§ 177-179 (amending G. L. c. 149, §§ 27F, 27G, 27H, 150 ). We have recognized that its primary purposes in doing so was to create a private right of action in a statute that previously had been enforced only by the Commonwealth. See Lipsitt v. Plaud,
By contrast, the minimum fair wage law, G. L. c. 151, § 20, provided for individual actions from its inception, but did not provide for class actions. See St. 1947, c. 432, § 1. In 2008, the Legislature amended this statute to provide for a civil action to be brought by an allegedly aggrieved employee "in his own name and on his own behalf, or for himself and for others similarly situated" (emphasis added). St. 2008, c. 80, § 7. This provision is worded identically to that conferring a private right of action in the Wage Act, and we thus infer a similar legislative intent to create a "substantive right to bring a class proceeding" where none had previously existed. Machado v. System4 LLC,
General Laws c. 93A, § 9 (2) was enacted before the Massachusetts Rules of Civil Procedure (including rule 23 ) were adopted. See Feeney v. Dell Inc.,
"Despite its moniker, the numerosity requirement is less about the number of class members than it is about the impracticability of joinder of the several parties." J. Greaney, K.C. Adam, & L. M. Scalisi, Deconstructing Rule 23 : A Comparison of Massachusetts and Federal Class-Action Litigation, § 2.3.1 at 11 (2013). In turn, the "determination of practicability should depend upon all the circumstances surrounding a case." Reporter's Notes (1973) to Rule 23 (a) (1), Mass. Ann. Laws Court Rules, Rules of Civil Procedure, at 508 (LexisNexis 2018-2019), quoting Demarco v. Edens,
In Salvas v. Wal-Mart Stores, Inc.,
The plaintiff concedes that employees who voluntarily "asked to leave early" would not be entitled to reporting pay, although he disputed that employees who the defendant asked to volunteer would truly have left voluntarily. Additionally, the defendant offers no justification for why it would not owe reporting pay in other circumstances when it required an employee to leave work early, such as closing a restaurant for inclement weather.
The judge compounded this burden of proof error when he redefined the proposed class to "contain only employees who were involuntarily cut before three hours and employees who were offered a choice to leave before three hours, but that choice was 'not free from express or implied pressure from the employer' (i.e., the employees was involuntarily cut)." As the United States Court of Appeals for the Seventh Circuit has explained: "A case can't proceed as a class action if the plaintiff seeks to represent a so-called fail-safe class -- that is, a class that is defined so that whether a person qualifies as a member depends on whether the person has a valid claim" (quotation and citation omitted). McCaster v. Darden Restaurants, Inc.,
The judge essentially did the same here, contrary to the purpose of class actions. See 1 Newberg on Class Actions § 3:6 at 171-172 ("liability-begging definitions" result in "head[s] I win, tails you lose" scenario because any putative class members to whom defendant is not found liable are not in class, not bound by judgment, and can continue to litigate same issue at expense of judicial economy and contrary to purpose of class actions). Although a judge has discretion to redefine a class, that discretion must be exercised "in accord with the purposes sought to be achieved by class actions," as defined by the standards set out in rule 23. Salvas,
Remand is appropriate because, in the absence of any findings or conclusions with respect to the other class certification factors, we cannot determine whether the judge exercised his discretion as to these factors properly. See Commonwealth v. Lys,
As explained in the Reporter's Notes (1973) to Rule 68, Mass. Ann. Laws Court Rules, Rules of Civil Procedure, at 1382 (LexisNexis 2018-2019), "[w]ith one slight exception [Massachusetts] Rule 68 is the same as Federal Rule 68." In relevant part, the State rule provides that a "party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against him for the money or property or to the effect specified in his offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the clerk shall enter judgment. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment exclusive of interest from the date of offer finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer." Mass. R. Civ. P. 68,
The plaintiff's decision not to take an interlocutory appeal from the class certification decision did not waive his right to appeal. See Packaging Indus. Group, Inc. v. Cheney,
Most Federal courts have reacted with "suspicion or outright hostility" to attempts by defendants to render moot putative class actions by tendering full relief to the named plaintiff with respect to his or her individual claims. K. Christakis, J. Pilgrim, & J. Morrissey, "So You're Telling Me There's A Chance!": The Post-Campbell-Ewald Possibility of Mooting a Class Action by "Tender" of Complete Relief,
By contrast, Demmler vs. ACH Food Companies, Inc., U.S. Dist. Ct., No. 15-13556-LTS, slip op. at 8,
The Court also held that the claims of the named plaintiffs were not moot because they retained an "individual interest" in an award of class-wide attorney's fees. Deposit Guar. Nat'l Bank of Jackson, Miss. v. Roper,
This conclusion is consistent with our previous decisions on mootness in the class action context. In those cases, we recognized that class claims should not be rendered moot where the defendant voluntarily stopped the complained of conduct as to the named plaintiff but not necessarily to the broader putative class. See Cantell v. Commissioner of Correction,
Reference
- Full Case Name
- Felice GAMMELLA v. P.F. CHANG'S CHINA BISTRO, INC.
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- 12 cases
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