Sloane v. Rehoboth McKinley Christian Health Care Servs., Inc.
Sloane v. Rehoboth McKinley Christian Health Care Servs., Inc.
Opinion
{1} This is a wage-and-hour putative collective and class action alleging that Defendant, Rehoboth McKinley Christian Health Care Services, Inc. (Rehoboth), failed to pay Plaintiffs and other non-exempt employees for time they spent working during meal breaks. This Court granted Plaintiffs' application for interlocutory appeal to consider two questions: (1) whether the district court erred in denying conditional certification for a collective action under the Minimum Wage Act (MWA), NMSA 1978, §§ 50-4-19 to -30 (1955, as amended through 2013); and (2) whether the district court erred in denying *21 class certification for Plaintiffs' unjust enrichment claim. For the reasons that follow, we reverse the district court's denial of conditional certification for the MWA claim, and we affirm the district court's denial of class certification for the unjust enrichment claim.
BACKGROUND
{2} Rehoboth is a non-profit, integrated healthcare delivery system that operates a sixty-bed acute care hospital in Gallup, New Mexico. Plaintiffs are a group of Rehoboth employees considered to be non-exempt for purposes of calculating minimum wage and overtime wages. During the relevant period, Rehoboth employed hundreds of such non-exempt employees at its Gallup facility. The non-exempt employees were all subject to Rehoboth's employee handbook. Particularly relevant to this case, the handbook outlined Rehoboth's policy on meal breaks.
{3} Under Rehoboth's meal break policy, non-exempt employees involved in direct patient care or support services received unpaid meal breaks. In order to carry out this policy of unpaid meal breaks, Rehoboth's timekeeping system automatically deducted time for meal breaks in half-hour increments. Basically, this means that non-exempt employees were provided with an unpaid half hour during their shift in which to eat, and the purpose of the automatic deduction was to ensure that this period was accounted for without the employee having to clock out and then clock back in. If an employee had to work through a meal break, the policy provided that the employee must get his or her supervisor's permission and must affirmatively punch the "no lunch" button on the time clock at the end of his or her shift. The "no lunch" option thus allowed the employee to be compensated for a meal period for which he or she worked. In addition, the employee could also report-after the fact-that he or she had worked through a meal break, and several avenues existed to reverse the automatic deduction. Specifically, the employee, supervisor, or payroll department could make changes to the employee's pay report.
{4} Plaintiffs are five non-exempt employees of Rehoboth who allege that they worked through their meal periods, but due to the automatic deduction, they were not compensated for the time that they worked. They were employed in various capacities at Rehoboth's Gallup facility, including a technician on the overnight shift in the emergency department; a technician on the weekday shift in the radiology department; a certified nursing assistant (CNA) on the day shift in the medical/surgery department and emergency department; a CNA and patient care technician on the day shift in the emergency department; and a registered nurse on the overnight shift in the emergency department. The allegations common to all of Plaintiffs' claims are that supervisors at Rehoboth discouraged non-exempt employees from using the "no lunch" button and told employees that they were to find a way to take an uninterrupted meal break, but that employees were often called back to work or took calls for service during their meal breaks due to staffing issues. One Plaintiff alleges that he punched the "no lunch" button after one such occasion, but a supervisor revoked that entry.
{5} Plaintiffs brought suit under the MWA, alleging that Rehoboth's failure to compensate them for the time they worked during meal breaks resulted in a failure to pay them overtime wages. Plaintiffs also brought suit for unjust enrichment, basically alleging that Rehoboth was unjustly enriched by Plaintiffs' uncompensated labor. Relatively early in the litigation, Plaintiffs moved for conditional certification of a collective action under the MWA and certification of a class action for the unjust enrichment claim. After full briefing, the district court denied certification of both the collective action and the class action. The district court certified its order for interlocutory appeal, pursuant to NMSA 1978, Section 39-3-4 (1999). Plaintiffs filed an application for interlocutory appeal, which this Court granted.
DISCUSSION
Collective Action Under the New Mexico Minimum Wage Act
{6} Plaintiffs allege that, as a result of Rehoboth's failure to pay them for the time they worked during meal breaks, they were not properly compensated under the MWA for time they worked beyond forty hours per *22 week. See § 50-4-22(D) ("An employee shall not be required to work more than forty hours in any week of seven days, unless the employee is paid one and one-half times the employee's regular hourly rate of pay for all hours worked in excess of forty hours."). Plaintiffs brought suit on behalf of themselves and on behalf of other employees similarly situated. See § 50-4-26(C) ("[A]n employer who violates any provision of Section 50-4-22 ... shall be liable to the employees affected in the amount of their unpaid or underpaid minimum wages plus interest, and in an additional amount equal to twice the unpaid or underpaid wages."); see also § 50-4-26(D) ("An action to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees for and on behalf of the employee or employees and for other employees similarly situated[.]"). Later, Plaintiffs moved to conditionally certify a collective action. The district court's denial of Plaintiffs' motion is a subject of this interlocutory appeal.
{7} This Court first dealt with MWA collective actions in
Armijo v. Wal-Mart Stores, Inc.
,
{8} Under the two-tiered/ad hoc approach, "a court typically makes an initial notice stage determination of whether plaintiffs are similarly situated."
Thiessen
,
{9} "At the second stage, which typically follows discovery and/or a motion to decertify the class, the court must revisit its initial determination, only now under a stricter standard of similarly situated."
{10} The initial question on appeal, which we address de novo, is whether the district court applied the proper legal standard.
See
Thiessen
,
{11} The next question, then, is whether the district court abused its discretion in denying Plaintiffs' motion for conditional certification under the initial notice-stage standard.
See
{12} In the present case, after reviewing Plaintiffs' allegations and accompanying exhibits, the district court found that
[t]his evidence establishes, at best, ... Plaintiffs were discouraged from using the "no lunch" button and that their work circumstances, based on [Rehoboth's] scheduling practices, sometimes required them to work through meal breaks for which they were sometimes not compensated.
Despite this finding, the district court determined that Plaintiffs had not met their relatively minimal burden. The district court reached this conclusion based on its findings that Plaintiffs had not alleged an illegal policy or plan; Plaintiffs did not provide any evidence of a corporate atmosphere or culture to improve the bottom line; and Plaintiffs did not present methodologies by which they expected to demonstrate that uncompensated work during meal breaks was a widespread problem. We address each of these in turn.
{13} With respect to the illegality of the policy or plan, the district court-apparently convinced by Rehoboth's argument that the requirement that the putative class be "victims" of a single decision, policy, or plan, means that the policy or plan must itself be illegal-found that
these facts taken singularly or together do not establish substantial allegations of an illegal policy on the part of [Rehoboth]. No illegality is alleged, such as [Rehoboth], as a policy, disciplining or sanctioning Plaintiffs or putative class members required to work through a lunch break, or that [Rehoboth], as a policy, knowingly refus[ed] to pay employees for working through their lunch break. The failure to allege something potentially illegal like the example above, precludes a finding of substantial allegations being made by ... Plaintiffs.
(Emphases added.) The district court's reasoning appears to be undergirded by Rehoboth's contention that an automatic meal break deduction is not, in and of itself, unlawful. On this discrete point, we agree with Rehoboth.
See
Fengler v. Crouse Health Found.
,
{14} These same failures likewise potentially run afoul of the MWA and, consequently, are potentially unlawful notwithstanding the lawfulness of the automatic deduction itself. Put another way, Plaintiffs' allegations, accompanied by supporting affidavits, appear to set forth a potential violation of the MWA-that the putative class of Plaintiffs was sometimes required to work through meal breaks, but not compensated for such work-and that such violation stems from a single policy or plan to not only schedule workers in such a way that missing meal periods was sometimes unavoidable, but also to discourage employees from using the "no lunch" button that would have resulted in full compensation for time worked. In concluding otherwise-that these
*24
allegations did not set forth a potentially unlawful or illegal policy-the district court relied on
Blaney v. Charlotte-Mecklenburg Hospital Authority
, No. 3:10-CV-592-FDW-DSC,
{15} In
Blaney
, the only system-wide policy in place required full compensation for all hours worked.
{16} The district court also relied on
Barron
to conclude that Plaintiffs did not allege an illegal common policy or plan. We observe, however, that in
Barron
, the court indicated that the Eleventh Circuit does not require proof of a common policy to establish that employees are similarly situated.
{17} Next, the district court determined that Plaintiffs failed to present sufficient evidence to support their allegation that Rehoboth fostered an unlawful corporate atmosphere or culture of requiring employees to work without pay in order to improve Rehoboth's bottom line, and that Plaintiffs failed to present methodologies through which they hoped to demonstrate that missed and uncompensated meal breaks were a widespread problem. The district court, relying on Armijo , appears to have viewed these as requirements for collective action.
{18}
Armijo
had a different procedural posture from that of the present case. In
Armijo
, we recognized that although the case had been ongoing for six years and extensive discovery had been completed, there had in fact been no discovery on the merits.
{19} Here, although acknowledging that this case is at the initial notice stage-and nominally applying the notice-stage standard-the district court actually applied a standard more closely resembling the more stringent second-stage standard.
See
Thiessen
,
{20} We conclude that Plaintiffs' allegations, supported by affidavits, that the putative class was sometimes required to work through meal breaks, but not compensated for such work, and that such potential violations of the MWA stemmed from a single policy or plan to not only schedule workers in such a way that missing meal periods was sometimes unavoidable, but also to discourage employees from using the "no lunch" button that would have resulted in full compensation for time worked, satisfy the minimal standards associated with the notice stage.
See
Brown v. Money Tree Mortg., Inc.
,
Class Certification for Plaintiffs' Unjust Enrichment Claim
{21} Plaintiffs also moved for class certification under Rule 1-023 NMRA for their unjust enrichment claim. The district court denied the motion. We review the district court's order denying class certification for an abuse of discretion.
See
Brooks v. Norwest Corp.
,
{22} In determining whether class certification is appropriate, a district court must engage in a "rigorous analysis" to decide whether the requirements of Rule 1-023 are met.
Brooks
,
*26 will entail some overlap with the merits of the plaintiff's underlying claim. That cannot be helped."). 2
{23} "Class certification is appropriate under Rule 1-023 when all four prerequisites of Rule 1-023(A) and at least one of the requirements of Rule 1-023(B) are met."
Armijo
,
{24} In light of the two infirmities identified by the district court, we are essentially dealing with two overlapping requirements for class certification. See id. ¶ 42 (explaining that "the commonality requirement is usually subsumed by the predominance requirement"). That is, commonality asks whether there are issues common to the class and predominance asks whether these common questions predominate over individual issues.
{25} Turning first to commonality, the United States Supreme Court has emphasized that commonality requires that the class members' claims "depend upon a common contention" such that "determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke."
Dukes
,
{26} At the outset, we observe that if Rehoboth's employees followed the handbook and policy on meal breaks, they should not have, in the usual course, worked through their meal breaks. In fact, use of the "no lunch" button or the other methods by which an employee can ensure payment would only be necessary in the event that an employee works through his or her meal break. Thus, according to Plaintiffs, an instance in which an employee works through a meal break, and is not compensated for doing so, raises the following questions. Can Rehoboth, as a matter of law, defend its failure to pay for the meal breaks by the mere presence of the "no lunch" button? Were the employees subject to a culture or mindset that discouraged them from utilizing the "no lunch" button? And were Rehoboth's staffing levels such that employees could not take their meal break?
{27} The answers to these questions, according to Plaintiffs, constitute common contentions that will resolve issues central to Plaintiffs' unjust enrichment claim. In other words, Plaintiffs' argument is that Rehoboth benefitted from the employees' uncompensated work and that it would be unjust to allow Rehoboth to retain that benefit where the free work resulted from Rehoboth's staffing issues and concomitant discouragement of employees from using the "no lunch" option. The district court disagreed, determining that these answers would not resolve the unjust enrichment claim in one stroke.
See
Dukes
,
*27
{28} Normally, we would review whether the district court erred in its commonality determination. However, the district court, in an abundance of caution, went on to analyze whether common issues predominate for purposes of Rule 1-023(B)(3). As we noted above, the commonality requirement is usually subsumed by the predominance requirement.
See
Berry
,
{29} "The end goal of the predominance inquiry is to determine whether a proposed class is sufficiently cohesive to warrant adjudication by representation."
Id.
¶ 47 (internal quotation marks and citation omitted). Generally, "predominance may be found when the issues in the class action that are subject to generalized proof, and thus applicable to the class as a whole, predominate over those issues that are subject only to individualized proof."
Id.
¶ 48 (omission, internal quotation marks, and citation omitted). As a result, "the predominance requirement brings into primary focus the plaintiffs' proposed methods of proof at trial of the elements of their claims."
Armijo
,
{30} The questions for the district court, then, were whether Plaintiffs' common allegations that the employees worked through their meal breaks because Rehoboth's staffing levels required them to and that the employees did not seek compensation for such work because of a culture that discouraged the use of the "no lunch" button were not only susceptible to common proof, but also whether those issues predominated over issues subject to individualized proof.
See
Berry
,
{31} We can see no abuse of discretion on the part of the district court in this regard. Specifically, even if we were to assume that the culture issue is susceptible to common proof, through testimony that supervisors discouraged employees from using the "no lunch" button, we are not convinced that the understaffing question can be answered by common proof. That is, proving classwide liability on that point presents particular problems where the putative class encompasses a variety of positions and shifts and where each instance of understaffing may depend on, as Rehoboth argues, the number of patients and the amount of staff on duty on any given shift. While we are not certain that these issues can never be established by common proof, the district court found that Plaintiffs here failed to offer any methodology by which they intend to prove, by common evidence, that Rehoboth's understaffing resulted in unjust enrichment.
{32} Our review of Plaintiffs' briefing, both in the district court and in this Court, bears this out. Plaintiffs address their proposed methods of proof in two ways. First, Plaintiffs cite
Romero
, stating somewhat matter-of-factly that "[t]he questions common to the class are, as in
Romero
, subject to common proof." However, Plaintiffs do not in any way describe
how
the common questions particular to this case will be proven, or indeed how Plaintiffs' nondescript proposed methods of proof compare with those in
Romero
. We note that in
Romero
, the plaintiffs met their predominance burden by showing widespread antitrust injury to the class through presentation of various methodologies, including correlation analysis via an economic expert.
*28
Second, Plaintiffs refer to representative testimony, citing
Tyson Foods, Inc. v. Bouaphakeo
, --- U.S. ----,
{33} We conclude that sufficient evidence supports the district court's finding that Plaintiffs have failed to produce any methodology by which they intend to establish classwide liability-in particular, that staffing issues caused each purported class member to work through meal breaks uncompensated-whether through representative testimony, statistical evidence, expert testimony, or otherwise. We therefore cannot fault the district court for concluding that Plaintiffs did not meet their burden to demonstrate that common issues predominate over individual ones. Consequently, we are satisfied that the district court did not abuse its discretion by denying class certification.
CONCLUSION
{34} For the reasons stated above, we reverse the district court's denial of conditional certification for Plaintiffs' collective action under the MWA, and we affirm the district court's denial of class certification for Plaintiffs' unjust enrichment claim.
{35} IT IS SO ORDERED.
WE CONCUR:
STEPHEN G. FRENCH, Judge
EMIL J. KIEHNE, Judge
Unlike the FLSA, the MWA does not have extensive accompanying regulations defining and interpreting the statutory language. However, New Mexico courts have frequently looked to interpretations of the FLSA in order to interpret similar language in the MWA.
See, e.g.
,
Williams v. Mann
,
Rule 1-023 is identical to its federal counterpart.
Brooks
,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.