www.BaileyDaily.com Jaimez v. Daiohs Usa

Filed 1/12/10; pub. order 2/8/10 (see end of opn.)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIASECOND APPELLATE DISTRICTDIVISION ONEALEX JAIMEZ,Plaintiff and Appellant,v.DAIOHS USA, INC. et al.,Defendants and Respondents.B209486(Los Angeles CountySuper. Ct. No. BC372665)APPEAL from orders of the Superior Court of Los Angeles County, Michael L.Stern, Judge. Affirmed in part and reversed in part with directions.Law Office of Joseph Antonelli, Joseph Antonelli, Janelle C. Carney; Law Officeof Kevin T. Barnes, Kevin T. Barnes and Gregg Lander for Plaintiff and Appellant.Sheppard, Mullin, Richter & Hampton, Tracey A. Kennedy, Jason W. Kearnaghanand Kevin M. Rivera for Defendants and Respondents.

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2Appellant Alex Jaimez (Jaimez), a former Route Sales Representative (RSR) forrespondent DAIOHS U.S.A., Inc., dba DAIOHS First Choice Services (First Choice),

appeals the trial court‘s denial of his Motion for Class Certification (the certification

motion) and his subsequent Motion for Leave to Amend Complaint to substitute newclass representatives (the motion to amend). In the Complaint and certification motion,Jaimez alleged that First Choice applied a uniform policy and practice to its employees

that: (1) deliberately misclassified employees as ―exempt‖ (to avoid paying overtime);

(2) failed to provide employees with meal and rest break periods (and failed to pay theadditional compensation required by California law); and (3) failed to provide legallycompliant paystubs.On appeal, Jaimez contends the trial court abused its discretion in concluding thathis claims were not typical, that common issues of law or fact did not predominate, andthat Jaimez was not an adequate class representative; Jaimez asserts that the order shouldbe reversed accordingly. We agree that the order should be reversed, albeit for the

court‘s reliance on improper criteria

in determining that predominant common issues of fact and law were absent. We therefore reverse the order denying the certification motionexcept as to the finding that Jaimez is not an adequate class representative, which weaffirm. The trial court is d

irected to certify the subclasses as defined in Jaimez‘s motionupon the court‘s approval of a new class representative. The denial of the motion to

amend is reversed with directions to file the First Amended Complaint nunc pro tunc.

BACKGROUND

1

First Choice sells and services a comprehensive range of refreshment and otherproducts to business customers, including a line of gourmet coffees, brewing-related

equipment, bottled water, water coolers, and vending machines. The company‘s

California operations are headquartered in Downey, California. First Choice maintainssix other locations in the state: Fresno, Oakland, Ontario, Sacramento, San Diego, and

1

The facts are drawn from the Complaint and the parties‘ sub

missions inconnection with the certification motion.

3Santa Clara. First Choice believes Industrial Welfare Commission (IWC) Wage Order 7-2001 for the merca

ntile industry applies to its business and RSR‘s.

2

RSR‘s spend almost their entire workday on the road or at customers‘ places of

business. The only time spent onsite at First Choice is at the beginning and end of each

shift. In the morning, RSR‘s clock

-in, review the daily customer lists, verify the productsto be loaded onto the delivery vehicle for that day, and visually inspect the delivery

vehicle. In the evening, RSR‘s generate an end

-of-the-day report and clock-out.

Prior to 2003, RSR‘s received

a base salary, plus commissions.

3

First Choicestates that in the 2003

–2004 timeframe, it ―decided to take a more conservative

compliance approach regarding the classification of its employees. As such, First Choicere-classified certain exempt position[s], including the vast majority of RSR positions, tonon-exempt positions. . . . In this non-exempt classification, RSRs received a base hourlywage rate and overtime on such for work in excess of eight (8) hours per workday orforty (40) hours per workweek. As of October 31, 2007, all RSRs were converted to non-

exempt positions.‖

The PleadingsOn June 14, 2007, Alex Jaimez filed a putative class action against his employer,DAIOHS USA, Inc. and DAIOHS First Choice, seeking the recovery of unpaid wages.The Complaint alleged that First Choice improperly classified the putative class

2

Jaimez maintains that IWC Wage Order 9-2001, governing the transportation

industry, applies here, but notes the dispute is ―a legal issue amenable to class treatment‖

and, in any event, is immaterial for purposes of this appeal. We agree.

3

First Choice explains that it ―expected RSRs to sell products and/or services on

every customer call. For instance, upon delivery of bottled water and/or servicing of water cooler(s), a Route Bottled Water Sales Representative was expected to sell an

increased volume of bottled water and/or water coolers and to ‗up

-

sell‘ such products as

water cups and cupholders. Likewise, an Office Coffee Sales Representative wasexpected to sell such items as coffee, accompaniments (

i.e.

, creamer or sweetener), and

cups, and to ‗up

-

sell‘ such items as the Flavia Gourmet Coffee Station and related

productions (

i.e.

, gourmet coffee packets). This commission-based compensation systemincentivized RSRs to increase product sales t