Home Depot Overtime Cases

Filed 11/21/07 Home Depot Overtime Cases CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of Riverside County. Edward D. Webster, Judge. Affirmed.

KOZBERG & BODELL, Joel M. Kozberg, Gregory Bodell; Anticouni & Associates, Bruce Anticouni; Slovak Baron & Empey, Lucien A. Van Hulle, Thomas Slovak; The Quisenberry Law Firm, John N. Quisenberry; and Brad Seligman for Plaintiffs and Appellants.

Akin Gump Strauss Hauer & Feld, Rex S. Heinke, Jessica M. Weisel and Joel M. Cohn for Defendant and Respondent.

1. Introduction^[1]

Home Depot USA, Inc., the nationwide chain of home-improvement stores, employs Merchandising Assistant Store Managers (MASMs) to work 55 hours a week or more. The trial court denied plaintiffs motion seeking class certification. (Code Civ. Proc., 632.) Plaintiffs appeal.

Plaintiffs are managerial employees, seeking to recover overtime pay on the grounds they were misclassified as exempt employees. Their principal argument is that, for purposes of class certification, the trial court should have confined itself to considering only the realistic expectations of the job of MASM, rather than actual work performed by individual MASMs, and that the realistic expectations could be demonstrated by representative evidence, including statistical evidence. Because we reject plaintiffs fundamental premise that the trial court should not have considered actual work performed, we conduct a deferential review based on substantial evidence.

We hold the trial court did not abuse its discretion in determining that plaintiffs did not meet their burden of proof for class certification. The disputed issue, whether the proposed class is exempt from overtime wage laws, involves individual questions of fact that predominate over common issues, rendering class action treatment inappropriate. We also hold the trial court did not commit legal error, as urged by plaintiffs. We reject plaintiffs continuously reiterated position that, for purposes of class certification, the trial court should consider only the realistic requirements of the job of MASM in deciding whether it qualifies for exempt status. We affirm the judgment.

2. Background

The first of three consolidated actions was filed in July 2001. Plaintiffs made a motion for class certification that was granted by Judge Roger A. Luebs of the Superior Court of the County of Riverside in June 2005. Subsequently, this court granted Home Depots writ petition and directed the trial court to reconsider the certification motion. Judge Edward D. Webster reconsidered the motion and denied class certification. We now review that denial.

Plaintiffs and the proposed class members were all salaried managerial employees who worked a minimum of 55 hours a week and usually much more. Plaintiffs allege they spent more than 50 percent of their time on nonexempt activities. The three complaints assert related or similar claims for failure to pay overtime compensation, failure to pay wages, conversion, work and labor performed, unfair business practices (Bus. & Prof. Code, 17200 et seq.), violations of Labor Code sections 203, 204, 1194, and 1198, and breach of contract and the implied covenant of good faith and fair dealing.

In their motion for class certification, plaintiffs sought to be declared as class representatives for between 1,400 and 2,700 other Home Depot MASMs. Plaintiffs contend all MASMs perform the same standardized work as dictated by Home Depot. In opposition, Home Depot characterizes their work as diverse and individualistic.

The trial court ruled common issues do not predominate, nor would pursuing the matter as a class action be of substantial benefit to either the court or the parties. Thus, the trial court denied plaintiffs motion for class certification.

3. Principles of Class Actions and Overtime Executive Exemption

A plaintiff proposing a class action has the burden of showing common questions of law and fact predominate over individual questions of law and fact. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 336 (Sav-On Drug), citing Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1104 and Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 913.) Additionally, [a] trial court ruling on a certification motion determines whether . . . the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants. (Collins v. Rocha (1972) 7 Cal.3d 232, 238; accord, Lockheed, supra, 29 Cal.4th at pp. 1104-1105.) (Sav-On Drug, supra, at p. 326.) A class action may not be maintained if each members right to recover depends on separate facts applicable only to that individual. (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 459.) The trial court abuses its discretion when it certifies a class action if numerous individual issues must be litigated and these predominate over the common issues. (Washington Mutual, supra, at pp. 913-914.) Any valid pertinent reasons offered by the trial court will be sufficient to uphold an order denying class certification. (Sav-On Drug, supra, at pp. 326-327, citing Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435-436 (Linder).)

The Industrial Welfare Commission Wage Order 7-2001 (Cal. Code Regs., tit. 8,  11070)^[2]provides employees are exempt from the overtime wage laws if they are employed in an executive capacity, meaning: they manage a customarily recognized department; they supervise two or more other employees; they can hire or fire other employees or their recommendations to hire, fire, or promote are given weight; they exercise discretion and independent judgment; they are primarily engaged in exempt activity more than 50 percent of the time; and they earn a monthly salary equal to twice the state minimum wage for full-time employment. Whether an individual employee is exempt depends on the work actually performed by the employee, the amount of time spent on exempt and nonexempt work, and the employers realistic expectations and the actual requirements of the job. (Sav-On Drug, supra, 34 Cal.4th atpp. 336-337, citing Ramirez v. Yosemite Water, Inc. (1999) 20 Cal.4th 785, 802-803 (Ramirez).) California Code of Regulations, Title 8, section 11070, provides in part 1, subdivision (A)(2)(f): The work actually performed by the employee during the course of the workweek must, first and foremost, be examined and the amount of time the employee spends on such work, together with the employers realistic expectations and the realistic requirements of the job, shall be considered in determining whether the employee satisfies this requirement.

The issues involving class certification and the overtime exemption are related in that work properly characterized as exempt is less likely to be amenable to class treatment because of its individualistic nature. In other words, exempt employees would be less suited to class treatment because they work differently than one another. Nonexempt employees may properly be treated as a class because they perform primarily standardized, nondiscretionary tasks. What this means, however, is that in deciding a motion for class certification, the trial court necessarily makes a preliminary determination on the issue of employee exemption.

The present case concerns whether MASMs spend more than 50 percent of their time performing exempt work, whether they exercise discretion and independent judgment, and whether they have hiring and firing authority. The other three elements establishing exemption are conceded by plaintiffs.

We reject plaintiffs somewhat contorted argument that the trial court erred by not addressing plaintiffs prima facie case and the conceded elements and focusing its analysis on the three disputed elements. Although plaintiffs concede they could be considered exempt based on three factors, ultimately they want to prove they are not exempt. Therefore, it makes little sense to assert the trial court should have certified the class, seeking to prove MASMs are not exempt, based on plaintiffs concession they could be classified as exempt under three criteria. The present case is not like In re Nassau County Strip Search Cases (2d. Cir. 2006) 461 F.3d 219, 227, in which the district court erred in holding that a concession eliminate[s] a common issue from the predominance calculus. In concentrating on the disputed elements of exemption, the trial court in this case did not ignore the other elements or demonstrably use the wrong criteria as we now discuss more fully below. (Linder, supra, 23 Cal.4th at p. 426.)^[3]

4. The Certification Motion

In 2003, Home Depot operated 174 stores in California. They are usually divided into 11 departments. Each store employs between one and seven MASMs and between 150 and 400 hourly employees. Each MASM manages between two and six departments, supervises hourly employees, and reports directly to the Store Manager.

Plaintiffs contend Home Depots detailed system of centralized management and standardized policies causes the job of MASM to be uniform throughout California making it ineligible to be classified under the executive exemption by Home Depot. In support of their motion for class certification, plaintiffs submitted the expert declaration of David Levine, a professor of economics from University of California at Berkeley, who opines the ultimate issue of executive exemption can be decided on a representative class basis, using documentary evidence and representative testimony without examining actual work activities and individual testimony. Levine determined Home Depots stores are largely the same in size, design, staffing, and sales volume. All MASMs receive common training. They perform the same duties. Levine noted that Home Depot itself categorized MASMs as exempt based on a sampling of typical stores rather than an individualized analysis.

According to plaintiffs, Home Depots voluminous manual of Standard Operating Procedures provides that the Store Manager, not the MASM, has complete hiring and firing authority. The Store Manager, not the MASM, also is responsible for most discretionary matters involving store management. Meanwhile, MASMs have responsibilities more like those of hourly employees.

Also supporting plaintiffs motion were 42 declarations from people who worked as MASMs in 50 different California Home Depot stores. The declarations are generally similar with some variations. They state the declarants always worked at least 55 hours a week and often worked many more hours (as many as 90 hours a week), including on scheduled days off and during vacations. MASMs sometimes worked 31 hours, 32 hours, 36 hours, and 42 hours without a break. One MASM worked 24 hours with a four-hour break followed by another 24 hours. MASMs worked as many as 24 days in a row without a day off. MASMs did not get lunch and rest breaks. They worked at home on paperwork. More than half of MASM work involved the same tasks as hourly employees. Many declarants stated Home Depot would never allow sufficient hourly workers to be scheduled, meaning MASMs often had to perform the tasks of hourly workers. They were allowed to exercise little discretion in any aspect of their jobs, including employment decisions. The estimates of time spent on nondiscretionary work ranged from 70 percent to 96 percent. Some MASMs stated that there was no difference between stores or departments because of size, design, or sales volume.

In opposition, Home Depot submitted 58 MASM declarations, expert declarations, and other evidence. Home Depots three experts concluded that Home Depot could properly classify the position of MASM as exempt based on statistical analysis of a work sample of MASMs in five states (Arizona, California, Florida, Illinois, and New Jersey). One expert concluded that the average time spent on exempt work was 73.3 percent and on nonexempt work was 26.7 percent. The time spent on exempt work was between 35.1 percent and 95.4 percent and the time spent on nonexempt work was between 64.9 percent and 4.6 percent. A time and motion study showed MASMs spending between 15 and 95 percent of their time on exempt work. A third expert determined the work of MASMs to be extremely variable and specific to each individual MASM.

Home Depots MASM declarants stated they spent the majority of their time on exempt work like supervising hourly associates and managing the stores financial performance, product merchandising, inventory, customer service, and security. They estimated spending between 5 percent and 45 percent of their time on nonexempt work like assisting customers. Only two MASMs estimated spending as much as 30 to 45 percent assisting customers. The Home Depot declarants claimed they make marketing decisions, handle marketing events, and play an important or primary role in hiring and firing decisions.

5. The Trial Courts Ruling

After the hearing, the trial court issued a seven-page ruling in which it stated the contested issues involved whether common issues predominate and the question of substantial benefit . . . . We quote the trial courts ruling almost in full because it demonstrates the comprehensive and detailed analysis performed by the trial court.

. . . As to the procedural nature of the certification process, it is fair to note that it is not particularly clear how one determines if questions of fact common to the class predominate, without some assessment of the underlying facts. In fact, much of what was presented by both plaintiffs and Home Depot involves evidence arguably going to the merits of the action itself. . . . Home Depot has a fundamental due process right to raise affirmative defenses as to individual plaintiffs. This right . . . in conjunction with the individual nature of damages in this case makes it difficult to see how class certification would substantially benefit the court.

. . . MASMs are second level supervisors employed by Home Depot. They work in individual stores and supervise hourly associates and department supervisors. They, in turn, are subordinate to the store manager and the operations manager. . . . Home Depot conceded that MASMS are salaried employees and on average work at least 55 hours/week. . . . MASMs are presumptively eligible for overtime pay, which is what Plaintiffs are seeking. Home Depot has characterized MASMs as executive employees, which are exempt from the overtime requirements. . . . Home Depot bears the burden of establishing the exemption. . . . The plaintiffs and Home Depot are in agreement that virtually all MASMs do both exempt and non-exempt work. And, again both basically agree that the application of the exemption depends on a strict percentage evaluation. If a MASM does exempt work 50.1 percent of the time, he/she is exempt from overtime. If a MASM does non-exempt work 50.1 percent of the time, he/she is entitled to overtime pay.

Plaintiffs have submitted 42 declarations from individuals who worked as MASMs during the relevant period. Home Depot submitted 58 declarations. It is fair to state that according to plaintiffs declarations MASMs do the same non-exempt work as hourly associates for about 80 percent of their time (some more, some less). It is also fair to state that according to Home Depots declarations MASMs do exempt work 75 percent of their time (some more, some less). The truth, no doubt, lies somewhere between.

In response to plaintiffs contention that common questions predominate, as demonstrated by the stores similarity in size, design, operation, and organization, and by the similar training and duties dictated to the MASMs by the Standard Operating Procedures, the court offered a different view: The reality is considerably different. In many ways, each store is unique. Gross sales appear to vary from $2.5 million to $6 million/month. Stores vary in numbers of hourly associates from 150 to 400, which can change depending on the season. Some stores have only 2 MASMs, some stores have as many as 7. Different MASMs supervise different numbers of associates and departments. According to the MASM declarations submitted by Home Depot, the number of departments supervised by one MASM may vary from 1 to 8 and the number of people directly supervised may vary from 6 to 91. The nature of the work changes from department to department, as well. The court distinguished between specialty departments and more traditional retail departments. The court further identified variations in staffing, turnover, and experience that affected MASMs duties and responsibilities and the amount of weight accorded their employment decisions.

The court next addressed plaintiffs argument that Home Depot has misclassified MASMs as exempt employees and that a class action would allow the court to determine in one trial what are the reasonable expectations for the MASM position. If 50.1 percent of MASMs are engaged 50.1 percent of the time in non-exempt activities, then there has been a misclassification. Plaintiffs argue that Home Depot experts[] use and reliance on statistical evidence in this case, shows that Home Depot concedes that this determination can be validly made based on representative sampling. In other words, since Home Depot has used representative sampling and has taken the position that the evidence derived therefrom is reliable, it is in no position to object to the use of representative sampling to determine what are the reasonable expectations for the MASM job category. If at the trial, this evidence shows that Home Depot should have reasonably expected that a majority of MASMs are engaged in non-exempt work a majority of the time, then Home Depot has misclassified the position. This then gives rise to the general expectation that all MASMs are entitled to overtime pay. . . . That is, depending on whether the 50.1 percent are doing exempt or non-exempt work, either everyone would receive overtime or none would.

Upon remand, Plaintiffs maintain the class certification is still appropriate, but that another step should be added. If by offer of proof, Home Depot can establish that a particular MASM was engaged in exempt activities 50.1 percent of the time, not withstanding the misclassification, Home Depot would have the right to some kind of hearing to establish their affirmative defense as to that MASM. Presumably, if Home Depot were successful, the affected MASM would then not be entitled to overtime.

This court is [in] basic disagreement with Plaintiffs position that representative sampling may reliably be used to determine the issue of reasonable expectations for several reasons. Representative sampling does not address individual credibility. As previously noted, Plaintiffs declarants describe their work as non-exempt; Home Depots declarants see their work as exempt. Also, Home Depot has taken the deposition of approximately 16 of plaintiffs declarants and in several instances; there has been significant impeachment. In addition to issues of basic honesty, depending on point of view, a MASM may in good faith describe a task differently. If a MASM is stocking shelves with a number of hourly associates, one MASM may see their role as supervisory, which is an exempt activity, while another MASM might describe it as simply stocking shelves, a non-exempt activity. At some point, a trier of fact will have [to] make individual decisions on these characterizations and credibility. Next, this court has considerable concern as to whether tasks can be simply and categorically classified as exempt versus non-exempt. At times, a MASM may be multi-tasking and engaged in both exempt and non-exempt activities. In the process of helping a customer, a MASM might be resolving a personnel issue, or might be interrupted and make a discretionary management decision. Or, if the MASM is helping a customer as part of training exercise, is the activity exempt or non-exempt? If a MASM conducts a focused inventory of a product suspected to be a high theft item for the purpose of making a loss-control policy decision, is the MASM engaged in an exempt activity? At a certain point, customer service, which might otherwise be seen as non-exempt, may reach the level of an exempt activity. For example, if the MASM is dealing with a large special order, or coordinating with a MASM in another store, or negotiating on behalf of a customer with a contractor, one might characterize the work as exempt. Finally, this court disagrees in large part with Plaintiffs[] argument that Home Depot by submitting statistical proof and using statistical methods has acknowledged that representative sampling is an efficient and reliable way to adjudicate the reasonable expectation issue. Most of Home Depots statistical evidence has been directed at showing that there is considerable variance in what MASMs do and the time spent doing it. While Home Depot has used statistical evidence to argue that the great majority of MASMs spend the majority of their time on exempt work, this court does not find that evidence particularly persuasive. If one MASM does exempt work 100 percent of the time, and another does non-exempt work 100 percent of the time, the average for the two would be 50 percent exempt and 50 percent non-exempt, which is both meaningless and misleading.

Given that the test for entitlement to overtime will come down to a decision as to whether 50.1 percent of time is spent on non-exempt or exempt work, a basic fairness concern arises in the use of the class action procedure. It is the plaintiffs[] clearly articulated position that if 50.1 percent of MASMs are doing non-exempt work a majority of the time, everyone in the class presumptively is entitled to overtime. Likewise, if 50.1 percent of MASMs are engaged in exempt work a majority of the time, no one in the class recovers. Theoretically, this would result in a potential windfall to 49.9 percent of the population of MASMs, or a deprivation to 49.9 percent of MASMs deserving overtime pay. . . .

Sometimes, a class action is the best way to address an actionable wrong. Sometimes, it is the only way. If the loss per person i[s] small, or the wrongful conduct affects many people in a specific way, class actions are desirable. It would not be economically feasible for an individual to file suit, if the potential recovery will be small. Further, if the question is a narrow one, i.e., was a fee improperly assessed, was a particular policy properly applied, it makes sense to use a class action format and decide the question one time. This case is different. Using Home Depots conservative 15 hour per week overtime concession, the lowest paid MASM would stand to recover at least $25,000/year, plus interest, penalties and attorney fees. In short, an individual MASM does have sufficient incentive to pursue a meritorious claim. Further, there are adequate administrative and legal procedures currently in place to provide appropriate relief. . . . [] . . . []

By denying certification, this court is not suggesting that MASMs have no legitimate complaints. Apparently, from the moment hired, a MASM is scheduled to work in a store 11 hours/day 5 days a week. Most of plaintiffs declarations describe working on average well over 60 hours/week. [One MASM] describes working on average 80 hours per/week, once working 32 straight hours. [Another MASM] stated that he worked 20 days straight without a day off on several occasions. In Plaintiffs declarations, virtually every MASM described having to work extra hours for regularly scheduled special events, inventory time and something called Gold Cup contests. Additionally, many stated that they worked at home for hours on paperwork they could not complete at the store. One individual even described refusing to answer the phone on weekends to avoid being dragged into the store on his time off. If these declarations are true, one might fairly characterize Home Depots requirements as abusive. It is understandable why there is considerable turnover in the MASM position.

Nor is the court by denying certification suggesting that it is likely that every individual claim will be separately tried. This is a coordinated action, which has been designated complex. The court has considerable flexibility in case management. All claims from MASMs working in a particular store under the supervision of an identified store manager may be subject to consolidation. Test plaintiffs might be selected and their claims presented in a single proceeding. If one side were consistently unsuccessful, one would expect that side to seek some sort of settlement to minimize losses and litigation expenses. It is highly unlikely that there will be anything close to 400 separate trials.

The court reviewed at some length both Sav-[O]n Drug Stores, Inc. v. Superior Court, [supra], and Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715. [Sav-On] stands for the proposition that considerable deference will be given to the trial courts exercise of discretion in either certifying or non-certifying a class. In fact, the court at page 331 states We need not conclude that plaintiffs evidence is compelling or even that the trial court would have abused its discretion if it had credited defendants evidence instead. It is of no consequence that the trial court believing other evidence, or drawing other reasonable inferences, might have reached a contrary conclusion (cases cited). If the trial court had denied certification in [Sav-On], it is likely that decision would have been upheld as well. In short, this court finds that [Sav-On] does not compel a finding that class certification is the preferred course action.

Bell v. Farmers Ins. Exchange (FIE), supra, is of considerable interest in that statistical sampling and extrapolations were used to establish plaintiffs damages. On appeal FIE argued that this methodology violated its right to due process. The problem for FIE was that their expert statistician participated in creating the methodology used, concurred in the validity of the sampling evidence obtained and largely agreed with the inferences drawn from that evidence. Under these circumstances, the Court of Appeal found no denial of due process. . . .

6. Discussion

California favors the class action device (Sav-On Drug, supra, 34 Cal.4th at p. 340; Gentry v. Superior Court (2007) 42 Cal.4th 443, 457-462) and California law presumes an employee is entitled to overtime compensation. (Lab. Code, 510; Nordquist v. McGraw-Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 561; see Gentry, supra, at pp. 445-456.) Home Depot has the burden of proof on the affirmative defense of exemption. (Ramirez, supra, 20 Cal.4th at p. 795.)

Plaintiffs concede that an abuse of discretion standard generally applies to an order granting or denying class certification but they point to the two exceptions stated in Sav-On Drug, which are that a trial court ruling supported by substantial evidence generally will not be disturbed unless improper criteria were used or erroneous legal assumptions were made. (Dunbar v. Albertsons, Inc. (2006) 141 Cal.App.4th 1422, 1430-1431, citing Sav-On Drug, supra, 34 Cal.4th at pp. 326-327.) Plaintiffs contend the trial court committed several types of legal error, invalidating its denial of class certification. (Linder, supra, 23 Cal.4th at p. 436.)

We hold that plaintiffs did not demonstrate legal error by the trial court. Based on our deferential review, we conclude substantial evidence supports the trial courts ruling denying class certification.

a. Actual Work Performed by MASMs

The first purported legal error identified by plaintiffs is that the trial court based its ruling solely on consideration of the actual work performed by the MASMs, which is only one of several factors identified in Sav-On Drug as germane to the questions of individual issues and common proof. (Sav-On Drug, supra, 34 Cal.4th at pp. 336-337.) In particular, plaintiffs attack the trial courts statements about whether a MASM performs exempt work 50.1 percent of the time. Plaintiffs contend [t]his strict quantitative formulation based only upon the actual work activities of MASMs is contrary to established law and ignores other material elements of the exemption affirmative defense that must be established. In addition to the requirement that a worker be primarily engaged in exempt activity more than half the time, the other two pertinent elements involve hiring and firing authority and the exercise of discretion and independent judgment. (Cal. Code Regs., tit. 8, 11070, subd. 1(A)(1)(c) and (d).)

Plaintiffs are wrong to fault the trial court in this respect. The trial court clearly considered all three pertinent elements of the exemption defense. It determined that the evidence showed a dispute about whether MASMs were engaged in nonexempt work 80 percent of the time (plaintiffs position) or exempt work 75 percent of the time (Home Depots position). Additionally, the trial court expressly concluded that different MASMs had different hiring and firing authority and exercised different kinds and levels of discretion and judgment in other matters. Ultimately, the trial court sided with Home Depot and also determined that MASMs worked too variably for the proposed class to share common issues of fact and proof.

Plaintiffs are also wrong that the trial court did not analyze the exemption based on the following factors: first and foremost the work actually performed; followed by, the amount of time spent on exempt and nonexempt work; the employers realistic expectations; and the actual or realistic requirements of the job. (Sav-On Drug, supra, 34 Cal.4th atpp. 336-337, citing Ramirez, supra, 20 Cal.4th at pp. 802-803; Cal. Code Regs., tit. 8, 11070, subd. 1(A)(1)(f).) In addition to its detailed treatment of the most significant factor, actual work performed, and of the time split between exempt and nonexempt work, the trial courts ruling also discusses comprehensively the issue of reasonable expectations for the job of MASM and whether it can be properly decided based on statistical evidence. At the hearing, the trial court and the parties debated at length the meaning and significance of the realistic requirements and realistic or reasonable expectations of the job. Plaintiffs, in fact, identified realistic requirements as the critical issue. A fair reading of the trial courts ruling establishes the court considered both the actual work and realistic requirements of the job even though it ultimately rejected plaintiffs position. As in Walsh v. IKON Office Solutions, Inc. (2007) 148 Cal.App.4th 1440, 1453, footnote 7, the trial courts reasoning is discernable from the courts statements and context. Therefore, we decline plaintiffs challenge to the trial courts ruling on this basis.

We also comment that plaintiffs misinterpret our writ order in which we stated: Home Depot contends that the trial court changed the substantive law to accommodate the class action by ignoring that the most important consideration in determining an employees exempt status is how he actually spends his time. We said the trial courts reason for granting class certification based on misclassification was faulty, not that it was faulty to say that the most important consideration in determining an employees exempt status is how he actually spends his time. We did not state expressly or impliedly that actual work performed is not the primary consideration in the analysis of the executive exemption although we agree, of course, it is not the sole consideration. Plaintiffs argument about law of the case is also wrong.

b. Due Process Right to Raise Individual Affirmative Defenses

Citing Sav-On Drug, supra, 34 Cal.4th at pages 334-335 and 339-340, our writ order also stated: In a class action, once the issues common to the class have been tried, and assuming some individual issues remain, each plaintiff must still by some means prove up his or her claim, allowing the defendant an opportunity to contest each individual claim on any ground not resolved in the trial of the common issues. Further, to the extent the trial court would preclude Home Depot from raising an affirmative defense as to individual plaintiffs, it is substantively incorrect and violates due process.

Plaintiffs contend Judge Webster misinterpreted this language and erroneously used Home Depots right to present individual affirmative defenses as a reason to deny class certification because it would mean common issues would not predominate. On this point, the trial courts ruling stated: Home Depot has a fundamental due process right to raise affirmative defenses as to individual plaintiffs. This right to raise affirmative defenses as to individual plaintiffs, in conjunction with the individual nature of damages in this case makes it difficult to see how class certification would substantially benefit the court.^[4] Later, the trial court commented on circumstances in which Home Depot would be able to establish an affirmative defense as to a particular MASM.

The trial court, however, did not base its denial of class certification entirely on the problems created by individual defenses and damages. Instead, as we have already noted, the trial court performed a comprehensive analysis of many issues in the case and decided that, taken altogether, the common issues did not predominate. Plaintiffs cite authority from Sav-On Drug, supra, 34 Cal.4th at pages 337-338, to the effect that the trial court could justifiably have granted rather than denied class certification. But the issue is not whether this court could have upheld a different ruling by the trial court. Rather we are commanded by Sav-On Drug, supra, at page 331, to decide whether a reasonable court could have reached the conclusion it did here. We cannot agree, based on this record, that the trial court abused its discretion in considering individual affirmative defenses and damages as part of the predominance calculus. (City of San Jose v. Superior Court, supra, 12 Cal.3d at p. 463; Dunbar v. Albertsons, Inc., supra, 141 Cal.App.4th at pp. 1430-1432.)

c. Pattern and Practice and Statistical Evidence

Plaintiffs contend, in evaluating predominance for class certification purposes, the trial court rejected pattern and practice evidence showing Home Depot followed a systematic policy of misclassifying MASMs. The trial court did not, as asserted by plaintiffs, ignore methods of proof commonly allowed in the class action context. (Capitol People First v. State Dept. of Developmental Services (2007) 155 Cal.App.4th 676, 695.) The trial court acknowledged this evidence but gave more weight to the evidence of the differences in how MASMs perform their job.

Regarding statistical evidence, the trial court similarly concluded that representative samplings would not account for the variability in MASM work. Again we must defer to the trial courts ruling. (Sav-On Drug, supra, 34 Cal.4th at p. 331.) For that reason, we do not find that Bell v. Farmers Ins. Exchange, supra, 115 Cal.App.4th 715, compels a different result for the myriad reasons cited by plaintiffs. Bell upheld the trial courts discretion on the issues of due process and statistical sampling to prove damages and in finding a class action was the superior means of adjudication. (Id. at pp. 746, 751-758.) We agree with Bell the trial court, not the appellate court, can better decide these concerns.

7. Disposition

In upholding the trial courts exercise of discretion in denying class certification, our opinion resolves any other issues raised by plaintiffs. We affirm the trial courts ruling. As prevailing party, Home Depot recovers its costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

s/Gaut

J.

We concur:

s/Hollenhorst

Acting P.J.

s/Richli

J.

Publication courtesy of California free legal advice.

Analysis and review provided by Carlsbad Property line attorney.

^[1] We take note that about two-thirds of the record, volumes 10 through 31 of the appellants appendix, was filed under seal pursuant to a stipulated protective order in the trial court applying to confidential, trade secret, and/or proprietary business and financial information acquired through discovery. But much of the material under seal is not subject to protection as confidential information. An example is the entire class certification motion, including the memorandum of points and authorities and submission of out-of-state cases. The protective order also purports to affect 42 declarations of MASMs submitted by plaintiffs but not the 58 MASM declarations submitted by Home Depot. We doubt the parties meant to inhibit us in discussing the substance of the motion. But, if we find it necessary to refer to confidential information entitled to protection, we will do so generically and circumspectly. (Huffy Corp. v. Superior Court (2003) 112 Cal.App.4th 97, 105.)

^[2] The exact text is: 1.(A)(1) Executive Exemption [--] A person employed in an executive capacity means any employee: [] (a) Whose duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof; and [] (b) Who customarily and regularly directs the work of two or more other employees therein; and [] (c) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and [] (d) Who customarily and regularly exercises discretion and independent judgment; and [] (e) Who is primarily engaged in duties which meet the test of the exemption. The activities constituting exempt work and non-exempt work shall be construed in the same manner as such items are construed in the following regulations under the Fair Labor Standards Act effective as of the date of this order: 29 C.F.R. Sections 541.102, 541.104-111, and 541.115-116. Exempt work shall include, for example, all work that is directly and closely related to exempt work and work which is properly viewed as a means for carrying out exempt functions. The work actually performed by the employee during the course of the workweek must, first and foremost, be examined and the amount of time the employee spends on such work, together with the employers realistic expectations and the realistic requirements of the job, shall be considered in determining whether the employee satisfies this requirement. [] (f) Such an employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment. Full-time employment is defined in Labor Code Section 515(c) as 40 hours per week.

Primarily, as used in Wage Order 7-2001, means more than one-half the employees work time. (Cal. Code Regs., tit. 8, 11070, subd. 2(K).)

^[3] We generally disregard the more extended treatment of this issue, including new case law, first presented by plaintiffs in their appellants reply brief and which was not advocated by plaintiffs to the trial court except very briefly in its reconsideration motion. (Karlsson v. Ford Motor Co. (2006) 140 Cal.App.4th 1202, 1236.)

^[4] Even without there being actual proof of damages, it is manifest that each plaintiff will have a different claim for damages based on the time and hours he or she worked for Home Depot.