Co-authored by Soo Cho and Timothy Rusche

The Northern District of California in Ortiz v. CVS Caremark Corporation found class certification potholes were not hazards where policies establish rules of the road for employees driving between stores. In doing so, the court provided a roadmap for avoiding off-the-clock and reimbursement class claims.

Background

In Ortiz, the plaintiffs sought to create a roadblock to “inter-store transfers” during which CVS’ employees picked-up merchandise or prescriptions from one store and delivered them to another. The plaintiffs’ vehicle of choice? A three-pronged certification strategy:

First, they tried to certify a class of employees allegedly not paid for transfers occurring before or after they clocked out.

Second, they tried to certify a class of employees allegedly not reimbursed for mileage expenses incurred during transfers.

Third, they tried to certify a catch-all class of employees who were not reimbursed mileage in the full amount required by law.

To avoid class-certification tolls, CVS emphasized its policies: (1) strictly prohibiting off-the-clock work and requiring employees to be clocked in any time they are working; (2) allowing managers to change time records to account for inter-store transfers that occur before or after an employee has clocked in or out; (3) requiring employees to verify the hours worked and pay on their paychecks; and (4) mandating reimbursement for all necessary business expenses, including use of personal vehicles.

Plaintiffs tried to detour around these policies by claiming that CVS should have ensured employees were compensated for their time and reimbursed for their expenses because employees performed these transfers at the request of their managers.

The Holding

The court refused to certify the classes, finding potential class members had varying experiences and that the common questions required by Walmart Stores, Inc. v. Dukes were absent. The court reasoned that mini-trials would be required to unlock the truth and determine: (1) whether the transfer occurred off the clock; (2) whether a manager had adjusted the employee’s time records; and (3) whether management had reason to know that the employee had worked without pay.

Regarding the first mileage reimbursement class, the court found persuasive CVS’ declarations showing that individual experiences varied widely. For example, some employees used company cars and did not incur mileage expenses for inter-store transfers while others did not seek reimbursement. The court denied the catch-all reimbursement class because each individual class member would have to prove that the reimbursement offered was less than his or her actual expenses. 

Employer Take-Aways

CVS provides a roadmap for employers to defeat class certification in off-the-clock and expense reimbursement cases. The key? Highlighting lawful policies to demonstrate any individual’s contrary experience or an inadvertent policy violation is not systemic. And, when strong policies are supported by testimony emphasizing varying experiences, especially under different local managers, common questions abound and the road should lead to the denial of class certification.