Co-authored by Catherine M. Dacre, Tamara Fisher, and Simon L. Yang

When an employer has a denial of class certification remanded by an appellate court, it has a reason to worry. And while the employer might breathe a sigh of relief when the district court on remand again denies class certification, nothing is certain when that decision also is appealed. But FedEx might finally relax now that the Ninth Circuit earlier this week affirmed the Central District of California’s second refusal to certify a class of employees who alleged that they were not paid for off-the-clock work before shifts or during meal breaks.

After previously remanding the district court’s denial of class certification and instructing it to reconsider class certification in light of California law applicable to the plaintiffs’ claims, the Ninth Circuit blessed the lower court’s conclusion that individual issues predominated over both claims. As to pre-shift work, the Ninth Circuit found that the district court had properly considered whether common evidence demonstrated that FedEx exerted control over employees who had clocked in but were not paid for time prior to the start of their scheduled shifts and determined that “absent a policy that prevents the FedEx employees from using that time for their own benefit,” no common questions existed.  The mistaken belief of a few employees that they were not free to leave after clocking in did not equate to a policy of control, and the fact that employees would be paid for time worked prior to the scheduled start of shift, if reported, defeated the plaintiffs’ argument that common questions predominated.

Next, on the issue of off-the-clock work during meal breaks, the Ninth Circuit confirmed that California law requires an employer to pay for work during meal breaks only when it knew or reasonably should have known about the work.  It then explained the district court properly concluded that individual issues would predominate because FedEx did not know or have reason to believe employees worked through provided meal breaks.  Even though the plaintiffs argued that FedEx could have reviewed electronic data showing when packages were scanned to determine whether scans occurred during meal breaks, the Ninth Circuit confirmed this evidence wouldn’t establish liability.  Because employers are not required “to police employees’ meal breaks … FedEx had no obligation to sift through the volumes of electronic data produced by the scanning devices to determine whether its employees were actually taking their authorized breaks.”  In sum, even though employer data may have demonstrated that employees were working during meal breaks, the existence of such data did not support a finding that an employer knew or reasonably should have known about the work or provide common evidence supporting class certification.

At least on these facts, ignorance was bliss for the employer, but not for the employees. Because FedEx properly provided meal breaks, the fact that it maintained electronic data did not mean it knew or should have known employees performed work during their meal breaks.  By contrast, employees’ ignorance of their ability to do as they pleased during pre-shift time did not save their claims for off-the-clock pay where no company policy exerted control over them.