Jose Fernandez et al v. Bank of America, N.A. et al

REPLY in support of NOTICE OF MOTION AND MOTION to Certify Class 36

C.D. Cal.November 5, 2018

Plaintiffs’ Reply In Support Of Motion For Class Certification 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Joshua H. Haffner, SBN 188652 (jhh@haffnerlawyers.com) Graham G. Lambert, SBN 303056 (gl@haffnerlawyers.com) HAFFNER LAW PC 445 South Figueroa St., Suite 2325 Los Angeles, California 90071 Telephone: (213) 514-5681 Facsimile: (213) 514-5682 Mark R. Thierman, Cal. Bar No. 72913 (mark@thiermanbuc.com) Joshua D. Buck, Cal. Bar No. 258325 (josh@thiermanbuck.com) Leah L. Jones, Cal. Bar No. 276448 (leah@thiermanbuck.com) THIERMAN BUCK LLP 7287 Lakeside Drive Reno, NV 89511 Paul Stevens, SBN: 207107 (pstevens@stevenslc.com) STEVENS, LC 700 S. Flower Street, Suite 660 Los Angeles, California 90071 Telephone: (213) 270-1211 Facsimile: (213) 270-1223 Attorneys for Plaintiffs JOSE FERNANDEZ, ET. AL. Tel. (775) 284-1500 Fax. (775) 703-5027 Attorneys for Plaintiffs JOSHUA B. BOSWELL, ET. AL. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA JOSE FERNANDEZ, ET AL, Plaintiffs, v. BANK OF AMERICA, N.A.; and DOES 1 through 10, inclusive, Defendant. PLAINTIFFS’ REPLY IN SUPPORT OF MOTION FOR RULE 23 CLASS CERTIFICATION FOR THE CALIFORNIA ONLY CLASS Case No. 2:17-cv-06104-MWF-JC JOSHUA B. BOSWELL, ET. AL., Plaintiffs, v. BANK OF AMERICA CORPORATION, ET. AL.; Defendant. Consolidated with Case No.: 2:17-cv- 06120-GW-RAO Hearing Date: November 19, 2018 Hearing Time: 10:00 a.m. Courtroom: 5A (Assigned To Hon. Michael W. Fitzgerald) Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 1 of 27 Page ID #:836 i Plaintiffs’ Reply In Support Of Motion For Class Certification 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENT I. INTRODUCTION. .......................................................................................... 1 II. DEFENDANT FAILS TO ADDRESS THE CASE LAW ESTABLISHING PLAINTIFF’S CLAIMS, CONCEDING LIABILITY CAN BE DETERMINED ON A CLASS BASIS. ............................... 1 III. THE EXEMPTIONS RELIED ON BY DEFENDANT ARE DISPROVEN BY PREDOMINATELY COMMON EVIDENCE. .......................... 2 A. WHETHER EMPLOYEES ARE MISCLASSIFIED AS EXEMPT CAN BE DETERMINED BASED ON A CORPORATE POLICY OR RULE. ............................. 2 B. DEFENDANT DOES NOT DISPUTE THAT AS OF NOVEMBER 2016 ALL FINANCIAL CENTER LENDING OFFICERS (OTHER THAN A FEW HIGH EARNERS) WERE NON-EXEMPT. ........................................................... 5 C. THE OUTSIDE SALESPERSON EXEMPTION DOES NOT APPLY BASED ON COMMON PROOF. ................................................................................. 8 1. Defendant Had A Policy That Lending Officers Spend The Majority Of Their Time At Financial Centers. ................................................ 8 2. Defendant Reclassified All Financial Center Lending Officers, Other Than High Earners, As Non-Exempt In November 2016. Defendant Admits That Job Duties Did Not Change. .......................................................................................................... 12 3. Defendant Has Not Submitted A Single Class Member Declaration Attesting That They Spent The Majority Of Their Time Outside A Financial Center. ................................................................. 13 D. THE ADMINISTRATIVE EXEMPTION DOES APPLY BASED ON PREDOMINANTLY COMMON EVIDENCE. ............................................................... 14 E. THE OVERTIME EXEMPTIONS DO NOT APPLY. .......................................... 15 1. Primarily Commissioned Employee Exemption Is Disproven By Predominately Common Evidence. ........................................ 16 2. The Federal Exemptions Do Not Apply To The FLSA Claims That Serve As A Predicate To Plaintiff’s UCL Cause Of Action............................................................................................................. 17 IV. DEFENDANT’S TYPICALITY ARGUMENT LACKS MERIT. .................................................................................................................... 17 V. NUMEROSITY AND ADEQUACY ARE SATISFIED .............................. 20 VI. PLAINTIFFS SATISFY THE SUPERIORITY REQUIREMENT. .................................................................................................... 21 VII. ALL DERIVATIVE CLAIMS ARE APPROPRIATE FOR CLASS CERTIFICATION. ..................................................................................... 21 Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 2 of 27 Page ID #:837 Plaintiffs’ Reply In Support Of Motion For Class Certification ii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VIII. CONCLUSION. ....................................................................................... 21 Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 3 of 27 Page ID #:838 Plaintiffs’ Reply In Support Of Motion For Class Certification iii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Cases Dean v. United of Omaha Life Ins. Co., 2008 WL 7611369, (C.D. Cal. 2008) .......................................................................................20 Duran v. U.S. National Bank Association, 59 Cal.4th 1 ......................................8, 12 Ellis v. Costco Wholesale Corp.,657 F.3d 970, (9th Cir. 2011) ........................................................................................................................18 Hambleton Bros. Lumber Co. v. Balkin Enterprises, Inc., 397 F.3d 1217, (9th Cir. 2005) .................................................................................. 9 Hanlon v. Chrysler Corp., 150 F.3d 1011, (9th Cir. 1998) .....................................18 Hanon v. Dataproducts Corp., 976 F.2d 497, (9th Cir. 1992) ........................................................................................................................18 Koa v. Holiday, 12 Cal.App.5th 947 ........................................................................14 Lewis v. The CCPOA Benefit Trust Fund, 2010 WL 3398521, (N.D. Cal. 2010) ......................................................................................... 9 National Steel and Shipbuilding Co. v. Superior Court, 135 Cal.App.4th 1072 ..............................................................................................14 Nat'l Fed'n of Blind v. Target Corp., 582 F. Supp. 2d 1185, (N.D. Cal. 2007) .............................................................................................20 Noble v. 93 Univ. Place Corp., 224 F.R.D. 330 (S.D.N.Y. 2004) ........................................................................................................................18 Parson v. Ryan, 754 F.3d 657, (9th Cir. 2014) ........................................................18 Peabody v. Time Warner Cable, Inc., 59 Cal.4th 662 .............................................16 Petersen v. Costco Wholesale Co., 2016 WL 6768911 (C.D. Cal. 2016) .......................................................................................................20 Peterson v. Alaska Commc'ns Sys. Group., Inc., 2018 WL 4100665 (D. Alaska 2018) .................................................................................. 3 Santomenno v. Transamerica Life Ins. Co., 2016 WL 6469858 (C.D. Cal. 2016) ........................................................................................18 Stockwell v. City & Cty. of S.F., 749 F.3d 1107 ......................................................21 Tait v. BSH Home Appliances Corp., 289 F.R.D. 466 (C.D. Cal. 2012) .......................................................................................................20 Vaquero v. Stoneledge Furniture, LLC, 9 Cal.App.5th 98 2017 ......................................................................................................................1, 21 Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 4 of 27 Page ID #:839 Plaintiffs’ Reply In Support Of Motion For Class Certification iv 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 946 (9th Cir. 2009) ..................................................................................................... 2 Statutes Cal. Code Regs., Title 8, § 11040, 4-2001(3) ......................................................7, 19 California Labor Code § 1171 .............................................................................7, 19 Labor Code §515(a) .................................................................................................14 Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 5 of 27 Page ID #:840 1 Plaintiffs’ Reply In Support Of Motion For Class Certification 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. Introduction. In its opposition to Plaintiffs’ motion for class certification, Defendant Bank of America (“Defendant”) admits that it had a common pay plan applicable to all class members. Defendant also does not dispute that its common pay plan raises identical issues as to all class and subclass members regarding failure to compensate for rest breaks, minimum wage for nonproductive time, or overtime. Indeed, Defendant does not even address in its opposition the directly on-point authority cited in Plaintiffs’ motion, Vaquero v. Stoneledge Furniture, LLC, 9 Cal.App.5th 98 (2017) and Ashley Furniture Industries, Inc., 824 F.3d 1150 (9th Cir. 2016), which establish that this case is ideally suited for class treatment. Instead, Defendant focuses exclusively on a potpourri of potential exemptions from wage requirements it asserts would create issues defeating certification. Defendant’s arguments are wholly meritless, however. Each of the exemptions rise or fall on predominantly common evidence. Similarly, Plaintiffs are typical of all class members, each of whom operated out of financial centers under the same pay plan, policies, and rules, performing the same tasks and duties. This case is ideally suited for class treatment under recent precedent. For the reasons set forth in Plaintiffs’ motion and this reply, Plaintiffs respectfully request that the Court grant this motion and certify this case as a class action. II. Defendant Fails To Address The Case Law Establishing Plaintiff’s Claims, Conceding Liability Can Be Determined On A Class Basis. In Plaintiffs’ motion for class certification, Plaintiffs demonstrated that the Class claims for rest breaks and minimum wage were supported by directly on- point authority. Specifically, Plaintiffs cited to Vaquero, supra, 9 Cal.App.5th 98 as to rest breaks, and Ashley Furniture, supra, 824 F.3d 1150 in support of the minimum wage claims. Plaintiff also cited to the authority requiring payment of overtime. Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 6 of 27 Page ID #:841 Plaintiffs’ Reply In Support Of Motion For Class Certification 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant in its opposition wholly fails to address, challenge, or even mention Vaquero, Ashley or the overtime cases. This constitutes a concession that Plaintiffs’ substantive claims are appropriate for class treatment. Thus, the only issue that needs to be resolved is whether Defendant’s exemption defense can be litigated on a class basis. (Defendant’s Opposition To Plaintiffs’ Motion For Class Certification (“Opposition”), Dckt No. 39, 20:26-28 (“the key inquiry necessary to resolve the merits of Plaintiffs’ minimum wage and rest break claim is whether . . . [they were] properly treated as exempt”).) III. The Exemptions Relied On By Defendant Are Disproven By Predominately Common Evidence. Defendant’s reliance on nearly every conceivable exemption is meritless for predominantly common reasons applicable to all class members. A. Whether Employees Are Misclassified As Exempt Can Be Determined Based On A Corporate Policy Or Rule. Whether employees are misclassified as exempt from California wage laws is susceptible to class treatment under Ninth Circuit and California precedent. The Ninth Circuit has held that a uniform policy of applying an exemption to a class of employees is a relevant factor in considering certification. “The first line of attack, that Wells Fargo’s exemption policy was an impermissible factor, is a non-starter. An internal policy that treats all employees alike for exemption purposes suggests that the employer believes some degree of homogeneity exists among the employees. This undercuts later arguments that the employees are too diverse for uniform treatment. Therefore, an exemption policy is a permissible factor for consideration under Rule 23(b)(3).” In Re Wells Fargo Home Mortg. Overtime Pay Litigation, 571 F.3d 953, 957 (9th Cir. 2009) The Ninth Circuit also ruled that the exemption alone cannot be the only factor justifying class treatment. “While such uniform exemption policies are relevant to the Rule 23(b)(3) analysis, we hold that it is an abuse of discretion to rely on such policies to the near exclusion of other relevant factors touching on predominance.” In Re Wells Fargo Home Mortg. Overtime Pay Litigation, 571 F.3d 953, 955 (9th Cir. 2009); see also Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 946 (9th Cir. 2009) (class certification was not appropriate where it Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 7 of 27 Page ID #:842 Plaintiffs’ Reply In Support Of Motion For Class Certification 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 is based solely “on an internal uniform exemption policy to the near exclusion of other factors relevant to the predominance inquiry”). However, where a corporate policy is commonly applied relating to the exemption, that common policy coupled with the uniform exemption can provide the common proof for certification under existing Ninth Circuit cases. Thus, In Re Wells Fargo held that “uniform corporate policies will often bear heavily on questions of predominance.” In Re Wells Fargo, supra, 571 F.3d at 958. This is because “[s]uch centralized rules, to the extent they reflect the realities of the workplace, suggest a uniformity among employees that is susceptible to common proof.” Id. at 958-59.1 Indeed, recent case law discussing In Re Wells Fargo and Vinole has explicitly held that common corporate policies or practices make exemption misclassification cases suitable for class treatment. See e.g., Peterson v. Alaska Commc'ns Sys. Group., Inc., 2018 WL 4100665, *14 (D. Alaska 2018). In Peterson, the district court determined that a proposed class of sales persons, referred to as client account managers (“CAM”), satisfied Vinole and In re Wells Fargo, where the plaintiffs pointed to other uniform policies and practices beyond just the uniform outside sales exemption. These included uniform job descriptions and job appraisal forms, a uniform sales process for which CAMs receive training, and close management and supervision of CAMs. Id. at 14. Peterson also noted 1 BofA’s reliance on district court cases denying certification or decertifying classes is misplaced as none of those cases are analogous to facts here. In Trahan, there was no common evidence about where the putative class of business banking officers “spend their day.” Trahan v. U.S. Bank Nat'l Ass'n, 2015 WL 75139, *7 (N.D. Cal. 2015). In Alakozai, plaintiffs failed to put forth adequate common evidence on the administrative and salesperson exemptions and “disparities in terms of the Advisors’ duties and the amount of time they devoted to each.” Alakozai v. Chase Inv. Servs. Corp., No. CV 11-09178 SJO JCX, 2014 WL 5660697, *9-10 (C.D. Cal. 2014). In Perez v. Safelite Grp., Inc., 2014 WL 12569434 (C.D. Cal. 2014) the plaintiff attempted to rely solely on the defendant’s uniform exemption policy in violation of Vinole and Wells Fargo, and cited “no evidence regarding the time class members spent” in challenging the outside sales exemption. Perez, supra, at *3-4. Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 8 of 27 Page ID #:843 Plaintiffs’ Reply In Support Of Motion For Class Certification 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 that Plaintiffs demonstrated that the jobs and duties of CAMs closely follow the defendant’s sales process. Finally, Peterson noted that CAMs only varied in their time spent out of the office between 10% and 30%, and otherwise performed the same tasks and duties and were subject to the same supervision, training, and guidance. Based thereon, Peterson noted that “District courts have found the predominance inquiry satisfied under similar factual and evidentiary circumstances.” Id. Here, as in Peterson, Plaintiffs are relying on Defendant’s uniform centralized policies and practices, in addition to its uniform application of exemptions, in contending that the Class’ exempt status is subject to predominantly common proof. Specifically, Plaintiffs cite to, among others, the following common proof in addition to the uniform application of exemptions: (1) uniform and common draw against commission pay, which is governed by the same pay plan and offer letters. (Declaration of Joshua H. Haffner In Support Of Plaintiff’s Motion For Rule 23 Class Certification And Motion For FLSA Conditional Certification (“Haffner Decl. I”), Dckt No. 36-5, Exhs. 1-5); (2) job descriptions and uniform sales process for which putative class members receive training, and close management and supervision. (Declaration of Joshua H. Haffner In Support of Reply To Motion For Class Certification (“Haffner Decl. II”), Exhs.3-6); (3) policy that financial center Lending Officers primarily service bank- originated loans, and Lending Officers not attached to a financial center but working with home loan centers primarily self-source loans. (Haffner Decl. I, Dckt No. 36-5, Exh.10, 15:7-15, 17:11-16, 22:2-11, 24:23 – 25:1; Declaration of Susannah Howard in Support Of Defendant’s Opposition To Motion For Class Certification (“Howard Decl.”), Dckt No.41, 10/29/18, Exh. P, ¶4, 2:23-25; and Haffner Decl. II, Exh.1, 32:16-19.) Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 9 of 27 Page ID #:844 Plaintiffs’ Reply In Support Of Motion For Class Certification 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (4) Defendant’s PMKs testimony that all financial center Lending Officers “have a desk at that Financial Center,” are “expected to be there daily,” and for bank-sourced loans there was not “any need for a Lending Officer to be outside of the office.” (Haffner Decl. I, Dckt No. 36-5, 9/14/18, Exh.10, 16:12-17, 22:17-21, 25:11-2); (5) Defendant’s reclassification in November 2016 of nearly all of its financial center Lending Officers as non-exempt. (Haffner Decl. I, Exh.11, ¶2.); (6) Defendant’s PMK’s testimony that it was Defendant’s policy and practice before and after the November 2016 reclassification that over 50% of Class members time be spent in financial centers. (Haffner Decl. I, Dckt No. 36-5, Exh.10, 19:17-22, 21:11 – 22:1, 38:19 – 39:1; Haffner Decl. II, Exh.1, 68:10-14.); (7) Defendant’s PMKs’ testimony that the job duties of its financial center Lending Officers did not change before, or following, the November 2016 reclassification. (Haffner Decl. I, Dckt No. 36-5, Exh.10, 21:11-13, 59:7-13; and Exh.9, 43:25 – 44:13, 95:16 – 96:1.) (8) Class representatives testimony that they were required to be at the branch the vast majority of time for all periods in question. (Declaration of Joshua Boswell in Support of Motion for Class Certification (“Boswell Decl.”), Dckt No. 36-8, ¶4; Declaration of Alex Yong in Support of Motion for Class Certification (“Yong Decl.”), Dckt No. 36-9, ¶4; Declaration of Joes Fernandez in Support of Motion for Class Certification (“Fernandez Decl.”), Dckt No. 36-10, ¶5.) Class certification is appropriate based on this common proof. B. Defendant Does Not Dispute That As Of November 2016 All Financial Center Lending Officers (Other Than A Few High Earners) Were Non-Exempt. Defendant admits that, as of November 2016, it reclassified nearly all financial center Lending Officers as non-exempt. (Opposition, 9:7-10.) Thus, it is undisputed that the exemptions relied on by Defendant in opposition to this motion Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 10 of 27 Page ID #:845 Plaintiffs’ Reply In Support Of Motion For Class Certification 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 did not apply, as of November 2016, to the same Lending Officers that make up this class. As Plaintiffs stated in their motion for class certification, Defendant’s uniform decision to reclassify nearly all financial center Lending Officers as non- exempt in November 2016 strongly supports Plaintiffs’ argument that they were misclassified as exempt prior to November 2016. In response, Defendant makes several unmeritorious and unpersuasive arguments that its reclassification should not be taken into account in determining whether common issues predominate. First, it argues that PMK Lala was not designated on the topic of Lending Officer’s classification. But that misses the point. PMK Lala was designated as Defendant’s PMK on job duties, and he explicitly testified they did not change. (Haffner Decl. I, Dckt No. 36-5, Exh. 10, 21:11-13, 59:7-13.) If the duties were same before and after the reclassification, the classification issue is a non-issue – it’s all the same. Furthermore, the person Defendant states was the correct PMK witness to testify as to classification, Ms. Bridgmon, confirmed PMK Lala’s testimony that there was no reason based on Class members’ job duties for the reclassification: Q. My understanding is that, as far as you're aware, the job duties of MLO’s and senior MLO’s remain the same after the change in classification and titles in November 2016, correct? A. That is my understanding. (Haffner Decl. I, Exh.9, 95:16 – 96:1.) Defendant’s other attempted explanations as to why the reclassification is purportedly meaningless also fail. Defendant argues that, after the reclassification “the bank began placing greater emphasis on having LOs provide coverage at all Financial centers.” (Id. at 19:16-19.) This is hopelessly vague and is inconsistent from the direct testimony and admission of Defendant’s PMK Lala that it has “always been [Defendant’s] expectation that Lending Officers attached to financial centers would spend a majority of their time at those financial centers, both before and after November 2016.” (Haffner Decl. II, Exh. 1, 68:10-14; see also Haffner Decl. I, Dckt No. 36-5, Exh.10, 38:19 – 39:1 (“all Lending Officers, both before Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 11 of 27 Page ID #:846 Plaintiffs’ Reply In Support Of Motion For Class Certification 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and after November 2016, that worked in financial centers spent the majority of their time working in those Bank of America offices”).)2 Moreover, it is also refuted by the testimony of the Class Representatives, who testified and declared that while they were employed at Bank of America, they were required and expected to be physically present at the branch almost all the time they were working, far more than 50% of their time, and would have issues with management if they did not. (See Boswell Decl., Dckt No. 36-8, ¶4; Yong Decl., Dckt No. 36-9, ¶4; Fernandez Decl., Dckt No. 36-10, ¶5; and Haffner Decl. II, Exh. 2 (Deposition of Jose Fernandez), 19:8-13 and 21:6-17.) Finally, Defendant also argues that the reclassification was based on changing Department of Labor regulations regarding earning thresholds for federal administrative and highly compensated employees. (Opposition, Dckt. No. 39, 19:23 – 20:11.) However, compensation thresholds are only potentially relevant to federal exemptions. The California exemptions for outside salespersons or commission paid employees do not relate in any way to how much an employee produces or earns. California Labor Code § 1171; Cal. Code Regs., Title 8, § 11040, 4-2001(3). Thus, Defendant’s purported explanation regarding DOL regulations does nothing to explain why the California exemptions at issue in this motion – which have nothing to do with the amount of the employee’s income – were abandoned in November 2016. Indeed, this underscores the fact that the few financial center Lending Officers that were not reclassified as non-exempt in November 2016, like Plaintiff Boswell, remained misclassified under California law. This is because Defendant’s PMKs both admitted was no difference in the work or duties of those financial center Lending Officers classified as exempt versus non-exempt after 2 Although Defendant attempted to have its PMK make wholesale changes to the repeated admission that Class members worked primarily out of the branch, those corrections are improper and do not impact the issues, as set for the below in section III.C.1, infra. Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 12 of 27 Page ID #:847 Plaintiffs’ Reply In Support Of Motion For Class Certification 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 November 2016. (Haffner Decl. I, Dckt No. 36-5, Exh.9, 43:25 – 44:13 and Exh.10, 20:10-13.) Moreover, Defendant’s PMK witnesses admitted that the reason certain financial center Lending Officers were not classified as nonexempt after November 2016 was if they had “a high production level.” (Haffner Decl. I, Dckt No. 36-5, Exh.9, 43:25 - 44:18; and Exh.10, 54:14-19.) But, again, production level or amount of income is not relevant to any exemption under California law. Thus, Defendant offers no valid basis under California law for continuing to classify Plaintiff Boswell and other high earning financial center Lending Officers as exempt following the November 2016 reclassification. Defendant’s reclassification of its financial center Lending Officers as non- exempt in November 2016, when their duties and pay admittedly remained the same, is strong common evidence the exemptions are equally inapplicable to all. C. The Outside Salesperson Exemption Does Not Apply Based On Common Proof. Defendant’s reliance on the California outside salesman exemption to defeat commonality has no merit. 1. Defendant Had A Policy That Lending Officers Spend The Majority Of Their Time At Financial Centers. The outside salesperson exemption only applies if employees spend more than 50 percent of the workday engaged in sales activities outside the office. Duran v. U.S. National Bank Association, 59 Cal.4th 1, 12 (2014). In this case, Defendant’s PMK on Class members job duties, Mr. Lala explicitly and repeatedly testified that Defendant’s policy, before and after its November 2016 reclassification, was that Lending Officers working at financial centers were expected to spend the majority of their time at the financial center. Q. There's always been an expectation that Lending Officers attached to financial centers would spend a majority of their time at those financial centers, both before and after November 2016; correct? A. Correct. (Haffner Decl. II, Exh. 1 (PMK Lala depo.), 68:10-14.) Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 13 of 27 Page ID #:848 Plaintiffs’ Reply In Support Of Motion For Class Certification 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This testimony directly refutes Defendant’s reliance on the outside salesperson exemption as creating individualized issues. Indeed, the Ninth Circuit in In Re Wells Fargo explicitly held that this is the type of common evidence supporting class certification as to the validity of an exemption: “A centralized policy requiring employees to be at their desks for 80% of their workday would change this individual issue into a common one. Therefore, such a corporate policy would be highly relevant to the predominance analysis.” In Re Wells Fargo, supra, 571 F.3d at 959 (emphasis added).3 Because Defendant’s PMK has admitted it was Defendant’s policy and expectation “both before and after November 2016” that Lending officers spend a majority of their time at the financial centers, the outside salesperson exemption can be determined on predominately common evidence based on the Ninth Circuit holding in In Re Wells Fargo. PMK Lala’s deposition was taken June 6, 2018. On July 26, 2018, PMK Lala attempted to make wholesale changes to his testimony that the majority of time for Lending Officers working at financial centers was spent at the financial center. (Howard Decl., Dckt No.41, 10/29/18, Exh.A, pp.15-17.) This change, however, lacks credibility on multiple levels and is not permitted. See e.g., Hambleton Bros. Lumber Co. v. Balkin Enterprises, Inc., 397 F.3d 1217, 1226 (9th Cir. 2005) (must not be used to alter what was actually said under oath); Lewis v. The CCPOA Benefit Trust Fund, 2010 WL 3398521, * 3, (N.D. Cal. 2010) (“may only be used for corrective, and not contradictory changes”). Moreover, even if 3 In making this statement, In Re Wells Fargo was referring to the standard for outside salesperson exemption under the FLSA, which at the time was 80% of workday for the exemption to apply. See e.g., Rossello v. Avon Products, Inc., 2015 WL 3890403, *10 (D. Puerto Rico 2015) (referring to “the FLSA’s outside salesman exemption, which, under the DOL regulations than in effect, applied only to employees who spent at least 80 percent of their time making sales outside the office”). However, the analysis is equally applicable to application of California’s outside sales person exemption under the 50% standard. Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 14 of 27 Page ID #:849 Plaintiffs’ Reply In Support Of Motion For Class Certification 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 considered, it does not affect whether the outside salesperson exemption can be decided based on predominantly common evidence. First, PMK Lala’s testimony that financial center Lending Officers spend the majority of their time in Defendant’s offices was not a passing reference. Rather, he repeatedly and unequivocally testified at his deposition that Lending officers spent the majority of their time in a financial center. Thus, in addition to the testimony cited above, PMK Lala testified as follows: Q. For the Lending Officers that work in financial centers, they spend most of their time in the financial centers; correct? A. Correct. Q. Over 50 percent of their time; correct? A. Generally, yes. (Haffner Decl. I, Dckt No. 36-5, Exh.10 19:17-22.) * * * Q. And did the Lending Officers who worked in financial centers, did the time that they spent in those centers change at all from before November 2016 to after? A. It shouldn't have, no. Q. And before November 2016, the Lending Officers who worked in financial centers spent over 50 percent of their time there. Fair? A. They're supposed to. Q. And as far you know, they did; correct? . . . A. Yes. (Id. at 21:11 – 22:1.) * * * Q. For all Lending Officers, both before and after November 2016, those that worked in financial centers spent the majority of their time working in those Bank of America offices; correct? . . . A. Yes. (Id. at 38:19 – 39:1.) Defendant PMK Lala’s repeated testimony that Lending officers were required to spend over 50% of their time at financial centers is in the record. Whether the change in testimony is credible is a common issue applicable to all class members. Indeed, it is worth noting that the Defendant’s did not attempt to change PMK Lala’s testimony that all financial center Lending Officers “have a desk at that Financial Center,” are “expected to be there daily,” and for the bank- sourced loans handled at financial centers there was not “any need for a Lending Officer to be outside of the office.” (Haffner Decl. I, Dckt No. 36-5, 9/14/18, Exh.10, 16:12-17, 22:17-21, 25:11-2.) Indeed, Class representatives also declared Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 15 of 27 Page ID #:850 Plaintiffs’ Reply In Support Of Motion For Class Certification 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and testified, including under cross examination, that while they were employed at Bank of America, they were required and expected to be physically present at the branch almost all the time they were working, far more than 50% of their time, and that they understood that was the general requirement for all Lending Officers before the reclassification in 2016. (See Boswell Decl., Dckt 36-8, ¶4; Yong Decl., Dckt No. 36-9, ¶4; Fernandez Decl., Dckt No. 36-10, ¶5; and Haffner Decl. II, Exh. 2 (Deposition of Jose Fernandez), 19:8-13 and 21:6-17.) Finally, the changes in testimony by PMK Lala do not refute his testimony that Lending Officers were expected to spend the majority of their time at financial centers. Rather, the changed testimony refers to “service level agreements” with financial centers that “may” allow for some unspecified flexibility. (Howard Decl., Dckt No.41, Exh.A, 15 of 246, changes to deposition pages 21-22.) However, no “service level agreements” are actually submitted by Defendant with their opposition papers, let alone any such agreement reflecting an expectation that a Lending Officer spend less than half their time at a financial center. Thus, there is no evidentiary basis for any argument that Lending Officers service level agreements permit them to spend less than half their time at a financial center. Furthermore, the changes that PMK Lala made to his testimony do not state that any Lending Officers actually spend a majority of their time outside the financial center. (Id. at 16 of 246, page 41, line 13 (“the amount of time may have” changed); 17 of 246, page 58, line 8 (“the amount of spent on specific duties may have changed”); 17 of 246, page 68, line 14 (“prior to November 2016, a Lending Officer could be aligned to a financial center with an expectation that they would spend less than a majority of their time there”). Indeed, the best that Defendant can muster in its argument on the outside sales person exemption is that “many LOs have spent and still do spend significant time away from Bank of America locations. . .” (Opposition, Dckt. No. 39, 13:13- 14 (emphasis added).) The standard for application of the outside salesperson exemption under California law, however, is not whether the employee spends Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 16 of 27 Page ID #:851 Plaintiffs’ Reply In Support Of Motion For Class Certification 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “significant time” on outside sales activities, but whether they spend over 50% of their time. Duran, supra, 59 Cal.4th at 12. Defendant’s admission that Lending Officers, before and after the November 2016 reclassification, were expected to spend the majority of their time at Defendant’s financial centers, is common proof the outside salesperson exemption does not apply. 2. Defendant Reclassified All Financial Center Lending Officers, Other Than High Earners, As Non-Exempt In November 2016. Defendant Admits That Job Duties Did Not Change. In November 2016, Defendant reclassified all of its financial center Lending Officers as non-exempt, except those that had a “high production level.” (Haffner Decl. I, Dckt No. 36-5, Exh.11, ¶2; Exh.9, 43:25 - 44:18; and Exh.10, 54:14-19.) Defendant admits, however, that the job duties of the financial center Lending Officers did not change. Thus, Defendant’s PMK regarding job duties, Mr. Lala, testified as follows: Q. Did the [Lending Officers] duties change at all before to after November 2016? A. No. (Haffner Decl. I, Dckt. No. 36-5, Exh. 10, 21:11-13.) * * * Q. Did anything change as to Lending Officers before November 2016 to after November 2016 that would justify the change in classification from exempt to non-exempt, from your perspective? THE WITNESS: Not that I know of, no. (Id. at 59:7-13.) Defendant’s other PMK regarding BofA’s pay plan, PMK Bridgmon also confirmed that “the job duties of MLO’s and senior MLO’s remain[ed] the same after the change in classification and titles in November 2016.” (Haffner Decl. I, Dckt No. 36-5, Exh. 9, 95:16 – 96:1.) Defendant’s reclassification of all Lending Officers working out of financial centers except high earners as non-exempt, coupled with the fact that their job Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 17 of 27 Page ID #:852 Plaintiffs’ Reply In Support Of Motion For Class Certification 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 duties did not change, is common evidence that financial center Lending Officers were misclassified as exempt. 3. Defendant Has Not Submitted A Single Class Member Declaration Attesting That They Spent The Majority Of Their Time Outside A Financial Center. In its opposition, Defendant refers to declarations from another class action, entitled McLeod v. Bank of America, which involved reimbursement for fuel expenses. (Opposition, 6:18 – 7:22.) However, a review of these declarations reflect that none of them state they spent a majority of time outside Defendant’s financial center. (Howard Decl., Dckt No.41, 10/29/18, Exhs.H-O.) Moreover, none of the declarations even distinguish between whether the Lending Officers is a financial center Lending Officer (who are required to spend the majority of time at a branch and primarily handle bank sourced loans), or a self sourced Lending Officer (who are not tied to a financial center and self-source loans). (Id.) Thus, these declarations have no relevance to whether it can be proven based on predominantly common evidence that financial center Lending Officers spend a majority of their at financial centers.4 Indeed, in contrast to Defendant’s lack of testimony, Plaintiffs testified (consistent with Defendant’s PMK testimony) that they were required to be at the branch nearly all the time. (Boswell Decl., Dckt 36-8, ¶4; Yong Decl., Dckt No. 36-9, ¶4; Fernandez Decl., Dckt No. 36-10, ¶5.) Indeed, in his deposition, Plaintiff Fernandez was pressed on this issue, and was unequivocal, testifying that he was required to be at Defendant’s branch Monday through Friday, “during the hours the branch was open to the public.” (Haffner Decl. II, Exh.2, 19:8-14, 19:23 – 20:3, 21:6-17.) The fact that Defendant was unable to find a single class member to submit a declaration attesting that they spend a majority of their time outside a 4 The declarations and deposition from the McLeod case submitted by Defendant are also hearsay and inadmissible. Thus, in addition to the arguments set forth above, Plaintiffs object to them being considered in connection with this Motion. Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 18 of 27 Page ID #:853 Plaintiffs’ Reply In Support Of Motion For Class Certification 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 financial center speaks volumes as to the lack of merit of the outside salesperson exemption. Similarly, Defendant’s citation to allegations in a complaint from an action pending in Orange County is meritless. (Opposition, Dckt No. 39, 7:23 – 8:4; and Howard Decl., Dckt No.41, 10/29/18, Exh.Q.) That complaint does not distinguish between self-sourced and financial center Lending officers, and explicitly alleges that class members were misclassified as exempt during their initial period. (Id. at Exh.Q, ¶2) Moreover, allegations in a complaint are hearsay, and are not evidence of anything. That Defendant must resort to unverified allegations in a complaint, which do not even support the proposition it is cited, is a reflection of the lack of merit of Defendant’s position. In sum, the inapplicability of the outside salesman exemption will be proven based on predominantly common evidence. D. The Administrative Exemption Does Apply Based On Predominantly Common Evidence. The administrative exemption only applies to employees who “earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment.” (Cal. Code Regs., Title 8, § 11040, 4- 2001(1)(A)(2)(g); see also Labor Code §515(a).) The FLSA also requires a minimum “salary” to qualify for the administrative exemption. (29 C.F.R. §§541.200(a) and 541.600(b).) The administrative exemption is inapplicable where employees “did not receive the minimum salary required for exempt status.” Koa v. Holiday, 12 Cal.App.5th 947, 957 (2017). In National Steel and Shipbuilding Co. v. Superior Court, 135 Cal.App.4th 1072; 38 Cal.Rptr.3d 253, 279 (2006), vac’t, rev. granted, the California Court of Appeal explained that “employees who are paid on the basis of an hourly wage, or commissions, or piece rates, cannot be exempt from payment of overtime under the administrative, executive or professional exemptions.” Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 19 of 27 Page ID #:854 Plaintiffs’ Reply In Support Of Motion For Class Certification 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Here, the pay plan applicable to all class members was admittedly the same. (Haffner Decl. I, Exh.1, p.2; Exh.2, p.2; Exh.3, p.7; and Exh.9, 95:9-15, 155:9-17.) Thus, whether the draw against commission pay plan can meet the “minimum salary required” for the administrative exemption is a common issue. In its opposition, Defendant completely ignores this overriding common issue as to whether its commission-based pay plan qualifies as a salary for the administrative exemption. Thus, Defendant does not dispute that this issue will be decided based on common evidence that the draw against a commission is not a minimum salary for purposes of the administrative exemption. Instead, the only argument Defendant makes regarding the administrative exemption is that there are individual questions regarding how Class members spend their time. (Opposition, Dckt. No. 39, 14:11-19.) This is meritless for multiple reasons. First, if Class members are not paid a salary, as Plaintiffs contend, then the administrative exemption does not apply, regardless of any differences in job duties. Moreover, as stated above, class members job duties were the same before and after November 2016, when financial center Lending Officers were classified as non-exempt. Defendant’s admission that financial center Lending Officers (other than high earners) are now uniformly non-exempt, although job duties remained same before and after the change in classification status, is common evidence refuting Defendant’s contention that application of the administrative exemption will vary based on Lending Officer’s activities. Thus, the lack of applicability of the administrative exemption will be proven on predominantly common evidence. E. The Overtime Exemptions Do Not Apply. The exemptions specific to Plaintiffs’ overtime claim also do not create individual issues. Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 20 of 27 Page ID #:855 Plaintiffs’ Reply In Support Of Motion For Class Certification 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. Primarily Commissioned Employee Exemption Is Disproven By Predominately Common Evidence. In Plaintiffs’ motion, Plaintiffs demonstrated that California’s commissioned employee exemption would be decided based on predominantly common evidence. This is because, under California Supreme Court precedent, that exemption cannot be applied by attributing “commission wages paid in one biweekly pay period . . . to other pay periods to satisfy the exemption’s minimum earnings prong.” Peabody v. Time Warner Cable, Inc., 59 Cal.4th 662, 668-669 (2014). As Plaintiffs showed in their motion, in this case, Defendant pays all Class members a draw on a bi-monthly or bi-weekly basis, but commissions are paid only monthly. (Haffner Decl. I, Dckt No. 36-3, Exh.3 (BofA 2016 pay plan), p.7; and Dckt No. 36-5, Exh.9, (PMK Bridgmon depo.), 110:25 – 111:4, 161:13 – 162:14, 163:25 – 164:14.) Thus, for all Class members, at least one pay period per month is solely the Class members’ draw, without any commission payment. This gives rise to a common issue of whether the primarily commission employee exemption applies under Peabody. In response, Defendant admits that Peabody held the exemption did not apply where the employer fails to pay the minimum earnings amount in each pay period, but argues it did not address the second element for the exemption that more than half an employee’s compensation be from commissions. (Opposition, Dckt. No. 39, 15:20-26.) Defendant then asserts that “Peabody therefore does not preclude the Bank from relying on the commissioned employee exemption.” (Id. at 15:26-27.) Defendant concludes that the exemption is “clear[ly] applicabl[e]” because “more than half [plaintiffs’] compensation represented commissions.” (Id. at 15:5-8.) But the issue on class certification is not whether the exemption defense is applicable or precluded. Rather, the issue is whether the exemption can be decided based on predominantly common evidence. Plaintiffs contend that the primarily commission employee exemption fails under Peabody because for at least one pay period a month all Class members are not paid the minimum amount, and thus the Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 21 of 27 Page ID #:856 Plaintiffs’ Reply In Support Of Motion For Class Certification 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 first element of the exemption is not met. Thus, Defendant’s argument regarding Peabody’s holding illustrates that its applicability will be determined based on common evidence. Moreover, this exemption was also abandoned in November 2016, although class members’ duties did not change. That also constitutes common evidence disproving the primarily commission exemption. 2. The Federal Exemptions Do Not Apply To The FLSA Claims That Serve As A Predicate To Plaintiff’s UCL Cause Of Action. Defendant also relies on federal exemptions for outside sales persons, administrators, and highly compensated employees. (Opposition, Dckt. No. 39, 16:1 – 18:16.) In this motion for certification of California class, Plaintiffs only plead the FLSA as a predicate to the UCL. Thus, Defendant’s citation to these exemptions applies solely to the UCL claim predicated on the FLSA. As set forth more fully in Plaintiffs’ concurrently filed reply in support of conditional certification of Plaintiffs’ FLSA claims, those exemptions will also be determined based on predominately common evidence. Plaintiffs’ will not repeat those arguments here. However, Plaintiffs briefly note that the federal exemptions which are similar to the state exemptions (outside salesman and administrative exemption) fail to defeat commonality for similar reasons. The federal exemptions based on how much a Class member earns also do not pose an impediment to certification, as they are capable of resolution based on predominantly common proof regarding whether that earning threshold was met. IV. Defendant’s Typicality Argument Lacks Merit. Plaintiffs’ claims are typical of the class. Defendant’s argument that typicality is defeated because Plaintiffs were classified as exempt, and Defendant reclassified most Class members as non-exempt in November 2016, lacks merit. Everything remained the same as to all Class members with respect to their pay plan and job duties, pre and post reclassification. Plaintiffs Fernandez and Yong ceased working at Bank of America prior to the reclassification. Plaintiff Boswell Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 22 of 27 Page ID #:857 Plaintiffs’ Reply In Support Of Motion For Class Certification 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 worked following the November 2016 reclassification, and Defendant’s admit that no California exemption applied to him at that point. Because only Defendant’s classification label changed, without any underlying or supporting factual basis, there is no basis to merit to Defendant’s arguments challenging typicality. First, Defendant interprets the typicality standard too narrowly. “The Ninth Circuit explains the typicality requirement as revolving around a broad-based inquiry to ensure the interests of the class are the same as the interests of the named plaintiff.” Santomenno v. Transamerica Life Ins. Co., 2016 WL 6469858, *4 (C.D. Cal. 2016) (citing Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992).) “The test of typicality 'is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct.’” Ellis v. Costco Wholesale Corp.,657 F.3d 970, 984 (9th Cir. 2011) (quoting Hanon, supra, 976 F.2d at 508.) Typicality is thus satisfied if the Plaintiffs’ claims are “reasonably co-extensive with those of absent class members; they need not be substantially identical.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). “Rule 23(a)(3) requires only that [the named plaintiff] claims be ‘typical’ of the class, not that they be identically positioned to each other or to every class member.” Parson v. Ryan, 754 F.3d 657, 685 (9th Cir. 2014). Defendant’s reliance on Noble v. 93 Univ. Place Corp. is misplaced because the case is distinguishable on the facts. In Noble, the proposed lead plaintiff was a chef who sought to represent a class of “cooks, stock clerks, cashiers, dishwashers and the like” for overtime claims. Noble v. 93 Univ. Place Corp., 224 F.R.D. 330, 336 (S.D.N.Y. 2004). The lead plaintiff was found atypical because whether he might qualify as a “managerial employee” and therefore exempt from overtimes laws was a defense unique to him alone. Id. at 336. Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 23 of 27 Page ID #:858 Plaintiffs’ Reply In Support Of Motion For Class Certification 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 By contrast, here, whether Plaintiffs were properly exempt is not a defense unique to them. Rather, it common to the entire pre November 2016 reclassification group, as well as the post classification “high production” Class members. Moreover, all Class representatives testified that they each worked far greater than 50% of their time at a branch which confirms them as similarly situated and typical (if not identical) to the all of the post November 2016 reclassified Lending Officers. Notably, while Plaintiffs Fernandez and Yong ceased working for Defendant prior to the November 2016 reclassification, given that all LO’s were reclassified, they would have presumably been reclassified had they remained with Defendant past November 2016. Thus, the fact that they left Defendant’s employment prior to Defendant’s reclassification has no impact on their typicality for the period after reclassification. As to Plaintiff Boswell, he continued working for Defendant at its financial center following the November 2016 reclassification, but remained classified as exempt. The reason Defendant did not reclassify Plaintiff Boswell as non-exempt was because he was a high earner. (Haffner Decl. I, Dckt. No. 36-5, Exh. 11, ¶9; Exh.9, 43:25 - 44:18; and Exh.10, 54:14-19.) But earning levels have no relevance to any California exemption. California Labor Code § 1171; Cal. Code Regs., Title 8, § 11040, 4- 2001(3). They are only potentially relevant to federal exemptions. . (Opposition, Dckt. No. 39, 19:23-25.) Thus, there are no material differences between Plaintiff Boswell and the Class post November 2016 reclassification with respect to the California exemptions at issue in this motion. Indeed, in sum, the evidence from Defendant’s uniform plans, policies, procedures, and the testimony of Defendants PMK’s and the Class Representatives indicates the only difference for the Lending Officers working at Defendant’s financial centers between the pre and post reclassification was a form over substance name change from “exempt” to “non-exempt.” Everything else was the Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 24 of 27 Page ID #:859 Plaintiffs’ Reply In Support Of Motion For Class Certification 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 same. Thus, Plaintiffs are situated the same as all mortgage brokers who worked out of financial centers at all relevant periods, and are typical. Second, to the extent the Court is persuaded by Defendant’s typicality argument, it should allow Plaintiffs to add a class representative for a minimum wage and rest-break subclass consisting of: All current or former California residents who worked for Defendant at its financial centers selling or originating mortgages at any time from the date of the November 2016 reclassification through the date notice is mailed to the Class, and who were classified as non-exempt. The Court may conditionally certify this subclass subject to the addition of a another class representative. Nat'l Fed'n of Blind v. Target Corp., 582 F. Supp. 2d 1185, 1201 (N.D. Cal. 2007) (“As long as the proposed class satisfies the requirements of Rule 23, the court may certify the class conditioned upon the substitution of another named plaintiff”). Courts routinely allow for the substitution or addition or class representatives where lead plaintiffs may be found inadequate or atypical of all or part of a class. See e.g., Dean v. United of Omaha Life Ins. Co., 2008 WL 7611369, *3 (C.D. Cal. 2008); Petersen v. Costco Wholesale Co., 2016 WL 6768911, *6 (C.D. Cal. 2016). Plaintiffs would further request that the court order Defendant to provide the contact information necessary to identify a suitable representative. Tait v. BSH Home Appliances Corp., 289 F.R.D. 466, 477 (C.D. Cal. 2012) (ordering defendant to produce to plaintiff unredacted hardcopy and electronic information about the identity of all product owners to facilitate the identification of a substitute class representative). V. Numerosity And Adequacy Are Satisfied Defendant does not contest that Plaintiffs’ motion satisfies both the numerosity and adequacy requirements under Rule 23(a)(1) and (4). Hence, those requirements have been established. Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 25 of 27 Page ID #:860 Plaintiffs’ Reply In Support Of Motion For Class Certification 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VI. Plaintiffs Satisfy the Superiority Requirement. Defendant contends the predominance of individual rather than common issues precludes Plaintiffs from establishing that a class action provides a superior and manageable means of adjudicating their minimum wage, rest break, and overtime claims. (Opposition, 23:24-28.). As set forth throughout, however, common issues in fact predominate. There is one set of pay plans and uniform policies that applied to all. Thus, Plaintiffs’ substantive claims are appropriate for class treatment. See Vaquero, supra, 9 Cal.App.5th 98; and Ashley Furniture, supra, 824 F.3d 1150. VII. All Derivative Claims Are Appropriate For Class Certification. Defendant finally argues that Plaintiffs cannot satisfy the requirements of Rule 23 with respect to their dependent claims. Defendant is incorrect. All derivative claims associated with Plaintiff’s rest break, minimum wage, and overtime claims (failure to pay wages at separation, failure to provide accurate wage statement, and violation of California’s unfair competition law), are similarly based on the common issues of law and fact. Thus, the determination of these issues will “be so for all class members or for none; their claims rise and fall together.” (Stockwell v. City & Cty. of S.F., 749 F.3d 1107, 1115 (9th Cir. 2014).) Accordingly, certification is appropriate for the derivative claims. VIII. Conclusion. For the reasons set forth herein, Plaintiffs respectfully request that the Court grant this motion, and certify the Class and Subclass requested in this Motion. DATED: November 5, 2018 HAFFNER LAW PC By: /s/ Joshua H. Haffner Joshua H. Haffner Graham G. Lambert Attorneys for Plaintiffs Jose Fernandez and Alex Yong Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 26 of 27 Page ID #:861 Plaintiffs’ Reply In Support Of Motion For Class Certification 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DATED: November 5, 2018 STEVENS, L.C. By: /s/ Paul D. Stevens Paul D. Stevens Attorneys for Plaintiffs Jose Fernandez and Alex Yong DATED: November 5, 2018 THIERMAN BUCK LLP By: /s/ Mark R. Thierman Mark R. Thierman Joshua D. Buck Attorneys for Plaintiff Joshua Boswell Case 2:17-cv-06104-MWF-JC Document 42 Filed 11/05/18 Page 27 of 27 Page ID #:862