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Hicks v. Colorado Hamburger Co.

2022 COA 149. No. 22CA0968. Class Actions—Class Certification—CRCP 23—Proof of Liability and Damages.

December 29, 2022

Colorado Hamburger Company, Inc. and JOBEC, Inc. (collectively, defendants) own and operate three McDonald’s restaurant franchises. Plaintiff was employed at one of defendant’s locations. He filed a class action complaint alleging that defendants violated a Colorado Department of Labor and Employment (CDLE) regulation by failing to provide (1) 10-minute compensated rest breaks for every four hours worked and (2) 30-minute uncompensated meal breaks for every five consecutive hours worked. Plaintiff moved to certify the class of current and former nonexempt employees who worked for defendants from six years before the filing of the complaint through final judgment. As part of discovery, defendants provided 70 affidavits of current and former employees stating that they record work time, including lunch and rest breaks, through an electronic system. Defendants also supplied unredacted timesheets for the 70 employees who provided the affidavits. The court determined that plaintiff’s proposed class satisfied the CRCP 23(a) requirements of numerosity, commonality, typicality, and adequacy, but failed to meet CRCP 23(b)(3)’s requirement that common questions predominate over individual ones. The court denied class certification.

On interlocutory appeal, plaintiff argued that the district court abused its discretion in denying the proposed class certification. Under CRCP 23(b)(3), whether common questions predominate over individual ones turns on whether the trial proof will be predominantly common to the class or primarily individualized. A party may rely on a class-wide inference to prove a common element of the claim. Here, to prove liability and damages on their meal break theory, class plaintiffs would have to show that for each missed meal break, the manager did not provide that employee with the option to have an on-the-clock meal. However, the timesheets are not probative of this fact, so individualized evidence would be necessary to prove liability and damages. Accordingly, the individualized inquiries required to prevail on the meal break theory predominate over the common issues it implicates, and plaintiff failed to satisfy CRCP 23(b)(3) on this theory.

As to the alleged deprivation of rest breaks, CRCP 23(b)(3) only required plaintiff to advance a theory to prove or disprove “an element on a simultaneous, class-wide basis.” Here, plaintiff’s meta-analysis of the timesheets showed a dramatic decrease in missed breaks after this lawsuit was filed; he argued that the absence of a recorded break showed that the employer failed to authorize and permit a break, so liability and damages can be inferred from the timesheets. Defendants countered that the timesheets could not support such an inference because the employees could have waived or failed to record a break, or did not receive one but were compensated on the back end by the manager’s manual adjustment. In reaching its conclusion that class certification was inappropriate on the rest break theory, the district court noted that a class-wide inference was impermissible because a missed rest break could mean that employees waived their break or failed to record it. However, the record shows that defendants offered little evidence to support these possibilities, and to the extent their countervailing evidence challenges the timesheets as class-wide proof, such doubts can be resolved through circumstantial evidence, thus preserving the possibility of the class-wide inference. Further, plaintiff plans to use employee timesheets to prove liability and damages for the failure to authorize and permit rest breaks, which provide a viable class-wide means of proof; the jurisprudence favors class certification, and providing plaintiff’s proposed class the opportunity to prove that they were deprived of rest breaks is consistent with CRCP 23’s purpose; and class certification is conditional, so the district court retains the ability to decertify the class. Accordingly, class certification is appropriate on the rest break theory.

The order was affirmed with respect to its conclusion regarding meal breaks and reversed with respect to its conclusion regarding rest breaks, and the case was remanded with directions to enter an order certifying a class premised on the denial of rest breaks.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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