Amaral v. Cintas Corp. No. 2, ___ Cal.App.4th ___, 2008 WL 2357895 (Jun. 11, 2008) (First Apellate District, Division Three), is a lengthy wage and hour opinion previously discussed in detail in the blogosphere. The Complex Litigator had two separate posts on the opinion, and Wage Law also covered it.
For purposes of this blog's subjects of focus, two passages from the opinion stand out. The first addresses the burden of proof in the class certification context when key evidence rests within the defendant's control (which it frequently does, particularly in wage and hour class actions):
In general, “[e]xcept as otherwise provided by law, a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting.” (Evid. Code, § 500.) On occasion, however, courts may alter the normal allocation of the burden of proof. (National Council Against Health Fraud, Inc. v. King Bio Pharmaceuticals, Inc. (2003) 107 Cal.App.4th 1336, 1346; see, e.g., Sargent Fletcher, Inc. v. Able Corp. (2003) 110 Cal.App.4th 1658, 1670 [burden of proof on issue of causation will be shifted to the defendant when circumstances make it impossible for the plaintiff to prove its case].) “ ‘In determining whether the normal allocation of the burden of proof should be altered, the courts consider a number of factors: the knowledge of the parties concerning the particular fact, the availability of the evidence to the parties, the most desirable result in terms of public policy in the absence of proof of the particular fact, and the probability of the existence or nonexistence of the fact.’ [Citation.]” (Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 660-661.)
One long-standing application of burden-shifting occurs in the wage-and-hour context when an employer’s compensation records are so incomplete or inaccurate that an employee cannot prove his or her damages. When the United States Supreme Court addressed this problem with regard to claims under the Fair Labor Standards Act of 1938 (29 U.S.C. § 201 et seq.), it observed that the remedial nature of the statute and public policy “militate against making [the evidentiary burden] an impossible hurdle for the employee.” (Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, 687 (Anderson).) Considering that an employer has a statutory duty to maintain proper records of wages, hours and work conditions and is in the best position to know salient facts about the nature and amount of work performed, the court concluded it is appropriate to shift the burden of proof to the employer. (Id. at pp. 687-688.) Specifically, once an employee proves he or she “has in fact performed work” that was improperly compensated, and presents enough evidence to allow an inference as to the amount of this work, the burden shifts to the employer to prove the precise amount of work performed or to negate the inference drawn from the employee’s evidence. (Ibid.) The high court observed that applying the normal burden of proof in such circumstances would unfairly penalize an employee for the employer’s failure to keep proper records and would allow the employer to keep the benefits of the employee’s labors without paying full compensation. (Id. at p. 687.)
Relying on Anderson, California courts have shifted the burden of proof to employers when inadequate records prevent employees from proving their claims for unpaid overtime hours (Hernandez v. Mendoza (1988) 199 Cal.App.3d 721, 726-728) and unpaid meal and rest breaks (Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 961-963). Anderson’s reasoning has also been applied to permit class action plaintiffs to prove their damages for unpaid overtime by the use of statistical sampling. (Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 746-751.)
In addition, California has long approved of burden-shifting outside the wage-and-hour context when the parties have unequal access to evidence necessary to prove a disputed issue. “ ‘Where the evidence necessary to establish a fact essential to a claim lies peculiarly within the knowledge and competence of one of the parties, that party has the burden of going forward with the evidence on the issue although it is not the party asserting the claim.’ [Citations.]” (Sanchez v. Unemployment Ins. Appeals Bd. (1977) 20 Cal.3d 55, 71 (Sanchez).) ....
It makes sense to apply burden-shifting in this case because, as plaintiffs’ employer, Cintas is in the best position to know which class members worked on the Hayward contracts and at which times. Although the LWO imposes no record-keeping requirements as such, the entire aim of the ordinance is to require contractors to pay a living wage to employees who work on service contracts with the City. Thus, if a contractor does not wish to compensate all its employees in accordance with the LWO, the onus is on the contractor to segregate work on Hayward contracts and assign it to specific employees, or at least to keep records of which employees perform contract-related work. Given Cintas’s control over workflow and its greater knowledge about the obligations imposed by the LWO, it would be unrealistic and unfair to expect individual class members to prove they performed work related to the Hayward contracts.
Slip op. at 24-26 (footnote omitted) (emphasis added).
The second noteworthy passage relates to whether the Private Attorney General Act (Labor Code sections 2698 et seq.) ("PAGA") applies to cases filed before its effective date, which was January 1, 2004. The Court of Appeal relied in part on the Prop. 64 retroactivity decision, Californians for Disability Rights v. Mervyn’s LLC, 39 Cal.4th 223 (2006), in holding that it does:
Our case is the procedural opposite of Mervyn’s, because PAGA granted private parties standing whereas Proposition 64 took their standing away absent a showing of injury. But the high court’s analysis of retroactivity is directly on point. Like Proposition 64, PAGA did not impose new or different liabilities on defendants based on their past conduct. (See Mervyn’s, supra, 39 Cal.4th at p. 232.) It merely changed the procedural rules governing who has authority to sue for certain penalties. Like the amendments to standing addressed in Mervyn’s, PAGA’s extension of standing to private parties is prospective in nature. Accordingly, it was properly applied to the claims pending in this lawsuit.
Id. at 37-38.