Facts

Guadalupe Salazar, Genoveva Lopez, and Judith Zarate filed a class action against McDonald's Corp., McDonald's USA LLC, McDonald's Restaurants of California Inc., and Bobby O. Haynes Sr. and Carol R. Haynes Family Limited Partnership dba McDonald's.

Plaintiffs reached a settlement with the franchisee and proceeded against McDonald's Corp. and McDonald's USA LLC.

PLAINTIFFS' CONTENTIONS:
Plaintiffs sued under the California Labor Code, the Unfair Competition Law, and the common law. Plaintiff asserted claims of failure to pay minimum and overtime wages, failure to provide meal and rest breaks or pay for missed breaks, failure to indemnify employees for necessary expenses, failure to provide accurate wage statements, failure to maintain required records, failure to pay wages when due, negligence, and retaliation.

Plaintiffs contended, on an ostensible agency theory, that McDonald's was jointly liable with the franchisee. Plaintiffs moved for class certification on the ground that they could establish ostensible agency on a classwide basis through common and representative evidence and classwide inferences, and that each of the underlying violations could also be proven classwide.

DEFENDANTS' CONTENTIONS:
McDonald's opposed class certification on the ground that establishing ostensible agency at trial would require individual analysis, and therefore plaintiffs could not satisfy the predominance and commonality prongs of FRCP 23. McDonald's also contended that because plaintiffs' PAGA claims against McDonald's also require proof of ostensible agency liability, those claims are not manageable and should be stricken.

Result

The district court denied class certification on the ground that plaintiffs' ostensible agency theory could not be proven classwide. The district court also struck plaintiffs' PAGA claims as unmanageable, insofar as they rested on a theory of ostensible agent liability.

Other Information

FILING DATE: March 12, 2014.