Case Name: Derrick Fenley, et al. vs. Rite Aid Corporation.
Case No.: 1-12-CV-229127

This is a putative wage and hour class action by plaintiffs Derrick Fenley (“Fenley”), Stacy Wolchow (“Wolchow”), Steve Ton (“Ton”) and Anthony Centeno (“Centeno”) (collectively “Plaintiffs”) on behalf of themselves and others who are or have been employed by defendant Rite Aid Corporation (“Defendant”) and misclassified as overtime-exempt retail managers in any store in the State of California within the applicable class period. The class period is defined as the time from November 4, 2009 through trial. Plaintiffs allege that during the class period, Defendant has had a consistent policy of (1) permitting, encouraging and/or requiring its allegedly overtime-exempt Store Managers to work in excess of eight hours per day and in excess of forty hours per week without paying them overtime compensation as required by California’s wage and hour laws, (2) unlawfully denying Plaintiffs and putative class statutorily-mandated meal and rest periods, and (3) willfully failing to provide Plaintiffs and putative class with accurate semimonthly itemized wage statements reflecting the total number of hours each worked, the applicable deductions, and the applicable hourly rates in effect during the pay period, and (4) failing to reimburse putative class members for business expenses related to the operations of Defendant. In addition, Plaintiffs allege on information and belief that Defendant has had a consistent policy of willfully failing to pay compensation (including unpaid overtime) in a prompt and timely manner to the Plaintiffs and those putative class members whose employment with Defendant has terminated.

The original Complaint was filed by Fenley and Wolchow on July 25, 2012. The First Amended Complaint (“FAC”) was filed by Fenley, Wolchow and Ton on August 22, 2012, and asserted seven causes of action for: (1) unlawful failure to pay overtime wages; (2) failure to provide meal and rest periods; (3) failure to provide accurate itemized wage statements; (4) failure to pay wages on termination; (5) failure to reimburse expenses and/or prohibited cash bond; (6) unfair business practices under the Unfair Competition Law; and (7) violation of the Private Attorneys General Act (“PAGA”) (Cal. Lab. Code, § 2698 et seq.).

On November 13, 2012, Defendant filed its Answer to the FAC.

On March 21, 2014, Plaintiffs’ motion for leave to file a Second Amended Complaint (“SAC”) was granted. The SAC, filed March 24, 2014, asserts the same seven causes of action as the FAC, and adds Cenento as a named Plaintiff.

Three motions are before the Court at this time: (1) Defendant’s demurrer to Fenley, Wolchow and Ton’s seventh cause of action under the PAGA; (2) Defendant’s motion to strike time-barred portions of Centeno’s seventh cause of action under the PAGA; and (3) Defendant’s motions to seal various exhibits filed in connection with Plaintiffs’ motion for class certification.

Requests for Judicial Notice

In support of the demurrer and motion to strike, Defendant requests judicial notice of the declarations submitted by all four Plaintiffs in support of their motion for class certification. Defendant argues the records are introduced solely to establish Plaintiffs’ admissions regarding their dates of employment with Defendant.

The Court may take judicial notice of its own court records. (See Evid. Code, § 452, subd. (d).) The Court may also take judicial notice of a party’s admissions. (See Pang v. Beverly Hosp., Inc. (2000) 79 Cal.App.4th 986, 989-990 [“In addition to the facts pleaded, we may consider matters that may be judicially noticed, including a party’s admissions or concessions which can not reasonably be controverted. [Citation.]”)

Plaintiffs did not file an opposition to the request for judicial notice, but in their opposition brief to the demurrer and motion to strike, Plaintiffs argue the Court should not take judicial notice of their declarations submitted in support of the class certification motion because their statements do not conflict with allegations in the SAC. However, Plaintiffs do not dispute that the Court may take judicial notice of court records, or that under Pang, the Court may judicially-notice a party’s admissions which cannot reasonably be controverted. Here, the end dates of Plaintiffs’ employment with Defendant as stated in their own sworn declarations are not reasonably controverted, and to the extent the statements support Defendant’s statute of limitations argument, they constitute admissions that the Court may judicially notice under Pang. Defendant’s request for judicial notice is GRANTED.

In opposition to the demurrer and motion to strike, Plaintiffs request judicial notice of: (1) Complaint in Fenley, et al. v. Rite Aid Corporation (Case No. BC473068) filed by Fenley and Wolchow in the Superior Court of California, County of Los Angeles on November 4, 2011 (Exh. A); and (2) Judgment entered by the U.S. District Court for the Central District of California in Fenley, et al. v. Rite Aid Corp. (Case No. C 12-228 DSF (PLAx)), dated May 18, 2012 (Exh. B).

The Court may take judicial notice of records of any court of this state or any court of record of the United States. (Cal. Evid. Code, § 452, subd. (d).) Plaintiffs’ request for judicial notice is GRANTED.

Timeliness of Demurrer and Motion to Strike

In their opposition, Plaintiffs argue Defendant’s demurrer and motion to strike are untimely because Plaintiffs’ PAGA claim has been pending since this action was commenced on July 25, 2012, and Defendant’s time to demur or strike has long since passed.

Generally, demurrers and motions to strike must be brought within 30 days after service of the challenged pleading. (See Cal. Code Civ. Proc., § 430.40, subd. (a) [time to demur]; Cal. Code Civ. Proc., § 435, subd. (b) [motion to strike may be brought within time allowed to respond to pleading].) After a complaint is amended, the defendant has 30 days after service thereof to “answer” the complaint as amended (Cal. Code Civ. Proc., § 471.5, subd. (a)), which includes the right to demur to the amended complaint. (See McAllister v. County of Monterey (2007) 147 Cal.App.4th 253, 281.) Plaintiffs cite no authority supporting their position that Defendant’s failure to demur to the PAGA claims in prior complaints bars Defendant from demurring to the PAGA claims in the SAC within the time allowed for demurrers to amended complaints.

However, the timeliness of Defendant’s motions is in question for other reasons. The Court’s docket shows that on March 24, 2014, the SAC was filed and electronically served on all counsel appearing on the electronic service list. In its reply brief, Defendant contends that service of the SAC “was effected” on March 26, 2014, but Defendant does not provide any argument or support for this statement. If March 24, 2014 is the relevant date for purposes of measuring Defendant’s time to file a responsive pleading, then the April 25, 2014 demurrer and motion to strike would be untimely.

Nevertheless, the failure to timely demur does not waive an objection that the pleading fails to state a cause of action. (See Cal. Code Civ. Proc., § 430.80, subd. (a).) The Court may construe Defendant’s untimely demurrer as a motion for judgment on the pleadings, which may be brought after the time for a demurrer has passed (Cal. Code Civ. Proc., § 438, subd. (f)(2)) and is based on the same legal standards as a general demurrer for failure to state a cause of action. (See Gerawan Farming, Inc. v. Kawamura (2004) 33 Cal.4th 1, 32.) The Court has similar latitude with regard to Defendant’s untimely motion to strike because the Court may strike a pleading or portion thereof “at any time in its discretion.” (See Cal. Code Civ. Proc., § 436.)

Defendant’s Request to Strike Extrinsic Evidence

In opposition to the demurrer and motion to strike, Plaintiffs submit the declaration Stephen Noel Ilg, attaching four exhibits: (1) a letter from Fenley to the LWDA, dated November 4, 2011 (Ilg Exh. A); (2) a letter from Fenley to Defendant, dated November 4, 2011 (Ilg Exh. B); (3) a letter from the LWDA to Plaintiffs’ counsel, dated December 14, 2011 (Ilg Exh. C); and (4) a letter from Centeno to the LWDA, dated November 7, 2013 (Ilg Exh. D).

Defendant moves to strike the Ilg declaration and exhibits on the ground that the declaration and exhibits are not part of Plaintiffs’ request for judicial notice and therefore should not be considered when ruling on the demurrer.

“In reviewing the ruling on a demurrer, a court cannot consider…the substance of declarations, matter not subject to judicial notice, or documents judicially noticed but not accepted for the truth of their contents. [Citations.]” (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) Plaintiffs did not request judicial notice of these letters and does not contend that judicial notice of the letters is proper. The Court will disregard the Ilg declaration and exhibits.

Demurrer

Defendant demurs to Fenley, Wolchow and Ton’s PAGA claims on the ground that they are time-barred. Defendant argues that a claim for civil penalties under the PAGA is governed by a one-year statute of limitations, which may be extended by 33 days to account for exhaustion of administrative remedies. Defendant contends that the PAGA claims of Fenley, Wolchow and Ton were filed more than one year and 33 days after their employment with Defendant ended.

“A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. [Citation.] In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred. [Citation.]” (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403.)

Under the PAGA, “[n]otwithstanding any other provision of law, any provision of [the Labor C]ode that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees … may, as an alternative, be [enforced, and the penalty] recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees …” (Cal. Lab. Code, § 2699, subd. (a).) Before bringing a civil action for statutory penalties, an employee must comply with California Labor Code section 2699.3 , which requires the employee to give written notice of the alleged violation to both the employer and the LWDA which describes the facts and theories supporting the violation. (Id., § 2699.3, subd. (a) .) If the LWDA notifies the employee and the employer that it does not intend to investigate, or fails to respond within 33 days, the employee may then bring a civil action against the employer. (Id., § 2699.3, subd. (a)(2)(A).) If the LWDA decides to investigate, it then has 120 days to do so. If the agency decides not to issue a citation, or does not issue a citation within 158 days after the postmark date of the employee’s notice, the employee may commence a civil action (Id., § 2699.3, subd. (a)(2)(B); see Arias v. Superior Court (2009) 46 Cal.4th 969, 981.)

“[California Code of Civil Procedure section] 340 [subdivision] (a) imposes a one-year statute of limitations upon ‘[a]n action upon statute for a penalty or forfeiture, if the action is given to an individual, or to an individual and the state, except if the statute imposing it prescribes a different limitation.’ If, however, the action is for a statutorily-created liability other than a penalty or forfeiture, a three-year statute of limitations applies. [Citation.] The civil penalties that Plaintiff seeks to recover under PAGA are a ‘penalty’ within the meaning of CCP § 340(a). [Citations.] Accordingly, a one-year statute of limitations will apply unless PAGA ‘prescribes a different limitation.’ [Citation.]” (Thomas v. Home Depot USA Inc. (N.D. Cal. 2007) 527 F.Supp.2d 1003, 1007-1008.)

The PAGA tolls any statute of limitations while aggrieved parties await a response or investigation from the LWDA. “The periods specified in [section 2669.3] are not counted as part of the time limited for the commencement of the civil action to recover penalties under this part.” (Cal. Lab. Code, § 2699.3, subd. (d).)

The SAC does not disclose Plaintiffs’ employment end dates. However, the judicially-noticed declarations demonstrate that Fenley was employed by Defendant as a Store Manager until January 10, 2011; Wolchow was employed by Defendant “from approximately April 27, 1997 through August 20, 2010” and was a Store Manager “from around 2002 through 2005, and again from around 2006 through the date my employment ended on August 20, 2010”; and Ton was employed by Defendant as a Store Manager until “approximately April 22, 2011.” Defendant argues that since Fenley, Wolchow and Ton were not employed by Defendant on or after June 22, 2011 (which was one year and 33 days prior to the July 25, 2012 filing date of the original Complaint), their PAGA claims are time-barred.

Plaintiffs argue that Fenley exhausted all administrative requirements in 2011 prior to the filing of the original Complaint. According to Plaintiffs, Fenley gave notice to the LWDA in November 2011 and filed suit in November 2011, and therefore, Fenley timely asserted a PAGA claim on behalf of other similarly-situated employees. Plaintiffs contend that under the doctrine of equitable tolling, Defendant was on notice of Plaintiffs’ PAGA claim as alleged in Fenley’s prior lawsuit, which was pending for approximately six months before this case was filed. Thus, Plaintiffs argue that the unnamed class members’ claims should be tolled an additional six months.

As discussed above, the Court disregards the letters between the LWDA and Fenley that were submitted with the Ilg declaration, but judicially notices the fact that Fenley and Wolchow were part of a wage/hour lawsuit against Defendant that was filed in Los Angeles County on November 4, 2011, presumably removed to federal court, and then dismissed without prejudice on May 18, 2012. However, the prior lawsuit cannot be used to equitably toll the statute of limitations on the PAGA claims asserted here because the prior lawsuit was voluntarily dismissed. “Under California law, equitable tolling will be warranted where the defendants have induced the plaintiff to delay filing until after the statute of limitations has run. . . . In addition, California courts have concluded that absent express statutory language, a plaintiff’s voluntary dismissal will not entitle him to toll the statute of limitations. [Citations.]” (Johnson v. Riverside Healthcare System, LP (9th Cir. 2008) 534 F.3d 1116, 1127.)

Plaintiffs further argue that the PAGA claim is substantially compliant with the statutory procedures because Plaintiffs have satisfied the administrative exhaustion requirements in myriad ways and raised a PAGA claim numerous times, placing Defendant fully on notice of Plaintiffs’ PAGA claims since November of 2011. However, as Defendant points out, the cases Plaintiffs cite – Cory v. City of Huntington Beach (1974) 43 Cal.App.3d 131 and State of California v. Superior Court (2004) 32 Cal.4th 1232 – were not PAGA cases, and they involved prematurely-filed claims, not untimely claims.

Nevertheless, the Court has lingering questions regarding the demurrer to Ton’s PAGA claim. In the same judicially-noticed declaration that Defendant relies upon to establish Ton’s employment end date, Ton states that he filed a lawsuit against Defendant in Los Angeles County on January 3, 2012. It is not clear from the record whether Ton brought a PAGA claim in that lawsuit or what events led to Ton’s suit being brought alongside those of Fenley and Wolchow in the instant action, but he does state that his case was “moved to Santa Clara Superior Court and coordinated with” the instant action. If in fact Ton filed a PAGA claim against Defendant in January of 2012, and his PAGA claim was not voluntarily dismissed like Fenley’s prior action and is now being asserted in this action, then arguably the claim would not be untimely. Because the circumstances of Ton’s current PAGA claim are unclear, it cannot be said that the running of the statute of limitations on Ton’s PAGA claim clearly and affirmatively appears from the pleadings and judicially-noticed documents to support the instant demurrer.

A further problem with Defendant’s demurrer is that it only considers the tolling effect of the 33-day period under Labor Code section 2699.3 subdivision (a)(2)(A), which applies when the LWDA fails to respond to an employee’s written notice of Labor Code violations. However, there is nothing on the face of the SAC or in the judicially-noticed documents from which to conclude that the LWDA failed to respond to Plaintiffs’ notices, as opposed to deciding to investigate the claims but not issuing a citation, which extends the tolling period to 158 days. (See Cal. Lab. Code, § 2699.3, subd. (a)(2)(B).) Granted, this only matters for Ton. One year and 158 days prior to the original Complaint’s filing date was February 18, 2011, and among the named Plaintiffs, only Ton was employed by Defendant at that time. Because Defendant’s demurrer simply presumes the LWDA did not decide to investigate Ton’s claims and does not discount the possibility that the 158-day tolling period applies, the running of the statute of limitations on Ton’s PAGA claim does not clearly and affirmatively appear on the face of the pleadings or judicially-noticed documents.

For all of these reasons, the demurrer to the PAGA cause of action is SUSTAINED WITHOUT LEAVE TO AMEND as to Fenley and Wolchow, but OVERRULED as to Ton.

Motion to Strike

In moving to strike portions of Centeno’s PAGA claim, Defendant acknowledges that the SAC adding Centeno as a named Plaintiff was filed within one year after Centeno left Defendant’s employ, but Defendant argues that to the extent Centeno seeks penalties for a time period beyond the applicable limitations period (before February 19, 2013, or one year and 33 days prior to Centeno’s addition in this action), that portion of his seventh cause of action should be stricken. Defendant argues the relation-back rule cannot create the fiction that Centeno exhausted his administrative remedies on July 25, 2012 when Fenley and Wolchow filed their original Complaint in this action because under Mazzei v. Regal Entm’t Group (C.D. Cal. 2013) 2013 U.S. Dist. LEXIS 177883, “[a] subsequent pleading which sets out the subsequent performance of a condition precedent to suit cannot relate the time of performance of the condition back to the time of the filing of the original complaint and thereby toll the running of the period of limitation . . . the rule of relation back does not operate to assign the performance of a condition precedent to a date prior to its actual occurrence. [Citations.]” (Mazzei, supra, at *10.)

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Cal. Code Civ. Proc., § 436.)

Here, Defendant moves to strike “the time-barred portion of plaintiff Anthony Centeno’s seventh cause of action under PAGA.” However, this does not correspond to any particular matter actually pled or inserted in the SAC. The seventh cause of action under the PAGA does not refer to a time period for which PAGA penalties are sought.

Furthermore, the overruling of Defendant’s demurrer to Ton’s PAGA claim undermines Defendant’s argument on the motion to strike as well because the motion is based on the premise that none of the Plaintiffs had the ability to pursue a PAGA claim as of July 25, 2012. Based on the current state of the pleadings, there is no basis to strike the portions of the PAGA claim seeking penalties for time periods prior to Centeno’s addition in this action if Ton’s PAGA claim can support those penalties.

For these reasons, the motion to strike portions of Centeno’s PAGA claim is DENIED.

Motions to Seal

Defendant brings three motions to seal: (1) March 28, 2014 motion to seal various exhibits filed by Plaintiffs in support of their motion for class certification; (2) April 4, 2014 first supplemental motion to seal various exhibits filed by Defendant in opposition to class certification; and (3) April 24, 2014 second supplemental motion to seal various exhibits filed by Plaintiffs in support of their reply to class certification as well exhibits filed in support of Plaintiffs’ motion to strike some of Defendant’s evidence filed in opposition to class certification.

“Unless confidentiality is required by law, court records are presumed to be open.” (Cal. Rules of Court, rule 2.550(c).) “A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.” (Cal. Rules of Court, rule 2.551(a).) “The court may order that a record be filed under seal only if it expressly finds facts that establish: [¶] (1) There exists an overriding interest that overcomes the right of public access to the record; [¶] (2) The overriding interest supports sealing the record; [¶] (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; [¶] (4) The proposed sealing is narrowly tailored; and [¶] (5) No less restrictive means exist to achieve the overriding interest.” (Cal. Rules of Court, rule 2.550(d).) Where some material within a document warrants sealing, but other material does not, the document should be edited or redacted if possible, to accommodate the moving party’s overriding interest and the strong presumption in favor of public access. (Cal. Rules of Court, rule 2.550(d)(4), (5).) In such a case, the moving party should take a line-by-line approach to the information in the document, rather than framing the issue to the court on an all-or-nothing basis. (In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 309.)

Original Motion to Seal

Defendant’s first motion to seal pertains to Exhibits C, F, G, H, I, J, K, L, M, P, Q, R, S, T, U, W, X, Y, Z, BB, CC, FF, and HH to the Declaration of Molly A. DeSario in Support of Plaintiffs’ Motion for Class Certification.

According to Defendant, these exhibits contain confidential information including operational materials and related communications (DeSario Exhs. F, G, J, K, P, and BB); training materials (DeSario Exhs. L, M, Q-U, W, Z and CC); and human resources materials (DeSario Exhs. C, H, I, X, Y, FF, and HH).

Defendant submits that all Rite Aid employees sign confidentiality agreements regarding Rite Aid’s confidential and proprietary information, including business methods, business plans, know-how, management, operations, products, services, pricing strategies, and methods of competing. Defendant contends that the operational materials and related e-mail communications (DeSario Exhs. F, G, J, K, P, and BB) contain business processes that are used by Defendant in operating its stores and that help the stores maintain a competitive advantage in the marketplace. Defendant submits that it keeps those documents on a secure portion of its intranet called the “Store Portal” that only managerial employees can access.

Defendant contends that the training materials (DeSario Exhs. L, M, Q-U, W, Z and CC) discuss Defendant’s confidential energy conservation strategies and procedures for making safe and secure bank deposits. Defendant argues that disclosure could place it at a competitive disadvantage and create safety risks for employees who make bank deposits. Defendant contends the training materials are either contained in a secure portion of the Store Portal or made available only to higher-level managerial employees in hard copy.

Defendant contends that the human resources materials (DeSario Exhs. C, H, I, X, Y, FF, and HH) contain excerpts from the handbook for managerial employees called the Policies and Procedures Manual: A Manager’s Guide to Company Practices and Associate Relations, which is available only to managerial employees, who must keep it in a secure location because it discusses confidential information regarding Defendant’s business processes that Defendant provides to managers to allow them to better lead their stores. These materials also contain notes from a confidential meeting between Store Managers, District Managers and Group Directors and discuss information regarding Defendant’s staffing models and business structure that competitors could use.

The motion is supported by declarations of Defendant’s Senior Director of Human Resources for the Western Division for Rite Aid Headquarters Corp. Roger Ceballos, Defendant’s Senior Group Director Toble Koski, and Defendant’s Vice President, Talent Management Ghislaine Lespinasse-Bond.

Financial information involving confidential matters relating to the business operations of a party may be sealed where public revelation of the information would interfere with the party’s ability to effectively compete in the marketplace and there is a substantial probability that their revelation would prejudice the foregoing legitimate interests of the party. (See Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1285-1286.) Here, the evidence demonstrates that Defendant keeps the materials at issue confidential and/or limits their dissemination to managerial employees. Defendant’s declarants also support, albeit rather generally, the competitive advantage that Defendant obtains from the materials sought to be kept under seal. The operational and training materials do contain fairly detailed management and training techniques, and one could make the case that Defendant would be prejudiced if these management techniques were disclosed and used by competitors to replicate Defendant’s successful operations. Likewise, disclosure of Defendant’s bank deposit guidelines could create safety risks that would prejudice Defendant and its employees.

The Court finds that Defendant demonstrates an overriding interest in its confidential business records relating to operations, training and human resources that overcomes the right of public access and supports sealing these records, that a substantial probability exists Defendant’s overriding interest in its confidential business records will be prejudiced if the records are not sealed, that the proposed sealing is narrowly tailored and that no less restrictive means exist to achieve the overriding interest. The original motion to seal is GRANTED.

Defendant does not move to seal DeSario Exhibits N, O, V, AA, or JJ, even though Plaintiffs lodged these exhibits conditionally under seal. Accordingly, Plaintiffs should submit a revised public version of the DeSario declaration that includes Exhibits N, O, V, AA, or JJ.

First Supplemental Motion to Seal

Defendant’s first supplemental motion to seal pertains to Exhibits A-I to the Declaration of Roger Ceballos in Opposition to Plaintiffs’ Motion for Class Certification, and Exhibit A to the Declaration of Robert Timberlake in Opposition to Plaintiffs’ Motion for Class Certification.

Ceballos Exhibits A-C and E-G are the same documents that Defendant sought to seal in the original motion, with additional excerpts from those documents and additional versions of those documents.

Ceballos Exhibit D is a Store Manager Annual Performance Review Form, and Ceballos Exhibits H and I are Expense Management System User’s Guides. Timberlake Exhibit A is a Front End Workload Efficiency Manager’s Guide.

Defendant submits that these documents are stored on the secure Store Portal. Defendant contends that the Store Manager Annual Performance Review Forms contains confidential information regarding Defendant’s performance expectations for Store Managers which help ensure Store Managers successfully lead their respective stores.

The first supplemental motion to seal is GRANTED IN PART as to Ceballos Exhibits A-G. Ceballos Exhibits A-C and E-G are subject to sealing for the same reasons discussed above with regard to the original motion to seal. The additional excerpts and versions do not alter the findings made in the original motion to seal. As for Ceballos Exhibit D, Defendant demonstrates that the Store Manager Annual Performance Review Form is kept confidential, and the form relates to performance objectives and metrics for Store Managers. One could argue that public disclosure of the ways that Defendant evaluates and measures Store Manager performance could prejudice Defendant because it would remove a competitive advantage Defendant has in maintaining the successful operation of its stores. The Court finds that Defendant demonstrates an overriding interest in its confidential business records relating to Store Manager performance expectations and review that overcomes the right of public access and supports sealing these records, that a substantial probability exists Defendant’s overriding interest in its confidential business records will be prejudiced if the records are not sealed, that the proposed sealing is narrowly tailored and that no less restrictive means exist to achieve the overriding interest.

As for Ceballos Exhibits H and I and Timberlake Exhibit A, the first supplemental motion to seal is CONTINUED to __June 27, 2014. A motion to seal “must be accompanied by…a declaration containing facts sufficient to justify the sealing.” (Cal. Rules of Court, rule 2.551(b)(2).) Here, the notice of the first supplemental motion to seal indicates it is based on the Ceballos Declaration and the Timberlake Declaration, which are the declarations submitted as Exhibits 3 and 9 to Defendant’s Compendium of Executive Management Declarations in Opposition to Plaintiffs’ Motion for Class Certification. Technically then, these are not declarations accompanying the first supplemental motion to seal, and the first supplemental motion to seal is not otherwise accompanied by a declaration containing facts sufficient to justify the sealing, as required by rule 2.551(b)(2). Furthermore, while the Ceballos and Timberlake Declarations submitted in Defendant’s opposition compendium generally explain the nature of the exhibits at issue, they do not address all of the requirements of the Sealed Records Rules so as to justify sealing. Defendant does not otherwise explain how it would be prejudiced by disclosure of these records. Within 10 days, Defendant may submit supplemental papers addressing the requirements of the Sealed Records Rules for Ceballos Exhibits H and I and Timberlake Exhibit A.

Second Supplemental Motion to Seal

Defendant’s second supplemental motion to seal pertains to Exhibits E and H to the Declaration of Molly A. DeSario in Support of Plaintiffs’ Reply to Defendant’s Opposition to Plaintiffs’ Motion for Class Certification, and Exhibit C to the Declaration of Molly A. DeSario in Support of Plaintiffs’ Motion to Strike Defendant’s Compendiums of Store Manager and Executive Manager Declarations, Declaration of Jullie Z. Lal, Summary of Evidence, and Withheld Documents.

DeSario (Reply) Exhibit E is Defendant’s FY2012 Store Bonus Program Summary. DeSario (Reply) Exhibit H includes Defendant’s Bank Deposits and Armored Car Services procedures. DeSario (Motion to Strike) Exhibit C is Defendant’s Annual Performance Review for FY2014 for non-exempt Store Managers.

Defendant argues these documents are kept confidential in order to protect Defendant’s sensitive business information. Defendant submits a detailed declaration of Mr. Ceballos who states that the Store Bonus Program Summaries are kept confidential because they contain the amounts of potential bonuses, as well as Defendant’s criteria and formulae for calculating bonus amounts. As for the Bank Deposits and Armored Car Services procedures, Mr. Ceballos states that Defendant also limits the availability of these procedures, and disclosure could present safety risks to Rite Aid associates who handle bank deposits. As for the Annual Performance review for FY2014 for non-exempt Store Managers, Mr. Ceballos states that this form is a printout of a blank version of the online screens that a District Manager sees when evaluating a non-exempt Store Manager. Defendant keeps this form confidential because it contains Defendant’s performance expectations for non-exempt Store Managers to ensure that they successfully lead their respective stores.

The Court finds that Defendant demonstrates an overriding interest in its confidential business records relating to bonuses, bank deposits and armored car procedures, and performance reviews for non-exempt Store Managers that overcomes the right of public access and supports sealing these records, that a substantial probability exists Defendant’s overriding interest in its confidential business records will be prejudiced if the records are not sealed, that the proposed sealing is narrowly tailored and that no less restrictive means exist to achieve the overriding interest. The second supplemental motion to seal is GRANTED.

Defendant does not move to seal DeSario (Reply) Exhibits C, F, I, J, and K, as well as Exhibit G to the Declaration of Molly A. DeSario in Support of Plaintiffs’ Opposition to Defendant’s Motion to Strike Plaintiffs’ Store Manager Declarations, even though Plaintiffs lodged these exhibits conditionally under seal. Accordingly, Plaintiffs should submit revised public versions of the DeSario declarations that include these exhibits.