This is a putative wage and hour class action by plaintiff Michael Gauthier (“Plaintiff”) against defendant Apple Inc. (“Defendant”). Plaintiff alleges he was employed by Defendant as a non-exempt employee and paid on an hourly basis. Plaintiff brings this putative class action on behalf of himself and all individuals who are or were employed by Defendant in a California retail store as non-exempt employees paid on an hourly basis in the four years prior to the filing of the Complaint (the “California Class”). Plaintiff alleges that Defendant has engaged in the uniform and systematic practice of requiring Plaintiff and the putative California Class to wait for and submit to loss prevention inspections or “bag checks” in accordance with company policies after clocking out for meal breaks and at the end of each scheduled shift before they were allowed to exit the Apple stores. Plaintiff alleges that the time he and other putative class members spent waiting for and submitting to the loss prevention inspections constituted compensable work time, but Defendant failed to compensate them.

The Complaint also identifies a California sub-class for purposes of the causes of action arising under the California Labor Code, defined as all members of the California Class who are or were employed by Defendant in a California retail store as non-exempt employees paid on an hourly basis at any time during the period three years prior to the filing of the Complaint (the “California Labor Sub-Class”).

The operative Complaint, filed October 15, 2013, asserts four causes of action for: (1) unlawful business practices (Cal. Bus. & Prof. Code, § 17200 et seq.) (by Plaintiff and the California Class); (2) failure to pay minimum wages and overtime compensation (Cal. Lab. Code, §§ 510, 1194) (by Plaintiff and the California Labor Sub-Class); (3) failure to provide accurate itemized statements (Cal. Lab. Code, § 226) (by Plaintiff and the California Labor Sub-Class); and (4) failure to pay wages when due (Cal. Lab. Code, §§ 201-203) (by Plaintiff and the California Labor Sub-Class).

Motion to Stay

Defendant now moves to stay the action during the pendency of prior actions filed in federal court involving the same parties and the same subject matter. According to Defendant, there are already three “bag check” cases against it in the U.S. District Court for the Northern District of California: (1) Frlekin, et al. v. Apple, Inc., Case No. 13-3451 (WHA), filed July 25, 2013 (“Frlekin”); (2) Kilker, et al. v. Apple, Inc., Case No. 13-3775 (WHA), filed August 14, 2013 (“Kilker”); and (3) Kalin, et al. v. Apple, Inc., Case No. 13-4727 (WHA), filed October 10, 2013 (“Kalin”) (collectively the “Federal Actions”). Defendant contends that Plaintiff’s wage and penalty claims under California law are duplicative of those already pending before U.S. District Court Judge William Alsup in the Federal Actions, as Plaintiff seeks to recover unpaid wages and penalties as a result of Defendant’s loss prevention inspection policy after employees clock out for meal breaks and at the end of their shifts. Defendant contends that Plaintiff is himself within the putative classes in the Federal Actions. Defendant further contends that Plaintiff’s action adds no new or unique facts not already presented in the Federal Actions. According to Defendant, on September 9, 2013, Judge Alsup ordered that Kilker was related to Frlekin and issued a detailed case management order setting several deadlines, including a March 27, 2014 deadline for filing a motion for class certification and a February 9, 2015 trial date. Defendant contends that discovery in Frlekin and Kilker is well underway. As for Kalin, Judge Alsup ordered the matter related to Frlekin and Kilker on October 28, 2013. Defendant argues it would cause confusion and delay in the administration of justice if the action is not stayed because, assuming the federal classes are certified, they will receive multiple notices for different class action lawsuits for the same claims. Furthermore, Defendant argues there is the risk of inconsistent rulings between the federal and California actions.

Plaintiff argues the motion should be denied because it would allow Defendant to circumvent California’s policies encouraging class actions to protect employees under overtime laws. Plaintiff contends that he is a different individual than the plaintiffs in the Federal Actions, has different counsel, and the defenses applicable in federal court would not apply to Plaintiff here. Plaintiff argues the actions do not allege the same claims, as he only asserts California claims, while the Federal Actions include claims under the Fair Labor Standards Act, New York and Ohio state law. Plaintiff fears that the California claims will take a “back seat to the federal claims.” Plaintiff argues he would informally agree to coordinate discovery so that no discovery would be duplicated.

Analysis: Trial courts generally have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency. (Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489.)

[W]hen a federal action has been filed covering the same subject matter as is involved in a California action, the California court has the discretion but not the obligation to stay the state court action. [Citations.]

‘In exercising its discretion the court should consider the importance of discouraging multiple litigation designed solely to harass an adverse party, and of avoiding unseemly conflicts with the courts of other jurisdictions. It should also consider whether the rights of the parties can best be determined by the court of the other jurisdiction because of the nature of the subject matter, the availability of witnesses, or the stage to which the proceedings in the other court have already advanced.’ [Citation.] The California Supreme Court also has isolated another critical factor favoring a stay of the state court action in favor of the federal action…– the federal action is pending in California not some other state. [Citation.]

(Caiafa Prof. Law Corp. v. State Farm Fire & Cas. Co. (1993) 15 Cal.App.4th 800, 804.)

Here, there is no basis to conclude that Plaintiff brought this action solely to harass Defendant. The availability of witnesses is likely a non-factor, since both actions are in Northern California near Defendant’s place of business.

However, there is no dispute that the Federal Actions cover the same subject matter involved in this action. Although the California Class in the instant action defines a class period for Plaintiff’s UCL claim that is a year longer than the class periods in the Federal Actions, the actions still involve substantially the same claims for unpaid wages arising out of Defendant’s policy of requiring hourly, non-exempt employees to undergo off-the-clock security bag checks before meals and after they have clocked out at the end of their shifts. The complaints in both Frlekin and Kalin assert causes of action for wages and penalties under the California Labor Code as well as unfair competition claims under California Business and Professions Code section 17200.

Furthermore, a number of the Caifa factors weigh in favor of staying this action. Regarding the potential for “unseemly conflicts,” it is clear that the Federal Actions and the instant action arise out of the same set of facts over the same general time period and are brought against the same Defendant. Common to all of these actions will be the issue of whether Defendant violates the California Labor Code and Business and Professions Code by not compensating its hourly employees during the time they are subject to mandatory off-the-clock bag inspections. Plaintiff argues he is not a named party in any of the Federal Actions, but he does not dispute that he belongs to the putative classes defined in the Frlekin, Kilker and Kalin Complaints. Thus, the potential for conflicting rulings by each of the courts with regard to common issues is very real.

Another Caifa factor that favors a stay is that the Federal Actions are in California, not another state. This is a “critical factor” according to the Supreme Court in Caifa.

Regarding the stage of proceedings, the instant matter was filed in October of last year, but has progressed little since then. The Federal Actions have seen marginally more progress in that dates for filing a motion for class certification and trial have been set, and discovery is well underway.

As for whether the rights of the parties can best be determined by the court of the other jurisdiction, Plaintiff assumes that the California law claims in the Federal Actions will receive less priority than the federal and non-California causes of action. However, this is speculative and doubtful given that two of the three Complaints in the Federal Actions (Frlekin and Kalin) define California classes and assert causes of action under the California Labor Code and Business and Professions Code.

Plaintiff further argues that the rights of California putative class members can be better determined by this Court because: (1) in federal court, there is no right of direct appeal of a class certification order, (2) federal courts have imposed insurmountable barriers to a plaintiff’s request for the class list such as requiring a showing of “evidence of company-wide violations”, and (3) claims for penalties under the Private Attorney General Act (“PAGA”) (Cal. Lab. Code, § 2698 et seq.) need not satisfy class certification requirements in California court as they must do in federal court under Federal Rule of Civil Procedure 23. Plaintiff argues the Court should not allow Defendant to circumvent these policy considerations by forum shopping for an exclusive federal venue.

Plaintiff’s arguments are not persuasive. On the differences between state and federal court regarding the appeal of class certification orders, Plaintiff cites no authority suggesting that this results in a less friendly environment for class plaintiffs in federal court. As for the barriers imposed by federal courts regarding discovery of class contact information, Plaintiff cites Nguyen v. Baxter Healthcare Corp. (C.D. Cal. 2011) 275 F.R.D. 503 for the position that federal courts require plaintiffs to show “evidence of company-wide violations” in order to obtain class contact information. However, the cited portion of Nguyen was not in reference to obtaining class contact information, but to obtaining discovery from an employer’s branch locations where the plaintiff did not work. (See Nguyen, supra, 275 F.R.D. at p. 508.) Moreover, the U.S. District Court in Nguyen held that under California law, plaintiff’s counsel was entitled to communicate with putative class members, subject to a Belaire opt-out procedure that would give the putative class members an opportunity to object to disclosure of their information. (See Nguyen, supra, 275 F.R.D. at p. 512, citing Pioneer Electronics (USA), Inc. (2007) 40 Cal.4th 360, 374-375 and Belaire-West Landscape Inc. v. Superior Court (2007) 149 Cal.App.4th 554.) Thus, Nguyen does not support Plaintiff’s position that the rights of California putative class members are not adequately protected in the Federal Actions. Finally, even if PAGA claims are more difficult in federal court because they must be certified under Rule 23, the simple fact is that Plaintiff has not brought a claim for PAGA penalties in this action.

In summary, the following Caifa factors weigh strongly in favor of staying this action pending resolution of the Federal Actions: the potential for conflicts, the relative stages of the proceedings, and the “critical” factor of the Federal Actions being in California

Plaintiff cites Gregg v. Superior Court (1987) 194 Cal.App.3d 134 for the position that a stay is not justified simply because two actions filed by different parties are related and involve the same subject matter. However, Gregg is distinguishable because it did not involve a putative class action in the pending federal court action that covered the same subject matter as the state action. In Gregg, the Court of Appeal directed the trial court to dissolve its stay of a state court action by a franchisee (Gregg) against the franchisor during the pendency of 11 federal court cases filed by others with similar grievances (and represented by the same counsel as Gregg). The ruling in Gregg was based on the fact that in the state court action, Gregg sought personal relief from contracts and damages for fraud and unlawful business practices directed toward him, and he was not a party in the federal action. (See Gregg, supra, 194 Cal.App.3d at p. 138.) Here, Plaintiff belongs to the putative classes defined in the Federal Actions and asserts substantially the same class claims raised in the Federal Actions. Moreover, the circumstances in Gregg were unique in that Gregg’s counsel, who represented the others in the federal actions, had been ordered by the federal court not to file new actions there until trial in his lead federal case. “Thus, the court’s stay order has forced [Gregg] to suspend all efforts to seek monetary and injunctive relief.” (Ibid.) Here however, because the Federal Actions encompass the same class claims asserted in this action and include Plaintiff as a putative class member, Plaintiff’s right to monetary and injunctive relief under the Labor Code and Business and Professions Code for Defendant’s bag check policies is not suspended by a stay of this action.

For all of these reasons, Defendant’s motion to stay this action during the pendency of the Federal Actions is GRANTED.