By Gerald L. Maatman, Jr., Jennifer A. Riley, Alex S. Oxyer, Andrew D. Welker

Seyfarth Synopsis: On January 15, 2020, in Guzman v. Chipotle Mexican Grill, Inc., No. 17-CV-02606-HSG, 2020 WL 227567 (N.D. Cal. Jan. 15, 2020), Judge Haywood Gilliam of the U.S. District Court for the Northern District of California denied a motion for class certification brought by Chipotle employees of Mexican and/or Hispanic national origin working in the company’s California restaurants. The plaintiffs alleged that Chipotle unlawfully subjected them to company-wide policies requiring that they only speak English while working in the restaurants and that employees were only eligible for promotion if they can speak proficient English. The Court ultimately declined to certify the class because the plaintiffs failed to show that their experiences at the company were common to or typical of the class.

The decision is a must-read for corporate counsel on class action litigation over workplace policies in general, and Rule 23 defenses in particular.

Case Background

This case began when three plaintiffs brought individual and class claims of discrimination, harassment, and retaliation against Chipotle pursuant to California’s Fair Employment and Housing Act (“FEHA”). The plaintiffs sought to certify a class of all current and former employees of Hispanic and/or Mexican national origin working in Chipotle restaurants in California, which included approximately 43,000 employees across 400 restaurants.  Plaintiffs’ class certification motion focused on two allegations, that: (i) Chipotle allegedly maintained a discriminatory, unwritten policy that employees were required to only speak English while working in the restaurants; and (ii) Chipotle maintained a promotion policy that employees must demonstrate a subjective level of English proficiency to be eligible for promotion to management positions.

In their motion for class certification, plaintiffs argued they satisfied the numerosity, commonality, typicality, and adequacy of representation requirements for class certification outlined in Rule 23(a).  In support of their motion, plaintiffs submitted declarations from eight former employees outlining their experiences related to the alleged English-only and promotion policies. All eight former employees averred that their former managers spoke English; six asserted that they were told they could not speak Spanish at least some of the time in the restaurants; and six also claimed to have understood that they had to speak English proficiently to be eligible for further promotion.

Chipotle denied the truth of plaintiffs’ underlying allegations.  Further, in response to the motion, Chipotle argued that plaintiffs failed to satisfy the commonality, typicality, and adequacy of representation requirements of Rule 23, and that plaintiffs’ proposed class definition was overbroad.  Chipotle further argued that plaintiffs lacked the necessary Article III standing to bring their claims because they had failed to show how they were injured by the allegedly discriminatory policies.

The Court’s Decision

In its opinion, the Court addressed Chipotle’s argument that the plaintiffs lacked Article III standing. The Court reaffirmed the standard promulgated by the Ninth Circuit that putative class representatives must present evidence to establish Article III standing in motions for class certification and cannot rest on the allegations in a complaint.  However, the Court found that the affidavits accompanying the plaintiffs’ motion for class certification were sufficient to satisfy such obligations, because they contained specific examples of alleged discrimination and harassment.

Since Chipotle did not dispute the plaintiffs’ satisfaction of the Rule 23(a) numerosity requirement, the Court turned to the question of commonality, which it called “the crux of this case.” Id. at *8.  Plaintiffs argued that the commonality element was satisfied because the employees in the class were subjected to the same written and unwritten policies and, therefore, common questions of law and fact existed regarding the legality of those policies. The Court, however, rejected the plaintiffs’ argument, finding that their own affidavits showed that the employees all had different experiences with the alleged policies and how those policies were implemented was dependent on the discretion of Chipotle’s managers.  Thus, because individual inquiries would be required to establish the experiences and injuries of each individual class member, the Court concluded that the plaintiffs were unable to satisfy the commonality requirement. 

The Court also determined that the plaintiffs were unable to meet the typicality requirement for the same rationale.  The plaintiffs failed to offer sufficient evidence to convince the Court that the experiences of the named plaintiffs were typical of those of the class or that the alleged discriminatory policies existed on a company-wide basis. Because the plaintiffs did not satisfy the commonality or typicality requirements, the Court denied their motion for class certification.

At the same time, the Court went on to reject Chipotle’s argument that some of the plaintiffs were not adequate representatives of the class because, as former managers, they may have participated actively in administering the allegedly discriminatory policies.  The Court reasoned that Chipotle had not submitted any evidence supporting that claim or cited any legal support showing that such participation would result in a conflict of interest.

Implications For Employers

This case is a departure from the growing trend of decisions granting class certification motions (a trend that we addressed in our 16th Annual Workplace Class Action Report, a summary of which is here). The Court’s ruling is also a reminder that plaintiffs must demonstrate common questions of law and fact and that their experiences are typical to the class to warrant class certification. The opinion further affirms that plaintiffs may not simply rely on the complaint’s allegations to demonstrate standing on class certification, but must support such allegations with evidence. This case provides helpful guidance for employers seeking to defeat class certification, particularly in the discrimination context where employees may have differing experiences and the implementation of company policies may be subject to some level of discretion by employee supervisors.