Batze v. Safeway, Inc.

Filed 4/4/17
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

GARY BATZE et al., B258732

Plaintiffs and Appellants, (Los Angeles County
Super. Ct. Nos. BC348090 &
v. BC399811)

SAFEWAY, INC., et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Los
Angeles County, Anthony J. Mohr, Judge. Affirmed.
Daniels, Fine, Israel, Schonbuch & Lebovits, Paul R.
Fine, Scott A. Brooks and Craig S. Momita; Law Offices of
Ian Herzog and Ian Herzog; Law Offices of Stephen Glick
and Stephen Glick for Plaintiffs and Appellants.
Littler Mendelson, J. Kevin Lilly, R. Brian Dixon and
Philip L. Ross for Defendants and Respondents.
 Appellants Gary Batze, Carlo Cesar and Justin Hayes
brought suit against their employer, Safeway, Inc. and The
Vons Companies, Inc. for failure to pay overtime wages.1
Appellants claimed that in their positions as First and
Second Assistant Managers (AMs) for respondent‟s stores
they had been required to work long hours performing such
non-managerial tasks as stocking shelves, checking
customers‟ purchases and building product displays. After
weeks of trial and the testimony of dozens of witnesses, the
trial court ruled, for the most part, in respondent‟s favor,
finding that appellants were engaged for more than 50
percent of their work week in managerial tasks, and that
they met all the other qualifications to be exempt from the
overtime rules. The court also ruled that during the five-
month period when Batze and Hayes replaced striking
hourly workers, they continued to be exempt employees.
Finally, the court ruled that only those claims arising within
the four years preceding appellants‟ respective complaints
were cognizable, and declined to apply equitable tolling to
relate their claims back to the filing of a proposed class
action for which certification had been denied.
Appellants contend the court‟s findings that they spent
the majority of their time at work engaged in managerial

1 As Safeway and Vons are affiliated, the parties drew no
distinctions between employees who worked at Safeway stores
and those who worked at Vons stores, and the defendants were
jointly referred to below as “Safeway,” the two companies will
jointly be referred to as “respondent.”

2
activities during the four-year period at issue was not
supported by substantial evidence. Specifically, they
contend that an employee‟s ratio of exempt to non-exempt
activities must be determined on a week-by-week basis, that
no inferences may be drawn from the employee‟s activities in
surrounding weeks, and that because the employer bears the
burden of proof, for any specific week in which no defense
witness observed appellants‟ actions at work the court
should have found in appellants‟ favor. We reject that
contention and conclude the court drew reasonable
inferences from the witnesses‟ testimony and other evidence
that established how appellants spent the majority of their
time.
Appellants also contend the court improperly found
that the strike period constituted an emergency that
permitted respondent to assign managerial employees to
non-exempt tasks without losing their exempt status. We
affirm the court‟s decision.
Finally, appellants contend the trial court erred in
ruling that the statute of limitations precluded them from
raising claims based on periods of employment more than
four years prior to the filing of each of their complaints. We
conclude the trial court reasonably found that the filing of
the class action did not toll the statute of limitations.

3
 FACTUAL AND PROCEDURAL BACKGROUND
A. Background Facts
In July 2002, a putative class action was filed by Peter
Knoch and Jason Ritchey (the Knoch action) on behalf of all
store managers and AMs employed by respondent. The
claims included failure to pay overtime wages and violation
of the unfair competition law (Bus. & Prof. Code, § 17200 et
seq., UCL).2 The motion for class certification was filed in
November 2006. Class certification was denied in July 2007;
the order denying certification was entered in September
2008.
Appellant Gary Batze, who had been a Second AM for
respondent, filed his complaint for unpaid wages in February
2006. Appellants Carlo Cesar and Justin Hayes, who had
been First AMs, filed their complaints in October 2008.3
Multiple other managerial employees filed related claims
against respondent in 2005 and 2006. Appellants‟ claims
were selected to be tried together.

2 Because the statute of limitations for a UCL claim is four
years, the wage claims proceeded under that act; all other claims
were abandoned. (See Pineda v. Bank of America, N.A. (2010) 50
Cal.4th 1389, 1401 [plaintiff may seek restitution of unpaid
overtime wages via the UCL].)
3 Both the First AM and Second AM were salaried positions
for which respondent did not pay overtime for working more than
eight hours a day or more than 40 hours a week.

4
 B. Evidence at Trial4
1. Evidence Pertinent to Batze
a. Plaintiffs’ Evidence
Batze worked for respondents from June 1987 through
August 2006. In August 1998, he was promoted to a salaried
managerial position at the Blackstone store.5 Between 2000
and 2006, he worked at the Clovis store, with a stint at
Bakersfield and Lake Isabella stores during the five-month
strike by union employees in 2003 and 2004. Throughout his
tenure as a salaried employee, he was assigned to the
night/early morning shift (4:00 a.m. to noon or 1:00 p.m.),
and testified that he regularly worked 50 to 60 hours per
week.
According to Batze, his primary duty was building and
filling merchandise displays. He was given specifications as
to the design of the displays, where they were to be placed in
the store, and the merchandise to include, exercising little or
no discretion. When products requiring display arrived, he
might spend up to 12 hours in a single day moving pallets of
products from the back room to the floor, physically tearing

4
Due to the fact-specific nature of each appellant‟s work and
its relationship to the caterorization of such work as exempt or
non-exempt, we examine the evidence in some detail.
5 Batze testified that he was first given the title grocery
manager and then Second AM, but that both positions involved
essentially the same work. The court ruled that any claims
arising from the period Batze worked at the Blackstone store
were time-barred.

5
down the old displays and putting up the new ones. He also
stocked shelves and was responsible for keeping the back
room organized, which required him to personally move and
stack pallets and merchandise some of the time. Although
Batze was the sole managerial employee at the store during
the late night hours and was titularly in charge, the night
crew boss normally oversaw the hourly employees. Because
few of his working hours took place when the store was open,
he had little opportunity to supervise the clerks as they
served customers. Batze estimated he spent 90 to 95 percent
of his time as a Second AM “doing physical manual work.”
Throughout the time Batze and the other appellants
were employed by respondent, the stores were required to
adhere to an “operating ratio” of sales to employee salary.6
In Batze‟s experience, meeting the operating ratio required
salaried employees to perform the jobs of hourly workers
because salaried employees could work overtime without
causing the store to incur additional labor costs.
During the Southern California grocery clerks‟ strike
that took place from October 2003 to the beginning of March
2004, Batze claimed to have worked at stores in Bakersfield
and Lake Isabella for 14 to 16 hours a day for two or three
weeks without a day off. He did everything the striking

6 The operating ratio was the number of labor hours
budgeted to a store based on the store‟s sales. If a store
repeatedly failed to meet the operating ratio, the manager would
be disciplined.

6
hourly employees would have done, except checking. He
denied having responsibility for training the employees
brought in to replace the striking workers.7
As a Second AM, Batze had no discretion over pricing,
hours of operation, employee salary, the dress code, or the
design and layout of stores. Batze was never enrolled in
respondent‟s Retail Leadership Development (RLD)
program.8 Batze did not deny that he performed some
managerial tasks, including writing employee appraisals and
preparing the work schedule for the night crew, but
estimated he spent only a couple of hours a year writing
appraisals and only 10 to 15 minutes a week writing the
schedule. He acknowledged that he had discretion over the
displays in “one [or] two” locations in the store, that he could
add products he believed tied in to displays, and that at least
some of the displays were built by vendors, under his
supervision. Batze also was responsible for minimizing “out-
of-stocks” (products carried by the store that sold out,
leaving empty shelves) and for placing orders for the grocery
department, which comprised the bulk of the store.
Managing out-of-stocks required him to walk the aisles to

7 On cross-examination, Batze was shown his handwritten
calendar, indicating that from January to March 2004, he was
working his regular hours. Cash register data showed him
working at his regular store (Clovis). Batze claimed the calendar
did not necessarily reflect the hours he worked.
8 The RLD program was respondent‟s program to train
managerial employees and is discussed further, infra.

7
see whether the store was low on any product, scan bar codes
to trigger the warehouse to send more product, confirm that
deliveries had come in, and work with the night crew to get
products from the pallets on which they were delivered to
the shelves. He used his discretion in taking tags off the
shelves when he knew or believed the warehouse was out of
the described products.
Batze called fellow employees, current and former, to
support his claim. Thomas Moore, a store manager who
worked with Batze from 1998 to 2000, testified Batze
primarily built displays and stocked shelves, and that these
were typical tasks for Second AMs during Moore‟s tenure
with respondent (1967 to 2007). Debbie Lucio, a former
Second AM who worked for respondent from 1990 to 2006,
observed Batze building displays and working long hours
when he was a Second AM. James Saubert worked with
Batze at the Clovis store. From his observations, Batze
appeared to be spending the majority of his time -- 90
percent, according to Saubert -- building displays and
stocking shelves. Saubert also observed Batze engaged in
managerial tasks, such as talking to the receiver about
organizing the back room and talking to the dairy manager
about the status of orders. Tammy Baldridge worked with
Batze from 1999 to 2006. She primarily observed him
building displays. She took over the Second AM position
when Batze left. She spent a significant part of her shifts
“throw[ing] loads” (organizing products delivered to the back
room) and building displays. Tom Dunehew worked as a

8
Second AM for 12 years, and held that position at the Clovis
store after Batze and Baldridge left. Dunehew testified that
as a Second AM, he primarily built and filled displays and
stocked shelves. Staci Dack worked with Batze at Clovis for
six years. She recalled that Batze was at work before she
arrived for her eight-hour shift and remained there after she
left. She primarily observed him building displays or
helping the night crew stock shelves.

2. Defense Evidence
Michelle Macaluso was the store manager who
supervised Batze at the Clovis store from January 2004 to
August 2006, when Batze left respondent‟s employ. The
Clovis store was very large and busy. There were 115 to 125
employees, and weekly sales were approximately $600,000.
It was open from 6:00 a.m. to midnight. Macaluso worked
from 6:00 or 7:00 a.m. to 5:30 p.m., Monday through
Wednesday, and Friday and Saturday, 48 to 50 hours per
week. Batze, who started at 4:00 a.m., generally left on time
at noon or 1:00 p.m., or if he worked late one day, left early
another.
Macaluso testified Batze was responsible for
“merchandising,” making sure displays were built at the
correct place in the store and filled. Batze had some
discretion concerning where to place displays and how large
they would be. He could create a theme for a display, such
as a holiday theme, and could add items he believed were
tied in to the products he was required to include. There

9
were 40 to 45 displays in the store; some changed weekly or
monthly, but others were permanent. Batze built four to six
displays per week. He had the assistance of the “GM”
manager, an hourly position, when he built them. Vendors
were responsible for many of the displays, and Batze
coordinated with 20 to 25 vendors per week concerning their
displays and where to place them. Because the Clovis store
was so large, Batze had discretion to give vendors additional
display space. Macaluso disputed that Batze could have
spent 90 percent of his time building displays because they
were built only Mondays through Wednesdays.
Batze supervised the ten employees, (including four
clerks, two night crew supervisors, a receiver, and a scan
coordinator) on duty at night. He coached them and
reviewed their performance. He addressed their negative
behavior. He trained new employees. Batze also was
responsible for the back room, making sure it was organized
and that vendors delivered the correct amount of product.
He had the assistance of the store‟s receiver, an hourly
employee. Batze placed his office in the back area so he
could more easily interact with the vendors. Macaluso
confirmed that Batze was responsible for minimizing the
store‟s out-of-stocks. In that role, he coordinated with
department managers or the receiver to ensure they ordered
correctly to prevent the problem from arising. Personally
walking up and down the aisles assisted him in managing
out-of-stocks, as it permitted him to determine where and
when the problems arose. Macaluso put Batze in charge of

10
eliminating or minimizing “shrink” (unsold products, such as
those that spoil and must be discarded). She credited him
with producing “the best shrink numbers in the district.”
Batze also was on the safety committee which met monthly
and regularly communicated safety concerns to employees.
Macaluso estimated Batze spent 60 percent of his time on
managerial work.
Respondent introduced a number of notes Macaluso
wrote to Batze about his management skills, including one
congratulating him for achieving a score of “100%” on the
“[s]hrink audit.” Respondent also introduced performance
appraisals demonstrating Batze had been commended for
“mak[ing] good decisions,” “involv[ing] his employees in some
decision making,” “foster[ing] a positive attitude with
employees,” “tak[ing] charge of his department,” “build[ing]
a strong team,” “display[ing] good leadership qualities,”
“improv[ing] sales in the grocery department,” and
“manag[ing] with minimal supervision.” Concerning his
claim to have worked overtime in Bakersfield and Lake
Isabella during the strike, respondent submitted cash
register data showing Batze working in the Clovis store in
the early part of 2004. Macaluso testified that Batze was
working with her in Clovis from January 2004 until the
strike ended.
Batze was the subject of an observational study on
September 27, 2004 (a Monday), over a year before he filed
suit. The observer tracked him through the store that day
and wrote down precisely how much time he spent on his

11
various activities.9 He was observed performing a
substantial number of managerial tasks, including walking
the aisles of the store (performing a “store walk”) while
talking to the receiver about ordering, talking to clerks,
stockers and the receiver about the schedule, directing a
clerk to make tags and signs, asking a clerk about the status
of an order, telling a stocker how to arrange merchandise,
directing a stocker to arrange a display, talking to a stocker
about a soda shipment, talking on the phone with a frozen
food manager about placing an order, talking to the dairy
manager about diversity training, talking with a store
manager about a sick employee, and talking to a vendor
about an order, stock levels and display changes. The
observational study showed that Batze spent approximately
40 percent of his time “[b]uilding [d]isplays and [s]tocking”
and minimal amounts of time on other non-exempt work.10
Overall, the study showed that Batze spent 53.6 percent of

9 Batze told the observer that he would not have done
anything differently had he not been observed, and that there
was nothing unusual about how he spent his time that day. He
testified the tasks he performed that day were “typical” but not
the hours worked.
10 Besides building displays and stocking, Batze was observed
performing such non-exempt tasks as moving and stacking
pallets, physically reorganizing the back room, ringing purchases,
setting up mats at the front of the store, taking out trash,
breaking down boxes, and helping customers. Although there
were many such tasks over the course of the observed day, none
took more than a few minutes each.

12
his time on managerial work and 46.4 percent on non-
exempt tasks.

2. Evidence Pertinent to Cesar
a. Plaintiffs’ Evidence
Cesar began working for respondent in June 1987 and
was still employed by respondent at the time of trial. In
August 2002, while working at the Dublin store, he became a
First AM.11 Prior to assuming the position, he completed
respondent‟s Retail Leadership Development program.12

11 Prior to becoming a First AM, Cesar had been a Second
AM, but due to the trial court‟s ruling on the statute of
limitations, none of his time as a Second AM was considered by
the court in making its decision. During the relevant period
(2004 to 2008), Cesar worked at eight different stores: Dublin in
2004, Livermore from 2004 to 2006, Pleasanton in 2006, Pleasant
Hill in 2006, Lafayette from 2006 to 2007, Orinda from 2007 to
2008, Blackhawk/Danville in 2009, and Alamo.
12 Respondent introduced evidence that the RLD program
consisted of six months of classes, and that it cost respondent
over $50,000 per trainee. The program materials described
typical responsibilities of a First AM as “writing next week‟s front
end schedules, monitoring the ad special in-stock position for
evening business, and checking and assisting with customer
questions and issues.” The First AM was “officially „in charge‟
the minute the Store Manager leaves the store.” The First AM
was also responsible for “managing overall operations,
. . . making sure that end displays are up and stocked, the floors
maintained, fluid dairy products are property filled, the bread
displays are fully stocked and rotated, spot-stocking fast selling
items, reporting out-of-stocks, ensuring that orders are
(Fn. continued on next page.)

13
The program trained him to work in every part of the store.
This was because managers were expected to understand
how to do everything in the store and be able to fill in
everywhere. Cesar described his duties as being a “gap-
filler. . . , filling gaps wherever it‟s needed,” including
checking, stocking shelves and organizing the back room.
He said that using AMs to perform the work of hourly
employees allowed stores to meet their prescribed operating
ratio.
Cesar testified that he spent between 60 and 90
percent of his work time on non-exempt tasks, and that the
allocation between managerial and non-managerial tasks
was fairly similar at all the stores in which he worked as an
AM. At his then current position, the Alamo store, almost
every day he would be given a list of non-exempt tasks by
the store manager, such as cleaning a freezer, filling an
outside stand with advertising brochures, moving products
on and off the floor, straightening products in displays or on
the shelves, or cleaning and organizing the upstairs storage

transmitted on time, safe work habits are being observed, and
monitoring front end operations.” A “key responsibility” for the
First AM was “to maintain superior Service in the store,
especially monitoring the front end for service levels.” In
addition, the First AM “respond[ed] to customer inquiries” and
“handle[d] employee issues that ar[o]se during [his or] her shift.”
The First AM was to “take[] full responsibility for operating the
store during [his or] her shift.”

14
area. He stated that he checked and stocked shelves almost
every day, and was often formally scheduled to be a stocker
or the backup checker. He recently had been asked to wear
the badge of a “manager in training” because the union had
complained about the Alamo store having too many salaried
employees.
According to Cesar, one of his duties at virtually all the
stores to which he had been assigned was to work as the
“front-end” manager. This required him to stay at the front
of the store observing the checkers, directing customers,
calling for more checkers, and checking “as needed.”13 At
Alamo, Cesar was assigned the task of managing the front-
end approximately one to two hours per day. At the
Blackhawk/Danville store, his prior assignment, he spent
three to four hours at the front-end. At Orinda and
Lafayette, he was in the front-end three to six hours daily.
At the Pleasanton store, almost all his time was in the front-
end. At Pleasant Hill, he was at the front-end one to two
hours per day. At the Livermore store, he was at the front-

13 When working as the front-end manager, Cesar estimated
he had to jump in and assist with checking from one to four hours
on any given day. However, respondent produced computerized
logs of employee checking activity that showed Cesar generally
checked no more than one to three hours per week. In addition,
defense witnesses testified that during an audit, the AM at the
front-end was instructed to manage, not check. As will be
discussed in greater detail, the logs showed Cesar checking a
significant amount of time over the course of certain weeks. The
trial court awarded him overtime for those weeks.

15
end from two to six hours until the store got a new manager,
at which point he was reassigned and spent more time
stocking and organizing the back room. At Dublin, he
averaged two to four hours per day in the front-end.
Cesar did not deny that he spent some time in the
manager‟s office every day performing managerial tasks,
such as writing schedules, attending meetings, reading and
responding to emails, disciplining employees and taking
calls. He estimated that at the Alamo store, he was in the
office one to two hours per day. Overall, he estimated that
he averaged between one and two hours per day in the office
throughout his tenure as an AM, except on those days he
had a specific task requiring more office time. At
Blackhawk/Danville, the time he spent in the office was
slightly less. Cesar acknowledged that in his position as
AM, he disciplined and terminated employees and
sometimes delegated longer tasks to others. He
acknowledged that when performing a non-managerial task,
he would frequently have to shift duties to take care of a
managerial function.
One of Cesar‟s regular duties was to perform a store
walk at the end of his shift, checking displays and ordering
items needed to fill them, and making sure products on
shelves around the perimeter were “faced” (placed neatly on
the shelf, older items in the front). He performed dozens of
shorter store walks every day to observe store conditions.
During those store walks, he sometimes brought a dolly full
of merchandise to fill in shelves or displays. He also looked

16
for opportunities to observe and communicate with
employees, and to ensure they were staying on task.
In his deposition, Cesar was asked about what he had
done on his most recent day of work, a day he had described
as “typical.” He testified he met with the store manager
when he arrived at work and obtained a list of tasks, which
was not lengthy. He had a meeting that lasted 30 minutes
and participated in a conference call. He checked his email.
He conducted a short store walk, during which he greeted
department managers, fixed the problems he could, and put
other items on a list to be handled later, either by himself or
assigned to other employees, at his discretion. He testified
that he checked for an hour and stocked shelves and worked
on displays for only one to two hours that day.
In 2009, after his stint at the Orinda store and a period
of disability, Cesar was placed on a Performance
Improvement Plan (PIP) by his superiors. Under the PIP, he
was given the goal of keeping out-of-stocks to fewer than 120
daily. He was told to “identify and develop at least one
department manager and two employees to meet
[respondent‟s] goal in key performance areas, service, [out-
of-stocks], shrink, foot safety and sanitation.” He was told to
make sure to sign off on various inspections. Other goals
given in the PIP were to plan advertising weekly with
department managers and order writers; attend weekly
profit hour meetings; perform “mock shops” and “role plays”
with employees to test their performance; hold three
“huddles” daily with employees; create a list while walking

17
the store for merchandising, food safety and sanitation;
delegate tasks to employees with follow-up; and develop a
system to ensure all department managers knew about sales
and projections.
In his annual evaluations, Cesar had been praised for
his hiring, training, coaching and mentoring efforts. He had
been criticized for failing to “get involved in opportunities to
save costs and add value to [the] bottom line,” “demonstrate
an acceptable degree of forecasting and scheduling ability,”
“spend [sufficient] time on scheduling and in merchandising
for sales,” “follow through on the work that he has
delegated,” and review the inventory report. He also was
criticized when a store to which he was assigned failed to
pass its safety audit on multiple occasions, and was directed
to monitor safety issues more closely and to perform more
“safety laps.” He had been told in his evaluations to
“address disciplinary issues,” “take a more active role in
identifying and solving store issues,” “improve on holding
people accountable and following up on directions given,”
“tak[e] charge of an issue or opportunity to improve the
overall store performance,” “[rally] employees to service
excellence,” and “identify opportunities in the operation and
then make the improvements.” One evaluation said that
Cesar “works hard, but does not work the big picture,” that
he was “very adaptable to various demands and
assignments[,] always willing to get in and work,” but that
his “willingness to roll up [his] sleeves [got] in the way of
managerial functions.”

18
 A number of Cesar‟s fellow employees testified in
support of his claim that he spent more than half his work
time on non-exempt tasks. Jonathan Meyer worked with
Cesar at the Dublin, Livermore and Blackhawk/Danville
stores.14 According to Meyer, Cesar spent much of his time
at Dublin checking, “throwing freight,” and stocking shelves.
If an hourly employee called in sick, Cesar would take over
his or her job. At the Livermore store, Cesar worked
alongside Meyer, building displays and stocking shelves.
Meyer estimated 90 to 95 percent of Cesar‟s time was spent
performing non-managerial work.
Thomas Hogan, a store manager, supervised Cesar at
the Livermore store in 2005 and 2006.15 Hogan
acknowledged AMs were responsible for watching out for
problems and training staff, but stated there were not
enough hourly employees at the store to perform all the
necessary tasks, requiring use of salaried managers to fill in
to meet the prescribed operating ratio. Hogan believed the
majority of Cesar‟s day was spent checking, cleaning or
stocking shelves, rather than performing managerial tasks.
Hogan acknowledged that Cesar was in charge of the store
two days a week, on Hogan‟s days off.

14 At the time of his testimony, Meyer was pursuing a claim
against respondent.
15 At the time of his testimony, Hogan was pursuing a claim
against respondent.

19
 Nicholas Schirato worked with Cesar at the Livermore
store, where Schirato was a Second AM.16 Schirato observed
Cesar stocking shelves, “merchandising” and cleaning. He
estimated Cesar spent 90 percent of his time performing
those tasks.
Jennifer Attia, an hourly employee, worked with Cesar
in Pleasant Hill, where Cesar had been acting store
manager, and at the Alamo store.17 Cesar stocked shelves,
checked and generally did whatever needed to be done,
including relieving employees on breaks. Attia did not see
Cesar in the office very much at Alamo. Attia acknowledged
that Cesar used store walks to observe how employees were
doing their jobs and to see what needed to be done.
Vickie Penny, a clerk, Amy Carey, a clerk and former
AM, and Debra Penny, a bookkeeper and clerk, worked with
Cesar at the Lafayette store.18 They testified he was
stocking or checking 85 to 90 percent of the time. Carey also
recalled Cesar building displays. Debra Penny said he
frequently watched the front-end.19

16 At the time of his testimony, Schirato was pursuing a claim
against respondent.
17 At the time of her testimony, Attia‟s husband was pursuing
a claim against respondent.
18 Debra Penny testified that she intended to pursue a claim
against respondent.
19 At the time of her testimony Debra Penny was working
with Cesar at Alamo. She observed him stocking shelves and
(Fn. continued on next page.)

20
 Jeremy Schoen and Shena Meyer worked with Cesar at
the Orinda store.20 Schoen testified that for the majority of
his time at work, Cesar checked, worked freight or filled
displays. In Meyer‟s perception, Cesar was greeting
customers, stocking shelves, facing, checking, bagging and
helping in any short-staffed department 95 percent of the
time.
Tracy Pierson, an hourly employee, Carole Drevno, a
front-end manager, and Gary Dunmoyer, a day stocker,
worked with Cesar at the Blackhawk/Danville store.21 They
testified that the bulk of his day was spent on the sales floor,
doing non-managerial tasks, such as stocking, checking and
building displays. He was in the office one to two hours per
day.
Susan Bryce and Scott Benvie, both hourly clerks, and
Daniel Carey worked with Cesar at the Alamo store.22 They
testified they typically observed him stocking shelves and
building displays. Bryce testified that Cesar checked more
than the other managers. Carey also observed Cesar

filling seasonal displays, and estimated he spent 85 percent of his
time on physical tasks.
20 At the time of her testimony, Meyer‟s husband was
pursuing a claim against respondent.
21 Dunmoyer later became a Second AM, and at the time of
his testimony, was a plaintiff in a lawsuit against respondent.
22 Carey later became an AM, and was planning on pursuing
a claim against respondent.

21
working in the back room, checking and helping supervise in
the front.

b. Defense Evidence
Janet Navarrette worked in the Dublin store with
Cesar in 2004. She was the deli manager. She saw Cesar
performing store walks of up to two hours. She rarely saw
him working at the cash registers. In Navarette‟s
estimation, Cesar spent 50 percent of his time in the office,
dealing with managers, vendors and employees.
Beverly Gandolfo, a Second AM, worked with Cesar at
the Livermore store in 2006 and at the Alamo store, his then
current assignment. Gandolfo had been a stocker at the
Livermore store and did not observe Cesar working in that
capacity with any frequency. There were sufficient hourly
stockers at the store to complete the task without the
assistance of the AMs. Gandolfo described her
responsibilities as an AM at Alamo as observing, coaching
and mentoring employees, preparing the work schedule,
preparing time and attendance reports, reviewing emails,
participating in conference calls, and performing store
walks. She spent a great deal of her time in the office.
During store walks, she observed employees and talked to
them about service, met with the various department
managers, checked for out-of-stocks, and made sure missing
items were ordered. She did not have time during store
walks to perform tasks that could be delegated to an hourly
employee. Because she was responsible for controlling out-

22
of-stocks, she sometimes scanned them herself. This
facilitated her ability to follow up with her crew and the
receiver to determine why the problem had arisen. Gandolfo
had seen Cesar perform store walks at Alamo and did not
notice him doing anything differently than she did. She
often saw Cesar working in the office. She acknowledged
that she sometimes worked on displays, stocked shelves and
checked, and was occasionally given a non-managerial task
to perform by the store manager, but maintained that she
performed managerial work the majority of her time. She
had not seen Cesar stocking shelves, building displays or
checking for lengthy periods. On a typical day, those
activities would occupy less than two hours of a manager‟s
time.
Helen Carver was the district manager when Cesar
was the acting manager at Pleasant Hill and when he
worked at the Lafayette and Orinda stores. Carver
transferred Cesar from Pleasant Hill to the Lafayette store,
after observing that the Pleasant Hill store was experiencing
problems with cleanliness, organization and missing
signage. When Carver spoke to Cesar about the problems
the store was experiencing and his transfer, he did not
suggest that spending time on non-exempt work had
interfered with his ability to properly manage the store.
After Cesar‟s transfer to Lafayette, Carver observed
problems with cleanliness, out-of-stocks and poor service,
and saw that quick-moving products were not being stored in
the right place for easy access. Carver helped prepare the

23
PIP, which was put in place after Cesar returned from leave
to begin work at Blackhawk/Danville. Carver further
testified that she expected managerial employees to deal
directly with out-of-stocks because minimizing them
required coordinating with order writers and determining
what items were likely to be hot sellers and why. Carver
explained that during a “checkout success” audit, imposed on
a store when it was not meeting service goals, managers
were told to stand in front of the store and oversee the
checkers, not to check themselves.
Steven Kozak was the store manager for the
Blackhawk/Danville store where Cesar was assigned after
being placed on the PIP. The store was large, with 100 to
150 employees. There were sufficient numbers of
nonsalaried people to perform all needed stocking and
checking. Kozak had no trouble meeting the operating ratio
without overusing salaried managers. He did not expect
Cesar to spend more than half his time on non-managerial
functions. When Kozak performed a store walk, he took
notes, wrote down “opportunities,” made a list of tasks,
talked to staff, made sure the departments were up and
running, coached and gave direction. He trained Cesar to do
the same. He gave Cesar other managerial responsibilities,
including preparing the weekly marketing plan. He told
Cesar to pick a different department every day and meet
with the employees working in that department to coach
them on service. He instructed Cesar to document that he
had engaged in three “huddles” daily. He saw Cesar

24
stepping in to check more often than he should have, and
told him “he should not be the first person in the check
stand.” Kozak did not observe Cesar stocking shelves for
long periods.
Kimberly Johnson took over from Kozak as store
manager for Blackhawk/Danville. She supervised Cesar in
2009. She twice admonished Cesar to do less checking.
Once, she had been out for part of the day and returned to
find Cesar checking when the lines were not long. She told
him to move on to other tasks. Johnson performed store
walks with Cesar in the afternoons. During those walks,
they would evaluate store conditions, make adjustments,
talk to employees about service, coach and role play,
delegate tasks to prepare for the evening business, and tidy
up displays. Cesar would perform a store walk on his own in
the morning for approximately two hours. She observed
Cesar interacting with employees throughout his workday.23
The store had multiple hourly stockers, and Cesar was
assigned to oversee them and keep them on task. Out-of-
stocks were scanned three times a day by managerial
employees. Cesar typically did the afternoon scan. After the
scan, a report was generated that Johnson and Cesar

23 Johnson testified that when she was on the floor she was
constantly being interrupted by employees with questions, and
that she spent her time on the floor “looking at store conditions,”
“checking to make sure people have followed through on tasks . . .
assigned them,” and “watching . . . employees interact with
customers.”

25
reviewed and used to delegate tasks to the various
departments. Johnson discouraged Cesar from writing
orders himself, and told him to use the report as a training
opportunity and to go over out-of-stock problems with the
order writers. Johnson estimated Cesar spent 20 to 25
percent of his time at the front-end of the store and 60 to 70
percent on the floor, and that 80 percent of this front-end
and floor time was spent on managerial tasks. Cesar worked
in the back room 10 percent of his time, and half of that was
managerial. He was in the office 10 to 15 percent of his
time, and all of that was managerial.
Adrienne Simpson worked with Cesar at the
Blackhawk/Danville store in 2009. In her capacity as a
bookkeeper, she was frequently in and out of the manager‟s
office. She saw Cesar in the office a couple of hours each
day. She observed him directing employees to perform
various tasks and disciplining employees. She saw him in
the check stands daily, but only for a few minutes at a time.
She never saw him stocking shelves.
Susan Obenour was the deli manager at the Alamo
store and worked with Cesar in 2009. From her work area,
she could see the manager‟s office. She also went in and out
of the office multiple times a day. She estimated Cesar was
in the manager‟s office from 30 to 55 percent of his time.
When Cesar did his morning store walk, Obenour observed
him writing notes about problems that she and other
department managers might be having.

26
 3. Justin Hayes
a. Plaintiffs’ Evidence
Hayes completed respondent‟s RLD program in 2003.
He was working as a First AM at the Citrus Heights store at
the time of trial. He had worked as a First AM at the Arden
Way store from 2004 to 2007, at the West Sacramento store
for a few months in 2007, and at the Elk Grove/Laguna store
from 2007 to 2009.24 In addition, he had been acting store
manager for part of his tenure at the West Sacramento and
Elk Grove/Laguna stores.
Hayes‟s hours were generally 7:30 am. to 5:30 p.m. or
10:00 a.m. to 8:00 p.m. He estimated that 90 percent of his
time as First AM was spent on “physical things,” including
checking, stocking shelves, dealing with deliveries and
manning the customer service counter.25 Even during the
periods he was acting store manager, he believed he spent 80
to 90 percent of his time on non-managerial work. He did

24 Hayes became a Second AM in 2001 and a First AM in
2004. Because of its statute of limitations ruling, the trial court
considered only the period from October 2004 onward, after
Hayes had become a First AM. Like Batze, Hayes claimed to
have replaced striking hourly workers during the 2003 to 2004
strike, but the court found that Hayes‟s claims for that period
were foreclosed by the statute of limitations.
25 Hayes included in the calculation time spent standing at
the front-end overseeing the checkers, a task he performed from
3:00 p.m. to 7:00 p.m. every day and 10:00 a.m. to 7:00 p.m. on
weekends during a period when two of his stores were being
audited for their “checkout success.”

27
non-managerial tasks because there was no one else to do
them. A few months prior to trial, the district manager
threatened him with termination if his store did not meet its
operating ratio. The district manager told him that if Hayes
had to send hourly people home and take over checking, that
was what he should do.
On cross-examination, Hayes acknowledged
performing managerial tasks. He was responsible for
minimizing out-of-stocks. He regularly reviewed emails,
service reports, the store schedule, payroll documents, out-
of-stock reports, budget reports and sales reports. When he
performed a store walk, he stopped to speak to department
managers and looked for safety issues. His responsibilities
for the front-end included evaluating the clerks. He
performed financial forecasting. He was acting manager at
his current store when the store manager was out, during
which time he was responsible for supervising all the store‟s
employees. At his deposition, Hayes testified he was in the
office up to two hours daily.
Hayes injured his shoulder in 2003. After examining
Hayes, the medical examiners reported that he was “working
more in management so has been able to work full duty” and
that he had “progressed to an[] upper position not requiring
the same duties as [a] retail clerk.”
Kristin Caro and Susan Venrick-Mardon, both hourly
employees, worked with Hayes at the Arden Way store when
he was an AM. They testified that Hayes did every job that
needed to be done, including checking, stocking shelves,

28
building and filling displays and filling out-of-stocks. Caro
testified Hayes was rarely in the office, and that he was
performing some type of non-managerial physical labor 80
percent of the time.
Sajid Khan, a checker, worked with Hayes at the West
Sacramento store and the Elk Grove/Laguna store. At West
Sacramento, he saw Hayes spending significant time
returning misplaced items to shelves, stocking, checking and
helping with shipments from vendors. At Elk Grove/Laguna,
Hayes spent most of his time setting up promotional or
holiday displays. Hayes also checked and stocked. He was
rarely in the office at either store.
Patricia Hadley, Dale Martin, Kashmira Law and
Sherry Venezio worked with Hayes at the Elk Grove/Laguna
store.26 They all testified that Hayes spent most of his time
-- 80 to 90 percent -- on non-exempt tasks, including
checking, throwing freight, filling out-of-stocks, building
displays and organizing the back room.
Thomas LePage, the manager of the Elk Grove/Laguna
store testified on Hayes‟s behalf.27 He said Hayes occupied
his workdays checking, stocking shelves and building
displays. Hayes was in the office five to ten percent of his
time and a little longer on the days he put together the

26 At the time of his testimony, Martin was pursuing a claim
against respondent.
27 At the time of his testimony, LePage was pursuing a claim
against respondent.

29
schedule. LePage testified he was told to use AMs in
positions like checking and stocking because there were not
enough hours of administrative work to fill their time.
LePage acknowledged that Hayes had to fulfill more
managerial tasks when he took over as acting store manager
when LePage was out.

b. Defense Evidence
Camelia Chira worked with Hayes at the Arden Way
store. She was the Second AM. She saw Hayes preparing
the schedule, working on projections, and doing other
paperwork. Hayes trained Chira to do the paperwork
required of an AM. She did not recall ever seeing him
stocking shelves. He performed store walks, during which
he talked to employees and customers, fixed things and
made sure everything was running smoothly. She
occasionally saw him check. He spent the bulk of his time,
up to 70 percent, in the office.
Joseph Chappelle, a store manager, supervised Hayes
at the Arden Way store. He testified that Hayes wrote the
schedule for the night crew, the front-end and the courtesy
clerks -- more than 70 employees. Writing the schedule
required knowledge of sales projections and hours allotted by
the operating ratio. It also required knowledge of which
checkers were better than others, so they would be scheduled
during prime periods, and input from the employees as to
when they wanted time off. Hayes spent eight to ten hours
per week on the schedule. Chappelle testified that Hayes

30
spent 75 percent of his time in the office, writing the
schedule, pulling reports and e-mails, and participating in
conference calls and meetings. Hayes checked only 5 percent
of his day, and was even less involved with stocking shelves
or building displays. Those tasks were taken care of by
hourly employees.
Lisa Lewis became the store manager of the West
Sacramento store at the end of 2007, relieving Hayes who
had been acting manager. When she arrived, she asked him
to stay on for two weeks and run the store as if she were not
there. Hayes prepared sales plans, wrote the schedule,
talked to employees, and walked around the front-end to
make observations. He replenished eggs or milk a few times
during that period, but that task took only five to ten
minutes at a time. Hayes spent 80 percent of his time in the
office, and lesser amounts of time managing the front-end or
performing a store walk. There were more than 60
employees, and preparing the schedule could take up to two
hours. After Lewis became manager of the West Sacramento
store, she spent most of her time in the office. She spent
time checking, but rarely built displays or stocked shelves.
Managing the front-end required her to observe the checkers
to see if there were any inefficiencies in their manner of
working that could be corrected. When she performed a
store walk, she put items back where they belonged, but also
talked to the department managers, and made notes of tasks
to hand off to employees.

31
 Lewis had been First AM at the Elk Grove/Laguna
store, where Hayes went after West Sacramento. Her duties
there were very similar to her duties as store manager
because the Elk Grove/Laguna store manager, LePage, was
frequently absent and left her in control of the store. She
estimated she spent 70 percent of her time managing. She
never had to check or stock for the store to meet its
operating ratio.
Nicholas Patmore, a produce manager, worked with
Hayes at the Elk Grove/Laguna store. Hayes was usually in
the office when Patmore needed to find him. When an extra
checker was needed, someone from the produce department
would step in, not Hayes. Patmore saw Hayes walking the
store, but not stocking shelves.
John Cain was a district manager and a 35-year
employee of respondent. Hayes had been an assistant
manager in his district for ten years. Because Hayes‟s
Citrus Heights store was near Cain‟s office, Cain visited it
frequently. He normally found Hayes in the store manager‟s
office. Hayes took over the manager‟s duties on the
manager‟s two days off per week and during the manager‟s
vacations.
Cain also discussed the typical responsibilities of the
First AMs in his district. They are responsible for store
safety and participate in safety calls every week. They are
responsible for ensuring that the store‟s departments do not
go over budget on supplies. They keep track of sales
forecasts and checker productivity. They are responsible for

32
developing ways to minimize shrink. They are expected to
deal with product recalls. They are responsible for
front-end service, including the checkers‟ performance and
the appearance of the areas in front of the store. They are
expected to observe employees on the sales floor and to train,
coach and “role play” with them. Cain testified that First
AMs engaged in those and other managerial tasks more than
50 percent of the time.
Lance Feliciano, a receiving clerk, worked with Hayes
at the Citrus Heights store. Hayes frequently called
Feliciano away from his regular responsibilities to work as a
checker. Feliciano rarely saw Hayes checking and never saw
him stocking shelves. Feliciano estimated Hayes spent 70 to
80 percent of his time in the manager‟s office.
Melissa Mastalski, a deli manager, worked with Hayes
at the Citrus Heights store. She never saw Hayes stocking
shelves. She occasionally saw him checking, but only for a
few minutes a day. Mastalski would go to Hayes for help
with employee disciplinary problems, because Hayes “t[ook]
care of the discipline of employees” for the store. She
described him as a “by-the-book” manager who spent most of
his time in the office. Mastalski further stated that the store
manager preferred to work on the floor and let Hayes handle
the office work and the more administrative parts of
managing the store.

33
 B. Trial Court’s Statement of Decision
1. Preliminary Findings
After hearing the evidence, the trial court prepared a
101-page modified statement of decision (MSOD) that
summarized and analyzed the evidence in great detail.28
The court recognized that its primary task was to determine
“how each plaintiff spent his time,” particularly whether
“they customarily and regularly exercised discretion” and
“devote[d] more than 50% of their time to exempt
activities.”29 The secondary issue was “if they did not, was
their failure . . . due to their own substandard work such
that they failed to meet [respondent‟s] realistic expectations

28 The court prepared a tentative decision, which was entirely
in favor of respondent. A few days after appellants submitted
objections to the tentative decision, this court issued its opinion
in Heyen v. Safeway Inc. (2013) 216 Cal.App.4th 795 (Heyen).
Following further briefing and argument, the court issued the
MSOD.
29 The court found that appellants indisputably met certain of
the criteria of the exemption: “They managed a work unit with a
permanent status and function. Batze handled the night crew.
Cesar and Hayes supervised at least the front end of their stores
and usually their entire stores. . . . Second, [appellants] directed
the work of at least two other employees, and usually more than
that. Third, there is evidence that each [appellant] had the
authority to make suggestions and recommendations as to the
employees they supervised. As the evidence [showed], all three
could discipline and admonish . . . . Finally, their monthly salary
met the minimum amount.” (See Wage Order No. 7-2001 [Cal.
Code Regs., tit. 8, § 11070, subd. (1)(A)], discussed further, infra.)

34
with respect to [AMs]?” The court recognized that
respondent bore the burden of “convinc[ing] [the] court that
it realistically expected people like [appellants] to manage,
and that they in fact did so more than half the time.” The
court also recognized that exemptions to the general rule
requiring employees to be paid overtime “are narrowly
construed against the employer and the application is
limited to employees who are plainly and unmistakably
within their terms.” On the evidence before it, the court
found in favor of respondent on both issues.
Preliminarily, the court rejected the contention that
because respondent bore the burden of proof, “it must
produce evidence of [the] tasks [appellants] performed
during every workweek for which liability is in question.”
Instead, the court ruled that respondent could properly rely
on logical inferences or evidence from which extrapolation
was possible.30 The court acknowledged it should not apply
data directly pertinent to one appellant to another, but found
it “proper to consider a store‟s time records for one
[appellant‟s] so-called typical day in determining [the] time

30 In making this ruling, the court cited a July 6, 1993
Division of Labor Standards Enforcement (DLSE) Opinion Letter
stating: “[T]he Division take the position that if an employee
fulfills all of the other requirements of the managerial or
executive exemption, the presumption is that the activity the
employee is „engaged in‟ is probably exempt, unless the facts
prove to the contrary.” (Underscoring omitted.)

35
the same person spent on other days in the same store, or
even in stores of similar size and characteristics.”
The court then considered how to categorize three of
the predominant work activities engaged in by appellants:
store walks, managing out-of-stocks, and working at the
front-end. The court recognized that “[t]he regulations do
not recognize hybrid activities,” and that “each discrete task
[must] be separately classified as exempt or non[-]exempt.”
The court found that “store walks, especially long ones,
constitute exempt tasks.” They were, the court observed,
“the chief method a manager uses to determine what is going
on in the store and where (and with whom) he needs to
devote attention.” The walks “offer an opportunity to
interact with employees, survey the merchandise and spot
needs, especially with respect to the all-important out-of-
stocks.” The court concluded that “[a] momentary pause” to
relocate or rearrange products did not transform the activity
from exempt to non-exempt: “The purpose of the walk
remains managerial . . . .”
With respect to managing out-of-stocks, the court broke
down the activity into three parts -- “counting, ordering and
replenishing.” The court found that “replenishing” --
essentially stocking shelves -- was non-exempt. It found the
other two aspects of managing out-of-stocks to be
managerial. Taking part in scanning the tags on the shelves
allowed the AM to personally determine where the problems
were, what items were fast-moving and the time of day they
were likely to run out. Thus, “the AM can assess the

36
situation and determine if the [out-of-stock] comes from the
vendor, the failure of the night clerk to order, a problem at
the warehouse, or a problem that can be controlled at the
store level.” Taking part in ordering allowed the AM to give
order writers input and training. Moreover, fixing the
problem might require the AM to communicate directly with
the vendor to determine what happened. If an employee
were “told to scan [out-of-stocks] and d[id] simply that,” the
activity would be non-exempt, but because the evidence
indicated the AMs performed the scanning as part of their
managerial responsibilities, the court found the activity
exempt.
Finally, the court found that the time appellants spent
at the front-end was exempt time. The purpose of the task
was to “regulat[e] the work flow and/or [watch] and
evaluat[e] the performance of their employees . . . .” Because
“[t]he manager is surveying the employees and trying to
ensure that they deliver excellent service, that the checkout
lines run smoothly, and that no confounding incidents
occur[,] [t]he activity calls for discretion and independent
judgment and qualifies as exempt.”

2. Exercise of Discretion
With respect to the exercise of discretion, the court
noted that respondent limited an AM‟s discretion in
significant ways: “The inventory they carry, the
merchandise they display, the manner in which they display
it, how much they display -- [respondent] dictates all of those

37
points. . . . Just about everything is measured and audited
either by a corporate auditor, a division auditor, a field
merchandiser, or [a district manager].” Nevertheless, the
court concluded that “[a]ll the micromanaging [respondent]
engaged in did not eliminate the need for a person with
common sense and leadership ability to exercise the
discretion needed to make the store operate according to
[respondent‟s] practices and procedures, schedules and
schematics.” The evidence pertaining to each appellant
“show[ed] they got involved with employees . . . , coaching
and disciplining and training them.” The AMs were
expected to “schedule their stores, train the front-end
employees, train the courtesy clerks, and hold a minimum of
two huddles a day,” in short, “create order out of chaos.”
While they may have been “tightly bound,” the court
concluded “managers do not lose their exempt status when
their job is to manage the little things. If left unchecked,
little problems can become big problems.”
Turning to the related question whether each appellant
spent more than 50 percent of his time in managerial
activities requiring the exercise of discretion, the court
reviewed all the testimony and made credibility findings
before concluding that respondent had largely met its
burden of proof on this issue.

3. Batze
With respect to Batze, the court pointed out that Batze
himself had acknowledged “he wrote the schedule,” “was

38
responsible for managing the grocery department, which
constituted the bulk of the store,” “was responsible for
keeping the back room organized,” “gave personal
evaluations to employees,” and “wrote appraisals . . . .”
Batze‟s testimony with respect to taking labels off the
shelves to create the impression the number of out-of-stocks
was lower than it actually was constituted an exercise of
managerial discretion and “support[ed] an inference that
this activity [was] exempt.” The court observed that even
witnesses called to support Batze‟s claim attested to
observing him engaged in managerial tasks, such as
Saubert‟s testimony that Batze talked to the receiver and
dairy manager about employee performance and orders.
In support of its finding that Batze spent the majority
of his time on exempt work, the court found credible
Macaluso‟s testimony that Batze spent 60 percent of his time
performing managerial duties. The court found her
testimony “straightforward” and “honest.” In addition, her
testimony was supported by memoranda she wrote and
compliments she directed to Batze for his management work.
The court found particularly significant Macaluso‟s
testimony that Batze coordinated and negotiated with 20 to
25 vendors per week to determine where they would put
their displays: “Ms. Macaluso testified, and this court
agrees, that the relationship between an AM like Gary Batze
and a vendor was important. If they did not get along, the
store would suffer lost sales and lost loyalty.” The court also
found significant the evidence that Batze was put in charge

39
of eliminating shrink, and that the Clovis store ended up
with “the best shrink numbers in the district.” With respect
to Batze‟s witnesses, the court concluded that their
estimates that he was working on non-exempt tasks 80 to 90
percent of the time were “exaggerated,” and likely “the
product of faulty memory,” causing the court to discount
their testimony.
The court also relied on the observational study that
found Batze performed “a host of managerial functions”
throughout the day, including “[d]irecting a clerk to make
tags and signs[,] [¶] telling a stocker how to arrange
merchandise[,] [¶] directing a stocker to re[-]merchandise a
display[,] [¶] . . . [¶] speaking to the receiver about
performance[,] [¶] talking to a receiver about an employee‟s
time and attendance[,] [¶]. . . [¶] talking to a stocker about a
soda shipment, talking on the phone with a frozen food
manager about placing an order, talking with a store
manager about an employee who was sick, and talking to a
receiver and a manager about the placement of signs.”
While the study found that Batze spent more than 40
percent of his time working on displays and stocking, the
court made clear that it did not agree that all time spent
dealing with displays was non-exempt. Although
“„corporate‟” controlled the designs, layouts and items to
include on displays, Batze had discretion about what to
display in some areas, and he could create themes and add
tie-ins. “Product placement can be important to marketing
effectiveness. Such an activity does not lose its exempt

40
status because of the company‟s desire for standardization
and uniformity. . . . [¶] . . . Viewed from the vantage point of
expensively-educated professionals, Mr. Batze‟s tasks may
appear to be trivial, but they were not. These kinds of
activities are important to a store like the Vons in Clovis.
Someone needs to coordinate and oversee activities.
Someone must make certain that displays are built, that the
right merchandise gets on them, and that the merchandise is
ordered in the right quantity and at the right time. That,
coupled with the duty to look out for (supervise) fellow
employees, constitutes the essence of management. The
activities may not require great sophistication, but they
require knowledge and the exercise of common sense.”
The court found further support for its conclusions
concerning Batze in the characteristics of the Clovis store:
“[A]pproximately 115-125 people were employed at that
location[,] . . . [its] average weekly sales reached $600,000[,]
[it] occupie[d] 55,000 square feet, and the sales floor [took]
up 40,000 square feet.” A store of that size “cannot run
itself, nor can one manager handle it. There are simply too
many people and too many moving parts to the operation. [¶]
. . . [W]hen employees are first hired to work in a
supermarket, they generally have no training and probably
no background in the food industry. They start in entry
positions like courtesy clerks and advance to positions like
front-end managers, grocery managers, and deli managers.
. . . Someone has to give them instructions and make sure
they follow them. The „corporate people‟ are not there often

41
enough to do this task. To fill the missing link, [respondent]
uses managers and [AMs]. For this reason, among others,
. . . it is hard to accept that the store‟s leadership could
devote almost all their time to non-exempt physical work.
Even acknowledging the lesser customer interaction during
night work, logic dictates that someone must direct and
coordinate after-hours activities if the store is to remain
organized and properly stocked. The size of stores like
Clovis, standing alone, constitutes strong evidence that
. . . Batze had to have performed exempt tasks most of the
time. Otherwise, the night operation would have fallen
apart.”
The court concluded that the “reasonable, credible, and
solid value evidence [respondent] presented with respect to
[Batze‟s] time and tasks” satisfied its burden with respect to
Batze: “[Respondent] realistically expected him to manage,
and he did so. . . . more than fifty percent of the time.”

4. Cesar
The court then turned to Cesar. Preliminarily, the
court pointed to Cesar‟s own testimony that he spent a
minimum of one to two hours in the office, that he did not
“typically sit or stand in one place during the day,” that he
did not “devote continuous time to one task, but d[id] many
things in small increments,” and that he was “constantly
looking for opportunities to observe and communicate with
employees.” The court also relied on Cesar‟s deposition
testimony describing his activities on a typical day -- in

42
particular, the testimony that he spent no more than an
hour checking that day and no more than one to two hours
stocking shelves and building displays -- and his testimony
in court that his tasks did not change much from store to
store. The court found it “difficult to accept the conclusions
of [the co-workers who testified on behalf of Cesar] because
1) several g[a]ve time estimates that depart[ed] so far from
logic that the court doubts their credibility; 2) some have
been directly discredited; and 3) . . . their testimony
depend[ed] on recollection, and where [respondent does]
have records, those writings support [respondent‟s]
position.”31 The court also discounted the testimony of
Cesar‟s witnesses because (1) many had “reasons . . . to be
biased,” either because they or their family members were
pursuing suits of their own or had been the subject of
criticism or discipline by respondent; (2) their work hours
did not significantly overlap Cesar‟s; (3) their assessments of
what constituted managerial work differed from the court‟s;
or (4) they simply did not appear credible on the stand. In
short, the court concluded, documentary evidence “coupled
with the testimony of [respondent‟s] witnesses, constitute[d]
evidence that is more reasonable, credible, and of solid value
than the memories of [Cesar‟s] supporters.”

31 The documentary evidence to which the court referred were
the records showing the minimal amount of time Cesar spent
checking, the evaluations over the years of his managerial skills,
and documents introduced by respondent showing Cesar gave
written instructions to and disciplined subordinate employees.

43
 The court specified the testimony it found particularly
credible: (1) Kozak‟s testimony that the Blackhawk/Danville
store had sufficient stockers and checkers that there was no
need for AMs to perform those tasks, and that he had no
difficulty meeting his store‟s operating ratio without relying
on salaried AMs to perform non-exempt tasks; (2) Johnson‟s
testimony that when she heard Cesar and another AM had
spent a large amount of time in the check stand on her
partial day off, she questioned why; (3) Gandolfo‟s testimony
that as a First and Second AM, she spent the majority of her
time engaged in managerial tasks, including observing,
mentoring and disciplining employees, handling emails and
daily time and attendance reports, scheduling, attending to
recalls, regularly talking to department managers, and
performing store walks; (4) Gandolfo‟s testimony that Cesar
performed store walks similar to hers, spent more than half
his time in the office, and did not spend excessive time
stocking shelves or checking; (5) Carver‟s testimony that
when she put Cesar on a PIP because his store was not
meeting expectations, he did not suggest it was because he
was required to perform non-exempt labor; (6) Obenour‟s
testimony that she generally saw Cesar in the office doing
paperwork at the Alamo store or walking the store to
identify problems; (7) Navarrette‟s testimony that Cesar
spent most of his time in the office at the Dublin store; (8)
Simpson‟s testimony that she saw Cesar in the office two
hours a day at the Blackhawk/Danville store and never saw
him stocking shelves; and (8) Johnson‟s testimony

44
concerning the percentage of time Cesar spent at the front-
end, in the back room, on the sales floor, in his office, and on
managerial tasks. Based on the evidence it found most
credible, the court concluded that Cesar spent 35 percent of
his time on store walks, 25 to 30 percent of his time in the
office, and five to ten percent of his time on the floor engaged
in other managerial tasks.32

5. Hayes
With respect to Hayes, the court recounted Lewis‟s
testimony that when she “asked Hayes to run the store as
though she were not there,” he “made sales plans, drew up
schedules, spent, she estimate[d,] 80% of his time in the
office [citation], talked with employees, walked the front
end[,] made observations, moved displays, and made a few
changes to them.” Moreover, “[s]he did not observe Hayes
stocking except for five or ten minutes when he replenished
eggs or milk.” The court also recounted Lewis‟s “densely
detailed narrative of management activities, based on her
experience in that position”: “She described the [operating

32 Based on the check stand data, the court found nine weeks
stood out from the rest because Cesar spent an unusually high
amount of time checking -- 15 hours a week or more. The court
found that “it [was] probable that if [Cesar] had to devote
exceptional time to this non-exempt task at the cash register, the
situation at his store required him to perform other non-exempt
tasks beyond what he normally performed,” and therefore was
primarily engaged in non-exempt activities. For those weeks, the
court awarded Cesar $11,090.25 in overtime pay.

45
ratio] system, participating in huddles, managing out[-]of[-
]stocks, attending safety meetings, profit hour meetings,
using front end activities as an opportunity to coach,[] and
performing store walks. . . . She contradicted [appellants]
(and especially Hayes) every step of the way, claiming that
some 80-90% of her time is spent in the office managing
[citation] and maybe 5-10% of her time at the front end,
where she mostly manages. She said it was „absolutely not‟
true that a manager had to check or stock to make
[operating ratio]. She spends „maybe thirty minutes to four
hours a week‟ checking and next to no time building and
stocking displays as she has clerks who do that.” (Fn.
omitted.) The court found Lewis “credible throughout.”
The court also highlighted Cain‟s, Mastalski‟s,
Patmore‟s, Feliciano‟s, and Chappelle‟s testimony that Hayes
spent most of his time in the office, Mastalski‟s testimony
that the Citrus Heights store manager preferred to let Hayes
handle paperwork and administrative matters, and
Feliciano‟s testimony that he never saw Hayes stocking.
With respect to Chappelle‟s testimony that Hayes was
responsible for scheduling the store‟s employees, the court
observed: “He scheduled the night crew and the front end
including courtesy clerks -- all told, over seventy employees.
. . . This was not a simple task. One needs to know the sales
projections, learn how many hours you have to work with,
designate where people will work and at what times, what
jobs need to be done, and who will do them. One needs to
identify the best checkers and then schedule them into the

46
busiest periods. As a result, it is not surprising that this
witness [said] that Hayes spent 8-10 hours a week
scheduling and writing those schedules in the manager‟s
office.”
The court discounted much of LePage‟s testimony.
Because he was pursuing a claim against respondent, he had
reason to be biased. “[M]ore important, given his time away
from the store, it is hard to accept that his conclusions about
Hayes‟ time on tasks are accurate.”
With respect to Hayes himself, the court pointed out
numerous discrepancies between his testimony at trial and
his deposition testimony, including whether he regularly
reviewed and passed on information in departmental budget
reports, whether he conversed with employees and
department heads while performing store walks, and the
amount of time he spent in the office at the West
Sacramento store. The court also found that Hayes had been
less than honest concerning whether he reported to his
workers‟ compensation doctor that his duties were
managerial and not the same as a clerk‟s. The court
discussed the data provided by respondent summarizing the
amount of time Hayes engaged in checking; it showed that
he generally spent 15 hours or less per week in that activity,
thus refuting his claim that he spent “the better part of his

47
days checking.”33 It appeared to the court that Hayes‟s
memory was faulty, and that he erroneously believed he was
toiling more hours doing non-exempt work than he actually
was.
Ultimately, the court concluded that Hayes spent “at
least 55% of his time in the office performing exempt tasks,”
that “[a]t least 10-15% of his time was devoted to store
walks, also exempt,” that “he spent no more than 37% of his
time in the check stand,” and that “[t]he other non-exempt
activities he performed did not consume more than 10% of
his time.” In short, the court concluded, “[respondent] met
its burden with respect to Justin Hayes.”

6. Realistic Expectations
The court further found that respondent had a realistic
expectation that its store managers and AMs would be
involved primarily in exempt work. The court focused on
whether “there was enough exempt, i.e., managerial, work
for [appellants] to fill their day.” If not, or “if there was
plenty of managerial work but [respondent] constantly
diverted [appellants] to non-exempt physical or clerical
tasks, that constitute[d] evidence that [respondent] did not
realistically expect [appellants] to manage.” The fact that
respondent put most of its AMs, including Cesar and Hayes,

33 The court found two weeks in which the records showed
Hayes spent 19 or 20 hours checking. The court awarded Hayes
$595.19 for those periods.

48
through the costly RLD program supported the inference
that it reasonably expected them to spend the majority of
their time managing: “[T]he program lasts six months
during which future managers receive on the job training.
They learn how to schedule, how to do payroll, in short, how
to manage a store. They are tested on what they learn. The
goal is for a participant to emerge equipped to run his or her
own store. The training materials [citation] are extensive.[]”
(Fn. omitted.) “[Respondent] spends over $50,000 per
employee on this activity. It is difficult to see how
[respondent] would invest this level of resources in such an
undertaking, yet expect its graduates to spend more than
50% of their time performing non-exempt tasks like checking
and throwing freight. The RLD program constitutes
powerful evidence that [respondent] realistically expected its
AMs to perform the exempt functions a manager would.”
The court found further support for its determination
that respondent‟s realistic expectation was that appellants
would engage primarily in managerial work in the evidence
concerning AMs‟ responsibilities. In addition to being
responsible for the entire store on the store manager‟s day
off, the First AM had nearly entire responsibility for the
front-end, including customer service, checkout success, the
outside areas, the lobby and the parking lot. The evidence
further established that AMs were expected to schedule the
employees‟ work hours and to discipline them. The court
also relied on evidence that when AMs performed non-
exempt tasks, the store suffered: “AMs are responsible for

49
service levels and conditions, and if they are tethered to a
specific task, they are unable to move about and effectively
manage the store.” Carver testified that the Pleasant Hill
and Lafayette stores suffered due to Cesar‟s failure to
adequately manage. The evidence concerning the
characteristics of the stores -- their size, the number of
personnel each employed, and the number of daily sales
transactions -- further persuaded the court that respondent
realistically expected its managers to perform exempt tasks:
“A store like this cannot run itself, nor can one manager
handle it. There are simply too many people and too many
moving parts to the operation.”
The court found further support in the evaluations
appellants received over the course of their employment.
Batze‟s evaluations “focus[ed] on his management style, his
ability to motivate others, mak[e] solid sound decisions,
proactively involv[e] employees in decision making, not being
afraid „to go outside the envelope to make his department
the best,‟ even calling his team on his days off.” The court
also discussed the evaluations for Cesar: (1) complimenting
his hiring, training and mentoring abilities; (2) stating that
he needed to learn to analyze financial reports and get
involved in opportunities to save cost to “„add value to [the]
bottom line‟”; and (3) faulting him for failing to “make sure
to follow through on work he . . . delegated.” He was held
accountable when one of his stores failed its safety audit. He
was told his “„willingness to roll up [his] sleeves” got in the
way of his managerial functions. He was criticized for

50
jumping into the check stand too often. Everything he was
told to do to bring himself off the PIP was managerial in
nature: “The company wanted Cesar to, inter alia, maintain
store standards in merchandising, food safety and
sanitation, and cleanliness; to plan with the department
managers; to hold order writer meetings at least weekly; to
do service mock shops once a day, five role-plays daily, and
hold no fewer than three huddles a day; and to hold
employees accountable to meet goals. The company wanted
him to walk the store daily and create a store walk list of
merchandising, food safety and sanitation and cleanliness,
and to delegate to employees. He was to develop a system to
ensure that all department managers knew, each day,
information such as sales vs. projections.” From evidence on
“the macro level” (“[respondent‟s] policies and the syllabus of
the [RLD] program”) and “the micro level” (“disciplinary
write-ups, . . . PIP forms, and performance evaluations”) the
court concluded respondent realistically expected appellants
to manage.

7. Exempt Work During Strike
The court found that the work performed during the
strike did not transform Batze or Hayes into non-exempt
employees. The court found the strike constituted an
emergency, during which neither employee lost his exempt
status even if performing non-exempt work. In addition, the
court found that Hayes‟s claim for work during the strike
was barred by the statute of limitations, and that Batze‟s

51
claim to have worked long days at the Lake Isabella and
Bakersfield stores was not credible in the face of other
evidence -- including cash register data and Batze‟s own
calendar -- showing him working his usual hours at the
Clovis store.

8. Statute of Limitations
The court found that the statute of limitations
precluded appellants from raising claims arising more than
four years before the filing of their individual complaints and
that the filing of the Knoch action in 2002 did not toll the
running of the statute. Specifically, the court found “[t]he
discrepancies between what happened to each of these many
plaintiffs in each of their many stores are simply too great
for the Knoch action to have put [respondent] on notice that
it needed to preserve evidence with respect to every one of its
managers and assistant managers.” Moreover, respondent
could not “„be expected to maintain all employment records
relating to literally thousands of employees who have held
multiple positions in hundreds of locations dating back to
1998 on the theory that such employees may decide after
certification is denied to bring an individual suit.” (Italics
omitted.) The court found it “unrealistic to expect a business
to gather statements from co-workers about co-workers and
preserve them for so many years.” The court further found
that Cesar and Hayes had unreasonably delayed in bringing
their actions after class certification in Knoch was denied.
Finally, alluding to numerous instances during trial when

52
witnesses could not recall events, the court stated: “To force
[respondent] to resist claims based on evidence up to twelve
years old is not fair. Few, including [appellants], can
accurately remember what happened that long ago,
especially nonparty employees who were not focusing on the
situation at hand.”
Judgment was entered on the court‟s findings. This
appeal followed.

DISCUSSION
A. Substantial evidence supports the court’s
determination that appellants were primarily
engaged in exempt work.
1. Categorizing Work as Exempt or Non-exempt
California‟s Labor Code mandates overtime pay for
employees who work more than 40 hours in a given work
week. (Labor Code, § 510, subd. (a).) However, the
Legislature authorized the Industrial Welfare Commission
(IWC) to establish exemptions for various categories of
employees, including “executive . . . employees,” where the
employee is “primarily engaged in the duties that meet the
test of the exemption,” the employee “customarily and
regularly exercises discretion and independent judgment in
performing those duties,” and the employee “earns a monthly
salary equivalent to no less than two times the state

53
minimum wage for full-time employment.”34 (Labor Code,
§ 515, subd. (a).)
In keeping with this authority, the IWC promulgated
Wage Order No. 7-2001 (Wage Order), codified in the
California Code of Regulations, which governs employees of
the “mercantile industry” and sets forth criteria for
determining whether an employee may be classified as an
exempt executive:35 “(a) [His or her] duties and

34 As explained in Brinker Restaurant Corp. v. Superior Court
(2012) 53 Cal.4th 1004: “Nearly a century ago, the Legislature
responded to the problem of inadequate wages and poor working
conditions by establishing the IWC and delegating to it the
authority to investigate various industries and promulgate wage
orders fixing for each industry minimum wages, maximum hours
of work, and conditions of labor. [Citations.] Pursuant to its
„broad statutory authority‟ [citation], the IWC in 1916 began
issuing industry-and occupation-wide wage orders specifying
minimum requirements with respect to wages, hours, and
working conditions [citation]. . . . Consequently, wage and hour
claims are today governed by two complementary and
occasionally overlapping sources of authority: the provisions of
the Labor Code, enacted by the Legislature, and a series of 18
wage orders, adopted by the IWC.” (Brinker, supra, at p. 1026.)
Although the IWC was defunded in 2004, its wage orders remain
in effect. (Gonzalez v. Downtown LA Motors, LP (2013) 215
Cal.App.4th 36, 43; California Correctional Peace Officers’ Assn.
v. State of California (2010) 188 Cal.App.4th 646, 651.)
35 “„Mercantile [i]ndustry‟” is defined as any business
“operated for the purpose of purchasing, selling, or distributing
goods or commodities at wholesale or retail; or for the purpose of
renting goods or commodities.” (Cal. Code Regs., tit. 8, 11070,
(Fn. continued on next page.)

54
responsibilities involve the management of the enterprise in
which he/she is employed or of a customarily recognized
department or subdivision thereof; and [¶] (b) [he or she]
customarily and regularly directs the work of two or more
employees therein; and [¶] (c) [he or she] has the authority to
hire or fire other employees or [his or her] suggestions and
recommendations as to the hiring or firing and as to the
advancement and promotion or any other change of status of
other employees will be given particular weight; and [¶] (d)
[he or she] customarily and regularly exercises discretion
and independent judgment; and [¶] (e) [he or she] is
primarily engaged in duties which meet the test of the
exemption . . . ; (f) Such an employee must also earn a
monthly salary equivalent to no less than two (2) times the
state minimum wage for full-time employment.” (Cal. Code
Regs., tit. 8, § 11070, subd. (1)(A)(1).)
The Wage Order states that exempt and non-exempt
work “shall be construed in the same manner as such items
are construed in the following regulations under the Fair
Labor Standards Act effective as of the date of this order
[2001]: 29 C.F.R. Section 541.102, 541.104-111, and
541.115-116.” It also states that exempt work includes “all
work that is directly and closely related to exempt work and
work which is properly viewed as a means for carrying out

subd. 2(H).) There is no dispute that respondent is in the
mercantile industry.

55
exempt functions.” (Cal. Code Regs., tit. 8, § 11070, subd.
(1)(A)(1)(e).)
As this Court discussed in Heyen, supra, 216
Cal.App.4th 795, the 2001 version of section 541.102 of title
29 of the Code of Federal Regulations includes a list of
activities “easily recognized” as exempt, including
“„[i]nterviewing, selecting, and training of employees; setting
and adjusting their rates of pay and hours of work; directing
their work; maintaining their production or sales records for
use in supervision or control; appraising their productivity
and efficiency for the purpose of recommending promotions
or other changes in their status; handling their complaints
and grievances and disciplining them when necessary;
planning the work; determining the techniques to be used;
apportioning the work among the workers; determining the
type of materials, supplies, machinery or tools to be used or
merchandise to be bought, stocked and sold; controlling the
flow and distribution of materials or merchandise and
supplies; providing for the safety of the men and the
property.‟” (216 Cal.App.4th at p. 819, quoting 29 C.F.R.
§ 541.102(b) (2001).) Moreover, “exempt work includes not
only the tasks necessary for the actual management of a
department and the supervision of its employees, but also
tasks that are „closely associated with the performance of the
duties involved in such managerial and supervisory
functions or responsibilities.‟” (216 Cal.App.4th at p. 819,
quoting 29 C.F.R. § 541.108(a) (2001).)

56
 The pertinent federal regulations discussed in Heyen
contain examples of exempt and non-exempt activities
directly applicable here: “„In a large retail establishment
. . . , where the replenishing of stocks of merchandise on the
sales floor is customarily assigned to a nonexempt employee,
the performance of such work by the manager or buyer of the
department is nonexempt.‟” (Heyen, 216 Cal.App.4th at
p. 820, quoting 29 C.F.R. § 541.108(c) (2001).) On the other
hand, “„a department manager or buyer in a retail or service
establishment who goes about the sales floor observing the
work of sales personnel under his supervision to determine
the effectiveness of their sales techniques, checking on the
quality of customer service being given, or observing
customer preferences and reactions to the lines, styles,
types, colors, and quality of the merchandise offered, is
performing work which is directly and closely related to his
managerial and supervisory functions. His actual
participation, except for supervisory training or
demonstration purposes, in such activities as making sales
to customers, replenishing stocks of merchandise on the
sales floor, removing merchandise from fitting rooms and
returning to stock or shelves, however, is not.‟” (Heyen,
supra, at pp. 820-821, quoting 29 C.F.R. § 541.108(e) (2001).)
The Wage Order defines “„[p]rimarily‟” (Cal. Code
Regs., tit. 8, § 11070(1), subd. (A)(1)(e)) to mean “more than
one-half the employee‟s work time.” (Id., § 11070, subd.

57
(2)(K).)36 It also specifies the following method to determine
whether the employee is “primarily engaged in duties which
meet the test of the exemption”: “The work actually
performed by the employee during the course of the
workweek must, first and foremost, be examined and the
amount of time the employee spends on such work, together
with the employer‟s realistic expectations and the realistic
requirements of the job, shall be considered in determining
whether the employee satisfied this requirement.” (Cal.
Code Regs., tit. 8, § 11070, subd. (1)(A)(1)(e).)
In Heyen, supra, 216 Cal.App.4th 795, we resolved
whether the checking, bagging and stocking activities of a
grocery store manager could be considered exempt if the
manager was “„also always still managing the store
operations, including engaging in activities such as
observing store operations and employee activities, and
instructing employees in their assignments and any
corrective measures that needed to be taken.‟” (Id. at
p. 825.) We concluded the employer‟s proposed “„multi-
tasking‟ standard” was contrary to California law: “[T]he
federal regulations cited in Wage Order 7 expressly
recognize that managers sometimes engage in tasks that do
not involve the „actual management of the department [or]

36 This is not a day-by-day analysis. The issue is whether the
employees “spend more than 51% of their time on managerial
tasks in any given workweek.” (Dunbar v. Albertson’s Inc. (2006)
141 Cal.App.4th 1422, 1426.)

58
the supervision of the employees therein.‟ [Citation.] In
those circumstances, the regulations do not say, as Safeway
would have us hold, that those tasks should be considered
„exempt‟ so long as the manager continues to supervise while
performing them. Instead, the regulations look to the
supervisor‟s reason or purpose for undertaking the task. If a
task is performed because it is „helpful in supervising the
employees or contribute[s] to the smooth functioning of the
department for which [the supervisors] are responsible‟
[citation], the work is exempt; if not, it is nonexempt.” (216
Cal.App.4th at p. 826, quoting 29 C.F.R. § 541.108(a), (c)
(2001).) Put simply, “the regulations do not recognize
„hybrid‟ activities -- i.e., activities that have both „exempt‟
and „nonexempt‟ aspects. Rather, the regulations require
that each discrete task be separately classified as either
„exempt‟ or „nonexempt.‟ [Citations.]” (216 Cal.App.4th at
p. 822, italics omitted.)
We did not state, however, that the same task must
always be labeled exempt or non-exempt: “[I]dentical tasks
may be „exempt‟ or „nonexempt‟ based on the purpose they
serve within the organization or department. Understand-
ing the manager‟s purpose in engaging in such tasks, or a
task‟s role in the work of the organization, is critical to the
task‟s proper categorization. A task performed because it is
„helpful in supervising the employees or contribute[s] to the
smooth functioning of the department‟ is exempt, even
though the identical task performed for a different,

59
nonmanagerial reason would be nonexempt.‟ [Citation.]”
(216 Cal.App.4th at pp. 822-823.)
In Ramirez v. Yosemite Water, Inc. Co. (1999) 20
Cal.4th 785, our Supreme Court considered whether an
employee fell into the exemption for an outside salesperson
(Wage Order No. 7-80). In doing so, the Court clarified the
provision found in multiple Wage Orders, including Wage
Order No. 7-2001, requiring consideration of “the employer‟s
realistic expectations” and the “realistic requirements of the
job”: “Is the number of hours worked in sales-related
activities to be determined by the number of hours that the
employer, according to its job description or its estimate,
claims the employee should be working in sales, or should it
be determined by the actual average hours the employee
spent on sales activity? The logic inherent in the IWC‟s
quantitative definition of outside salesperson dictates that
neither alternative would be wholly satisfactory. On the one
hand, if hours worked on sales were determined through an
employer‟s job description, then the employer could make an
employee exempt from overtime laws solely by fashioning an
idealized job description that had little basis in reality. On
the other hand, an employee who is supposed to be engaged
in sales activities during most of his working hours and falls
below the 50 percent mark due to his own substandard
performance should not thereby be able to evade a valid
exemption.” (20 Cal.4th at p. 802, italics omitted.) The trial
court “must steer clear of these two pitfalls by inquiring into
the realistic requirements of the job,” considering “first and

60
foremost, how the employee actually spends his or her time.”
(Ibid., italics omitted.) If the employee spends excessive
time engaged in non-exempt activities, the trial court must
then consider “whether the employee‟s practice diverges
from the employer‟s realistic expectations, whether there
was any concrete expression of employer displeasure over an
employee‟s substandard performance, and whether these
expressions were themselves realistic given the actual
overall requirements of the job.” (Ibid.)

2. The Evidence Below
Applying these principles, we conclude the trial court
properly addressed the issues before it. It found that
appellants clearly met three of the five criteria of Wage
Order No. 7-2001: they supervised the entire stores or a sub-
department; they customarily and regularly directed the
work of two or more employees, they had authority to hire or
fire other employees or to make suggestions and
recommendations as to hiring, firing, promotions or other
changes in employees‟ status, and they earned the requisite
salary.37 With respect to whether they customarily and

37 We reject appellants‟ claim that there was no evidence their
duties and responsibilities involved the management of the
enterprise in which they were employed or a recognized
department or subdivision of the enterprise (Cal. Code Regs., tit.
8, § 11070, subd. (1)(A)(1)(a), or that they customarily and
regularly directed the work of two or more other employees (id.,
§ 11070, subd. (1)(A)(1)(b)). The evidence established that Batze
(Fn. continued on next page.)

61
regularly exercised discretion and independent judgment
and were primarily engaged in exempt duties, the court
waded through weeks of testimony from dozens of witnesses
and a massive quantity of documentary evidence in
concluding that respondent had met its burden of proving
they did. The evidence supporting the court‟s findings was
carefully documented in its MSOD and outlined above. With
respect to Batze, the testimony of his store manager,
Michelle Macaluso, and the observational study provided
substantial evidence that while working as a Second AM at
the Clovis store (the only assignment under consideration
due to the court‟s statute of limitations ruling) Batze spent
the majority of his time on managerial tasks.38

was in charge of the entire store and the 10-member night crew
during his shifts. As First AMs, Cesar and Hayes were
responsible for the front-end and its employees. In addition, both
had been responsible for entire stores during the store managers‟
days off, vacations and leave, and had been acting store
managers in some of their assignments.
38 Appellants claim the observational study was faulty
because it took place on a Monday, the day on which Macaluso
held the weekly department manager‟s meeting (which occupied
37 minutes and 40 seconds of his time) and because it included a
period of training on time and attendance corrections (18 minutes
and 20 seconds) which they contend should have been deemed
non-exempt. We believe the more germane statistic is the one
showing that Batze spent only approximately 40 percent of his
time building displays and stocking, activities which he claimed
occupied nearly all his work time. According to Macaluso,
Mondays were one of the three days of the week displays were
(Fn. continued on next page.)

62
 Cesar‟s situation was more complex, as he had multiple
assignments at multiple stores during the relevant claim
period. But the evidence presented covered some aspect of
each of his assignments. Janet Naverrette, who worked with
him at the Dublin store, testified Cesar was in his office 50
percent of the time dealing with managerial problems. She
also saw him perform store walks up to two hours long, a
task the court reasonably found exempt because of its
importance to proper management of the stores. Beverly
Gandolfo, who had been a stocker at the Livermore store
during Cesar‟s time there, did not recall his assisting her
with that function with any regularity and testified there
were sufficient hourly stockers to complete the task without
the assistance of the AMs. There were no defense witnesses
who worked alongside Cesar at Pleasanton, Pleasant Hill,
Lafayette or Orinda, but respondent provided records
showing that Cesar spent minimal time checking during that
period. Cesar himself testified that he spent significant
periods working at the front-end during his assignments to
those stores, including nearly 100 percent of his time at the
Pleasanton store. The court reasonably found that working
at the front-end, except while actually checking, was a
managerial assignment because it required the AM to

built. From the fact that building displays occupied less than
half of Batze‟s time on a typical Monday, the court could
reasonably conclude these tasks occupied significantly less time
than Batze and the witnesses who supported him perceived.

63
observe and direct the checkers to ensure they were properly
performing their jobs and providing superior customer
service. Moreover, Cesar was acting manager of the entire
store when he was at Pleasant Hill. Helen Carver testified
concerning Cesar‟s performance at Pleasant Hill and
Lafayette, and explained that she transferred Cesar from
Pleasant Hill to Lafayette and placed him on a PIP after
Orinda because he was not meeting respondent‟s managerial
expectations. Numerous witnesses testified concerning
Cesar‟s performance at the Blackhawk/Danville store,
including two managers: Steven Kozak and Kimberly
Johnson. Both testified that Cesar spent his time primarily
on managerial tasks. Finally, at his deposition, Cesar
himself attested to his “typical” day at Alamo, supporting the
determination that he spent only two to three hours on non-
exempt tasks.39 This was confirmed by Susan Obenour, who
estimated that Cesar worked in the office 30 to 55 percent of
his time at that store.
Hayes worked at multiple stores as well, and evidence
was presented that supported the court‟s findings as to each
of them. Joseph Chappelle, the store manager when Hayes
was at the Arden Way store, and Camelia Chira, a co-worker
there, both testified that Hayes spent the majority of his
time -- up to 70 percent -- in the office. Lisa Lewis relieved

39 Appellants contend Cesar‟s deposition testimony indicated
he spent additional time on non-exempt tasks, but cite only to the
lodged deposition transcript, not to the trial record.

64
Hayes as manager of the West Sacramento store and had
him walk her through his duties as manager for two weeks.
She testified he spent the majority of his time in the office on
managerial tasks. Lewis had come from the Elk
Grove/Laguna store to which Hayes was transferred and
described her duties, which were primarily managerial.
Several employees who observed Hayes at the Citrus
Heights store -- district manager John Cain and co-workers
Lance Feliciano and Melissa Mastalski -- testified he was
primarily involved in managerial tasks.40
Appellants do not dispute any of this evidence, but
contend it was insufficient because it did not cover in week-
by-week detail all periods in which they worked. Appellants
point out that in challenging class certification, respondent
argued that “„managers were not trained uniformly,‟”
“„[m]anagers [did] different jobs at different times,‟” “„[e]ven

40 Appellants contend the court improperly inferred from the
evidence that they engaged in specific non-exempt tasks for
limited periods of time that they were engaged in exempt tasks
the remainder of their time. We disagree. There were only a few
non-exempt activities that appellants claimed occupied a
significant portion of their workday: building/filling displays,
stocking/facing shelves, and checking. The evidence presented by
respondent refuting that appellant spent excessive time on these
tasks supported the conclusion that appellants spent more time
on the managerial portion of their jobs. Moreover, as the above
discussion establishes, the court did not rely exclusively on this
inference to establish the ratio between exempt and non-exempt
activities.

65
stores of similar size operate differently,‟” and there were
“„many differences among [its] stores which affect the time
spent on various job duties.‟” The trial court adopted
respondent‟s arguments, at least in part, in concluding that
“„significant differences in the size of [the] various stores,
both in dollar volume and physical configuration, to the
seasonal nature of business at certain stores, to the
differences in daily tasks allegedly flowing from variations in
the managerial skills and experience of any given team of
managers in a given store, both as to location and as to
time,‟” militated against class certification, as did the
testimony showing that a number of managers “„perform[ed]
different duties and/or allocated the time differently among
similar tasks depending on the store to which they were
assigned.‟” Appellants claim respondent is now taking a
contrary position, “arguing that a single day at a single store
could be used as a basis for inference and extrapolation, even
without evidence of any of the myriad factors it previously
claimed made such assumed facts impossible.”
Our review of the record finds no such contradictory
positions taken by respondent or adopted by the trial court.
The evidence presented established that each appellant had
varying duties. Batze was in charge, inter alia, of displays,
which required him not only to build and fill them, a non-
exempt task, but to deal with vendors and consider how
displays could be used to the best advantage of his store.
Neither Cesar nor Hayes spent a significant portion of his
time building displays. Nor did either spend as much time

66
in the back room as Batze, who had his office there in order
to deal more efficiently with vendors and fulfill his
responsibility of keeping the area organized. Both Cesar and
Hayes spent more time managing the front-end of the store
and ensuring checkers and courtesy clerks performed
efficiently, while providing superior service to the customers.
This required them to step in and out of the check stands, a
non-exempt task Batze rarely performed as the bulk of his
workday occurred before the store opened for customers.
Batze spent little time scheduling, as his crew was fairly
small, whereas Hayes spent a significant number of hours
per week on this task at one of his stores, scheduling more
than 70 employees. Both Hayes and Cesar had responsibi-
lity for their stores on the store manager‟s days off or when
the manager was on vacation or leave. Moreover, both had
been acting store managers at various times, something
Batze never experienced, and had significantly more
responsibility for discipline than Batze. In reaching its
conclusion, the court took all this evidence into account,
including evidence of the variations in tasks from party to
party and store to store.
Appellants claim there were substantial gaps in the
evidence that precluded a finding in respondent‟s favor for
every contested period of their employment. For example,
appellants contend there was no defense evidence covering
Batze for the period prior to 2004, when Macaluso became
the store manager and the observational study was
conducted. They further point to the lack of defense

67
witnesses who directly observed Cesar for the periods he was
assigned to Pleasanton, Pleasant Hill, Lafayette and Orinda,
or for Hayes for part of the period he was assigned to the
Arden Way store.41 As discussed, there was sufficient
defense evidence from which the court could make
reasonable inferences about how appellants spent their time
at every store. Although the significant period for
determining exempt status is the work week, and
“„employees‟ exempt or non-exempt status can vary on a
week by week basis‟” (Dunbar v. Albertson’s Inc., supra, 141
Cal.App.4th at p. 1426), this rule in no way suggests that the
trier of fact may not make reasonable inferences about a
party‟s activities during the relevant period based on his or
her activities in earlier and later periods, particularly where
there is nothing to suggest the employee‟s duties and
responsibilities changed significantly. (See Leatherbury v.
C&H Sugar Co. (N.D. Cal. 2012) 911 F.Supp.2d 872, 883-884
[employee‟s “description of his typical day” showed that “his
primary duties were either the direct supervision of the
union employees or other activities that were „directly and
closely related to exempt work‟ or were „a means for carrying

41 Appellants primarily fault respondent for failing to present
witnesses for periods the court found to be outside the statute of
limitations, for example, Batze‟s time at the Blackstone store
from 1998 to 2000, Cesar‟s time at the Walnut Creek/Bancroft
store in 2001 and 2002, and Hayes‟s time as a Second AM.
Because we find no error in the trial court‟s statute of limitations
determination, we do not consider these periods.

68
out exempt functions or [were] closely related to the
supervision of the union employees‟”]; Maddock v. KB
Homes, Inc. (C.D. Cal. 2007) 248 F.R.D. 229, 242 [when
classifying employees as exempt or non-exempt, California
law “calls first for an individualized inquiry into the work
actually performed in a typical workweek by the employee to
determine how much of that work is exempt”].) Here,
neither Batze nor Hayes testified that his responsibilities
varied markedly from store to store or week to week, and
Cesar affirmatively testified that his responsibilities did not.
In short, the evidence amply supported the court‟s conclusion
that in all their assignments, appellants‟ work was primarily
managerial and thus exempt.
Similarly supported was the court‟s finding that to the
extent appellants spent excessive amounts of time
performing tasks that could have been performed by hourly
workers, respondent realistically expected them to be
engaged primarily in managerial activities. (See Ramirez,
supra, 20 Cal.4th at p. 802 [“[A]n employee who is supposed
to be engaged in [exempt] activities during most of his
working hours and falls below the 50 percent mark due to
his own substandard performance should not thereby be able
to evade a valid exemption”].) The court cited the extensive
and costly management training respondent provided most
new managers, the contents of the RLD program, the
numerous managerial responsibilities assigned to the AMs,
the size and complexity of the stores, the testimony of
multiple managerial employees that they had no trouble

69
meeting the operating ratio, providing good customer
service, keeping the check lines moving, the shelves stocked
and the stores clean and organized without doing the work
themselves or relying excessively on salaried employees, the
evidence that stores suffered when managerial employees
spent too much time on non-exempt tasks, and the evidence
that Cesar in particular had been criticized for performing
hourly work rather than attending to managerial duties.
The court‟s finding as to respondent‟s realistic expectations,
amply justified by the evidence, further supports the
determination that appellants were exempt employees.
Appellants claim the trial court improperly placed on
them the burden of proving that they performed non-exempt
work. They point to its citation to the 1993 DLSE letter
suggesting a presumption arises that an employee‟s duties
are exempt if he or she “„fulfills all of the other requirements
of the managerial or executive exemption . . . .‟”
(Underscoring omitted.) They further contend the court‟s
references to respondent‟s “„[r]ealistic [e]xpectations‟”
indicate it used respondent‟s expectations to create a
presumption that the majority of tasks performed were
exempt. The lengthy MSOD leaves no doubt that the court
understood and applied the appropriate burden of proof.
Indeed, it reiterated that burden throughout its decision.42

42 On the second page of the MSOD, the court stated that
“with the exception of a few discrete . . . workweeks -- Safeway
has met its burden of proof with respect to these plaintiffs.” On
the following page, it noted: “Both sides agree that the
(Fn. continued on next page.)

70
In addition to clearly and repeatedly articulating the correct
burden of proof, the court carefully outlined the evidence on
which it relied in finding that appellants performed exempt
tasks the majority of the time. In short, appellants‟ claim
that the court erroneously shifted the burden of proof is
belied by the record.
Appellants claim the court improperly categorized the
three work activities frequently engaged in by AMs:
managing out-of-stocks, store walks, and working at the
front-end.43 They contend that scanning the bar codes for

defendants have the burden of proof with respect to their
affirmative defense to the effect that the plaintiffs meet the
requirements for the executive exemption . . . .” As to the
individual appellants, the court found: (1) “that [respondent] has
met its burden with respect to Gary Batze”; (2) that “[t]he
evidence preponderates that for the majority of the weeks in
question, Carlo Cesar spent more than fifty percent of his time
engaged in exempt activities,” but that as to certain weeks,
“[respondent] has not met its burden of proof”; and (3) that with
the exception of two pay periods, “[respondent] . . . has met its
burden with respect to Justin Hayes.” On the 99th page of the
101-page decision, the court states: “Here most of the evidence
preponderates in favor of the defendants, with the conclusion
that they have met their burden of proof.”
43 Appellants contend that in this regard, the trial court
disregarded Heyen. The same trial judge presided over the trial
in Heyen, where we affirmed his ruling that an employee cannot
be seen as simultaneously performing exempt and non-exempt
tasks, i.e., “„actively . . . manag[ing] the store while also
concurrently performing some checking and bagging of customer
grocery purchases.‟” (Heyen, supra, 216 Cal.App.4th at p. 799.)
(Fn. continued on next page.)

71
out-of-stock products should have been deemed a non-
exempt activity because it is routinely done by hourly
employees. The court recognized that this task could be
done by hourly employees. When performed occasionally by
an AM, however, the court concluded that walking the aisles
scanning out-of-stocks was exempt because it assisted the
AM to fulfill his or her managerial responsibility for
determining when and where out-of-stocks occur and
minimizing them. The regulations permit the trier of fact to
make such distinctions. (See Cal. Code Regs., tit. 8, § 11070,
subd. (1)(A)(1)(e) [“Exempt work shall include . . . all work
that is directly and closely related to exempt work and work
which is properly viewed as a means for carrying out exempt
functions.”]; Heyen, supra, 216 Cal.App.4th at p. 822
[“[I]dentical tasks may be „exempt‟ or „nonexempt‟ based on
the purpose they serve within the organization or
department. Understanding the manager‟s purpose in
engaging in such tasks, or a task‟s role in the work of the
organization, is critical to the task‟s proper categorization. A
task performed because it is „helpful in supervising the
employees or contribute[s] to the smooth functioning of the
department‟ is exempt, even though the identical task

Nothing in the MSOD suggests the trial court included time
spent on non-exempt tasks when calculating whether managerial
tasks occupied more than 50 percent of each appellant‟s workday,
or that the court believed an employee could be engaged in both
exempt and managerial activities simultaneously.

72
performed for a different, nonmanagerial reason would be
nonexempt”].)
Appellants claim that store walks should have been
deemed non-exempt because they might involve cleaning,
fixing displays, stocking shelves or returning products to the
correct shelves. The court found that the “long” store walks,
the walks lasting “from two to two and a half hours,” were
“the chief method a manager uses to determine what is going
on in the store and where (and with whom) he needs to
devote attention,” that the walks “offer an opportunity to
interact with employees, survey the merchandise and spot
needs, especially with respect to the all important out-of-
stocks,” and that “[a] momentary pause” during a lengthy
walk conducted for these purposes did not “turn the activity
from exempt to non-exempt.” That managerial employees
performed lengthy store walks once or twice a day for the
purpose of talking to department heads and other
employees, assessing the condition of the store and
determining the problems that needed to be addressed
throughout the store that day, was established by the
testimony of numerous witnesses, and supported the court‟s
categorization of store walks as exempt tasks.
Appellants similarly claim that time spent at the front-
end was non-exempt, contending it was “uncontroverted”
that much of their front-end time was spent checking,
bagging and performing other routine services for customers.
To the contrary, the evidence established that AMs were put
at the front to improve customer service by observing the

73
checkers and courtesy clerks to determine whether they
were working efficiently and providing satisfactory customer
service. AMs were told to stand in one place to observe and
manage, not to check. Moreover, as appellants acknowledge,
if circumstances required an AM to step in to check, that
time was recorded on the checking data submitted by
respondent. The trial court reviewed that data carefully and
concluded that with minimal exceptions, appellants were not
required to spend excessive time checking.

B. The court properly rejected Hayes’s and Batze’s
claims for work performed during the strike.
Section 541.706 of title 29 of the Code of Federal
Regulations (formerly 29 C.F.R. § 541.109) (2004) provides
that “[a]n exempt employee will not lose the exemption by
performing work of a normally nonexempt nature because of
the existence of an emergency.” A employee strike, even a
lengthy one, can constitute an emergency. (See Dunlop v.
Western Union (D.N.J. Jan. 28, 1976) 1976 U.S. Dist. LEXIS
16956, *4 [facts must be analyzed in evaluating whether a
lengthy strike constitutes an emergency; court cannot simply
presume it loses its emergency status after set amount of
time].)
The court ruled that the strike constituted an
emergency under the regulations. It further ruled that the
period Hayes spent replacing striking employees was beyond
the statute of limitations for his complaint, filed in October
2008. With respect to Batze, the court found not credible his

74
testimony that he worked lengthy hours replacing striking
workers in Lake Isabella and Bakersfield. Batze was
impeached by his own calendar and by checking data
showing him working in Clovis during the strike. In
addition, Macaluso denied that Batze had been sent to other
stores to work after she arrived in January 2004. The
court‟s finding was supported by substantial evidence, and
its decision to credit respondent‟s evidence over Batze‟s
testimony “with respect to how Batze spent his time and how
long he worked” was within its purview as the trier of fact.

C. The trial court did not err in finding the statute of
limitations was not tolled.
Appellants contend that under the rule of American
Pipe & Construction Co. v. Utah (1974) 414 U.S. 538
(American Pipe), the statute of limitations was tolled from
the date the Knoch action was filed in 2002 until the trial
court‟s order denying class certification was filed in
September 2008, and that their work assignments dating
back to 1998 should have been at issue. We conclude the
court properly analyzed the tolling issue under the relevant
authorities.
In American Pipe, the United States Supreme Court
held that under certain limited circumstances, the filing of a
class action lawsuit could toll the statute of limitations with
respect to individual members of the putative class who
made timely motions to intervene after the court denied
certification. (American Pipe, supra, 414 U.S. at pp. 552-

75
553.) In Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103
(Jolly), the California Supreme Court considered whether
and when to apply that rule in line with its view that “in the
absence of controlling state authority, California courts
should utilize the procedures of rule 23 of the Federal Rules
of Civil Procedure,” and concluded: “The presumption . . .
should be . . . that lack of commonality will defeat
certification and preclude application of the American Pipe
tolling doctrine.” (44 Cal.3d at pp. 1118, 1125.) Thus,
“putative class members would be ill advised to rely on the
mere filing of a class action complaint to toll their individual
statute of limitations.” (Id. at p. 1125.) A trial court may,
nonetheless, apply tolling to save untimely claims. But in
doing so, the court must address “two major policy
considerations.” The first is “protection of the class action
device,” which requires the court to determine whether the
denial of class certification was “unforeseeable by class
members,” or whether potential members, in anticipation of
a negative ruling, had already filed “„protective motions to
intervene or to join in the event that a class was later found
unsuitable,‟ depriving class actions „of the efficiency and
economy of litigation which is a principal purpose of the
procedure.‟” (Jolly, supra, at 1121, quoting American Pipe,
supra, at p. 553.) The second consideration is “effectuation
of the purposes of the statute of limitations,” and requires
the court to determine whether commencement of the class
suit “„notifie[d] the defendants not only of the substantive
claims being brought against them, but also of the number

76
and generic identities of the potential plaintiffs who may
participate in the judgment.‟ [Citation.] In these
circumstances, . . . the purposes of the statute of limitations
would not be violated by a decision to toll.” (Jolly, supra, at
p. 1121, quoting American Pipe, supra, at pp. 554-555.)44
Here, class certification was denied due to lack of
commonality, giving rise to a presumption that American
Pipe tolling should not apply. The trial court, nonetheless,
considered whether to do so under the standards set forth in
Jolly. It found the discrepancies between the claims of the
members of the putative class were “too great for the Knoch
action to have put [respondent] on notice that it needed to
preserve evidence with respect to every one of its managers
and assistant managers,” that respondent had no way of
predicting which of the thousands of managerial employees

44 The California Supreme Court applied these rules to
conclude that the statute was not tolled in the case before it -- a
mass tort action for personal injury. “Because of the nature of
the [original] complaint . . . and the differences in issues of fact
and law . . . the [original] class suit [citation] could not have
apprised defendant of plaintiff‟s substantive claims” nor “put
defendants on notice of allegations related to personal injury
within the statutory period of limitation so that they might
prepare their defense.” (Jolly, supra, 44 Cal.3d at pp. 1123-
1224.) Although the Supreme Court did not specify a standard of
review, the principles under which the tolling determination are
to be made are equitable, and we generally review a trial court‟s
decision to grant or deny equitable relief for abuse of discretion.
(County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215,
1230.)

77
holding multiple positions in hundreds of locations would
believe themselves to have been deprived of overtime and
decide to bring a suit, and that it would have been
unrealistic to expect that the filing of the Knoch action would
have prompted respondent to maintain all employment
records relating to every managerial employee or to gather
evidence and witness statements pertaining to every
managerial employee.
The evidence presented bore out the court‟s
conclusions. Each appellant relied on different facts and
different scenarios, and there was little overlap in the
evidence to support the respective claims. Moreover,
numerous managers and AMs testified that the majority of
their workdays was spent attending to managerial duties.
Respondent could not have anticipated who might be a
member of the putative class when the Knoch action was
filed in 2002, and thus had no realistic opportunity to
prepare a defense for the potential claimants. The fact that
nearly 200 plaintiffs had already brought individual claims
before the class certification was denied adds further support
to the trial court‟s ruling, as it demonstrates that denial of
class certification was not unforeseen. The court also found
that Cesar and Hayes unreasonably delayed asserting their
claims after certification was denied, adding to the prejudice
to respondent of defending stale claims. Under these
circumstances we discern no error in the trial court‟s
determination that the statute of limitations was not tolled.

78
 DISPOSITION
The judgment is affirmed. Respondent is awarded
costs on appeal.
CERTIFIED FOR PUBLICATION

MANELLA, J.

We concur:

EPSTEIN, P. J.

WILLHITE, J.

79