Source: http://thecomplexlitigator.com/?offset=1428020057898&category=Class+Actions%3A+Wage+%26+Hour
Timestamp: 2019-04-24 12:42:33+00:00

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As I fill the backlog, we have yet another big decision from the California Supreme Court. In Ayala v. Antelope Valley Newspapers, 59 Cal. 4th 522 (June 30, 2014), the Supreme Court examined how the question of certification should be answered in the context of misclassification of independent contractors. Newspaper carriers, classified as independent contractors, filed suit to obtain remedies available to employees under California’s wage & hour laws. Plaintiffs moved for class certification. The trial court concluded the case could not proceed as a class action, holding that on the critical question whether plaintiffs and the class were employees, plaintiffs had not shown common questions predominate. The trial court held that to determine employee status for the class would necessitate numerous unmanageable individual inquiries into the extent to which each carrier was afforded discretion in his or her work. The Court of Appeal disagreed in part, holding that the trial court had misunderstood the nature of the inquiries called for, and remanded for reconsideration of the class certification motion as to five of the complaint’s claims.
The trial court and Court of Appeal correctly recognized as the central legal issue whether putative class members are employees for purposes of the provisions under which they sue. If they are employees, Antelope Valley owes them various duties that it may not have fulfilled; if they are not, no liability can attach. In turn, whether putative class members' employee status can be commonly resolved hinges on the governing test for employment.
Ayala, 59 Cal. 4th at 531. The Court added an additional, significant observation to this formulation, observing, “The worker's corresponding right to leave is similarly relevant: “ ‘An employee may quit, but an independent contractor is legally obligated to complete his contract.’ ” (Perguica v. Ind. Acc. Com. (1947) 29 Cal.2d 857, 860, 179 P.2d 812.)” Ayala, 59 Cal. 4th at 531 n. 2. The Court then listed the secondary factors that a court may consider, including: (a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee.
at the certification stage, the relevant inquiry is not what degree of control Antelope Valley retained over the manner and means of its papers' delivery. It is, instead, a question one step further removed: Is Antelope Valley's right of control over its carriers, whether great or small, sufficiently uniform to permit classwide assessment? That is, is there a common way to show Antelope Valley possessed essentially the same legal right of control with respect to each of its carriers? Alternatively, did its rights vary substantially, such that it might subject some carriers to extensive control as to how they delivered, subject to firing at will, while as to others it had few rights and could not have directed their manner of delivery even had it wanted, with no common proof able to capture these differences?
The trial court lost sight of this question. Its order reveals the denial of certification ultimately rested on two related determinations: (1) the record reflected considerable variation in the degree to which Antelope Valley exercised control over its carriers; and (2) the putative class as a whole was not subject to pervasive control as to the manner and means of delivering papers. Neither of these considerations resolves the relevant inquiry. Whether Antelope Valley varied in how it exercised control does not answer whether there were variations in its underlying right to exercise that control that could not be managed by the trial court. Likewise, the scope of Antelope Valley's right to control the work does not in itself determine whether that right is amenable to common proof.
[T]he existence of variations in the extent to which a hirer exercises control does not necessarily show variation in the extent to which the hirer possesses a right of control, or that the trial court would find any such variation unmanageable. That a hirer may monitor one hiree closely and another less so, or enforce unevenly a contractual right to dictate the containers in which its product is delivered, does not necessarily demonstrate that the hirer could not, if it chose, monitor or control the work of all its hirees equally. (See Estrada v. FedEx Ground Package System, Inc. (2007) 154 Cal.App.4th 1, 13–14, 64 Cal.Rptr.3d 327 [recognizing that how a hirer exercised control over a particular hiree might show, not the hirer's differential control of that hiree, but the extent of its common right to control all its hirees].) For class certification under the common law test, the key question is whether there is evidence a hirer possessed different rights to control with regard to its various hirees, such that individual mini-trials would be required. Did Antelope Valley, notwithstanding the form contract it entered with all carriers, actually have different rights with respect to each that would necessitate mini-trials?
Certification of class claims based on the misclassification of common law employees as independent contractors generally does not depend upon deciding the actual scope of a hirer's right of control over its hirees. The relevant question is whether the scope of the right of control, whatever it might be, is susceptible to classwide proof. Bypassing that question, the trial court instead proceeded to the merits. In so doing, the court made the same mistake others have when deciding whether to certify claims predicated on common law employee status, “focus[ing] too much on the substantive issue of the defendant's right to control its newspaper deliverers, instead of whether that question could be decided using common proof.” (Dalton v. Lee Publications, supra, 270 F.R.D. at p. 564.) Moreover, by purporting to resolve on a classwide basis the scope of Antelope Valley's right to control its carriers, the trial court contradicted its own conclusion, that classwide assessment of Antelope Valley's right to control is infeasible.
Preliminarily, we caution that courts assessing these secondary factors should take care to correctly identify the relevant considerations. Here, for example, the trial court noted variation in the “place of work.” The inquiry that sheds light on a hiree's common law employee status, however, is into who provides the place of work, the hirer or hiree (Borello, supra, 48 Cal.3d at p. 351, 256 Cal.Rptr. 543, 769 P.2d 399; Rest.3d Agency, § 7.07, com. f, p. 211; Rest.2d Agency, § 220, subd. (2)(e)), and thus the relevant inquiry is whether there is variation in who provides facilities. That carriers could pick up papers at any of several Antelope Valley warehouses or drop locations, as Antelope Valley argued, does not show variation in the underlying secondary factor.
Ayala, 59 Cal. 4th at 538.
The Court remanded with instructions to consider the certification question in light of the Court’s guidance.
It is a bit belated, but I'm getting some write-ups of the big cases up for your reading pleasure (or agony). First up is Duran v. U.S. Bank National Association (May 29, 2014). Loan officers for U.S. Bank National Association (USB) sued for unpaid overtime, claiming they had been misclassified as exempt employees under the outside salesperson exemption. Plaintiffs moved to certify the case as a class action. Plaintiffs provided declarations from 34 current and former putative class members, all stating that they worked overtime hours and spent less than half of their workday engaged in sales-related activities outside their branch office. USB argued that plaintiffs could not establish a predominance of common issues or that the class action device was superior to other methods of adjudication. USB filed declarations from 83 putative class members, 75 of whom said they usually spent more than 50 percent of their workday engaged in outside sales. USB also submitted deposition testimony from the four former class representatives stating that they regularly worked more than half the day outside the office. The Court certified the class of 260 individuals.
The trial court then devised a plan to determine the extent of USB’s liability to all class members by extrapolating from a random sample. After considering competing proposals, the court expressed concern about the potential for biased survey results and proposed an alternative of its own devising. The court opted to select a random sample of 20 class members to testify at trial. A decertification motion was denied. The court later ruled on a key motion in limine, denying USB the ability to introduce any testimony or declarations from class members or other loan officers not in the random sample group.
Phase one of the bench trial lasted 40 court days. The two named plaintiffs and 19 of the 20 other RWG members testified. USB called several corporate witnesses and the direct supervisors of some of the RWG witnesses.
In anticipation of phase two, plaintiffs moved to amend the declaration of their expert, Jon Krosnick, to permit trial testimony about the results of a telephone survey Krosnick had conducted of class members’ work hours. The court allowed the amendment. USB moved to exclude the survey evidence. In opposition, plaintiffs filed a declaration from their statistics expert, Richard Drogin, whon opined that phase one findings of liability and average weekly hours of unpaid overtime could be “reliably projected to the whole class” because they were based on a random sample. Drogin calculated a weighted average of overtime for the RWG at 11.87 hours per week, with a margin of error of plus or minus 5.14 hours at a 95 percent confidence interval. The relative margin of error for the overtime estimate was plus or minus 43.3 percent. The Court then concluded USB did not carry its burden of proof on the outside salesperson exemption. Based primarily on testimony from RWG witnesses, the court ruled that the entire class employed by USB was misclassified as exempt, and all class members were owed overtime in amounts to be determined in phase two of the trial.
During the damages phase, USB’s statistician testified that it was statistically possible that 13 percent of the class was properly classified as exempt. He calculated that up to 14 percent of the class, or 36 members, could have been properly classified as exempt.
Nevertheless, the court calculated the total amount of overtime restitution owed to the class at $8,953,832. With prejudgment interest, the total award as of May 15, 2009, came to $14,959,565. The impact of a 14 percent error on the judgment total would have been approximately $2 million. On appeal, the Court of appeal ordered the class decertified and reversed the judgment. A petition for review was then granted.
We have observed that some common questions about the exemption “are likely to prove susceptible of common proof” in a class action. (Sav-On, supra, 34 Cal.4th at p. 337.) Job requirements and employer expectations of how duties are to be performed may often be established by evidence relating to a group as a whole. (Ramirez, supra, 20 Cal.4th at p. 802.) But litigation of the outside salesperson exemption has the obvious potential to generate individual issues because the primary considerations are how and where the employee actually spends his or her workday. (Sav-On, at pp. 336-337; Ramirez, at p. 802.) Of course, the questions of actual performance and employer expectations can be intertwined.
In her concurring opinion in Brinker, Justice Werdegar drew an instructive distinction between the types of affirmative defenses that can undermine manageability: “For purposes of class action manageability, a defense that hinges liability vel non on consideration of numerous intricately detailed factual questions, as is sometimes the case in misclassification suits, is different from a defense that raises only one or a few questions and that operates not to extinguish the defendant’s liability but only to diminish the amount of a given plaintiff’s recovery.” (Brinker, supra, 53 Cal.4th at p. 1054 (conc. opn. of Werdegar, J.), fn. omitted.) Defenses that raise individual questions about the calculation of damages generally do not defeat certification. (Sav-On, supra, 34 Cal.4th at p. 334.) However, a defense in which liability itself is predicated on factual questions specific to individual claimants poses a much greater challenge to manageability.
However, individual issues will not necessarily overwhelm common issues when a case involves exemptions premised on how employees spend the workday. In Sav-On, supra, 34 Cal.4th 319, for example, we upheld certification of an overtime class action based on a showing that all plaintiffs performed jobs that were highly standardized. As a result, class members performed essentially the same tasks, most of which were nonexempt as a matter of law. (Id. at pp. 327-328.) Further, the defendant’s corporate policy required all class members to work overtime. (Id. at p. 327.) Where standardized job duties or other policies result in employees uniformly spending most of their time on nonexempt work, class treatment may be appropriate even if the case involves an exemption that typically entails fact-specific individual inquiries.
USB’s exemption defense raised a host of individual issues. While common issues among class members may have been sufficient to satisfy the predominance prong for certification, the trial court also had to determine that these individual issues could be effectively managed in the ensuing litigation. (See Brinker, supra, 53 Cal.4th at p. 1054 (conc. opn. of Werdegar, J.); Sav-On, supra, 34 Cal.4th at p. 334.) Here, the certification order was necessarily provisional in that it was subject to development of a trial plan that would manage the individual issues surrounding the outside salesperson exemption.
In general, when a trial plan incorporates representative testimony and random sampling, a preliminary assessment should be done to determine the level of variability in the class. (See post, at p. 40.) If the variability is too great, individual issues are more likely to swamp common ones and render the class action unmanageable. No such assessment was done here.
While class action defendants may not have an unfettered right to present individualized evidence in support of a defense, our precedents make clear that a class action trial management plan may not foreclose the litigation of relevant affirmative defenses, even when these defenses turn on individual questions.
The court’s decision to extrapolate classwide liability from a small sample, and its refusal to permit any inquiries or evidence about the work habits of BBOs outside the sample group, deprived USB of the ability to litigate its exemption defense. USB repeatedly submitted sworn declarations from 75 class members stating that they worked more than half their time outside the office. This evidence suggested that work habits among BBOs were not uniform and that nearly one-third of the class may have been properly classified as exempt and lacking any valid claim against USB.
Slip op., at 31. The Court rejected analogies to disparate treatment discrimination cases, where individual treatment is of little relevance and aggregate group treatment is the singular question.
This is not to say that an employer’s liability for misclassification may never be decided on a classwide basis. A class action trial may determine that an employer is liable to an entire class for misclassification if it is shown that the employer had a consistently applied policy or uniform job requirements and expectations contrary to a Labor Code exemption, or if it knowingly encouraged a uniform de facto practice inconsistent with the exemption. (See, e.g., Bell, supra, 115 Cal.App.4th at p. 743.) In such a case, the evidence for uniformity among class members would be strong, and common proof would be sufficient to call for the employer to defend its claimed exemption.
It is an open question, hotly contested among the parties and amici curiae, whether statistical sampling can legitimately be used to prove a defendant’s liability to absent class members. The question has arisen in numerous contexts, ranging from mass torts (e.g., Cimino v. Raymark Industries, Inc. (5th Cir. 1998) 151 F.3d 297, 319-320) to employment discrimination (e.g., Wal-Mart Stores, Inc. v. Dukes, supra, 564 U.S. at p. __ [131 S.Ct. at pp. 2560-2561]). In the wage and hour context, recent decisions from federal district courts have disagreed about whether statistical sampling may be used to prove liability.
We need not reach a sweeping conclusion as to whether or when sampling should be available as a tool for proving liability in a class action. It suffices to note that any class action trial plan, including those involving statistical methods of proof, must allow the defendant to litigate its affirmative defenses. If a defense depends upon questions individual to each class member, the statistical model must be designed to accommodate these case-specific deviations.
Slip op., at 38. The Court expressly noted that the Mt. Clemens use of statistical evidence to calculate damages in overtime pay cases, while well accepted by courts, did not provide a sound rationale for accepting too much error in the liability phase of a misclassification case.
The Court then discussed errors in the Court’s statistical methodology, noting that (1) the sample size was too small, (2) the sample was not random, suffering from non-response bias and self-selection bias, (3) the 43 percent margin of error was far too large, (4) the response rate was poor, (5) measurement errors were likely, and (6) the methodology differed significantly from Bell, where two experts worked together to determine a reliable sampling methodology.
[I]n recognizing that California’s definition of an outside salesperson is quantitative in nature, Ramirez did not say that the test boils down to whether a particular employee actually spends more than 50 percent of his or her working hours on outside sales. Instead, the ultimate question is: what are “the realistic requirements of the job”?
[N]either an aggregate method of proof (like sampling or representative witness testimony) nor individualized evidence (like a declaration) is necessarily dispositive when the ultimate issue at trial is to determine “the employer’s realistic expectations” or “the realistic requirements of the job.” (Ramirez, supra, 20 Cal.4th at p. 802.) The two types of evidence must be considered and weighed alongside each other, and more broadly, they must be considered and weighed together with the full range of evidence bearing on the ultimate issue, including the employer’s job description, company policies, industry customs, and testimony of supervisors or managers who monitored, evaluated, or otherwise set expectations for employees in the class. We entrust our trial courts with the task of weighing such multidimensional evidence, and their judgments will be sustained if supported by substantial evidence.
Today’s opinion properly identifies the shortcomings of the representative witness group in this case and the trial court’s failure to give due consideration to the individualized evidence that U.S. Bank National Association (USB) sought to introduce in its defense. But it is important to note that the trial court focused on the right question on the merits: What were the realistic requirements of the BBO position?
Slip op. conc., at 11. There is little doubt that Duran will be oversold as a bar on all forms of aggregate proof in class actions. The only remedy will be to present a thorough analysis of what Duran does and does not stand for in misclassification cases and the greater class certification context.
Rage, rage against the dying of the light. Chastise the universe for failing you, and sometimes it responds. Just earlier today I decried the absence of any decisions having anything to do with the subjects usually covered here. But soft! what light through yonder window breaks? It is an opinion, and suitable seating is the sun. In Hall v. Rite Aid Corporation (May 16, 2014), the Court of Appeal (Fourth Appellate District, Division One) reversed a trial court order decertifying a suitable seating claim.
The plaintiff successfully certified a class action alleging failure to provide suitable seating. Later, defendant Rite Aid moved for decertification, citing to other decisions and to evidence it offered. The trial court granted the motion to decertify and denied the cross-motion to permit the matter to proceed as a non-class representative action. (Oh my gosh, this is already exciting!) Based on the analytic framework of Brinker ("O, speak again, bright angel! for thou art As glorious to this night, being o'er my head As is a winged messenger of heaven Unto the white-upturned wondering eyes Of mortals that fall back to gaze on him When he bestrides the lazy-pacing clouds And sails upon the bosom of the air."), the Court of appeal concluded that the trial court erroneously considered the merits of the action, rather than whether the action was amenable to class treatment.
The decertification train got rolling after Rite Aid cited the recently decided matter of Duran v. U.S. Bank Nat. Assn., 203 Cal. App. 4th 212 (2012) (review granted). Rite Aid then pounced, asking the trial court to sua sponte decertify. The trial court declined, but briefing was requested. Rite Aid then submitted federal court decisions and declarations from cashiers that had opted out of the action, along with other evidence. In spite of numerous bases for opposition, the trial court granted the motion to decertify and denied the motion to permit the case to proceed as a representative action.
Our review of Brinker, which is binding on this court (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450), compels the conclusion the trial court erroneously based its decertification order on its assessment of the merits of Hall's claim rather than on the theory of liability advanced by Hall. We are instructed under Brinker that the starting point for purposes of class certification commences with Hall's theory of liability because, "for purposes of certification, the proper inquiry is 'whether the theory of recovery advanced by the plaintiff is likely to prove amenable to class treatment.' " (Benton, supra, 220 Cal.App.4th at p. 726.) Here, as in Brinker and its progeny, Hall alleged (and Rite Aid did not dispute) that Rite Aid had a uniform policy of the type envisioned by Brinker: Rite Aid did not allow its Cashier/Clerks to sit (and therefore provided no suitable seats for its Cashier/Clerks) while they performed check-out functions at the register. Hall's theory of liability is that this uniform policy was unlawful because section 14 mandates the provision of suitable seats when the nature of the work reasonably permits the use of seats, and the nature of the work involved in performing check-out functions does reasonably permit the use of seats. Hall's proffered theory of liability is that, regardless of the amount of time any particular Cashier/Clerk might spend on duties other than check-out work, Rite Aid's uniform policy transgresses section 14 because suitable seats are not provided for that aspect of the employee's work that can be reasonably performed while seated.
Rite Aid's arguments on appeal largely ignore the analysis of Bradley, Benton and Faulkinbury. Instead, Rite Aid asserts the trial court properly reached the merits of (and correctly rejected) Hall's theory of liability when it ruled on the decertification motion because Brinker cannot be read to permit a plaintiff to "invent a class action by proposing an incorrect rule of law and arguing, 'If my rule is right, I win on a class basis.' "
The Court found it unnecessary to address the representative action theory and declined the plaintiff's request to address the correct standard applicable to section 14's seating mandate.
I remarked on a number of occasions during Class Re-Action podcast episodes that Brinker's true impact was in the certification sphere, not the wage & hour issues it addressed. Q.E.D. Well, that's insanely smug and pretentious. But, you know, scoreboard.
In Martinez, employees of different Joe's Crab Shack (JCS) restaurants in California filed suit, seeking to represent a class of salaried managerial employees who worked at JCS restaurants in California. The parties submitting conflicting groups of declarations. Presented with this evidence, the trial court denied the motion for class certification on the grounds plaintiffs had failed to establish (1) their claims were typical of the class, (2) they could adequately represent the class, (3) common questions predominated the claims, and (4) a class action is the superior means of resolving the litigation. The first two findings were based on plaintiffs' inability to estimate the number of hours spent on individual exempt and nonexempt tasks and their admission that the amount of time spent on particular tasks varied from day to day. As to the third and fourth findings, the trial court acknowledged the existence of common questions of law and fact, but concluded there remained significant individual disputed issues of fact relating to the amount of time spent by individual class members on particular tasks. The variability among individual members of the putative class would require adjudication of the affirmative defense of exemption for each class member, “a time- and resource-consuming process.” The trial court rejected as unfair plaintiffs' proffered trial plan, under which their expert proposed to assess the rate at which managerial employees are engaged in nonexempt tasks through statistical sampling methods. Under these circumstances, the court concluded, a class action would not be the superior means of resolving the litigation.
With respect to typicality, this analysis suffers from an overly focused examination of the facts that looked toward individual differences rather than commonality. In essence, the trial court resolved the factual conflict between plaintiffs' declarations, in which they stated nonexempt tasks routinely occupied more than 50 percent of their time, and their deposition testimony that they could not estimate the number of hours they spent on individual tasks because those tasks varied day to day. The inability of the witnesses to specify time spent on particular tasks is hardly surprising, however, and does not create an issue that must be resolved on a motion for class certification. What was common to plaintiffs, in addition to the standard policies implemented by CAI at each of their restaurants, were their assertions their tasks did not change once they became managers; they performed a utility function and routinely filled in for hourly workers in performing nonexempt tasks; and they worked far in excess of 40 hours per week without being paid overtime wages. Their claims—and the defense of executive exemption to those claims—are thus typical of the class.
Martinez, 221 Cal. App. 4th at 1159. Turning to the conflict between general managers and assistant manager, the Court agreed that antagonism existed but found it non-fatal: “This apparent conflict, however, is not fatal. In the interest of preserving the claims of subordinate managerial employees, the trial court may on remand exercise its discretion to create a general managers subclass or to exclude general managers entirely from the class definition.” Martinez, 221 Cal. App. 4th at 1160.
The trial court's failure here to focus on the impact of JCS policies and practices on its managerial employees essentially shifted the burden of disproving the executive exemption to plaintiffs. Indeed, although the court recognized the evidence established the existence of a finite task list that could aid in the identification of common issues among the putative class members, its analysis effectively omitted any consideration of this potential class-wide proof.
Martinez, 221 Cal. App. 4th at 1163-64.
We have not ignored the substantial case authority, including our own, upholding trial court decisions not to certify class actions for claims similar to those raised here (see, e.g., Dailey v. Sears, Roebuck & Co. (2013) 214 Cal.App.4th 974, 154 Cal.Rptr.3d 480; Mora v. Big Lots Stores, Inc., supra, 194 Cal.App.4th 496, 124 Cal.Rptr.3d 535; Arenas v. El Torito Restaurants, Inc. (2010) 183 Cal.App.4th 723, 108 Cal.Rptr.3d 15); nor do we express any disagreement with the outcome of those cases. However, we understand from Brinker, supra, 53 Cal.4th 1004, 139 Cal.Rptr.3d 315, 273 P.3d 513, a renewed direction that class-wide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof. By refocusing its analysis on the policies and practices of the employer and the effect those policies and practices have on the putative class, as well as narrowing the class if appropriate, the trial court may in fact find class analysis a more efficient and effective means of resolving plaintiffs' overtime claim.
Martinez, 221 Cal. App. 4th at 1165.
At least until Duran is decided, there appears to be a change of direction in the pendulum following Brinker. I would note that in the last Class Re-Action Podcast, we discussed with our mediator panel whether there was something akin to a market correction to the overly hostile treatment class actions received in recent years. The panel generally though it was too soon to tell. It's looking less anecdotal with every decision.
While Wal-Mart Stores, Inc. v. Dukes was quickly applied by lower federal courts, it took some time to see how California courts would apply Dukes. (Heck, it took quite some time for me to get around to writing this post, so I suppose we can excuse others for not racing their appeals up the ladder just to generate opinions for us to dwell upon.) In Williams v. Superior Court (Allstate Ins. Co.), 221 Cal. App. 4th 1353 (Dec. 6, 2013), the Court of Appeal (Second Appellate District, Division Eight) offered us our first look at how a California Court of Appeal views the relevance of Dukes in a state class action, outside the Title VII context.
The background of the case generated some additional interesting points, so it's worth a quick summary. The trial court initally certified a class. After Wal–Mart Stores, Inc. v. Dukes was decided, the parties and trial court discussed Dukes. The trial court thereafter permitted Allstate to file a motion based on Dukes for decertification of the Off–the–Clock class. In its decertification motion, Allstate emphasized two points from Dukes. First, “there must be some ‘glue’ holding the class members' claims together, such that common facts can resolve the claims for everyone in the class.” And, second, “a trial-by-formula using statistical sampling is an improper means to try class claims, as it deprives a defendant of due process by precluding a defendant from proving its individual defenses against each class member.” Allstate told the trial court, “In light of the U.S. Supreme Court's decision in Wal–Mart Stores, Inc. v. Dukes [, supra,] 131 S.Ct. 2541, which the Court admitted changed the relevant legal landscape for this case, and additional discovery since the class certification order, it is apparent that the close call on certification must be reversed.” The trial court agreed, and decertified the Off–the–Clock class and the corresponding Unfair Competition Claim.
Williams, 221 Cal. App. 4th at 1360-61. Frankly, the point that a decertification motion is not a "do-over" was a point long overdue. Talk about motions that are nothing but billing opportunities and time wasters.
Despite the trial court's turning to Dukes' analysis of the restrictions on, if not outright unavailability of, money damages under rule 23(b)(2) to explain the trial court's decertification order, appellant was not pursuing a 23(b)(2) type of class action. Appellant instead sought class certification under California's class action statute, Code of Civil Procedure section 382.5 Section 382 is analogous to subpart (a) of Rule 23, which establishes the four requirements of a class action. (In re Tobacco II Cases (2009) 46 Cal.4th 298, 318, 93 Cal.Rptr.3d 559, 207 P.3d 20.) The trial court's reliance on Dukes' analysis of subpart (b)(2) of Rule 23—a class action seeking injunctive relief—was thus misplaced because appellant's class members here were seeking principally, if not exclusively, monetary damages, that the federal rules establish is a different type of class action. (Compare Rule 23(b)(2) with 23(b)(1) and 23(b)(3); Dukes, supra, 131 S.Ct. at p. 2558 [“monetary claims belong in Rule 23(b)(3)”].) More fundamentally, the concern expressed in Dukes about the unmanageability of trying 1.5 million claims which depended on proof of the subjective intents of thousands of individual supervisors is not present here. Appellant asserts there is a companywide policy to deny overtime pay. The resolution of that issue does not involve the subjective intents of countless supervisors.
Williams, 221 Cal. App. 4th at 1363-64.
The Supreme Court's second area of focus in Part III of Dukes involved the statutory affirmative defenses in the anti-discrimination statute Title VII. Because the affirmative defenses were statutory, Dukes concluded a class proceeding could not deprive Wal–Mart of its right to present those defenses. (Dukes, supra, 131 S.Ct. at pp. 2560–2561.) As those affirmative defenses required individualized evidence, Dukes disapproved a “Trial by Formula” of Wal–Mart's affirmative defenses because it prevented Wal–Mart from offering its individualized evidence.
Williams, 221 Cal. App. 4th at 1364.
Finally, the Court concluded that nothing in Dukes rendered the original certification order of the trial court incorrect, which necessarily rendered decertification inappropriate. There is one major lesson here: you can't predict with very much accuracy the ultimate impact of a big decision when it is first released. This opinion stems from Brinker, which is having a much more far reaching impact than the subject matter of that case initially suggested. Dukes is having less of an impact at the state level.
One of the things that had me preoccupied recently was an oral argument in the Ninth Circuit. Coincidentally, the same day that I was there, Dennis Moss, one of my former employers, was arguing his own case before the Ninth Circuit. In Fatemeh Johnmohammadi v. Bloomingdale's, Inc., the same issue of Section 7 and 8 rights running up against class action waivers addressed in D.R. Horton was raised. You can listen to the argument here. In light of the Fifth Circuit's decision (which I haven't yet written about), it seems like a better than typical bet that if the Ninth Circuit were somehow convinced to part company with the Fifth Circuit, the Supreme Court would end up with the final say on this debate.
Class certification in California is still actually a "procedure"
What to make of this one? I should have commented on it long ago, I know, but that start-your-own-law-firm thing is fairly time consuming, so I get to writing when I can. So while I was doing some show prep for this upcoming weekend's podcast, I finally took a look at Benton v. Telecom Network Specialists, Inc. (Oct. 16, 2013) to see for myself what the Court of Appeal (Second Appellate District, Division Seven) did that has many plaintiff-side practitioners so excited.
The Court of Appeal reversed, remanding for further proceedings. In an extensive opinion tracking development of the certification standards as applied to wage and hour cases beginning primarily with Brinker, the Court also examined decisions in Bradley v. Networkers International, 211 Cal. App. 4th 1129 (2012) and Faulkinbury v. Boyd & Associates, 216 Cal. App. 4th 220 (2013).
Slip op., at 24-25. This line of cases appears to strongly emphasize what was, for a time, an argument receiving less traction: variations in damages does not require denial of certification.
The written order (as well as statements made at the motion hearing) make clear that the trial court did not believe TNS would be liable upon a determination that its lack of a meal and rest policy violated applicable wage and hour requirements; rather, it concluded that TNS would become liable only upon a showing that a technician had missed breaks as a result of TNS’s policies.
Slip op., at 27. The Court continued in this same vein, thoroughly rejecting both the defendant’s theories and trial court’s method of analysis, repeatedly holding that variations in experiences by class members impacted their damages, not the plaintiffs’ theory of the case, which challenged the absence of lawful policies required by the Wage Order.
The press of obligations at work left little time for my blogging, which I regret. And, I haven't seen anything all that interesting in the class action/complex litigation arena in the last few weeks. That did change last week when, in Faulkinbury v. Boyd & Associates, Inc. (May 10, 2013), the Court of Appeal (Fourth Appellate District, Division Three) [What?!?] reconsidered its prior decision following remand after Brinker. The Court concluded that, along with the overtime class it previously ordered certified, the meal period and rest break claims should also have been certified.
Just to summarize, if my prose above was too painful to follow, the trial court denied class certification as to all claims, covered by three subclasses referred to as the Meal Break Class, the Rest Break Class and the Overtime Class. The Court of Appeal, in a decision previously published as Faulkinbury v. Boyd & Associates, Inc., 185 Cal. App. 4th 1363 (2010), review granted Oct. 13, 2010, S184995 (Faulkinbury I), reversed the order denying certification of the overtime class but affirmed the order denying certification of the Meal Break Class and the Rest Break Class. Then Brinker. Then review granted. Then remand with an order to vacate Faulkinbury I and reconsider in light of Brinker.
Slip op., at 7, n. 1.
This is one area in which California certification procedural law appears to track somewhat more favorably for certification than does federal law applying Rule 23. At the very least, it appears to conceptually negate the flavor-of-the-month argument, magically extracted from Wal-Mart, that a defendant is entitled to assert individual defenses in every case against every class member, thereby defeating class certification in virtually every conceivable case (which, logically, could not be true or someone might have noticed this over the decades upon decades of class action jurisprudence, but I digress as I so often do). Wal-Mart, a case about a specific intent type of violation, says nothing of the sort, absent very creative quote extraction, coupled with very creative editorial content used to describe that very creative quote extraction. But stated another way, Brinker doesn't diverge from the federal track so much as hold the line that California has charted for some time, while cagey defense counsel try to move the tracks over on the federal side. I suspect that, when the dust settles, the tracks will have moved back to a point closer to convergence, but not until there isn't much left of that Wal-Mart horse to beat.
Justice Werdegar's concurrence in Brinker is identified as providing guidance on the question of missed meal breaks, Slip op., at 10.
The Court agreed with the analysis of Brinker supplied by Bradley v. Networkers Internat., LLC, 211 Cal. App. 4th 1129 (2012), Slip op., at 16.
Without deciding the lawfulness of the policy, the Court concluded that the question of whether the on-duty meal period policy was legal was a question suitable for certification, even if questions existed as to the frequency that meal periods were missed or the reasons as to why they were missed. Slip op., at 15-16.
I can't promise that work obligations won't steal blogging time, but I will keep doing my best to highlight major decisions and events, intermingled with my brand of commentary.
mechanism does not create a conflict warranting dismissal of the state law claims.
Slip op., at 9. I will write up a bit more later, but this holding should put an end to the wasteful motion practice around this issue in the Ninth Circuit. Given the agreement manifesting between the Circuits, it is unlikely that we will see Supreme Court review of this issue any time soon.
In Armenta v. Osmose, Inc., 135 Cal. App. 4th 314 (2005), one Court of Appeal (2/6) concluded that the governing Wage Order required payment of the minimum wage during every hour worked (as opposed to dividing compensation by total hours worked to check whether the average hourly compensation exceeds minimum wage). In Gonzalez v. Downtown LA Motors, LP, et al., (April 2, 2013), the Court of Appeal (Second Appellate District, Division Two) examined the same issue, and reached the same conclusion.
In Gonzalez, the defendant compensated its automotive service technicians on a what was characterized as a “piece rate” basis for repair work. The question before the trial court was whether the defendant was also required to pay those technicians a separate hourly minimum wage for time spent during their work shifts waiting for vehicles to repair or performing other non-repair tasks directed by the employer. The defendant argued that it was not required to pay the technicians a separate hourly minimum wage for such time because it ensured that a technician's total compensation for a pay period never fell below what the defendant called a “minimum wage floor,” calculated as the total number of hours the technician was at work during the pay period (including hours spent waiting for repair work or performing non-repair tasks), multiplied by the applicable minimum wage rate. The employer did so by supplementing a technician's pay, if necessary, to cover any shortfall between the technician's piece-rate wages and the minimum wage floor. The trial court did not find this persuasive, concluding that each hour had to be separately compensated at above minimum wage, even if other hours were compensated well above the minimum wage. The Court of Appeal agreed.
Slip op., at 11-12. Gonzalez, when coupled with Armenta, solidifies the construction of California's minimum wage obligation.

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