Source: http://bryanschwartzlaw.blogspot.com/2014/
Timestamp: 2019-04-19 05:21:13+00:00

Document:
This week, in a decision synthesizing a line of recent California Supreme Court decisions, including Duran v. U.S. Bank and Ayala v. Antelope Valley Newspapers, Inc., a California Court of Appeal reaffirmed the longstanding principle that “classwide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof.” The opinion, Martinez v. Joe’s Crab Shack Holdings, B242807 (Cal. App. 2d Dist. November 10, 2014), 2014 WL 5804110, is available here.
The case was filed on behalf of salaried employees of Joe’s Crab Shack (“JCS”) restaurants, on claims that they had been misclassified as exempt employees and were entitled to unpaid overtime pay. They alleged that they spent the majority of their time performing “utility” functions, filling in where needed as cooks, servers, bussers, hosts, stockers, bartenders, or kitchen staff. As a result, they worked extended time in positions ordinarily occupied by hourly employees, but had received no overtime compensation for those tasks. Defendants contended that these employees served in “executive capacities” and were therefore exempt from overtime requirement.
The Court of Appeal reversed, and Supreme Court granted review and deferred further action pending the outcome of Duran v. U.S. Bank. Following the Duran decision in July 2014 (59 Cal.4th 1), the Supreme Court remanded the case to the Court of Appeal for reconsideration.
On reconsideration, the Court of Appeal affirmed its prior reversal of the trial court’s order and clarified several guiding principles for the certification analysis when confronted with the “myriad individual facts” asserted by employers in support of their exemption defense to a wage claim.
The court also explained, in examining the employer’s actual policies, that the proper inquiry is on “the employer’s realistic expectations and classification of tasks,” not employees’ retrospective recollection of when they were engaged in exempt or nonexempt tasks. The analysis of employer’s realistic expectations, the court noted, was “likely to prove susceptible of common proof.” In Martinez v. JCS, common proof showed that salaried employees of JCS functioned consistently as utility workers, cross trained in all tasks, who could be assigned to fill in where needed without affecting the labor budget or requiring overtime compensation.
Finally, the court acknowledged the difficulties presented by potential individual questions and the need to examine how individual employees actually spent their time. For this, the court encouraged use of statistical sampling to identify the realistic demands of the job and to determine whether the typical employee was able to meet those expectations, so long as the method affords an employer an opportunity to prove its affirmative defenses.
Martinez v. JCS thoroughly rejected the analytic framework which would have created “a requirement that courts assess an employer’s affirmative exemption defense against every class member’s claim before certifying an overtime class action.” It makes crystal clear that the certification rules never envisioned such a requirement. When faced with overtime claims with exemption defenses, the Martinez v. JCS decision now affirms, courts should focus their analysis on the “policies and practices of the employer and the effect those policies and practices have on the putative class,” consider the employer’s realistic expectations of the job, and utilize the analytic tools available in class action suits, such as statistical sampling, even where facts appear to present difficult issues of proof.

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