Source: http://thecomplexlitigator.com/post-data/category/Class+Actions%3A+FLSA
Timestamp: 2019-04-20 08:12:03+00:00

Document:
Today, the California Supreme Court issued an Opinion following its acceptance of questions about the construction of California law from the United States Court of Appeals for the Ninth Circuit. In Sullivan v. Oracle Corporation (June 30, 2011), the Court addressed (1) whether the Labor Code's overtime provisions apply to plaintiffs' claims for compensation for work performed in this state [with the ancillary question of whether the same claims can serve as predicates for claims under California's unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.)], and (2) whether the plaintiffs' claims for overtime compensation under the federal Fair Labor Standards Act of 1938 (FLSA) (29 U.S.C. § 201 et seq.; see id., § 207(a)) for work performed in other states can serve as predicates for UCL claims.
The Court responded "yes" to the first question group, and "no" to the second.
The Opinion was issued by a unanimous Court.
The post title was corrected after the initial posting.
Plaintiffs worked consecutive 14-day “hitches” on Metson's ships, providing emergency clean up of oil spills and other hazardous chemical spills off the California coast. This arrangement gave rise to questions about how Metson calculated pay for the seventh consecutive workday in a week and compensation for employees when on call. In Seymore v. Metson Marine, Inc. (February 28, 2011), the Court of Appeal (First Appellate District, Division Three) reversed an order granting summary judgment in favor of Metson.
Slip op., at 5. The Court found a DLSE memorandum on the issue to be in potential conflict with the statutory language and disregarded it.
Slip op., at 10. (As an aside, I find it amusing that two cases I handled, one on the prevailing side and one on the losing side, factored into the Court's discussion of this on-call issue. Glad I didn't completely screw it up for the plaintiffs here.) In any event, after an extended discussion of how California parallels but does not exactly follow FLSA precedent surrounding this issue, the Court then spent a moment discussing the fact that, in California, an employer may agree with an employee to designate eight sleeping hours as uncompensated time when an employee works a 24-hour shift. The Court concluded by suggesting that Metson's arguments about the need for revised exceptions to current wage orders (or a new wage order) were worthy of consideration but did not provide a basis for the Court to disregard existing law.
United States District Court Judge Lawrence J. O'Neill (Eastern District of California) granted a motion to certify a collective action of grape farm workers pursuant to he Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 210 et seq. Gomez v. H & R Gunlund Ranches, Inc., 2010 WL 5232973 (E.D.Cal. Dec 16, 2010). The Court applied the more common two-stage certification approach used in FLSA actions. The Court rejected the defendant's argument that the plaintiffs were obligated to provide evidence that other would opt-in if given the opportunity to do so. The Court then issued instructions on required revisions to the proposed notice, including removal of all references to state law claims. The Court refused to grant the defendant's request to limit the plaintiffs' ability to communicate with opt-in Plaintiffs. The Court also refused to preclude additional notice through Spanish language media, noting that maximizing notice was beneficial and rejecting the argument that such media, often used in class actions, would somehow constitute a violation of professional responsibility rules.
The district court certified the FLSA claim as a collective action. It certified the state-law claims as a class action under Rule 23(b)(2) and, alternatively, under Rule 23(b)(3). In the state-law class action, it provided for notice and opt out, but subsequently invalidated the opt outs. It granted partial summary judgment to plaintiffs; held jury and bench trials; entered judgment for plaintiffs; awarded attorney’s fees to plaintiffs; and conducted a new opt-out process. CDN appeals, challenging aspects of each of these rulings, as well as the jury’s verdict.
Forms were mailed to 187 individuals, and notice was posted and forms made available at CDN’s Monterey Park facility. Plaintiffs received back about 155 opt-out forms, including 18 from individuals not on the original list of class members. Plaintiffs filed a motion to invalidate the opt outs, for curative notice, and to restrict CDN’s communication with class members. On June 7, 2006, the court granted the motion, finding that “the opt out period was rife with instances of coercive conduct, including threats to employees’ jobs, termination of an employee supporting the litigation, the posting of signs urging individuals not to tear the company apart, and the abnormally high rate of opt outs.” Wang v. Chinese Daily News, Inc., 236 F.R.D. 485, 491 (C.D. Cal. 2006). The district court deferred any future opt-out procedure until after the trial on the merits.
Slip op., at 16395. Facing cross-motions for summary judgment, the trial court then ruled that news reporters were not exempt professionals. Next, the matter proceeded to a trial. The defendant contended that only the FLSA claims should be tried and that UCL claims were pre-empted by the FLSA, but the trial court elected to retain supplemental jurisdiction, rejected the pre-emption argument and tried the state law claims as well.
The Court of Appeal first tacked the exemption analysis. After examining decisions from other Circuits, the Court concluded that the reporters did not satisfy the creative professionals exemption.
Although the evidence submitted revealed disputes over how to characterize CDN’s journalists, we agree with the district court that, even when viewing the facts in the light most favorable to CDN, the reporters do not satisfy the criteria for the creative professional exemption.
Slip op., at 16400. Next, the Court examined whether the trial court had applied the correct criteria for determining whether certification under Rule 23(b)(2) was appropriate. The Court concluded that, although the matter was decided prior to Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (9th Cir. 2010) (en banc), the trial court applied essentially identical standards and correctly decided the issue.
Finally, plaintiffs submitted a declaration from the president of a class action notice company explaining that ordinarily opt-out rates do not exceed one percent. In this case, the district court found that current employees opted out at a 90 percent rate, whereas former employees opted out at a 25 percent rate.
Slip op., at 16407. After concluding that the decision to invalidate the opt-outs was supported, the Court examined whether deferring a new opt-out period until after the trial was appropriate. Again the Court noted the trial court's broad discretion to regulate the notice process: "The ordinary procedure is to give notice at the time of class certification. But the rule does not mandate notice at any particular time. See Fed. R. Civ. P. 23(c)(2)." Slip op., at 16408. The Court then affirmed the trial court's conclusion that it was necessary to delay a new notice and opt-out process in order to avoid the taint imposed during the initial process.
Finally, after observing that the evidence supported the jury verdict regarding meal periods under either the "provide" or "ensure" standards currently up for review by the California Supreme Court, the Court ended its Opinion by explicitly holding what most courts in the Ninth Circuit had already concluded: the FLSA does not preempt state law claims like the UCL.
The second-step usually occurs after discovery is complete, at which time the defendants may move to decertify the class. In the second step, the court makes a factual determination about whether the plaintiffs are similarly situated by weighing such factors as (1) the disparate factual and employment settings of the individual plaintiffs, (2) the various defenses available to the defendant which appeared to be individual to each plaintiff, and (3) fairness and procedural considerations. If the court determines that the plaintiffs are not similarly situated, the court may decertify the class and dismiss the opt-in plaintiffs' action without prejudice. Even when the parties settle, the court must make some final class certification finding before approving a collective action settlement.
Under the two-step approach, the court first considers whether to certify a collective action and permit notice to be distributed to the putative class members. See Thiessen, 267 F.3d at 1102; Russell v. Wells Fargo & Co., 2008 WL 4104212, at *2-3 (N.D.Cal. Sept.3, 2008). At this first stage, the standard for certification is fairly easy to satisfy. Courts have required only “substantial allegations, supported by declarations or discovery, that the putative class members were together the victims of a single decision, policy, or plan.” Russell, 2008 WL 4104212, at *2.
At the second stage, after discovery has been taken, the court may decertify the class if it concludes that the class members are not similarly situated. Id. at *3. The court can consider a number of factors in deciding whether an action should ultimately proceed collectively, including: (1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to the defendant and whether they appear to be individual to each plaintiff; (3) fairness and procedural considerations; and (4) whether plaintiffs made the required filings before filing suit. Thiessen, 267 F.3d at 1103. However, a requirement that the class members be identical would be inconsistent with the intent of FLSA's provision that a case can proceed as a collective action. Pendlebury v. Starbucks Coffee Co., 518 F.Supp.2d 1345, 1361 (S.D.Fla.2007).
Plaintiffs' argument overstates the requirement of the pertinent FSLA regulation. Plaintiffs are correct that in order to qualify for the executive exemption, an employee must “customarily and regularly direct[ ] the work of two or more other employees.” 29 C .F.R. § 541.100(a)(3). The language of the regulation, however, does not require a strict mathematical ratio between an “employee employed in a bona fide executive capacity” and “other employees.” All the regulation requires is that an employee customarily or regularly direct the work of two or more other employees. The other employees whose work the executive directs may or may not themselves be executives. Thus, the FLSA does not create a “ratio requirement.” Whether the present conditional class should be decertified, then, depends on the individualized assessment of whether the class members are “similarly situated.” The court now turns to that inquiry.
Slip op., at 3. No dice. Turning to the merits of the motion by defendant, the Court, as did the District Court in Weigele v. Fedex (discussed here), placed little weight on the uniform classification of employees by a central office: "[T]he recent decision of In re Wells Fargo Homes Mortg. Overtime Litig., 571 F.3d 953 (9th Cir.2009), which involved certification under Federal Rule of Civil Procedure 23(b)(3), cautions against placing too much weight on an internal policy of classifying all members of a particular class of employees as exempt." Slip op., at 5. More importantly, however, the Court discussed the plaintiffs' inability to rebut substantial evidence showing great disparity in the job duties of different Supervisors.
Are there really that many large businesses out there that let their employees do whatever they want?

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