Employers Win Some, Lose Some, in California Cases Started Prior to Dukes

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Despite blockbuster cases like Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and Brinker Rest. Corp. v. Superior Court, 273 P.3d 513, 527 (Cal. 2012), California remains a hotbed of employment class litigation as a recent spate of cases reflects. The Dukes case and others have certainly helped to level the playing field for employers. Before those cases were decided, however, plaintiffs had filed many employment class actions in California, and even two years later courts are still working to resolve them.

We’ll start with the best for employers. In Santiago v. Amdocs, Inc., Case No. 3:10-cv-04317-SI (N.D. Cal. Sept. 30, 2013), the plaintiffs were tech workers employed in a variety of IT roles who claimed that they were improperly classified as exempt. The district court conditionally certified the class under the FLSA, but, following discovery, the defendant moved to decertify the class and the plaintiffs moved to certify a Rule 23 class under California law and to narrow their FLSA class to exclude certain groups of employees. The district court, noting the variety of roles held by the putative class members, decertified the FLSA class and also denied the plaintiffs’ motion for certification as to the state law claims.

Similarly, in Till v. Saks Inc., Case No. C 11-00504 SBA (N.D. Cal. September 30, 2013), the same court on the same day addressed the claims of misclassification of a group of Saks department and assistant managers. The plaintiffs moved to certify the class and the defendant filed a preemptive motion to deny certification under the FLSA. The court found, under Dukes, that the experiences of the managers were too disparate to justify certification under either Rule 23(a) or 23(b)(3) and denied certification of the state law class. For the same reasons, the court granted the defendant’s motion to deny certification of the FLSA class. Three years ago, one decision like this from this court would have been unusual, let alone two.

In Rai v. CVS Caremark Pharmacy Corp., Case No. CV 12-08717-JGB (VBKx) (C.D. Cal. Oct. 16, 2013), the plaintiffs brought suit against the CVS pharmacy chain based on alleged violations of California’s meal and rest break requirements on behalf of a class of assistant managers and supervisors. This is, incidentally, the only case of this group that was filed after the Dukes decision was reached, but was originally filed in state court and removed to federal court. The plaintiffs moved to certify the class. Interestingly, the court first addressed the issue whether the class was even ascertainable because the duties that allegedly sparked the claimed violations, such as “key carrier” responsibilities, were not uniformly distributed among the putative class members. Although troubled by the difficult class definition, the court found that commonality was met, but ultimately decided that the plaintiffs could not meet Rule 23(b)(3)’s predominance and superiority requirements. The Rai case ended up a victory for the employer, but the case is noteworthy because of the class definition issues and because the court, more reminiscent of pre-Dukes opinions, resolved the matter under Rule 23(b)(3).

The Ninth Circuit, too, has been addressing employment class action claims. In Abdullah v. U.S. Security Associates, Inc, Case No. 11-55653 (9th Cir. Sept. 27, 2013), the plaintiffs were security officers working in California who claimed that they were denied rest and meal periods under that state’s law. The majority of the putative class members worked alone, and the employer sought to take advantage of an exception to the rest and meal period rules relating to the “nature of the work” being performed. The district court granted certification of the class and the Ninth Circuit found that it did not abuse its discretion in doing so. The employer was likely hurt by testimony from a company executive (testimony it later tried to retract) to the effect that over 99% of the class members worked under similar conditions. The Abdullah thus is not a bad case in the sense of a court overreaching to create a class but, rather, a reflection that Dukes permits certification of a class on the right facts.

Leaving what might be the worst case for last, the case of Wang v. Chinese Daily News, has been pending since 2004, has been tried, and has been appealed multiple times. The underlying case involves claimed wage and hour violations under both the FLSA and California state law. Years ago, the plaintiffs won a substantial jury verdict, later expanded by the district court, and the Ninth Circuit affirmed. Wang v. Chinese Daily News, 623 F.3d 743 (9th Cir. 2010). The Supreme Court, however, reversed and remanded the case in the wake of the Dukes decision. The Ninth Circuit, in turn, remanded to the district court, but the case remains unresolved. Last March, the Ninth Circuit again remanded the case for consideration of whether the class meets Dukes standards. Wang v. Chinese Daily News, 709 F.3d 829 (9th Cir. 2013). Last month, the Ninth Circuit denied en banc review of that order, but issued a slightly modified opinion that still directed a remand and consideration of the class issues under Dukes (9th Cir., Sept. 3 2013). While the decision was a win of sorts for the employer, the Wang case is now 9 years old, with no end in sight.

The Bottom Line: The Dukes decision is, however reluctantly, taking hold in the Ninth Circuit in employment cases, but class action litigation remains a genuine threat and such claims may take substantial time and resources even if the employer ultimately prevails.