Court Decertifies Class Challenging Timekeeping Practices

by BakerHostetler

Yogi Berra often has been quoted for the phrase “It ain’t over till it’s over,” and Lenny Kravitz even made a hit song of it in 1991. While no one will likely ever make a popular song out of Rule 23, the phrase applies just as well to class action litigation, as a recent case indicates.

The litigation in Angeles v. US Airways, Inc., No. C-12-05860 CRB (N.D. Cal. Feb. 13, 2017), looked in many respects like countless other California wage and hour claims. The plaintiffs in Angeles were flight support personnel who performed tasks like handling bags and cargo and pushing back or cleaning planes. In 2008, the airline introduced a new electronic timekeeping system called “Workbrain” that tied into the employees’ schedules and essentially permitted the employees to log time only during established hours. If any employees clocked in before or after shift, the system assumed they were not working and logged the minutes as unpaid time called “grace time.” The question therefore came down to whether employees actually worked during this grace time, and whether they were paid through some other mechanism if they did, or whether they engaged in personal activities.

The employees brought suit under California law, asserting the raft of claims one generally sees in such litigation. In 2014, the court, noting that it was a close call, certified a class, and discovery continued. The court also rejected the airline’s arguments under the California wage order that excluded employees governed by the Railway Labor Act (RLA), 45 U.S.C. § § 151 et seq., from coverage. (For those not familiar with it, the RLA also covers airlines, 45 U.S.C. § 181). As later events would prove, this second ruling was erroneous, but the plaintiffs at this stage should have been feeling pretty confident, in that they had a certified class in a favorable jurisdiction with the court refusing to accept the employer’s primary argument.

Not so fast. After additional discovery, the defendant moved to decertify the class and also moved for summary judgment on the RLA issue. Let’s turn to the decertification issue first. The court noted that discovery revealed that the company’s procedures required payment for time worked, something that was not surprising given that these were bargaining unit employees covered by a collective bargaining agreement. Significantly, it found that each airline location or station in California had its own procedures for tracking and ultimately paying for time worked during the grace period and that managers freely approved any such request for time. Finally, discovery revealed that work before a shift was rare and that many employees spent grace time socializing, coming in early to beat traffic, watching TV or, in one case, having a cookout on the tarmac. The court concluded that the class issues did not predominate, and it decertified the class under Rule 23(b)(3).

Interestingly, the court distinguished the case of Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036 (2016), which had permitted representative evidence in collective action cases. We blogged that case here. In Tyson Foods, the court found the question was whether the employees were donning and doffing and whether that time was compensable. In US Airways, the question was what the individuals were doing during the grace time, not how long they were engaging in a single disputed activity.

With refreshing candor, the court also admitted that it should have granted the employer’s prior motion to dismiss based on RLA coverage. In doing so, it cleverly noted that while the employer was asserting a “recycled argument,” it was one that had been correct all along. California Wage Order No. 9 simply excludes employees covered by RLA contracts from its overtime provisions, and the case should have ended there. The court therefore granted summary judgment on the remaining individual claims.

The US Airways case is a good example of what can happen when an employer continues to defend a case despite early unfavorable rulings. In this instance, the employer not only turned a certification order in its favor but also persuaded the court to revisit a 4-year-old erroneous ruling.

The bottom line: Even in California, courts can revisit certification and decertify a class when the record reveals that class issues do not predominate.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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