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Wednesday, April 9, 2014

Williams v. Superior Court: Court of Appeal Reverses Decertification Order In Off-the-Clock Class Action

Williams v. Superior Court (Allstate Insurance Company) (12/6/13, mod. 12/24/13) 221 Cal.App.4th 1353, concerns facts very similar to those in Jones, which I discussed recently. The plaintiff sued his employer, Allstate, alleging that he and other insurance adjusters worked off the clock, performing tasks such as logging onto their work computers, but that they “hesitated to request overtime because they did not want to be perceived as ‘bad’ employees.” Slip op. at 3. 

The trial court originally certified an “off-the-clock” class, but granted Allstate’s motion for decertification after the United States Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes (2011) 131 S.Ct. 2541, 564 U.S. 277. Relying on evidence that not all adjusters worked off the clock and others worked only de minimis amounts of time, the trial court held that trial would result in Allstate presenting evidence of affirmative defenses to more than 200 individual claims, an unmanageable prospect. Slip op. at 6. The Court of Appeal reversed, noting as an initial matter: 
A certification motion does not invite the trial court to resolve disputed facts in a free-floating inquiry aimed at deciding the merits of the plaintiff’s claims. The trial court ordinarily must assume the claims have merit. Slip op. at 6, citing Brinker, at 1023 (resolution of merits must be postponed until after certification has been decided).  
The Court then held that Dukes’ discussion of affirmative defenses in a federal Title VII pattern and practice discrimination action did not apply to the present case. Slip op. at 8-14. In particular, the Court held that Rule 23(b)(2) of the Federal Rules of Civil Procedure, under which the Dukes plaintiffs sought certification, differs greatly from California Code of Civil Procedure section 382, which applies in state court. Slip op. at 11. In addition, although the Supreme Court in Dukes disapproved of a “trial by formula” of Wal-Mart’s statutory affirmative defenses to liability, trial by formula is permitted in state court to determine damages, and damage calculations have “little, if any, relevance at the certification stage....” Slip op. at 11-12. 
Here, the question is whether Allstate had a practice of not paying adjusters for off-the-clock time. The answer to that question will apply to the entire class of adjusters. If the answer to that question is “yes” – which is the answer the trial court initially assumed when it first certified the Off-the-Clock class, and is the answer we must presume in reviewing decertification – then, in Dukes’ phrase, that answer is the “glue” that binds all the class members. If some adjusters had more uncompensated time off the clock than other adjusters, that difference goes to damages. But differences in the amount of individual damages do not by themselves defeat class certification. 
Slip op. at 12-13 (internal citations omitted).  

Next, the Court held that Dukes’ discussion of commonality did not support decertification because the alleged commonality was the practice of adjusters working off-the-clock, and the allegation of that practice was sufficient on certification. Slip op. at 17. Allstate disputed that such a practice existed, but the Court declined to engage in an improper examination of the merits. Slip op. at 18. 

Finally, the Court reiterated that the need to prove individual damages could not defeat certification: 
It may be true that some adjusters never worked off the clock, and such adjusters were thus not injured by Allstate’s practice of adjusters working off the clock. But the existence of individuality as to damages does not defeat class certification.
Slip op. at 19. 

The opinion is available here

Tuesday, April 8, 2014

Jones v. Farmers Insurance Exchange: Court of Appeal Reverses Denial of Class Certification in Off-the-Clock Class Action

In Jones v. Farmers Insurance Exchange (10/28/13, mod. and pub. 11/26/13) 221 Cal.App.4th 986, the plaintiff worked as an adjuster for Farmers. He sued, alleging that Farmers should have paid him for "computer sync time" work performed before beginning his scheduled shifts.  

The plaintiff filed for class certification, and Farmers opposed, arguing that it had no uniform policy requiring unpaid pre-shift work and that individual issues thus predominated. The trial court denied certification, and the Court of Appeal reversed, finding as follows: 

Under Brinker and Sav-On the question on commonality is "whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment," and the fact that individual class members will have to prove their damages does not defeat certification. Slip op. at 9-11. 

Although the trial court is "afforded great discretion in ruling on class certification" (slip op. at 11-12), the trial court here abused its discretion "by focusing on individual issues concerning the right to recover damages rather than evaluating whether the theory of recovery is amenable to class treatment." 

Slip op. at 14. Further, "the trial court erred to the extent that its ruling was based on its evaluation of the merits of Plaintiffs’ claim as to the existence of such a uniform policy." Slip op. at 15. 

Plaintiffs’ theory of recovery is that Farmers applied a uniform policy to all putative class members denying them compensation for “computer sync time” work performed at home before the beginning of their scheduled shifts. The existence of such a policy is a factual question that is common to all class members and is amenable to class treatment.

Whether such a policy, if it exists, deprives employees of compensation for work for which they are entitled to compensation is a legal question that is common to all class members and is amenable to class treatment.  Slip op. at 12-13. Farmers disputed that it had such a policy, but this argument raised a "common question amenable to class treatment." Slip op. at 13. Farmers' other evidence went to damages, which did not defeat certification. Slip op. at 13-14. “Farmers’s liability depends on the existence of such a uniform policy and its overall impact on its APD claims representatives, rather than individual damages determinations.” Slip op. at 15. 

Because of the predominance of common issues, class certification would "provide substantial benefits to the litigants and the courts," and a class action would be a superior method of resolving the dispute. Slip op. at 15. 

Substantial evidence supported the trial court's finding that Mr. Jones was not an adequate class representative because he did not file a declaration stating that he understood his fiduciary obligation to the class. Slip op. at 17. However, rather than deny certification on this basis, the trial court should have allowed plaintiffs to amend their complaint to name a suitable class representative. Slip op. at 17-18. 

Monday, April 7, 2014

Martinez v. Joe's Crab Shack: Court Reverses Certification Denial in Misclassification Class Action

In Martinez v. Joe's Crab Shack (11/12/13, pub. 12/4/13) 221 Cal.App.4th 1148, the plaintiffs alleged that the defendants misclassified them and other salaried management employees as exempt from California’s overtime requirements. The trial court denied certification, and the Court of Appeal reversed, holding as follows: 

The plaintiffs adequately represented the class because any antagonism to the case voiced by putative class members did not go “to the very subject matter of the litigation” and could be managed by creating subclasses. Slip op. at 10-12. 

The plaintiffs’ claims were typical, even though different managers may have spent more or less than 50% of their time engaged in exempt administrative tasks. The trial court erred in focusing too greatly on this potential difference among putative class members and in attempting to resolve factual conflicts in the evidence. Slip op. at 11-12. 

Common questions of law and fact predominated, and the trial court erred in failing to find ways to prove the plaintiffs’ claims through the resolution of those common questions. Slip op. at 13-19. 
“Rather than engage in a post hoc calculation for each employee of hours worked in excess of the mandated 40-hour work week,” the fact finder should determine common issues, such as whether the employer properly classified the class members as exempt, by examining the employer’s “realistic expectations and classification of tasks.”
Slip op. at 14-15. 

Finally, the Court remanded to the trial court to reconsider whether class treatment was a superior method of resolving the plaintiffs’ claims: 
[W]e understand from Brinker, supra, 53 Cal.4th 1004, 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.
 Slip op. at 19. 

The opinion is available here

Thursday, March 13, 2014

Palagin v. Paniagua Construction: Undertaking in Labor Commissioner Appeal Is Jurisdictional

Just a quick word on this case.

In Palagin v. Paniagua Construction, Inc. (12/16/13) --- Cal.App.4th ---, the Court of Appeal held that the statutory deadline for an employer to post an undertaking "as a condition to filing an appeal" of a Labor Commissioner award is a jurisdictional deadline that the trial court cannot extend. Under Labor Code section 98.2(b), where the employer fails to post the undertaking within the statutory period, the trial court must dismiss the appeal. Cf. Progressive Concrete, Inc. v. Parker (2006) 136 Cal.App.4th 540, 552-553 (the undertaking requirement in an earlier version of section 98.2(b) was not mandatory and jurisdictional).

Palagin v. Paniagua Construction is available here.

Wednesday, March 12, 2014

Ayala v. Antelope Valley Newspapers: California Supreme Court Calendars Oral Argument in Independent Contractor Class Action

In Ayala v. Antelope Valley Newspapers, Inc. (9/19/12, pub. 10/17/12) 210 Cal.App.4th 77 (discussed here), the plaintiffs sought to certify a class of newspaper home delivery carriers, alleging that AVP improperly classified them as independent contractors rather than employees. The trial court held that individual issues predominated because of numerous variations in how the carriers performed their jobs. The Court of Appeal reversed in part, holding that such variations did not preclude class certification under S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341.

The California Supreme Court granted the defendant's petition for review and 
On June 26, ordered the parties to submit letter briefs: 
discussing the relevance of Martinez v. Combs (2010) 49 Cal.4th 35, 52-57, 73, and IWC wage order No. 1-2001, subdivision 2(D)-(F) (Cal. Code Regs., tit. 8, § 11010, subd. 2(D)-(F)), to the issues in this case. (See also Sotelo v. Medianews Group, Inc. (2012) 207 Cal.App.4th 639, 660-662; Bradley v. Networkers Internat., LLC (2012) 211 Cal.App.4th 1129, 1146-1147.)  
The Court will hear oral argument on April 2, 2014, at 9:00 a.m., in Los Angeles. This is the same day that the Court is hearing Iskanian v. CLS TransportationThe Supreme Court's docket for Ayala is here (Case No. S206874)

Like Iskanian, Ayala will be covered at the State Bar's Fourth Annual Advanced Wage and Hour Conference on July 30, 2014, in Los Angeles, and the discussion will be broadcast on the internet. As a result, we are not planning to conduct a Watch List webinar on the case. 

Tuesday, March 11, 2014

Salas v. Sierra Chemical: Court Schedules Oral Argument In Undocumented Worker Case

In Salas v. Sierra Chemical Co. (Supreme Court Case No. S196568, docket here), the California Supreme Court will consider whether an employee's use of a false social security number to obtain employment prevents the employee from later suing his employer for disability discrimination. The issues stated:
Did the trial court err in dismissing plaintiff's claims under the Fair Employment and Housing Act (Gov. Code § 12900 et seq.) on grounds of after-acquired evidence and unclean hands, based on plaintiff's use of false documentation to obtain employment in the first instance?  
Did Senate Bill No. 1818 (2001-2002 Reg. Session) preclude application of those doctrines in this case? (See Civ. Code § 3339; Gov. Code § 7285; Health & Saf. Code § 24000; Lab. Code § 1171.5.) 
On February 27, the Court asked the parties to address an additional issue:
Does federal immigration law preempt state law and thereby preclude an undocumented worker from obtaining, as a remedy for a violation of "state labor and employment laws" (Lab. Code § 1171.5; Civ. Code § 3339; Gov. Code § 7285; Health & Saf. Code § 24000), an award of compensatory remedies, including backpay? (See Hoffman Plastic Compounds, Inc. v. NLRB(2002) 535 U.S. 137.)
The Court has scheduled Salas for oral argument on Wednesday, April 2, 2014, at 9:00 a.m., in Los Angeles. The Court's decision will be due 90 days later, or July 1, 2014.

We are working to bring you a Watch List webinar on the decision shortly after it comes down. 

Monday, March 10, 2014

Supreme Court Schedules Oral Argument in Iskanian

The California Supreme Court has scheduled oral argument in Iskanian v. CLS Transportation Los Angeles, LLC (6/4/12) --- Cal.App.4th --- (discussed here). In Iskanianthe Court of Appeal issued a broad-ranging decision which held, among other points: 
Concepcion invalidated the holding in Gentry v. Superior Court (2007) 42 Cal.4th 443, that class waivers in arbitration agreements should not be enforced if “class arbitration would be a significantly more effective way of vindicating the rights of affected employees than individual arbitration.” 
The NLRB incorrectly decided D.R. Horton (discussed here), and nothing in the NLRA or the Norris-La Guardia Act evidences an intent to override the FAA's policies in favor of construing arbitration agreements according to their terms.  
Contrary to the holding in Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489 (discussed here), Concepcion applies to a plaintiff's representative claims under the Labor Code Private Attorneys General Act (PAGA).  
Contrary to the holding in Reyes v. Macy’s Inc. (2011) 202 Cal.App.4th 1119, (discussed here), the plaintiff could pursue individual PAGA claims in arbitration.  
The Court will hear oral argument on Thursday, April 3, 2014, at 9:00 a.m., in Los Angeles. The Supreme Court's docket page for Iskanian is here.

We will address Iskanian at the State Bar Labor and Employment Law Section's Fourth Annual Advanced Wage and Hour Conference on July 30 in Los Angeles, so we will not run a separate Watch List webinar on it. I believe that the Conference will be available for viewing via webcast. More information to follow.