Dailey v. Sears, Roebuck: Court Affirms Order Denying Certification of Manager / Assistant Manager Misclassification Action

In Dailey v. Sears, Roebuck and Co. (3/27/13) --- Cal.App.4th ---, the Court of Appeal affirmed a trial court order denying certification of a putative class action alleging that the employer, Sears, violated California wage and hour laws by classifying its auto center managers and assistant managers as exempt employees.  The Court held that the record contained "substantial evidence that Dailey's theory of liability — i.e., that Sears acted in a uniform manner toward the proposed class members, resulting in their widespread

misclassification as exempt employees — is not amenable to proof on a classwide basis" and that the trial court did not abuse its discretion in denying certification.  Slip op. at 3.

Specifically, the Court held: 

The trial court did not fail to explain sufficiently its reasons for denying class certification. The law does not demand great detail from the trial court, and while the order was "succinct," and a more detailed order may have been "desirable," the lack of detail did not preclude "meaningful review" by the Court of Appeal.  Slip op. at 14-17. 

The trial court did not abuse its discretion in denying class certification. The parties presented conflicting evidence of Sears's policies and practices and the effect of those policies and practices on the putative class members. The trial court did not improperly evaluate the merits of the case in evaluating the evidence presented by both sides and crediting the evidence presented by Sears, which indicated "that highly individualized inquiries would dominate resolution of the key issues in this case."  Slip op. at 17-25. 

Substantial evidence supported the trial court's finding that common questions did not predominate. For example, Sears presented evidence that there was no shortage of hourly labor, and the putative class members were not required to fulfill the roles of their nonexempt employees.  Given this and other evidence, "showing a wide variation in proposed class members' job duties," the trial court did not abuse its discretion in finding that plaintiff's theory of liability was not susceptible of common proof at trial.  Slip op. at 25-33. 

Dailey's proposal to use random sampling as a means of managing any individual questions did not "cure the deficiencies of his evidentiary showing." The sampling proposal was "not tied specifically to the facts of this case, or tailored to the evidence presented by the parties," and the trial court did not err in rejecting it.  Slip op. at 34-38.  

Dailey failed to present substantial evidence that "Sears employed any policy or routine practice to deprive proposed class members of 'off duty' meal and rest breaks and, accordingly, Dailey failed to show that this allegation could be proved on a classwide basis." Evidence that Sears had no formal written policy regarding meals and rest periods for the putative class members, provided "no evidence of a policy or widespread practice of Sears  to deprive nonexempt employees of uninterrupted meal periods and rest breaks." Indeed, such evidence was consistent with Sears's treatment of them as exempt employees.  Slip op. at 38-42. 

The trial court did not err in ruling on Sears's motion to preclude certification, even though it was addressed to a broader, statewide class that Dailey subsequently narrowed, in the second amended complaint, to a San Diego district class.  Evidence presented by Sears was relevant to the more narrow class defined by Dailey, and the trial court's order was not "so broad as to preclude any class beyond the San Diego district class."  Slip op. at 42-44. 

The opinion is available here.  

Dailey filed his petition for review in the California Supreme Court on April 30, 2013.  My gut reaction is this: after Brinker and all of its progeny, I would be surprised if the Court were to grant review, but I would not be surprised if it were to grant a petition for depublication.