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Monday, June 28, 2010

Court of Appeal Issues Class Certification Decision

In Faulkinbury v. Boyd & Associates, Inc. (June 24, 2010) --- Cal. App. 4th ---, the Court of Appeal affirmed in part and reversed in part a trial court order denying certification of a class of approximately 4,000 security guards.

The plaintiffs moved for certification of a class of all employees during the applicable period, plus eight sub-classes, and the trial court denied certification without prejudice. The plaintiffs' second motion sought certification of a broad class of all employees and three sub-classes for the following: (1) meal period violations; (2) rest period violations; and (3) failure to include certain expenses and bonus compensation in the class members' regular rates for overtime compensation purposes. The trial court again denied certification.

The Court of Appeal held as follows:
  1. The order denying plaintiffs' first motion was not res judicata as to plaintiffs' second motion because the court's ruling was made without prejudice. Slip op. at 4-5.
  2. Plaintiffs' motion to re-designate the case as non-complex following denial of class certification did not evidence an intent to abandon the class action remedy and did not render the appeal moot. Slip op. at 5-6.
  3. The fact that defense counsel made arguments as to the merits of plaintiffs' claims at the certification hearing did not mean that the Court improperly relied on such arguments in denying certification. The trial court expressed permissible reasons for denying certification. Slip op. at 6-8.
  4. On plaintiffs' meal period claim, substantial evidence supported the trial court's finding that common issues of law or fact did not predominate over individual issues. Although the defendant required all class members to sign on-duty meal period agreements and take on-duty meal periods, defendant's evidence established that "the conditions and nature of security guard services vary from location to location and often from shift to shift," such that individual issues predominated. Slip op. at 10-16.
  5. On plaintiffs' rest period claims, substantial evidence also supported the trial court's finding that common issues did not predominate. The defendant's declarations showed that employees sometimes took rest periods, destroying commonality. Slip op. at 16-17.
  6. The trial court abused its discretion in refusing to certify the overtime sub-class, as the overtime sub-class claims "are governed by common legal principles set forth in the Labor Code and case authority." Whether an employer must include reimbursement items and bonus compensation in the calculation of its employees' overtime rate of pay "can be decided on a class-wide basis as a legal matter based on common proof." The fact that damages must be calculated individually does not destroy commonality. Slip op. at 17-18.

Thursday, June 24, 2010

US Supreme Court To Review Class Arbitration Waiver Case

The US Supreme Court has granted certiorari to review the Ninth Circuit's decision in Laster v. AT&T Mobility LLC, 584 F.3d 849 (9th Cir. October 27, 2009). In Laster, the Ninth Circuit affirmed a District Court decision that a class arbitration waiver was unconscionable and unenforceable. The Court also held that the Federal Arbitration Act does not preempt California unconscionability law. Our post on Laster is here.

The Supreme Court case is entitled AT&T Mobility, LLC v. Concepcion (No. 09-893). The Court's docket is here. I am adding this case to our watch list.

Monday, June 21, 2010

Department of Labor Addresses Donning and Doffing Issues in New Administrative Interpretation

The United States Department of Labor ("DOL") Wage and Hour Division ("WHD") has issued its second "Administrator Interpretation" (No. 2010-2) addressing certain donning and doffing issues.

First, WHD clarified the term "clothes" in relation to Section 3(o) of the Fair Labor Standards Act ("FLSA"). 29 U.S.C. § 203(o).
Section 3(o) of the Fair Labor Standards Act (FLSA) provides that time spent “changing clothes or washing at the beginning or end of each workday” is excluded from compensable time under the FLSA if the time is excluded from compensable time pursuant to “the express terms or by custom or practice” under a collective bargaining agreement. 29 U.S.C. § 203(o). After a careful analysis of the statutory provision and a thorough review of the legislative history and case law, the Administrator is issuing this interpretation of the term “clothes” in § 203(o), and of whether clothes changing covered by § 203(o) is a principal activity, to provide needed guidance on these important and frequently litigated issues.
WHD found that "protective equipment worn by employees that is required by law, by the employer, or due to the nature of the job" does not constitute "clothes" under section 203(o). See Alvarez v. IBP, Inc., 339 F.3d 894, 905 n.9 (9th Cir. 2003), aff’d on other grounds, 546 U.S. 21 (2005). As such, time spent donning or doffing such protective equipment is compensable time.

Second, WHD considered whether non-compensable time spent changing clothes is a "principal activity" that begins the "continuous workday."
Generally, donning and doffing, which may include clothes changing, can be a “principal activity” under the Portal to Portal Act, 29 U.S.C. § 254. IBP v. Alvarez, 546 U.S. 21, 30 (2005). The Supreme Court in Alvarez explicitly held that activities that are integral and indispensable are principal activities, and activities occurring after the first principal activity and before the last principal activity, are compensable. Alvarez, 546 U.S. at 37. Thus time spent in donning and doffing activities, as well as any walking and waiting time that occurs after the employee engages in his first principal activity and before he finishes his last principal activity, is part of the “continuous workday” and is compensable under the FLSA. Id. at 37.
WHD sided with the "weight of authority" and found that changing clothes covered by section 203(o) "may be a principal activity. Where that is the case, subsequent activities, including walking and waiting, are compensable."

WHD's web page for Administrator Interpretations is here. You can sign up to receive automated email alerts from DOL here.

Friday, June 11, 2010

Cal. Supreme Court to Review Attorney Work Product Issue

Thank you to Kimberly Kralowec of the UCL Practitioner for noting that the Supreme Court has granted review in Coito v. Superior Court (State of California. The Court of Appeal in Coito held:
written and recorded witness statements, including not only those produced by the witness and turned over to counsel but also those taken by counsel, are not attorney work product. Because such statements are not work product, neither is a list of witnesses from whom statements have been obtained (the list requested by form interrogatory No. 12.3).
Our post on the Court of Appeal's decision is here, and the Supreme Court's case summary page is here. Although Coito is not a wage and hour or class action case, we deal with these issues frequently, and I have added it to my watch list.

Tuesday, June 1, 2010

Court of Appeal Affirms Decision That Party Waives Right to Compel Arbitration by Participating in Litigation for More than Six Months

In Adolph v. Coastal Auto Sales, Inc. (May 26, 2010) --- Cal.App.4th ----, 2010 WL 2089482, the Fourth District Court of Appeal affirmed a trial court order denying a defendant's motion to compel arbitration of an action under the Consumer Legal Remedies Act ("CLRA"). Cal. Civ. Code 1750 et seq. Citing the trial court, the Court of Appeal held:
[I]t is apparent to the court that defendant's conduct has been inconsistent with an intent to arbitrate. Related to this is the 6 months of delay from the filing of Plaintiff's complaint to the instant petition to compel. In that time period defendant filed two demurrers, accepted and contested discovery request [s], engaged in efforts to schedule discovery, omitted to mark or assert arbitration in its case management statement.
The effect of these inconsistent actions by defendant has resulted in more than merely participating in litigation or expending legal cost[s] but in prejudice to the plaintiff by substantially undermining plaintiff's ability at this late date to take advantage of the benefits and cost savings provided by arbitration. It is clear to the court that defendants intended by their conduct to proceed with their court action. It was only until defendant's second demurrer was overruled that it now request[s] this court that it litigate now in another forum to which all appearances it hopes that it will limit its litigation risk and expense. It will also increase plaintiff's expenses and burdens, having already required plaintiff to expend its efforts and resources in vigorously litigating this case in court. To allow defendant at this time with a trial set for May when it has known of its right to arbitrate this matter since June 2008 yet remained silent until it lost its motion to now go to arbitration would in this court's view cause an unnecessary waste of time and effort to all concerned but more importantly is unfair and prejudicial to plaintiff. Simply put as one court stated "[t]he courtroom may not be used as a convenient vestibule to the arbitration hall so as to allow a party to create his own unique structure combining litigation and arbitration."
Slip op. at 5.