Zelasko-Barrett v. Brayton-Purcell: Court Finds that Law School Graduate Was Exempt Professional

A number of recent cases address the scope of the white collar exemptions under California law. The Cal. Supremes have Harris v. Superior Court, (blogged here) in which they will determine whether insurance adjustors are exempt administrative employees, on their docket. They have granted review in two other cases pending their decision in Harris:

Hodge v. AON Insurance Services (blogged here) (whether insurance adjustors are administrative exempt) and Pellegrino v. Robert Half Intern., Inc. ("Pellegrino I," blogged here) (whether account executives are administrative exempt).

In June, the Second District Court of Appeal issued Soderstedt v. CBIZ (blogged here) holding that unlicensed employees of a public accounting firm may be exempt as learned professionals, and the Ninth Circuit Court of Appeals issued Campbell v. PricewaterhouseCoopers LLP (blogged here) reaching the same conclusion.

And now the First District Court of Appeal has issued the battle of the hyphenated names, Zelasko-Barrett v. Brayton-Purcell, LLP (8/17/11) --- Cal.App.4th ----, 2011 WL 3594015, holding that a law school graduate who was not licensed to practice law but who worked for a law firm and performed tasks customarily performed by junior attorneys was exempt as a learned professional.

I will not get into the details of the case, because I assume that the plaintiffs will petition for review and have an odd's on chance of it being granted pending Harris.

The opinion is available here.

Plancich v. UPS: Another Court Addresses Prevailing Defendant Costs in Wage Dispute

In Kirby v. Immoos Fire Protection, Inc. (blogged here), the Cal. Supreme Court will address the following issues:

1. Does Labor Code section 1194 apply to a cause of action alleging meal and rest period violations (Lab. Code 226.7) or may attorney's fees be awarded under Labor Code section 218.5?
2. Is our analysis affected by whether the claims for meal and rest periods are brought alone or are accompanied by claims for minimum wage and overtime?

In Plancich v. United Parcel Service, Inc. (8/11/11) --- Cal.App.4th ----, 2011 WL 3506066, the Fourth District Court of Appeal held that while Labor Code section 1194 gives a prevailing employee the right to recover attorney's fees and costs, it "does not contain express language excluding prevailing employers from recovering their costs. Slip op. at 3.

Accordingly, based on the plain meaning of the words of the statutes in question, section 1194 does not provide an “express” exception to the general rule permitting an employer, as a prevailing party, to recover costs under Code of Civil Procedure section 1032, subdivision (b), because section 1194 makes no mention of prevailing employers.

Ibid. To avoid this result, the plaintiff argued that Labor Code section 218.5, rather than section 1032, controlled. The Court responded to this argument:

Assuming, without deciding, that Plancich is correct and Labor Code section 218.5 controls the awarding of costs in suits brought for unpaid wages, then UPS should still be awarded its costs. UPS was the prevailing party in this action. In UPS's answer to Plancich's complaint, UPS requested that UPS “be awarded its reasonable costs and attorneys' fees.” Accordingly, UPS fulfilled the requirements for being awarded costs under Labor Code section 218.5, namely, it was the prevailing party and it requested costs be awarded at the initiation of the action. Accordingly, we are not persuaded by Plancich's argument.

Slip op. at 4. Finally, the Court distinguished Earley v. Superior Court (2000) 79 Cal.App.4th 1420, in which the Court held that a successful defendant cannot recover its attorney fees and costs in a minimum wage action under Labor Code section 1194.

We do not find the Earley opinion to be persuasive authority in this case, because the Earley opinion did not discuss the costs provision of section 1194 in relation to Code of Civil Procedure section 1032, subdivision (b). Rather, the opinion was focused on the issue of attorney's fees in section 1194, and how that provision related to Labor Code section 218.5, as well as issues related to absent class members.

Slip op. at 5. Having distinguished Earley, the Court again reasoned that section 1194 does not provide an express exception to section 1032.

Will the Supreme Court grant and hold Plancich pending its decision in Kirby? The Court already has one case on hold, In re. UPS Wage and Hour Cases (2/24/11) (blogged here). Perhaps Plancich will be grant-and-hold number two.

The opinion is available here.

Pitts v. Terrible Herbst: Ninth Circuit Holds that Offer of Judgment for Full Amount Owed to Class Rep. Does Not Moot Class Action

In Pitts v. Terrible Herbst, Inc., --- F.3d ----, 2011 WL 3449473 (9th Cir. 8/9/11) , the plaintiff filed a putative class and collective action under the Fair Labor Standards Act (FLSA) and Nevada state law. Before the plaintiff filed her motion for class certification, the defendant made a Rule 68 offer of judgment for $900, even though the plaintiff claimed only $88 in damages for himself. The plaintiff rejected the offer.

Because Terrible's offer fully compensated Pitts for his individual monetary claim, Terrible filed a motion to dismiss the action for lack of subject matter jurisdiction. Specifically, Terrible argued that its offer of judgment rendered the entire case moot. Following the Fifth Circuit's decision in Sandoz v. Cingular Wireless LLC, 553 F.3d 913 (5th Cir.2008), the district court, in March 2010, held that a Rule 68 offer of judgment does not moot a putative class action so long as the class representative can still file a timely motion for class certification. Nevertheless, the district court then held that Terrible's offer mooted the action because Pitts failed to timely seek class certification.... The court then dismissed the entire action with prejudice for lack of subject matter jurisdiction, entered judgment in the defendant's favor, and ordered Terrible to pay $900 to Pitts and $3,500 to Pitts's attorney.

Slip op. at 1-2.

The Ninth Circuit reversed. Reviewing a line of Supreme Court decisions regarding mootness of class actions, the Court discerned several important principles:

First, if the district court has certified a class, mooting the putative class representative's claim will not moot the class action. [After certification], a defendant may moot a class action through an offer of settlement only if he satisfies the demands of the class; an offer to one cannot moot the action because it is not an offer to all.

Second, if the district court has denied class certification, mooting the putative class representative's claim will not necessarily moot the class action. The putative class representative retains an interest in obtaining a final decision on class certification that allows him to litigate the denial of class certification on appeal.

Third, even if the district court has not yet addressed the class certification issue, mooting the putative class representative's claims will not necessarily moot the class action. “[S]ome claims are so inherently transitory that the trial court will not have even enough time to rule on a motion for class certification before the proposed representative's individual interest expires.” McLaughlin, 500 U.S. at 52 (internal quotation marks omitted). An inherently transitory claim will certainly repeat as to the class, either because “[t]he individual could nonetheless suffer repeated [harm]” or because “it is certain that other persons similarly situated” will have the same complaint. Gerstein, 420 U.S. at 110 n. 11. In such cases, the named plaintiff's claim is “capable of repetition, yet evading review,” id., and “the ‘relation back’ doctrine is properly invoked to preserve the merits of the case for judicial resolution,” McLaughlin, 500 U.S. at 52; see also Geraghty, 445 U.S. at 398; Sosna, 419 U.S. at 402 n. 11. Application of the relation back doctrine in this context thus avoids the spectre of plaintiffs filing lawsuit after lawsuit, only to see their claims mooted before they can be resolved.

Slip op. at 6. Applying these principles to the case at hand, the Court held that "Terrible's unaccepted offer of judgment did not moot Pitts's case because his claim is transitory in nature and may otherwise evade review. Accordingly, if the district court were to certify a class, certification would relate back to the filing of the complaint." Slip op. at 7. The Court reasoned that allowing a defendant to "buy off" a class action by offering to satisfy the named plaintiff's claim would make the matter transitory such that it would evade review. Ibid.

Accordingly, we hold that an unaccepted Rule 68 offer of judgment-for the full amount of the named plaintiff's individual claim and made before the named plaintiff files a motion for class certification-does not moot a class action.

Slip op. at 8.

The opinion is available here.

Paton v. Advanced Micro Devices: Sabbatical Leave May Be Protected as Vacation under Labor Code 227.3

In Paton v. Advanced Mirco Devices, Inc. (8/5/11) 197 Cal.App.4th 1505, a former employee brought a class action against his former employer, alleging that he was entitled to be paid for an eight-week sabbatical that he had earned but not used at time he resigned. The trial court (Santa Clara Superior, Judge Jack Komar) granted the employer's motion for summary judgment, and the employee appealed. The Court of Appeal reversed, holding that it could not determine as a matter of law that the sabbatical leave was not vested vacation pay subject to Cal. Labor Code section 227.3.

The Court first asked, "What is vacation?"

It is paid time off that accrues in proportion to the length of the employee's service, is not conditioned upon the occurrence of any event or condition, and usually does not impose conditions upon the employee's use of the time away from work. (See DLSE Opn. Letter [as of Jul. 26, 2011] “Leave time which is provided without condition is presumed to be vacation no matter what name is given to the leave.”)

Slip op. at 7.

In contrast to regular vacation, sabbatical leave, as it originated in the academic setting, is a conditional type of paid leave. The dictionary definition of “sabbatical” is “a period of paid leave granted to a university teacher for study or travel (traditionally one year for every seven years worked).” (Concise Oxford English Dict. (11th ed.2004) p. 1262, col. 2.) Sabbaticals are usually granted for one academic semester or for a full year. During the sabbatical the faculty member engages in a project intended to promote his or her professional development and, in turn, enhance the institution's status as an institute of higher learning. (Boening & Miller, Research and Literature on the Sabbatical Leave: A Review (Univ. of Ala., Higher Education Administration Program 1997), available at [as of Jul. 26, 2011].) Sabbaticals are granted with the expectation that the faculty member will return to the employing institution and put his or her newly acquired expertise to use there after the sabbatical is over. (Ibid.) Thus, traditional sabbaticals are like special-purpose, conditional types of leave in that the employee is expected to use time for the identified purpose. They also have an incentive component to the extent they encourage the employee to continue in the service of the institution that provides the opportunity for professional growth.

Ibid. Adopting three tests promulgated by the DLSE and adding a fourth test, the Court held that sabbatical leave differs from vacation as follows:

First, leave that is granted infrequently tends to support the assertion that the leave is intended to retain experienced employees who have devoted a significant period of service to the employer [and thus is sabbatical, not vacation]....

Second, the length of the leave should be adequate to achieve the employer's purpose. Since we are concerned here with unconditional sabbaticals given for the purpose of reenergizing the employee then, as the Labor Commissioner suggested, the length of the leave should be longer than that “normally” offered as vacation. Since regular vacation time may be used for rest, a sabbatical ought to provide the extended time off work that regular vacation does not.

Third, a legitimate sabbatical will always be granted in addition to regular vacation. And this point carries more weight when the regular vacation program is comparable in length to that offered by other employers in the relevant market. Because an employer could offer a minimal vacation plan and reward senior staff with sabbaticals as a way to avoid the financial liability of a more generous vacation plan, the employer's regular vacation policy should be comparable to the average vacation benefit offered in the relevant market.

A fourth factor is one that is implicit in the DLSE test but is not called out specifically. Since a sabbatical is designed to retain valued employees, then a legitimate sabbatical program should incorporate some feature that demonstrates that the employee taking the sabbatical is expected to return to work for the employer after the leave is over.

As to the nature of the employee to whom the sabbatical is offered, we are not persuaded that employers must limit sabbaticals to upper management or professional employees. Nor does it seem necessary to preclude offering sabbaticals to all employees, or to all employees in a class. The fundamental question is whether the leave is compensation earned over the course of the employment, the enjoyment of which is deferred, or whether the leave is intended to retain the most experienced or valued employees and to enhance their future service to the employer. The rank or classification of the employee to whom the sabbatical is offered may or may not be relevant to that question. Indeed, any number of other factors could apply as well as the four we have set forth above. As the Labor Commissioner suggested when first confronting the question, “The point is that each case will have to be decided on its own facts.”

Slip op. at 9. The Court found the record inconclusive and thus reversed the order granting summary judgment.

Although the underlying facts, such as they are, are essentially undisputed, the ultimate fact to be determined is defendant's purpose in establishing its sabbatical policy. That is the central fact in dispute and the record before us does not resolve it conclusively. While there are facts to support a finding that the sabbatical was intended as incentive to induce experienced employees to continue working for defendant and increase their productivity or creativity upon return to work, reasonable minds could find, instead, that the leave was actually intended as additional vacation for longer term employees.

Slip op. at 11. The opinion is available here.

Ingram v. Oroudjian: Ninth Circuit Issues Fee Award Decision

The Ninth Circuit touched on a number of attorney fee issues in Ingram v. Oroudjian, --- F.3d ----, 2011 WL 3134530 (9th Cir. 7/27/11) . In Ingram, a tenant and a fair housing civil rights advocacy organization brought a discrimination and retaliation action against the owner and manager of an apartment building. After settlement, the district court (C.D. Cal., Judge Feess) awarded the plaintiffs attorney fees, and the plaintiffs appealed. The Ninth Circuit held:

1. The district court did not abuse its discretion by considering the settlement negotiations (plaintiffs had rejected the same settlement offer that they later accepted) in deciding a reasonable attorney fee;

2. The district court did not abuse its discretion by disallowing attorney fees for 40 hours spent opposing a summary judgment motion because the plaintiffs should have pursued settlement more aggressively earlier in the case, and plaintiffs' counsel unduly extended the duration of the litigation;

3. The district court did not abuse its discretion by disallowing attorney fees spent briefing an issue with which counsel should have been familiar; and

4. The district court did not abuse its discretion by relying on its own familiarity with the legal market in setting counsel's reasonable hourly rates, particularly where plaintiffs failed to submit affidavits from local attorneys or from a fee expert to show that the requested rates matched the prevailing market rates.

The opinion is available here.

In re Van Dusen: District Court Must Analyze FAA Exemption Claim Before Ordering Arbitration

In In re Van Dusen, --- F.3d ----, 2011 WL 3134584 (9th Cir. 7/27/11), the plaintiffs were two interstate truck drivers who entered independent contractor operating agreements (ICOAs) with a putative employer. The plaintiffs filed a putative collective and class action alleging violation of the Fair Labor Standards Act (FLSA) and state labor laws. The company moved to compel arbitration. The plaintiffs opposed the motion, alleging that the the ICOAs were exempt from arbitration under Section 1 of the Federal Arbitration Act (FAA), which exempts “contracts of employment of seaman, railroad employees, or any other class of workers engaged in foreign or interstate commerce” from the FAA's provisions. 9 U.S.C. § 1.

The District Court (D. Ariz) declined to rule on the applicability of the exemption, holding that the question of whether an employer/employee relationship existed between the parties was a question for the arbitrator to decide in the first instance. Finding that the ICOAs contained valid arbitration clauses, the District Court ordered arbitration. The plaintiffs moved for certification of an interlocutory appeal, which the District Court denied. The plaintiffs then sought mandamus relief before the Ninth Circuit.

The Ninth Circuit held that the district court erred in failing to analyze the FAA exemption issue. however, because there was no case law directly on point, the Court held that the district court's error was not "clear error" sufficient to justify a writ of mandate:

We agree that [the plaintiffs] make a strong argument that the District Court erred, but we nonetheless hold that this case does not warrant the extraordinary remedy of mandamus. We therefore deny the petition.

Slip op. at 1. The opinion is available here.

Hensel Phelps Construction Co: Project on Public Land Subsidized by Rent Credits is Subject to Prevailing Wage Law

Interesting prevailing wage case: Hensel Phelps Construction Company v. San Diego Unified Port District (7/26/11) 197 Cal.App.4th 1020.

The Department of Industrial Relations (DIR) determined that a hotel construction project on public land leased from a government entity was covered by the Prevailing Wage Law (PWL). The developer and general contractor petitioned for writ of mandate, and a trade union intervened. The trial court (San Diego Superior, Judge William R. Nevitt) granted the developer's petition, and the trade union appealed.

The Court of Appeal reversed, holding that the construction project qualified as a public work where the lease required the lessor to build a hotel on the property, according to the government entity's specifications, and provided a rent credit to subsidize the project. A public agency may pay for construction out of public funds either by reducing rent or by charging rent at less than fair market value, and the rent credit constituted a reduction and waiver of rent for purposes of Labor Code Sec. 1720(b)(4). Because the project was paid for out of public funds, the PWL applied.

The opinion is available here.

NewLife Sciences v. Weinstock: Court Did Not Err in Granting Trade Secret Injunction as Discovery Sanction

In NewLife Sciences v. Weinstock (July 15, 2011) 197 Cal.App.4th 676, a medical device corporation brought a trade secret action against the device's inventor for trade secret and other claims, including an injunction to enforce a non-competition agreement. Following a number of discovery disputes, the court (Los Angeles Superior, Judge Charles F. Palmer) entered issue sanctions against the inventor. Relying on the issue sanctions, the Court later granted a preliminary injunction against the inventor, prohibiting him from competing against the corporation. After further discovery disputes, the court entered terminating sanctions.

On appeal from the order granting the order granting the preliminary injunction, the Court held that the trial court did not abuse its discretion in granting the preliminary injunction based on the issue sanctions.

Weinstock argues that the court erred in relying on the issue sanctions rather than holding a hearing to determine, without regard to the sanctions, whether the noncompete agreement was enforceable. He argues that had the court not granted the issue sanctions, it would have determined that the noncompete clause was invalid and unenforceable and would have found that NLS did not demonstrate a probability of success on the merits. Essentially, Weinstock argues that the court should have ignored the issue sanctions and determined the issues anew. This misunderstands the nature of issue sanctions. Such sanctions for discovery abuse may be proper even when inconsistent evidence is available, leaving the jury with a misimpression as to actual facts, because the sanctions “effectively remove[ ] from the jury's consideration evidence favorable to the offending party's position, or ... deem [ ] issues in favor of the aggrieved party even though the offending party has strong evidence to the contrary. Such is the natural consequence of serious discovery violations.” (Karlsson v. Ford Motor Co., supra, 140 Cal.App.4th at 1220, fn. 11, 45 Cal.Rptr.3d 265.) The court did not abuse its discretion in relying on the issue sanctions in granting the preliminary injunction.

The issue sanctions established that Weinstock knowingly breached his employment contract, including the noncompete clause, and engaged in unfair competition; that the employment contract and the noncompete clause were enforceable; that Weinstock used the TMR machine in doing so, and without the proper supervision of a physician; and that NLS suffered damages. These issues having been deemed determined against Weinstock, the court was entitled to consider them in determining NLS's likelihood of success. Given that the determined issues virtually assured that NLS would prevail at trial, there was a very strong showing of likelihood of success on its claim that Weinstock had violated the enforceable noncompete clause and had used the TMR device in doing so, to the detriment of NLS.

Slip op. at 10.

The opinion is available here.

Back from Hiatus - Ready to Catch Up

I'm back from hiatus and ready to catch up on some recent developments.

In Life Technologies Corp. v. Superior Court (7/14/11) 197 Cal.App.4th 640, the plaintiff in a discrimination and wrongful termination action sought detailed information regarding certain of his former co-workers, including:

(a) The names of all employees terminated during a two-year period, November 1, 2008 to June 28, 2010.

(b) The department each worked for when terminated.

(c) The date of termination.

(d) The age of each at termination.

(e) The reason for termination.

(f) Whether severance benefits were offered.

(g) Whether offered severance benefits were accepted.

(h) A description of any offered severance benefits.

(i) A detailed explanation of reasons for any failure to offer severance benefits.

(j) The identity (including name, address and telephone number) of all former Applied Biosystems employees still employed by LTC after the RIF.

(k) Whether the terminated employees were former employees of Appelera or Applied Biosystems.

Slip op. at 4. The trial court (San Mateo Superior, Judge Joseph C. Scott) granted the plaintiff's motion to compel, and the Court of Appeal granted the defendant's writ application. The Court held that the information sought "implicates significant privacy rights of the third party employees/former employees." Slip op. at 6. The Court distinguished Pioneer Electronics, Crab Addison, and Lee v. Dynamex because the potential witnesses were not class members. Slip op. at 8. The Court concluded:

We therefore conclude the trial court abused its discretion in ordering further answers to the challenged special interrogatories. The court failed to evaluate, with regard to each category of information requested by Joyce, whether a compelling need for the information outweighs the third parties' privacy interests, taking into consideration whether less intrusive means exist for Joyce to obtain the information he seeks. (See Britt, supra, 20 Cal.3d at pp. 855–864, 143 Cal.Rptr. 695, 574 P.2d 766; Harding Lawson Associates v. Superior Court, supra, 10 Cal.App.4th at p. 10, 12 Cal.Rptr.2d 538; El Dorado Savings & Loan Assn. v. Superior Court, supra, 190 Cal.App.3d at p. 346, 235 Cal.Rptr. 303.) The court also failed to provide sufficient notice to the third party employees/former employees affording them a simple, reasonable means of objecting to the disclosure of their personal information, and failed to provide for the protection of any such information ultimately ordered disclosed. (See Alch, supra, 165 Cal.App.4th at p. 1418, 82 Cal.Rptr.3d 470; cf. Code Civ. Proc., § 1985.6, subds. (b)–(f).)

Slip op. at 10. The opinion is available here.

Boschma v. Home Loan Center: Compliance with Truth in Lending Act Does Not Provide Safe Harbor in Fraud and UCL Action

Just a brief note on this case. In Boschma v. Home Loan Center, Inc. (8/10/11) 198 Cal.App.4th 230, the plaintiffs were borrowers who brought an action against a mortgage lender for fraudulent omissions and violations of Unfair Competition Law (UCL). Cal. Bus. & Prof. Code 17200. Specifically, the plaintiffs alleged that the lender's loan documents failed to disclose the essential terms of the loans, "namely that plaintiffs would suffer negative amortization if they made monthly payments according to the only payment schedule provided to them prior to the closing of the loan."

The trial court (Orange County Superior, Judge Andler) sustained the lender's demurrer without leave to amend, and the borrowers appealed. The Court of Appeal reversed, holding that the borrowers adequately alleged fraud and violation the UCL to withstand demurrer based on defendant’s allegedly misleading, incomplete, and/or inaccurate disclosures. 

The opinion is available here.

More District Court Reaction to Dukes

Last week I noted Spellman v. American Eagle Express, No. 10-1764 (E.D. Pa. July 21, 2011), in which the district court declined to reconsider its order granting conditional certification in light of Walmart v. Dukes. I have learned of three similar orders in other cases:

Jasper v. C.R. England, Inc., No. 08-05266 (C.D. Cal. June 30, 2011), in which the court denied an application to vacate an order certifying a Rule 23 class action alleging violation of California wage law on behalf of a class of truck drivers deemed independent contractors.

Butcher v. United Airlines, Inc., No. 09-11681 (D. Mass. July 22, 2011), in which the court denied a motion for reconsideration following Dukes:

Dukes does not involve the FLSA, and its holding does not apply to conditional certification. It is well settled that Rule 23 is more stringent than § 216(b) generally, see Lewis v. Wells Fargo Co., 669 F. Supp. 2d, 1124, 1127 (N.D. Cal. 2009) (The requisite showing of similarity of claims under the FLSA is considerably less stringent than the requisite showing under Rule 23 of the Federal Rules of Civil Procedure, quoting Wertheim v. Arizona, 1993 WL 603552, at *1 (D. Ariz. 1993)), and especially so at the conditional certification stage.

And Ramos v. SimplexGrinnell LP, No. 07-CV-981 (E.D. NY June 21, 2011), in which the court granted a Rule 23(b)(3) motion for class certification in an action for unpaid prevailing wages under New York law.

The Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. _, 2011 WL 2437013 (2011), issued earlier this week, does not command a different result. In Wal-Mart, the Court considered whether plaintiffs had bridged the “conceptual gap” between an individual’s claim of injury and the existence of a class of persons who have suffered the same injury. 2011 WL 2437013, at *8. The Court held that the gap could be bridged with “significant proof that [defendant] operated under a general policy of discrimination.” Id. (internal quotation marks omitted). The Court found that such proof was “entirely absent” and emphasized that plaintiffs did not allege “any express corporate policy” of discrimination, id. at *4, and that the challenged pay and promotion decisions were “generally committed to local managers’ broad discretion, which [was] exercised in a largely subjective manner.” Id. at *3. The relevant facts and circumstances in Wal-Mart have little bearing here. As indicated above, plaintiffs have come forward with significant proof that defendant routinely failed to account for labor performed on public works projects and pay prevailing wages for covered work. Moreover, there is little discretion or subjective judgment in determining an employee’s right to be paid prevailing wages; the right arises automatically, by operation of law, provided the nature of the construction project and the type of labor performed fall within the scope of New York Labor Law § 220. In addition, whereas in Wal-Mart defendant had an “announced policy” prohibiting discrimination, id. at *8, defendant here has not come forward with evidence of an expressed uniform policy that ensured the payment of prevailing wages to its employees when due. Finally, although the efforts of the Wal-Mart plaintiffs to prove their case with statistical evidence failed, plaintiffs here have come forward with class-wide proof culled from defendant’s electronic data that, as discussed in greater detail below, is sufficiently reliable to be presented at trial.

Slip op. at 9-10.

On the other hand, there is Cruz v Dollar Tree Stores Inc., Nos. 07-2050 SC, 07-4012 SC (N.D. Cal. July 7, 2011), in which the court decertified a class of store managers because plaintiffs' plan to rely at trial on "representative testimony from a handful of class members" became untenable following Marlo v. United Parcel Service, Inc. ("Marlo II") --- F.3d --- (9th Cir. 4/28/11) and Dukes.

Spellman v. American Eagle: Dukes Does Not Apply to FLSA Conditional Certification Order

Spellman v. American Eagle Express, No. 10-1764 (E.D. Pa. July 21, 2011) is a FLSA collective action in which the plaintiffs allege that American Eagle (AEX) misclassified them and their co-workers as independent contractors, rather than employees. In May, the court granted conditional certification. After the Supreme Court issued its decision in Walmart v. Dukes, the defendant moved for reconsideration. The court denied the motion:

On May 11, 2011, this Court granted Plaintiffs’ motion for conditional certification of a Fair Labor Standards Act (FLSA) collective class, represented by the named Plaintiffs and consisting of all former and current AEX delivery drivers who may be owed unpaid overtime wages under the FLSA. AEX asks this Court to reconsider its Order, arguing the Supreme Court’s recent decision in Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011), renders conditional certification inappropriate. In Dukes, the Supreme Court declined to certify a class pursuant to Federal Rule of Civil Procedure 23 on the basis that Rule 23(a)(2)’s commonality requirement could not be satisfied. Id. at **18.

The instant case is a collective action brought pursuant to the FLSA, 29 U.S.C. § 216(b). Unlike Rule 23 class actions. the FLSA requires collective action members to affirmatively opt in to the case. See § 216(b). To determine whether the proposed group of plaintiffs is “similarly situated,” and therefore qualified to proceed as a conditional collective action, a district court applies a two-step test. See Smith v. Sovereign Bancorp, Inc., No. 03-2420, 2003 U.S. Dist. LEXIS 21010 (E.D. Pa. Nov. 13, 2003). In the first step, which is assessed early in the litigation process, the plaintiff at most must make only a “modest factual showing” that the similarly situated requirement is satisfied. See Bosley v. Chubb Corp., No. 04 - 4598, 2005 U.S. Dist. LEXIS 10974, at *7-9 (E.D. Pa. Jun. 3, 2005). The Plaintiffs have made this modest factual showing, and this Court’s analysis is not affected by Dukes. The second step of the collective action certification process will be conducted at the close of class-related discovery, at which time this Court will conduct “a specific factual analysis of each employee’s claim to ensure that each proposed plaintiff is an appropriate party.” Harris v. Healthcare Servs. Grp., Inc., No. 06-2903, 2007 U.S. Dist. LEXIS 55221, at *2 (E.D. Pa. Jul. 31, 2007). At this second stage, AEX may argue that Dukes’s analysis of what constitutes a “common question” is persuasive to this Court’s analysis of whether an FLSA collective action should be certified. In the interim, AEX’s motion for reconsideration is denied.

Slip. op at 1 fn. 1.