Supreme Court Hears Dukes Oral Argument

The Supreme Court has just finished hearing oral argument in Wal-Mart v. Dukes, the national gender discrimination class action.

According to the Associated Press, "The justices suggested that they are troubled by lower court decisions allowing the class-action lawsuit to proceed against the world's largest retailer. Justice Anthony Kennedy, often a key vote on the high court, said he is unsure 'what the unlawful policy is' that Wal-Mart engaged in to deprive women of pay increases and promotions comparable to men."

Given Kennedy's swing role on the Court, this obviously is a bad sign for the plaintiffs.

I will post more news as it becomes available.

More from the AP:

Joseph Sellers, the lawyer for the women, said that lower courts were persuaded by statistical and other evidence put forth so far in the 10-year-old lawsuit.

Sellers said a strong corporate culture at Wal-Mart's Bentonville, Ark., headquarters that stereotyped women as less aggressive than men translated into individual pay and promotions decisions at the more than 3,400 Wal-Mart and Sam's Clubs stores across the country.

"The decisions are informed by the values the company provides," Sellers said.

Justice Antonin Scalia said he felt "whipsawed" by Sellers' description. "Well, which is it?" Scalia asked. Either individual managers are on their own, "or else a strong corporate culture tells them what to do," he said.

***

Justice Ruth Bader Ginsburg said that at this stage of the lawsuit, the issue is not proving discrimination, but showing enough evidence to go forward. "We're talking about getting a foot in the door," Ginsburg said, a standard she called not hard to meet.

The 78-year-old justice, who made her name by bringing discrimination claims, said it was possible that Wal-Mart could refute the claims at a trial.

But several of her colleagues appeared to agree with Boutrous that even subjecting Wal-Mart to a trial would be unfair.

The transcript is now available here. I will post more once I can review it.

Dukes Oral Argument On Calendar for 3/29

The Supreme Court of the United States will hear oral argument in Wal-Mart Stores, Inc. v. Dukes on March 29, 2011, at 10:00 a.m. EST. I have not had time to dissect the merits briefs, but they are available on the Impact Fund's web site (and from other sources):

Wal-Mart's Opening Brief

Plaintiffs' Brief

Wal-Mart's Reply Brief

The merits briefs and al of the amicus briefs are available here. The Impact Fund has additional info on the case here. After the oral argument, the Court will post the transcript here, and we'll provide a synopsis. SCOTUSblog has comprehensive coverage. Nabiha Syed details media coverage, and Amanda Frost writes about academic debate inspired by the case. Lyle Deniston gives a good preview of the argument.

Kasten v. Saint-Gobain: Verbal Complaints Protected Under FLSA, US Supreme Court Says

Kasten v. Saint-Gobain Performance Plastics Corp. (3/22/11) --- U.S. ---, 2011 WL 977061, resolves an important question regarding retaliation claims under the federal Fair Labor Standards Act (FLSA). The FLSA makes it illegal “to discharge ... any employee because such employee has filed any complaint” alleging a violation of the Act. 29 U.S.C. § 215(a)(3).

The District Court in one action found that defendant Saint-Gobain violated the FLSA by placing timeclocks in a location that prevented workers from receiving credit for the time they spent donning and doffing work-related protective gear.

Plaintiff Kevin Kasten then brought an FLSA anti-retaliation suit against Saint-Gobain, alleging that Saint-Gobain discharged him because he orally complained to company officials about the timeclocks. The District Court granted Saint-Gobain summary judgment, concluding that the Act's antiretaliation provision did not cover oral complaints. The Seventh Circuit affirmed.

The Supreme Court reversed, holding that Congress intended the antiretaliation provision to cover oral, as well as written, complaints.

The sole question presented is whether “an oral complaint of a violation of the Fair Labor Standards Act” is “protected conduct under the [Act's] anti-retaliation provision.” The Act protects employees who have “filed any complaint,” 29 U.S.C. § 215(a)(3), and interpretation of this phrase “depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authorities that inform the analysis.” This analysis leads us to conclude that the language of the provision, considered in isolation, may be open to competing interpretations. But considering the provision in conjunction with the purpose and context leads us to conclude that only one interpretation is permissible.

Slip op. at 4.

Several functional considerations indicate that Congress intended the antiretaliation provision to cover oral, as well as written, “complaint[s].” First, an interpretation that limited the provision's coverage to written complaints would undermine the Act's basic objectives. The Act seeks to prohibit “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” 29 U.S.C. § 202(a). It does so in part by setting forth substantive wage, hour, and overtime standards. It relies for enforcement of these standards, not upon “continuing detailed federal supervision or inspection of payrolls,” but upon “information and complaints received from employees seeking to vindicate rights claimed to have been denied.” And its antiretaliation provision makes this enforcement scheme effective by preventing “fear of economic retaliation” from inducing workers “quietly to accept substandard conditions.”

Slip op. at 7.

The Secretary of Labor has consistently held the view that the words “filed any complaint” cover oral, as well as written, complaints. The Department of Labor articulated that view in an enforcement action filed many years ago... It has subsequently reaffirmed that view in briefs. And more recently it has acted in accordance with that view by creating a hotline to receive oral complaints...

Slip op. at 9.

Justice Breyer wrote the majority opinion. Justice Scalia dissented, with Justice Thomas joining. Justice Kagan did not take part. The opinion is available here.

Augusta v. Keehn: Court Finds Plaintiff Who Filed Civil Action Waived Right to Compel Arbitration

I like to keep track of decisions dealing with the waiver of one's right to compel arbitration. See posts here and here.

This one came out a while ago, but I've never published my post on it. In Augusta v. Keehn & Associates (3/4/11) 193 Cal.App.4th 331, the Court of Appeal affirmed the holding of the trial court (San Diego Superior Court, Judge Jay M. Bloom) that the plaintiff waived his right to arbitrate a legal malpractice claim where he knew of the arbitration clause when he filed his civil complaint but did not petition to compel arbitration for six and a half months and plaintiff undertook formal discovery in the civil action. The Court held that substantial evidence supported the trial court's finding that defendant’s supplemental discovery responses were sufficiently prejudicial to warrant the denial of arbitration since these answers revealed new information, and plaintiff had refused to reciprocate in discovery.

The opinion is available here.

Supreme Court Calendars Sullivan v. Oracle Oral Argument

The California Supreme Court will hear oral argument in Sullivan v. Oracle on April 6, 2011, at 9:00 a.m., in Los Angeles. Sullivan raises the following questions:

First, does the California Labor Code apply to overtime work performed in California for a California-based employer by out-of-state plaintiffs in the circumstances of this case, such that overtime pay is required for work in excess of eight hours per day or in excess of forty hours per week?

Second, does § 17200 apply to the overtime work described in question one?

Third, does § 17200 apply to overtime work performed outside California for a California-based employer by out-of-state plaintiffs in the circumstances of this case if the employer failed to comply with the overtime provisions of the FLSA?

We will provide more information as soon as we can after the oral argument.

Seymore v. Metson Marine: Court of Appeal Issues On Call Time, Sleep Time Decision

Seymore v. Stetson Marine, Inc. (2/28/11) --- Cal.App.4th ----, 2011 WL 680344, is an unusual case involving 24-hour shifts, on call time, and sleep time. The defendant, Metson, "provides 'crew members and vessel operations for offshore oil spill recovery vessels.' Metson's vessels must be prepared to respond to emergency oil spills 24 hours a day. Plaintiffs were employed as crew members on Metson's ships...." Plaintiffs worked 14-day “hitches” on Metson's ships, alternating with 14 days off. Each shift started on a Tuesday at noon, and ended 14 days later. Metson paid plaintiffs for 12 hours per day -- 8 hours at straight time, and 4 hours at time and a half -- whether they worked 12 hours or not. The remaining hours were designated "stand by" time: 8 hours for sleep; three hours for meals; and 1 hour for recreation. Plaintiffs could leave the ship, but had to carry a pager and be able to return within 30 to 45 minutes.

Plaintiffs filed suit for unpaid overtime, the trial court (Contra Costa Superior Court, Judge Maddock) granted summary judgment for Metson, and plaintiffs appealed. The Court of Appeal reversed in part and affirmed in part.

First, the Court held that Metson "attempted to evade" the overtime laws in the way that it calculated Plaintiffs' workweek:

Although it is undisputed that Metson's employees, including plaintiffs, worked a regular 14-day schedule beginning at noon on Tuesdays and ending at noon two Tuesdays later, Metson calculated overtime pay on the premise that the workweek began at 12:00 a.m. on Monday and ended at 11:59 p.m. the following Sunday. Under Metson's calculations, plaintiffs worked six days in the first workweek, seven days in the second workweek and two days in a third workweek. On that basis, plaintiffs were paid a single seventh day premium at the end of the second workweek.

Slip op. at 3, citing In re Wal-Mart Stores, Inc. Wage and Hour Litigation (N.D.Cal.2007) 505 F.Supp.2d 609, 617-618. Addressing the argument that an employer may designate its own workweek, the Court held: "Metson may designate any workweek it wishes, but the workweek it selects and requires its employees to observe is the workweek it must use for the purpose of calculating employee compensation." Slip op. at 4.

The Court next agreed with the plaintiffs that they were entitled to overtime pay for the 12 hours they were on "stand by" each day because the restrictions Metson imposed during that time period subjected them to Metson's continued control. After reviewing the rule that employers must pay for all time during which their employees are within their control (Morillion v. Royal Packing Co.), the Court held:

It is undisputed that Metson allocated eight hours of the twelve hours of off-duty, standby time for sleeping and required plaintiffs to sleep aboard ship during their 14 day hitches. With respect to the remaining four hours of the twelve off-duty standby hours, plaintiffs were subject to a response time requirement that effectively placed a geographic restriction on their activities during that period. “As a practical matter, if an employee is not required to remain on the employer's premises, geographical restrictions are imposed according to the required response time for an employee to return to the employer's premises. [Citations.] In such cases, the employee while on-call may only travel that distance from the employer's premises which can be traveled safely within the required response time.” [Citations.] The undisputed evidence here establishes that if plaintiffs left their ship during their standby time, they needed to be able to return to the ship within at most 45 minutes.

Considering only the four hours not designated as a period for sleep ... plaintiffs were free to pursue whatever activities they chose, so long as they did not consume alcohol and could safely return to the ship within the prescribed time. The required response time (and perhaps the alcohol ban) precluded plaintiffs from going places and pursuing activities in which they might otherwise have engaged. [Citations.] Nonetheless, plaintiffs were free to pursue recreational activities of their choice aboard ship, such as reading, watching television or using the internet, and they could and did leave the ship to exercise and run personal errands. Moreover, the undisputed evidence is that emergencies were rare and that plaintiffs were seldom called back to the ship during their off-duty standby hours.

***

Except with respect to certain occupations in which the employee resides on the premises, covered by a different wage order, California courts have consistently held that an employee required to sleep at the work site is subject to the employer's control during sleeping hours. [Citations.]

***

Thus, assuming that the restrictions imposed by Metson on its employees, including the on-board sleeping requirement, are in fact reasonable in light of the nature of the services Metson provides, hours during which the employees remain under the substantial control of Metson nonetheless constitute hours worked. Such control unquestionably exists during hours that employees are required to sleep aboard ship.

***

Thus, the degree of control exercised by requiring the employees to sleep aboard ship, which is not their residence, renders the eight sleep time hours “hours worked” under California law. The fact that plaintiffs were required to spend their sleeping hours aboard ship also bears on the appropriate characterization of the additional four hours per day of standby time. While the balance of factors specified in Gomez might otherwise lead to the conclusion that those four hours are not under the employer's control, the fact that the employees must under all circumstances return to the ship to sleep tips the balance in the other direction. The on-board sleep requirement significantly affects and limits what the employee can and cannot do during the four non-sleeping hours. [Citations.] Viewing the entire 12-hour off-duty standby period as a whole, the restrictions placed on plaintiffs' whereabouts significantly restricted their ability to pursue activities of their choice. [Citations.]

Slip op. at 6-10. The Court thus concluded that all 24 hours of each day was "hours worked." However, the Court held that this did not equate to compensable time.

As noted above, Metson allocated eight hours of unpaid time a day for sleep. The undisputed facts establish that sleeping facilities were provided for employees on the ships, and that it was exceptionally rare for their sleep to be interrupted by an emergency. The undisputed facts also establish an implied agreement between the parties that plaintiffs would not be compensated for eight hours of sleep time so long as their sleep was not interrupted. Prior to their employment, plaintiffs received a handbook that set forth Metson's compensation policies, including that employees would not be compensated for eight hours of “off-duty” sleep time each day. Plaintiffs did not dispute that they were “aware of and worked for [Metson] pursuant to the pay structure set forth in [Metson's] employee handbook.”

Thus, while plaintiffs were entitled to be compensated for only four, rather than 12, hours of standby time during each 24-hour working day, the summary judgment in favor of Metson must be reversed also because plaintiffs are entitled to be compensated for those four-hour periods.

Slip op. at 12.

The opinion is available here.

In re. Baycol Cases I and II: Cal. Supreme Court Clarifies Class Action "Death Knell" Doctrine

In re Baycol Cases I and II (2/28/11) --- Cal.4th ----, 2011 WL 682378, clarifies issues regarding the “death knell” doctrine in class actions. In Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, the Supreme Court adopted a “death knell” doctrine that allowed a party to appeal immediately orders dismissing class action claims. In Baycol, the Court considered whether the doctrine extends to orders that simultaneously terminate individual claims as well, or does it apply only where, as in Daar itself, individual claims survive?

We conclude the preservation of individual claims is an essential prerequisite to application of the death knell doctrine: the doctrine renders appealable only those orders that effectively terminate class claims but permit individual claims to continue. When instead an order terminates both class and individual claims, there is no need to apply any special exception to the usual one final judgment rule to ensure appellate review of class claims. Instead, routine application of that rule suffices to ensure review while also avoiding a multiplicity of appeals. Because the Court of Appeal misapplied these principles in dismissing an appeal from the sustaining of a demurrer to class claims here, we reverse.

Slip op. at 1. The Court explained, and I'll quote it at some length because I find it interesting:

Two procedural circumstances were critical to our decision in Daar: first, that the appealed-from order was the practical equivalent of a final judgment for some parties, and second, that in the absence of our treating the order as a de facto final judgment, any appeal likely would be foreclosed. On the first point, the order “virtually demolished the action as a class action” and was in “ ‘legal effect’ ... tantamount to a dismissal of the action as to all members of the class other than plaintiff”. In cases decided since Daar, we and the Courts of Appeal have emphasized that orders that only limit the scope of a class or the number of claims available to it are not similarly tantamount to dismissal and do not qualify for immediate appeal under the death knell doctrine; only an order that entirely terminates class claims is appealable.

Equally important in Daar was the circumstance that the order appealed from was essentially a dismissal of everyone “ other than plaintiff.” We emphasized that permitting an appeal was necessary because “[i]f the propriety of [a disposition terminating class claims] could not now be reviewed, it can never be reviewed”, and we were understandably reluctant to recognize a category of orders effectively immunized by circumstance from appellate review. This risk of immunity from review arose precisely, and only, because the individual claims lived while the class claims died. As the United States Supreme Court has explained, “[t]he ‘death knell’ doctrine assumes that without the incentive of a possible group recovery the individual plaintiff may find it economically imprudent to pursue his lawsuit to a final judgment and then seek appellate review of an adverse class determination.” This concern-that an individual plaintiff may lack incentive to pursue his individual claims to judgment, thereby foreclosing any possible appellate review of class issues-is present in cases such as Daar, where individual claims persist but remain unresolved, but is wholly absent in cases where a final judgment resolving all claims will follow as a matter of course without further action by the individual plaintiff. Consistent with this understanding, decisions in other jurisdictions specially permitting appeal of orders terminating class claims routinely rely on the assumption that appeal is warranted because review otherwise would be foreclosed by the persistence of individual claims.

Thus understood as requiring an order that (1) amounts to a de facto final judgment for absent plaintiffs, under circumstances where (2) the persistence of viable but perhaps de minimis individual plaintiff claims creates a risk no formal final judgment will ever be entered, the death knell doctrine fits comfortably within the existing statutory framework. In Daar itself, we described the class certification denial order as “in legal effect a final judgment” settling the respective rights of the absent class members vis-à-vis the defendant, and thus within the settled rule that orders amounting to de facto judgments as to some but not all parties could be treated as final judgments and appealed under former section 963.

Slip op. at 3-4.

Justice Werdegar wrote for a unanimous Court. The opinion is available here.