In a major ruling on a
wage-hour case several years ago, the California Supreme Court encouraged the
use of class actions to efficiently resolve the claims of many individuals at
the same time.1
In that
decision’s aftermath, employers feared it would become harder to convince
courts to deny class certification. However, a new case shows that class
certification isn’t a foregone conclusion.
Can This Class Be
Certified?
The grocery chain
Albertson’s Inc. operates stores in
each generally having a grocery manager and a store director to whom the
grocery manager reports.
Maurice Dunbar filed a
lawsuit on behalf of himself and approximately 900 other Albertson’s grocery
managers, charging that they were misclassified as exempt managers. The suit
sought back overtime and benefits.
certify the case as a class action. In support of this, he provided the court with
declarations from 61 grocery managers stating that most of their work time was
spent performing nonmanagerial tasks, including “walking the floor” to verify proper
shelf inventory, stocking shelves, organizing the stock room, unloading
merchandise, responding to customer questions, cashiering, putting price tags
on items, checking inventory, and doing routine paperwork.
Paying Overtime: 10 Key Exemption Concepts
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Employer Says No Common
Issues, No Class Action
Albertson’s countered
with declarations from another 79 grocery managers, showing that they performed
mostly managerial tasks and therefore qualified as exempt. What’s more,
Albertson’s argued that the tasks grocery managers had to perform—whether
exempt or nonexempt duties—varied greatly from week to week and from store to
store, depending on store size, number of departments in that store,
neighborhood demographics, personal management style, etc. Thus, the company
contended, the legal and fact issues were different for each manager—meaning
there was no “commonality”—so the case could not proceed as a class action.
The trial court refused
to certify the case as a class action. The court agreed with Albertson’s that
common issues did not predominate among the managers, so a class action was not
an efficient way to resolve the litigation.
appealed.
Class Cert Denial Upheld
Now a California appeals
court has upheld the order denying class certification.2 The court explained that
to certify a class action under California law, the class representative—Dunbar—must
show that his claims are typical of the class and that common questions of law or
fact predominate among the class members.
The court agreed with
the trial court that, because of the significant variation in duties among the
900 grocery managers, 900 individual inquiries would be required to determine
exempt status. So it was reasonable to conclude that
claims were not necessarily typical of the class, that legal and factual issues
were different for each of the 900 class members, and that a class action wasn’t
an efficient means to resolve the case.
What’s more, said the
court, commonality wasn’t established simply because each grocery manager had the
same job title and job description and Albertson’s had a uniform policy and
practice of classifying all 900 grocery managers as exempt. That’s because
courts must engage in an actual fact inquiry, rather than just look at a job
description, when determining whether someone is exempt or nonexempt.
Furthermore, a single policy decision to classify employees as exempt may be
accurate for some individuals but not others, so a common policy or practice
doesn’t prove commonality for class action purposes.
Impact for Employers
This decision is
significant because it shows that courts at both the trial and appellate levels
are still willing to scrutinize whether it is appropriate to hear a case as a
class action or to simply have each individual file his or her own claim.
Nevertheless, it remains critical for employers to use care in classifying
employees as exempt. It is dangerous to impose exempt status on a large job
category without taking a close look at the duties performed by individuals in
that job.
You can find the
decision online at www.courtinfo.ca.gov/opinions/.
_
1 Sav-On Drug Stores Inc. v. Superior Court
(Rocher), Calif., Calif. Supreme Court No. S1-6718, 2004
2 Dunbar v. Albertson’s
Inc.,
Court of Appeal (Dist. 1) No. A111153, 2006