Oracle Labor Law Class Action Defense Cases–Sullivan v. Oracle: Ninth Circuit Reverses Summary Judgment In Favor Of Defense In Labor Law Class Action Holding California Labor Code Applies To Work Performed In The State By Nonresidents

Class Action Against Oracle Alleging Failure to Pay Overtime Pursuant to State and Federal Laws Survives Summary Judgment as to California Law Claims because Nonresidents are Protected by California Labor Code for Work Performed within California, but District Court Properly Granted Summary Judgment as to Class Action Claim Alleging Violation of California’s Unfair Business Practices Act (UCL) for Failure to Pay Overtime under Federal Fair Labor Standards Act (FLSA) because California’s UCL “does not have Extraterritorial Application” Ninth Circuit Holds

Plaintiffs filed a class action against their employer, Oracle, alleging labor law violations; specifically, the class action complaint asserted that Oracle failed to pay employees overtime under either the federal Fair Labor Standards Act (FLSA) or California state law. Sullivan v. Oracle Corp., ___ F.3d ___ (9th Cir. November 6, 2008) [Slip Opn., at 15261]. According to the class action, Oracle hired hundreds of employees “to train Oracle customers in the use of its software” but “classified these workers as teachers who were not entitled to compensation for overtime work under either federal or California law.” _Id._ The putative class was not limited to California residents, and the three putative class representatives were nonresidents of California who “performed only some of their work for Oracle in California,” _id._ The class action complaint contained three claims for relief – two of them sought recovery for work performed in California, and one for work performed “anywhere in the United States.” _Id._ Each of the claims, however, was premised on California law; specifically, either the California Labor Code, or California Business & Professions Code section 17200 (unfair business practices). _Id._, at 15264-65. Defense attorneys moved for summary judgment on all claims in the class action; the district court granted the motion “on the ground that the relevant provisions of California law did not, or could not, apply to the work performed by Plaintiffs.” _Id._, at 15261. The district court reasoned that California’s Labor Code “do[es] not apply to nonresidents who work primarily in other states,” and that it would violate the Due Process Clause of the Fourteenth Amendment to construe the Labor Code so as to apply to work performed primarily outside of California, _id._, at 15265. Similarly, the federal court concluded that California’s unfair business practices statute does not apply to work performed outside of California, _id._ The Ninth Circuit affirmed as to the class action’s unfair business practices claim premised on work performed outside of California, but reversed as to the first two claims for relief.

Briefly, Oracle’s principal place of business is California, and it hires “instructors” on a contract basis to travel throughout the U.S. and for the purpose of training its customers in the use of Oracle software. Sullivan, at 15261-62. Three individuals – two of them residents of Colorado, and the third a resident of Arizona – worked as Oracle Instructors; they each spent a limited amount of time in California, though not necessarily each calendar year. See id., at 15262-63. None of the plaintiffs worked more than 36 days in California during a calendar year, and one of the plaintiffs did not work in California at all one year. Id. Oracle originally classified its instructors as “teachers” and did not pay them overtime; however, in 2003 Oracle reclassified its California instructors and began paying them overtime under California law, and in 2004 it reclassified its remaining instructors and began paying them overtime under the FLSA. Id., at 15263.

Class Action Court Decisions Employment Law Class Actions Uncategorized

FLSA Class Action Defense Cases—In re DirecTech: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Eastern District of Louisiana

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Class Action Plaintiffs, and Transfers Actions to Eastern District of Louisiana Three class actions –in the Eastern District of Louisiana, the Western District of Tennessee and the Eastern District of Texas – were filed against DirecTech Southwest alleging violations of the federal Fair Labor Standards Act; specifically, the class action complaints allege defendant failed to pay its technicians overtime as required by the FLSA.

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Class Action Defense Cases–Brinkley v. Public Storage: In Labor Law Class Action, California State Court Affirms Defense Summary Judgment On Class Action’s Meal And Rest Period Claims Holding Breaks Need Only Be Available

Class Action Claims Alleging Employer Violated State Law because it did not Ensure Employees took Meal and Rest Breaks Failed because Employer need only make Meal and Rest Breaks “Available” but need not “Ensure” they are taken California State Court Holds

Plaintiff filed a class action against his former employer, Public Storage, alleging state labor law violations; in pertinent part, the class action complaint alleged that the paystubs defendant provided to employees failed to comply with state law, and that defendant failed to ensure that employees took all meal and rest breaks permitted by state law. Brinkley v. Public Storage, Inc., 167 Cal.App.4th 1278 (Cal.App. 2008) [Slip Opn., at 2]. The trial court granted plaintiff’s motion to certify the litigation as a class action. Id., at 4-5. Defense attorneys then moved for summary judgment on the grounds that (1) the class action paystub claim failed because defendant’s misstatements were not knowing and intentional, and plaintiff did not suffer any injury, and (2) the class action meal and rest period claims failed because defendant made the breaks available, and California law requires nothing more. Id., at 2. The trial court granted the defense motion and entered judgment in favor of defendant as to all causes of action in the class action complaint premised on those theories (the third, fifth and sixth causes of action). Id., at 5. The California Court of Appeal affirmed. We address the issues in reverse order, because far more labor law class action complaint allege missed meal and rest breaks.

With respect to the class action’s meal and rest period claim, the appellate court held that an employer need only make such breaks available to employees but need not ensure that they are taken. Brinkley, at 10-12 (meal periods) and 12-13 (rest periods). Specifically addressing the class action’s meal breaks claim, the appellate court explained that while plaintiff introduced evidence only that he and other class members “at times missed meal breaks,” but he “did not produce evidence that he or other employees were denied an opportunity to take them.” Id., at 12. Similarly, as for the class action’s rest period claim, defendant pointed to its written policy authorizing employees to take rest breaks, plaintiff’s receipt of that policy, and defendant statements at meetings instructing employees that they were required to take rest periods. Id., at 13. The Court of Appeal held that plaintiff’s allegation that he “could not” take rest breaks was insufficient to raise a triable issue of material fact, id.

Class Action Court Decisions Employment Law Class Actions Uncategorized

FLSA Class Action Defense Cases–Hoffman v. Construction Protective Services: Ninth Circuit Affirms Order Barring Plaintiffs From Introducing Evidence Of Damages At Trial Of Labor Law Class Action Due To Plaintiffs’ Failure To Disclose Damages

FLSA Class Action Plaintiffs Required to Disclose Evidence of Computation of Damages under Rule 26(a) and Failure to do so Justified District Court Order Granting Motion In Limine Barring such Damages Evidence at Trial as Sanction under Rule 37 Ninth Circuit Holds Plaintiffs filed a class action against Construction Protective Services alleging violations of the federal Fair Labor Standards Act (FLSA) and of the California Labor Code. Hoffman v. Construction Protective Services, Inc.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases–In re Lucent Death Benefits: Third Circuit Affirms Dismissal Of ERISA Class Action Agreeing That Pension Benefit Was Unvested And Terminable By Lucent

District Court Properly Dismissed ERISA Class Action because Employer’s Termination of Pensioner Death Benefits Underlying Class Action Claims were “an Unvested Welfare Benefit” and ERISA did not Prohibit Termination of the Benefit Third Circuit Holds Plaintiffs, former employees of AT&T and Lucent Technologies, filed a putative class action against various defendants alleging violations of the Employee Retirement Income Security Act (ERISA); specifically, the class action complaint alleged that defendants violated ERISA in terminating a pensioner death benefit.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases–Rojas v. Brinderson:  California Federal Court Dismisses Labor Law Class Action For Failure To Allege Facts Necessary To Establish Class Action Claim

Class Action Claim on which Federal Court’s Original Jurisdiction was Based Dismissed for Failure to Plead Necessary Elements, and Supplemental Jurisdiction over Remaining Labor Law Class Action Claims will not be Exercised California Federal Court Holds

Plaintiffs-employees filed a labor law class action against Brinderson Constructors; the class action complaint contained five wage and hour claims, and a claim for alleged violation of California Labor Code section 2810.  Rojas v. Brinderson Constructors Inc., 567 F.Supp.2d 1205, 1207 (C.D. Cal. 2008).  With respect to the wage-and-hour claims, “[a] class action involving these very claims has been pending in California state court since 2004.”  Id.  Defense attorneys moved to dismiss the class action’s Labor Code section 2810 claim, which the district court had previously dismissed with leave to amend.  Id.  The district court granted the defense motion to dismiss the class action’s sixth cause of action, and then declined to exercise supplemental jurisdiction over the class action’s remaining state law claims and, accordingly, dismissed the class action complaint in its entirety.  Id.

Because the district court found Section 2810 to be unambiguous, the court found it unnecessary to consider the statute’s legislative history.  Rojas, at 1208.  The federal court explained at page 1208, “Under Section 2810(a), an entity is liable ‘where the entity knows or should know that the contract or agreement [it entered] does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws.’”  According to the statute, liability is predicated on an entity “entering into a contract with actual or constructive knowledge of the insufficiency of the funds,” thus requiring that the class action allege not only that Brinderson violated labor laws but that the Refinery Defendants “knew or should have known that their contracts with Brinderson did not include sufficient funds for Brinderson to comply with those laws.”  Id., at 1208-09.  The district court found that “Plaintiffs’ scattered allegations and incongruous arguments firmly ground this claim in conjecture.”  Id., at 1209.  Based on the court’s analysis, see id., at 1209-10, it held that “Plaintiffs may not proceed with this claim based on such vacuous allegations,” id., at 1210.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases–Shirk v. Fifth Third Bancorp: Ohio Federal Court Certifies ERISA Class Action Holding Rule 23’s Class Action Requirements Were Met And That ERISA Breach Of Fiduciary Duty Claims Are Appropriate For Class Action Treat

ERISA Class Action Claims Satisfied Requirements for Class Action Treatment because “Federal Courts have Overwhelmingly Held that ERISA Breach of Fiduciary Duty Claims are Appropriate for Class Action Treatment” Ohio Federal Court Holds

Plaintiffs, former employees of Fifth Third Bancorp and participants in the company’s profit sharing plan, filed a class action against various defendants alleging breach of fiduciary duties under ERISA; specifically, the class action complaint asserted that the company’s stock was an “imprudent investment” during the proposed class period. Shirk v. Fifth Third Bancorp, ___ F.R.D. ___ (S.D. Ohio September 30, 2008) [Slip Opn., at 1-2]. According to the class action, defendants “knew or should have known that the merger of Fifth Third with Old Kent Financial Corp. severely strained Fifth Third’s infrastructure and exposed a widespread breakdown in Fifth Third’s internal controls, … [which] ultimately led Fifth Third to take an $81 million dollar pre-tax charge for its erroneous accounting reconciliation.” _Id._, at 2. Thus, the district court explained at page 2 that “[t]he quintessential claim is that Fifth Third stock was an imprudent investment for the Plan throughout the class period.” Plaintiff filed a motion with the federal court for certification of the litigation as a class action; the district court granted the motion.

Preliminarily, the federal court stated that “federal courts have overwhelmingly held that ERISA breach of fiduciary duty claims are appropriate for class action treatment.” Shirk, at 3 (footnote omitted). The district court readily found the class action numerosity requirement had been met because the proposed class contained 20,000 people. Id., at 3-4. The court also found that the commonality and typicality requirements for class action treatment had been satisfied, id., at 4-5, and that plaintiff was an adequate class representative, id., at 5-6. Finally, analyzing the class action requirements of Rule 23(b), the federal court concluded that ERISA breach of fiduciary duty class actions are properly certified under Rule 23(b)(1)(B), which states that courts may certify a lawsuit as a class action if “the prosecution of separate actions by or against individual members of the class would create a risk of * * * adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.” Id., at 7. Accordingly, the district court granted plaintiff’s class action certification motion. Id., at 9.

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized

FLSA Class Action Defense Cases–Roussell v. Brinker International: Texas Federal Court Decertifies FLSA Class Action Holding Central Question Could Not Be Resolved Fairly In Single Collective Proceeding

Class Action Alleging Employer Coerced Restaurant Employees to Share Tips in Violation of Federal Fair Labor Standards Act (FLSA) Decertified as Class Action because “Critical Questions of Fact” in Proposed Class Action “Vary from Plaintiff to Plaintiff and Restaurant to Restaurant” Texas Federal Court Holds Plaintiff filed a class action against her employer, Brinker International, alleging violations of the federal Fair Labor Standards Act (FLSA); specifically, plaintiff alleged that at its Chili’s restaurants, defendant required that servers share their tips with “Quality Assurance employees (QAs).

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized

ERISA Class Action Defense Cases–In re Mutual Funds: Maryland Federal Court Grants Motion To Compel In ERISA Class Action Holding Fiduciaries Waived Attorney-Client/Work Product Doctrines By Producing Documents To Regulators

Production of Documents to Regulators Pursuant to Confidentiality Agreement Constituted a Waiver of Attorney-Client/Work Product Doctrines Entitling Class Action Plaintiffs to Documents in ERISA Class Action Maryland Federal Court Holds

Plaintiffs, former employees of Scudder/Deutsche Former who had participated in defined contribution retirement plans, filed a class action against various defendants for violations of ERISA (Employee Retirement Income Security Act); specifically, the class action complaint alleged that defendants breached fiduciary duties owed under ERISA by engaging in market timing and late trading in connection with the plans’ investment in mutual funds. In re Mutual Funds Investment Litig., 251 F.R.D. 185, 186 (D.Md. 2008). The Judicial Panel on Multidistrict Litigation coordinated the class action litigation for pretrial purposes in the District of Maryland. Id. During the course of the MDL litigation, class action plaintiffs sought from defendants the production of certain documents “previously disclosed by the Scudder/Deutsche defendants to regulatory officials, specifically the SEC and the New York Attorney General’s Office, in connection with those agencies’ investigation of similar allegations against the defendants.” Id. Defendants refused on the grounds that the documents were protected from disclosure by the attorney-client privilege and/or attorney work-product protection, and that the documents had been disclosed to regulators “subject to a confidentiality agreement.” Id. In essence, defense attorneys relied on the doctrine of “selective waiver” in opposing plaintiffs’ document request, id.; the district court rejected the defense arguments and ordered defendants to produce the documents requested.

The documents had been produced to regulators “subject to ‘non-waiver’ and ‘confidentiality’ agreements” that expressly stated that “Deutsche Bank does not intend to waive the protection of the attorney work product doctrine, attorney-client privilege, or any other privilege applicable as to third parties” and required regulators to “maintain the confidentiality of the Confidential Materials pursuant to this agreement and…not disclose them to any third party”; ultimately, defendants settled with the regulatory agencies and paid more than $100 million in civil penalties. In re Mutual Funds, at 186. The class action plaintiffs sought production of all documents given to the SEC or other regulatory agencies with regard to market timing or late trading; defendants withheld 36,000 pages, asserting the attorney-client privilege and/or work product doctrine. Id., at 186-87. In their motion to compel, plaintiffs did not dispute whether the documents generally would fall within the scope of those doctrines; rather, they argued that the privileges had been waived. Id., at 187. The district agreed: “There is no question that the defendants have disclosed otherwise protected material, voluntarily, to an adversary, for their own benefit in negotiating a settlement with the regulators.” Id. After discussing Fourth Circuit and Tenth Circuit authority concerning disclosures that constitute a subject-matter waiver of attorney-client and work product documents and of the validity of “selective waiver” as a defense to such waiver, the district court granted plaintiffs’ motion. The district court concluded at pages 187 and 188, “The defendants’ voluntary disclosure of otherwise protected material to the [regulatory agencies], despite the entry of a confidentiality agreement, results in waiver.” However, the district court held that the waiver applied only to those documents “actually disclosed” to regulatory agencies; specifically, the court rejected class action plaintiffs’ claim that defendants’ production constituted a “subject matter waiver as to any attorney-client and non-opinion work product, not simply waiver as to the actual documents disclosed.” Id., at 188.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Wal-Mart Class Action Defense Cases–Salvas v. Wal-Mart: Massachusetts Reverses Decertification Of Labor Law Class Action (And Grant Of Summary Judgment On Class Action Claims) Holding Predominance Test Had Been Satisfied

Labor Law Class Action Erroneously Decertified because Evidence Submitted by Class Action Plaintiffs Concerning Nationwide Practices was Relevant to Predominance of Class Action Claims of Massachusetts Employees Supreme Judicial Court Holds

Plaintiffs filed a putative class action against their former employer, Wal-Mart, alleging labor law violations; the class action complaint alleged that Wal-Mart “wrongfully withheld compensation for time worked and denied of cut short rest and meal breaks to which they were entitled.” Salvas v. Wal-Mart Stores, Inc., 452 Mass. 337, 338-39 (Mass. September 23, 2008). The trial court certified the litigation as a class action on behalf of roughly 67,500 current and former employees who worked for Wal-Mart in Massachusetts during a ten-year period, id. Wal-Mart subsequently moved for summary judgment on the class action claims; Wal-Mart also moved to exclude as unreliable the testimony of plaintiffs’ main expert witness, and to decertify the class action. Id. The trial court granted summary judgment with respect to the class action’s meal breaks claims, and with respect to some of the wage claims; the trial court also granted Wal-Mart’s motions to exclude the expert testimony and to decertify the class action. Id. The Massachusetts Supreme Judicial Court reversed. We address here only that portion of the Supreme Judicial Court’s opinion concerning class action certification.

The Supreme Judicial Court found that Wal-Mart’s home office established and directed corporate-wide policies, including payroll controls. Salvas, at 339. Under these procedures, each hourly employee “adhere[d] to stringent timekeeping procedures, including clocking in and out at the beginning and end of each shift and at other prescribed times.” Id., at 340. According to Wal-Mart policy, “hourly employees should never be required to work ‘off-the-clock’” and hourly employees were generally prohibited from working overtime. Id., at 340-41. Employees were repeatedly warned that they could be terminated for working off-the-clock or for failing to take breaks, and store managers were required to investigate “every instance” of off-the-clock work. Id., at 341. Individual store managers also worked under a competing pressure: “the responsibility for payroll came with considerable pressure from the home office to boost profits by, among other things, minimizing labor costs, one of the corporation’s largest controllable expenses.” Id., at 342. Further, “Store managers were rewarded for keeping payroll costs low. Conversely, if they exceeded Wal-Mart’s stringent labor cost guidelines, they might lose their bonuses or lost their jobs.” Id. And at least as early as 1989, Wal-Mart knew that “despite the written policy directives to the contrary, store managers were sometimes ‘[a]ltering time cards to decrease reported payroll expenses’ and ‘[i]nstructing associates to work off the clock.’” Id. Wal-Mart knew also that some hourly employees were missing meal and rest breaks, id., at 342-43.

Certification of Class Actions Class Action Court Decisions Employment Law Class Actions Uncategorized