Class Action Defense Cases–Lee v. Dynamex: California Court Reverses Denial Of Class Action Certification Holding Erroneous Discovery Ruling Precluded Plaintiff From Meeting Burden Of Showing Commonality And Typicality Of Claims

Trial Court Erroneous Order in Labor Law Class Action Denying Motion to Compel Discovery of Contact Information of Putative Class Members Deprived Plaintiff of Opportunity to Develop Evidence Required to Support Motion for Class Action Certification thus Requiring Remand California Court Holds

Plaintiff filed a putative class action against parcel delivery company, Dynamex, alleging labor law violations; specifically, the class action complaint alleged that Dynamex, a nationwide courier and delivery service, “had improperly reclassified the drivers from employees to independent contractors in violation of California law.” Lee v. Dynamex, Inc., ___ Cal.App.4th ___ (Cal.App. August 26, 2008) [Slip Opn., at 2]. Prior to seeking class action certification, plaintiff sought to compel Dynamex to identify and provide contact information for putative class members; the trial court denied the motion, and subsequently denied class action treatment of the lawsuit. _Id._ The California Court of Appeal reversed, holding that “the trial court’s discovery ruling directly conflicts with the Supreme Court’s subsequent decision in _Pioneer Electronics (USA), Inc. v. Superior Court_ (2007) 40 Cal.4th 360 (_Pioneer_), as well as our decisions in _Belaire-West Landscape, Inc. v. Superior Court_ (2007) 149 Cal.App.4th 554 and _Puerto v. Superior Court_ (2008) 158 Cal.App.4th 1242 (_Puerto_), and that ruling improperly interfered with [plaintiff’s] ability to establish the necessary elements for class certification….”_Id._, at 2.

Since 2001, Dynamex has employed approximately 800 drivers and has operated out of four locations in California; and in December 2004, the company reclassified its drivers as independent contractors “after management concluded such a conversion would generate economic savings for the company.” Lee, at 2. We do not go into greater detail as to the facts underlying the class action allegations, as they are not material to the issue resolved by the appellate court. In brief, plaintiff worked for Dynamex for 15 days, and filed his class action complaint three months after he stopped working for the company. Id., at 3. In essence, the class action alleged that as independent contractors, Dynamex drivers “performed the same tasks in the same manner as they did when they were classified as employees,” id. Soon after filing his class action, plaintiff sought from Dynamex discovery of the names and addresses of all drivers who had worked as independent contractors for the company; Dynamex objected on the ground that its employees should be given the right to “opt-in” to the request, relying on the then-recent appellate opinion in Pioneer Electronics (USA) Inc. v. Superior Court (Mar. 30, 2005, B174826), which held that “opt-in” letters protected consumer privacy rights by giving them the right to choose whether they wished to have their personal contact information shared with class action plaintiff lawyers. Id., at 3-4. The trial court denied plaintiff’s motion to compel as “premature,” and stated personal contact information would not be ordered disclosed unless and until the litigation had been certified as a class action. Id., at 4.

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

ERISA Class Action Defense Cases–White v. Coca-Cola: Eleventh Circuit Affirms Summary Judgment In Favor Of Employer In ERISA Class Action Holding Plan Administrator’s Decision To Reduce Benefits Based On Social Security Benefits Was Reasonable

District Court Properly Granted Summary Judgment in Class Action Alleging Coca-Cola Violated ERISA by Interpreting Plan so as to Permit an Offset Based on Receipt of Social Security Benefits and to Recoup Overpayment of Benefits Eleventh Circuit Holds

Plaintiffs, participants in long term disability plan, filed a class action against their employer, Coca-Cola, in its capacity as sponsor and administrator of a benefits plan alleging violations of the Employee Retirement Income Security Act of 1974 (ERISA); specifically, the class action complaint challenged the plan administrators “reduction of benefits under a long-term-disability plan based on a participant’s receipt of Social Security disability benefits.” White v. Coca-Cola Co., ___ F.3d ___, 2008 WL 4149706, *1 (11th Cir. September 10, 2008). The class action “contest[ed] the plan administrator’s interpretation of both a provision that permits an offset for the receipt of other disability benefits and a provision that allows the plan to recoup overpayments of benefits.” _Id._ The parties filed cross-motions for summary judgment; the district court granted the defense motion and entered judgment in favor of Coca-Cola on the class action claims. _Id._ Based on this ruling, the district court denied as moot plaintiffs motion to certify the litigation as a class action. _Id._, at *4. The Eleventh Circuit affirmed.

We do not here summarize the terms of the plan, other than to note that it “grants the committee exclusive responsibility and discretionary authority ‘to construe the Plan and decide all questions arising under the Plan,’ including the authority ‘to determine the eligibility of Participants to receive benefits and the amount of benefits to which any Participant may be entitled under the Plan.’” White, at *1. We note also that the plan “works with” Social Security benefits received, and provides “for the recoupment of any overpayment of benefits.” Id., at *2. Procedurally, before filing the class action, one of the plaintiffs asked Coca-Cola to reconsider his benefits payments arguing, in part, “that, even if the plan permits the offset of his future benefits to account for his Social Security benefits, the plan and ERISA prohibit the recovery of an overpayment of his past benefits.” Id., at *3. The committee retained outside counsel, who concluded that the plan’s offset provision was ambiguous but that the committee could legally interpret the plan to permit an offset in the manner that it had: accordingly, the committee did not alter its interpretation of the plan. Id.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases–Kimoto v. McDonald’s: California Federal Court Denies Summary Judgment For Employer Because Fact Questions That Defeated Class Action Treatment Also Create Genuine Issues Of Material Fact

Labor Law Class Action Alleging Failure to Provide Meal and Rest Breaks not Entitled to Class Action Treatment but Questions of Fact Defeat Employer’s Motion for Summary Judgment as to Plaintiff’s Individual Claims California Federal Court Holds Plaintiff filed a class action complaint in California state court against her former employer, McDonald’s, on behalf of hourly, non-exempt employees; the class action alleged that she did not receive all of her meal or rest breaks.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases–Kimoto v. McDonald’s: California Federal Court Grants Defense Motion To Deny Class Action Certification Of Labor Law Class Action Holding Employers Need Not Ensure That Employees Take Meal And Rest Breaks

Class Action Complaint Alleging Failure to Provide Meal and Rest Breaks not Entitled to Class Action Treatment because Employers need only “Offer” or “Authorize” Employees to Take Meal and Rest Breaks but need not Ensure that Employees Take Them California Federal Court Holds

Plaintiff filed a class action complaint in California state court against her former employer, McDonald’s, on behalf of hourly, non-exempt employees; the class action alleged that she did not receive all of her meal or rest breaks. Kimoto v. McDonald’s Corp., ___ F.Supp.2d ___ (C.D. Cal. August 19, 2008) [Slip Opn., at 1-2]. Defense attorneys removed the class action to federal court, _id._, at 1-2. Defense attorneys filed a motion to deny class action treatment; plaintiff’s lawyers filed a cross-motion for class certification. _Id._, at 2. Defense attorneys advanced several grounds for denying class action certification, including that plaintiff could not establish Rule 23(a)’s typicality or adequacy of representation requirements for her meal and rest period claims, that she could not establish Rule 23(b)(3)’s commonality and superiority requirements for her meal period, rest period, wage statement and overtime claims, that she lacks standing to pursue the wage statement claims, and that she is barred from seeking class action treatment because of her failure to seek class certification within the 90-day requirements of the court’s Local Rules or at an “early practicable time” within the meaning of Rule 23. _Id._, at 4. The district court denied class action certification both as untimely and on the merits.

With respect to the timing of plaintiff’s motion to certify the litigation as a class action, the district court found that plaintiff failed to comply with Rule 23(c)(1)(A)’s mandate to seek class certification at “an early practicable time after a person sues or is sued as a class representative.” Kimoto, at 4. Specifically, the motion was not filed until August 14, 2008 – a full month after the discovery cut-off date, and only two months before trial. Id. In fact, plaintiff waited until “the last date to file a motion of any kind in this action.” Id. The fact that the district court permitted plaintiff to file the motion as late as she did was not dispositive: As the federal court found at page 4, “Given that trial is just two months away, the Court does not find this to be ‘an early practicable time’ under Rule 23(c)(1)(A).” This is particularly true in light of the fact that the parties had previously requested permission of the court to have the motion on class certification heard as late as August 4, but the court denied the motion on the ground that such a late hearing date would be inappropriate. Id., at 4.

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

Class Action Defense Cases–Parra v. Bashas’: Ninth Circuit Reverses Denial Of Class Action Treatment Of Labor Law Class Action’s Pay Discrimination Claim And Remands For Consideration Of Remaining Class Action Factors

District Court Erred in Finding Lack of Commonality Among Proposed Class in Labor Law Class Action Alleging Pay Discrimination Ninth Circuit Holds but Remands Class Action to District Court for Further Consideration because Lower Court had not Addressed Remaining Rule 23 Class Action Requirements

Plaintiffs, current and former Hispanic employees Bashas’, filed a putative class action against Bashas’ alleging violations of Title VII of the 1964 Civil Rights Act; specifically, the class action alleged that Bashas’ discriminated against members of the putative class on the basis of their national origin in that their “pay and working conditions [were] based on their national origin.” Parra v. Bashas’, Inc., ___ F.3d ___ (9th Cir. July 29, 2008) [Slip Opn., at 9636]. According to the class action complaint, Bashas’ operates 150 grocery stores under the trade names of Bashas’, A.J.’s Fine Foods and Food City, _id._, at 9637. The demographics of both the patrons and the employees differ substantially; for example, 15% of the Bashas’ and A.J.’s workforce is Hispanic, but 75% of the Food City workforce is Hispanic. _Id._ The class action alleged that, while the clientele differed, the employee job requirements at the three stores were “practically indistinguishable,” and that in 2003 Bashas’ implemented a program to equalize the pay scales at the stores over a period of time. _Id._ The class action complaint further alleged that the pay discrepancies ranged from $300-$6000 per year, with Hispanic employees generally receiving less pay than employees at Bashas’ and A.J.’s, _id._ Plaintiffs moved the district court to certify the litigation as a class action; the federal court granted class action treatment with respect to the “working conditions” claim, but ruled that plaintiffs had failed to adequately establish commonality to support class action treatment of the “pay discrimination” claim. _Id._, at 9636. The Ninth Circuit granted plaintiffs’ request for leave to appeal the district court’s order, _id._, at 9638, and reversed.

The Circuit Court focused solely on the district court’s conclusion that plaintiffs “failed to establish commonality among the proposed class members for their pay discrimination claim.” Parra, at 9639. To find commonality under Ninth Circuit authority, “‘[t]he existence of shared legal issues with divergent factual predicates is sufficient, as is a common core of salient facts coupled with disparate legal remedies.’” Id., at 9640 (citations omitted). The Court noted at page 9641 that “the district court found past pay disparities for similar jobs at Bashas’, Inc.’s three brand stores,” and that it “noted there significant conclusions conceded by Bashas’, Inc.” – (1) that a higher percentage of its employees work for Food City, (2) that during the relevant time period the pay scale at Food City was lower than at Bashas’ and A.J.’s, and (3) that Hispanic employees were paid a lower hourly rate for similar jobs. The district court found these facts insufficient because ”pay disparities no longer existed at the time the order [denying class action certification] was written.” Id., at 9641. This ruling was error, because the court also should have considered “evidence of past pay disparities and discrimination common to the Hispanic workers at Food City.” Id.

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

ERISA Class Action Defense Cases–Lanfear v. Home Depot: Eleventh Circuit Reverses Dismissal Of ERISA Class Action Holding District Court Had Subject-Matter Jurisdiction Because Class Action Sought Benefits Not Damages

Class Action Complaint for Breach of Fiduciary Duty Regarding the Diminution of Value of a Defined Contribution Retirement Plan States a Claim for Benefits under ERISA Eleventh Circuit Holds, Requiring Reversal of District Court Dismissal of ERISA Class Action

Plaintiffs filed a class action against their former employer, Home Depot, and certain of its officers and directors, alleging breach of fiduciary duty under ERISA (Employee Retirement Income Security Act of 1974); the class action complaint alleged that plaintiffs received benefit payments under a defined contribution retirement plan, but “that the payment were less than they should have been” because defendants had engaged in conduct that “artificially inflated the value of Home Depot stock.” Lanfear v. Home Depot, Inc., ___ F.3d ___ (11th Cir. July 31, 2008) [Slip Opn., at 1, 4]. Defense attorneys moved to dismiss the class action claim for lack of subject-matter jurisdiction because (1) the class action sought “damages,” not “benefits,” and (2) plaintiffs were not “participants” entitled to sue for breach of fiduciary duty. _Id._, at 1. The district court agreed and dismissed the class action complaint, _id._ Additionally, none of the class action plaintiffs pursued administrative remedies before filing the complaint, _id._, at 5; accordingly, the federal court alternatively concluded that plaintiffs failed to exhaust their administrative remedies, _id._, at 2, but the court did not rule on the impact of that failure on the class action complaint – specifically, “the district court did not decide whether it should dismiss the complaint without prejudice on that ground or stay the action to allow the former employees to pursue their administrative remedies,” _id._, at 2-3. The Eleventh Circuit affirmed in part, reversed in part, and remanded the class action for further consideration by the district court.

The class action presented an issue of first impression in the Eleventh Circuit: “whether a complaint for breach of fiduciary duty regarding the diminution of value of a defined contribution retirement plan states a claim for benefits under [ERISA].” Lanfear, at 1. The Circuit Court explained that participant payments under a defined benefits plan are not affected by the value of the plan’s assets; however, participant payments under a defined contributions plan are so affected because “[t]he participant is entitled to the value of the assets in his account, whatever that value may be.” Id., at 4. According to the class action complaint, “Home Depot violated its fiduciary duty by allowing the plan to invest in Home Depot stock even though corporate officials were backdating stock options and making fraudulent transactions, which artificially inflated the value of Home Depot stock.” Id. The complaint sought to restore to the plan the losses allegedly suffered as a result of this conduct. Id., at 4-5.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Labor Law Class Action Defense Cases–Advanced-Tech v. Superior Court: California State Court Reverses Denial Of Defense Summary Judgment Motion Holding Class Action’s Failure To Pay Overtime Claim Failed As A Matter Of Law

Defense Entitled to Summary Judgment on Class Action Claim Seeking Triple Time for Overtime Hours Worked on Holidays because Employer Only Obligated to Pay Time-and-a-Half for Overtime, including Hours Worked on Holidays, California State Court Holds Plaintiff, a security guard, filed a putative class action against her employer, Advanced-Tech Security Services, for failure to pay overtime. Advanced-Tech Security Services, Inc. v. Superior Court, 77 Cal.Rptr.3d 757, 759 (Cal.App. 2008). Defendant’s employee handbook explained the company’s policies for overtime and holiday pay, and provided that all hours worked in excess of 40 hours per week would be paid at 1½ times normal rate and that all hours worked on any of six specified holidays will be paid at the regular rate for employees who do not work on those holidays and at 1½ times normal rate for employees who do work on those holidays.

Class Action Court Decisions Employment Law Class Actions Uncategorized

ERISA Class Action Defense Cases-Nichols v. Alcatel: Fifth Circuit Affirms Denial Of Class Action Plaintiffs’ Motion For Preliminary Injunction Holding Plan Was A Welfare Plan Rather Than A Benefit Plan And Plaintiffs Not Likely To Prevail On Class Action

Class Action Plaintiffs Failed to Establish Likelihood of Success on the Merits of ERISA Violations Alleged in Class Action Complaint so District Court Properly Denied Request for Preliminary Injunction that Sought to Enjoin Employer from Implementing Changes to Benefit Plan Fifth Circuit Holds Plaintiffs, retired employees of Alcatel USA, filed a putative class action against Alcatel alleging violations of ERISA (Employee Retirement Income Security Act); according to the class action complaint, Alcatel improperly eliminated retirement medical benefits of the putative class members and breached fiduciary duties owed to the class.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Labor Law Class Action Defense Cases–Brinker v. Superior Court: California Appellate Court Reverses Trial Court Order Certifying Labor Law Class Action Holding Employers Need Not “Ensure” Employees Take Meal And Rest Breaks

Trial Court Erred in Granting Class Action Treatment to Complaint Alleging Labor Law Violations because Employer need only “Provide” Meal and Rest Periods to Employees but need not “Ensure” that Meal and Rest Breaks are Taken California State Court Holds

Plaintiffs filed a class action in California state court against Brinker Restaurant, Brinker International and Brinker International Payroll alleging labor law violations; specifically, the class action complaint alleged that Brinker failed to provide its employees with meal and rest breaks. Brinker Restaurant Corp. v. Superior Court, _\_Cal.App.4th __ (Cal.App. July 22, 2008) [Slip Opn., at 3]. Plaintiffs moved the trial court to certify the litigation as a class action, and the court granted the motion. Id. The central issue in the class action was whether an employer must ensure that employees take meal and rest breaks in order to comply with California law, or whether it is sufficient to make available meal and rest breaks; the Court of Appeal held that an employer is not responsible for ensuring that employees take meal and rest breaks to which they are entitled. Id., at 3-4. Accordingly, the appellate court granted defendants’ petition for writ of mandate and reversed the trial court’s class action certification order.

Defendants have a written policy, on a form signed by each employee, that sets forth the statutory meal and rest periods and acknowledging that the employee may be disciplined or terminated for failing to take those breaks. Brinker, at 5. Employees also are required to clock in and out so that defendants may maintain accurate records for payroll purposes, id., at 5-6. Plaintiffs’ class action complaint alleged that defendants failed to provide meal and rest breaks, id., at 7-8. The class action alleged further that defendants required employees to take “early lunches” and then required that they work upwards of 9 hours without any additional meal period, id., at 8. Finally, the class action alleged that defendants required employees to work “off the clock,” id., at 8-9. Plaintiffs argued that employers “must ‘ensure’ that the employee takes meal periods,” id., at 9. The trial court an employer must give employees a meal break “before [an] employee’s work period exceeds five hours,” and that the purpose of the statute is “to provide employees with break periods and meal periods toward the middle of an employee[‘]s work period in order to break up that employee’s ‘shift.’” Id., at 10.

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

Dell FLSA Class Action Defense Cases–Norman v. Dell: Oregon Federal Court Certifies FLSA Class Action Against Dell But Denies Without Prejudice Request To Certify Class Action Of State Law Claims

Class Action Complaint Alleging Violations of Federal Fair Standards Labor Act (FLSA) and of Oregon State Labor Laws Conditionally Certified as a Class Action as to FLSA Claims but Denied Without Prejudice as to State Law Claims Oregon Federal Court Holds

Plaintiffs filed a class action complaint against Dell Inc. and other defendants alleging violations of the federal Fair Labor Standards Act (FLSA) and Oregon’s state labor laws; the class action alleged that plaintiffs are “consumer sales representatives” (CSRs) who sell Dell computers via telephone, and that Dell (1) misclassified CSRs as exempt from overtime pay, failed to properly pay incentive compensation, and required CSRs to work “off the clock.” Norman v. Dell Inc., ___ F.R.D.___ (D.Or. July 14, 2008) [Slip Opn., at 1, 3]. Plaintiffs’ lawyer moved the district court to certify the litigation as a class action, _id._, at 1; specifically, plaintiffs sought an order conditionally certifying the class action complaint’s FLSA claims, and an order certifying under state law a class action of the complaint’s state labor law claims, _id._, at 2. Defense attorneys opposed any class action treatment. _Id._, at 1. The district court granted the motion with respect to the FLSA claims, but denied the motion without prejudice as to the state law claims pending expiration of the opt-in period for the federal claims and briefing as to the impact on the opt-in response on certification of the state class action claims. _Id._, at 2.

The federal court addressed first the request for certification of the FLSA claims. After noting that federal law does not define “similarly situated” under the FLSA, the court utilized the two-tier approach followed by most federal courts. Norman, at 2-3. The first step considers whether, “based on the pleadings and affidavits submitted by the parties,” notice should be given to the putative class, and employs a “fairly lenient standard” that, in the court’s opinion, usually results in class certification. Id., at 2. The second step involves a motion by defense attorneys to decertify the class action following completion of discovery, id., at 3. At the first stage, however, courts look only to whether there are “substantial allegations that the putative class members were subject to a single illegal policy, plan or decision,” but plaintiffs may not rely solely on the allegations in their class action complaint. Id. Under that standard, the district court concluded that plaintiffs adequately established that Dell policies and practices with respect to compensation of the putative class members is essentially uniform, id.

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