Class Action Defense Cases–Otsuka v. Polo Ralph Lauren: California Federal Court Certifies Class Action Against Polo Ralph Lauren Holding Rule 23 Requirements For Labor Law Class Action Had Been Satisfied

Complaint Alleging Labor Law Violations Granted Class Action Status because Overriding Issues Involved Company Policies and Practices and Class Action Treatment was Superior to Other Means of Resolving Disputes California Federal Court Holds

Plaintiffs filed a putative class action complaint in California state court against their former employer, Polo Ralph Lauren, alleging labor law violations; specifically, the class action complaint alleged that in the 28 stores operated by defendants in California, defendants failed to provide rest breaks or pay for off-the-clock time, failed to pay overtime by misclassifying employees as commissions salespeople exempt from such pay, and improperly reduced earnings on future commissions if salespeople failed to meet certain sales requirements. Otsuka v. Polo Ralph Lauren Corp., 251F.R.D. 439 (N.D.Cal. 2008) [Slip Opn., at 1-2]. The complaint identified not only a main class, but two subclasses – one for misclassification and one for arrearages. The class action alleged further that defendants’ California stores used a single employee handbook, and that “defendants’ policies and practices are standardized throughout California in both retail and outlet stores.” Id., at 2. Defense attorneys removed the class action to federal court, id., at 1-2. Plaintiffs moved the district court to certify the litigation as a class action, id., at 1. Defense attorneys “vigorously” objected to class action treatment, id., at 5. The federal court granted the motion, concluding that “defendants’ arguments primarily dispute the merits of plaintiffs’ claims and raise questions of act that will not be resolved at this juncture,” id.

With respect to numerosity, the main class identified in the class action complaint encompassed more than 5,000 employees; the subclasses, however, consisted of 49 members and 69 members, respectively. Otsuka, at 5. Defendants argued these subclasses failed to satisfy the numerosity requirement, id. The federal court disagreed, noting that under Ninth Circuit authority class actions with “as few as 39 members may be sufficiently numerous under the right circumstances.” Id., at 5-6 (citation omitted). Similarly, the district court found that commonality clearly existed as to the main class identified in the class action complaint, id., at 6, and it rejected defense challenge to the subclasses because it attacked the merits but failed to demonstrate that common questions existed within the subclasses, id., at 6-7. With respect to typicality, defense attorneys argued that the claims on the named plaintiffs were not typical with respect to the misclassification subclass because after the lawsuit had been filed defendants performed a reconciliation and compensated them for overtime not previously paid. Id., at 7-8. The court found that this did not render them unqualified to serve as typical class representatives because (1) they may establish that they are entitled to additional overtime pay, and (2) their claims that defendants acted unlawfully by failing to perform annual reconciliations. Id., at 8. With respect to adequacy of representation, the district court rejected the technical objection made by defendants to one of the named representatives, id., at 8-9. Thus, the federal court found that the Rule 23(a) requirements for class action treatment had been met.

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

Wal-Mart Class Action Defense Cases–Braun v. Wal-Mart: Minnesota Trial Court Rules In Favor Of Class Action Plaintiffs In Labor Law Class Action Against Wal-Mart And Finds Maximum Potential Damages May Approximate $2 Billion

Wal-Mart Willfully Violated Minnesota Labor Laws Entitling Members Covered by Class Action Lawsuit to Millions in Damages and Potentially Billions in Civil Penalties Minnesota Trial Court Holds

Plaintiffs filed a labor law class action against Wal-Mart in Minnesota state court alleging that it required them to work “off the clock” without pay and deprived them of meal and rest breaks, that it violated Minnesota’s Fair Labor Standards Act (MFLSA), and that it failed to maintain accurate time records. Braun v. Wal-Mart, Inc., Case No. 19-CO-01-9790 (Minn. Dakota County, June 30, 2008) [Slip Opn., at 1-2 and 6-7]. The class action sought various relief including civil penalties, liquidated damages, and injunctive relief, id., at 2. The class action complaint alleged further that Wal-Mart’s conduct was “willful” so as to fall within the longer three-year statute of limitations period under Minn. Stat. § 541.07(5), id. The scope of the class action included claims against Sam’s Club, id., at 3 n.1. The trial court certified the litigation as a class action, id., at 7, and the matter proceeded to a bifurcated bench trial, id., at 2. At the liability phase, the trial court limited each side to 60 witnesses and 100 hours of testimony. Id., at 2. The trial court heard about 160 hours of testimony from more than 90 witnesses, and received into evidence almost 1200 exhibits. Id. Forty (40) of the witnesses were Wal-Mart hourly employees, id., at 7. The court then issued a 151-page opinion ruling against Wal-Mart in the class action.

In part, defense attorneys argued that class action treatment was inappropriate because “each individual’s experience is so intrinsically unique that each individual should have to testify about their experience.” Braun, at 11. The trial court found, however, that “[s]ome general patterns and some shared experiences emerged from the testimony at trial” such that it could “decide the factual and legal issues in dispute on a class-wide basis.” Id. In part, the court found that Wal-Mart “should have been on notice of that there was a potential widespread problem of missed rest and meal breaks.” Id., at 18. This problem appears to have been caused by understaffing, and while employee contemporaneous complaints that there were too few employees was not alone sufficient to establish chronic understaffing, see id., at 16-17, an internal audit that revealed tens of thousands of missed meal and rest breaks attributed the problem to “staffing and scheduling not being prepared appropriately,” see id., at 19. The understaffing was particularly problematic in light of Wal-Mart’s written policy to avoid overtime. See id., at 27-29. The trial court found that Wal-Mart “ignored” the internal audits, id., at 20. Subsequent audits revealed that “in November 2003, every audited store in Minnesota scored ‘unsatisfactory’ for the portion of the audit dealing with rest and meal break compliance.” Id., at 21. Moreover, nationally “rest and meal break compliance was the item most frequently rated as ‘unsatisfactory.’” Id., at 22. The court rejected defense efforts to attack the reliability of these audits. Importantly, the court also found that Wal-Mart’s decision to terminate the practice of employee swiping in and out for breaks was directly tied to the problems identified by the audits: “Wal-Mart chose to stop requiring associates to clock in and out for rest breaks, at least in part, to avoid creating what might be construed or used, whether fairly or not, as evidence of missed breaks in litigation.” Id., at 24. The court additionally found that “payroll pressure” contributed to this problem, id., at 25-27.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases—In re Orleans Homebuilders: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Eastern District of Pennsylvania

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 Pennsylvania Two class actions – one in New Jersey and one in Pennsylvania – were filed against Orleans Homebuilders and OHB Homes alleging violations of the federal Fair Labor Standards Act; specifically, the class action complaints allege “that defendants avoided paying overtime to employees classified as ‘community sales managers,’ ‘sales assistants,’ or ‘sales associates.

Class Action Court Decisions Employment Law Class Actions Multidistrict Litigation Uncategorized

BCBG Class Action Defense Cases–In re BCBG: California State Court Upholds Court Order Granting Defense Motion To Strike Class Action Allegations In Labor Law Class Action

In Connection with Labor Law Class Action Alleging Failure to Pay Managers and Assistant Managers Overtime, Trial Court did not Abuse its Discretion to Manage Class Action Certification when it Granted Defense Motion to Strike Class Action Allegations from Complaint California State Court Holds

Plaintiffs filed a putative class action against AZ3, Inc., doing business as BCBG Maxazria (BCBG), alleging that it had failed to pay its managers and assistant managers for overtime. In re BCBG Overtime Cases, ___ Cal.App.4th ___, 78 Cal.Rptr.3d 257 (Cal.App. June 13, 2008) [Slip Opn., at 2]. A separate class action was filed by a single plaintiff, and then the three plaintiffs filed a coordinated class action complaint against BCBG, _id._ Defense attorneys moved to strike the class action allegations pursuant to Rule 1857(a)(3) of the California Rules of Court. _Id._, at 3. The motion was supported by declarations from 25 current or former managers and assistant managers explaining that “managers are not assigned uniform duties and spend more than 50 percent of their time on non-managerial work,” and that each store is different, targeting different customers, and requiring that managers exercise independent judgment in designing and laying out the store. _Id._ Plaintiffs’ lawyer opposed the motion on the ground that it was improperly sought to circumvent the class action certification process. _Id._, at 4. At oral argument, after the trial court issued a tentative ruling to grant the motion, plaintiffs asked for leave to depose some of the declarants, and for leave to file an amended class action complaint. The trial court denied plaintiffs’ requests and granted the motion finding that it was “properly before it because ‘class certification issues may be determined at any time during the litigation.’” _Id._ As the appellate court explained at page 4, “It found that BCBG had met its burden to show that the action is not suitable for class certification by producing ‘substantial evidence which establishes that Plaintiffs cannot prove the elements of typicality or commonality necessary for class certification.’” The Court of Appeal affirmed.

On appeal, plaintiff argued that the trial court should not have considered evidence outside the pleadings in ruling on the defense motion to strike the class action allegations, and that she should have been granted leave to amend. BCBG, at 1-2. In the alternative, plaintiff argued that she should have been allowed to conduct discovery before the court ruled on the motion, id., at 2. With respect to the first issue, the appellate court held that trial courts have considerable “flexibility” in addressing the certification of class actions and, indeed, have been encouraged by the California Supreme Court to be “procedurally innovative” in connection with “determining whether to allow the maintenance of a particular class suit.” Id., at 5 (quoting City of San Jose v. Superior Court, 12 Cal.3d 447, 453 (Cal. 1974)). California law permits either party to file a motion to certify a class action, and provides that “the pleadings be amended to eliminate allegations as to representation of absent persons, and that the action proceed accordingly.” Cal. Rule of Court, Rule 3.767(a)(3).

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

FLSA Class Action Defense Cases–Johnson v. Big Lots: Louisiana Federal Court Decertifies FLSA Collective Action After Week-Long Bench Trial Because Evidence Revealed Class Members Were Not Similarly Situated

Defense Post-Trial Motion to Decertify FLSA Collective Action Granted because Evidence Revealed Lack of Similarity Among Class Members thereby Precluding Defense from Presenting a Uniform Defense to FLSA Claims Louisiana Federal Court Holds

Plaintiffs filed a labor law class action against Big Lots Stores for violations of the federal Fair Labor Standards Act (FLSA); specifically, the class action complaint alleged that Big Lots had misclassified employees and failed to pay them overtime. Johnson v. Big Lots Stores, Inc., ___ F.Supp.2d ___ (E.D. La. June 20, 2008) [Slip Opn., at 1]. The gravamen of the class action was that Big Lots failed to pay its store managers and assistant store managers for overtime, _id._, at 3. Over defendant’s objection, the district court certified the litigation as an FLSA collective action and approximately 1,000 people elected to opt-in to the lawsuit, _id._, at 4-5. Following a one-week bench trial, the federal court decertified the nationwide class, dismissed without prejudice the claims of the individuals who had opted in to the action, and held that plaintiffs could proceed with their individual actions. _Id._, at 1.

Big Lots is a nationwide retailer with approximately 1,400 stores in 46 states. Johnson, at 2. Typically, each store has store manager and at least one assistant store manager, but the physical size, products available for sale, sales volume, sales history and number of employees all affected the number and nature of managers and assistant managers at any given store. Id. “Significant variations” existed as to the duties performed by assistant store managers, but each one was expected to work at least five 9-hour shifts per week. Id., at 3. All managers and assistant managers were salaried employees, but they were classified as “executive employees” under the FLSA and therefore exempt from overtime pay. Id., at 2. The job description of an assistant store manager supported this classification, see id., at 2-3. The class action complaint, however, filed as a collective action under the FLSA, alleged that Big Lots misclassified its assistant store managers as exempt employees because, in the words of one plaintiff, “a Big Lots ASM is nothing more than a ‘glorified stocker.’” Id., at 3-4.

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

FLSA Class Action Defense Cases–Amendola v. Bristol-Myers: New York Federal Court Denies Plaintiff’s Request To Give Notice Of FLSA Class Action And To Equitably Toll Claims Period For Employees Who Later Join Class Action Litigation

FLSA Class Action Plaintiff not Entitled to give Notice of Litigation to Other Pharmaceutical Representatives of Bristol-Myers Squibb because Administrative Employee Exemption to Overtime Pay Likely Applies New York Federal Court Holds

Plaintiff filed a putative labor law class action against Bristol-Myers Squibb alleging violations of the federal fair Labor Standards Act (FLSA); specifically, the class action complaint alleged that Bristol-Myers misclassified its pharmaceutical representatives as exempt from overtime pay. Amendola v. Bristol-Myers Squibb Co., ___ F.Supp.2d ___ (S.D.N.Y. June 4, 2008) [Slip Opn., at 2]. As part of her discovery leading up to a motion to certify the litigation as a class action, plaintiff sought the names and addresses of defendant’s other pharmaceutical representatives, and asked the federal court to authorize that notice of the class action complaint be sent to those individuals and that the limitations period for absent class members to file claims be equitably tolled. _Id._ The district court denied the motion finding that while defendant’s pharmaceutical representatives are not exempt from overtime pay under the “outside salespersons” exemption, the “administrative employees” exemption likely applies. _Id._

According to the class action complaint, plaintiff worked for Bristol-Myers from February 1998 through March 2006 and was “often required…to work more than forty hours per week” but never received overtime pay. Amendola, at 3. Plaintiff filed her class action on June 28, 2007 and promptly sought discovery of the names and contact information of all 4500 pharmaceutical representatives. Id. At a status conference, defense attorneys explained that the company’s pharmaceutical representatives “include four levels of seniority and are employed by five distinct business units, each of which is subdivided across several geographic regions”; the defense argued that pharmaceutical representatives are not “similarly situated” as required for the litigation to proceed as an FLSA collective action. Id. The district court responded by ordering defense counsel to provide the names of “two or three” representatives “randomly selected from each business unit, geographic region, and job level”; Bristol-Myers ultimately provided plaintiff with contact information for 350 employees and 6000 documents. Id., at 3-4. It also produced for deposition five witnesses, consisting of the “vice president or manager overseeing each of [the company’s] five business divisions.” Id., at 4. Plaintiff then renewed her request to notify the pharmaceutical representatives of the litigation; defense attorneys opposed the motion, arguing that at least one of four statutory or regulatory exemptions applied. Id., at 4-5.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Class Action Defense Cases–Amaral v. Cintas: California Court Affirms Class Action Judgment In Favor Of Plaintiffs In Labor Law Class Action Holding City’s Living Wage Ordinance Applied To All Work By All Employees

Class Action Judgment in Favor of Plaintiffs Proper because City’s Living Wage Ordinance Covered Work Performed on City Contract Outside the City by Employees who did not Live within the Territorial Boundaries of the City, and because Employees were Intended Beneficiaries of Ordinance and therefore had Standing to Pursue Claims under it California State Court Holds

Plaintiffs filed a class action against Cintas for labor law violations; the class action complaint alleged that because Cintas has a contract with the City of Hayward, California, that required it to comply with Hayward’s Living Wage Ordinance, Cintas was required to pay workers in the City of San Leandro the wages mandated by the Ordinance. Amaral v. Cintas Corp. No. 2, ___ Cal.App.4th ___, 78 Cal.Rptr.3d 572 (Cal.App. 2008) [Slip Opn., at 1]. The class action alleged violations of the Ordinance, as well as California Labor Code § 200 and Business and Professions Code § 17200. _Id._ Defense attorneys admitted that Cintas did not provide employees located outside of Hayward with “the minimum wages or benefits required by the ordinance,” but argued that the Ordinance was unconstitutional, _id._ The trial court disagreed and, on cross-motions for summary judgment, found that Cintas for backpay and unpaid benefits, _id._ The trial court also found, however, that Cintas did not act “willfully” and so limited the amount of plaintiffs’ damages. _Id._, at 2. Both parties appealed; the California Court of Appeal affirmed the trial court order in all respects.

Briefly, the facts are as follows. From 1999 to 2003, Cintas contracted with the City to provide uniform and linen services; the City would lease linens and garments from Cintas, and contracted further with Cintas to collect, clean and return these items. Amaral, at 2. The City did not lease specific items, and Cintas did not necessarily return to the City the same items that it had picked up from the City; rather, the linens and garments would be collected and cleaned as a group, inspected for damage, sorted, and sent out to customers. Id. Cintas processed items it collected from and delivered to Hayward, at its facilities in Union City and San Leandro, and employees at both locations “worked on items for many different customers each day.” Id. Hayward’s Living Wage Ordinance was enacted in 1999 for the purpose of providing sufficient compensation so employees could “afford a decent standard of living in Hayward,” id., at 3 (italics added), and “requires covered contractors to pay their employees at least $8.00 per hour if health benefits are provided, or $9.25 per hour if no health benefits are provided,” id. Before the Ordinance went into effect, the City advised Cintas of its passage, and after the Ordinance went into effect, the City required Cintas certify that it would comply with the Ordinance. Amaral, at 4. Cintas represented to the City that it agreed to comply with the Ordinance, but never contacted the City to inquire into its applicability to employees outside the City. Id. Cintas terminated its contract with the City in 2003; during the life of the contract, the City’s business accounted for less than 1% of the company’s revenue. Id., at 5.

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Class Action Defense Cases–Sharp v. Next: California Court Affirms Trial Court Order Refusing To Disqualify Plaintiffs’ Class Action Counsel And Refusing To Remove All Plaintiffs From Serving As Class Action Representatives

Potential Conflict Between Labor Organization Financing Class Action Litigation and Individual Named Plaintiffs in Class Action Lawsuits did not Disqualification of Plaintiffs’ Class Action Counsel, Funded by Labor Organization, because Conflict Waivers Signed by Plaintiffs and Labor Group were Effective and Trial Court did not Err in Refusing to Disqualify Named Plaintiffs from Prosecuting Class Actions as Motion was Premature California State Court Holds

The Writers Guild of America is a labor organization that represents film, television, news and other media writers; the Guild held several meetings with writers of reality television programs because it believed that reality TV show employees were not provided breaks or overtime pay as required by California law. Sharp v. Next Entertainment, Inc., ___ Cal.App.4th ___ (Cal.App. May 28, 2008) [Slip Opn., at 4]. The Guild believed that class action litigation “would create economic pressure on those who paid illegal wages” and “could facilitate the Guild’s unionizing campaign.” _Id._, at 4-5. Ultimately, two class action lawsuits were filed (the _Sharp_ class action against Next Entertainment and others, and the _Shriver_ class action against Rocket Science Laboratories and others); the class action complaints were filed on behalf of 21 individuals, 16 of whom had attended the meetings referenced above, by a law firm that “had represented the Guild in a significant number of matters for many years.” _Id._, at 5. The class action plaintiffs signed conflict waivers, acknowledging that “the Guild would subsidize the attorney fees for the class action lawsuits and that the firm represented the Guild in other matters”; however, the named plaintiffs demanded, and received the Guild’s assurance, that they control the litigation, not the Guild. _Id._ Defense attorneys eventually moved to dismiss plaintiffs’ law firm arguing that the Guild’s interests and the law firm’s interests conflicted with the interests of the named plaintiffs, and that the law firm had divided loyalties. _Id._, at 9. The trial court denied the motion to disqualify plaintiffs’ counsel, but expressed concern about potential conflicts of interest and the possibility that the Guild would seek to control the litigation, and it issued verbal and written orders to plaintiffs and their counsel seeking to address this concern. _Id._, at 10-11. The trial court also ordered that four of the class action plaintiffs be removed from the litigation based on their deposition testimony that “one of their personal goals was to assist the Guild’s unionizing efforts.” _Id._, at 11. The trial court refused, however, to dismiss all 21 of the class action plaintiffs, _id._, at 12. Defense attorneys appealed the denial of the motions to disqualify and to remove all of the named plaintiffs from the class action litigation; plaintiffs cross-appealed, challenging certain of the verbal and written orders by the trial court, _id._ The appellate court affirmed the orders appealed by the defense, and reversed the orders appealed by the plaintiffs.

The vast majority of the Court of Appeal opinion concerns defendants’ appeal. See Sharp, at 13-32. The appellate court disagreed that the entire law firm representing plaintiffs had to be disqualified because the firm’s “duty of loyalty to the Guild creates actual and potential conflicts of interest because the Guild’s interest in furthering its organizing efforts is antithetical to the sole interests of absent class members, which is to maximize the recovery on the wage and hour claims.” Id., at 13. After providing a detailed summary of the law surrounding motions to disqualify and conflicts of interest, see id., at 13-21, the Court of Appeal’s comprehensive analysis led it to conclude that the conflict waivers signed by the named plaintiffs in the two class action lawsuits were effective, see id., at 21-30. The appellate court stressed, however, that “the class action procedures already include a system by which the court determines if the named class representatives can adequately represent the class,” and that “when plaintiffs seek to have the classes certified, they will have the burden of meeting these requirements.” Id., at 23. The Court of Appeal was also mindful that the motion to disqualify had been filed not by one of the class action plaintiffs, who allegedly suffer as a result of the purported conflict, “but by opposition parties who are not directly touched by the purported conflict.” Id., at 24.

Class Action Court Decisions Employment Law Class Actions Uncategorized

ERISA Class Action Defense Cases–Loughman v. Unum: New York Federal Court Grants Defense Summary Judgment Motion In ERISA Class Action Holding Policies Excluded Plainly Coverage During Elimination Period

ERISA Class Action Alleging Failure to Pay Benefits Premised on Strained Reading of Long-Term Disability Insurance Policies and Defense Entitled to Partial Summary Judgment as to certain Class Action Claims New York Federal Court Holds

Plaintiffs filed a putative class action lawsuit against Unum Provident Corporation, Unum Life Insurance Company of America, First Unum Life Insurance Company and Colonial Life and Accident Insurance Company (collectively, “Unum”) alleging violations of ERISA (Employee Retirement Income Security Act). Loughman v. Unum Provident Corp., 530 F.Supp.2d 1121, 2008 WL 515916, *1 (S.D.N.Y. February 25, 2008). The policies underlying the class action are “substantially similar” and “provide for the payment of benefits only in the event that an employee suffers a long-term disability and, consequently, contain language establishing an elimination period.” Id. The second amended class action complaint alleged that Unum improperly terminated long-term disability (LTD) benefits and wrongfully withheld LTD benefits during “the so-called ‘elimination period’”; defense attorneys moved for partially summary judgment with respect certain class action claims on the ground that no LTD benefits are due during the elimination periods in the respective policies. Id. The district court agreed and dismissed the class action with prejudice.

The heart of the class action is as follows: plaintiffs sought disability benefits based on the argument that, while LTD benefits are not payable during the elimination period, the policies require that “once the elimination period has run, a policyholder is entitled to receive retroactive benefits for the prior 180 days of disability.” Loughman, at *2. As a matter of contract interpretation, the district court disagreed. After explaining that ambiguity in a contract may not be premised on a “strained” reading of its terms, see id., at *3, the court rejected plaintiffs’ interpretation of the policies because the class action claims “hinge on their selective reading of a provision of the Policies outside the context of the Policies as a whole,” id., at *4. The federal court explained at page *4 that “plaintiffs construe the phrase ‘[t]he benefit will be paid for the period of disability’ to mean that they are entitled to benefits for the entire period in which they are disabled, regardless of other language in the Policies limiting the period for which benefits must be paid.” But this superficial reading of the policy language ignores the balance of its terms.

Class Action Court Decisions Employment Law Class Actions Uncategorized

Kraft FLSA Class Action Defense Cases–Spoerle v. Kraft: Wisconsin Federal Court Certifies Class Action Of Class Action Complaint Alleging Labor Law Violations For Failure To Compensate Employees For Doffing/Donning Protective Gear

Class Action Complaint Alleging Failure to Pay Employees for Time Incurred Doffing and Donning Protective Gear Satisfied Rule 23 Requirements for Class Action Certification Wisconsin Federal Court Holds

Plaintiffs filed a labor law class action against their employer, Kraft Foods, alleging violations of the Federal Labor Standards Act (FLSA) for failure to pay them for time spent doffing and donning protective gear at a meat processing plant; the class action complaint alleged that employees were required “to put on several items of safety and sanitation equipment and then walk to their work stations” before clocking in for the day, and were required to reverse the process after clocking out at the end of the day. Spoerle v. Kraft Foods Global, Inc., ___ F.Supp.2d ___ (W.D. Wis. May 5, 2008) [Slip Opn., at 1]. As the court explained at page 4, Kraft “requires that all hourly employees wear certain company-provided items in the performance of their jobs: footwear…, hair nets, beard nets…, protective headgear…, polyester frocks, and ear plugs or ear muffs,” and that some employees are required to wear cotton shirts and/or safety glasses. Employees are required to don this gear before swiping in, and to doff the gear after swiping out, _id._, at 5. The time incurred by employees to comply with this requirement varies, as does the time incurred in walking to/from the employee’s workstations. _Id._, at 1. The gravamen of the class action is that Kraft’s failure to pay for this “off the clock” time violates federal and state labor laws. _Id._ Defense attorneys moved for summary judgment on the grounds that the time at issue was not compensable because it fell within the scope of various exceptions under the FLSA; the district court denied the motion. _See Spoerle v. Kraft Foods Global, Inc._, 527 F.Supp.2d 860 (W.D. Wis. 2007). Plaintiffs moved the court to certify a collective action under the FLSA and a Rule 23(b)(3) class action under Wisconsin state law, _Spoerle_, at 2; the district court granted plaintiffs’ motion, finding this to be “an easy case” for certification of a class action, _id._, at 3.

The federal court first addressed the defense argument that the state and federal class action claims could not be prosecuted in the same action, based on the theory that “a plaintiff should not be allowed to maintain a representative action involving both federal and state law wage claims because of the procedural differences between the two types of claims.” Spoerle, at 8. This argument is premised on the fact that employees must affirmatively “opt in” to the FLSA class action to be members of the class, but the same employees are deemed members of the state law class action unless they affirmatively “opt out.” Id. According to defense attorneys, “potential plaintiffs will be hopelessly confused by the differences between the two claims and will be unable to make an intelligent decision regarding whether to opt in or out of the lawsuit,” id.; this confusion is exacerbated by plaintiffs’ unilateral and premature notice to the class, which “contained inaccurate information,” id., at 9. The district court agreed that “plaintiffs made a foolish blunder,” id., at 9, but concluded that any confusion could be addressed through carefully drafted notices, id., at 8-9.

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