Reversal of Fortune for Two Class Action Defendants

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In the past 10 days, the California Court of Appeal, Second Appellate District, has published a pair of recent opinions reversing the denial of class certification by the trial court. See Martinez v. Joe’s Crab Shack Holdings, No. B242807 (Cal. Ct. App. Nov. 12, 2013); Jones et al. v. Farmers Insurance Exchange, No. B237765 (Cal. Ct. App. Oct. 28, 2013) (slip opinions available here and here). The publication orders issued on 12/4/13 and 11/26/13, respectively. Both Martinez and Jones are wage and hour class actions asserting multiple claims, including for unpaid overtime and improper wage statements.

In Martinez, filed in 2007, a proposed class of restaurant managers sued their employers for unpaid overtime, based on a theory of misclassification. The defendants claimed that individualized determinations would have to be made regarding the amount of time each employee spent on non-managerial tasks in order to determine liability for misclassification, and the trial court denied certification on that basis. However, the appellate court disagreed, finding that individual issues of proof did not predominate over common issues, and held that the trial court had not followed the directives of Sav-On and Brinker: “Sav-on instructs courts in overtime exemption cases to proceed through analysis of the employer’s realistic expectations and classification of tasks rather than whether the employee can identify in retrospect whether, at a particular time, he or she was engaged in an exempt or nonexempt task” and “we understand from Brinker . . . a renewed direction that class-wide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof.” Slip op. at 15, 19.

The Jones plaintiffs, a putative class of insurance adjusters, filed their complaint in 2009, alleging unpaid overtime, wage statement, and minimum wage violations. All of the purported violations stemmed from a company-wide written policy dictating that time spent on certain job-related tasks (such as logging into the company’s computer system to get an assignment, or travel time to the first assignment of the day) was not compensable. The trial court had denied class certification, finding that common issues did not predominate and that the plaintiffs had not demonstrated that defendant had a classwide policy of refusing to pay overtime, but the court of appeal emphatically disagreed. Just as in Martinez, the court relied on Sav-on and Brinker, as well as Jaimez v. Daiohs, and concluded that the trial court erred in “focusing on individual issues concerning the right to recover damages rather than evaluating whether the theory of recovery is amenable to class treatment.” Slip op. at 14.

Publication of Martinez and Jones appears to represent a renewed endorsement of resolving wage and hour class actions on a class-wide basis, and should be frequently cited in the future.