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Single issue class certification

Employers frequently misclassify workers to avoid paying premium overtime wages.  Failing to follow the exemption requirements can expose an employer to significant liability particularly since all employees are presumed to be non-exempt. (Nordquist v. McGraw–Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 562).  That is, the employer bears the burden of proof to establish that the employees fit “plainly and unmistakably” within an exemption’s terms. Id.

In a recent case handled by Righetti Glugoski, Assistant Managers filed a class action claiming that their employer, Save Mart, misclassified them as “exempt” in order to avoid paying overtime and other benefits.  The Honorable George Hernandez granted the employees motion to certify the case as a class action and ordered a first phase of trial limited to a single issue, to wit, whether the Assistant Managers “customarily and regularly exercise discretion and independent judgment on matters of significance.”

In doing so, Judge Hernandez was persuaded to follow California Rule of Court, Rule 3.765, which states: “(b) When appropriate, an action may be maintained as a class action limited to particular issues. A class may be divided into subclasses.”  Rule of Court 3.767(a)(4) also provides: “In the conduct of a class action, the court may make orders that “facilitate the management of class actions through consolidation, severance, coordination, bifurcation, intervention or joinder….”  And, “the court in its discretion shall regulate the order of proof.”  Heppler v. J.M. Peters Co. (1999) 73 Cal. App. 4th 1265, 1285 [“a court has wide discretion in controlling the manner in which evidence is presented.”]. Federal law is similar.[1] “The first requirement of FRCP Rule 23(b)(3) is predominance of common questions over individual ones. Implicit in the satisfaction of the predominance test is the notion that the adjudication of common issues will help achieve judicial economy. See 1 Newberg & Conte, supra, § 4.25 at 4–86. Even if the common questions do not predominate over the individual questions so that class certification of the entire action is warranted, Rule 23 authorizes the district court in appropriate cases to isolate the common issues under Rule 23(c)(4)(A) and proceed with class treatment of those particular issues. See Dalkon Shield, 693 F.2d at 856; see also Copley, 158 F.R.D. at 491, 7B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, supra, § 1790 at 276; 1 Newberg & Conte, supra, § 4.25 at 4–81.”

Certification of a single issue that predominates has long been approved under the law.  See, Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996) [“Even if the common questions do not predominate over the individual questions so that class certification of the entire action is warranted, Rule 23 authorizes the district court in appropriate cases to isolate the common issues under Rule 23(c)(4) and proceed with class treatment of these particular issues.”].  In fact, courts have specifically found that the single issue of whether employees customarily and regularly exercise discretion and independent is a discreet issue, independent of the other elements of the exemption, sufficiently common to justify class certification:

Though “even a single common question will do” for purposes of Rule 23(a)(2), see Dukes at 2556, the Court notes that the remaining two questions identified by Plaintiffs are also sufficiently common to justify class certification. The third question, whether DSMs customarily and regularly exercise discretion and independent judgment, is susceptible to common proof because of the theory on which Plaintiffs rely.

 Nelson v. Avon Prod., Inc., No. 13-CV-02276-BLF, 2015 WL 1778326, at *7 (N.D. Cal. Apr. 17, 2015).

After carefully considering the record in Save Mart, Judge Hernandez found there was:

no evidence that any assistant manager ever exercised discretion as to any matters of significance. The record overwhelmingly demonstrated that this element can be tried based upon common evidence and, at this stage, supports Plaintiffs’ decision to stake their entire case on disproving just one element of Defendant’s affirmative defenses.”  Ex. 4, at p. 9. [Emphasis added.]

            Righetti • Glugoski, P.C., is an award-winning California-based law firm that specializes in protecting the rights of employees. Righetti Glugoski frequently litigates employment class actions, including overtime claims under state and federal law.

To speak with an experienced employment law attorney about any aspect of employment law like discrimination, wage disputes, overtime pay or unpaid time, contact us today.

[1] California follows federal class action authority under Rule 23.  “We have previously suggested that trial courts, in the absence of controlling California authority, utilize the class action procedures of the federal rules. (See Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 709; Vasquez v. Superior Court (1971) 4 Cal.3d 800, 821.).”  La Sala v. Am. Sav. & Loan Assn., 5 Cal. 3d 864, 872, (1971).

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