We Thought It Might Be Getting Better … But Class Certification is Still On the Rise

10 August 2015 Labor & Employment Law Perspectives Blog

The explosion of wage and hour class action litigation in the last 10 to 15 years or so has shined a spotlight not only on wage and hour practices themselves, but also on the critical question of whether an employer’s practices can and should support class certification. Class certification has accordingly become an issue of serious concern for employers; a lawsuit filed by one current or former employee over a relatively small wage amount can quickly multiply into a combined lawsuit of thousands — with significant amounts at issue — if the case gets certified as a class action.

Following some recent U.S. Supreme Court decisions, including a 2011 decision denying class certification and directing courts to rigorously analyze whether there exist common questions that drive resolution of all class member claims (and not just common facts across the class members), a 2012 decision finding enforceable class waivers in arbitration agreements, and a recent California Supreme Court decision finding enforceable class waivers in employee arbitration agreements, it looked like there might be reason to hope the class action trend would begin to slow. Employers appeared to have improved prospects of demonstrating that the “commonality” requirement for class certification is a high standard and claims requiring inquiry into individual circumstances are inappropriate for class certification. Alas, two recent appellate court decisions, both from California, serve as reminders that employee class actions are still getting certified and even a hint of a company-wide policy or practice can act as a basis for certification.

Two weeks ago, the California intermediate appellate court affirmed a class certification order of over 200,000 grocery store employees who claimed they missed their meal periods and failed to receive corresponding premiums and that such conduct constituted an unfair practice under California’s unfair competition laws. The court acknowledged that the employer’s obligation is only to provide a meal break and not to “ensure” that each employee actually takes each break, and further acknowledged that the employer submitted over two thousand declarations from employees affirming that they were provided meal periods and attempting to show there was no system-wide policy of denying meal breaks. Notwithstanding all the foregoing, the appellate court affirmed certification of the class, claiming primarily that – regardless of whether or not there may be any actual liability – the employer’s failure to pay any meal break premiums over the course of several years demonstrated a system-wide practice that made class certification proper.

Then last week, another company was left thinking “say it ain’t so”: a California federal court certified a class of truck drivers who claimed they did not receive payment for all hours worked. More specifically, the employees alleged that the company compensated truck driver employees based on the distance or amount of mileage driven, rather than all hours worked, such that these employees were not compensated for time spent on non-driving activities. As in the decision above, the court found that there was a company-wide, non-discretionary practice of paying drivers based on mileage only and that such a uniform practice was the basis for class certification.

The highly anticipated decision in the pending class action brought by Uber drivers may provide more insight into where exactly this class action trend is headed. In the meantime, and just as we previously cautioned employers to be mindful of the company-wide policies in their handbooks, we encourage employers to pay attention to the policies and practices that are routinely applied in the various offices, stores, or other locations across the state or even the country. The finding of an unlawful and uniform practice can quickly turn a relatively small case into a multi-million dollar class action that is discussed in a really cool law blog.

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