As we wrote about last month, on May 21, 2018, the Supreme Court rendered its decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1632 (2018), rejecting perhaps the largest remaining obstacles to the enforcement of class action waivers in arbitration agreements in the employment context.  The Court concluded that the class action waivers did not violate the National Labor Relations Act (“NLRA”).  Although the Court’s opinion also seemed dispositive of whether such agreements could be avoided under the Fair Labor Standards Act (“FLSA”), at least one claimant tried to continue to litigate the issue, which was disposed of last week in Gaffers v. Kelly Servs., Inc., No. 16-2210 (6th Cir. 2018).  And now the Sixth Circuit has addressed whether Epic Systems would apply to arbitration agreements with putative independent contractors who contended that they should have been treated as employees.

Continue Reading Supreme Court’s Decision Upholding Arbitration Agreements Applies to Independent Contractors Too

When a party receives an adverse order on a motion for class certification, whether the court of appeals grants permission to appeal under Rule 23(f) can be a crucial turning point in the case.  If the appellate court will not hear this interlocutory appeal, the only way to obtain review of that decision is to take the case through trial, to a final judgment.  But, due to the high stakes and large costs involved, few class actions are tried and cases often settle after the class certification order is issued by the trial court.

Continue Reading Appellate Court Provides Valuable Guidance for Interlocutory Appeals of Class Certification Orders Under Rule 23(f)

On January 20, 2016, the U.S. Supreme Court issued its ruling in Campbell-Ewald Co. v. Gomez, affirming the Ninth Circuit’s decision that a defendant cannot moot a putative class action by offering full relief to the individual plaintiff.

Continue Reading U.S. Supreme Court Rules That A Settlement Offer To The Individual Plaintiff Cannot Moot A Putative Class Action

On August 12, 2015, the Fifth Circuit held that an unaccepted Rule 68 offer of judgment to a named plaintiff in a class action does not render the plaintiff’s claim moot. In Hooks v. Landmark Indus., Inc., No. 14-20496 (5th Cir. 2015), the Fifth Circuit joined the minority of Circuit Courts—Second, Ninth, and Eleventh Circuits—and held that an unaccepted Rule 68 offer is a legal nullity, with no operative effect. The majority of the Circuit Courts to decide this issue —Third, Fourth, Sixth, Seventh, Tenth, and Federal Circuits—have all held that a complete Rule 68 offer moots an individual’s claim.

Continue Reading Fifth Circuit Holds Unaccepted Rule 68 Offers to Named Plaintiffs Do Not Moot Individual or Class Claims

In several recent cases in California, courts have applied Brinker Restaurant Corp., et al. v. Superior Court to reverse trial court decisions denying class certification.  Brinker is the ground breaking case in California where the California Supreme Court held that employers are only required to provide the opportunity for employees to take 30 minute meal breaks, but are not required to ensure those breaks are actually taken.  The Brinker court also held that where an employer has a uniformly-applied policy that is unlawful, class certification may be appropriate.  The recent California appellate cases have, therefore, focused on uniform policies and procedures, which allegedly violate California law and which are applied to the putative class members.  In the most recent case, Martinez v. Joe’s Crab Shack, decided December 4, 2013, the Second Appellate District in California reversed a trial court’s decision to deny a class certification motion.  The standard on review does not make this easy.  The trial court is given broad discretion to make these decisions.  However, the appeals courts are focused on what they perceive as a misapplication of Brinker where there are common and uniform policies and procedures that arguably result in overtime violations.  In Martinez, the issue was whether the managerial exemption applied.  The appellate court downplayed the myriad of facts that showed the differences in the individual putative class members in regard to the amount of time they spent on particular tasks and the tasks they performed.  Instead, the court primarily focused on whether the company’s implementation of uniform practices resulted in managerial employees being undercompensated for performing exempt work.  The court found it important, for example, that the putative class members testified that their duties did not change when they were promoted to management positions, and they were directed to performed a “utility” function and were routinely required to fill in for hourly employees.  The court also focused on the company’s uniform hiring and training practices, operations manual, menu, evaluation practices, and classification of all “managerial” employees as exempt.  The court stated that the focus should be on the employer’s “realistic expectations” and “actual overall requirements of the job.”  Ultimately, the court directed that the focus of the analysis should be on the policies and practices of the employer and the effect those policies and practices have on the putative class.

Employers across the Country are relying on Wal-Mart Stores, Inc. v. Dukes (2011) 131 S.Ct. 2541 to fight class certification or to file decertification motions.  Many are finding success, and for good reason.  Dukes is a major obstacle to class certification.  However, in a recent California appeals decision, Williams v. Superior Court (Allstate Insurance Company), December 6, 2013, Second District, Div. Eight, 2013 S.O.S. B244043, the appellate court found that the trial court abused its discretion when it decertified a class based on Dukes.  The trial court found that Dukes required that Allstate be permitted to individually litigate its defenses, which included that: (1) a particular adjuster did not work off the clock, or if he did, Allstate did not know about it, and, (2) any time worked off the clock was de minimis.  The Court of Appeals found that Dukes did not “require” decertification.  The Court first distinguished Dukes on grounds that the California’s rules for class certification applied, not federal rules, and damages were being sought in the form of overtime pay.  In addition, the employees were alleging a company-wide policy of failing to pay overtime, so it was not necessary to establish subjective intent as to countless supervisors, as it was in Dukes.  A “pattern and practice” could be found for off-the-clock overtime claims where the employer knew or should have known about the unlawful practice.  These facts were sufficient to support a common claim of fact or law to support commonality for class certification.  The Court also noted that class at issue was far smaller than that in Dukes.

On March 27, 2013, the U.S. Supreme Court held that evidence of class-wide injury must survive a “rigorous analysis” before a putative class can be certified.  Comcast Corp. v. Behrend, No. 11–864, 2013 WL 1222646, at *5 (U.S. March 27, 2013). While the Comcast case involved subscribers to Comcast’s cable television service who filed a class action lawsuit alleging anti-trust violations and monopolization, the decision is significant for employers facing class actions.

Continue Reading Supreme Court Heightens Scrutiny Of Evidence Offered In Support Of Class Certification