Executive Summary: The U.S. Supreme Court has vacated the decision of a California state court, which held that a trial court should apply the factors set out in the California Supreme Court’s 2007 decision in Gentry v. Superior Court to determine whether a pre-employment arbitration agreement containing a class-action waiver is enforceable. The U.S. Supreme Court remanded the case to the state court for further consideration in light of the Supreme Court’s decision in American Express Co. v. Italian Colors Restaurant (2013). See CarMax Auto Superstores California v. Fowler, No. 13-439 (February 24, 2014).
Articles Discussing California Workplace Class Actions.
A recent case from a California state appeals court reinforces the importance of having counsel review and revise arbitration agreements early and often. In Avery v. Integrated Healthcare Holdiings, the state appellate court affirmed a lower court’s refusal to compel arbitration in an overtime class action involving a hospital management company’s employees, despite several plaintiffs’ acknowledgment that they had signed arbitration agreements.
Class certification is unwarranted where auto center managers and assistant managers alleged they were improperly classified as exempt and denied overtime and meal and rest breaks in violation of the California Labor Code, the California Court of Appeal has ruled. Affirming a trial court determination, the Court concluded that the class representative could not rely on random statistical samples to establish liability and that individual issues predominated over common issue in this case. Dailey v. Sears, Roebuck and Co., No. D061055 (Cal. Ct. App. Mar. 20, 2013). The Court also held the class representative failed to show the employer had a uniform policy of depriving managers of meal or rest breaks.
Reversing a $15 million judgment against an employer in a class action for alleged unpaid overtime, the California Court of Appeal, First Appellate District, has held that the trial courtâ€™s trial management plan, which used sampling evidence to prove class liability, denied the employer due process by preventing it from defending against over 90% of class claims. Duran v. U.S. Bank Natâ€™l Assâ€™n, Nos. A125557 & A126827 (Cal. Ct. App. Feb. 6, 2012). The Court found the plan â€œwas fatally flawedâ€ and concluded the lower courtâ€™s adherence to it denied the employer due process because the court based its evidentiary rulings on the plan, rather than trial testimony. The Court reversed the judgment and ordered the class to be decertified.