Sportswear-inspired designs, bold prints, and gingham aren’t the only things trending for Spring 2015 in the fashion world. Judging from a recent wave of lawsuits, wage and hour class actions are trending as well. Over the past few years, class action lawsuits over unpaid internships have been on the rise, with this most recent wave of filed lawsuits serving as a powerful reminder to employers that intern programs can’t simply be viewed as a way to recruit free labor.
Joining the ever growing list of opinions on the arbitrability of class claims, an NLRB Administrative Law Judge recently ruled that an arbitration agreement that did not expressly bar workers from bringing class or collective actions still violated federal labor law because the employer’s steps taken to enforce the agreement in court had the practical effect of doing so. Read More
In a boon to defendants seeking to remove cases to federal court under the Class Action Fairness Act (“CAFA”), the Ninth Circuit has overturned a rule requiring defendants to show to a “legal certainty” that the jurisdictional amount in controversy is satisfied when a complaint alleges a lesser amount of damages.
CAFA authorizes federal jurisdiction over civil class actions when the class has more than 100 members, there is minimal diversity, and the amount in controversy exceeds $5 million. The claims of individual class members are aggregated to determine whether the jurisdictional threshold is met. But until last week, Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994 (9th Cir. 2007), required defendants to establish to a “legal certainty” that the amount in controversy exceeded $5 million in order to remove a case when a putative class action complaint alleged damages below that amount. This rule allowed plaintiffs to avoid federal jurisdiction by artful pleading. Read More
Imagine for a second that you’re watching your favorite sports team: They’re losing, time is winding down, and you’re left watching the other team run down the clock. That frustration you’re feeling is something similar to what defendants in a state court case might feel as they watch the days pass by, one by one, until they’re out of time, and it’s too late to remove their case to federal court. Read More
Last week, in Irizarry v. Catsimatidis, Docket No. 11-4035-cv (July 9, 2013), the Second Circuit held that Gristedes Foods CEO—and current NYC mayoral candidate—John Catsimatidis faces personal liability for settlement payments of FLSA claims against his company. The Court determined that Catsimatidis’ active participation in the operation of the company qualified him as an “employer” under the FLSA and could therefore lead to personal liability. Read More
As employers welcome a new group of eager interns to their offices this summer, employers may be thinking about the recent wave of class action lawsuits alleging that unpaid internships violate minimum wage and overtime laws. Should these claims be litigated on a classwide basis? Read More
The United States Supreme Court’s recent ruling in Comcast Corp. v. Behrend, Case No. 11-864 (March 27, 2013) reinforces class certification requirements as spelled out in Wal-Mart v. Dukes. However, the closely divided court (5-4) and a strong dissent underscore that the battle over class certification standards may be far from over. While Comcast involved antitrust claims, the Court’s decision has implications for all Rule 23 cases, including employment class actions. Read More
The U.S. Supreme Court’s decision in Standard Fire Insurance Co. v. Knowles confirms that a plaintiff cannot avoid federal jurisdiction under the Class Action Fairness Act (“CAFA”) by stipulating that the class will seek less than CAFA’s $5 million amount in controversy threshold. Read More
Employers in California have been watching closely to see how courts will apply the United States Supreme Court’s decision in AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011), which held that the Federal Arbitration Act (FAA) preempted state law concerning the enforceability of class action waiver provisions, in which a party waives his or her right to arbitrate claims on a class basis. Read More
On October 10, 2012, a California Court of Appeal held that a wage and hour class action could not be certified where the common company-wide policy at issue did not answer the “central liability” question of the case.
The case, Morgan v. Wet Seal, Inc., was brought by former Wet Seal employees against the clothing store alleging that the company violated California law by requiring employees to 1) purchase Wet Seal clothing and merchandise as a condition of employment; and 2) travel between Wet Seal business locations without reimbursing them for mileage. The plaintiffs moved for class certification, pointing to written company policies as evidence of the common issues of fact and law that predominated over individual issues. Wet Seal opposed the plaintiff’s motion for class certification arguing, among other things, that their written policies actually undermined the plaintiff’s claims. The policies at issue specifically state that employees are not required to wear Wet Seal clothing and that employees may be eligible for reimbursement for mileage.
The Court of Appeal affirmed the trial court’s holding that the facially legal policies made it impossible to use a class-wide method of proving liability. For example, the Court explained that the plaintiffs’ dress code claims raised issues of 1) whether Wet Seal requires employees to wear the merchandise as a condition of employment; 2) whether the allegedly required attire constitutes a uniform; and 3) whether any given purchase by an employee constituted a “necessary expenditure.” Here, the Court found that the policy explicitly did not require wear and the policy’s description of the dress code as “consistent with the current fashion style that is reflected in the stores” was too broad and vague to constitute a “uniform” under the definition provided by the DLSE. Therefore, any question of liability would inevitably turn on what each Plaintiff was told, who told it to them, how they interpreted that information, whether the interpretation was reasonable and whether the employee then purchased merchandise pursuant to that conversation.
The Court of Appeal emphasized that the allegation of a companywide policy is not sufficient in and of itself to establish that common issues predominated because “there was no class wide method of proof for resolving this key liability question.” The anecdotal evidence provided in Plaintiffs’ declarations attempting to show a practice of requiring employees to purchase Wet Seal clothing as a uniform only reinforced the Court’s conclusion that liability would have to be decided on an individualized basis.