The California Court of Appeal for the Fourth District held that misclassification alone does not establish liability for overtime violations, and, thus, the fact that members of a putative class were classified as exempt was not sufficient to demonstrate the required commonality and typicality for a misclassification class action to proceed. The court in Kizer v. Tristar Risk Management held that in addition to alleging misclassification, the plaintiffs needed to prove that the misclassification caused harm. The standard announced by the Kizer Court augments the burden on plaintiffs in misclassification wage and hour class actions to establish commonality and typicality. On July 26, the decision was certified for publication. READ MORE
In a victory for pharmaceutical companies, the Ninth Circuit Court of Appeals recently held that plaintiff-appellant pharmaceutical sales representatives (“reps”) were exempt from California law’s overtime requirements. See Menes v. Roche Laboratories, Inc., No. 08-55286 (9th Cir. July 23, 2012) (unpublished) (consolidated with D’Este v. Bayer Corp. and Barnick v. Wyeth).
The Ninth Circuit decision is on the heels of the U.S. Supreme Court’s similar holding that reps are exempt from federal law overtime requirements. Back in June 2012, the U.S. Supreme Court in Christopher v. SmithKline Beecham Corp., No. 11-204 (U.S. June 18, 2012) held that reps were exempt from overtime under the Fair Labor Standards Act’s outside sales exemption. The Supreme Court found reps were exempt as outside salespersons despite laws that prohibit reps from selling pharmaceuticals directly to patients or physicians based on a “common sense” approach to the exemption. It was also a significant victory for employers because the Department of Labor attempted to use amicus briefs to argue that courts must defer to its interpretation of the law—the Supreme Court rejected this practice. See Orrick’s Blog Post about Christopher here.
Unlike Christopher and unlike the district court below, the Ninth Circuit in Menes did not reach the issue of whether reps were exempt under California’s outside sales exemption. Rather the Ninth Circuit held that reps were exempt under California’s administrative exemption, a different exemption, which generally provides that individuals who spend more than 50 percent of their time performing non-manual work directly related to the management policies or general business operations of his employer or customers are exempt.
Orrick represents Roche Laboratories, Inc. Read Law360’s coverage of this case here.
Is it “here we go again” for Harris? In the latest round of the donnybrook that is the administrative exemption in California, a California Court of Appeal in Harris v. Super. Ct., No. B195121 (Cal. App. July 23, 2012), held that the plaintiffs, insurance claims adjusters, were—as a matter of law—not exempt from California’s overtime laws under California’s administrative exemption. After a trial court certified a partial class of California claims adjusters, but denied plaintiffs’ motion for summary judgment, the parties appealed the decision all the way to the California Supreme Court. READ MORE