misclassification

AB 5 and AB 71: CA Legislature Dukes It Out Over Dynamex and Borello

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The battle between Dynamex and Borello continues. Two competing bills – Assembly Bill 5 (“AB 5”) and Assembly Bill 71 (“AB 71”) – each seek to codify the respective worker classification tests. On May 29, 2019, the California State Assembly overwhelmingly passed AB 5, a bill seeking to codify Dynamex Operations West, Inc. v. Superior Court of Los Angeles, which adopted the three-factor “ABC” test to determine a worker’s classification for wage order claims. Now the bill is headed to the state Senate. Meanwhile, AB 71, a bill seeking to codify S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, has thus far not enjoyed the same success. READ MORE →

Are Franchisees Employees? California Court Says No

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In October 2017, four franchisees filed a federal complaint against the global convenience store chain, 7-Eleven, seeking to represent a purported class of over 1,000 similarly situated 7-Eleven franchisees in California. The franchisees alleged 7-Eleven’s corporate entity violated the Fair Labor Standards Act, California Labor Code, California Code of Regulations, and California Business and Professions Code. The central issue in the case was whether 7-Eleven misclassified franchisees as independent contractors instead of employees. READ MORE →

Shake It Off: Employer Misclassification of Exotic Dancers under the Fair Labor Standards Act

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Gavel and Hundred-Dollar Bill

Recently, there’s been a wave of Fair Labor Standards Act (“FLSA”) rulings adverse to employers in the adult entertainment industry. Early this year, a Southern District of New York judge approved an $8 million settlement for a class of dancers at an adult establishment who alleged that they were misclassified as independent contractors. See In re: Penthouse Executive Club Compensation Litigation, Case No. 1:10-cv-01145, 2014 U.S. Dist. LEXIS 5864 (S.D.N.Y. Jan. 14, 2014). And just last month, the court in Hart, et al. v. Rick’s Cabaret Int’l, Inc., Case No. 1:09-cv-03043, 2014 U.S. Dist. LEXIS 160264 (S.D.N.Y. Nov. 14, 2014) which previously had held that dancers at the New York club were employees under the FLSA, denied a motion to decertify the class and awarded almost $11 million in damages to the dancers for FLSA violations.

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Try, Try Again: The California Supreme Court Sends “Fundamentally Flawed” Duran Case Back to the Trial Court

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Employment class action defendants in California who were hoping for an unequivocal statement that statistical sampling has no place in class actions are likely to be disappointed by today’s ruling in Duran v. U.S. Bank, N.A.  The California Supreme Court cautiously left all avenues to certification open, stating that a “[s]tatistical sampling may provide an appropriate means of proving liability and damages in some wage and hour class actions.” (Emphasis added.)  But despair not!  The bulk of the opinion agreed with the court of appeal in finding the trial court’s methods “profoundly flawed,” recognized the “thorny” issues of proof that arise in misclassification cases, and reaffirmed a court’s obligation to consider the manageability of individual issues in certifying a class action.  The Court’s instructions to lower courts and litigants to determine – as an integral part of class certification – whether the case can be manageably tried are likely to aid employers in certification battles to come.     READ MORE →

California Court of Appeal Denies Wage-and-Hour Class Claims and Enforces Arbitration Agreement under Concepcion

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Gavel and Hundred-Dollar Bill

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 →

The Price of Peace – Consulting Group Identifies Average Cost of Wage-and-Hour Class Settlements

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It is no secret that the vast majority of wage-and-hour class actions are settled.  What is less clear is the going settlement rate.  Researchers from NERA, an economic consulting group, recently answered this question:  approximately $1,100 per plaintiff per class year.  READ MORE →