Posts Tagged ‘Class Action’
Monday, September 21st, 2015
Corporate America has been tireless in trying to sharply limit, or simply eliminate, all class action lawsuits. When corporations break the law by doing things such as not paying workers for time they work, paying women less than men, or by violating privacy rights in willful ways, Corporate America knows that workers and consumers can band together in a class action. If that ability to organize is taken away, however, in a great many cases consumers and workers will not be able to fight illegal conduct at all.On too many occasions, corporations that don’t want to be hemmed in by consumer protection and civil rights laws have found a willing partner in battling those actions among the five conservative members of the U.S. Supreme Court. On several key occasions in recent years, the Court has invented new rules of federal law that have sharply limited when individuals can join together and enforce the law through class actions.
Things could get much worse, though. There are no less than three cases in the Court’s upcoming term that could be disastrous for consumers, workers and small businesses cheated by anti-competitive behavior that violates antitrust and other laws. In each of the three cases, the plaintiffs won in the trial court under laws that have been on the books for years and accepted by nearly all of the lower courts. In each case, Corporate America is asking the Supreme Court to invent a new federal law that would immunize them.
These are the three cases, and questions, the Court will tackle in the coming weeks.
Tyson v. Bouaphaekeo: Should Courts Ignore Statistical Evidence If It Proves a Corporation Broke the Law?
As part of their job, meat processing employees in an Iowa plant had to put on and take off certain protective clothes when they were working in an area using certain knives. Tyson Foods estimated it would take four minutes to do these tasks, and that’s all it paid them for. In fact, it takes a lot longer. That’s why a jury found that Tyson owed workers $5.8 million for underpaying its employees. (This is what we would call “wage theft.”)
One of the pieces of evidence the jury considered was a statistical sample of 744 observations of employees putting on and taking off the protective gear. That data clearly showed that it took far longer than the four minutes Tyson claimed. Tyson now says that using this statistical evidence was illegal, because it was a “trial by formula.” Tyson now says it should be able to have an individual trial for every single employee, and that using a sample of 744 observations is improper.
That’s a pretty staggering idea. Courts have allowed juries and judges to infer facts from statistical evidence for decades; the idea that no jury could consider statistical evidence without it being a supposedly illegal “trial by formula” is radical. Our military and intelligence services use statistical analyses in their national security strategies, and pharmaceutical and medical companies all rely upon statistical analyses of results and observations in their work, too. They do because it has been shown to be effective. Now, Tyson is arguing that when it comes to proving a corporation violated the law in a class action, courts should pretend that in that one context, statistical analyses of data is banned. This is pretty convenient for corporations engaged in wage theft, but it makes no sense at all as a matter of law.
Spokeo v. Robins: Should the Court Essentially Repeal Hundreds of Statutes that Let People Sue for Set Sums When a Company Breaks the Law?
Spokeo is a company that “scrapes” information from a variety of sources on the internet, and then sells it to people who want to find out about others. In this case, the plaintiff says Spokeo got a lot of facts wrong about him: his age, education, employment and marital status, and a number of other facts. Under the Fair Credit Reporting Act, if an agency that gathers information about people sells false information about someone; and willfully uses lousy procedures that are likely to make substantial mistakes, they have to pay a set amount (up to $1,000) to any consumer about whom they made a false statement. The consumer doesn’t have to prove they lost money or suffered physical injury because of the false statement. Congress just presumed that it would bad for consumers to have corporations lying about them and wanted to discourage corporations from willfully doing so.
This idea of “statutory damages” is a very old one in American law, and is included in literally hundreds of statutes. That’s because, if someone lies about you, how can you put a number on how much it hurt you? So rather than bar victims of this kind of illegal act from receiving anything, legislatures give them a flat dollar figure, as sort of rough justice.
Now, Corporate America is asking the Supreme Court to say that if an individual can’t prove in what it calls a “concrete way” just how much they were harmed because of a lie, that the Constitution says they were not injured at all. In an extremely clever but very ugly feat of focus group politics, corporate advocates call this a “no injury” case, and say that the hundreds of statutes that Congress passed creating statutory damages for hard-to-measure injuries are all unconstitutional.
This would be a sweet deal for corporations that willfully create procedures through which they report false things about consumers, and if Spokeo wins, it will suddenly become much easier for corporations to violate Americans’ privacy. If the Supreme Court does invent this new rule of law, it will essentially strike down hundreds of existing laws (talk about activism!) by doing so.
Campbell-Ewald v. Gomez: Does the Constitution Authorize Corporations to Bribe Named Class Representatives to Sell Out Everybody Else?
The basic idea of a class action is that one or more people are going to come forward on behalf of everyone in a group who’s been treated a certain way. The people who bring the case are called the “named class representatives,” and they have an obligation to protect the interests and stick up for everyone whom they’re representing. The idea is not that someone files a case and says “I’m suing for a group of people who were all cheated the same way, but if you pay me off, I’ll toss them all under the bus and just take some money for myself.”
But in Campbell-Ewald, that is exactly the argument the defendant is making. The corporation wants to pay off the named class representative by offering the exact amount of money he is owed under the law, and then argues that the Constitution magically requires that every other person who has a claim disappear.
First, this argument runs exactly counter to the core idea that the named class representative is supposed to adequately represent everyone else in the class. As a system, we want the people who come forward on behalf of a class to take their obligations to the rest of the class seriously. We want people who know that it’s not all about them, but that it’s about protecting the rights of a group.
Second, the defendant’s repulsive argument here encourages the worst kind of game playing. Are you a corporation who’s been caught red-handed, cheating a crowd of people? Well, under this theory, you can just pay off the people who step forward to bring a case one by one. You’llnever have to pay off anywhere near all of the people you cheated. (If there’s no class action, no one will ever be able to find them all, explain to them what happened, and get them to come forward). So, corporations just have to individually pay off the people who step forward. The laws won’t be enforced, and the corporation will get to keep nearly all the money it took. Is that justice? Maybe it’s considered justice in the board rooms of corporations that break the law and cheat people, but nowhere else.
So What Will Happen?
It’s really hard to know. There is no doubt that the U.S. Supreme Court has five justices who have a very strong deregulatory impulse; they seem to feel that we have way too many laws protecting consumers and workers, and they don’t mind reining them in. On the other hand, even the five pro-corporate justices on this Court sometimes fail to get a full majority to support very radical changes in the law. When the Court was asked to basically eliminate nearly all class actions in cases involving securities fraud a few years ago, that was a bridge too far for the majority. The betting here is that Corporate America has asked for too much in each of these cases: they want rulings that are so radical, so counter to what the law has been for years, that there won’t be five votes to let them get away with such behavior. But if I’m wrong, we’re in fora lot of trouble.
This Blog originally appeared on Public Justice and was reprinted by Daily Kos on September 21, 2015. Reprinted here with permission.
About the Author: Paul Bland, Jr., Executive Director, has been a senior attorney at Public Justice since 1997. As Executive Director, Paul manages and leads a staff of nearly 30 attorneys and other staff, guiding the organization’s litigation docket and other advocacy.
Friday, February 24th, 2012
Anyone who watches NFL games each week is witness to organized warfare, with players delivering excruciating and merciless blows to the opposition. To deal with the frequent injuries, players are often given a shot of the painkiller Toradol, known medically as Ketorolac, before games.
A dozen former NFL players have filed a class-action in U.S. District Court in New Jersey against the league, claiming that they weren’t warned of the consequences of taking the drug. The players allege that among other side effects, Toradol masked pain, which masked the symptoms of concussion. Playing through their head injuries, the suit states, has brought on long term debilitating conditions, such as “anxiety, depression, short-term memory loss, severe headaches, sleeping problems and dizziness.”
If the NFL is taking these allegations seriously, it has a funny way of showing it: it still permits the painkiller to be administered during play.
In a recent NY Times op-ed, former Denver Broncos player (2003-2008) Nate Jackson, who is not a party to the lawsuit, wrote of his own experiences with the drug, which included routinely lining up with his teammates before games for injections. He was never quite sure why.
As to how much Toradol he was given during his tenure with the Broncos, or the results of any tests given at the time of his playing, the op-ed was silent — not because Mr. Jackson didn’t want to tell us, but because he couldn’t.
He can’t access his medical records: “Even after I filed a workers’ compensation lawsuit against the Broncos a year ago that later included a request for that folder,” he writes, “I still don’t have it. The team hasn’t released it to me.”
How can this be? All of us have an absolute right to our medical records, right?
In the leading case on the subject, the Second U.S. Circuit Court of Appeals ruled in 1975 that that we patients don’t have a constitutionally protected rights to direct and unrestricted access of our medical records.
Partly to remedy that incongruity, in 1996 the Department of Health and Human Services passed Health Insurance Portability and Accountability Act (HIPAA), a federal regulation granting people a general right to access (not ownership) of their medical records. This regulation requires a “covered entity” to furnish either a copy or access to the records within 30 days of a patient’s request.
OK, now we’re talking. So Mr. Jackson has a legal right to see his records immediately, right?
The medical care model in professional sports has made for an interesting dynamic among the doctors, teams, and players. The current trend is for the doctors to be supplied by hospitals who pay the team to use their services in exchange for advertising and other perks. If this is how Mr. Jackson was treated, and he’s made his request to the doctors and hospitals that cared for him, he has a valid claim under HIPPA to view his records.
But if a full-time team physician employed exclusively by the Denver Broncos treated him during his NFL years, it doesn’t seem as though the Denver Broncos would be considered a “covered entity”.
State laws may provide more access rights than the floor set by HIPPA and most states have medical access statutes that recognize patients’ right to access their records. In Colorado, for example, where Mr. Jackson’s medical treatment primarily took place, state law recognizes the patient’s right to access his medical records “at reasonable times and upon reasonable notice.”
We’ve found no case law that directly pertains to Mr. Jackson’s situation – and we tried.
Anyone with comments or thoughts, we invite you to weigh in.
This blog originally appeared in Legal as She is Spoke, a project of the Law and Journalism track at New York Law School, on February 22, 2012. Reprinted with permission.
About the Author: Steven Ward (3L) proudly hails from the Jersey Shore. He graduated from the University of Massachusetts at Amherst with a bachelors degree in Sport Management. Steven has completed internships with Major League Baseball, the Washington Nationals, the NYC Office of Emergency Management and the NYPD. Steven looks forward to working in the sports and entertainment industry.
Thursday, May 26th, 2011
CHICAGO—Last week, the Chicago-based group Warehouse Workers for Justice (WWJ) filed its second class action lawsuit this year against an agency responsible for staffing Wal-Mart’s warehouse in suburban Elwood.
The suit, filed May 18, charges the staffing company SIMOS Insourcing Solutions with legal violations including not fulfilling promises made to workers as part of the terms of their hiring. Among other things, workers said they were offered paid vacations that were never granted.
According to a WWJ press release, the company “required employees to incur fees to get their paychecks and failed to give the warehouse workers critical information about their pay, benefits and other terms of their employment as required by Illinois law.”
The new class action lawsuit is part of a larger campaign to force staffing agencies to give workers written proof of their contracts, their wages and the way their pay is calculated. Wage theft is reportedly rampant in the industry, but often hard to prove since workers are given little or no documentation of what they have been promised, how many hours they have worked, how much they are paid and in some cases who they are even technically working for.
In March, the group filed another class action lawsuit alleging that the Reliable Staffing agency, which hired workers for the Elwood Wal-Mart warehouse, paid them much less than promised, in part through manipulating or changing the terms of a piece-meal pay schedule.
As I previously blogged:
“The check stub is a fiction – their check stub could show they worked 36 hours when they really worked 72 hours,” said attorney Chris Williams. That’s why, Williams said, it’s so important the workers are able to demand their billing records under the state day labor services act.
Also earlier this month workers at a Kraft-Cadbury warehouse in the suburb of Joliet filed complaints with the Equal Employment Opportunity Commission about alleged discrimination by the firm Schenker Logistics. Filing such a complaint is the first step in filing an employment discrimination lawsuit, if the EEOC decides not to investigate itself.
These legal actions are part of a multi-faceted campaign to hold staffing companies legally accountable for their behavior; and also build greater public awareness of rampant labor rights issues in the warehouse industry; and to embolden workers to speak out about these issues. The group has not sued Wal-Mart, since the company argues it is not directly responsible for hiring and wage and hour issues in its warehouses. SIMOS is based in Georgia and promises to slash labor costs for clients like Wal-Mart. The company’s website says:
Ultimately, our goal is to drive constant improvements in cost, quality, and on time delivery. SIMOS consistently delivers cost reduction programs our clients can actually see. On average, SIMOS customers save 10-25% in labor costs per unit while increasing their output by 15-30%.
It says it achieves these labor cost reductions by a “combination of engineering, workforce management and supervision.” Critics say this is just code for paying workers as little as possible, including by keeping them in the dark about the actual terms of their working agreements.
This article originally appeared on the Working In These Times blog on May 23, 2011. Reprinted with permission.
About the Author: Kari Lydersen, an In These Times contributing editor, is a Chicago-based journalist whose works has appeared in The New York Times, the Washington Post, the Chicago Reader and The Progressive, among other publications. Her most recent book is Revolt on Goose Island. In 2011, she was awarded a Studs Terkel Community Media Award for her work. She can be reached at firstname.lastname@example.org.
Thursday, August 5th, 2010
It may not seem credible that gender discrimination remains widespread and systemic in American workplaces. Women outnumber men in colleges and graduate programs; they have entered the workforce in force; women run some companies, universities, states, and departments of the federal government.
Despite all this progress, though, discrimination persists. Women are only 17% of Congress members. Women head a mere 2.6% of Fortune 500 companies. In other words, men still overwhelmingly control our most powerful political institutions and our economy.
The familiar glass ceiling argument could explain this striking disparity: women can rise up through the ranks professionally, but at some point they hit the glass ceiling and cannot go any higher. If that were the only problem, it might explain why women are so conspicuously absent from the powerful positions listed above. But the gender disparities start well below the highest levels of power.
A striking pattern emerges from statistics analyzing the numbers of women at various levels in financial services companies (which I’ve become familiar with from representing so many women in discrimination cases against them). At the entry level, there can be as many female as male employees. At the next level up, women make up a smaller percentage of employees. At the next level, even fewer of the workers are women. And on it goes, until you reach the near complete absence of women from the position of CEO. Graphically, the numbers describe a pyramid: with every promotion the percentage of women shrinks.
Social scientists like William Bielby of the University of Illinois at Chicago and Barbara Reskin of the University of Washington have studied this phenomenon and traced it to its roots: unconscious bias that affects subjective decision-making.
Even the most fair-minded people are subject to unconscious biases. The Implicit Association Test is one of many studies to demonstrate that people can have strong preferences and antipathies they may not be aware of. Even people who consider themselves very fair-minded can be unconsciously prejudiced against minorities, for example. To give a very rough summary of part of the underlying theory, people tend to think in terms of “in groups” and “out groups.” My “in group” is the group of people who are like me in salient ways such as gender, race, religion, age, educational background, profession, family status, etc. I tend to attribute more positive characteristics to members of the in group and more negative characteristics to members of the out group, who are unlike me. For instance, as a native Midwesterner, I may unconsciously prefer fellow Midwesterners to people from other parts of the country, although if you ask me whether I think Midwesterners are better than other Americans in any way, I will honestly answer that I don’t. The bias is unconscious.
Unconscious biases operate in the workplace as they do in every other sphere of human interaction, with the result that the groups in power tend to stay in power. Male managers may subconsciously believe that other men are more capable than women, outperform women, or are more committed to their work than women. Again, these beliefs can be subconscious, but they still affect decision-making. When it comes to a subjective decision such as who deserves a promotion, a male manager with an unconscious bias in favor of men is more likely to promote a man than a woman. The same is true of granting raises, distributing assignments, and making opportunities like management training available. This is how unconscious bias can combine with subjective decision-making to favor men (and other groups like whites) and to create the pyramid that leaves women at the lower corporate levels while disproportionately men climb to power.
There are other factors at work here too. People tend not only to think more highly of members of their in group, but to be more comfortable with them. As a result, a male manager may invite some employees to a golf outing or to dinner – nothing formal, just being a down-to-earth supervisor. He invites the employees with whom he feels most comfortable or thinks he has the most in common. A slew of scientific studies demonstrate that he is likely to feel most comfortable with the employees who belong to his in group – in this case, men. As a result, he gets to know his male subordinates better and become friends with them. When plum assignments or opportunities for promotion arise, the manager is more likely to dole them out to the subordinates he is more comfortable working with and is friends with.
Unconscious bias is difficult if not impossible to change. Researchers including Frank Dobbin of Harvard University have shown that common techniques for combating prejudice, such as diversity training, not only do not help – they actually backfire.
The way to tackle workplace discrimination is not to try to change people’s unconscious thoughts, but to make decision-making processes less subjective and therefore less vulnerable to unconscious bias. Action must come from the top of the organization: an employer that provides clear, objective criteria to guide otherwise subjective decisions, and that enforces the use of those criteria, will make the workplace less discriminatory by diminishing the opportunity for decision-makers’ unconscious biases to affect their judgment.
The settlement of the gender discrimination class action against Novartis discussed in the first part of this post takes a stab at making these kinds of changes. It requires Novartis to clarify and systematize the criteria for evaluating employees, to train managers to evaluate employees fairly, and to “calibrate” evaluations to check that evaluators are applying performance criteria in a uniform manner.
Where bias is conscious and discrimination is intentional, decision-makers will find ways around objective criteria for decision-making. Conscious prejudice presents an entirely different set of challenges than unconscious bias. But I’d like to believe that a lot of workplace discrimination results from unconscious bias and that employers will improve their procedures to protect decision-making processes from that bias. Some employers have already done so, albeit usually under court order (demonstrating the need for more discrimination class actions). Employer initiatives to make subjective decision-making more objective will help end workplace discrimination. Please post a comment to share your workplace experience
About The Author: Piper Hofman is a writer and attorney living in Brooklyn with a B.A. magna cum laude from Brown University and a J.D. cum laude from Harvard Law School. She has professional experience with the laws related to employment, animal rights, poverty, homelessness, and women’s rights.
Thursday, May 27th, 2010
The California Supreme Court is expected to render a decision in the Brinker v. Superior Court case later this year that will answer critical legal questions about the meal and rest break rights of hourly workers in California. At issue in the case is when and under what circumstances workers are entitled under California law to rest and meal breaks.
Though the case was originally filed as a class action, and the appeal involved the trial court’s order granting class certification to a group of 5,500 restaurant workers, the Supreme Court’s decision will necessarily address questions that will have an impact on individual meal and rest break cases as well. Commentators from across the political spectrum agree Brinker is one of the most important labor cases pending before the California Supreme Court today.
The case is important to workers because the Court of Appeal’s decision severely limited the rights of workers to obtain damages for missed meal and rest breaks. The Court’s conclusions of law were broad-ranging and quite friendly to employers. It held:
(1) while employers cannot impede, discourage or dissuade employees from taking rest periods, they need only provide, not ensure, rest periods are taken; (2) employers need only authorize and permit rest periods every four hours or major fraction thereof and they need not, where impracticable, be in the middle of each work period; (3) employers are not required to provide a meal period for every five consecutive hours worked; (4) while employers cannot impede, discourage or dissuade employees from taking meal periods, they need only provide them and not ensure they are taken; and (5) while employers cannot coerce, require or compel employees to work off the clock, they can only be held liable for employees working off the clock if they knew or should have known they were doing so. We further conclude that because the rest and meal breaks need only be “made available” and not “ensured,” individual issues predominate and, based upon the evidence presented to the trial court, they are not amenable to class treatment.
These conclusions, if adopted as state law by the Supreme Court, would effectively deny workers the right to use class actions to recover wages for missed meal and rest breaks in California. Further, the adoption of these conclusions by California’s highest court would make it harder than ever before for individual workers to obtain relief for missed meal and rest breaks.
The restaurant workers have asked the Supreme Court to decide a number of key issues of law:
• Does a California employer need to relieve employees of all duties so they can take meal and rest breaks or simply make them “available”?
• Can the employer simply make meal and rest breaks available to their employees at any time during a shift, or must the rest and meal break be provided within a certain number of hours of beginning a work shift?
• When and how frequently must an employer provide meal and rest breaks to its employees?
• In wage and hour class action cases, can workers rely on statistical data to show a class-wide pattern of meal and rest break violations or are the factual issues always too individualized for class treatment?
The answers to these questions are of great interest to labor groups and business advocates alike, and battle lines were quickly drawn. A mere three days after the Court of Appeal issued its decision in Brinker, the California Labor Commissioner, under Republican Governor Arnold Schwarzenegger, issued a memorandum entitled “Binding Court Ruling on Meal and Rest Period Requirements” instructing all California Division of Labor Standards Enforcement (“DLSE”) employees to adopt the perspective laid out in the Brinker appellate decision.
The Labor Commissioner virtually ignored other California appellate decisions more favorable to workers’ rights, and instead relied on federal court decisions interpreting California’s meal and rest break laws. In Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 94, for example, California’s Third District Court of Appeal had decided that employers have “an affirmative obligation to ensure that workers are actually relieved of all duty [for meal breaks].”
The Third District’s decision in Cicairos was directly supported by a prior interpretation of the law issued during Governor Gray Davis’s administration by the DLSE.
Almost immediately after the Labor Commissioner issued its binding memorandum, the California Labor Federation responded with biting criticism of Labor Commissioner Angela Bradstreet’s directive. “The Federation is deeply concerned that your hasty publication of this unbalanced and flawed analysis will undermine California workers’ rights to meal and rest breaks.”
The Labor Commissioner has since withdrawn its binding memorandum, replacing it with one that still plainly sides with the Court of Appeal’s restrictive reading of workers’ meal and rest break rights. The Schwarzenegger administration is clearly hopeful the Supreme Court will uphold the severe restrictions set out by the appellate court.
A decision in Brinker will have an immediate impact on pending lawsuits, particularly meal and rest break class actions. Whether the Supreme Court ultimately backs the employer-friendly logic of the decision under review or adopts the worker protections set out in Cicairos, attorneys representing both employees and employers undoubtedly will have clearer guidance on the law.
Finally, many employee rights advocates are certain, or at least very hopeful, that the California Supreme Court’s decision will not result in a substantial impairment of an individual employee’s right to meal and rest breaks. The larger and more immediate concern is that Brinker could seriously impair the ability of workers to sue their employer collectively for failing to provide appropriate meal and rest breaks. If the Supreme Court makes it more difficult to sue on a class-wide basis for meal and rest break violations, most violations will go unchallenged in court. Labor advocates are counting on the Supreme Court to render a decision that protects the rights of California workers to use the class action process to vindicate these important wage and hour rights.
About the Author: Patrick Kitchin is a labor rights attorney with offices in San Francisco and Alameda, California. He has represented thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. According to retail experts and the media, his wage and hour class actions against Polo Ralph Lauren, Gap, Banana Republic, and Chico’s led to substantial changes in the retail industry’s labor practices in California. Patrick is a 1992 graduate of The University of Michigan Law School and is personally and professionally committed to the protection of workers’ rights everywhere.
Monday, October 26th, 2009
In 2004, a group of Black workers of Eastman-Kodak filed a class action against the company, alleging widespread discrimination in pay and a failure to promote on the basis of race. A second class action was filed by another group of workers in 2007. The two classes together consist of about 3000 past and current employees. This past July, the company proposed a $21.4 million dollar settlement with the class–with payouts between $1,000 and $75,000 for individual class members. Magistrate Judge Jonathan Feldman (W. D. N.Y.) held a hearing Friday on the fairness of the proposed settlement, and will hold another on November 5. At Friday’s hearing, several class members objected that the payouts were too low, that the attorneys were getting too much of the award, and that class members who left the company before 1999 would be excluded.
Some examples of the unfairness of the award include that one decades-long employee would be awarded $1000 while her daughter, employed for only 11 months, would be awarded $3000. For more details see news reports here and here.
Despite this example, it’s hard to predict without knowing more what the judge will likely rule on whether the settlement is fair overall. In addition to the money, the company promised to improve its diversity training for supervisors and hire an industrial psychologist and two labor statisticians to review its pay and promotion policies and to recommend improvements. As Jason Bent recently suggested, having an external monitor to report to the court and some sort of ongoing supervision would be even better.
This article originally appeared in Workplace Prof Blog on October 24, 2009. Reprinted with permission from the author.
About the Author: Marcia L. McCormick joined the SLU LAW faculty in 2009. Her scholarship explores the areas of employment and labor law, federal courts, and civil rights, broadly defined. She is also a co-editor and contributor to Workplace Prof Blog, which provides daily information on developments in the law of the workplace and scholarship about
Tuesday, April 7th, 2009
On Thursday, March 19, 2009, the Ninth Circuit Court of Appeals reversed a District Court’s order and reinstated a class action lawsuit against FedEx Kinko’s Office and Print (“FedEx”) seeking unpaid overtime and related penalties on behalf of a class of hundreds of the company’s Center Managers. This short three page decision carries monumental implications which extend far beyond the class members of this single action to reinforce the rights of all California employees who are paid on a “salaried” basis and denied compensation for their overtime work.
The case filed in May 2005 alleged that Center Managers at FedEx’s California Stores were improperly classified as “exempt” from overtime pay under California law on the basis that these employees met what is commonly referred to as the “managerial” exemption. Under California law, exemptions from overtime pay are narrowly construed and the employer has the burden to prove the exemption applies. For the managerial exemption to apply, the employer must prove, among other things, that the employees spend more than one-half of their work time on exempt duties and “customarily and regularly” exercise discretion and independent judgment under Cal. Labor Code § 515.
The case was certified as a class action in 2006. In May 2007, FedEx moved for summary judgment asking the District Court to conclude that the entire class was exempt from overtime under California’s “executive” exemption. The District Court agreed and granted Defendant’s motion. The Plaintiff appealed to the Ninth Circuit seeking to have that decision overturned.
The Ninth Circuit reversed the District Court’s decision holding that the class members testimony and expert witnesses raised triable issues regarding whether the Center Managers were primarily engaged in management duties. The decision is important as it reinforces the heavy burden employers must meet in order to show that their employees are spending at least half of their time on exempt tasks – merely referring to those employees as “managers” is not enough.
By reversing the District Court’s finding for FedEx, the Ninth Circuit sent a clear message of the Court’s intention to require employers who seek to circumvent overtime laws by paying their employees fixed salaries to provide substantial evidence to support these decisions – rather than merely referring to thoseemployees as “managers”. The fact that the decision was issued a mere eight days after the hearing is somewhat unusual and bodes well for the rights of all salaried employees throughout the state.
In light of the ruling, the parties will be proceeding toward trial. If successful there, hundreds of FedEx Center Managers could recover compensation for years of lost wages. Employees with similar claims would be well advised to strike while the iron is hot in seeking to recover owed wages pursuant to this ruling. If you are currently working in the state of California and are not receiving overtime pay (or if you are an attorney currently representing such an employee), please visit the Scott Cole & Associates, APC website to obtain further information regarding this lawsuit.
About the Author: Matthew R. Bainer, Esq. is an experienced and successful advocate of employees’ rights and has successfully represented tens of thousands of employees, both in California and throughout the nation. Mr. Bainer, a well-respected practitioner in his field, has written for both legal periodicals and academic law reviews. For more information about Mr. Bainer and his firm, please visit the Scott Cole & Associates, APC website at www.scalaw.com.
Monday, March 23rd, 2009
Tomorrow, March 24th, Betty Dukes and the now two million women who are members of the largest sex-discrimination class action case, Dukes v. Wal-Mart, move one step closer to victory. A panel of 11 judges of the federal Ninth Circuit Court of Appeals will hear Wal-Mart’s latest attempt to stop this case from moving forward as a class action.
In 2001 Betty Dukes and a handful of women sued Wal-Mart, charging it violates Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination on the basis of an individual’s race, color, religion, sex or national origin. They charged that women who work at Wal-Mart are paid less than men in comparable positions despite having higher performance ratings and greater seniority. They also allege that women receive fewer promotions and when promoted they wait much longer than male employees.
Following two years of discovery, including review of over a million pages of documents (including Wal-Mart’s employee compensation data), depositions of both Wal-Mart executives and our clients, testimony of statisticians, a labor economist and a sociologist, the District Court certified the class finding that common questions of fact and law existed. The court also found that there was significant evidence of corporate-wide practices and policies of excessive subjectivity and gender stereotyping in personnel decisions. The class was certified for injunctive relief and punitive damages.
This is Wal-Mart’s third attempt to decertify the class, and it has garnered the support of large corporate interests, as well as the Pacific Legal Foundation whose amicus brief in support of Wal-Mart sums up their view of this case. Their two points are that “class certification would violate Wal-Mart’s due process rights” and that “federal courts are not the proper forum for redressing broad social justice claims or disputes between social classes.”
When broad social justice goals are embedded in the law, then courts must redress these claims. Title VII was enacted with the stated goal of eliminating the societal norm which relegated women and men of color to second class status in employment, excluding them from many jobs, paying them lower wages and subjecting them to the least desirable working conditions.
Since this action was filed Wal-Mart has put forth numerous arguments seeking to defeat class certification: the case is too big and unmanageable; plaintiffs’ claims are not typical; there is no evidence of common practices that harm the plaintiffs; and Wal-Mart’s right to due process would be violated. The case is big because Wal-Mart, with 4,259 stores, is the nation’s largest employer. Wal-Mart wants the right to defend itself against each and every woman who claims she was paid less or unfairly denied promotion opportunities.
Class actions were established as a vehicle for addressing systemic harms, and Wal-Mart and many other large businesses seek to convince the courts that justice is better served on an individual case by case basis. But given the astronomical disparity in resources between Wal-Mart and the underpaid female class members, this case presents the textbook example of why class actions have been–and still are–the only viable means of redressing systemic discrimination. A Wal-Mart employee has a better chance of winning the Lotto than garnering the resources to sue one of the largest profit-making enterprises in the world. Wal-Mart knows that if it can defeat class certification, it diminishes the likelihood it will be held accountable for its wide-spread discriminatory practices.
Until recently big business enjoyed a period of exuberance and expansion fueled by the mantra that less oversight and regulation fostered business growth and prosperity. Accounts of corporate excesses and irresponsibility (and at times criminal activity) remind us daily that an absence of regulation is not a good thing. Wal-Mart is one of the very few corporations that continues to post a profit and is performing admirably well in the rough economic environment. Our clients want Wal-Mart to succeed, and as the company’s backbone, they should be sharing in its success. They look forward to the day when every woman who works or shops at Wal-Mart knows that the Company’s financial success has not been made at the expense of its female workforce.
A Peaceful Revolution is a blog about innovative ideas to strengthen America’s families through public policies, business practices, and cultural change. Done in collaboration with MomsRising.org, read a new post here each week.
NOTE: Cross posted from Huffington Post: http://www.huffingtonpost.com/debra-a-smith/ipeaceful-revolutioni-wal_b_178260.html
About the Authors: Irma D. Herrera is the Executive Director of Equal Rights Advocates, a San Francisco based organization whose mission is to protect and secure equal rights and economic opportunities for women and girls through litigation and advocacy. Her articles on legal and cultural issues were published in the New York Times, the Washington Post, Newsday, and Ms. Magazine. Debra A. Smith has over twenty-five years experience litigating complex employment discrimination and other civil rights. Debra has been with Equal Rights Advocates since July 2001 where she continues her class action litigation, including co-counseling in the largest sex discrimination class action to date in the United States against Wal-Mart Stores, Inc. which involves more than 1.6 million low wage women workers.