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Existence of Individual Damages Does Not Preclude Predominating Class Issues, Appeals Court Rules

 

A recent California state appeals court decision caught the eyes of our Chicago employment class action attorneys because it addressed fine distinctions in class certification. In Jaimez v. Daiohs USA, 2010 Cal. App. LEXIS 156 (Feb. 8, 2010), California’s Second District Court of Appeal ruled that a trial court improperly denied class certification when it relied on individual testimony to establish the existence of a uniform employer policy. It agreed, however, that plaintiff Alex Jaimez was an inappropriate class representative.

From 2001 to 2007, Jaimez was a route sales representative for DAIOHS First Choice Services, which provides refreshments and vending-machine products to offices. From 2003 to 2007, all of them were reclassified from overtime-exempt to non-exempt, receiving an hourly wage plus overtime when applicable. In 2007, Jaimez filed this action in Los Angeles Superior Court, seeking to certify four classes of employees who were allegedly denied overtime; meal breaks; rest breaks; or pay stubs.

The plaintiffs argued that First Choice had improperly classified RSRs as exempt before the change, illegally denying overtime, meal breaks and rest breaks. After the change, the company continued not paying overtime, the plaintiffs claimed, but pressured RSRs to finish their routes in eight hours even when the routes were long. The plaintiffs also claimed that they were not informed that they were entitled to another meal break if they worked more than 10 hours. Before 2006, they said, meal breaks were automatically removed from time records regardless of whether they were taken; after 2006, employees were pressured to sign a statement that they took the break, even when they didn’t. These were the result of consistent, uniform corporate policies, the motion said, making class certification appropriate. The proposed class sought back wages and penalties under state law.

First Choice opposed the class certification motion by submitting testimony from 25 current RSRs who said they had no such problem. All of them said they were able to take rest and meal breaks when they wished, are encouraged to do so and have time to do so. Relying on these declarations, the trial court denied class certification, saying Jaimez was not typical enough an the proposed class did not have common questions of law and fact. It also said Jaimez was not a good representative, because pretrial testimony showed that he’d lied about a previous criminal conviction for petty theft when he was hired. Plaintiffs then asked for leave to file a First Amended Complaint with new class representative, but was denied. They appealed both orders.

On appeal, the Second District said the trial court misapplied state class certification standards by considering conflicting issues of fact rather than evaluating whether the plaintiffs’ theory of recovery was appropriate for class treatment. In this case, the plaintiff’s “theory of recovery” includes questions of fact and law that predominate over all RSRs in the class, including questions about First Choice’s policies, record-keeping and misclassification of employees. When the trial court used the RSR declarations submitted by First Choice to deny this, the appeals court said, it incorrectly reached the merits of the claim rather than the question of predominance. In fact, the appeals court said the declarations actually support to some extent the allegations made by the plaintiffs about policies and practices. That RSRs may have different damages does not mean they don’t have common questions of law and fact to try.

The appeals court further found that Jaimez was a sufficiently typical representative of the class, noting that he had submitted nine declarations from others that were substantially similar. However, it also found that he was not an adequate representative because of his dishonesty about his criminal conviction. Thus, the appeals court upheld the trial court’s class certification ruling on that issue, but reversed on all other issues. It also reversed the denial of leave to file a First Amended Complaint, noting that the trial court itself invited Jaimez to file such a complaint and that First Choice did not oppose it. The case was remanded to trial court with instructions to certify subclasses after a new class representative is appointed.


At DiTommaso Lubin Austermuehle, we have seen similar class certification rulings from courts around the United States. Here in Illinois, as in California, courts must not make class certification rulings based on the merits of the case rather than the merits of trying the case as a class. Nonetheless, our Illinois wage and hour lawyers continue to see cases where workers must fight larger, better-funded employers simply to get their day in court. Workers who have been incorrectly denied wages, including overtime wages, can recover those wages and other penalties if they band together in class actions. Our Chicago and Evanston overtime rights attorneys represent workers who are pursing this type of claim, individually or as part of a class action. If you’re considering this type of lawsuit and you’d like to know more, we invite you to contact us for a free evaluation of your case. You can call toll-free at 1-877-990-4990 or send us a message through our site.