In Martinez v. Joe’s Crab Shack Holdings, ___ Cal.App.4th ___ (Nov. 11, 2013; pub. ord. Dec. 4, 2013), the California Court of Appeal (Second Appellate District, Division Seven) reversed the Los Angeles County Superior Court court’s order denying class certification of claims by salaried restaurant managers that they were improperly classified as exempt and, therefore, denied overtime pay.
The trial court had denied class certification on the grounds that plaintiffs had failed to establish: (1) their claims were typical of the class; (2) they could adequately represent the class; (3) common questions predominated over individual ones; and (4) a class action was superior to individual litigation.
“The first two findings were based on plaintiffs’ inability to estimate the number of hours spent on individual exempt and nonexempt tasks and their admission the amount of time spent on particular tasks varied from day to day.” As to the third and fourth findings, the court concluded that significant individual disputed issues of fact relating to the amount of time spent by individual class members on particular tasks would require adjudication of the affirmative defense of exemption for each class member.
Noting that “class-wide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof,” the appellate court reversed.
With respect to typicality, the trial court had held that plaintiffs’ claims would be “vulnerable to the defense that each of them performed exempt tasks more than 50% of their work time,” as opposed to the “putative class members who [allegedly] spent more than 50% of their work time performing non-exempt tasks.” The appellate court concluded that “this analysis suffers from an overly focused examination of the facts that looked toward individual differences rather than commonality.” Instead, the court held, the trial court should have focused on what was common to plaintiffs’ claims.
Regarding adequacy, the appellate court noted a potential conflict in the proposed class between general managers and assistant manager but reasoned that this was “not fatal. In the interest of preserving the claims of subordinate managerial employees, the trial court may on remand exercise its discretion to create a general managers subclass or to exclude general managers entirely from the class definition.”
Regarding commonality, the court relied heavily on Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012), as well as its prior decision in Benton v. Telecom Network Specialists, Inc., 220 Cal.App.4th 701 (2013), noting that this case raised “similar questions of proof.” Although the court agreed that the factfinder would ultimately have to decide whether the class members were properly classified as exempt, issues such as the employer’s realistic expectations and the actual overall requirements of the job “are likely to prove susceptible of common proof.” The trial court’s failure to focus on the impact of defendants’ policies and practices on its managerial employees essentially shifted the burden of disproving exemption to plaintiffs.