Achieving Appellate Victories for Insurer in Wage-Hour Class Action
A company’s first and often best opportunity to successfully defend a wage-hour class action is to defeat certification of the proposed class. Epstein Becker Green has successfully opposed class certification in many wage-hour actions. For example, on behalf of a national insurance company, Epstein Becker Green defeated class certification in a decision that withstood two appellate challenges within the past year.
As we reported, a Los Angeles Superior Court denied class certification on claims that the plaintiffs, property inspectors working for the national insurance company, had been misclassified as independent contractors, denied meal and rest periods, and provided inaccurate wage statements, among other things. This case was unusual in that the plaintiffs proposed trying the class action in a day or two through a single witness—their expert, who would testify about what he was told in an anonymous, non-random survey. Epstein Becker Green’s client and the other defendants would never be allowed to cross-examine a single putative class member at trial, let alone know who had participated in the survey. Also, there would be no repercussions if a class member lied or exaggerated as a result. Ironically, the plaintiff’s expert testified that putative class members could be expected to remember the lengths of breaks they took 10 years ago—but the expert couldn’t remember how long his own breaks were during his deposition for the case!
The plaintiffs appealed the trial court’s decision, but in late 2018, a California court of appeal affirmed the trial court’s denial of class certification. (The appellate decision tackled a number of issues that had not previously been addressed by the courts of appeal, including the standards for using surveys to establish liability in class actions.) The court of appeal adopted many of Epstein Becker Green’s arguments wholesale in its decision. The plaintiffs/appellants then petitioned the court of appeal for a rehearing, which was granted. However, after the rehearing, in July 2019, the court of appeal again sided with Epstein Becker Green’s position and upheld the denial of class certification.
The Epstein Becker Green team included Michael S. Kun and Kevin Sullivan.
Assisting Insurer in Defeating Class Certification in Wage and Hour Case
In May 2017, Epstein Becker Green attorneys achieved a major victory for a national insurance company in a wage and hour class action pending in Los Angeles Superior Court. The Epstein Becker Green team convinced the trial court to deny the plaintiffs’ motion for class certification on all claims. The lawsuit had alleged that property inspectors who worked for the insurance company had been misclassified as independent contractors, had not been paid minimum wages or overtime, did not receive meal periods and rest periods, and were not reimbursed for business expenses, among other things.
The Epstein Becker Green team included Michael S. Kun and Kevin Sullivan.
Obtaining Dismissal of Statewide Representative Suit Brought Against California Client
In December 2016, Epstein Becker Green obtained the dismissal of a statewide representative action against a California employer. The plaintiff had alleged that our client did not pay several thousand California employees for all time worked, denied them meal and rest periods, and gave them inaccurate wage statements.
The suit was brought under California’s Private Attorneys General Act (“PAGA”), which allows employees to file representative actions—similar to class actions—on behalf of all “aggrieved employees.” Epstein Becker Green filed a motion to dismiss the statewide claims on a variety of procedural and substantive grounds.
After reviewing Epstein Becker Green’s motion to dismiss, plaintiff’s counsel conceded that the motion would be granted and agreed to dismiss all of the statewide representative claims. The plaintiff will now be proceeding with individual claims only, which we believe he is required to arbitrate.
The Epstein Becker Green team included Michael S. Kun and Amy B. Messigian.
Epstein Becker Green Persuades California Court to Deny Certification of Misclassification, Meal Period, and Rest Period Claims Against Restaurant Client
After more than five years of litigation, a Los Angeles Superior Court has denied a motion for certification of a class action against Epstein Becker Green client Joe's Crab Shack Restaurants on claims that its managers were misclassified as exempt and denied meal and rest periods in violation of California law. The Epstein Becker Green team, which was led by Michael S. Kun, argued on behalf of the defendant that the plaintiffs' claims could not be certified for class treatment because, among other things, individualized inquiries would need to be conducted because managers' experiences differ from restaurant to restaurant, position to position, and day to day.
In denying the plaintiffs' class certification motion, Judge Charles Palmer found that the plaintiffs had not established adequacy of class representatives, typicality, commonality, or superiority. In addition, Judge Palmer noted that handling this case as a class action would require every individual member to prove whether or not he or she spent more than half his or her time on exempt managerial tasks, which would be time-consuming and burdensome for the court. This ruling also emphasized a defendant's due process right to provide individualized defenses to class members' claims.
Epstein Becker Green Persuades Federal Court in California to Deny Certification of Wage and Hour Claims Against Technology Client
Epstein Becker Green has achieved a major victory in a wage and hour collective/class action in a federal court in California. In this case, the plaintiffs filed a collective and class action alleging violations of the Fair Labor Standards Act ("FLSA") and the California Labor Code against one of our clients, a global technology company. The named plaintiffs are former information technology employees who alleged that their job duties consisted primarily of providing computer support, trouble shooting, testing related to repairs and problem-solving, and technical services. The plaintiffs claimed that they were improperly classified as exempt, worked in excess of 40 hours per week without overtime pay, and were not provided with required meal and rest breaks. Previously, the judge had conditionally certified an FLSA class. Ruling on the parties' respective motions in September 2013, the court denied the plaintiffs' motion to certify a Rule 23 class action under California law, and it granted our client's motion to decertify the conditionally certified FLSA class.
Interestingly, the law firm that represented the plaintiffs in this case represented a similar group of employees in a prior class action brought against a prior owner, and settled that case for approximately $16 million. The Epstein Becker Green team, which was led by Michael S. Kun and included Aaron F. Olsen and Lisa M. Watanabe, crafted and executed a creative strategy that led to a very different result for our client.
Epstein Becker Green Persuades California Court to Deny Class Certification Against Insurance Client
On March 24, 2014, after five years of litigation, Epstein Becker Green succeeded in defeating a motion for class certification in a significant class action lawsuit brought against our client Farmers Group, Inc., an insurance company, in Los Angeles Superior Court. In the case, the plaintiffs alleged that the persons who work for vendors performing property inspections for Farmers Group were wrongly classified as independent contractors, that Farmers Group was their "joint employer," and that they were entitled to overtime pay, minimum wages, reimbursement for business expenses, and a variety of penalties on a class-wide basis. Epstein Becker Green convinced the court that there were individualized issues that prevented class-wide determinations of whether the individuals had been misclassified as independent contractors, whether Farmers Group was their "joint employer," and whether Farmers Group could be held liable on any of the substantive claims. EBG also succeeded in convincing the court that the plaintiffs had not established the critical "superiority" element for class treatment.
The Epstein Becker Green team that represented Farmers Group included Michael S. Kun, Aaron F. Olsen, Lisa M. Watanabe, and Amy B. Messigian.
Epstein Becker Green Obtains Dismissal of Wage and Hour Class Action Brought Against Health Care Client
In March 2014, Epstein Becker Green obtained a significant victory in a wage and hour class action brought against a health care client in California. Although our client was confronted with potential exposure in the millions of dollars, the case was resolved without any payment by our client. Epstein Becker Green obtained this result by first filing motions to dismiss and to strike portions of the Complaint. Those motions were granted in part, essentially cutting the case in half (the court dismissed the class claims, subject to plaintiff's right to attempt to amend the Complaint). When the plaintiff's attorneys chose not to try to amend the Complaint during the time permitted, Epstein Becker Green was able to convince the plaintiffs to dismiss the rest of the case based on documentation showing that the remaining claims were meritless.
The Epstein Becker Green team representing our client included Adam C. Abrahms, Michael S. Kun, and Deanna L. Ballesteros.