Marin v. Costco Wholesale Corporation explains how to calculate overtime on certain bonuses

/

Greatsealcal100One might be tempted to conclude that all of the novel issues surrounding overtime pay would long ago have been exhausted.  But being that this is a law blog, and seeing as how this blog emphasizes developments in California law, you already know that this is a post about a new issue in overtime litigation.  In Marin v. Costco Wholesale Corporation (December 23, 2008), the Court of Appeal (First Appellate District, Division One), in a case of first impression, reviewed the lawfulness of Costco's formula for calculating overtime pay on semi-annual bonuses paid to hourly employees.

First, some clarifying information is in order.  The bonuses at issue in Marin were "nondiscretionary" bonuses that were paid out based upon the number of hours that certain long-term employees worked during the six months period before the semi-annual bonus dates.  (Slip op., at pp. 1-2.)  This type of bonus is distinguished from discretionary bonuses (such as year-end bonuses issued only when the employer declares a bonus) because nondiscretionary bonuses are, essentially, deferred compensation tied in some way to production (which, in this case, is simply the hours worked).  The Court explained generally how Costco's plan functions:

“Costco pays a formulaic bonus, based on paid hours, to long-term hourly employees. To be eligible for the bonus, paid in April and October, these employees must: (1) have been paid a specified number of hours for continuous service—8,000 hours (approximately four years) for those hired before March 15, 2004, and 9,200 hours (approximately 4.6 years) for those hired after that date; (2) generally be at the top of their pay scale; and (3) have been employed by defendant on April 1 for the April bonus and October 1 for the October bonus. The maximum semi-annual base bonus amount is $2,000 for those with less than 10 years of service, $2,500 for those with 10 to 14 years of service, $3,000 for those with 15 to 19 years of service, and $3,500 for those with 20 or more years of service.

To qualify for the maximum base bonus, the employee must have been paid for at least 1,000 hours in the six-month period preceding April 1 and October 1. Bonuses are prorated for those paid for less than 1,000 hours; the formula for the base bonus is thus: hours paid up to 1,000 ÷ 1,000 × maximum bonus amount.

(Slip op., at pp. 1-2, footnote omitted.)  The Court then explained how the parties calculated overtime owed to certain employees:

“Defendant calculated the overtime owed on the bonus by dividing the employee’s maximum base bonus by the minimum number of paid hours required to achieve that maximum bonus (1,000) to determine a regular hourly bonus rate, and then by multiplying the number of overtime hours worked during the bonus period by one-half of that regular bonus rate. Plaintiffs contend that defendant was required to calculate the regular bonus rate by dividing the base bonus the employee earned by the number of straight time hours worked during the bonus period, and then multiply the number of overtime hours by 1.5 times that regular bonus rate.

For example, under defendant’s formula, an employee who achieves a maximum base bonus of $2,500 by virtue of being paid for 840 straight time hours, 100 overtime hours, and 100 vacation hours during the bonus period is entitled to $125 of overtime pay on the bonus, calculated as follows: $2,500 (maximum base bonus) ÷ 1,000 (paid hours required for maximum base bonus) = $2.50 (regular hourly bonus rate) × 100 (overtime hours) × 0.5 = $125. Under plaintiffs’ formula, the same employee would receive $477 overtime on the bonus: $2,500 (base bonus earned) ÷ 840 (straight time hours worked) = $2.98 (regular bonus rate) × 100 (overtime hours) × 1.5 = $447.

(Slip op., at pp. 3-4.)

Turning to the opinion's analysis, the Court examined Skyline Homes, Inc v. Department of Industrial Relations (1985) 165 Cal.App.3d 239, Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557 and the "Division of Labor Standards Enforcement’s (DLSE) 2002 Enforcement Policies and Interpretations Manual (Manual) distinguishing 'flat sum' bonuses (Manual § 49.2.4.2) from bonuses 'based on a percentage of production or some formula other than a flat amount' (Manual § 49.2.4)" in its search for a framework in which to evaluate Costco's plan. The Court concluded that no source of controlling law specified a formula for calculating overtime on the nondiscretionary bonuses issued by Costco:

“In sum, no California court decision, statute, or regulation governs bonus overtime, the DLSE Manual sections on the subject do not have the force of law, and the DLSE advice letters on the subject are not on point. Consequently, defendant’s bonus plan cannot be deemed to violate California law. While this conclusion is dispositive of plaintiffs’ state law claims, we proceed to explain why in practical effect defendant’s bonus plan comports with the rationales for the pertinent sections of the Manual.

(Slip op., at p. 13.)  The primary reason that Costco's bonus plan caused any difficulty is that it operates as a hybrid of a "production" bonus and a "flat amount" bonus when employees work more than 1,000 hours in the six-month period used to calculate the bonus: "Defendant’s bonus does not fit neatly into either of the categories the DLSE has posited: bonuses for a “flat sum, such as $300 for continuing to the end of the season, or $5.00 for each day worked” (Manual § 49.2.4.2) and bonuses earned each payday “based on a percentage of production or some formula other than a flat amount” (Manual § 49.2.4)." (Slip op., at p. 13.).

After examining the public policies surrounding overtime premiums, and the various incentives created by overtime premiums, the Court concluded that Costco's plan did not run afoul of those concerns in a way that required a court to declare Costco's plan unlawful:  "To recapitulate, defendant’s bonus is in the nature of a production bonus until the 1,000 paid hour threshold is reached, and while the bonus has some qualities of a flat sum bonus on hours paid thereafter, it does not encourage imposition of overtime during the post-1,000 hour period in a way that would support the use of the DLSE’s flat sum bonus formula even as to overtime worked during that period." (Slip op., at p. 17.)

Of note, the Court of Appeal concluded that section 49.2.4.2 of the DLSE's Manual governing "flat sum" bonuses is a void regulation under Tidewater, because it was not  "'a standard of general application interpreting the law the DLSE enforce[s],' and 'not merely a restatement of prior agency decisions or advice letters.'" (Slip op., at p. 12.)

Of further note, the appellate counsel on both sides of this appeal were highly qualified, so I assume that they provided the Court of Appeal with high-quality policy arguments in a case of first impression where even suggestive authority is sparse.

Other blogs noting the decision include What's New in Employment Law.

Read More

For the moment, California law is clear: no punitive damages for violations of labor code provisions regulating breaks

/

Greatsealcal100Whether punitive damages are available for violations of various labor code provisions has been something of an open question in California. You may recall, for instance, that a jury found against Wal-Mart in the matter of Savaglio v. Wal-Mart, awarding $172 million to the class members, including $115 million in punitive damages.  In that particular case, after Wal-Mart argued that punitive damages amounted to a penalty on a penalty, Judge Ronald Sabraw rejected the argument that meal and rest break premiums were penalties.  That particular finding was later confirmed as the correct interpretation in Murphy v. Kenneth Cole (2007) 40 Cal.4th 1094.  In any case, without clear guidance on the question, it has seemed prudent to at least request punitive damages for such violations and let a Court say that they weren't recoverable.

Yesterday, however, a Court of Appeal approached this issue from a different perspective.  In Brewer v. Premier Golf Properties (December 3, 2008) the Court of Appeal (Fourth Appellate Distirct, Division One) reviewed, among other things, whether a punitive damage award for violation of various Labor Code sections was valid.  The Brewer Court concluded that punitive damages are not available for several violations of the Labor Code: 

“We are convinced, both by application of the "new right-exclusive remedy" doctrine and under more general principles that bar punitive damages awards absent breach of an obligation not arising from contract, punitive damages are not recoverable when liability is premised solely on the employer's violation of the Labor Code statutes that regulate meal and rest breaks, pay stubs, and minimum wage laws.

(Slip op., at pp. 10-11.)  The Brewer case was an individual action, but it is covered here because of the significant impact on many wage & hour class actions.  If you are curious about the "new right-exclusive remedy" doctrine, take a look at Rojo v. Kliger (1990) 52 Cal.3d 65.

It is worth noting that Savaglio remains on appeal and may ultimately affect this area of law.  However, Savaglio has been stayed pending the outcome in Brinker, so it will be several years before that case moves forward.

Read More

In Kullar v. Foot Locker Retail, Inc., Court of Appeal sides with objector to class action settlement

/

Greatsealcal100Objectors to class action settlements have limited prospects for success.  I haven't seen any data, but the success rate of objectors looks to be exceedingly low.  So it is of some note when a published opinion accepts an objector's contention that a class action settlement is "fair, reasonable and adequate."  In Kullar v. Foot Locker Retail, Inc. (Echeverria as Objector and Appellant) (November 7, 2008), the Court of Appeal (First Appellate District, Division Three) did just that.

Echeverria contended that the trial court erred in finding a settlement "fair, reasonable and adequate without any evidence of the amount to which class members would be entitled if they prevailed in the litigation...." (Slip op., at p. 1.) The Court of Appeal agreed that the trial court was obligated to consider the potential range of possible recoveries before concluding that a settlement meets that standard:

“More fundamentally, neither Dunk, 7-Eleven, nor any other case suggests that the court may determine the adequacy of a class action settlement without independently satisfying itself that the consideration being received for the release of the class members’ claims is reasonable in light of the strengths and weaknesses of the claims and the risks of the particular litigation. The court undoubtedly should give considerable weight to the competency and integrity of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement represents an arm’s length transaction entered without self-dealing or other potential misconduct. While an agreement reached under these circumstances presumably will be fair to all concerned, particularly when few of the affected class members express objections, in the final analysis it is the court that bears the responsibility to ensure that the recovery represents a reasonable compromise, given the magnitude and apparent merit of the claims being released, discounted by the risks and expenses of attempting to establish and collect on those claims by pursuing the litigation. “The court has a fiduciary responsibility as guardians of the rights of the absentee class members when deciding whether to approve a settlement agreement.” (4 Newberg on Class Actions, supra, § 11.41 at p. 118; 7-Eleven, supra, 85 Cal.App.4th at p. 1151.) “The courts are supposed to be the guardians of the class.” (Dickerson, Class Actions: The Law of 50 States (2008 ed.) § 9.02[2], p. 9-6.)

(Slip op., at pp. 13-14.)  The Court of Appeal acknowledged the factual circumstances that guided the trial court but ultimately dismissed those circumstances (a possible mediation privilege) as a basis for presuming the fairness of a settlement without testing it against the range of potential recoveries: 

“Here, the trial court acknowledged that “in logic” it would have been preferable for it to have been presented with data permitting it to review class counsel’s evaluation of the sufficiency of the settlement, but felt that this was precluded because the supporting information was exchanged in the course of mediation. We disagree with this conclusion for two reasons. First, the fact that the settlement was reached during mediation to which Evidence Code section 1119 applies does not eliminate the court’s obligation to evaluate the terms of the settlement and to ensure that they are fair, adequate and reasonable. If some relevant information is subject to a privilege that the court must respect, other data must be provided that will enable the court to make an independent assessment of the adequacy of the settlement terms. Secondly, the fact that communications were made during the mediation and writings prepared for use in the mediation that are inadmissible and not subject to compulsory production does not mean that the underlying data, not otherwise privileged, is also immune from production. (Evid. Code, § 1120 [“Evidence otherwise admissible or subject to discovery outside of a mediation . . . shall not be or become inadmissible or protected from disclosure solely by reason of its introduction or use in a mediation . . .]; Rojas v. Superior Court (2004) 33 Cal.4th 407, 417; Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137, 157-158.) Foot Locker’s payroll records, for example, if relevant to the quantification of the claims being settled, are subject to discovery and may be introduced in opposition to the settlement even if they were disclosed to class counsel during the mediation, and even if class counsel was shown only a summary or analysis of those records that is not itself subject to production because prepared for use in the mediation.

(Slip op., at pp. 16-17.)

Easy moral:  Give the trial court something to hang its hat on when seeking approval of a settlement.  Sample calculations for claimants would be a good start, coupled with a discussion of how risk impacts a claim calculated at any particular recovery level.

Read More

Petition for Review filed in Johnson v. Glaxosmithkline, Inc.

/

Greatsealcal100This blog briefly reported on a new opinion in Johnson v. Glaxosmithkline, Inc. (September 19, 2008).  You can read that post here.  A Petition for Rehearing was filed on October 7, 2008.  It was denied the day it was filed.  On October 14, 2008, the Court of Appeal modified its opinion, without changing the judgment.  In a later post, I guessed (not a stretch) that a Petition for Review was coming.  Last week the expected Petition was filed with the Supreme Court.

Read More

Brinker redux in Brinkley v. Public Storage, Inc.

/

Greatsealcal100On October 22, 2008, the Supreme Court has GRANTED the Petition for Review in Brinker Restaurant Corporation, et al. v. Superior Court (Hohnbaum).  See this blog's coverage here and here for more information. The calm didn't last long though, as another Division of the Court of Appeal has re-asserted portions of the Brinker holding that were rendered uncitable with the grant of review.

In Brinkley v. Public Storage, Inc. (October 28, 2008), the Court of Appeal (Second Appellate District, Division Three), relying on the same federal court decision used by the Court of Appeal in Brinker, determined that employers need only "provide" meal breaks, not "ensure" that they are taken:

“In fact, the obligation to affirmatively ensure that workers are relieved of all duty is consistent with the rule requiring employers to provide a meal break. (White v. Starbucks Corp. (N.D.Cal. 2007) 497 F.Supp.2d 1080, 1089 (White) [interpreting Cicairos].) In White, the court rejected the plaintiff’s argument under sections 226.7 and 512 that employers “must affirmatively enforce the meal break requirements.” (White, at p. 1088.) The court noted that it would be impossible for employers with large work forces to enforce such meal breaks. (Ibid.) It further stated that “employees would be able to manipulate the process and manufacture claims by skipping breaks or taking breaks of fewer than 30 minutes, entitling them to compensation of one hour of pay for each violation. This cannot have been the intent of the California Legislature, and the court declines to find a rule that would create such perverse and incoherent incentives.” (Id. at p. 1089.) We agree with this analysis.

(Slip op., at pp. 10-11.)  The California Courts website has been difficult to access today, so have patience if you are looking for the full opinion there.

I authored a column, published in the Daily Journal, where I discussed the weakness in the Brinker/White economic analysis of employer and employee incentives.  (A Bad Meal Deal: 'Brinker' Gets the Incentive Question Wrong, Daily Journal (Los Angeles), August 6, 2008.)  The same criticisms apply with equal force.  Here is a brief excerpt of that column:

“The fundamental flaw in Brinker's analysis is that it is premised on false assumptions. The idea that it is "impossible" to control breaks is inconsistent with the observable fact that employers of all sizes control employees in a variety of ways every day. In fact, since S. G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989), "[t]he principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired." As one example of such control, employers habitually set hours of work for their employees. Under the analysis supplied by White and adopted by Brinker, a large employer should find it impossible to control when its employees arrive and depart each day. And yet somehow, they do. The primary manner in which they do so is through a combination of positive and negative incentives. An employee who is punctual and performs well will receive favorable reviews, earn raises or qualify for promotions. A habitually tardy employee may ultimately face termination. For most employees, these combined incentives control their behavior. An employer's failure to modify a recalcitrant employee's behavior is the fault of the employer, not evidence of the impossibility of employee control.

As a result of accepting the White conclusions, Brinker misses many obvious incentives that could overwhelm the financial incentive on an employee to work during a meal break. The potential loss of employment is a larger financial incentive on an employee than an additional hour of pay. Rational employees, working for an employer that enforces its meal break policy, will respond to the larger financial incentive of job retention. Similarly, an employer faces an economic incentive to affirmatively relieve all employees of work duties for 30 minutes during shifts of sufficient length. The employer must then determine whether enforcement of policy is the preferred course to paying meal break premiums. In addition, the employer faces the additional, strong incentive to avoid meal break litigation by employees seeking to recover meal break premium payments. These incentives on employers and employees seem sufficient to overwhelm the singular incentive mentioned in Brown and accepted by Brinker.

(A Bad Meal Deal: 'Brinker' Gets the Incentive Question Wrong, Daily Journal (Los Angeles), August 6, 2008.)  If Courts are considering a discussion of economics as a supporting basis for an opinion's analysis, such Courts would be well advised to either offer a complete discussion of the economic forces at work or avoid the topic entirely.  An incomplete economic analysis in Brinker, and now Brinkley, results in conclusions that don't stand up to scrutiny.

It's very disappointing to see the law premised upon a suspect rationale that individuals without an economics background might not notice.  It creates the appearance, whether accurate or not, of outcome-driven decisions.  The integrity of our legal systems requires our citizens to believe that the law is dispassionately interpreted without a pre-determined outcome in mind.  I don't perceive that to be the case here.

Read More

More on Brinker under review

/

Wage Law also notes that the Supreme Court has GRANTED the Petition for Review in Brinker Restaurant Corporation, et al. v. Superior Court (Hohnbaum).  But Wage Law then asks a very intriguing question:  Will the DLSE update its enforcement manual that was revised immediately to reflect the decision in Brinker?  Wage Law guesses that the current administration will do nothing unless forced to do so by a Court decision.  My initial post on that enforcement decision can be found here.  Perhaps the California Labor Federal Federation will have something to say on a further update to the manual, after their strongly-worded criticism of the initial update.

Read More

BREAKING NEWS: Petition for Review granted in Brinker Restaurant v. Superior Court (Hohmbaum)

/

Greatsealcal100The Supreme Court has just GRANTED the Petition for Review in Brinker Restaurant Corporation, et al. v. Superior Court (Hohnbaum).  View the Supreme Court docket here.  Aside from Justice Werdegar, who was absent and did not participate, all other justices voted in favor of the Petition.  As I obliquely suggested in this post, so much for Brinker Restaurant Corporation's prediction that this matter would quietly return to the Superior Court after turning wage & hour class action precedent on its head.

UPDATE:  This post has been marked as "featured" so as to appear first on the home page of this blog while interest in this news remains high.

Read More

Interesting brief excerpt persuasively argues that "independent contractors" are equally entitled to indemnity under Labor Code section 2802

/

I've been off my game with respect to blogging, but an interesting item that just crossed my electronic desk prodded me to start back in on the pile of items and partially completed posts that I need to finish. A regular reader supplied me with a trial court brief that advances a fascinating proposition:  "independent contractors" are entitled to indemnification (read: reimbursement of necessary expenses) under Labor Code section 2802 because the definition of "employee" that applies to Labor Code section 2802 encompasses what would be "independent contractors."  If accepted by courts, that contention would have significant consequences for the many businesses that attempt to avoid all costs of employment by designing systems that classify groups of workers as "independent contractors" or "franchisees."  Because the analysis is so thorough and so thought-provoking, I include it here (divided so that only a part appears on the front page due to length), with minimal editing:

[BEGINNING OF EXCERPT]

“‘California has a strong public policy that favors the indemnification . . . of employees by their employers for claims and liabilities resulting from the employees’ acts within the course and scope of their employment.’ [Citation.] Labor Code section 2802 codifies this policy . . . .” Edwards v. Arthur Andersen LLP, 44 Cal.4th 937, 81 Cal.Rptr.3d 282, 293, 189 P.3d 285, 295 (2008). Section 2802(a) requires that “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties . . . . (Emphasis added.) The “obvious purpose” of section 2802 is “to protect employees from suffering expenses in direct consequence of doing their jobs.” Grissom v. Vons Companies, Inc., 1 Cal.App.4th 52, 59-60, 1 Cal.Rptr.2d 808 (1990). Section 2802 “shows a legislative intent that duty-related losses ultimately fall on the business enterprise, not on the individual employee.” Janken v. GM Hughes Electronics, 46 Cal.App.4th 55, 74, fn. 24, 53 Cal.Rptr.2d 741 (1996). Section 2802 is unwaivable. Cal. Lab. Code § 2804 (“Any contract or agreement, express or implied, made by any employee to waive the benefits of this article or any part thereof, is null and void . . . .”) And “[a]rbitration awards have been reviewed to determine whether the arbitrators complied with statutes conferring unwaivable rights. [Citations.]” Cable Connection, supra, 44 Cal.4th at 1362.

Read More

California Supreme Court construes validity of employees' release agreements

/

Greatsealcal100Last Thursday, the Supreme Court issued its decision in Edwards v. Arthur Andersen, LLP (August 7, 2008) __ Cal.4th __.  That decision addressed two questions, but the one of interest is the second of the two issues, which asks, "[I]s a contract provision requiring an employee to release “any and all” claims unlawful because it encompasses nonwaivable statutory protections, such as the employee indemnity protection of Labor Code section 2802?"  (Slip op., at p. 1.)  The answer, according to the Supreme Court, is no, but only because "any and all" is ambiguous, requiring resort to statutory presumptions that legal contructions are to be preferred over illegal constructions:  "[A] contract provision releasing 'any and all' claims does not encompass nonwaivable statutory protections, such as the employee indemnity protection of Labor Code section 2802 and, accordingly, is not void under Labor Code section 2804." (Slip op., at pp. 18-19, 21.)  The reaction to that holding is what interests me for purposes of this post.

While I routinely examine new appellate decisions, I first learned about Edwards through a post at WageLaw.  What caught my eye in the post was the statement that, as Justice Kennard mentioned in her dissent, the case may be misunderstood, to the detriment of employees.  Thus, I had to read the opinion for myself to see whether I agreed that negative consequences are likely.  Having read and considered the opinion, and although I habitually agree with WageLaw's analysis, I don't believe that this case presents the risk articulated by Justice Kennard and WageLaw.

The Supreme Court was faced with two possible outcomes to the question of how to construe a release of "any and all" claims, when the language could potentially waive claims that are statutorily nonwaivable.  The first option was to declare such a release entirely void.  The second option was to construe the release as encompassing only those claims that can be lawfully released.  The Supreme Court selected the second option.

Justice Kennard (with Justice Werdegar concurring) argues that the release may have been devised to trick employees into not bringing indemnity claims, even though such a release was void:

“As the Court of Appeal observed, Andersen’s actions suggest a possible purpose of misleading employees into thinking they had waived rights that could not be waived, thereby minimizing the number of indemnity claims these employees might bring against Andersen.

(Slip dissent, at p. 5.)  While Andersen's actions may have been intentional, I don't see why the intent is a significant factor in analyzing whether employees will be deceived.  An innocently vague release of "any and all" claims may also cause an employee to relinquish a statutorily protected claim out of the mistaken belief that it had been released.  In fact, had the Supreme Court declared such releases completely void, the use of such a release could still trick employees into believing that they had released claims when they had not.  Ultimately, an employee needs to seek legal counsel if they have any question about the extent of their rights with respect to releases, or any other employment issue.  The value of the Edwards decision is that a definitive ruling has found that general release language cannot be construed as any sort of release or waiver of statutorily protected claims or rights.  The concerns about its negative consequences are, I think, overstated.

Read More

The Pioneer ripples continue to expand in Lee, et al. v. Dynamex, Inc., et al.

/

Greatsealcal100Back on August 14th, I commented on yet another decision giving a further boost to the Supreme Court's decision in Pioneer Electronics (USA), Inc. v. Superior Court (Olmstead), 40 Cal.4th 360 (2007), in which the California Supreme Court confirmed the right of plaintiffs to discover the identity and contact information of putative class members.  Discussing Alch v. Superior Court (August 14, 2008) in this post, I commented that it furthered the trend of Belaire-West Landscape, Inc. v. Superior Court, 149 Cal.App.4th 554 (2007) and Puerto v. Superior Court, 158 Cal.App.4th 1242 (2008).  It turns out that appellate courts aren't done reminding parties about the fundamental right to engage in discovery in class actions.

On August September 17, 2008, the Second Appellate District (Division Seven) added to the discussion regarding the substantial right to basic discovery of information about putative class members.  In Lee, et al. v. Dynamex, Inc., et al., the Court of Appeal tied all of the threads emanating from Pioneer together and concluded that the failure to permit discovery about class member identity was grounds for reversing the trial court's order denying class certification:

“After first denying Lee’s motion to compel Dynamex to identify and provide contact information for potential putative class members, the trial court denied Lee’s motion for class certification. Because the trial court’s discovery ruling directly conflicts with the Supreme Court’s subsequent decision in Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360 (Pioneer), as well as our decisions in Belaire-West Landscape, Inc. v. Superior Court (2007) 149 Cal.App.4th 554 and Puerto v. Superior Court (2008) 158 Cal.App.4th 1242 (Puerto), and that ruling improperly interfered with Lee’s ability to establish the necessary elements for class certification, we reverse both orders and remand for further proceedings regarding class certification.

(Slip op., at p. 2.)  In light of Dynamex, defendants must carefully weigh whether to offer any opposition to plaintiffs seeking discovery of the identity and contact information for class members.  A successful opposition to such discovery may lead to a second chance at certification if the trial court denies certification.  In order to control costs and avoid such a result, we may see defendants electing to stipulate to an order to produce such discovery (as the expedient means of satisfying the defendant's obligation to maintain some degree of control over class member contact information).  As an aside, Dynamex had the misfortune of drawing the last panel they would have wanted to review this appeal.  I'd guess that Appellate Justices don't take kindly to trial court decisions that essentially ignore that panel's prior, controlling decisions on the issues confronting the trial court.

The opinion also includes an educational discussion about the "ascertainability" requisite for certification.  In short, the Court of Appeal again reminds us that all class members need not be identified or identifiable at the certification stage.

I'm still trying to catch up after two weeks of depositions out of state.  This has been a busy week for class-related decisions (and the week's not over yet); I'm working through the decisions and other news as fast as I can get to them.

Read More