Are punitive damages available in class actions asserting statutory wage & hour violations? Savaglio v. Wal-Mart may have the answer.

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California Punitive Damages has an intriguing post about a pending appeal that could affect punitive damage claims in wage & hour class actions.  (Cutting, Pending Appeal Will Affect Punitive Damages Claims In Wage & Hour Class Actions (May 16, 2008) calpunitives.blogspot.com.)  In an appeal to the First Appellate District, Division Four, Wal-Mart is contesting, among other things, a $115 million punitive damages award by asserting the "new right-exclusive remedy" rule:

“Among the issues that Wal-Mart has raised on appeal is whether California's "new right-exclusive remedy" rule bars the punitive damages award in this wage and hour case. Under this rule, "where a statute creates a right that did not exist at common law and provides a comprehensive and detailed remedial scheme for its enforcement, the statutory remedy is exclusive." (Rojo v. Kliger (1990) 52 Cal.3d 65, 79.) According to Wal-Mart's opening appellate brief, no California appellate cases have upheld an award of punitive damages for any statutory wage and hour claims, and at least three federal district courts have applied the "new right-exclusive remedy" rule to dismiss claims seeking punitive damages predicated on alleged wage and hour violations.

(Ibid.)  So what is the "new right-exclusive remedy" rule you ask?  Tell me about Rojo you say?  You had but to ask.

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Updates to The Complex Litigator likely to slow during the week of May 19

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I have an undesirably congested schedule this week.  As a result, there will probably be fewer posts of great length this week, and the posts that do go up may not go up as regularly as usual.  Though it might be getting old for me to say this, thanks for visiting.

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Littler Mendelson, P.C., provides educational report on how to achieve total wage & hour compliance

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Littler Mendelson, P.C. released a wage & hour report entitled, "Total Wage and Hour Compliance: An Initiative to End the Wage and Hour Class Action War."  The abstract on the firm's website summarizes the focus of the report:

“Wage and hour class actions are rising sharply and the potential exposure is unprecedented. The number of wage and hour class actions filed in federal courts more than doubled from 2001 to 2006, and settlements are frequently in the multi-million dollar range. Absent a complete and comprehensive approach to tackling wage and hour compliance, the trend is unlikely to end. In this report, a Littler Task Force lays out seven key components to help employers reach and maintain a level of compliance that greatly reduces the likelihood and cost of litigation. By implementing these components, a systematic process can be developed to move the level of wage and hour compliance as close to "total" as is reasonably possibly, with a sensible allocation of corporate resources.

(Abstract: Total Wage and Hour Compliance: An Initiative to End the Wage and Hour Class Action War (April 2008) www.littler.com.)

The report has received quite a bit of attention around the blogosphere in a variety of contexts.  Wage Law notes that "[s]ome of the best ideas for the plaintiff's bar have come from defense lawyers. . . . It isn't just a learning tool for employers. It also provides considerable food for thought if you are represent employees . . . ."  (Walsh & Walsh, New Littler Report on Wage and Hour Compliance (May 9, 2008) wagelaw.typepad.com.)  Cal Biz Lit cites from the Littler report in a detailed article about attorney fee-shifting statutes in California.  (Nye, Attorneys' Fee Awards in California III: More Attorney Fee Shifting Statutes (May 14, 2008) www.calbizlit.com.)   California Punitive Damages also quotes from the Little report, saying, "Indeed, a recent report issued by Littler Mendelson (which specializes in labor and employment law) indicates that at least 311 wage and hour related class actions were filed in California state courts alone in the nearly six-month period between October 1, 2007, and March 28, 2008."  (Curt Cutting, Pending Appeal Will Affect Punitive Damages Claims in Wage & Hour Class Actions (May 16, 2008) calpunitives.blogspot.com.)

I have faced off against one of the report's authors, Kevin Lilly, in a wage & hour class action.  He's a sharp attorney (and a gentleman), and I have no hesitation in suggesting that you take a look at the Littler report.  In any case, I have to commend a defense-oriented firm that essentially says, "If you want to avoid wage & hour class actions, your only choice is to comply with the law 100% of the time."  If everyone would offer sage advice like that (and if the recipients would follow it), I could get into some other line of work.

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WHO'S WHO (AND WHERE) OF COMPLEX LITIGATION: Julia Strickland

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Julia Strickland has been selected by the Daily Journal as one of the top 75 Women Litigators in California.  A partner at Stroock & Stroock & Lavan LLP, Ms. Strickland's practice focuses on the defense of class actions and other complex commercial actions.  Her notable accomplishments include a major ruling under the California Consumers Legal Remedies Act in Berry v. American Express. Berry held that credit card issuers may not be sued under the statute, and the decision has been interpreted broadly in other cases to hold that transactions for "money or credit" generally -- all lending activity -- are not regulated by the statute.

Of note is the fact that Ms. Strickland began her legal career at Stroock in 1977. In addition to being a member of the Firm's National Executive Committee, she has played a central role in development of the firm's Los Angeles office.

Reference:  May 15, 2008 Press Release

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Class of "technical writers" seeking overtime certified in suit against Sun Microsystems

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In a case that may draw renewed attention to wage & hour practices at high tech businesses, Santa Clara Superior Court Judge Jack Komar certified a class comprised of "technical writers" employed by Sun Microsystems since 2002.  Plaintiff Hoenemier is challenging the company's practice of treating Hoenemier and about 300 other writers as exempt from state labor laws governing overtime and breaks.  At issue in this case is the overtime exemption applicable to "computer professionals," found at Cal. Labor Code section 515.5.  "If the company loses, it could owe 'well over $20 million' in back pay, according to Hoenemier's attorney, Aaron Kaufmann of Walnut Creek."  (Brandon Bailey, Sun overtime lawsuit a class action (May 15, 2008) www.mercurynews.com.)

Sun contends in the suit that it is an industry-wide practice to classify technical writers as exempt under section 515.5.  If the Court ultimately determines that Sun is wrong in its classification, the whole industry will face a wave of wage & hour lawsuits, given that suits for back wages remain viable, irrespective of a corrective classification going forward.

Other coverage:

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Cal Biz Lit blog adds The Complex Litigator to its blogroll

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Given that I have appreciated the writing and analysis on Cal Biz Lit, I note with gratitude the fact that The Complex Litigator has passed muster as a blog that meets with Bruce Nye's approval.  You can also take a look at Bruce Nye's firm, Adams Nye Trapani Becht LLP at adamsnye.com.  Thank you, Bruce.

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ClassActionBlawg.com provides a weekly collection of class action blog posts

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Paul KarlsgodtClassActionBlawg.com has just posted a round-up of class action blawg articles from the last week or so.  This week's round-up includes one article by The Complex Litigator, so a special thanks for that.  ClassActionBlawg.com includes these useful round-ups once a week, but the most recent collection of posts is particularly thorough; it makes for a great launching point to look around the blawgosphere for topical posts on class actions.

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Law review article contends that puntive damage claims have been precluded in class actions

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Inferential preclusion of punitive damage claims in many class actions is the premise of a forthcoming Law Review article by Professor Sheila Scheuerman of the Charleston College of Law. (Scheuerman, Sheila B., Two Worlds Collide: How the Supreme Court's Recent Punitive Damages Decisions Affect Class Actions (2008, forthcoming) Baylor Law Review, available at SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1127691.) Although self-described as an alternative assessment of the impact of recent Supreme Court punitive damage decisions, the article ultimately echoes the refrain advanced by, among others, members of the defense bar immediately following the United States Supreme Court’s decision in Philip Morris USA v. Williams, 127 S.Ct. 1057 (2007).

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Showing laudable common sense in Bufil v. Dollar Financial Group, Inc., a California Court of Appeal limits Alvarez v. May Dept. Stores Co.

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Greatsealcal100I must confess that, of all decisions for which I may take blame or credit, Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223 sticks in my craw as the most abhorrent and most memorable (by a slight margin).  Not that I didn't give Alvarez my all; I have no shame there.  But I lost the appeal.  Then my Petition for Review was denied by the California Supreme Court (though Justice Kennard was of the opinion that it should have been granted), and I even went so far as to file a Petition for Writ of Certiorari with the United States Supreme Court.  It was, of course, denied.  The oral argument in the Court of Appeal lasted something like 45 minutes (it went way over the allowed time), and about 40 minutes of it were non-stop questions from all three justices.  It was brutal, educational, and intensely disappointing.  Mostly disappointing.

Enter Bufil v. Dollar Financial Group, Inc. (April 17, 2008, ord. pub. May 13, 2008), issued by the First Appellate District, Division Four.  The introduction to the opinion summarizes the legal terrain:

“On the heels of the denial of class certification against employer and respondent Dollar Financial Group, Inc. (Dollar), in a suit alleging violation of meal and rest break labor laws, appellant Caren Bufil pursued class certification in a new suit which significantly narrowed the class definition. Relying on the doctrine of collateral estoppel, the trial court granted judgment on the pleadings in favor of Dollar. Also relying on this doctrine as well as traditional concerns relevant to the issue of certification, the court denied Bufil’s motion for class certification. We reverse.

(Slip op., at p. 1.) 

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COMPLEX TECH: Update on IronKey USB Security and Encryption Tool

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Ironkey_logo_web225A couple of days ago, I posted information about the IronKey USB key, a great solution for data encryption.  At the end of my post, I also mentioned the fact that my request for law firm specific information had not received a response.  I first want to note that I have since learned that my inquiry (1) didn't go to the right person, and (2) wasn't sent through the expected channel.  As soon as IronKey's team learned about my request for information through my post on this blog, I received a courteous and prompt response to my inquiry (to the extent they could do so without violating client confidences, an issue they apparently take as seriously as do lawyers).

I can report that several "BigLaw" firms have already deployed the IronKey to their attorneys.  Without knowing the identities of the firms, it is still safe to say that large firms reside at the conservative end of the spectrum.  If the IronKey won over the IT departments of some big firms, it should be able to impress everyone.  The IronKey just strikes me as a solution that is almost customized for the needs of law firms.

I also need to mention the fact that IronKey offers an managed enterprise solution that is particularly useful for larger deployments of IronKey USB devices.  The managed enterprise service provides an Administrator IronKey that allows recovery of forgotten passwords.  When the Administrator IronKey and one of the deployed keys are both attached to a computer, the Administrator can access a secure site to "reset" the password on the otherwise useless IronKey.

I don't usually get too excited by new technology tools, because, from my perspective, there is always something more they can do.  It's easy to be an armchair critic.  But here, it's hard to see where IronKey missed the boat with this device.

I strongly suggest that you at least take a look at the Ironkey.  Considering everything under the hood, it is very reasonably priced, and IronKey offers some additional features that I didn't cover in my prior post.

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