The Ninth Circuit makes history of a sort by reversing an employment case class certification denial

Ninth Circuit SealThese days, it seems as if the Ninth Circuit and its District Courts aren't operating from the same play book.  As has been discussed repeatedly in connection with Brinker Restaurant Corporation, et al. v. Hohnbaum, et al (July 22, 2008), District Courts have repeatedly made news with their decisions undermining wage & hour class actions.  In Brown v. Federal Express Corp., (C.D.Cal. 2008) ___ F.R.D. ___ [2008 WL 906517], a district court concluded that a claim of meal period violations was not amenable to class treatment because the court would be "mired in over 5000 mini-trials" to determine if such breaks were provided.  Another District Court opinion (White v. Starbucks Corp., 497 F.Supp.2d 1080 (N.D. Cal. 2007)) refused to hold that employers must ensure that their employees take meal breaks. The White v. Starbucks Corp. court guessed that the California Supreme Court, if deciding the issue, would require only that an employer offer meal breaks, without forcing workers to take those breaks.

Instead of joining with the district court, the Ninth Circuit has pushed in the opposite direction.  For example, in an unpublished opinion, the Ninth Circuit reversed a substantial portion of a District Court order denying class certification in a wage and hour class action entitled Sepulveda v. Wal-Mart Stores, Inc. Recently, the Ninth Circuit went a step further.  In Parra v. Bashas', Inc. (9th Cir. July 29, 2008) ___ F.3d ___, the Ninth Circuit made history (in the Circuit), when it reversed a denial of class certification in a wage & hour class action where the denial of certification was predicated on lack of commonality:

Although this circuit has, up to now, never reversed a district court finding that commonality was lacking in an employment suit, other circuits have. See, e.g., Forbush v. J.C. Penny Co., 994 F.2d 1101, 1106 (5th Cir. 1993); Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1557 (11th Cir. 1986); Paxton v. Union Nat’l Bank, 688 F.2d 552, 561 (8th Cir. 1982).

(Slip op., at p. 9641.)  It's only a matter of time before all of this wage & hour employment law matter and anti-matter collide and destroy the planet.

[Via UCL Practitioner and Alaska Employement Law]

UPDATE:  The problem with the title of this post has been corrected.

UPDATE 2:  An astute reader points out that I was a bit sloppy with my labels in this post.  The case involves employment law claims (discrimination issues), which do not fall into the subset of employment law claims referred to as "wage & hour" cases.  As a very general proposition, many of the policies that govern "wage & hour" cases govern all employement law cases.  However, there are special policy considerations that govern matters like discrimination cases such that the distinction between "employment law" and "wage & hour" is not necessarily irrelevant.  I actually appreciate the correction because I strive for accuracy.

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BREAKING NEWS: California Labor Federation confronts Labor Commissioner over bias/haste in issuing Brinker memo

On July 30, 2008, this blog reported that the DLSE had already updated its enforcement materials in response to Brinker Restaurant Corporation, et al. v. Hohnbaum, et al (July 22, 2008).  The information now coming to light is significantly more troubling than a simple revision of DLSE enforcement materials.  In a July 25, 2008 Memorandum entitled Binding Court Ruling on Meal and Rest Period Requirements, Angela Bradstreet, the Labor Commissioner, described Brinker as a “binding court ruling,” without noting that Brinker is one of two decisions that interpret regulations governing meal breaks (the other being Cicairos v Summit Logistics, Inc. (2005) 133 Cal App.4th 949, which still stands as valid authority).

The California Labor Federation was none too pleased with the July 25, 2008 Memorandum.  In strongly-worded correspondence of July 30, 2008, the California Labor Federation took Ms. Bradstreet to task for what it persuasively described as a biased, pro-employer approach from the very regulatory body charged with enforcing employee-protective laws and regulations.  And by fortunate happenstance, I've stumbled across a copy of that correspondence (with attachments):

The correspondence can also be downloaded in pdf format here.  The letter is definitely worth reading.

Because of the significance of this issue, I intend to set this post so that, for at least the next week, it appears as the first post on The Complex Litigator (assuming nothing else demands top billing in that time).  So be sure to check below to see new posts.

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Review by Supreme Court denied in Bufil v. Dollar Financial Group, Inc.

Yesterday, the California Supreme Court denied review in Bufil v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193.  Other commentators noted this denial as significant because Bufil contains language that appears to conflict with Brinker Restaurant Corp., et al. v. Hohnbaum, et al. (2008) ___ Cal.App.4th ___.  (See, e.g., Wage Law.)  While I find the Brinker connection of great interest, I find this denial most significant because it let stand a rather significant reduction in the impact of Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223.  My initial post on Bufil discusses the Alvarez connection in painful detail.

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DLSE will immediately enforce Brinker decision, despite risk

Greatsealcal100Multiple sources are now reporting that the DLSE has already updated its materials to require hearing officers to follow Brinker Restaurant Corporation, et al. v. Hohnbaum, et al (July 22, 2008).  Reporting sources include California Labor & Employment Law Blog, What's New In Employment Law, and Wage Law.  Adding to the general coverage, Storm's California Employment Law blog has a brief but insightful obsevation about the fact that the DLSE's rush to implement pro-employer policies may ultimately harm them. 

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After reviewing the play, Sprint's "home run" declared a ground-rule double

On June 12, 2008, Sprint avoided liability when a California jury ruled in its favor in a trial involving the contentious issue of early termination fees (ETFs) in wireless service contracts.  In later commentary, this blog characterized that result as a "home run" for Sprint.  It turns out that such a declaration was premature.  Late Monday, issues of law decided by the Court did not go in Sprint's favor.  Sprint was ordered to refund almost $20 million to consumers that paid ETFs.  (David Kravetz, Sprint Ordered to Pay Millions in Early Termination Fee Flap (July 29, 2008) blog.wired.com.)

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Tillery makes case that class action suits are essential

Stephen Tillery is using the recent settlement of a nationwide class action settlement against Sears Roebuck and Co. to make the case that class actions are an essential tool for consumer protection.  (Stanford Schmidt, Lawyer makes case for class action suits (July 28, 2008) www.thetelegraph.com.)  The article is a quick read, but it offers specific examples of where governmental enforcement of consumer protection standards has failed, necessitating class actions as a private remedy for such failures.

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Even more on Brinker Restaurant Corporation, et al. v. Hohnbaum, et al.

Greatsealcal100One measure of a decision's significance is the amount of commentary it generates. By that standard, Brinker Restaurant Corporation, et al. v. Hohnbaum, et al (July 22, 2008) is moving rapidly towards the rarefied air set aside for events like the passage of Proposition 64.  The Complex Litigator has already run several posts on this decision, noting its issuance and summarizing coverage here and here.  To help readers stay on top of the coverage and the dialog, I'm adding to the coverage collection:

I will continue to follow the commentary about Brinker, collecting new articles in further posts as appropriate.  Stay tuned.

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And now for a change of pace...

KpandalogoI've worked at Arias Ozzello & Gignac LLP for over three and a half years.  But I have decided to explore new opportunities, and so my time there is over.  I will be working at a rapidly expanding plaintiffs' firm in Los Angeles, Khorrami Pollard & Abir, LLP.  I am looking forward to this new opportunity; I will be one of the attorneys charged with day-to-day management of the class action practice group.  I will continue to handle wage & hour and consumer class actions.  In addition, I will endeavor to develop a supportive appellate practice that can compliment the work of other practice groups.

I will continue to develop The Complex Litigator.  As an aside, while considering the opportunity at KP&A, I was pleased to hear how supportive they were of my blogging efforts.  As of July 28, 2008, I can be reached at:

H. Scott Leviant
Khorrami Pollard & Abir, LLP
444 S. Flower Street, 33rd Floor
Los Angeles, California 90071
Tel:  (213) 596-6000
Fax:  (213) 596-6010

My e-mail address is listed on the contact information page, where it is mildly obfuscated with a small script.

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Brinker Restaurant Corporation, et al. v. Hohnbaum, et al. covered in Daily Journal

Greatsealcal100Brinker Restaurant Corporation, et al. v. Hohnbaum, et al. (July 22, 2008) keeps on making news.  Yesterday, I attempted to collect as much coverage as I could in one post.  However, Brinker isn't remotely done making news.  In today's edition of the Daily Journal (July 25, 2008), D. Gregory Valenza asks, "Meal and Break Class Actions: On the 'Brink' of Extinction?"  (Subscription required.)  Mr. Valenza's article follows closely on the heels of a July 23, 2008 article by Daily Journal Staff Writer Pat Broderick, which briefly summarized the core of the Brinker decision.

Mr. Valenza's analysis is substantially more thorough than the July 23, 2008 article, but it is, essentially, a further summary of the Court's primary holdings.  While the article discusses several sources of law at issue in the Brinker decision, Mr. Valenza doesn't delve into the competing policies that are suggested but left unresolved by that opinion.  In fact, no commentator has yet addressed the full set of economic incentives at play within and without the Brinker world view of wage & hour class actions.  The Brinker opinion opens the door to this analysis but fails to step through.  Instead, the Court picks one of many economic incentives at work to justify its conclusion:  "It would also create perverse incentives, encouraging employees to violate company meal break policy in order to receive extra compensation under California wage and hour laws."  (Slip op., at p. 44, quoting Brown v. Federal Express Corp. (C.D.Cal. 2008) ___ F.R.D. ___ [2008 WL 906517 at *6].)  In selectively discussing such incentives, the Court overlooks employer economic incentives to cheat the system and employee economic incentives to adhere to a meal break policy where job loss is the consequence for failure to do so.  These incentives are likely far stronger, due to the amounts at issue, than one employee's desire to obtain an extra hour of pay.

If policy considerations are going to drive the judicial determination of the meal and rest break obligations, the Brinker decision must be viewed with some measure of skepticism until the full picture of incentives is faily presented and fully analyzed.

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More on Brinker Restaurant Corporation, et al. v. Hohnbaum, et al.

Greatsealcal100Brinker Restaurant Corporation, et al. v. Hohnbaum, et al. (July 22, 2008) dropped a bit of a bombshell in the busy field of wage & hour class actions, at least judging by the early and numerous reactions.  The Complex Litigator noted the issuance of the opinion shortly after it was posted to the California Courts website.  Other blogs and media outlets followed with commentary and analysis, some of it extensive.  Defense-oriented firms proclaimed it a much-needed victory, while plaintiff-side commentators lamented the irrationality of the decision and the need for speedy review by the California Supreme Court.  To keep up with the dialog, a round-up of coverage, in no particular order, is in order:

  • Wage Law has two posts on the decision.  The first post hits the highlights of the decision.  The second post comments on the Governor's statement in support of the decision, noting that the fact of the Governor's comment, in and of itself, demonstrates that Supreme Court review is needed to "settle an important question of law."
  • Storm's California Employment Law blog offers its own collection of comments from the blawgosphere and internet.
  • California Workforce Resource Blog also has two posts on the Brinker.  The first post is an extensive discussion of the decision, offered from the vantage point of a firm that represents employers.  The second post provides a collection of comments about the decision.
  • What's New In Employment Law offers a decidedly partisan cheer for the Brinker decision, but notes that it is premature to celebrate.
  • The UCL Practitioner, one of the many counsel in Brinker, judiciously limits her comments to a refutation of quotes attributed to her about the decision in the Recorder.  Importantly, Ms. Kralowec takes exception with the attributed statement that the decision "creates an appellate split that likely will ensure Supreme Court review."  Ms. Kralowec notes that she would never be so presumptuous as to declare what the Supreme Court will, in the exercise of its discretion, decide to do about Brinker.
  • California Labor And Employment Law Blog also offers two posts on Brinker.  The first post describes the "favorable" outcome in Brinker.  The second mentions the Governor's pro-Brinker statement.
  • In its customarily business-like fashion, Class Action Defense Blog just explains Brinker in a detailed post.
  • The Recorder article to which UCL Practitioner reacted can be found at Law.com.
  • Market Watch declares that the Brinker decision "reverberates" through workplaces.
  • The Sacramento Bee describes the decision as one backing "flexible" rules on meal breaks.
  • And, finally, Brinker thinks that the case will just proceed back to the trial court with no further interruptions.  Uh huh.

You can now mark your calendars.  The Petition for Review should be on file anywhere between August 22nd and the end of August.

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