Class Action Decertification Affirmed!

January 2010Newsletters California UPDATE Employment Law

A class consisting of retail store managers who were classified as exempt from overtime wage laws was recently decertified by a California Court of Appeal. Class certification was granted in January 2004, but after extensive discovery, the defendant filed a motion to decertify the class in December 2006. The trial court granted the defendant’s motion because individual issues predominated over common issues. The appellate court affirmed the trial court’s ruling.

The appellate court used the “community of interest” analysis, stating that it “applies equally to an order decertifying a class as well as an order granting certification.” In reviewing the evidence presented, the appellate court found that individualized inquiries into the classification of the store managers as exempt employees predominated over any common questions of law or fact. The defendant’s evidence in support of its motion to decertify the class consisted of declarations of its expert, three managers, the vice president of store operations and five defense attorneys. In sum, the evidence demonstrated that there was a wide disparity in store location, size, configuration, management duties and styles, socioeconomic makeup and the number of employees at each location. The trial court also found that managers routinely exercise their independent judgment and that the amount of time that they spent performing managerial duties were matters of individual inquiry.

This ruling is helpful to employers facing misclassification claims, particularly retailers similar to the defendant, whose operations are numerous and who have diverse locations, stores of different sizes and positions with wide variances in job duties. The case is Keller v. Tuesday Morning, Inc., ___ Cal.App.4th ___ (Nov. 4, 2009; pub. ord. Dec. 4, 2009) (Second Appellate District, Division Six).