The Need for “Mini-Trials” on Individual Factual Issues Prompts Denial of Class Certification

Third Quarter 2010Newsletters California Update Employment Law

Two recent rulings found that cases were not suitable for class action treatment because individualized issues of law and fact predominated over common issues.

In Arenas v. El Torito, 183 Cal.App.4th 723 (2010), the California Court of Appeal affirmed denial of class certification in a lawsuit brought by salaried managers claiming they were misclassified as exempt from overtime wage laws. The plaintiffs claimed that the defendant automatically classified the managers as exempt, based on their job description, and that they spent less than half of their working hours on exempt job duties. The defendant presented evidence that the managers' job duties and the time spent on specific tasks differed significantly among restaurant locations. The court found the conflicting evidence provided by the parties would require "mini-trials" on each individual manager's job duties to determine whether each was misclassified. The court concluded that plaintiff's theory that "managers, based solely on their job descriptions, were as a rule misclassified, was not amenable to common proof."

In Nguyen v. Starbucks Corporation (filed May 5, 2010), the Ninth Circuit denied an appeal by a putative class member and affirmed the district court's denial of class certification in Koike v. Starbucks Corporation. The plaintiffs were former assistant managers who alleged that Starbucks forced them to work off the clock without pay. The trial court found class action treatment was not appropriate because "individualized factual determinations" were needed to determine whether the class members actually engaged in off-the-clock work and whether Starbucks had knowledge of any such work being performed.