California Court Decertifies wage, Break Claims due to lack of Commonality

Home delivery newspaper carriers brought suit against the publisher for violations of the California Labor Code, arguing that they were not paid overtime wages, the proper minimum wage, and did not receive rest breaks, among other things. Specifically, the carriers claimed that they were improperly classified as independent contractors, though they were actually more akin to employees, and thus should have received the benefits of being an employee (such as receiving overtime wages).

The publisher initially filed a motion for partial summary judgment as to one of the carriers’ claims, which the court granted. The court then granted class certification finding that there was a significant issue common to the class sufficient to warrant certification, which was whether the publisher improperly characterized the carriers as independent contractors instead of employees.

The publisher, relying upon the U.S. Supreme Court’s post-class certification decision in Wal-Mart Stores, Inc. v. Dukes, sought to decertify the class on the ground that predominating individualized issues made a class action unmanageable and inferior. The court denied this request, finding that the carriers satisfied the Wal-Mart commonality prerequisite because of the issues central to the case (e.g., whether the publisher improperly characterized the carriers as independent contractors instead of employees).

Later, the publisher sought leave to file a renewed motion to decertify the class based upon the contention that the carriers were unable to present common evidence at trial as required to do so per Federal Rules of Civil Procedure, Rule 23(a)(2). At this point, only four causes of action remained: 1) failure to pay minimum wage, hourly wages, and overtime wages; 2) failure to provide rest breaks or compensation in lieu thereof; 3) failure to reimburse reasonable business expenses; and 4) unfair business practices.

Upon review, the U.S. District Court for the Southern District of California reaffirmed the finding that the question of employee status may be resolved on a class-wide basis. At the same time, however, the court concluded that certain causes of action were not amenable to class treatment.

Here, because the carriers used substitutes and/or helpers to assist them in performing their obligations under the contract, an individualized inquiry would be required in order to determine that the carriers worked more than six days per week such that they would be entitled to overtime. The carriers could not prove the number of days that they worked as a result of the substitute and helper issue. Individualized inquiries and determinations are therefore required to ascertain each carrier’s eligibility for the claims.  

For the same reason, the minimum wage claim failed because there was no reliable, common proof that a carrier, and not a substitute or helper, actually performed the subject work. This, too, would necessitate an individualized inquiry, and was thus not amenable to class treatment.

The court accordingly decertified the claims for failure to pay overtime wages, failure to pay minimum wage, and failure to provide rest breaks. The court affirmed class certification for the claims for unfair business practices and failure to reimburse for reasonable expenses.

More and more courts are declining to certify classes, finding a lack of commonality under FRCP 23 (or similar state statutes) in the wake of Wal-Mart, which is a positive sign for employers defending against such actions.